23 Июл 2018

FOREX Newsletter

FOREX Newsletter

July 23, 2018

 

  Pulse of the Market

·      The Dollar fell against a basket of the other major currencies on Friday, snapping a four day rally

·      The British Pound traded higher on Friday, with GBP/USD adding on 0.89% to trade at 1.3129

·      This week, investors will focus how the U.S economy performed in the second quarter

·      U.S President indicated Friday that he is prepared to slap tariffs on all Chinese imports to the U.S

The U.S Dollar fell on Friday after U.S. President Donald Trump criticized the Federal Reserve for increasing interest rates but was still on target for a second week of gains. The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.15% to 94.84. Despite the dip, the dollar was on target for a second straight week of gains and has risen more than 5% in the last three months due to expectations that interest rates will rise. Trump said in an interview on CNBC that he does not approve of how the Fed is approaching monetary policy. The Fed raised rates twice this year and is expected to raise rates at least once more before the end of the year. “I’m not thrilled,” Trump said. “Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time I’m letting them do what they feel is best.” Meanwhile trade tensions continued, with the European Union expected to retaliate against the U.S. with more tariffs after America imposed tariffs on steel and aluminum in June. Tariffs on around $3.8 billion of U.S. goods have already been imposed by Europe. The dollar was lower against the safe-haven yen, with USD/JPY decreasing 0.06% to 112.39. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion. This week, investors will have a chance to see how the U.S economy performed in the second quarter. Friday’s GDP report is expected to show that the economy rebounded in the three months to June, boosted by an increase in consumer spending. Markets will also get an update on the health of the housing market, with reports due out on existing and new home sales. In Europe, monetary policy will be in focus, with the European Central Bank expected to leave rates on hold at its meeting on Thursday, following policy changes at its last meeting. Investors will also be monitoring developments in the intensifying global trade conflict, which has roiled markets. U.S. President Donald Trump indicated Friday that he is prepared to slap tariffs on all Chinese imports to the U.S., worth around $500 billion per year. Trump made the threat in a pre-recorded interview with CNBC that aired on Friday.

 

  
Time(GMT)   Economic Release IMP Actual Forecast Prior
01:10 BOJ Outright Bond Purchase 3~5 Years Low
07:00 Switzerland Money Supply M3 (YoY) (JUN) Low 2.9%
08:00 Switzerland Total Sight Deposits CHF (JUL 20) Low
12:30 Canada Wholesale Trade Sales (MoM) (MAY) Low 0.1%
12:30 U.S Chicago Fed Nat Activity Index (JUN) Low -0.15
13:00 Mexico Economic Activity IGAE (YoY) (MAY) Medium 4.53%
14:00 Euro-Zone Consumer Confidence (JUL) Medium -0.5
14:00 U.S Existing Home Sales (MoM) (JUN) Medium -0.2% -0.4%
15:30 U.S. to sell 3-Month Bills Low
15:30 U.S. to sell 6-Month Bills Low
23:30 ANZ Roy Morgan Weekly Consumer Confidence Index (JUL 22) Low

 

Euro

The single currency has been treading water. It is unlikely to find a rescuing hand from the ECB, whose policymakers met last week. While analysts expect the shared currency to strengthen as the year progresses, the conviction in that view is shaky, with strategists having pared their calls recently. The euro has weakened about 2.5 per cent so far this year. Overall, the EUR/USD traded with a low of 1.1624 and a high of 1.1737 before closing the day around 1.1719 in the New York session.

 

Yen

The Japanese Yen pair retreated further from the multi-month high of 113.17 and finished the week in the red at 111.42, amid broad dollar’s weakness following comments from US President Trump. Comments from Fed’s Bullard added to the pair’s decline, as he said that the Fed should hold off on hiking further. Overall, the USD/JPY traded with a low of 111.38 and a high of 112.60 before closing the day around 111.45 in the U.S session.

 

British Pound

The British Pound came off recent multi-month lows against the Dollar following the closing of Brexit-related talks in Brussels. Granted, the 0.60% advance in GBP/USD flatters the picture somewhat as the move is largely a function of Dollar weakness in the wake of some punchy comments on the Dollar’s ongoing ascent from President Donald Trump. Overall, the GBP/USD traded with a low of 1.2993 and a high of 1.3138 before closing the day at 1.3134 in the New York session.

 

Canadian Dollar

The Canadian Dollar rose against a broadly weak U.S. dollar on Friday after strong inflation and retail sales data reinforced expectations for another interest rate hike by the Bank of Canada this year. The loonie posted its largest one-day gain versus the U.S. dollar in three weeks.. Canada’s annual inflation rose last month to its highest level in more than six years. Overall, USD/CAD traded with a low of 1.3112 and a high of 1.3287 before closing the day at 1.3131 in the New York session.

 

Australian Dollar

The Australian Dollar gained sharply in Friday’s trading session as the U.S Dollar held below a one-year high on Friday after U.S President Donald Trump expressed concern about a stronger currency, although a weakening Chinese Yuan reduced risk appetite. Trump said a strong dollar puts the United States at a disadvantage. Overall, AUD/USD traded with a low of 0.7316 and a high of 0.7429 before closing the day at 0.7421 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 56 and lies above the neutral zone. In general, the pair has lost 0.22%.

 

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 45 reading and lies below the neutral zone. On the whole, the pair has gained 0.04%.

 

  

Aussie-Yen

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 51 reading and lies above the neutral region. In general, the pair has gained 0.03%.

  

  

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 63 and lies above the neutral region. On the whole, the pair has lost 0.27%.

  

 

Sterling-Swiss

This cross is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 39 and lies below the neutral region. In general, the pair has gained 0.25%.

 

 Appendix

 

FOREX Closing Prices for July 20, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16414 1.17375 1.16248 1.17191 0.0079
USD/JPY 112.442 112.604 111.383 111.452 -0.9980
GBP/USD 1.30132 1.31383 1.29932 1.31347 0.0122
USD/CHF 0.99927 1.00085 0.99139 0.99212 -0.0068
USD/CAD 1.32655 1.32873 1.31125 1.31318 -0.0138
EUR/JPY 130.92 131.188 130.575 130.628 -0.2900
GBP/JPY 146.343 146.636 145.95 146.406 0.0640
CHF/JPY 112.486 112.651 112.178 112.306 -0.2280
AUD/JPY 82.692 82.96 82.176 82.72 0.0220
EUR/GBP 0.89443 0.8956 0.89187 0.89201 -0.0024
EUR/CHF 1.16323 1.16523 1.16233 1.1628 -0.0002
GBP/CHF 1.30057 1.30463 1.29835 1.30329 0.0033

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1537 1.1581 1.1650 1.1694 1.1763 1.1807 1.1876
USD/JPY 109.80 110.59 111.02 111.81 112.24 113.03 113.46
GBP/USD 1.2894 1.2944 1.3039 1.3089 1.3184 1.3234 1.3329
USD/CHF 0.9793 0.9853 0.9887 0.9948 0.9982 1.0042 1.0076
USD/CAD 1.2892 1.3002 1.3067 1.3177 1.3242 1.3352 1.3417
EUR/JPY 129.79 130.18 130.41 130.80 131.02 131.41 131.63
GBP/JPY 145.34 145.64 146.03 146.33 146.71 147.02 147.40
CHF/JPY 111.63 111.91 112.11 112.38 112.58 112.85 113.05
AUD/JPY 81.49 81.83 82.28 82.62 83.06 83.40 83.85
EUR/GBP 0.8870 0.8894 0.8907 0.8932 0.8945 0.8969 0.8982
EUR/CHF 1.1588 1.1606 1.1617 1.1635 1.1646 1.1664 1.1675
GBP/CHF 1.2933 1.2958 1.2996 1.3021 1.3058 1.3084 1.3121

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.