Analyst Articles – Forex News 24

UK GDP Up 0.2% in February, GBP Price Depends on Brexit Extension Talks
Oil Prices Most Overbought Since Q4 Crash
Yen, US Dollar May Rise as Grim ECB, FOMC Sour Market Mood
Norwegian Krone, Swedish Krona Eyeing Brexit, ECB, FOMC
March Fed Meeting Minutes & EURUSD Price Outlook
Crude Oil Prices May Fall on ECB, FOMC Global Slowdown Fears
Euro Shivers, Dax and S&P 500 Fall on IMF Outlook, Italy Growth
S&P 500 Breaks Most Consistent Bull Trend in 15 Years, Ready for EURGBP Shock
US Dollar to Gain Versus Malaysian Ringgit? USDPHP, USDIDR May Fall
March US Consumer Price Index & USDJPY Price Outlook

UK GDP Up 0.2% in February, GBP Price Depends on Brexit Extension Talks

Posted: 10 Apr 2019 02:32 AM PDT

UK GDP, Brexit and GBP price: news and analysis:

UK GDP was up 0.2% in February month/month, better than the expected flat reading but still suggesting that the Brexit stalemate is holding the UK economy back.
Theresa May will seek a short-term Brexit extension today but the EU will likely insists on a longer one.
That could shift the GBPUSD price out of its recent narrow trading range but in which direction is debatable.

UK economy grows 0.2% in February

The UK economy grew by 0.2% month/month in February, with the latest monthly data showing GDP growth above the expected 0.0% but below the previous month's 0.5%. That lifted year/year growth to 2.0% from an upwardly revised 1.5%. The three-month/three month growth rate was a same-again 0.3%

The data suggest that Brexit uncertainty is weighing only mildly on UK GDP but, for GBP traders, the principal driver of GBP prices near-term will be the outcome of talks today between the UK and the EU on a possible Brexit extension.

At today's Summit, the key question is whether the EU will grant the UK a Brexit delay and, if so, for how long. UK Prime Minister Theresa May will seek an extension to June 30 but the EU is expected to insist on a longer delay, perhaps to the year-end or even next Spring.

In the political jargon, a "flextension" – where the leaving date depends on circumstances – is also possible, probably with conditions attached. As talks between May and Opposition leader Jeremy Corbyn are still showing few signs of progress, the EU will likely question whether a short delay will serve any purpose unless a way can be found in the UK to exit the Brexit maze.

GBPUSD Price Chart, 30-Minute Timeframe (April 4-10, 2019)

Chart by IG (You can click on it for a larger image)

For GBP traders, the key question is whether GBPUSD will break out from its recent narrow trading range between just under 1.30 and just above 1.31 but for now there is little sign of a strong move one way or the other.

As for the latest UK economic data, that also showed better-than-expected increases in industrial production, manufacturing output and construction. However, the deficit on trade in goods was worse than economists had predicted.

The GDP growth rate was the highest year/year since November 2017, perhaps due to pre-Brexit stockpiling.

Resources to help you trade the forex markets:

Whether you are a new or an experienced trader, at DailyFX we have many resources to help you:

— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

2019-04-10 09:00:00

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Oil Prices Most Overbought Since Q4 Crash

Posted: 10 Apr 2019 01:20 AM PDT

Oil Price Analysis and News

Oil Prices Gain Amid Rising Geopolitical Premium
WTI Crude Outperformance Over Brent Crude
Oil Waiver Extension Raises Prospect of Pullback

Oil Prices Gain Amid Rising Geopolitical Premium

In recent sessions crude oil prices have been edging higher with Brent crude futures most recently hitting a 5-month high having topped $71/bbl. This is largely unsurprising given that bullish catalysts continue to remain intact for oil prices despite the fears that global growth is slowing with the IMF yesterday cutting their forecast to the lowest since the financial crisis.

Oil sanctions on Iran and Venezuela continue to cripple oil supply in both nations with the latter likely to see supply south of 1mbpd with no end in sight for supply disruptions. While for Iran, tensions stepped up yet again after the US designated Iran's Revolutionary Guard as a foreign terrorist group. Elsewhere, the latest catalyst to propel oil prices higher had been due to the escalation of fighting in Libya. Although oil supply and exports have yet been impacted, it has been enough to take crude oil to 5-month highs. Alongside this, union strikes at Shell's Pernis refinery (largest in Europe, with a capacity of 404kbpd) have also added to the bullish sentiment with Shell stating that 65% of output will be impacted.

WTI Crude Outperformance Over Brent Crude

However, what is perhaps more surprising is that much of the gains have been seen in WTI as opposed to Brent, which in turn has seen the WTI/Brent narrow to $6.60. Some reasons for this had been due to the most recent Genscape cushing figures reporting a sizeable drawdown, while the WTI curve had also moved into backwardation. Although, given yesterday's larger than expected build in the API report (4.09mln vs. Exp. 2.3mln) eyes will turn towards today's DoE crude inventory report.

Oil Waiver Extension Raises Prospect of Pullback

As it stands, oil prices are now the most overbought (on RSI) since the Q4 crash which may signal that upside may be somewhat stretched, particularly as oil continues to move into President Trump's tweeting zone, while the expiration of the current oil waivers draws closer (expiration early May). Currently, Japan and India have reported that they have halted their purchases of Iranian crude for May as they await further clarity on Iran oil waivers. If indeed the Trump administration allow for an extension, this could moderate the upside seen in oil. However, with Trump's determination to bring Iranian exports to zero, a decision to not offer an extension could see the next wave of buying in in crude with a move towards $75 on the cards, provided Brent breaks above resistance at $72.50.

BRENT CRUDE OIL DAILY TIME FRAME (AUG 2018 – APR 2019)

Please add a description for the image.

Oil Impact on FX

Net Oil Importers: These countries tend to be worse off when the price of oil rises. This includes, KRW, ZAR, INR, TRY, EUR, CNY, IDR, JPY

Net Oil Exporters: These counties tend to benefit when the price of oil rises. This includes RUB, CAD, MXN, NOK.

TALKING POINTS – ECB, FOMC, YEN, US DOLLAR, EU SUMMIT, BREXIT, UK GDP, US CPI

Yen, US Dollar may rise as grim ECB and FOMC sour market mood
UK GDP and US CPI statistics might pressure risk sentiment further
EU leaders' summit to take up UK request for delaying Brexit date

Choppy price action prevailed across most of the G10 FX space in Asia Pacific trading hours as the markets braced for the week's most-anticipated event risk: the ECB rate decision and the publication of minutes from last month's FOMC meeting.

The Eurozone monetary authority surprised on the dovish side last month, delaying a rate hike at least through 2019 and introducing a fresh round of TLTRO bank liquidity injections. Fed officials were also decidedly downbeat, backing off from further rate hikes until 2020 and dialing back the pace of QT.

This points to a downbeat tone in incoming rhetoric. That may build on global slowdown fears revived by a grim IMF outlook update yesterday. If this triggers de-risking across financial markets, the anti-risk Yen and US Dollar may benefit while commodity bloc currencies bear the brunt of selling pressure.

UK GDP, US CPI DATA MAY COMPOUND RISK-OFF DYNAMICS

UK GDP and US CPI are also due. The former is expected to show growth stalled in February while the latter puts core inflation at 2.1 percent in March, unchanged from the prior month. The former may amplify risk-off dynamics. The latter is a worry too in that it may hint at limited scope for Fed easing.

EU LEADERS TO DEBATE BREXIT EXTENSION

Finally, an emergency EU leaders' summit will take up the question of delaying Brexit per the UK government's request. They may opt for a longer-term delay than the June 30 deadline proposed by Prime Minister May and approved by Parliament, triggering uproar in Westminster.

What are we trading? See the DailyFX team's top trade ideas for 2019 and find out!

CHART OF THE DAY – S&P 500 TECHNICAL SETUP WARNS OF DOWNTURN AHEAD

The bellwether S&P 500 stock index is tracing out a bearish Rising Wedge chart pattern. Negative RSI divergence bolsters the case for ebbing upside momentum while the apprance of an Evening Star candlestick pattern warns that topping might be imminent. The setup speaks to what may be a broad-based risk-off shift in market-wide sentiment trends just around the corner.

FX TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

2019-04-10 06:30:00

Norwegian Krone, Swedish Krona Eyeing Brexit, ECB, FOMC

Posted: 10 Apr 2019 12:03 AM PDT

TALKING POINTS – BREXIT DEAL, MONETARY POLICY, ECB RATE DECISION, FOMC

ECB, FOMC, Brexit main focus for NOK, SEK, global markets
How will slower European growth impact Nordic economies?
Norway CPI could be overshadowed by external event risks

See our free guide to learn how to use economic news in your trading strategy!

Global markets are in for a volatile day over the remaining 24 hours. The FOMC is preparing to release its meeting minutes, the ECB is announcing its next rate decision with commentary by Mario Draghi, and the EU's verdict on granting the UK government a Brexit extension is due. Because of the global impact from all of these potential market-disrupting factors, local Nordic data may as a result be overshadowed due to the focus on external event risks.

The release of the FOMC meeting minutes will reveal the Fed's outlook for monetary policy going forward, and what some of the board members' outlook is for global growth and how the central bank intends to respond. As outlined in my weekly Nordic fundamental outlook, if policymakers' forecasts are adequately pessimistic enough for them to believe a cut is warranted, it could result in a substantial amount of volatility.

The ECB will be releasing its interest rate decision with policymakers anticipating a hold, though commentary from Mario Draghi will likely be the market-moving event. At the last meeting it sent USD higher against all its major counterparts amid a heightened sense of risk aversion after the central bank cut inflation forecasts. Given the IMF's recent global growth forecast, it is likely the ECB will deliver a similar outlook.

Today the 27 EU member states decide on whether to grant the UK government a Brexit extension. The emergency summit was called by European Council President Donald Tusk who has also proposed allowing a one-year flexible exit date, permitting the UK to leave on or before the one-year mark. Were this to occur, the UK would likely have to participate in the upcoming European parliamentary elections.

In the Nordics, Sweden's Prospera inflation report is expected to be released with expectations that inflation will be lower than what Riksbank policymakers are hoping for. In Norway, CPI data will be published and is looking to outperform relative to economists' expectations. This may largely be due to part the recent recovery in crude oil prices.

Because of the Norwegian economy's heavy reliance on the petroleum sector, key benchmark assets – like the Krone and OBX equity index – closely track the movement in crude. This also leaves the country vulnerable to changes in global sentiment, a particularly important theme for Krone traders to keep in mind given the growing concern about waning global demand.

CHART OF THE DAY:

NORDIC TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

2019-04-10 06:30:00

March Fed Meeting Minutes & EURUSD Price Outlook

Posted: 09 Apr 2019 11:25 PM PDT

Talking Points:

– The minutes from the March Fed meeting is due on Wednesday, April 10 at 18:00 GMT.

– The March Fed meeting saw the FOMC eliminate plans to raises rates in 2019, as well as end its balance sheet reduction process sooner than expected.

– Retail traders remain net-long EURUSD, but recent positioning changes suggest that prices may mean that prices reverse higher soon.

Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.

04/10 WEDNESDAY | 18:00 GMT | USD March FOMC Meeting Minutes

The Federal Reserve's March meeting hit markets like an earthquake. Between the decision to eliminate the prospect of a 25-bps rate hike in 2019 as well as end the balance sheet reduction process later this year, traders were caught off guard. Citing a weakening economic backdrop in the United States thanks to the US government shutdown, coupled with a challenging global environment weighed down by trade tensions, the Fed took what some may consider a surprisingly dovish stance.

Significant dislodgements across asset classes – currencies, bonds, equities, commodities – led to the most volatile day of price action in all of 2019. Yet no less than 48-hours after the March Fed meeting, the FX markets kicked into reverse and saw all the Fed-induced US Dollar losses unwind.

In the weeks since, US growth expectations have continued to rebound, up from 0.5% annualized on the day of the March Fed meeting to 2.1% on April 5, according to the Atlanta Fed GDPNow Q1'19 growth tracker (the NY Fed Nowcast is less bull, at 1.5%). As such, the rationale behind the Fed's latest decisions will come under a microscope this Wednesday; in turn, greater than normal volatility in USD-pairs should be anticpated.

Pairs to Watch: DXY Index, EURUSD, USDJPY, Gold

EURUSD Price Chart: Daily Timeframe (December 2017 to April 2019) (Chart 1)

EURUSD’s turn higher from last week has seen price settle near its daily 21-EMA ahead of the Fed minutes. While both daily MACD and Slow Stochastics remain in bearish territory, they have turned higher, continuing to work off divergences between price and the indicators. Put in context of the DXY Index’s bearish evening star candle cluster, there may still be upside in EURUSD yet.

IG Client Sentiment Index: EURUSD (April 10, 2019) (Chart 2)

Retail trader data shows 63.5% of traders are net-long with the ratio of traders long to short at 1.74 to 1. In fact, traders have remained net-long since Mar 26 when EURUSD traded near 1.12738; price has moved 0.1% lower since then. The number of traders net-long is 1.6% lower than yesterday and 11.2% lower from last week, while the number of traders net-short is 0.1% higher than yesterday and 35.4% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EURUSD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EURUSD price trend may soon reverse higher despite the fact traders remain net-long.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX

2019-04-10 06:00:00

Crude Oil Prices May Fall on ECB, FOMC Global Slowdown Fears

Posted: 09 Apr 2019 10:40 PM PDT

CRUDE OIL & GOLD TALKING POINTS:

Crude oil prices lower on IMF outlook downgrade, Italy recession woes
Gold price rise stalls as risk aversion revives haven US Dollardemand
ECB policy call, FOMC minutes may keep markets in a defensive mood

Crude oil prices fell alongside stocks yesterday amid a broad-based deterioration in risk appetite. The bulk of the move played out after the IMF unveiled a grim global economic outlook update (as expected). Earlier worries EU-US trade war risk and a downgrade of Italy's growth outlook – along with its implications for renewed budgetary tensions between Rome and EU authorities – added to the downbeat mood.

Gold prices managed early gains as the US Dollar built on prior losses, but the move stalled as sentiment unraveled. The risk-off move revived haven demand for the benchmark currency, sapping the appeal of anti-fiat assets and capping gold's advance. A parallel drop in benchmark bond yields seemed to offer enough support to head off an outright selloff however.

CRUDE OIL MAY FALL ON DOWNBEAT ECB, FOMC MINUTES

Looking ahead, the ECB monetary policy announcement as well as the release of minutes last month's FOMC meeting are in focus. Grim rhetoric speaking to policymakers' deepening concerns about a downshift in the global business cycle may keep markets in a defensive stance. That seems to bode ill for oil. As before, the impact on gold will depend on the relative magnitude of divergent moves in bond rates and USD.

Elsewhere, industrial production figures from Italy, France and the UK as well as the monthly UK GDP report may inform global growth bets. US CPI is also on tap. A tendency to disappoint on recent macro news-flow warns of soft results that might pressure sentiment further. Finally, EIA inventory data is seen showing stockpiles added 2.5 million barrels last week. API flagged a larger 4.09-million-barrel rise yesterday.

See the latest gold and crude oil forecasts to learn what will drive prices in the second quarter!

GOLD TECHNICAL ANALYSIS

Broadly speaking, gold price positioning still suggests a bearish Head and Shoulders topping pattern is taking shape. Confirmation of the setup is still pending and would require a break below the pattern's neckline (now at 1283.53). A daily close above resistance in the 1303.70-09.12 area and the subsequent falling trend line set from the February 20 high – now at 1312.41 – is needed to invalidate near-term bearish cues.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices put in a Harami candlestick pattern below support-turned-resistance in the 63.59-64.88 area. This is a sign of indecision that may precede a downturn. A daiyy close below the $60/bbl figure would break the uptrend from late December and expose 57.24-88 zone. Alternatively, a push above 64.88 is followed almost immediately by another layer of resistance in the 66.09-67.03infection zone.

COMMODITY TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

2019-04-10 04:30:00

Euro Shivers, Dax and S&P 500 Fall on IMF Outlook, Italy Growth

Posted: 09 Apr 2019 09:24 PM PDT

TALKING POINTS – EURUSD, S&P500, DAX, ITALY GROWTH, BUDGET, IMF WORLD OUTLOOK

SPX and DAX fell on IMF and Italian econ growth outlooks
Italy budget deficit to widen – How will Brussels respond?
EU-US trade war to weigh on battered Eurozone economy

See our free guide to learn how to use economic news in your trading strategy!

EURUSD, along with S&P500 and DAX futures began to fall following the IMF's publication on the outlook for global growth being at its lowest point since the financial crisis. Risk aversion was further compounded by news that the Italian economy may only expand 0.1 percent (down from the 1.0 estimate) and the budget deficit forecast was widened to 2.5%, substantially larger than what Rome and Brussels had agreed upon.

DAX, S&P500 Futures, EURUSD – 15-Minute Chart

As forecasted in late 2018 and at the start of the year, the respite offered to markets by the fragile agreement between Rome and Brussels was an ethereal pause. The recessionary pressure and revised GDP numbers next to a bigger-than expected budget deficit could just be enough to push Brussels to reopen the budget case. This comes as the US pivots away from a trade conflict with China and appears to be now entering a new trade spat with the EU, another weight the economy will have to lift.

Looking ahead – specifically tomorrow – there are a number of major event risks. The ECB will be releasing its rate hike decision followed by a press conference with Mario Draghi. The commentary will likely echo a similar tone struck at the last meeting, only this time the urgency may be greater, and the outlook less certain.

Another European-based risk is the EU's verdict on whether to grant the UK an extension during the emergency summit in Brussels. Traders will also be eyeing the release of the FOMC meeting minutes, another major indicator to watch.

FX TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

2019-04-10 03:30:00

S&P 500 Breaks Most Consistent Bull Trend in 15 Years, Ready for EURGBP Shock

Posted: 09 Apr 2019 08:33 PM PDT

Growth Talking Points:

The IMF’s World Economic Outlook (WEO) lowered its 2019 global growth forecast 0.2 points to 3.3 percent with a long list of concerns
Trade wars was an issue the IMF weighed in on, but Trump’s threat of $11 bln in tariffs on the EU was uniquly troubling
If there were one currency pair at the center of volatility ahead, it would be EURGBP with an ECB decision and EU Summit on Brexit

What do the DailyFX Analysts expect from the Dollar, Euro, Equities, Oil and more through the 2Q 2019? Download forecasts for these assets and more with technical and fundamental insight from the DailyFX Trading Guides page.

IMF Downgrades Growth Forecast, Lists a Series of Concerns but Market Slow to Respond

Another overt warning flare was shot over the global economy this past session, and the markets seemed to finally bow somewhat to the growing concern. In the wake of last week’s disappointing May PMI figures and the World Trade Organization’s (WTO) sharp downgrade to its own GDP forecast, the International Monetary Fund (IMF) released its own update to the growth outlook for 2019. While not as severe as the WTO slash (3.7 to 2.6 percent), the 0.2 percentage point reduction to 3.3 percent marks a steady and unflattering downgrade to the potential of an economy that is fully funded by extreme monetary policy and contrasts speculative appetite that seems to price in perfection – if the Dow’s standings were our barometer. In addition to the broad and local downgrades to growth forecasts, the group’s WEO and Chief Economist would list a series of concerns for the future. The slowest pace of growth for China in decades and economic troubles for Europe highlights in the same vein. Yet, they list would venture into trade war and monetary policy risks – the two other themes that we have seen vie for the market’s control.

IMF's Growth Forecasts for Major Economies and Regions

S&P 500 Breaks Most Consistent Bull Trend in 15 Years, Ready for EURGBP Shock

The IMF suggested the Fed’s efforts to tighten monetary policy these past three years could translate into issues through a higher Dollar, pain for the emerging markets with exposure and potentially choke off growth and/or tip financial problems. Trade tensions was promoted as a principal concern for the future with the US-China negotiations and troubled USMCA sign off mentioned alongside the unrealized auto tariff threats. All of this could reasonably be fingered as possible catalyst for the day’s slip in risk trends. However, I think the market’s practiced complacency around forecasts likely contributed little to the session’s swoon. That responsibility likely goes to reports that US was considering tariffs on $11 billion in European goods as retaliation for unfair Airbus subsidies – which was ultimately followed by a definitive threat by President Trump delivered in a Tweet. Despite the magnitude of both a slowing global economy and possible spread of trade wars, the S&P 500’s slip on the day was rather modest. Nevertheless, it would represent the first bearish close in nine trading sessions – breaking a stretch of gains that matched the longest climb for the index in 15 years.

Chart of S&P 500 and Consecutive Candles (Daily)

S&P 500 Breaks Most Consistent Bull Trend in 15 Years, Ready for EURGBP Shock

Range Trading EURUSD, GBPUSD, USDJPY and More Facing Greater Volatility Risks

With the US indices’ incredible three-month climbs sputtering, we should evaluate the breadth of sentiment to see what the implications are for next moves. The short-term reversal risks that may arise from the failure to overtake previous record highs can garner its own speculative pressure, but this doesn’t register as a universal necessity. Looking at global equities excluding the United States (the VEU ETF), we find the asset class has been held up at the midpoint of 2018’s long and intense decline. Emerging markets, carry trade, commodities and other risk-leaning assets produce varying degrees of restraint all their own. Even looking within US equities, we find that there has been a disproportionate demand for tech shares versus other sectors such as finance, healthcare and staples. This suggests a leveraged speculative appetite that prioritizes momentum over value – something that we have registered before. Yet, at this stage and under this canopy of fundamental concerns, a turn in sentiment may not happen with any sense of urgency. Looking to volatility readings from equities and emerging assets to yields and currencies, it is clear that there is little pressure to invest in a hedge nor speculative on a reversal through derivatives. That doesn’t make these readings any more prophetic than US indices on the state and timing of a sentiment shift, but it will help restrict a sudden shock in sentiment.

In these conditions where fundamental threats are held at arm’s length and implied volatility remains deflated, shorter-term range trading remains the most appropriate approach to the markets. However, traders should consider the disparity in genuine risks and what is implied by a market that favors the convenience of familiar trends. Retail FX traders for example continue to pursue active range trading on many of the majors. For the likes of the EURUSD, that worked out well with the hold and turn from 1.1200 support. The run since that reversal was made has been reserved and that is the nature of setting objectives on low volatility markets. As well as that particular pair’s swing played out for retail traders, the same aggression follows the likes of AUDUSD. While that pair’s range is very consistent, it is also very narrow – representing significant risk for the amount of return pursued. Perhaps the risk is more appreciable for GBPUSD. Retail traders have ramped up their conviction in a Cable rebound from 1.3000 support. That is a bold enthusiasm given the deadlines on Brexit.

Chart of AUDUSD (Daily)

S&P 500 Breaks Most Consistent Bull Trend in 15 Years, Ready for EURGBP Shock

Once Again, EURGBP is the Convergence to Multiple Fundamental Lines

Weighing the top event risk for the upcoming session, I will be watching the second day of the IMF’s spring meeting. While there are a number of interesting presentations scheduled for the day, attention should be trained on the release of the Global Financial Stability Report (GFSR) and Fiscal Monitor (FM). This will relay the group’s fears for what could unsettled the global markets and what contribution/detriment the world’s governments (and their debt policies) will proffer to our future. Given the remarks through the opening day and Director Lagarde’s unfiltered views on the state of play, there assessment is not likely to be encouraging. The real question for traders is whether these implicit and explicit warnings actually prompt action from market participants. They have been conveniently ignored for an incredible amount of time. It wouldn’t be at all surprising if the speculative rank once again conveniently ignores the threats; but eventually, the risks will register with delay only building the probability of violence.

In the meantime, we can look to more regional fundamental developments for some localized volatility. The US has its own listings. This past session, the JOLTS jobs report reported its biggest drop in available positions in three-and-a-half years while the NFIB small business sentiment survey slowed from the previous month (though with less steep a decline than anticipated). The upcoming CPI reading and FOMC minutes cut closer to bone, but contributions to rate speculation have rendered relatively little market response of late. Far more interesting will be the event risk for the Euro and Pound. The former will host the ECB rate decision and the President’s press conference soon after. Given the central bank announced its dovish turn at its last meeting with the introduction of the TLTRO III – with oppressively cautious rhetoric – it would be very unlikely to see escalation of those fears at this gathering. To escalate concern any further would insinuate a serious economic or financial threat which authorities would want to avoid at all cost. As for the Sterling, the EU-27 summit is key; which is saying something considering we have February GDP and trade among other statistics. The gathering of EU leaders is expected to rule on the UK’s request for an extension to the Brexit. EU leadership suggested a delay beyond Friday’s cutoff will be realized, but the amount of additional time is up to debate. We discuss all of this and more in today’s Trading Video.

Chart of EURGBP and Aggregate of CBOE's Euro and Pound Volatility Indexes (Daily)

S&P 500 Breaks Most Consistent Bull Trend in 15 Years, Ready for EURGBP Shock

If you want to download my Manic-Crisis calendar, you can find the updated file here.

2019-04-10 01:29:00

US Dollar to Gain Versus Malaysian Ringgit? USDPHP, USDIDR May Fall

Posted: 09 Apr 2019 07:58 PM PDT

ASEAN Technical Outlook – USD/PHP, USD/SGD, USD/IDR, USD/MYR

US Dollar may extend advance versus the Malaysian Ringgit
USD/PHP, USD/IDR may turn lower after clearing support
Next USD/SGD trend brewing as falling resistance stems gains

Trade all the major global economic data live as it populates in the economic calendar and follow the live coverage for key events listed in the DailyFX Webinars. We'd love to have you along.

USD/MYR Technical Outlook: Bullish

The Malaysian Ringgit may be on the verge of extending declines against the US Dollar as USD/MYR's dominant downtrend looks increasingly vulnerable. I have been closely following the break above the Falling Wedge, which is typically a bullish pattern, over the past few weeks. Now, critical resistance is being tested at 4.095 which if broken, may open the door to testing 4.107. Meanwhile, a near-term rising support line from late March seems to be guiding the pair higher.

USD/MYR Daily Chart

US Dollar to Gain Versus Malaysian Ringgit? USDPHP, USDIDR May Fall

USD/IDR Technical Outlook: Bearish

After much consolidation between converging trend line, USD/IDR seems to be a step closer towards picking its direction, and it may be lower. The Indonesian Rupiah took out rising support from February, opening the door to testing 14089. A close under this psychological area exposes 14010 before the current 2019 lows. On the flipside, keep a close eye on the falling trend line from December which may stem a turn higher. If the pair does clear it, USD/IDR may then find itself testing resistance at 14340.

USD/IDR Daily Chart

USD/PHP Technical Outlook: Bearish

Like the Rupiah, the Philippine Peso also seems to be on the verge of appreciating against the US Dollar next. USD/PHP cleared support at 51.12, opening the door to testing 51.69 which would prolong the downtrend that followed the break under rising support from March. Otherwise, a turn higher exposes a falling resistance line from early March which is closely aligned with a psychological barrier around 52.55. If these are broken, 52.87 may be the next target.

USD/PHP Daily Chart

USD/SGD Technical Outlook: Neutral

The Singapore Dollar continues consolidating against its US counterpart after a bounce on support around 1.3444 in late March opened the door to testing resistance just under 1.3616. USD/SGD is struggling to climb at this point as a falling trend line from late October seems to be pressuring the pair lower (red line on the chart below).

If it holds, then USD/SGD could soon be looking to test near-term support again. For the time being, its next potential dominant trend is still brewing. Until a breakout occurs, feel free to follow me on Twitter here @ddubrovskyFXfor more timely ASEAN FX updates.

USD/SGD Daily Chart

**All Charts Created in TradingView

Read this week's ASEAN fundamental outlook to learn about the underlying drivers for these currencies!

FX Trading Resources

— Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

2019-04-10 02:00:00

March US Consumer Price Index & USDJPY Price Outlook

Posted: 09 Apr 2019 05:53 PM PDT

Talking Points:

– The March US Consumer Price Index is due on Wednesday, April 10 at 12:30 GMT.

– The inflation report on Wednesday will only underscore the belief that the Fed is due to keep policy on hold for the foreseeable future.

– Retail traders continue to sell US Dollar rallies versus the British Pound and the Euro.

Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.

04/10 WEDNESDAY | 12:30 GMT | USD Consumer Price Index (MAR)

The March US Consumer Price Index report is due to show a rebound in price pressures, in line with the continued rebound in energy prices as well as the improved streak of US economic data (Atlanta Fed GDPNow Q1'19 growth estimate is now 2.1%, up from 0.2% in the second week of March). Nevertheless, the readings are due short the Federal Reserve's medium-term target of +2%.

According to Bloomberg News, headline CPI is expected in at +1.8% from +1.5%, and Core CPI is due in to hold at 2.1% (y/y). The inflation report on Wednesday will only underscore the belief that the Fed is due to keep policy on hold for the foreseeable future; Fed funds futures are pricing in a 39% chance of a 25-bps rate cut in October and a 56% chance of a 25-bps rate cut by December.

Pairs to Watch: DXY Index, EURUSD, USDJPY, Gold

USDJPY Price Chart: Daily Timeframe (December 2017 to April 2019) (Chart 1)

Despite breaking the downtrend from the March swing highs, USDJPY has made no progress over the past few days. In returning back to former downtrend resistance, USDJPY has failed to climb back through the March 20 bearish outside engulfing bar high at 111.69. A return back to the April low at 110.80 isn’t out of the question, and below there, loss could accelerate towards uptrend support after the January Yen flash-crash.

IG Client Sentiment Index: USDJPY (April 9, 2019) (Chart 2)

usdjpy price chart, ig client sentiment index, igcs

Retail trader data shows 41.4% of traders are net-long with the ratio of traders short to long at 1.42 to 1. In fact, traders have remained net-short since Mar 31 when USDJPY traded near 110.941; price has moved 0.2% higher since then. The number of traders net-long is 12.6% higher than yesterday and 0.7% lower from last week, while the number of traders net-short is 8.9% lower than yesterday and 2.8% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current USDJPY price trend may soon reverse lower despite the fact traders remain net-short.

FX TRADING RESOURCES

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX

2019-04-10 00:30:00