14 九月 2018

FOREX Newsletter

           

FOREX Newsletter

September 14, 2018
 

 

Pulse of the Market

·      Consumer prices in the U.S rose less than expected, increasing 0.2% compared to a gain of 0.3%

·      Inflation numbers came just a day after data showed the producer price index fell 0.1% last month

·      The euro and sterling rallied after the Bank of England and European Central Bank kept rates steady

·      The ECB kept its deposit rate at -0.40% and expects its asset purchase program to end in December

Investors sent EUR/USD to its highest level this month on the back of the European Central Bank’s monetary policy announcement. Considering that Euro was trading strongly ahead of the rate decision, it didn’t take much for the currency pair to hit 1.17 and now that it has many traders are wondering if they should fade or follow the move. Market sentiment and positioning is very important when it comes to trading major event risks. Had the euro been hovering near this month’s low ahead of the rate decision, traders would have latched on to the central bank’s lower economic projections. However, the possibility of a GDP downgrade was leaked yesterday, giving investors the opportunity to discount the central bank’s move. The recent decline in Italian bond yields also helped euro stabilize this week. So when the softer US consumer price index was released, EUR/USD popped higher and extended its gains to 1.1700. Traders, who were looking for a reason to cover their shorts focused on the positive elements of Draghi’s comments. They were happy that he had anything positive to say at all and relieved there was no mention of the data disappointments in Germany and Italy. Sterling also traded higher today but not as a result of the Bank of England’s monetary policy announcement. GBP/USD actually weakened slightly after the central bank voted unanimously to leave interest rates unchanged. Their decision wasn’t a surprised considering that they had just raised interest rates in August. The BoE expects inflation to ease next year due to an energy price cap but pay could be stronger due to a healthy labor market. Ongoing tightening will be needed according to the central bank but future rate hikes will be limited and gradual. It wasn’t until the release of U.S CPI that GBP/USD started to strengthen. The pair eventually broke above 1.31 on the back of the ECB’s optimism and the general weakness of the U.S dollar. Looking ahead, Brexit negotiations continue to go well and we think that they will carry GBP/USD to 1.32. The Australian and New Zealand dollars stretched higher while the Canadian dollar held back. AUD and NZD benefitted from the general improvement in risk appetite and last night’s stronger than expected labor market report.

 

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
02:00 China Retail Sales (YoY) (AUG) Medium   8.8% 8.8%
02:00 China Industrial Production (YoY) (AUG) Medium   6.1% 6.0%
04:30 Japan Industrial Production (YoY) (JUL) Medium      
10:00 BOE’s Carney Speaks in Dublin High      
12:30 U.S Retail Sales Advance (MoM) (AUG) High   0.4% 0.5%
12:30 U.S Retail Sales Ex Auto and Gas (AUG) Medium   0.5% 0.6%
12:30 U.S Import Price Index ex Petroleum (MoM) (AUG) Medium   -0.1% -0.1%
12:30 U.S Export Price Index (YoY) (AUG) Medium     4.3%
13:15 U.S Industrial Production (MoM) (AUG) Medium   0.3% 0.1%
14:00 U.S Business Inventories (JUL) Medium   0.5% 0.1%
14:00 U.S U. of Mich. Sentiment (SEP) High   96.8 96.2
17:00 Baker Hughes U.S. Rig Count (SEP 14) Medium     1048

 

Euro

The single currency has entered a period of correction off 2018 low, rallying up into an important zone. In fact, the major pair has just poked back above the very important resistance level for the first time since April, which if sustained, could officially result in this market transitioning from correction to uptrend. Overall, the EUR/USD traded with a low of 1.1607 and a high of 1.1699 before closing the day around 1.1688 in the New York session.

 

Yen

The Japanese Yen pair posted gains erasing the losses seen on Wednesday. In economic news, Japanese Core Machinery Orders jumped 11.0%, its sharpest gain since January 2016. Japanese PPI ticked lower to 3.0%, just shy of the forecast of 3.1%. In the U.S, key consumer inflation reports missed their mark. CPI came in at 0.2%, shy of the estimate of 0.3%. Overall, the USD/JPY traded with a low of 111.15 and a high of 111.98 before closing the day around 111.90 in the U.S session.

 

British Pound

The British Pound rallied to the highest level against the dollar since August as the U.K pledged to provide information that could help solve a stand-off with the European Union over the Irish border. Sterling has been buffeted by Brexit headlines in recent sessions, oscillating between gains and losses in volatile trading. Overall, the GBP/USD traded with a low of 1.3024 and a high of 1.3122 before closing the day at 1.3103 in the New York session.

 

Canadian Dollar

The Canadian Dollar firmed to a two-week high against its U.S counterpart yesterday as tamer-than-expected U.S. inflation data weighed on the greenback, offsetting a pullback in crude oil prices. The greenback fell to a near 1-1/2-month low against a basket of currencies after data showed U.S consumer prices increased less than expected.  Overall, USD/CAD traded with a low of 1.2973 and a high of 1.3023 before closing the day at 1.2997 in the New York session.

 

Australian Dollar

The Australian Dollar is paying for the sins of others as investors short the commodity-exposed currency to 2-1/2-year low as a hedge against risks to global trade, China and emerging markets. Yet having the world’s whipping boy currency is ironically just what Australia needs right now as it faces falling home prices, moribund wages and stubbornly low inflation. Overall, AUD/USD traded with a low of 0.7165 and a high of 0.7227 before closing the day at 0.7189 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 62 and lies above the neutral zone. In general, the pair has gained 1.17%.

 

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 64 reading and lies above the neutral zone. On the whole, the pair has gained 1.05%.

  

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 above491 reading and lies below the neutral region. In general, the pair has gained 0.86%.

  

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 also issuing a bearish signal. The Relative Strength Index is above 43 and lies below the neutral region. On the whole, the pair has gained 0.09%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 48 and lies below the neutral region. In general, the pair has lost 0.11%.

 

Appendix

  

FOREX Closing Prices for September 13, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1625 1.16996 1.16077 1.16886 0.0064
USD/JPY 111.28 111.98 111.151 111.909 0.6670
GBP/USD 1.30428 1.31221 1.30245 1.31037 0.0059
USD/CHF 0.97055 0.97078 0.96499 0.96527 -0.0053
USD/CAD 1.29935 1.30233 1.29738 1.29976 0.0001
EUR/JPY 129.389 130.919 129.237 130.836 1.5070
GBP/JPY 145.167 146.793 144.991 146.67 1.5300
CHF/JPY 114.632 115.978 114.543 115.913 1.3370
AUD/JPY 79.757 80.77 79.671 80.431 0.6870
EUR/GBP 0.89113 0.89283 0.88911 0.89177 0.0008
EUR/CHF 1.12841 1.13133 1.12597 1.12835 -0.0003
GBP/CHF 1.26589 1.26869 1.26259 1.26506 -0.0014

  

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1539 1.1573 1.1631 1.1665 1.1723 1.1757 1.1815
USD/JPY 110.55 110.85 111.38 111.68 112.21 112.51 113.04
GBP/USD 1.2947 1.2986 1.3045 1.3083 1.3142 1.3181 1.3240
USD/CHF 0.9575 0.9612 0.9632 0.9670 0.9690 0.9728 0.9748
USD/CAD 1.2924 1.2949 1.2973 1.2998 1.3023 1.3048 1.3072
EUR/JPY 128.06 128.65 129.74 130.33 131.42 132.01 133.11
GBP/JPY 143.71 144.35 145.51 146.15 147.31 147.95 149.11
CHF/JPY 113.54 114.04 114.98 115.48 116.41 116.91 117.85
AUD/JPY 78.71 79.19 79.81 80.29 80.91 81.39 82.01
EUR/GBP 0.8859 0.8875 0.8896 0.8912 0.8934 0.8950 0.8971
EUR/CHF 1.1204 1.1232 1.1258 1.1286 1.1311 1.1339 1.1365
GBP/CHF 1.2561 1.2593 1.2622 1.2654 1.2683 1.2715 1.2744

 

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.