24 10 月 2018

FOREX Newsletter

FOREX Newsletter

October 24, 2018

 

Pulse of the Market

·      The Yen strengthened yesterday as a slew of geopolitical risk factors bolstered safe haven demand

·      The euro fell after the European Commission rejected Italy’s 2019 budget

·      The British Pound traded up in the European session before retracing those gains later in the day

·      The Canadian dollar traded sideways within a well-defined range yesterday

The U.S Dollar fell yesterday after Wall Street opened lower, spurring a risk-off move that benefited the safe-haven Japanese yen and Swiss franc against the greenback. The stock market has everyone’s attention. The dollar/yen is moved tick-to-tick with stocks. Although the dollar is also considered a safe-haven currency, weakness in U.S. markets will nevertheless disadvantage the greenback against other safe havens. Markets are starting to wonder if the good times generated from Trump’s tax cuts and deregulation are in the rear view mirror and what’s ahead is fallout from protectionist policies, and that has started to eat into corporate earnings. The euro fell after the European Commission rejected Italy’s 2019 budget and said it will ask Rome to present a new document within three weeks, according to reports from Italian news agency AGI, citing EU sources. The dispute over Italy’s spending plans and doubts about the leadership of Britain’s prime minister, who is mired in a stalemate over Brexit, has investors focusing on the likelihood of further political turmoil in Europe. Worries about Italy’s spending have bred some doubt about the European Central Bank’s plan to raise interest rates next summer, and that too has hurt the euro. Britain’s pound traded up in the European session before retracing those gains after falling precipitously on Monday over fears that the Northern Ireland border issue and disagreements within Britain’s ruling Conservatives over Brexit could cause Prime Minister Theresa May to face a serious leadership challenge. The yen strengthened yesterday as a slew of geopolitical risk factors bolstered safe haven demand for the Japanese currency, while the dollar dipped against a currency basket. A rally in Chinese equities reversed overnight, pulling down European stocks and U.S futures amid renewed worries over a host of economic and geopolitical issues. Concerns over the U.S.-China trade war and political uncertainty in Europe also weighed. The Japanese currency is often sought by investors for its relative safety during periods of economic or geopolitical uncertainty.

 

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
07:30 Markit/BME Germany Manufacturing PMI (OCT) Medium   53.4 53.7
07:30 Markit Germany Services PMI (OCT) Medium   55.5 55.9
08:00 Markit Eurozone Manufacturing PMI (OCT) Medium   53 53.2
08:00 Markit Eurozone Services PMI (OCT) Medium   54.5 54.7
08:30 U.K BBA Loans for House Purchase (SEP) Medium   39000 39402
11:00 U.S MBA Mortgage Applications (OCT 19) Medium     -7.1%
13:00 U.S House Price Index (MoM) (AUG) Medium   0.3% 0.2%
13:45 Markit US Manufacturing PMI (OCT) Medium   55.5 55.6
13:45 Markit US Services PMI (OCT) Medium   54 53.5
14:00 Bank of Canada Rate Decision (OCT 24) High   1.75% 1.50%
14:00 U.S New Home Sales (MoM) (SEP) Medium   -0.6% 3.5%
14:30 DOE U.S. Crude Oil Inventories (OCT 19) Medium   3000k 6490k
18:00 U.S. Federal Reserve Releases Beige Book Medium      
21:45 New Zealand Trade Balance (SEP) Medium   -1365m -1484m

 

Euro

The single currency ended yesterday’s session slightly higher. Euro zone consumer sentiment rose slightly in October, against expectations of a decline, according to figures released yesterday. The European Commission said a flash estimate showed euro zone consumer morale increased to -2.7 points in October from -2.9 points in September. Overall, the EUR/USD traded with a low of 1.1438 and a high of 1.1492 before closing the day around 1.1469 in the New York session.

 

Yen

The Japanese Yen pair came under a renewed selling pressure in the early trading hours yesterday and fell to a fresh five-day low before recovering slightly. With the flight-to-safety becoming the primary driver of the market action yesterday, the JPY stays strong against its peers. The US Dollar Index continues to fluctuate in a tight range Overall, the USD/JPY traded with a low of 111.93 and a high of 112.82 before closing the day around 112.42 in the U.S session.

 

British Pound

The British Pound rallied to the top of the leaderboard yesterday as the pendulum swung back in favor of a Brexit deal being struck by year-end. The British Pound remains highly attuned to sentiment on Brexit talks, and news of progress inevitably has seen the currency attract a bid. The market is again showing Brexit deal optimism. Overall, the GBP/USD traded with a low of 1.2935 and a high of 1.3042 before closing the day at 1.2928 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged lower earlier yesterday as oil and stock prices declined, although the loonie traded in a narrow range ahead of a Bank of Canada interest rate decision today. Canada runs a current account deficit and exports many commodities, including oil, so its economy could be hurt if the global flow of trade or capital slows. Overall, USD/CAD traded with a low of 1.3073 and a high of 1.3120 before closing the day at 1.3081 in the New York session.

 

Australian Dollar

The Australian Dollar has endured a soft start to the week after the government lost a 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. Australia’s ruling coalition lost its majority in the House of Representatives Saturday. Overall, AUD/USD traded with a low of 0.7053 and a high of 0.7088 before closing the day at 0.7086 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 41 and lies below the neutral zone. In general, the pair has lost 0.27%.

 

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 43 reading and lies below the neutral zone. On the whole, the pair has lost 0.20%.

 

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 41 reading and lies below the neutral region. In general, the pair has lost 0.29%.

  

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 49 and lies above the neutral region. On the whole, the pair has lost 0.06%.

 

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 gained 0.01%.

 

Appendix

  

FOREX Closing Prices for October 23, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.14644 1.14923 1.14381 1.14697 0.0007
USD/JPY 112.807 112.822 111.934 112.424 -0.3800
GBP/USD 1.29589 1.30425 1.29352 1.29822 0.0018
USD/CHF 0.99577 0.99687 0.9936 0.9947 -0.0012
USD/CAD 1.30988 1.312 1.30737 1.30817 -0.0016
EUR/JPY 129.341 129.357 128.189 128.966 -0.3510
GBP/JPY 146.227 146.38 145.265 145.967 -0.2890
CHF/JPY 113.247 113.275 112.454 112.991 -0.2440
AUD/JPY 79.585 79.884 79.01 79.637 -0.2290
EUR/GBP 0.88408 0.88457 0.87964 0.88338 -0.0005
EUR/CHF 1.14171 1.14278 1.1395 1.14103 -0.0006
GBP/CHF 1.29083 1.29801 1.28912 1.29144 0.0001

 

  

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1387 1.1413 1.1441 1.1467 1.1495 1.1521 1.1550
USD/JPY 111.08 111.51 111.96 112.39 112.85 113.28 113.74
GBP/USD 1.2823 1.2879 1.2931 1.2987 1.3038 1.3094 1.3145
USD/CHF 0.9900 0.9918 0.9932 0.9951 0.9965 0.9983 0.9998
USD/CAD 1.3017 1.3046 1.3064 1.3092 1.3110 1.3138 1.3156
EUR/JPY 127.15 127.67 128.32 128.84 129.49 130.01 130.65
GBP/JPY 144.25 144.76 145.36 145.87 146.48 146.99 147.59
CHF/JPY 111.72 112.09 112.54 112.91 113.36 113.73 114.18
AUD/JPY 78.26 78.64 79.14 79.51 80.01 80.38 80.88
EUR/GBP 0.8756 0.8776 0.8805 0.8825 0.8854 0.8875 0.8904
EUR/CHF 1.1361 1.1378 1.1394 1.1411 1.1427 1.1444 1.1460
GBP/CHF 1.2788 1.2840 1.2877 1.2929 1.2966 1.3017 1.3055

 

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

 

Disclaimer

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