Analyst Articles – Forex News 24

Pound Sterling Price Analysis: GBP/JPY Important Resistance Levels
GBPUSD Slumps, Data Highlights Economic Weakness, Brexit Fears
Gold Price Outlook Remains Positive, Silver Price Struggling with Resistance
Euro, US Dollar May Ignore Local Data
Crude Oil Prices Up, Gold Down as Markets Cheer US-Mexico Detente
AUD Market May Find Bar To Deeper Rate Cuts Very High Indeed
Dollar Drops Versus SGD, IDR on Fed Rate Cut Bets. China Trade Eyed
Canadian Dollar Gaps Up, Yen Drops as US Shelves Mexico Tariffs
Canadian Dollar, MXN May Gap After Trump Suspended Mexico Tariffs

Pound Sterling Price Analysis: GBP/JPY Important Resistance Levels

Posted: 10 Jun 2019 02:47 AM PDT

GBP/JPY Price Outlook, Charts and Analysis

GBP Sterling looking ahead to weekly earning numbers due to release tomorrow.
GBP/JPY looking to correct higher.

Did we get it right with our GBP and JPY forecasts? Find out more for free from ourQ2 GBP and JPY and main currencies forecasts

To learn more about data releases for this week check outDailyFX Economic Calendar

GBP/JPY – Bears Holding Fire

On June 4 bearish momentum started to fade as support level held. Since then GBP/JPY rallied and tested on Jun 7 the high end of the trading range (136.40 – 137.84), however it failed to close above.

Alongside, the Relative Strength Index (RSI) on Jun 6 abandoned the oversold territory and pushed above 30 reflecting the weakness in the bearish momentum.

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GBP/JPY DAILY PRICE CHART (FEB 24, 2019 – JUnE 10, 2019) Zoomed In

GBP/JPY DAILY PRICE CHART (NOV 10, 2016 – JUnE 10, 2019) Zoomed OUT

Looking at the GBP/JPY daily chart we notice the pair opened today with a gap to the upside, sending the price to trade in a higher trading range (137.84 – 139.00). Therefore, a close above 137.84 suggests more bullishness towards 139.00. A further bullish close above 139.00 could lead the price to rally towards 140.50. However, resistance levels at 139.55 and 140.06 need to be watched closely.

In turn, a close below 137.84 would return GBP/JPY to trade in the same old trading range with a likelihood to trade lower to 136.40. The weekly support levels at 137.55 and 136.99 would be worth monitoring.

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GBP/JPY Four-HOUR PRICE CHART (May 13, 2019- JUN 10, 2019)

Looking at the four- hour chart, on last Friday GBP/JPY pointed lower and created a low at 137.48. Therefore, a break below this threshold could open the door for more bearishness towards the June 6 low at 136.99 and if the selloff continues the bears could push towards the June 4 low at 136.55.

On the flipside, if GBP/JPY breaks above the May 30 high at 138,74 this could send the price to trade higher eying the resistance zone at 139.55 – the May 27 high at 139,64. However, weekly resistance at 139.00 need to be in focus.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

2019-06-10 09:30:00

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GBPUSD Slumps, Data Highlights Economic Weakness, Brexit Fears

Posted: 10 Jun 2019 02:07 AM PDT

Sterling (GBP) Price, Chart and Analysis

GBPUSD falls sharply, erases Friday's gains.
UK data paints a worrying picture.

Q2 2019 GBP and USD Forecasts andTop Trading Opportunities

Sterling Gives Back Gains on Brexit, Growth Woes

The latest set of UK growth figures missed market expectations by a wide margin, while industrial and manufacturing production figures all fell, hitting Sterling lower.

As shown above, all data missed with worrying weakness in m/m manufacturing and industrial production, while month-on-month GDP fell to -0.4% compared to expectations and a prior reading of -0.1%.

Commenting on today's GDP figures, Head of GDP Rob Kent-Smith said, "GDP growth showed some weakening across the latest 3 months with the economy shrinking in the month of April mainly due to a dramatic fall in car production with uncertainty ahead of the UK's original EU departure date leading to planned shutdowns.There was also widespread weakness across manufacturing in April, as the boost from the early completion of orders ahead of the UK's original EU departure date has faded."

GBPUSD gave back all of Friday's post-NFP gains and traded back below 1.2700. The next level of support for the pair comes in around 1.2660-1.2670 although this may come under pressure after today's data. Below here, there is little in the way of support before the May 31 low at 1.2560.

Sterling Weekly Forecast: GBPUSD Price Rallies to a 2-Week High.

IG Client Sentiment data paints a negative picture for the pair with 78.2% of traders long GBPUSD, a bearish contrarian bias signal. However, recent daily and weekly positional changes suggest that GBPUSD may soon reverse higher.

GBPUSD Daily Price Chart (October 2018 – June 10, 2019)

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on GBPUSD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.

2019-06-10 08:57:00

Gold Price Outlook Remains Positive, Silver Price Struggling with Resistance

Posted: 10 Jun 2019 01:30 AM PDT

Gold Price/Silver Price, Analysis and Charts.

Gold's fade lower may attract bulls once more.
Silver's bullish momentum reverses.

DailyFX Q2 USD and Gold Forecasts and Top 2019 Trading Opportunities.

Gold – A Bout of Profit-Taking?

Gold opens the session around 0.50% lower at $1,328/oz, around $20 lower than Friday's post-NFP spike high. Friday's $1,348/oz. print saw gold trade at its highest level since April 2018 but news over the weekend that us tariffs against Mexico have been put on the back burner has taking some of the risk-off premium out of the precious metal.

Price action in June has seen the series of lower highs broken decisively and suggests higher prices ahead. Gold trades above all three moving averages – with the 200-dma proving its support on May 21 and May 30 – while the CCI indicator shows gold coming out of extreme overbought conditions. The chart shows a cluster of support between $1,310/oz and $1,324/oz. made up of old lower highs and a gap on the June 3 bullish candle. Any fade lower into these levels may spark further upside momentum.

DailyFX Economic Calendar

How to Trade Gold: Top Gold Trading Strategies and Tips

Gold (XAU) Daily Price Chart (October 2018 – June 10, 2019)

IG Client Sentimentshows that retail traders are 53.6% net-long gold, a bearish contrarian indicator. Recent daily and weekly sentiment shifts however suggest that spot gold may soon reverse higher.

Silver Runs into Resistance

After rallying more than 6% since the recent low print on May 28, silver has turned sharply lower at the start of the week. The 200-day moving average ($15.02) – broken last week but not closed above – remains firm resistance for silver, while slightly lower the 23.6% Fibonacci retracement level at $14.92 should also be watched. The longer-term negative chart outlook has been broken, but silver needs to find support before further upside action can take place. A cluster of prior lows/highs either side of $14.65 may provide short-term support.

Silver Daily Price Chart (July 2018 – June 10, 2019)

Trading the Gold-Silver Ratio: Strategies and Tips

— Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

2019-06-10 08:00:00

Euro, US Dollar May Ignore Local Data

Posted: 10 Jun 2019 12:08 AM PDT

TALKING POINTS – TRADE WAR, BREXIT, EURO, USD

The Euro and USD may ignore local data
Volatility may come from external shocks
Brexit, US-China trade war still in focus

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

APAC RECAP

Asia Pacific markets woke up with a pep in their step after US-Mexico trade tensions were alleviated. US President Donald Trump announced on June 8 that tariffs are indefinitely suspended after a deal was reached with Mexican officials. The Mexican Peso and Canadian Dollar gapped higher amidst renewed hopes that the USMCA – NAFTA'S replacement– will pass.

LIGHT ECON DOCKET EXPOSES EURO, USD TO EXTERNAL SHOCKS

Since the economic docket both in Europe and the US will likely offer little volatility – due to the relatively benign nature of these indicators – the Euro and Greenback's price movement will likely be dictated by external shocks. Familiar fundamental themes such as the US-China trade war, Brexit and ongoing political risk in Europe between Rome and Brussels may rear their ugly heads and cause volatility.

At the end of June, US President Donald Trump will decide whether he wants to impose an additional $325 billion worth of tariffs against China. However, officials in Washington will take note of the PBOC's statement – or what some might call a veiled threat – on June 7. Officials said that China has more tools in its arsenal that it is ready to utilize if relations worsen. Some of these might include a ban or restricted supply of rare earth metals.

Looking ahead, most of the major event risk – barring any unexpected developments – will likely occur in the mid-to-tail end of the week. This could mean that markets may start coiling up before major volatility-inducing indicators are published, leading to potentially greater volatility. Some of these include US retail sales, U. of Michigan sentiment survey, and the meeting between Euro Area finance ministers over how to deal with Italy's budgetary ambitions.

CHART OF THE DAY: CADJPY, S&P 500 FUTURES, MXNUSD GAP HIGHER ON TRADE HOPES

FX TRADING RESOURCES

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

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

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2019-06-10 06:30:00

Crude Oil Prices Up, Gold Down as Markets Cheer US-Mexico Detente

Posted: 09 Jun 2019 10:12 PM PDT

CRUDE OIL & GOLD TALKING POINTS:

Crude oil prices rose with stocks as US shelved Mexico import tariffs
Gold prices down as bond yields, US Dollar advance in risk-on trade
Sentiment likely to remain in focus, stock index futures point upward

Sentiment-linked crude oil prices gapped higher alongside bellwether S&P 500 futures at the start of the trading week as news that the US has shelved a plan to impose tariffs on imports from Mexico buoyed overall risk appetite. Gold prices fell the upbeat mood cooled Fed rate cut speculation, sending the US Dollar higher alongside bond yields and undercutting the appeal of non-interest-bearing and anti-fiat assets.

CRUDE OIL MAY CONTINUE HIGHER AS GOLD FALLS IN RISK-ON TRADE

Looking ahead, a relatively muted offering on the economic data docket might broad-based trends in the markets' mood in focus. Futures tracking Wall Street stock benchmark are pointing convincingly higher, hinting that the risk-on tilt may extend from Asia Pacific trade into European and US hours. That might bode ill for gold as crude oil continues to recover.

Did we get it right with our crude oil and gold forecasts? Get them here to find out!

GOLD TECHNICAL ANALYSIS

Gold prices are pulling back from resistance marked by February's swing high at 1346.75. A turn back below resistance-turned-support at 1323.40 sets the stage for a retest of the 1303.70-09.12 zone. Alternatively, a daily close above resistance targetsa trend-defining barrier in the 1357.50-66.06 area.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices rose after forming a Bullish Engulfing candlestick pattern at support in the 50.31-51.33 area, as expected. From here, a daily close above support-turned-resistance at 55.75 targets the 57.24-88 zone next. Alternatively, a reversal below 50.31 opens the door to challenge support set from September 2016 in the 42.05-43.00 region.

COMMODITY TRADING RESOURCES

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

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

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2019-06-10 05:00:00

AUD Market May Find Bar To Deeper Rate Cuts Very High Indeed

Posted: 09 Jun 2019 07:41 PM PDT

Australian Dollar, Official Cash Rate, Talking Points:

Australian interest rates were cut to a new record low last week
Futures markets think they are going lower yet
They may, but deep cuts will pose big problems without offering obvious solutions

Find out what retail foreign exchange traders make of the Australian Dollar's prospects right now at the DailyFX Sentiment Page.

The Australian Dollar rose last week after the first domestic interest rate cut since late 2016 took the Official Cash Rate down to a new record low of 1.25%.

This is counterintuitive. After all lower rates ought to count heavily against a currency. However, in the Aussie's case the market had become extremely 'dovish' on interest rate policy before the fact. That means investors were certain that the delivered cut was coming. They were and remain pretty sure that rates will yet go lower still. This certainty had reached the point where the only way in which the Reserve Bank could have met it would have been by promising to cut again in July. It was never going to do this so, sure enough, it was read as 'less dovish than the market' and up went the currency.

However, Australian rate futures still price in the chance of another cut next month at more than 50%, with yet another reduction penciled in before May next year. That would take the OCR down to 0.75%.

Now on one important level this is not controversial. The RBA is mandated to target annualized consumer price inflation between two and three percent. The last read was 1.3%. Indeed, inflation has made only two, brief quarterly forays above 2% since mid-2014. Looked entirely through the prism of its mandate the case that the RBA should in fact have acted is quite easy to make. Perhaps indeed it should have acted sooner.

Don't Forget All That Debt

But there's at least one huge problem here for the central bank. In a word, it's 'debt.' Australian private individuals are already among the developed world's keenest borrowers. According to data from the Institute of International Finance Australian household debt equaled 127% of Gross Domestic Product at the end of last year, and 189% of disposable income. Both measures are close to record peaks and put Australia either at or very close to the top compared to similar economies.

The RBA will be keenly aware that more than two years of record low interest rates has of course stoked borrowing while not notably stimulating inflation. With too many Australians already horribly in hock, the dangers of encouraging yet more borrowing are clear enough. For its part central bank is betting much on the labor market. That has been a rare, consistent strong point in an Australian economy which remains an astonishing job-creation machine. It's been a non-inflationary machine too, so far, but the RBA still seems to believe that eventually wage pressures will be seen in the pricing figures.

So, this week's official labor market statistics will probably be even more notable than usual for Aussie watchers. The jobless rate is expected to have ticked lower to 5.1% in April. While it remains close to that psychologically comforting 5% level, the RBA will probably stick to its line that eventually labor will ride to inflation's aid. The market may well get the one more rate cut it's expecting, but action beyond that seems far less certain.

The combination of high private debt and strong job creation might make the bar to deeper cuts much higher than the market now thinks.

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!

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2019-06-10 02:00:00

Dollar Drops Versus SGD, IDR on Fed Rate Cut Bets. China Trade Eyed

Posted: 09 Jun 2019 05:48 PM PDT

ASEAN Fundamental Outlook

ASEAN currencies surged higher as Fed rate cut bets sunk the US Dollar
Disappointing US CPI, retail sales data may compound USD losses ahead
Markets will be gauging trade war impact on Chinese external sector data

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US Dollar and ASEAN FX Recap

It was a shaky week for US Dollar bulls as the Greenback underperformed largely because of two key fundamental developments. The first being rising chances of a Fed rate cut in July, those odds nearly doubled this past week and undermined the return of USD. Second, this fueled a recovery in the S&P 500 and risk trends, sapping the appeal of safe-haven assets such as the world's most liquid currency, USD.

One could imagine that this bolstered its ASEAN counterparts, and this was largely the case. The one notable exception was the Indonesian Rupiah, which saw restricted trade due to a week's worth of local holidays. Still, this didn't prevent the Bank of Indonesia from opening the door to a rate cut down the road if the nation faces a negative impact from trade wars. The central bank held rates unchanged back in May.

ASEAN Stocks Aim Higher

Sentiment-linked ASEAN currencies such as the Malaysian Ringgit and Philippine Peso also received a boost as regional benchmark stock indexes rallied. At one point last week, the PSEi Index on the chart below touched its highest since February. The FTSE Bursa Malaysia KLCI Index also held onto recent gains. Commentary from Fed Chair Jerome Powell calmed markets amidst rising US-Mexico trade tensions.

Week Ahead: Will US Economic Data Further Fuel Fed Rate Cut Bets? US-Mexico Trade Wars?

The impact of where credit conditions are heading in the world's largest economy should not be brushed aside for regional ASEAN markets. Given such certainty of a cut in July and the Fed's data-dependent approach, the focus continues to be on how the US economy performs. As we saw with the latest jobs report, US economic data is still tending to increasingly disappoint relative to expectations.

This opens the door to further weakness in US CPI data in the week ahead, which could potentially seal the nail in the coffin for a July cut in terms of what the markets could expect. Then, retail sales will be closely eyed for the health of the largest portion of US GDP, consumption. With room to cut, this may undermine the appeal of the US Dollar and aid to speed up the reversal in USDSGD.

Granted, odds of a cut have been rising also due to the reaction the Fed could take to rising trade war fears. This has been somewhat relieved after US President Donald Trump indefinitely suspended Mexico tariff threats. As such, this could support USD as Fed rate cut bets cool. The US still has to make a call on whether or not to raise levies on China on an additional $325b worth of goods towards the end of this month.

China is also facing a similar threat. After the Fed Chair spoke this past week, PBOC Governor Yi Gang also offered reassuring commentary that the nation has "lots of policy room" if trade wars worsen. China will be releasing trade, industrial production and retail sales this week. Like in the US, these may also be at risk to underperforming as markets gauge the impact of higher US tariffs.

As such, these high-profile event risk can heavily influence market mood and may overshadow regional developments in ASEAN such as Indonesian CPI and Philippine trade data. Though both will be important to watch for near-term volatility in USDIDR and USDPHP. In the medium-term however, rising fears of a US recession can benefit the Greenback with a key section of the yield curve still inverted.

FX Trading Resources

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

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

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2019-06-10 00:30:00

Canadian Dollar Gaps Up, Yen Drops as US Shelves Mexico Tariffs

Posted: 09 Jun 2019 04:26 PM PDT

CANADIAN DOLLAR, TRUMP, TARIFFS, MEXICO – TALKING POINTS:

The Canadian Dollar gapped higher (USDCAD lower) at the start of the trading week as markets responded to reports that the US has reached an agreement with Mexico late Friday that will indefinitely delay planned tariff hikes due to have taken effect this week. President Donald Trump threatened to levy Mexican imports to compel the country to do more about stopping illegal immigration into the US.

This is supportive for the Canadian unit because de-escalation of tensions between the US and Mexico increases the probability that the nascent USMCA – the free trade pact negotiated between the three North American countries to replace NAFTA – will pass through to implementation. The news was supportive for broader sentiment as well, with the anti-risk Japanese Yen and Swiss Franc tracking lower.

The Canadian economic data docket is all but through the remainder of the trading week, leaving the currency at the mercy of external cross-currents. US CPI data and its implications for Fed policy expectations, as well as a meeting of Eurozone finance ministers to decide on the penalties facing Italy for breaching budgetary limits, may command outsized attention.

See our free trading guide to help build confidence in your USDCAD trading strategy!

USDCAD TRADING RESOURCES

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

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

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2019-06-09 23:00:00

Canadian Dollar, MXN May Gap After Trump Suspended Mexico Tariffs

Posted: 09 Jun 2019 12:04 PM PDT

Asia Pacific Market Open Talking Points

MXN and CAD to gap and appreciate as US suspended Mexico tariff threat
Surprise effect is somewhat diminished, US Dollar may also climb ahead
USD/CAD downtrend in focus post US and Canadian employment reports

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.

MXN, CAD May Gap Higher as US Drops Mexican Tariffs

The Mexican Peso and Canadian Dollar may gap and appreciate against their peers at the beginning of the new week. After market close on Friday, US President Donald Trump announced that the nation will "indefinitely suspend" tariffs scheduled for Mexico. Though significant follow-through could be lacking as this wouldn't be too surprising.

Heading into Friday's close, Mr Trump said that there was a "good chance" that the US would make a deal with Mexico. Thus, the surprise effect has arguably lost some of its potency given that equities rallied into the week-end. For the Canadian Dollar, the cloud of uncertainty surrounding the passage of the USMCA, the replacement to NAFTA, is arguably lifted somewhat and thus should offer the currency a boost.

For equities, the outlook is not quite as clear heading into Asia markets. While the removal of US-Mexico trade war fears is an upside potential, it also alleviates pressure the Fed is facing on the external front and may cool rate cut bets. Granted, there is still the threat of additional tariffs on China. It would not be too surprising to see North American confidence-inspiring market sentiment to perhaps alleviate declines seen in the US Dollar as of late. The anti-risk Japanese Yen may weaken ahead.

USD Sinks on Jobs Report as CAD Rallies on Canadian Employment Data

Speaking of, the US Dollar rounded out its worst week since February 2018 on Friday, with the DXY plunging in the aftermath of a softer-than-expected local jobs report. In May, the US only added 75k positions compared to 175k expected as overall average hourly earnings fell short of estimates. Meanwhile, unemployment held steady at 3.6 percent as anticipated. The labor force participation rate also remained unchanged.

On the flip side of the spectrum, the Canadian Dollar outperformed amidst a rosier employment report. In May, Canada added 27.7k jobs versus 5.0k anticipated. Meanwhile, the unemployment rate ticked lower from 5.7 percent to 5.4. However, the labor force participation rate declined from 65.9 percent to 65.7 unexpectedly. Still, local 2-year government bond yields rallied as BoC rate cut bets cooled.

Canadian Dollar Technical Analysis

With that in mind, gains in the Loonie could be challenged by those seen in the US Dollar ahead. This comes as USD/CAD sits in a key support range between 1.3251 and 1.3291 after clearing rising support from February. If this area is taken out, we could be looking at testing lows not seen since March as the near-term downtrend extends.

USD/CAD Daily Chart

Chart Created in TradingView

FX Trading Resources

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

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

2019-06-09 19:00:00