23 Окт 2018

FOREX Newsletter

FOREX Newsletter

October 23, 2018

 

Pulse of the Market

·      The U.S Dollar gained following steep losses in British pound and the Euro yesterday

·      Brexit negotiations with the European Union over Northern Ireland remain in flux

·      The shared currency continued its slide on political uncertainty over Italy’s budget

·      Data showed Canadian wholesale trade decreased by 0.1 percent in August from July

The U.S Dollar rallied from an earlier low as sterling fell after reports that Northern Ireland’s Democratic Unionist Party (DUP) will back an amendment that would stop the Irish border backstop plan. The proposed amendment from a group of pro-Brexit MPs from within Theresa May’s ruling Conservative party would effectively make the European Union’s Irish border backstop proposal illegal. The U.S dollar index, which tracks the greenback against a basket of other currencies, rose 0.33% to 95.76. Meanwhile GBP/USD fell 0.80% to a two-week low of 1.2975. The dollar rose against the yen, with USD/JPY gaining 0.21% to 112.78. The euro was also lower, after Italy’s Deputy Prime Minister Luigi Di Maio said that if the commission reject Italy’s letter over their budget deficit there would still be weeks to discuss the budget with them. Investors remain wary over the disagreement between Italy’s government and the EU over Rome’s 2019 draft budget, which the European Commission has rejected as a breach of EU laws. Ratings agency Moody’s downgraded Italy’s credit rating on Friday, but maintained a stable rating. The Japanese yen edged lower yesterday. Japanese policymakers are keeping a close eye on the strained relations between China and the U.S., as the trade war between the two economic giants shows no signs of abating. The U.S Treasury Department released its semi-annual report on foreign exchange rates, and there was some relief in the markets as the report did not name China as a currency manipulator. Still, the report said that the U.S was “deeply disappointed’ with that China refuses to disclose the extent of its foreign currency intervention. The British pound fell on news that Brexit negotiations with the European Union over Northern Ireland remain in flux and as the euro continued its slide on political uncertainty over Italy’s budget. Prime Minister Theresa May on Monday said that 95 percent of Britain’s Brexit deal has been agreed to but repeated her opposition to an EU proposal for the Irish border. The Canadian dollar edged lower yesterday. Canadian wholesale trade decreased by 0.1 percent in August from July as weaker sales in the building material and supplies.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
03:00 RBA’s Bullock speaks on panel in Sydney Low      
04:30 RBA’s Debelle speaks on panel in Sydney Low      
05:30 Japan Nationwide Department Store Sales (YoY) (SEP) Low     -0.2%
06:00 Japan Machine Tool Orders (YoY) (SEP) Low     2.8%
06:00 German Producer Price Index (YoY) (SEP) Low   3.0% 3.1%
10:00 U.K CBI Trends Selling Prices (OCT) Low   15 13
10:00 U.K CBI Business Optimism (OCT) Low   -4 -3
10:30 BOE Chief Economist Haldane Speaks in Paris Low      
13:30 U.S Fed’s Kashkari Speaks at Early Childhood Development Event Low      
14:00 U.S Richmond Fed Manufact. Index (OCT) Low   24 29
14:00 Euro-Zone Consumer Confidence (OCT) Medium   -3.2 -2.9
15:20 BOE’s Carney Speaks at a Conference High      
23:30 Nikkei Japan PMI Manufacturing (OCT) Medium     52.5

 

Euro

The single currency failed to hold early-session gains as investors focused on the likelihood of further political uncertainty in Europe over Italy’s spending plans, despite a large drop in Italian government borrowing costs. Rating agency Moody’s downgraded Italy’s credit rating on Friday but unexpectedly kept the outlook at stable. Overall, the EUR/USD traded with a low of 1.1454 and a high of 1.1548 before closing the day around 1.1463 in the New York session.

 

Yen

The Japanese Yen edged lower yesterday. Japanese All Industries Activity improved 0.5%, up from 0.0% month earlier. The reading was a shade better than the estimate of 0.4%. Today, Japan releases Core CPI, the preferred indicator of the BOJ. Japanese policymakers are keeping a close eye on the strained relations between China and the U.S. Overall, the USD/JPY traded with a low of 112.33 and a high of 112.86 before closing the day around 112.80 in the U.S session.

 

British Pound

The British Pound posted strong losses yesterday. On the release front, there were no British or U.S events. Today, the U.K releases CBI Industrial Order Expectations and the U.S publishes the Richmond Manufacturing Index. Brexit negotiations appear deadlocked, although Prime Minister May sounded surprisingly upbeat about the status of the talks. Overall, the GBP/USD traded with a low of 1.2954 and a high of 1.3088 before closing the day at 1.2964 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged lower against its U.S counterpart in yesterday’s session as the greenback broadly rose and domestic data showed a surprise dip in wholesale trade, while a Bank of Canada interest rate decision was due later in the week. Canadian wholesale trade decreased by 0.1 per cent in August from July. Overall, USD/CAD traded with a low of 1.3077 and a high of 1.3124 before closing the day at 1.3097 in the New York session.

 

Australian Dollar

The Australian Dollar weakened after the government appeared on course to lose its one-seat majority in parliament and as the U.S criticized China’s response to efforts at de-escalating the so called trade war between the world’s two largest economies, but one trader says to buy the currency. Australia’s Liberal Party lost its majority in the House of Representatives Saturday. Overall, AUD/USD traded with a low of 0.7074 and a high of 0.7123 before closing the day at 0.7083 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 bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 44 and lies below the neutral zone. In general, the pair has lost 0.24%.

 

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 45 reading and lies below the neutral zone. On the whole, the pair has lost 0.53%.

  

Aussie-Yen

Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is indicating a bearish stance. The Relative Strength Index is above 44 reading and lies below the neutral region. In general, the pair has lost 0.27%.

 

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 also issuing a bullish signal. The Relative Strength Index is above 50 and lies above the neutral region. On the whole, the pair has gained 0.29%.

 

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 51 and lies above the neutral region. In general, the pair has lost 0.75%.

 

Appendix

  

FOREX Closing Prices for October 22, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1513 1.15488 1.14544 1.14632 -0.0058
USD/JPY 112.441 112.867 112.332 112.804 0.3000
GBP/USD 1.30715 1.30882 1.29544 1.29641 -0.0104
USD/CHF 0.99611 0.99783 0.9938 0.99589 0.0004
USD/CAD 1.31023 1.31242 1.3077 1.30978 -0.0007
EUR/JPY 129.471 130.179 129.18 129.317 -0.3140
GBP/JPY 146.992 147.556 146.017 146.256 -0.7840
CHF/JPY 112.85 113.395 112.663 113.235 0.2550
AUD/JPY 80.041 80.282 79.612 79.866 -0.2170
EUR/GBP 0.88058 0.88552 0.88043 0.88393 0.0025
EUR/CHF 1.14696 1.14989 1.14148 1.14167 -0.0053
GBP/CHF 1.30217 1.30326 1.29078 1.29131 -0.0098

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1334 1.1394 1.1429 1.1489 1.1523 1.1583 1.1618
USD/JPY 111.93 112.13 112.47 112.67 113.00 113.20 113.54
GBP/USD 1.2782 1.2868 1.2916 1.3002 1.3050 1.3136 1.3184
USD/CHF 0.9898 0.9918 0.9939 0.9958 0.9979 0.9999 1.0019
USD/CAD 1.3028 1.3052 1.3075 1.3100 1.3122 1.3147 1.3170
EUR/JPY 127.94 128.56 128.94 129.56 129.94 130.56 130.94
GBP/JPY 144.12 145.07 145.66 146.61 147.20 148.15 148.74
CHF/JPY 112.07 112.37 112.80 113.10 113.53 113.83 114.26
AUD/JPY 78.89 79.25 79.56 79.92 80.23 80.59 80.90
EUR/GBP 0.8760 0.8782 0.8811 0.8833 0.8862 0.8884 0.8912
EUR/CHF 1.1304 1.1359 1.1388 1.1443 1.1472 1.1528 1.1556
GBP/CHF 1.2745 1.2826 1.2870 1.2951 1.2995 1.3076 1.3119

 

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

 

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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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