31 10 月 2018

FOREX Newsletter

FOREX Newsletter

October 31, 2018

 

Pulse of the Market

·      Stronger than expected consumer confidence helped sustain the Greenback’s gains

·      The BOE will release its Quarterly Inflation Report with a monetary policy announcement

·      German Chancellor’s decision to step down in 2021 has made it difficult for EURO to rally

·      The Australian Dollar hit an 8 day high ahead of this evening’s third quarter inflation report

The U.S Dollar traded higher against all of the major currencies except for the Australian and New Zealand dollars. Stronger than expected consumer confidence helped sustain the greenback’s gains but the bulk of rally occurred well before the data was released. Instead, it was the uptick in US bond yields, softer Eurozone data and BoE concerns that prevented EUR, GBP and JPY from rallying. The recovery in US stocks today was strong but the late day move was not driven by the consumer confidence index which hit an 18 year high. Weaker Eurozone data and German Chancellor Merkel’s decision to step down as chancellor in 2021 has made it difficult for EURO to rally. Not only did Eurozone confidence fall across the board with the business climate, industrial confidence and services confidence slipping but GDP growth also slowed unexpectedly in Q3. Economists had been looking for growth to remain steady at 0.4%, but instead the regional economy expanded by half that amount (0.2%) between July and September. Inflation is still on the rise according to German CPI but the lack of growth makes Draghi’s optimism a hard sell. Its time to turn your focus to the British pound because today, the Bank of England will release its Quarterly Inflation Report in conjunction with a monetary policy announcement. They are not expected to change interest rates but changes to their economic projections and the overall tone of the report will have a significant impact on the currency. Sterling dropped to a 2 month low versus the U.S. dollar today as the BoE’s Quarterly Inflation report and Governor Carney’s comments will determine whether the currency falls through its August lows or turns higher from here.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:01 U.K GfK Consumer Confidence (OCT) Medium -10 -10 -9
00:30 Australia Consumer Prices Index (YoY) (3Q) High 1.9% 1.9% 2.1%
01:00 China Non-manufacturing PMI (OCT) Medium 53.9 54.6 54.9
01:00 China Manufacturing PMI (OCT) High 50.2 50.6 50.8
03:08 BOJ Outlook Report High      
03:08 BOJ Rate Decision (OCT 31) High -0.10% -0.10% -0.10%
03:08 BOJ 10-Yr Yield Target (OCT 31) High 0.00% 0.00% 0.00%
05:00 Japan Consumer Confidence Index (OCT) Medium 43.0 43.5 43.4
05:00 Japan Housing Starts (YoY) (SEP) Medium -1.5% -0.8% 1.6%
07:00 German Retail Sales (YoY) (SEP) Medium -2.6% 1.0% 1.6%
10:00 Euro-Zone Unemployment Rate (SEP) Medium   8.1% 8.1%
10:00 Euro-Zone Consumer Price Index Core (YoY) (OCT) High   1.1% 0.9%
11:00 U.S MBA Mortgage Applications (OCT 26) Medium     4.9%
12:15 U.S ADP Employment Change (OCT) Medium   187k 230k
12:30 Canada Gross Domestic Product (YoY) (AUG) High   2.4% 2.4%
13:45 U.S Chicago Purchasing Manager (OCT) Medium   60 60.4
14:30 DOE U.S Crude Oil Inventories (OCT 26) Medium   3106K 6346k

 

Euro

The single currency has entered the new week on its back foot after the outcome of another regional election in Germany saw the single currency’s political headache turn into a migraine yesterday. The Euro has had a volatile start to the week, with the news that Angela Merkel is likely to leave her post in December shaking confidence in the region. Overall, the USD/JPY traded with a low of 1.1339 and a high of 1.1386 before closing the day around 1.1342 in the New York session.

 

Yen

The Japanese Yen posted considerable losses in yesterday’s session, erasing Friday’s gains. On the release front, Japanese retail sales posted a strong gain of 2.1%, matching the forecast. In the U.S, the Core PCE Price Index gained 0.2%, edging above the estimate of 0.1%. Personal spending edged up to 0.4%, matching the forecast. Overall, the USD/JPY traded with a low of 112.28 and a high of 113.10 before closing the day around 113.09 in the U.S session.

 

British Pound

The British Pound fell against the U.S Dollar since breaching 1.2850 in late London and at the start of the North America trade as the dollar and risk appetite firms up. The Dollar has been finding a bid again with US stock markets battling back lost ground on Monday, following suit of a bounce in European bourses. . Overall, the GBP/USD traded with a low of 1.2694 and a high of 1.2810 before closing the day at 1.2704 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged lower yesterday, trading in a narrow range as stocks rose and oil prices declined. Canada runs a current account deficit and exports many commodities, including oil, so its economy tends to benefit when capital flows freely. Still, concern over the global economy put crude on track for its biggest monthly fall since mid-2016. Overall, USD/CAD traded with a low of 1.3098 and a high of 1.3145 before closing the day at 1.3108 in the New York session.

 

Australian Dollar

The Australian Dollar started the week lower against the U.S Dollar. Aussie has been hammered as risk sentiment took a knock following weakness in the Chinese Yuan. The RBA has held rates at 1.5 per cent since mid-2016 and markets imply only a 50-50 chance of a hike by December next year. Overall, AUD/USD traded with a low of 0.7019 and a high of 0.7102 before closing the day at 0.7088 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 36 and lies below the neutral zone. In general, the pair has gained 0.41%.

 

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 35 reading and lies below the neutral zone. On the whole, the pair has lost 0.02%.

   

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 39 reading and lies below the neutral region. In general, the pair has gained 1.36%.

  

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 58 and lies above the neutral region. On the whole, the pair has gained 0.44%.

  

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 45 and lies above the neutral region. In general, the pair has lost 0.34%.

 

Appendix

  

FOREX Closing Prices for October 30, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13714 1.13865 1.13391 1.13428 -0.0029
USD/JPY 112.355 113.102 112.285 113.099 0.7510
GBP/USD 1.27964 1.28107 1.2694 1.27042 -0.0087
USD/CHF 1.00162 1.00504 1.00065 1.00504 0.0033
USD/CAD 1.31314 1.3145 1.30982 1.3108 -0.0024
EUR/JPY 127.776 128.416 127.712 128.305 0.5280
GBP/JPY 143.796 144.367 143.189 143.712 -0.0240
CHF/JPY 112.148 112.741 112.073 112.495 0.3660
AUD/JPY 79.265 80.342 79.233 80.338 1.0780
EUR/GBP 0.88846 0.89377 0.8881 0.89265 0.0039
EUR/CHF 1.13905 1.14167 1.13685 1.14021 0.0010
GBP/CHF 1.28181 1.28354 1.27529 1.27714 -0.0043

  

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1278 1.1309 1.1326 1.1356 1.1373 1.1404 1.1421
USD/JPY 111.74 112.01 112.56 112.83 113.37 113.65 114.19
GBP/USD 1.2545 1.2620 1.2662 1.2736 1.2779 1.2853 1.2895
USD/CHF 0.9977 0.9992 1.0021 1.0036 1.0065 1.0080 1.0109
USD/CAD 1.3042 1.3070 1.3089 1.3117 1.3136 1.3164 1.3183
EUR/JPY 127.17 127.44 127.87 128.14 128.58 128.85 129.28
GBP/JPY 141.97 142.58 143.15 143.76 144.32 144.93 145.50
CHF/JPY 111.46 111.77 112.13 112.44 112.80 113.10 113.47
AUD/JPY 78.49 78.86 79.60 79.97 80.71 81.08 81.82
EUR/GBP 0.8836 0.8858 0.8892 0.8915 0.8949 0.8972 0.9006
EUR/CHF 1.1327 1.1348 1.1375 1.1396 1.1423 1.1444 1.1471
GBP/CHF 1.2655 1.2704 1.2738 1.2787 1.2820 1.2869 1.2903

 

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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