30 Авг 2018

FOREX Newsletter

         

FOREX Newsletter

August 30, 2018
 

 

Pulse of the Market

·      The Dollar gained against most currencies yesterday especially those in emerging markets

·      The Pound rallied after comments on Brexit by European Union negotiator Michel Barnier

·      The Single Currency was sharply lower against the British Pound yesterday

·      Market sentiment was supported by hopes that Canada will join the new trade agreement

It has been a week of good news in the financial markets and the record-breaking levels in U.S. stocks tell us that investors are pleased with the recent developments. Particularly the fact that the U.S reached a trade deal with Mexico, talks with Canada are going well and the EU is willing to work with the UK. It remains to be seen whether these talks will turn into paper agreements but the hope that it will have enough to drive currencies and equities sharply higher. As long as the positive headlines continue to flow in, the risk rally should continue. USD/JPY is finally participating in the move thanks to a stronger Q2 GDP report. Economists were looking for growth to be revised lower but instead, it was revised up to 4.2% from 4.1%. Today’s personal income and personal spending reports should also be stronger as earnings and retail sales increased last month. Sterling was the best performer yesterday gaining more than 1% against all of the major currencies. According to the European Union’s Chief Brexit negotiator Barnier, the EU is ready to offer the UK a deal that it hasn’t had with any other country. Coming hours after Brexit Secretary Dominic Raab complained about his availability for talks, the possibility of an unprecedented offer sent sterling sharply higher. GBP/USD broke out of a 5-day long consolidation to trade above 1.30 while EUR/GBP experienced its strongest one day decline in more than 2 months. Raab is heading back to Brussels on Friday to the resume negotiations with the goal of reaching an agreement by November. This type of news is exactly what sterling traders have been waiting for. The Euro pulled back and it came off its highs to hit a low of 1.1650 but with all of the good news, EURUSD found itself back at 1.17. The rally occurred despite weaker German consumer confidence and softer French consumer spending. One of the worst performing currencies yesterday was the Australian dollar.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
01:30 Australia Building Approvals (YoY) (JUL) Medium   -3.0% 1.6%
07:55 German Unemployment Change (000’s) (AUG) High   -8k -6k
07:55 German Unemployment Claims Rate s.a. (AUG) High   5.2% 5.2%
08:30 U.K Net Consumer Credit (JUL) Medium   1.5b 1.6b
08:30 U.K Net Lending Sec. on Dwellings (JUL) Medium   3.9b 3.9b
08:30 U.K Mortgage Approvals (JUL) Medium   65.0k 65.6k
12:00 German Consumer Price Index (YoY) (AUG) High   2.0% 2.0%
12:30 Canada Quarterly Gross Domestic Product Annualized (2Q) High   3.1% 1.3%
12:30 Canada Gross Domestic Product (YoY) (JUN) High   2.3% 2.6%
12:30 U.S Personal Consumption Expenditure Core (YoY) (JUL) High   2.0% 1.9%
12:30 U.S Personal Income (JUL) Medium   0.4% 0.4%
12:30 U.S Personal Spending (JUL) Medium   0.4% 0.4%
12:30 U.S Initial Jobless Claims (AUG 25) Medium   213k 210k
23:01 U.K GfK Consumer Confidence (AUG) Medium   -10 -10
23:30 Japan Jobless Rate (JUL) Medium   2.4% 2.4%

 

Euro

The single currency was flat to lower yesterday, with peripheral markets outperforming on a pick-up in risk appetite after Canada’s plans to rejoin NAFTA talks eased concerns about global trade. The U.S., Canada a, d Mexico have until Friday to reach a deal to update the North America Free Trade Agreement. Overall, the EUR/USD traded with a low of 1.1650 and a high of 1.1708 before closing the day around 1.1706 in the New York session.

 

Yen

The Japanese Yen traded lower against the U.S Dollar yesterday. On the release front, Japanese consumer confidence edged lower to 43.3, just below the estimate of 43.4 points. In the U.S, Preliminary GDP jumped 4.2%, beating the estimate of 4.1%. Pending Home Sales disappointed with a reading of -0.7%, well off the estimate of 0.3%. Overall, the USD/JPY traded with a low of 111.10 and a high of 111.80 before closing the day around 111.65 in the U.S session.

 

British Pound

The British Pound surged against the U.S Dollar yesterday after an official from the European Union indicated that progress has been made in the Brexit negotiations. Michel Barnier, the EU’s chief Brexit negotiator, said Europe is prepared to offer an unprecedented partnership to the UK. The news had been positive for the currency. Overall, the GBP/USD traded with a low of 1.2843 and a high of 1.3030 before closing the day at 1.3023 in the New York session.

 

Canadian Dollar

The Canadian Dollar gained slightly against the U.S Dollar yesterday. Canada’s top trade negotiator praised Mexico’s trade concessions on autos and labor rights on Tuesday as she rejoined NAFTA talks, while U.S. lawmakers warned that a bilateral U.S.-Mexico trade deal would struggle to win approval in Congress. Overall, USD/CAD traded with a low of 1.2900 and a high of 1.2960 before closing the day at 1.2904 in the New York session.

 

Australian Dollar

The Australian Dollar has fallen sharply in yesterday’s trading session in response to news that Westpac Bank, Australia’s second-largest lender, has hiked mortgage rates for both owner-occupier and investor borrowers. The bank cited a “sustained increase in wholesale funding costs” as the reason behind the out-of-cycle move.  Overall, AUD/USD traded with a low of 0.7273 and a high of 0.7347 before closing the day at 0.7297 in the New York session.

 

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 65 and lies above the neutral zone. In general, the pair has gained 0.55%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has gained 1.64%.

   

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 49 reading and lies below the neutral region. In general, the pair has gained 0.06%.

  

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is issuing a bullish signal. The Relative Strength Index is above 55 and lies above the neutral region. On the whole, the pair has lost 1.08%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 34 and lies below the neutral region. In general, the pair has gained 0.58%.

 

Appendix

  

FOREX Closing Prices for August 29, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16956 1.17084 1.16505 1.1706 0.0013
USD/JPY 111.172 111.809 111.103 111.659 0.4870
GBP/USD 1.28663 1.30307 1.28435 1.30236 0.0154
USD/CHF 0.9757 0.97741 0.97003 0.97032 -0.0057
USD/CAD 1.29252 1.29606 1.29008 1.29048 -0.0025
EUR/JPY 130.034 130.825 129.56 130.721 0.7180
GBP/JPY 143.053 145.542 142.798 145.439 2.3410
CHF/JPY 113.911 115.089 113.707 115.043 1.1700
AUD/JPY 81.529 81.764 81.018 81.605 0.0480
EUR/GBP 0.90882 0.90898 0.89813 0.89846 -0.0098
EUR/CHF 1.14145 1.14215 1.13419 1.13597 -0.0055
GBP/CHF 1.25544 1.26644 1.25087 1.26393 0.0073

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1610 1.1630 1.1668 1.1688 1.1726 1.1746 1.1784
USD/JPY 110.53 110.82 111.24 111.52 111.94 112.23 112.65
GBP/USD 1.2714 1.2779 1.2901 1.2966 1.3088 1.3153 1.3276
USD/CHF 0.9604 0.9652 0.9678 0.9726 0.9751 0.9800 0.9825
USD/CAD 1.2824 1.2862 1.2884 1.2922 1.2943 1.2982 1.3003
EUR/JPY 128.65 129.10 129.91 130.37 131.18 131.63 132.44
GBP/JPY 140.90 141.85 143.64 144.59 146.39 147.34 149.13
CHF/JPY 112.76 113.23 114.14 114.61 115.52 116.00 116.90
AUD/JPY 80.41 80.72 81.16 81.46 81.91 82.21 82.65
EUR/GBP 0.8839 0.8910 0.8947 0.9019 0.9056 0.9127 0.9164
EUR/CHF 1.1248 1.1295 1.1327 1.1374 1.1407 1.1454 1.1486
GBP/CHF 1.2388 1.2448 1.2544 1.2604 1.2700 1.2760 1.2855

 

 

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.

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