Analyst Articles – Forex News 24

AUDUSD & USDCAD Charts Wedging Up on Varying Time-frames
Japanese Yen Could Gain As Focus Grows On Creaking Inflation Target
Canadian Dollar Up with Oil on Fears US to End Iran Trade Waivers
Liquidity Fills Back Out to US GDP, BOJ and BOC Rate Decisions
EURUSD Counts Down to a Break but Euro Itself a Short-Term Bear Swing
Outlook Soft Even as Brexit Comes Back in Focus, US GDP on Friday
US Dollar May Rise on Haven Flows as Markets Turn Defensive
Will Sterling Stabilize with Brexit Risk in the Distance?
50% Off the Lows – Can Bulls Continue Rally?
Seeking Clear Dow, Dollar and Oil Trends Ahead

AUDUSD & USDCAD Charts Wedging Up on Varying Time-frames

Posted: 22 Apr 2019 02:49 AM PDT

AUDUSD/USDCAD Chart Highlights:

AUDUSD channel inside weekly triangle
USDCAD forming a triangle within upward channel

To see what fundamental drivers and technical signposts DailyFX analysts are watching, check out the Q2 forecasts for various markets on the DailyFX Trading Guides page.

AUDUSD channel inside weekly triangle

AUDUSD has been a real grind along with most of the major FX world. The size of the 3-month range when adjusted for 52-week volatility is in the bottom 16% when looking back over the past five years. While small, it can get smaller with some room to go before the apex of a developing wedge is met.

The descending wedge on the weekly chart (excluding the flash-crash low) is in-line with the broader trend lower since the beginning of last year, suggesting we are more likely to see a downside break. Cracking the 7000-mark will be the key for Aussie to really start rolling downhill again.

Shorter-term, there is a channel developing within the wedge. This structure can be used as a guide for fades on the top and bottom-side for as long as it holds. The bottom-side parallel is anticipated to give-way at some point fairly soon, though.

AUDUSD Weekly Chart (Descending wedge forming)

AUDUSD Daily Chart (Trading inside channel)

Q2 US Dollar Forecast

USDCAD forming a triangle within upward channel

Choppy trading in USDCAD has created the narrowest 3-month range (adjusted to 52-week vol) since October. We are also seeing this range tighten on the daily time-frame into a triangle formation. Giving the benefit of the doubt to the upward slope of the channel in place since September 2017, an upside break is anticipated not too long from now. A breakout should have the 13600s in play relatively quickly. To turn USDCAD negative, broadly speaking, a breakdown out of the channel and below the yearly low at 13068 will be needed.

USDCAD Weekly Chart (narrow range within upward channel)

USDCAD Daily Chart (triangle forming)

Forex & CFD Trader Resources

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—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

2019-04-22 09:30:00

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Japanese Yen Could Gain As Focus Grows On Creaking Inflation Target

Posted: 22 Apr 2019 01:35 AM PDT

Japanese Yen, Inflation Target, Bank of Japan Talking Points:

The Bank of Japan's inflation target looks increasingly untenable
Doubts about it are reportedly growing in official circles
If a change comes, the Yen could gain, and trade very differently to the way it does now

Join our analysts for live, interactive coverage of all major economic data at the DailyFX Webinars. We'd love to have you along.

The Japanese Yen tends to play the role of haven in international currency markets, sought after when investors are worried about global growth but not much wanted when risk appetite runs high.

The reasons for this are clear enough. The Japanese authorities have for many years been attempting to stoke pricing power with ultra-accommodative monetary policy. This has left Japanese short interest rates at -0.1% and Yen returns extremely paltry when compared to, say, the US Dollar's. US base rates may not be especially high by historical standards but, at 2.25-2-5%, they dwarf Japan's.

The only reason to repatriate your Yen, then, is when you are so worried about world growth prospects that you'll take even rock-bottom Japanese returns as the price of safety.

Where’s the Pricing Power?

The problem is, though, that the Japanese authorities have not managed to stoke that pricing power. Today, after decades of loose monetary policy the Japanese annualized consumer price inflation rate stands at 0.2%. Yes, you read it correctly. That is the annualized rate.

It seems obvious that the Bank of Japan's 'sustained 2%' inflation target is now unreachable. Inflation has been nowhere near that level since the end of 2014.

Officially the BoJ line is that powerful monetary easing will see that inflation target hit, but it's hard to find many in the markets who believe that that day is coming anytime soon. And it's very likely that doubts are growing in official circles too.

Nikkei reported last September that doubts were growing at the central bank about the target, with focus turning instead to mitigating the side effects of stimulus already applied. In November the Paris-based Organization for Economic Cooperation and Development (OECD) suggested that an inflation range might now be more appropriate for Japan than a simple target.

Inflation Target Could Need To Be Reviewed

The Bank of Japan's Governor Haruhiko Kuroda said in December that attempts to hit the target would be taken 'step by step.' This looks innocent enough on casual viewing, but it replaced earlier pledges to get there 'as soon as possible' and was a clear watering down of ambition.

Now comes a Bloomberg report suggesting that some at the BoJ think the target will remain elusive through this year, next year and into 2021.

It's important to note that all of the above are merely straws in the wind. As far as anyone knows these are unrelated reports and there may be no deeper meaning behind any of them.

But the inflation target is in focus again. If these stories keep coming, speculation that it could be altered will only increase. Should they gain traction then they may well provide the Yen with the sort of domestic economic data support it now lacks, given the current clear disconnect between economic performance and monetary policy.

It could well be worth watching out for headlines on this topic as we move into 2019's second quarter.

Resources for Traders

Whether you're new to trading or an old hand DailyFX has plenty of resources to help you. There's our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There's also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they're all free.

— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

2019-04-22 08:00:00

Canadian Dollar Up with Oil on Fears US to End Iran Trade Waivers

Posted: 22 Apr 2019 12:18 AM PDT

TALKING POINTS – CANADIAN DOLLAR, CRUDE OIL, US WAIVERS, IRAN, CHINA, INDIA

Canadian Dollar up with crude oil on reports US to end Iran sanctions waivers
Australian and NZ Dollars down as contagion fears stoke broader risk aversion
US Dollar and Japanese Yen might find support in safety-seeking capital flow

The Canadian Dollar rose alongside crude oil prices, which jumped to a six-month high amid reports that the US is preparing to announce that it will discontinue granting sanctions waivers to countries trading with Iran. The similarly-minded Norwegian Krone was also broadly higher. The oil industry is a standout driver of economic growth in both Canada and Norway.

Broader risk appetite soured in tandem. That probably reflected worries about rising energy prices at a time when global growth seems wobbly as well as fears about the knock-on effects that such a US escalation might have were it to materialize. For example, China is a leading importer of Iranian crude, and canceling its waiver would likely complicate ongoing trade negotiations.

Tensions with other allies may be heightened as well. Japan and South Korea currency have waivers. The US is just starting a round of trade talks with the former having recently recommitted to a free trade deal with the latter. Perhaps most worryingly, a tougher stance from Washington might portend a looming clash with the EU after it set up a framework to circumvent the US sanctions regime.

With this and perhaps fading hopes for further Chinese monetary stimulus in mind, the sentiment-geared Australian and New Zealand Dollars traded broadly lower. Bellwether S&P 500 futures are pointing lower ahead of the opening bell on Wall Street, warning that markets will be returning from the Easter holiday in a downbeat mood. That may buoy the anti-risk Japanese Yen and US Dollar as the day wears on.

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

CHART OF THE DAY – STOCKS, CURRENCIES IN INDIA & CHINA PLUNGE AS CRUDE OIL SOARS

India and China are the largest importers of crude oil from Iran. Both countries received US waivers when President Donald Trump opted for withdrawal from a mutlilateral denuclearization deal with Tehran negotiated and implemtened by the preceding Obama administration.

The possibility that ending these waivers might stunt growth and sharpen tensions at an already fragile stage in the global business cycle has understandably spooked local assets. India's NIFTY 50 stock benchmark fell alongside the the Rupee (INR). Shares in China and the offshore Yuan (CNH) followed suit.

FX TRADING RESOURCES

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

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

2019-04-22 06:38:00

Liquidity Fills Back Out to US GDP, BOJ and BOC Rate Decisions

Posted: 21 Apr 2019 12:10 PM PDT

While trade wars and global growth were active themes this past week, the conditions in liquidity sidelined most efforts to spin headlines into critical mass market moves. In the week ahead, the return from holiday will test traders focus on critical events like US earnings, BOJ and BOC rate decisions and 1Q US GDP among other high level event risk.

Check out our Economic Calendar for upcoming economic data and central bank events.

Australian Dollar Forecast – Australian Dollar Faces The Big One As Official CPI Numbers Loom

The Australian Dollar has been resilient as global risk appetite has held up pretty well. However, the market can now look to official inflation figures. They may not help the bulls' cause

Crude Oil Forecast – Crude Oil Prices Stalling Ahead of US Energy Earnings and GDP Data

The crude oil price outlook is neutral after the commodity and the S&P 500 stalled. Can Chevron, Exxon Mobil earnings fuel the dominant uptrend? Or will soft US GDP data sink oil?

British Pound Forecast – Will Sterling Stabilize with Brexit Risk in the Distance?

Expect fresh Brexit headlines next week with Parliament returning from recess following the UK's second extension to the EU Withdrawal Agreement. What should British Pound traders watch for?

US Dollar Forecast – US Dollar May Rise on Haven Flows as Markets Turn Defensive

The US Dollar may rise, buoyed by haven-seeking capital flows as financial markets bombarded with evidence of slowing global growth unwind exposure to risky assets.

Gold Forecast – Outlook Soft Even as Brexit Comes Back in Focus, US GDP on Friday

Gold prices turned lower mid-week as a reinvigorated US Dollar sapped demand for bullion; the combination of strong US equities and a strong US Dollar has been historically negative for Gold prices.

Euro Forecast – EURUSD Crumbles on Euro-Zone Growth Fears

Markets are unforgiving, and the Euro is currently under the pump with very little currently in the way of support to help stem the ongoing sell-off.

Equity Index Forecast – Dow Jones, S&P 500, DAX 30 and Nikkei 225 Fundamental Forecast

Earnings season is in full swing with corporate giants like Microsoft and Amazon slated to report in the week ahead. Meanwhile, the Nikkei looks to a rate decision from the Bank of Japan.

2019-04-21 19:00:00

EURUSD Counts Down to a Break but Euro Itself a Short-Term Bear Swing

Posted: 21 Apr 2019 06:31 AM PDT

Euro Technicals Talking Points:

Technical Forecast for the Euro: Bearish

There are two ways to view the Euro lately. One perspective is that offered by EURUSD which has worked its way into an ever-dwindling range that is raising speculative of a medium-term, significant break while simultaneously encouraging short-term speculative traders to trade the pair aggressively. Yet, a look to the Euro independent of the Dollar, presents a very different picture. From most of its crosses, we find the shared currency has extended a multi-week rally. It isn't a move that could readily qualify as a self-sustaining trend, but it nevertheless draws unmistakable contrast to the world's most liquid currency pair. If you intend to trade the Euro moving forward, EURUSD should be considered given its weight; but rely on the other liquid Euro-crosses and even an equally weighted measure of the currency for your gauge of critical inflection/acceleration points as well as general intent.

From the standard, daily chart of EURUSD below, we find the epitome of range-bound trading activity. The trend of lower swing highs dating back 10 months now establishes the most provocative resistance around 1.1355. That being said, the series of highs rejecting bulls at around 1.1325 is more immediate upside restraint while the 200-day moving average and mid-point to the 2016-2018 bull wave fall neatly around 1.1450. This is not a very broad zone of resistance which is consistent with an extended period of congestion. Support is more singular. While the November, March and April lows differ by as much as 40 points, they generally fall in line with the 61.8% Fib of the aforementioned 'phase' as well as the 61.8% Fib of the historical range of the exchange rate going back to the Euro's trade inception 20 years ago. Watch 1.1200 very closely.

Chart of EURUSD and 200-day Moving Average (Daily)

As EURUSD continues to bounce between its converging boundaries, the expectations for a breakout (which is non-directional, but many confuse with a 'break up') naturally grow. Yet, recognition of the congestion does not equate to any extreme timeline resolution. Consider below a monthly chart of the same pair with an 8-month historical range that reflects only one period of quiet more extreme than what we have recently experienced – the Summer of 2014. While this signals the same inevitability of a significant return to trend, it is just as important to consider the time scale of the transition. This is a monthly chart and we have yet to see the sparks that would signal even the early vestiges of a break.

Chart of EURUSD and 8-Month Historical Range as Percentage of Spot (Monthly)

While the Euro itself is not as constricted as the EURUSD insinuates, it is still generally limited as to its trend development. Below, we have an equally weighted index made out of the seven most liquid Euro crosses. While the explicit technical levels do not translate readily to any individual pairs, the fact that the 1.3000 level seen in this chart held to multiple and spaced out tests back to August 2017 indicates a fairly consistent refrain from the currency. Through the end of March, bearish progress started to catch a little traction for a 'break'; yet the markets were not ready to run with the move. These past three weeks offered a recovery that is now falling into a more reserved three-month span top. While it doesn't offer any great insight for the likes of EURUSD, the general restraint could carry serious weight for the likes of EURGBP or EURCHF.

Chart of an Equally-Weighted Euro Index and 20-Day ATR (Daily)

A pair that offers a more recognizable picture relative to the equally-weighted index is EURGBP. The past few weeks have seen a measured advance that has found a general resistance waiting to slow its progress to a halt around 0.8675. We left this past week holding that boundary and an inverse head-and-shoulders pattern is still in place with this most recent jog higher. Under more active conditions, this would look like a loaded formation, but given the Euro's stretch and the Sterling's constant lack of traction, range is even more the path of least resistance.

Chart of EURGBP and 100-day Moving Average (Daily)

Already putting in a signal supportive of range, we have EURJPY which posted its biggest daily drop in a month on Friday to retreat from a fairly dense collection of resistance. The series of lower highs back to October now happens to coincide with the 38.2% Fib of the September to January bear wave (excluding the flash crash wick on January 3rd) and the 38.2% Fib of the upswing from the June 2016 low to last year's February high all at 126.75. Range support is more of the 'zone' variety down around 124 to 123.50.

Chart of EURJPY (Daily)

In contrast to the hold of EURGBP and the tentative turn of EURJPY, EURCHF looks like it has achieved breakout velocity in favor of the more liquid currency in the pairing. Having broken through the 200-day moving average and the trendline pulled from descending swing highs back to August falling around 1.1350, it would seem that the threshold is crossed and the sky open to momentum. As impressive as this momentum has been – the strongest run over 15 trading days since August 2017 – it is still fighting the lackluster picture behind the Euro. The Franc has dropped across the board, but it is less likely to be the singular major that can develop a clear trend while the rest of the FX market struggles.

Chart of EURCHF and 200-day Moving Average (Daily)

EURCHF

If you are very convinced of the impending breakout and return to trend, it is worth consulting with implied (expected) volatility. The CME's Euro Volatility Index below has shown a dramatic collapse spurred on by the short-term relief of certain key fundamental risks and heading into the long, holiday weekend. Given the historical congestion and the known liquidity drain of the holiday, it is reasonable to project a deflated chance of a charge for the Euro or EURUSD. However, much as the congestion is overdone, so too is the slide in volatility. I would treat this as a contrarian signal, but remember the time frames that we are approaching this picture from. While a break and more significant price swings are inevitable, it could still take weeks to realize.

Chart of EURUSD and CME's Euro Volatility Index (Daily)

As we await the market's next significant movement, it is worth considering how market participants are positioned behind the Euro. Larger speculative interests measured through futures by the Commitment of Traders report has the net short interest continuing to build through last week and sitting at levels comparable to the end of 2016 (when the pair was forming its bottom). In contrast, the more mobile retail traders are more than happy to continue trading surprisingly reliable range in EURUSD. Eventually, this group will call for another turn when the break finally does arrive, but they are well suited to the conditions that we continue to trace out.

Chart of Net Speculative Positioning in EURUSD Futures from CFTC Report (Weekly)

Chart of Retail Trader Positioning from IG Clients (Daily)

Other Weekly Technical Forecast:

Crude Oil Forecast: 50% Off the Lows – Can Bulls Continue Rally

British Pound Forecast: GBPUSD, EURGBP & GBPNZD

US Dollar Forecast: Big Test of Resistance Nearing

Gold Forecast: XAU at Support, Fresh 2019 Lows

Australian Dollar Forecast: AUD/USD and EUR/AUD May Be at Turning Points, Facing Trend Lines

2019-04-21 13:00:00

Outlook Soft Even as Brexit Comes Back in Focus, US GDP on Friday

Posted: 21 Apr 2019 03:10 AM PDT

gold price forecast, gold fundamental forecast, gold price chart, gold chart, gold price

Fundamental Forecast for the Gold: Neutral

– Gold prices turned lower mid-week as a reinvigorated US Dollar sapped demand for bullion; the combination of strong US equities and a strong US Dollar has been historically negative for Gold prices.

– Brexit headlines will reappear now that UK parliament returns to session after its Easter-week holiday on April 23.

– The IG Client Sentiment Index shows that retail net-longs increased despite Gold prices falling to a fresh 2019 low.

See our long-term forecasts for Gold and other major currencies with the DailyFX Trading Guides.

Gold Price Week in Review

Gold prices continued their tumble in what has been a rough April, with fresh 2019 lows hit in several crosses. Gold in USD-terms (XAUUSD) dropped by -1.17% during the holiday shortened week, falling as low as 1271.07, its lowest level since December 27.

With risk appetite bolstered as US stocks maintained their gains, Gold prices were also hit versus the higher yielding, higher beta: in AUD-terms (XAUAUD) and CAD-terms (XAUCAD), Gold prices fell by -0.79% and -0.71%, respectively.

That other crosses like Gold in EUR-terms (XAUEUR) or in GBP-terms (XAUGBP) couldn't reach new 2019 lows speak to the underlying weakness facing those currencies at present time.

Brexit News to Come Back to the Headlines

The past week offered a much-needed reprieve from the daily ebb-and-flow of Brexit headlines; a lack of progress in UK parliament warranted a break in public discussions. But Brexit headlines will reappear now that UK parliament returns to session after its Easter-week holiday on April 23. The coming week-plus could have significant influence on how the next several months unfold.

UK Prime Minister Theresa May and Labour party leader Jeremy Corbyn have been engaged in cross-party talks to find common ground for the EU-UK Withdrawal Agreement to pass through UK parliament. Early indications from both Labour and Tory party officials suggest that the talks will result in very little.

If nothing is agreed upon, it's possible that UK PM May resigns or faces a no-confidence vote from Labour in May (see the full report regarding the near-term Brexit timeline: Next Brexit Steps to Prove Pivotal for EURGBP, GBPJPY, GBPUSD Prices). The fact is, a return of Brexit concerns to the newswire could prove to something that helps keep Gold prices afloat once more.

Pick Your Trade War Influence

The US-China trade war talks continue to point towards de-escalation and ultimately a Trump-Xi summit at some point over the coming weeks. Commentary from officials on both sides of the Pacific indicate that a trade agreement could be struck as soon as early-May, with a meeting between the American and Chinese presidents some time in late-May. As has been the case, signs of progress and a relaxation of tensions have been a negative influence on Gold prices.

But as one trade war is seemingly subsiding (thanks in part to the US willing to overlook enforcement mechanisms and some of the longstanding intellectual property disputes), the US is seemingly ready to engage on another front: the EU. After the WTO ruled that the EU's subsidies to Airbus (a French company) ran afoul of trade rules, the Trump administration outlined fresh tariffs against the world's largest economic block. A new tit-for-tat war is emerging, and if so, a potential positive influence on Gold prices.

Top FX Events in Week Ahead

The upcoming economic calendar is sparsely populated with significant economic data, relegating traders to the newswire for event risk for Gold prices. Like the data seen over the course of the past week, upcoming inflation data should give central banks little reason to act one way or another. Neither the upcoming Bank of Canada nor the Bank of Japan will signal policy moves anytime soon. If anything, the late-week initial Q1'19 US GDP report should show that early-year US recession fears were overblown, limiting the scope for immediate dovish policy action by the Federal Reserve – and therefore, representing a late-week risk to Gold prices.

Read the full report, FX Week Ahead – Top 5 Events: Australia Inflation; BOC Meeting; US GDP and More.

Gold Futures Positioning Holding Net-Long

Finally, looking at positioning, according to the CFTC's COT for the week ended April 16, speculators sharply reduced their net-long Gold positions to 56.3K contracts, down from the 105.4K net-long contracts held in the week prior. Net-long Gold positioning is now at its lowest level since the week of December 4, 2018.

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

2019-04-21 10:00:00

US Dollar May Rise on Haven Flows as Markets Turn Defensive

Posted: 21 Apr 2019 12:08 AM PDT

US DOLLAR FUNDAMENTAL FORECAST: BULLISH

US Dollar may be buoyed by haven flows on exodus from risky assets
First-quarter US GDP, external data flow might inspire risk aversion
Dour tone in corporate earnings reports to reinforce defensive mood

Check out the latest US Dollar forecast and see what is expected to drive prices through mid-year!

The US Dollar looks likely to cement its position as a vehicle for safety-seeking capital flows in the week ahead. Mounting evidence of a downturn in domestic economic activity is likely to keep Fed policy locked in wait-and-see mode even as it sours risk appetite and stokes haven demand.

PMI surveys published Thursday put the pace of manufacturing- and service-sector growth at the weakest since September 2016. Next week's GDP data is expected to confirm a slowdown in the first quarter. A print at 2 percent is expected but realized results may undershoot if the tenor of recent outcomes is sustained.

Meanwhile, external news-flow offers ample fodder for global slowdown speculation. The Bank of Canada will probably use the occasion of a policy announcement to worry aloud about downside risks. Incoming comments from UK Chancellor Hammond and SNB President Jordan may offer a similar message.

Turning to the data front, Germany's IFO survey of business confidence and New Zealand trade statistics might add to the downbeat mood. Both countries are prodigious exporters and the drop in trade volumes starting around mid-2018 shows no signs of a meaningful recovery.

The first-quarter corporate earnings reporting season will continue to in tandem. Over a third of the companies making up the bellwether S&P 500 equity index are due to show results. Data from Bloomberg based on those outcomes recorded thus far points to the first period of contraction in three years.

Taken together, this seems likely to put markets in a defensive posture, with each consecutive reminder about the shaky macroeconomic backdrop helping to inspire de-risking. That might put a premium on the Greenback's unrivaled liquidity, pushing it broadly higher.

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

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

US DOLLAR TRADING RESOURCES

OTHER FUNDAMENTAL FORECASTS:

Australian Dollar Forecast – Australian Dollar Faces The Big One As Official CPI Numbers Loom

Crude Oil Forecast – Crude Oil Prices Stalling Ahead of US Energy Earnings and GDP Data

British Pound Forecast – Will Sterling Stabilize with Brexit Risk in the Distance?

2019-04-21 07:00:00

Will Sterling Stabilize with Brexit Risk in the Distance?

Posted: 20 Apr 2019 09:29 PM PDT

GBP FORECAST – TALKING POINTS:

All has been quite on the Brexit front over the last two weeks with British MPs on recess and the UK's departure deadline getting pushed back until October 31, but recent lack of news could change with Parliament back in session
The latest retail sales data out of UK could bolster the British Pound, but uncertainty surrounding EU Parliamentary elections as well as cross-party talks between Theresa May and Jeremy Corbyn in addition to EU Parliamentary elections pose as potential headwinds
Download the free DailyFX Q2 GBP Forecast for comprehensive fundamental and technical insight over the second quarter covering various Pound Sterling currency crosses
Check out this Brexit Timeline for a chronological list of events surrounding the UK's withdrawal from the EU and how negotiations have impacted the markets

Since Theresa May suffered a third defeat over her Brexit Withdrawal Agreement, the Prime Minister has been conducting cross-party talks with Labour party leader Jeremy Corbyn. As British Parliament struggles to overcome its ongoing impasse regarding the next path for Brexit, the European Council agreed to extend Article 50 for a second time in order to avoid a hard-Brexit where the UK departs the EU without a deal. With the Brexit deadline now pushed back until October 31 and British MPs on recess for the last two weeks due to the Easter Sunday holiday, GBP price action has stabilized alongside collapsing implied volatility.

Although Parliament is due to resume its session this coming week, little is scheduled next week in the House of Commons. There will be some Parliamentary business on Tuesday, however, but the motions are regulatory in nature and are not expected to directly impact ongoing Brexit negotiations. On Wednesday at 11:00 GMT, the Prime Minister will address the Main Chamber and take questions from British MPs which will hopefully provide an update on the latest Brexit developments.

That being said, the next Brexit steps and upcoming EU Parliamentary elections will likely prove pivotal for GBP prices over the short and medium term. Forefront risks highlight the ongoing cross-party talks between May and Corbyn as well as the possibility of Tories ousting the Prime Minister from her position.

FOREX ECONOMIC CALENDAR – GBP

GBP Forex Economic Calendar British Pound Sterling Price Chart

Visit the DailyFX Economic Calendar for a comprehensive list of upcoming economic events and data releases affecting the global markets.

Honing in on the Pound Sterling economic calendar we can see that next week will be relatively quiet on the data front. Financial reports covering the public sector net borrowing released on Wednesday at 8:30 GMT and loans for house purchases expected Friday at 8:30 GMT will likely take the spotlight for upcoming UK economic data.

Also, with GBP bulls overlooking tepid inflation data, robust employment and retail sales numbers last week data could provide the British Pound with a positive tailwind. It is probable and should come as no surprise, however, that the progression of Brexit talks and related headlines will overshadow macroeconomic data and serve as the primary driver of GBP performance.

OTHER WEEKLY FUNDAMENTAL FORECASTS

AUD Forecast – Australian Dollar Faces the Big One as Official CPI Numbers Loom

Oil Forecast – Crude Prices Stalling Ahead of US Energy Earnings and GDP Data

TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has several free resources available to help you: a comprehensive education center, a proprietary indicator for monitoring trader sentiment; informativetrading guides and forecasts; analyticalwebinars held daily, and much more.

– Written by Rich Dvorak, Junior Analyst for DailyFX

– Follow @RichDvorakFX on Twitter

2019-04-21 04:00:00

50% Off the Lows – Can Bulls Continue Rally?

Posted: 20 Apr 2019 06:24 PM PDT

Crude Oil Price Four-Hour Chart

Crude Oil Price Talking Points:

– Oil Price Forecast: Crude Oil Crafts Lower-High After Support Bounce.

– Crude Oil Price May Recoil at Chart Barrier as Market Mood Sours.

Crude Oil Price Forecast: Neutral

Crude Oil Holds Support, but Bulls Shy Away from the Highs

Oil prices have started to digest recent gains, marked by a respect of both support and resistance during this week's trade. Coming into the week, I had looked at bullish strategies in Oil, driven by the potential for trend continuation in a move that's been showing over the past three months. The first support zone identified in last week's Oil Forecast came into play shortly after the weekly open, and prices put in a respectable bounce-higher in the first-half of the period. But, as discussed on Wednesday, buyers pulled back just shy of a re-test of prior highs; and this has led into a pattern of lower-highs to go along with a horizontal zone of support.

Crude Oil Price Two-Hour Chart

Chart prepared by James Stanley

At this point, Crude Oil prices have gained as much as 52.7% from the December low; a respectable run by almost any metric. Prices have continued to stretch higher in the opening weeks of Q2, with a hastening in that trend coming into this week.

The big question is whether a larger pullback might be needed before bulls can get back in the driver's seat in the longer-term trend. On the four-hour chart, a case can be made that a descending triangle has started to build, taking the recent series of lower-highs to go along with that horizontal support. And if we consider the resistance potential around the 65.00-handle, as the psychological level remains very near a key Fibonacci level at 64.89, and there could be ample motive for bulls to continue to shy away from re-tests of resistance, thereby allowing for the continued build of lower-highs.

But at this stage, there is nothing to suggest that this would be more than a near-term pullback in the almost four-month-old trend. This highlights deeper support potential on the chart, looking at the 's2' and 's3' zones from last week's forecast. The area from 61.58-61.87 is a group of swing-lows from earlier in April, and the area around 60.00-60.35 was a key zone of resistance in the month of March that, to date, hasn't yet been tested for higher-low support.

Crude Oil Price Four-Hour Chart

Chart prepared by James Stanley

Crude Oil Price Forecast: Neutral

Given the distance away from current prices to the 's2' zone looked at above, the technical forecast for Crude Oil will be set to neutral for the week ahead. A re-test of support in the 61.58-61.87 or 60.00-60.35 zones can re-open the door for bullish strategies; but until then, traders should remain cautious of a deeper pullback in what appears to be an overbought trend struggling at fresh highs.

Crude Oil Price Daily Chart

Chart prepared by James Stanley

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Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q1 have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

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DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you're looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we're looking at what we're looking at.

If you're looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

Other Weekly Technical Forecast:

Australian Dollar Forecast: AUD/USD and EUR/AUD May Be at Turning Points, Facing Trend Lines

2019-04-21 01:00:00

Seeking Clear Dow, Dollar and Oil Trends Ahead

Posted: 20 Apr 2019 12:19 PM PDT

The holiday-shortened week proved a clear curb on the development of general risk trends, which in turn hamstrung many of the benchmark assets. Will a return of liquidity help charge enough volatility to settle the Dow's proximity to record highs, clear the EURUSD's inevitable break from a historically-tight range or return crude oil prices to trend?

Australian Dollar Forecast: AUD/USD and EUR/AUD May Be at Turning Points, Facing Trend Lines

The Australian Dollar may be at a turning point against the US Dollar and Euro. AUD/USD uptrend eyeing rising channel support as EUR/AUD may enter downtrend, 2017 trend line eyed.

Crude Oil Forecast: 50% Off the Lows – Can Bulls Continue Rally

Oil prices remained strong this week as price action held higher-low support; but bulls are getting shy around resistance – is a retracement nearing?

British Pound Forecast: GBPUSD, EURGBP & GBPNZD

Sterling (GBP) continues to trade in restrictive ranges across a selection of currencies but headline GBPUSD may soon break below 1.3000 as the US dollar pushes higher.

US Dollar Forecast: Big Test of Resistance Nearing

The US Dollar Index remains confined within a big-picture wedge, a test of the top of this pattern is just on the horizon.

Gold Forecast: XAU at Support, Fresh 2019 LowsGold is down more-than 5.5% from the 2019 high with price now probing support at fresh yearly lows. These are the levels that matter on the XAU/USD weekly chart

Euro Forecast: EURUSD Counts Down to a Break but Euro Itself a Short-Term Bear Swing

There is value in assessing the Euro's technical potential through its most liquid cross – EURUSD – but traders would do well to consider the single currency's own bearings which paint a very different picture than range.

Equities Forecast: S&P 500, DAX, FTSE 100 Technical Forecast

Questions raised over possible S&P 500 reversal, DAX eyes critical trendline, while FTSE 100 uptrend remains intact.

2019-04-20 19:00:00