Analyst Articles – Forex News 24 |
- EURUSD Downward Momentum Stalls at Support
- Dollar Versus Gold Trends as Trump Warns on Trade War, FOMC Decision Approaches
- Dollar Versus Gold Trends as Trump Warns on Trade War, FOMC Decision Approaches
- August BOE Meeting & GBP/USD Rate Forecast
- July Fed Meeting & USD/JPY Rate Forecast
- Q2 Eurozone GDP, July Eurozone Inflation & EUR/JPY Rate Forecast
- ECB monetary policy | Nicholas Cawley
- South Africa Credit Rating Cut by Fitch, Rand Drops
- US Q2 GDP Stronger Than Expected, US Dollar Continues to Rally
- EURUSD, AUDUSD, GBPJPY, Gold Price & More – Charts for Next Week
| EURUSD Downward Momentum Stalls at Support Posted: 26 Jul 2019 09:13 PM PDT Hits: 6 EURUSD Technical Outlook:
For the intermediate-term fundamental and technical outlook, check out the Q3 Euro Forecast. Euro at an inflection point with volatile candlestick forming at supportPrior to the outcome of the ECB meeting on Thursday the Euro traded down to support above 11100, created by pair of lows back in April and May. The ensuing bounce and general volatility following the central bank meeting forged out a Long-legged Doji candlestick. These candlesticks, with their long shadows (upper and lower wicks) and open and close in near proximity, indicate an inflection point; a push/pull struggle between both sides of the market without a 'winner'. Given the candle formed at support it suggests we may see a bounce, but overall the trend is weak and any rally that develops may prove to be short-lived. Overall, the picture is a little tricky from a tactical standpoint. Taking a countertrend trade may not prove to be a fruitful opportunity with resistance not far ahead around the Thursday high (11187), and on the flip-side shorting support (especially with the candle that formed) has little appeal from where I sit. Traders may be best served next week sitting on the side-line until the picture clears up a bit. Keep in mind the FOMC decision on Wednesday, expect heightened volatility. To listen in live to the announcement, you can join Chief Strategist John Kicklighter on Wednesday, starting at 5:45 PM GMT time. Check out the IG Client Sentiment page to find out how changes in positioning in major markets could signal the next price move. EURUSD Daily Chart (Long-legged Doji at support)EURUSD 4-hr Chart (Lines & Levels to Watch)
Helpful Resources for Forex Traders Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex. —Written by Paul Robinson, Market Analyst You can follow Paul on Twitter at@PaulRobinsonFX http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| Dollar Versus Gold Trends as Trump Warns on Trade War, FOMC Decision Approaches Posted: 26 Jul 2019 07:55 PM PDT Hits: 7 EURUSD Talking Points:
What do the DailyFX Analysts expect from the Dollar, Euro, Equities, Oil and more through the 3Q 2019? Download forecasts for these assets and more with technical and fundamental insight from the DailyFX Trading Guides page. The Dollar and US Equity Rally Finds Lift From Uneven Growth ReadingsIt is difficult to miss the appetite for US assets. Demand for the US Dollar has shown through the general bull trend of the previous year while a particular bid arose through just the past week. In contrast to the favorite safe haven’s advance, the benchmark US indices have similarly projected recovery throughout 2019 and forged fresh record highs through the close of this past week for the S&P 500 and Nasdaq. That is a familiar trend for those that have been monitoring the pace-setter for speculative appetite, but so too should be the contrast this particular segment of the market is drawing to so many other ‘risk-based’ markets like global equities, emerging markets, global yields, carry trade and more. This is not a simple measure of ‘risk on’ or ‘risk off’ but instead a specific appeal for US-based markets. Chart of S&P 500 to VEU Rest of World ETF Ratio (Daily) There are a few elements that could reasonably be contributing to a Dollar and Dow bid, but one of the most prominent was on display this past week: relative economic out-performance. It started with the IMF’s updated growth forecasts for 2019 which showed a down-tick (-0.1 ppt to 3.2 percent) for the world yet an increase (0.3 ppt to 1.6 percent) for the US in particular. That trend carried forward with the US Composite PMI for July from Markit showing a jump where the Japanese figure languished in contractionary territory (below 50.0) and the Eurozone reading lost traction. Finally, on Friday, the US BEA 2Q GDP reading beat expectations of a 1.8 percent pace with a 2.2 percent post. While there wasn’t any global contrast to work with, the market was happy to follow the line. As a theme, the general health of the global economy will continue to draw attention. For big-picture government data, the 2Q Eurozone (along with French and Italian) GDP updates are due this week. That will clearly be a charge for European shares and perhaps the Euro, but it can also generate some further traction for the Dollar if the data drives capital towards or away from the world’s second largest currency. Unless there is an extreme contrast, the favorable winds for the US from growth are likely to die down. This shift in attention may generate some traction for the Euro in general, but EURUSD is likely to find its bearings from other, more pressing means. Equally-Weighted Euro Index (Daily)
President Trump Reminds That Trade Wars are Still a Severe BurdenThough growth was an effective driver, the hum of trade wars continued to buzz in the fundamental backdrop this past week. The headlines were reserved to reports that US and Chinese officials were meeting once again or overt threats being made between US and European officials over subsidies for their respective airplane manufacturers or lingering threats of auto tariffs. That changed into the close on Friday. US President Donald Trump waited until after the market close Friday to remark that China may not agree to a trade war agreement until after the election hoping for a change in administration. This may be as much a Trump Administration campaign tactic as an earnest evaluation of China’s position; but either way, that would equate to a severe economic burden. We’ll have to see how market’s account for evaluation – if they do at all – come next week. Another insight from the President that should be accounted for in our estimation of risk going forward is his take on currencies. In a wide-ranging talk, he would once again say the Yuan was ‘very low’ and manipulated while the Euro was ‘not doing well’. The insinuation was that the Dollar was unfairly forced higher by deflated counterparts, but he made the effort to say he supported a ‘strong Dollar’ policy. Despite these particular remarks, Trump has repeatedly bemoaned the high Greenback and lambasted the Fed for indirectly keeping it propped up – he made effort to critique the central bank Friday saying the GDP beat happened despite the “anchor around wrapped around our neck”. What was most interesting were reports that trade adviser Peter Navarro had presented means for devaluing the Dollar in the Oval Office this past week but was rejected. The best way to further destabilized a market already knocked off balance by a trade war is to introduce a currency war. Chart of Equally-Weighted Dollar Index with Consecutive Candle Count (Daily)
Fed Rate Decision Top Event Risk – As Much for Global Markets as the USLooking ahead to next week, trade wars may find unexpected winds and GDP will produce swells in areas with less global systemic heft, but monetary policy will line up for a systemic impact with three rate decisions on tap. Following this past week’s European Central Bank (ECB) rate decision, the market is keeping close tabs on dovish nuance – the group signaled an intent to ease through rates and/or quantitative methods in upcoming meetings. The Bank of Japan (BOJ) is first up on Tuesday morning and they will almost certainly maintain a position at the extreme end of the dovish scale, which only furthers their loss of credibility but doesn’t exactly alter the course of the Yen. The Bank of England’s (BOE) meeting on Thursday is dubbed ‘Super Thursday’ as it includes the quarterly inflation report. As important as that may be for insight on economic forecasts, the central bank is unlikely to alter course until the Brexit situation is clear – a resolution some ways into the future.
Top central bank insight and event overall is the Wednesday’s Federal Open Market Committee (FOMC) meeting. This gathering is expected result in the first rate cut from the world’s largest central bank in over a decade. There is certainty of ‘at least’ a 25 basis point cut at this meeting, but the real point of interest is whether the group feels it necessary to lower the range 50 basis points and/or signal further easing through the end of the year. According to Fed Funds futures, the probability of a half percent cut is 21 percent. The probability that the Fed goes for at least three cuts through year end is set at a 51 percent probability. There is no favorable outcome in this when we think it through. If the Fed bends to speculative will with faster cuts, it will suggest the situation for the market and economy is desperate. If they move slowly, there will be clear disappointment that the pace is well below what was anticipated. FOMC Scenario Table
Also on the Top Watch List: Gold; Pound and Australian DollarLooking outside the systemic themes, there are a few other key markets I will be watching for independent market movement. Gold is perhaps the most important measure overall. While it carries its own virtues and vices as a vehicle, my interests are more aligned to its use as a signal. The particular safe haven is well suited for an anti-fiat appetite that sent its value soaring in 2008-2011 when easing lead to an surge in stimulus. Accommodation is to be expected, but policy influx that accompanies an appetite for safe havens would speak to a financial backdrop that is extremely fragile – or already collapsing. Chart of Gold with Net Speculative Futures Positioning (Weekly)
The Sterling is another market of material interest. The currency may not have the weight of the Dollar against this week’s fundamental backdrop or the Euro after this past week’s ECB rate decision, but anticipation and speculative positioning may very well leverage a skew that resolves to useful moderation. The BOE decision is unlikely to detract from Brexit fears, and the UK-EU divorce is already seen heading towards a messy split. New PM Johnson has reiterated his willingness to pursue a no-deal Brexit, but there is still three months left until time runs out. In the meantime, Parliament can cause problems and a General Election is a meaningful risk. I am watching to see if the added time and extensive speculative lean against the Pound will lead to rebalancing over the week ahead. Chart of GBPUSD with Net Speculative Futures Positioning (Weekly)
Finally, there is the Australian Dollar. While I see merits to the Swiss Franc and New Zealand Dollar, the Australian currency is one of the more interesting options for reduced fundamental static. There is 2Q inflation data due out of the country this coming week, but the currency is already in a technically vulnerable position. AUDUSD slid six straight sessions through Friday. That isn’t record breaking but it does line up to the most persistent tumbles in a few years. A rebound would be well primed on a medium and short-term technical basis. But it is always useful to look for a fundamental cue along the way to help the market along. We disuss all of this in this weekend Trading Video. Chart of AUDUSD and Consecutive Candles (Daily)
If you want to download my Manic-Crisis calendar, you can find the updated file here. See how retail traders are positioning in EURUSD, Dow, Gold and other key FX markets, indices and commodities using the DailyFX speculative positioning data on the sentiment page. 2019-07-27 02:04:00 Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| Dollar Versus Gold Trends as Trump Warns on Trade War, FOMC Decision Approaches Posted: 26 Jul 2019 07:16 PM PDT Hits: 2 EURUSD Talking Points:
What do the DailyFX Analysts expect from the Dollar, Euro, Equities, Oil and more through the 3Q 2019? Download forecasts for these assets and more with technical and fundamental insight from the DailyFX Trading Guides page. The Dollar and US Equity Rally Finds Lift From Uneven Growth ReadingsIt is difficult to miss the appetite for US assets. Demand for the US Dollar has shown through the general bull trend of the previous year while a particular bid arose through just the past week. In contrast to the favorite safe haven’s advance, the benchmark US indices have similarly projected recovery throughout 2019 and forged fresh record highs through the close of this past week for the S&P 500 and Nasdaq. That is a familiar trend for those that have been monitoring the pace-setter for speculative appetite, but so too should be the contrast this particular segment of the market is drawing to so many other ‘risk-based’ markets like global equities, emerging markets, global yields, carry trade and more. This is not a simple measure of ‘risk on’ or ‘risk off’ but instead a specific appeal for US-based markets. Chart of S&P 500 to VEU Rest of World ETF Ratio (Daily)
There are a few elements that could reasonably be contributing to a Dollar and Dow bid, but one of the most prominent was on display this past week: relative economic out-performance. It started with the IMF’s updated growth forecasts for 2019 which showed a down-tick (-0.1 ppt to 3.2 percent) for the world yet an increase (0.3 ppt to 1.6 percent) for the US in particular. That trend carried forward with the US Composite PMI for July from Markit showing a jump where the Japanese figure languished in contractionary territory (below 50.0) and the Eurozone reading lost traction. Finally, on Friday, the US BEA 2Q GDP reading beat expectations of a 1.8 percent pace with a 2.2 percent post. While there wasn’t any global contrast to work with, the market was happy to follow the line. As a theme, the general health of the global economy will continue to draw attention. For big-picture government data, the 2Q Eurozone (along with French and Italian) GDP updates are due this week. That will clearly be a charge for European shares and perhaps the Euro, but it can also generate some further traction for the Dollar if the data drives capital towards or away from the world’s second largest currency. Unless there is an extreme contrast, the favorable winds for the US from growth are likely to die down. This shift in attention may generate some traction for the Euro in general, but EURUSD is likely to find its bearings from other, more pressing means. Equally-Weighted Euro Index (Daily)
President Trump Reminds That Trade Wars are Still a Severe BurdenThough growth was an effective driver, the hum of trade wars continued to buzz in the fundamental backdrop this past week. The headlines were reserved to reports that US and Chinese officials were meeting once again or overt threats being made between US and European officials over subsidies for their respective airplane manufacturers or lingering threats of auto tariffs. That changed into the close on Friday. US President Donald Trump waited until after the market close Friday to remark that China may not agree to a trade war agreement until after the election hoping for a change in administration. This may be as much a Trump Administration campaign tactic as an earnest evaluation of China’s position; but either way, that would equate to a severe economic burden. We’ll have to see how market’s account for evaluation – if they do at all – come next week. Another insight from the President that should be accounted for in our estimation of risk going forward is his take on currencies. In a wide-ranging talk, he would once again say the Yuan was ‘very low’ and manipulated while the Euro was ‘not doing well’. The insinuation was that the Dollar was unfairly forced higher by deflated counterparts, but he made the effort to say he supported a ‘strong Dollar’ policy. Despite these particular remarks, Trump has repeatedly bemoaned the high Greenback and lambasted the Fed for indirectly keeping it propped up – he made effort to critique the central bank Friday saying the GDP beat happened despite the “anchor around wrapped around our neck”. What was most interesting were reports that trade adviser Peter Navarro had presented means for devaluing the Dollar in the Oval Office this past week but was rejected. The best way to further destabilized a market already knocked off balance by a trade war is to introduce a currency war. Chart of Equally-Weighted Dollar Index with Consecutive Candle Count (Daily)
Fed Rate Decision Top Event Risk – As Much for Global Markets as the USLooking ahead to next week, trade wars may find unexpected winds and GDP will produce swells in areas with less global systemic heft, but monetary policy will line up for a systemic impact with three rate decisions on tap. Following this past week’s European Central Bank (ECB) rate decision, the market is keeping close tabs on dovish nuance – the group signaled an intent to ease through rates and/or quantitative methods in upcoming meetings. The Bank of Japan (BOJ) is first up on Tuesday morning and they will almost certainly maintain a position at the extreme end of the dovish scale, which only furthers their loss of credibility but doesn’t exactly alter the course of the Yen. The Bank of England’s (BOE) meeting on Thursday is dubbed ‘Super Thursday’ as it includes the quarterly inflation report. As important as that may be for insight on economic forecasts, the central bank is unlikely to alter course until the Brexit situation is clear – a resolution some ways into the future.
Top central bank insight and event overall is the Wednesday’s Federal Open Market Committee (FOMC) meeting. This gathering is expected result in the first rate cut from the world’s largest central bank in over a decade. There is certainty of ‘at least’ a 25 basis point cut at this meeting, but the real point of interest is whether the group feels it necessary to lower the range 50 basis points and/or signal further easing through the end of the year. According to Fed Funds futures, the probability of a half percent cut is 21 percent. The probability that the Fed goes for at least three cuts through year end is set at a 51 percent probability. There is no favorable outcome in this when we think it through. If the Fed bends to speculative will with faster cuts, it will suggest the situation for the market and economy is desperate. If they move slowly, there will be clear disappointment that the pace is well below what was anticipated. FOMC Scenario Table
Also on the Top Watch List: Gold; Pound and Australian DollarLooking outside the systemic themes, there are a few other key markets I will be watching for independent market movement. Gold is perhaps the most important measure overall. While it carries its own virtues and vices as a vehicle, my interests are more aligned to its use as a signal. The particular safe haven is well suited for an anti-fiat appetite that sent its value soaring in 2008-2011 when easing lead to an surge in stimulus. Accommodation is to be expected, but policy influx that accompanies an appetite for safe havens would speak to a financial backdrop that is extremely fragile – or already collapsing. Chart of Gold with Net Speculative Futures Positioning (Weekly)
The Sterling is another market of material interest. The currency may not have the weight of the Dollar against this week’s fundamental backdrop or the Euro after this past week’s ECB rate decision, but anticipation and speculative positioning may very well leverage a skew that resolves to useful moderation. The BOE decision is unlikely to detract from Brexit fears, and the UK-EU divorce is already seen heading towards a messy split. New PM Johnson has reiterated his willingness to pursue a no-deal Brexit, but there is still three months left until time runs out. In the meantime, Parliament can cause problems and a General Election is a meaningful risk. I am watching to see if the added time and extensive speculative lean against the Pound will lead to rebalancing over the week ahead. Chart of GBPUSD with Net Speculative Futures Positioning (Weekly)
Finally, there is the Australian Dollar. While I see merits to the Swiss Franc and New Zealand Dollar, the Australian currency is one of the more interesting options for reduced fundamental static. There is 2Q inflation data due out of the country this coming week, but the currency is already in a technically vulnerable position. AUDUSD slid six straight sessions through Friday. That isn’t record breaking but it does line up to the most persistent tumbles in a few years. A rebound would be well primed on a medium and short-term technical basis. But it is always useful to look for a fundamental cue along the way to help the market along. We disuss all of this in this weekend Trading Video. Chart of AUDUSD and Consecutive Candles (Daily)
If you want to download my Manic-Crisis calendar, you can find the updated file here. See how retail traders are positioning in EURUSD, Dow, Gold and other key FX markets, indices and commodities using the DailyFX speculative positioning data on the sentiment page. 2019-07-27 02:04:00 Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| August BOE Meeting & GBP/USD Rate Forecast Posted: 26 Jul 2019 03:34 PM PDT Hits: 11 GBP Price Hinges on Brexit, August BOE Meeting, UK Inflation
08/01 THURSDAY | 11:00 GMT | GBP Bank of England Rate Decision & Quarterly Inflation Report With PM Boris Johnson officially at the helm of British Parliament, the drums for no-deal Brexit are beating louder across the UK. This has put spot GBPUSD under a considerable amount of pressure with potential for further weakness which could be sparked by the August BOE meeting slated for next Thursday at 11:00 GMT. The Bank of England has been shackled to a cautious monetary policy normalization approach considering the vast amount of risk and uncertainty surround Brexit. Although, the hawkish tilt by the UK's central bank has shifted to a more neutral bias recently and monetary policy outlook could turn even less optimistic at the upcoming August BOE meeting. Aside from forward rate guidance, the BOE will also provide markets with its quarterly inflation report. Pairs to Watch: EURGBP, GBPJPY, GBPUSD SPOT GBPUSD TECHNICAL ANALYSIS: DAILY PRICE CHART (JULY 2018 TO JULY 2019)GBPUSD price remains below the daily 8-, 13-, and 21-EMA envelope, and if the daily candle were to finish at these levels, it would represent the lowest close of the year. Daily MACD has just turned lower again while bearish territory, a sign of significant weakness. Slow Stochastics have turned lower as well. Bearish momentum is accelerating again for GBPUSD; a breakdown to fresh yearly lows appears to be around the corner. IG CLIENT SENTIMENT INDEX: GBPUSD DAILY PRICE CHART (JANUARY 28, 2019 TO JULY 26, 2019)
Spot GBPUSD retail trader data shows 82.1% of traders are net-long with the ratio of traders long to short at 4.59 to 1. In fact, traders have remained net-long since May 06 when GBPUSD traded near 1.29061; price has moved 4.0% lower since then. The percentage of traders net-long is now its highest since Jul 17 when GBPUSD traded near 1.24318. The number of traders net-long is 9.3% higher than yesterday and 19.4% higher from last week, while the number of traders net-short is 21.5% lower than yesterday and 26.9% lower from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPUSD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPUSD-bearish contrarian trading bias. FOREX TRADING RESOURCES
— Written by Christopher Vecchio, CFA, Senior Currency Strategist &Rich Dvorak, Junior Analyst Connect with @CVecchioFX and@RichDvorakFX on Twitter for real-time market insight http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| July Fed Meeting & USD/JPY Rate Forecast Posted: 26 Jul 2019 02:14 PM PDT Hits: 9 US DOLLAR HIGHLIGHTED BY JULY FED MEETING
Persistent uncertainty surrounding the US-China trade war, mixed US economic data and ambiguous Fed-speak have all provoked significant volatility in Fed rate cut bets and consequently the US Dollar. Forex traders could be provided clarity on Wednesday, however, with the Federal Reserve slated to publish its latest monetary policy statement at 18:00 GMT. While rate traders have priced the probability of a rate cut as a near-certainty according to overnight swaps, speculation over the size of the anticipated rate cut will likely linger into the FOMC's interest rate decision. The sharp improvement in US economic data over recent weeks has seen little impact on lofty rate cutbets – driven largely by slowing global GDP growth and ongoing trade policy uncertainty – which could position the US Dollar for major upside if the Fed refuses to capitulate. Pairs to Watch: DXY Index, EURUSD, USDJPY, Gold SPOT USDJPY TECHNICAL ANALYSIS: DAILY PRICE CHART (JULY 2018 TO JULY 2019)Spot USDJPY has proven resilient in recent days, carving a path higher through several key resistance levels while breaking the downtrend from the April high. Momentum indicators have started to turn the corner: daily MACD is pushing higher, on the verge of a move into bullish territory above the signal line; and Slow Stochastics have continued their gains towards overbought territory (often a sign of a strong market). Yet, there is still work to be done before a true bottoming call can be made. The break of the downtrend from the April high is a good start; but clearing out the May swing low and July swing high area near 108.96/109.02 would be better. In doing so, USDJPY would have established a series of higher highs and lower lows in context of price action since the start of June. Seeing as how Fed rate cut odds have been the driving factor behind moves in US Treasury yields – and according to the Bank of International Settlements (BIS), two-year yield differentials matter most to FX markets – we expect USDJPY price action around the Fed meeting on Wednesday to closely mirror that of the bond market. IG CLIENT SENTIMENT INDEX: USDJPY DAILY PRICE CHART (JANUARY 28, 2019 TO JULY 26, 2019)
Spot USDJPY retail trader data shows 59.3% of traders are net-long with the ratio of traders long to short at 1.46 to 1. In fact, traders have remained net-long since May 03 when spot USDJPY traded near 111.913; price has moved 2.9% lower since then. The number of traders net-long is 5.0% lower than yesterday and 16.0% lower from last week, while the number of traders net-short is 5.8% higher than yesterday and 13.7% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY 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 USDJPY price trend may soon reverse higher despite the fact traders remain net-long. FOREX TRADING RESOURCES
— Written by Christopher Vecchio, CFA, Senior Currency Strategist & Rich Dvorak, Junior Analyst Connect with @CVecchioFX and @RichDvorakFX on Twitter for real-time market insight http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| Q2 Eurozone GDP, July Eurozone Inflation & EUR/JPY Rate Forecast Posted: 26 Jul 2019 01:37 PM PDT Hits: 11 EURO PRICE TURNS TO EUROZONE GDP & INFLATION DATA AFTER JULY ECB MEETING
07/31 THURSDAY | 09:00 GMT | EUR Eurozone GDP (2Q A) & Eurozone CPI (JUL A) Next week's economic calendar is jam-packed with event risk and Wednesday's release of Eurozone GDP and CPI data at 9:00 GMT is certainly among the top 5 forex trading events. The closely watched economic indicators will follow last week's July ECB meeting where central bank President Mario Draghi paved the road to ease monetary policy in the near future. Although Draghi mentioned that a rate cut was not discussed among the ECB Governing Council's most recent meeting, he did state that "a significant degree of monetary stimulus continues to be necessary for financial conditions to remain very favorable and support the euro area expansion, the ongoing build-up of domestic price pressures and headline inflation developments over the medium term." EUROZONE GDP GROWTH CHART (QUARTERLY, YEAR-OVER-YEAR)EUROZONE CPI CHART (MONTHLY, YEAR-OVER-YEAR)
Stubbornly-sluggish economic activity across the Euro area is likely to be reiterated in the Q2 Eurozone GDP and CPI report, which stands to follow weaker-than-expected Eurozone PMI data just released. ECB President Drahi expressed concern on inflation and conveyed that the Governing Council "will act with same determination whether inflation is above or below the inflation aim" of around 2%. Moreover, Draghi also said that outlook is getting worse and worse in manufacturing. As such, the Euro could face significant downside if the headline EU economic data disappoints. Eurozone Q2 GDP (YoY) is estimated to be reported 0.2% lower than Q1 at 1.0% whereas Eurozone CPI for July (YoY) is expected to come in 0.1% lower than the prior month's reading of 1.1% according to Bloomberg's survey of economists. Pairs to Watch: EURUSD, EURGBP, EURJPY SPOT EUR/JPY TECHNICAL ANALYSIS: DAILY PRICE CHART (SEPTEMBER 2018 TO JULY 2019)
EUR/JPY looks towards the end of July on shaky footing, continuing to hold below the rising trendline from the 2012 and 2016 yearly swing lows. Bearish momentum has eased off in recent days, as both daily MACD and Slow Stochastics have turned higher (albeit still in bearish territory). Price is still holding below the daily 21-EMA. Now that EUR/JPY has broken through the June swing low at 120.78, there may be an easier pathway for a return towards the 2019 low established during the Yen flash crash in January at 118.62. Otherwise, if bulls are going to retake control, a return above the descending trendline from the October 2017 and March 2019 highs is required; that could come above the 23.6% retracement of the 2018 high/2019 low range at 122.20. IG CLIENT SENTIMENT INDEX: EUR/JPY DAILY PRICE CHART (JANUARY 28, 2019 TO JULY 26, 2019)
EUR/JPY retail trader data shows 70.4% of traders are net-long with the ratio of traders long to short at 2.38 to 1. In fact, traders have remained net-long since Apr 25 when spot EUR/JPY traded near 125.662; price has moved 3.8% lower since then. The number of traders net-long is 8.0% higher than yesterday and 8.7% lower from last week, while the number of traders net-short is 8.1% lower than yesterday and 1.5% lower from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests spot EUR/JPY prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURJPY-bearish contrarian trading bias. FOREX TRADING RESOURCES
— Written by Christopher Vecchio, CFA, Senior Currency Strategist &Rich Dvorak, Junior Analyst Connect with @CVecchioFX and@RichDvorakFX on Twitter for real-time market insight http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| ECB monetary policy | Nicholas Cawley Posted: 26 Jul 2019 10:19 AM PDT Hits: 7 ECB monetary policy discussion: Key Points Covered in this Podcast:– Why 'easier' monetary policy is necessary in the eurozone – Will the plight of Italian banks impact ECB monetary policy? – The euro: How long will it continue to fall? In this edition of our podcast Trading Global Markets Decoded, our host Martin Essex is joined by DailyFX analyst Nick Cawley. On the agenda: the recent ECB monetary policy decision to prepare central banks for rate cuts – and the path forward for the ECB. Is trouble brewing? Benefit from our discussion with Nick Cawley and listen to the podcast by clicking on the link. Follow our podcasts on a platform that suits youiTunes: https://itunes.apple.com/us/podcast/trading-global-markets-decoded/id1440995971 Stitcher: https://www.stitcher.com/podcast/trading-global-markets-decoded-with-dailyfx Soundcloud: https://soundcloud.com/user-943631370 Google Play: https://play.google.com/music/listen?u=0#/ps/Iuoq7v7xqjefyqthmypwp3x5aoi Spotify: https://open.spotify.com/show/6FtbTf4iGyxS0jrQ5jIWfo On July 25th, Mario Draghi sent a clear signal to the ECB policy meeting that interest rates will be reduced by a minimum of ten basis points at the September meeting. The central bank was also clear about restarting the quantitative easing program – whatever possible to boost growth and inflation in the eurozone. Why is 'easier' monetary policy necessary in the eurozone at the moment? 'All the data has shown growth is slowing in the eurozone,' Nick says, pointing to global trade wars, general market uncertainty, and low ECB projections for growth. 'When you couple this with stubbornly low inflation, there needs to be new fiscal stimulus to reboot the economy, and get growth and inflation up to or even close to the levels the ECB are looking for.' The latest data points seem to underline that growth is going to be still weaker in future than it is already. 'The manufacturing sector around the eurozone is in real trouble,' Nick says. 'Germany is [supposedly] the powerhouse of Europe in manufacturing and the latest Purchasing Managers Index data is awful.' Indeed, the figures show ongoing contraction, with order books low. 'You can't let this carry on for too long because if it becomes entrenched you'll see an economy that's just going to contract and contract further.' Could the ECB have raised rates sooner?Did the ECB have the chance to raise interest rates sooner? 'It was mooted at the end of last year that they were going to embark on small interest rate rises in 2019,' Nick says. 'But since then global trade has affected the economy.' Is the weakness of EUR/USD more to do with a strong US Dollar or weak euro right now? It's mainly to do with the systemic weakness in the euro,' Nick says. He points to the German Bund and its negative rates for 20 years. 'When you have this interest rate structure and negative yield curves, it's difficult for a currency to have any kind of appreciation, especially when you have the yield differentials that you had maybe at the beginning of the year against USD.' Will the euro continue to fall? 'I do see it as a long-term trend, I see nothing on the horizon that would take me from a bearish position to a bullish position to make me want to buy the euro.' As for EUR/GBP, Nick doesn't see highs broken in the short term or if they are it would indicate to sellers there may be another opportunity there. In July's policy meeting, the ECB signaled lower interest rates, more QE, but also a tiered structure of rates. Does this reflect the troubles faced by eurozone banks? 'The decision about a tiered structure decision has been around for some time and is indeed to do with the European banking situation,' Nick says. 'When you look at results from the likes of Deutsche Bank and UBS, the euro banks are finding it a terrific struggle to make money in the present interest rate environment. 'Banks need positive interest rates to make money in a traditional banking model. There is also the TLTROs that are coming in, which show the ECB has taken into account the situation in European banking and are aware of problems that lie ahead.' Can stocks continue to rise?Looking elsewhere, stocks are at a record high; can this continue? 'If investors can't make money in the bond market they'll look somewhere else. And stocks will benefit from this new liquidity wave that we'll see.' Gold has also had a great run recently. 'When there are negative yields in the bond market then zero yields on gold begins to look attractive,’ Nick says. 'Money needs a home. Some of the stock markets do appear overvalued but there's still money coming in to buy them and then it comes back to supply and demand.' 2019-07-26 16:07:00 Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| South Africa Credit Rating Cut by Fitch, Rand Drops Posted: 26 Jul 2019 09:07 AM PDT Hits: 10 USDZAR CLIMBS AS FITCH CUTS SOUTH AFRICA CREDIT RATING
The South African Rand (ZAR) is coming under renewed pressure during Friday's trading session following news that Fitch Ratings cut South Africa's credit rating to BB+ with negative outlook for the country. So far today, spot USDZAR is benefiting the most in response with the currency pair eclipsing the 14.200 handle and now trading at its highest level since June 26. Spot EURZAR and spot GBPZAR are also pushing higher to the tune of 1.01% and 0.67% respectively. USDZAR SPOT PRICE CHART: 4-HOUR TIME FRAME (JUNE 14, 2019 TO JULY 26, 2019)It is worth mentioning that the recent jump in spot USDZAR began prior to Fitch Ratings releasing its South Africa credit downgrade. The South African Rand began to come under pressure earlier in the week following the IMF World Economic Outlook showing a 0.5% cut to its 2019 GDP growth forecast and a 0.4% reduction to its 2020 GDP growth estimate. The Fitch Ratings' South Africa credit downgrade reflected "a marked widening in the budget deficit as a result of lower GDP growth and increased spending" which raised estimates for the country's debt-to-GDP ratio. Concerns over the finances of state-owned electric company Eskom also contributed to the negative outlook. While this could be chalked up to a "buy the rumor, sell the news" event, there could be another South Africa credit downgrade coming down the pipeline from Moody's who currently lists the country at Baa3, the lowest rating for investment-grade status, with neutral outlook. Another credit downgrade would likely exacerbate weakness in the South African Rand which could keep USDZAR bid – even with a Fed rate cut expected next week. FOREX TRADING RESOURCES
– Written by Rich Dvorak, Junior Analyst for DailyFX – Follow @RichDvorakFX on Twitter http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| US Q2 GDP Stronger Than Expected, US Dollar Continues to Rally Posted: 26 Jul 2019 06:23 AM PDT Hits: 10 US Q2 GDP and Dollar Price, Chart and Analysis:
Q3 2019 USD Forecast andTop Trading Opportunities The advanced US Q2 GDP (annualized) fell to 2.1% from 3.1% in Q1 2019 but beat market expectations of 1.8%. According to the Bureau of Economic Analysis (BEA), "The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP in the second quarter reflected downturns in inventory investment, exports, and nonresidential fixed investment. These downturns were partly offset by accelerations in PCE and federal government spending." The US dollar basket (DXY) pushed marginally higher post-release, continuing its recent rally and taking it back towards its 27-month high of 97.86 made on May 23 this year. US Dollar Daily Chart (December 2018 – July 26, 2019)
Busy Week of Heavyweight US Data and Events AheadA quick look at the economic calendar shows a raft of market-moving events and data releases next week which should keep US dollar traders busy. While Wednesday's FOMC meeting is the main course – with a 0.25% interest rate cut now fully priced-in – inflation data on Tuesday and the latest Labor market report (NFP) on Friday will also give traders a much better picture of the underlying health of the US economy.
Keep up to date with all key economic data and event releases via the DailyFX Economic Calendar 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 USD – 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. http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| EURUSD, AUDUSD, GBPJPY, Gold Price & More – Charts for Next Week Posted: 26 Jul 2019 05:09 AM PDT Hits: 10 The Euro struck a familiar set of lows on Thursday's ECB meeting, posting a candlestick that suggests another worthy inflection point is in play. AUDUSD is breaking down from a wedge within the context of a downtrend, suggests lower prices ahead. A few of the pairs in the 'Yen-plex' look attractive, but GBPJPY (&AUDJPY) stand out given technical posturing. Gold is thoroughly testing a recent wedge breakout; a hold keeps the upside intact while a failure could lead to a quick drop back towards major support levels. Technical Highlights:
See where our team of analysts see your favorite markets and currencies headed in the in the DailyFX Trading Forecasts. EURUSD long-legged Doji formed at supportThe Euro reacted with some modest volatility to yesterday's ECB meeting, which resulted in a daily Long-legged Doji candlestick. The push/pull came at support from April and May just above the 11100-threshold, which could result in a bounce if the 11130 low can hold. Given the general tone this may only turn out to be a countertrend bounce for now. EURUSD Daily Chart (Long-legged Doji at support)AUDUSD corrective wedge breaking, looking lowerAUDUSD is in the process of breaking a rising wedge formation within the context of a downtrend. This should get Aussie rolling back towards the June lows or worse. Waiting for a bounce/consolidation following the break may offer the best risk/reward set-up at this juncture. Keep an eye on support at 6910. AUDUSD Daily Chart (corrective wedge breaking)
GBPJPY & AUDJPY have attractive bearish set-upsGBPJPY is in the process of building yet another bear-flag, best seen on the 4-hr time-frame. So far, the top of the pattern is at a pair of recent lows. The pattern still needs to fully mature and trigger by breaking the underside trend-line, but has good potential given the overall downtrend. GBPJPY 4-hr Chart (Another bear-flag forming)
AUDJPY wedged up nicely heading into this week. The break the other day has focus shifted lower. A drop through 7513 should put pressure on the pair towards the June lows surrounding 7400. AUDJPY 4-hr Chart (wedge broke)
Gold price action around wedge to determine near-termGold price is at a make-or-break point in the near-term, with the recent wedge breakout under threat of reversing. A hold and gold will stay constructive, while a break of the bottom-side trend-line of the wedge could spur a quick shot lower as longs are caught on the wrong-side. Gold Price 4-hr Chart (wedge hold or fold?)
Resources for Forex & CFD TradersWhether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex. —Written by Paul Robinson, Market Analyst You can follow Paul on Twitter at @PaulRobinsonFX http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
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