18 Окт 2018

FOREX Newsletter

       

FOREX Newsletter

October 18, 2018

 

Pulse of the Market

·      The U.S Dollar rose as traders waited for the latest meeting minutes from the Federal Reserve

·      U.S Building permits declined in September, increasing concerns over the health of the housing sector

·      The pound was lower as uncertainty over Brexit negotiations will lead to a deal spooked investors

·      The shared currency was also lower yesterday, with EUR/USD dipping 0.40%

The dollar was firmer against its major peers on Thursday after minutes from the U.S. Federal Reserve’s September meeting affirmed expectations that the central bank is likely to continue raising interest rates this year. The minutes from the Fed’s Sept. 25-26 meeting showed every Fed policymaker backed raising interest rates and also generally agreed borrowing costs were set to rise further, despite U.S. President Donald Trump’s view that the tightening has already gone too far. Interest rate futures are now pricing in an 83 percent likelihood that the Fed raises rates in December, according to the CME Group’s FedWatch Tool, the fourth hike this year. Two more increases are expected next year. The dollar index which measures its value against six major peers, traded at 95.65, up 0.08 percent today. The dollar is being bid as there is follow through support post the release of the FOMC minutes. Dollar bulls are playing to the view that the market is underpricing what the U.S. Fed can do. U.S. benchmark 10-year treasury yields climbed to 3.21 percent yesterday, on increasing rate hike expectations. The last time they traded below the psychologically important 3 percent level was on Sept. 18. Market focus is also trained on Rome, where the Italian government is headed for a showdown with Brussels over Italy’s insistence on pushing through a budget deficit target of 2.4 percent of GDP, wider than its previous target of 1.9 percent. Italy’s draft budget for next year, which boosts welfare spending, cuts the retirement age and hikes deficit spending, could breach the European Union’s fiscal rules that require Rome to lower its large public debt. The blowout has sparked investor concerns about more political tensions in the euro zone between Brussels and the common currency’s member states. The euro changed hands at $1.1497 today, trading flat versus the greenback, after losing 0.65 percent yesterday. The euro has lost 2.73 percent versus the dollar over the last three weeks. The British pound lost 0.12 percent versus the dollar on Thursday to $1.3096, weakening after EU’s chief Brexit negotiator Michel Barnier’s comments that more time was needed to secure an exit deal for Britain. The Canadian dollar changed hands with the dollar gaining 0.2 percent versus the loonie. The Dollar has risen 1.6 percent versus the Canadian dollar over the past twelve trading sessions.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:30 Australia Employment Change (SEP) High   15.0k 44.0k
00:30 Australia Unemployment Rate (SEP) High   5.3% 5.3%
00:30 BOJ Kuroda speaks at Branch Managers’s Meeting High      
00:30 Australia NAB Business Confidence (3Q) Medium     7
08:30 U.K Retail Sales Ex Auto Fuel (YoY) (SEP) Medium   3.8% 3.5%
12:30 Canada ADP Publishes September Payrolls Report Low      
12:30 U.S Philadelphia Fed Business Outlook (OCT) Medium   20 22.9
12:30 U.S Initial Jobless Claims (OCT 13) Medium   210k 214k
12:30 U.S Continuing Claims (OCT 6) Medium   1668k 1660k
14:00 U.S Leading Index (SEP) Medium   0.5% 0.4%
23:30 Japan National Consumer Price Index (YoY) (SEP) High   1.3% 1.3%

Euro

The single currency fell against the Dollar as the Greenback strengthened yesterday. Euro zone inflation accelerated in September in line with market expectations, driven mainly by a spike in energy prices, but core inflation, which excludes energy and unprocessed food costs, edged lower, data showed yesterday. Overall, the EUR/USD traded with a low of 1.1494 and a high of 1.1579 before closing the day around 1.1499 in the New York session.

 

Yen

The Japanese Yen pair was little changed against most of its major peers yesterday but made gains against the yen as upbeat Wall Street earnings turned global sentiment away from safe haven assets. The yen had strengthened over seven out of eight sessions. The yen has taken Swiss franc’s mantle as the safe haven currency of choice. Overall, the USD/JPY traded with a low of 111.99 and a high of 112.64 before closing the day around 112.63 in the U.S session.

 

British Pound

The British Pound weakened yesterday after data showed inflation fell more than expected in September and before a European Union summit at which Britain will try to unblock stalled negotiations for a Brexit deal. Economic data had briefly redirected traders’ attention towards the British economy and away from Brexit this week. Overall, the GBP/USD traded with a low of 1.3097 and a high of 1.3190 before closing the day at 1.3113 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened against its U.S. counterpart yesterday, pulling back from an 11-day high the day before as domestic data showed lower factory shipments and the greenback broadly rose ahead of the release of Federal Reserve minutes. Canadian factory sales fell by 0.4 per cent in August from July on lower motor vehicle sales. Overall, USD/CAD traded with a low of 1.2930 and a high of 1.3023 before closing the day at 1.3019 in the New York session.

 

Australian Dollar

The Australian Dollar should stabilize over coming weeks as much of the relevant bad news is now in the price of the currency, while an anticipated uptick in hedging activity among asset managers is also likely to support the Antipodean, according to NAB. The findings from one of Australia’s most important lenders comes as we enter the final quarter of a year. Overall, AUD/USD traded with a low of 0.7109 and a high of 0.7157 before closing the day at 0.7118 in the New York session.

 

Euro-Yen

EUR/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 41 and lies below the neutral zone. In general, the pair has lost 0.28%.

 

Sterling-Yen

 

Currently, GBP/JPY is trading below 14 and above 50, 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 49 reading and lies below the neutral zone. On the whole, the pair has lost 0.19%.

  

Aussie-Yen

Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 42 reading and lies below the neutral region. In general, the pair has lost 0.10%.

  

Euro-Sterling

This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is issuing a bearish signal. The Relative Strength Index is above 39 and lies below the neutral region. On the whole, the pair has lost 0.09%.

 

Sterling-Swiss

This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 62 and lies above the neutral region. In general, the pair has lost 0.06%.

 

Appendix

  

FOREX Closing Prices for October 17, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.15735 1.15791 1.14946 1.14992 -0.0074
USD/JPY 112.254 112.656 111.996 112.63 0.3960
GBP/USD 1.31801 1.31909 1.30978 1.3113 -0.0071
USD/CHF 0.99044 0.99528 0.9898 0.99511 0.0046
USD/CAD 1.29321 1.30236 1.29303 1.30193 0.0088
EUR/JPY 129.92 130.134 129.15 129.54 -0.3580
GBP/JPY 147.967 148.228 147.033 147.714 -0.2840
CHF/JPY 113.304 113.457 112.807 113.157 -0.1250
AUD/JPY 80.142 80.305 79.631 80.052 -0.0780
EUR/GBP 0.8778 0.88076 0.8763 0.87665 -0.0008
EUR/CHF 1.14637 1.14807 1.14352 1.14438 -0.0020
GBP/CHF 1.3056 1.30675 1.30016 1.30503 -0.0008

  

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1385 1.1440 1.1470 1.1524 1.1554 1.1609 1.1639
USD/JPY 111.54 111.77 112.20 112.43 112.86 113.09 113.52
GBP/USD 1.2984 1.3041 1.3077 1.3134 1.3170 1.3227 1.3263
USD/CHF 0.9860 0.9879 0.9915 0.9934 0.9970 0.9989 1.0025
USD/CAD 1.2865 1.2898 1.2959 1.2991 1.3052 1.3084 1.3145
EUR/JPY 128.10 128.62 129.08 129.61 130.07 130.59 131.05
GBP/JPY 145.89 146.46 147.09 147.66 148.28 148.85 149.48
CHF/JPY 112.17 112.49 112.82 113.14 113.47 113.79 114.12
AUD/JPY 79.01 79.32 79.69 80.00 80.36 80.67 81.04
EUR/GBP 0.8706 0.8734 0.8750 0.8779 0.8795 0.8824 0.8840
EUR/CHF 1.1380 1.1408 1.1426 1.1453 1.1471 1.1499 1.1517
GBP/CHF 1.2946 1.2974 1.3012 1.3040 1.3078 1.3106 1.3144

 

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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