The Latest in Forex News & Analysis.

Loonie surges

By Franc | June 28, 2017 12:06 pm | 0 Comments

Poloz speeches have pushed up the CAD. Markets are pricing a higher probability of a change in interest rate from BOC during the next meeting on July 12.

USDCAD is trading at its low level of 1.30.

The reaction of crude oil at that news is a bounce from 42.5 to 44.5

quiet markets in tight range

By Franc | June 26, 2017 12:21 pm | 0 Comments

Markets are trading within narrow ranges. EURUSD volatility is showing the lowest number registered in 2017. The same could be said for stock markets, where VIX has registered is minimum of the year during the last week.

Two important meetings could rise the volatility and give a direction to that market

  • Thursday, 29th June USD GDP
  • Friday 30th June, EUR Core CPI

Pressure on Oil drives currency market

By Franc | June 21, 2017 5:56 am | 0 Comments

Four consecutive negative session have drove Crude Oil price down to the lowest of the year.

The movement had impact on the main petrol currency USDCAD, that has reached the psychological level of 1.33 (far 1000 points from closing in Monday), bouncing back before closing.

Further to the conference of Carney from the BOE, reassuring a flat interest rate in UK, GBPUSD has moved down 150 points below the closing in Friday.

Kuroda, Governor of BOJ, keeps expectations unchanged, considering appropriate to continue easing.

Within an uncertain context such that, EURUSD has reached the lowest level of last 2 weeks at 1.11182.

EURUSD back to the start

By Franc | June 19, 2017 7:21 pm | 0 Comments

EURUSD is at a crucial level, it is clear from the beginning of the month. This level has been the starting point of the announced QE from ECB back in 2015. It is clear from the weekly chart below, how the market has always short EURUSD once this level has been tested, during the last 2 years. So, in terms of probability,  markets consider the range 1.13 to 1.115 as a selling range.

However, political environment have changed from January 2015; there is a new president in USA and  Europe is running without British. Those have shake the most liquid currency most of the time driving the EURUSD close to parity.

However, despite political uncertainty, economic figures have shown a recovery on both side from that time:

  • higher inflation for EU and lower Unemployment Rate,
  • lower Unemployment Rate for USA and stable inflation rate.

It is true that 6 months are still missing at the end of QE, however markets move from rumors.

Is that the time for EUR to go back on 2014 levels or political turmoils will move back the currency to its usual level seen during the last 3 years?

Similarities in action: does history repeats itself?

By Franc | June 14, 2017 12:14 pm | 0 Comments

Gold is trading back a the same levels of last year, depicting exactly same path that was back in May 2016. It is worth to find some similarities:

What happened last year? Further to rumors of hiking interest rates, which back in June 2016 have not been fulfilled, Gold has hit the high of $1374 a month later. Further to that, Gold has slowly reached the lowest value further to higher probability of a hike in December 2016 and stronger dollar during elections.

This sounds similar to what is happening lately. The Market is already discounting a hike with probability higher than 96%, and evaluating a third hike with a lower probability than the expected in January. Gold today is charting a first Heiken Ashi candle, further to a small retracement, exactly like last year.

Will a second candle open the doors for a new high?

One thing is certain:

Gold will go back to its highest level if the statement will show any shaky signal of third interest rate hike in USA and inflation expectation will not satisfy forecasts.

“MAKE AMERICA GREAT AGAIN”

By Franc | June 1, 2017 4:42 am | 0 Comments

After defining global warming a hoax aimed at weakening U.S. industry in 2016, D.J.Trump will announce the USA position on Paris Accord TODAY AT 3pm. The nations that haven’t agreed the Paris accord around the world are just Syria and Nicaragua. A U.S. pullout could have sweeping implications, concerning industries production, partnership with allies and reputation. The deal relies heavily on reductions in emissions by big polluter nations, and the United States is the world’s second-biggest carbon dioxide emitter behind China.

This will of course incentivize increase of the production in USA. In fact,  Trump has said the accord would cost the U.S. economy trillions of dollars without tangible benefit. For the president, a withdrawal would reflect his “America First” approach to policy.

The index that measures the strength of US Dollar (DXY) has drawn a downtrend from beginning of the year. The index has moved from 103 to 97. Technically, at the moment the index is to an important level where the index could either bounce back pointing to the next resistance (99.6) or collapse to the next important support (94.50).

Will the market consider the Trump withdraw as a turning point for USD?

Super EUR

By Franc | May 31, 2017 4:34 am | 0 Comments

Despite the positive numbers on the GDP in USA, last week, the EURUSD is maintaining the 1.11 level, registering a consolidation in the 1.1110/1.1220 range.

The market is waiting for 3 important events this week:

  • Core CPI in EUR zone and Unemployment Rate: if figures  are better than the expected, it would drive the EUR on the edge of the resistance 1.1250, since the idea of a decrease of QE could get real with a CPI higher than 1% and a lower Unemployment rate in the EU.
  • Non Farm Payroll: the usual meeting at the beginning of the month about the change in the number of people employed during the previous month, is always a key number that raises volatility and moves expectations on USD.
  • UK Elections: last but not least, the next prime minister of UK will be the one that will discuss the Brexit condition with EU. The polls are showing a decreasing spread between the Conservative and Labour, however,  current prime minister and leader of the Tories May is the favorite. GBPUSD and EURUSD are positively correlated at 78% Daily and 88% on Hourly basis. Therefore, any negative movement on GBP could be reflected on EUR, although the EURGBP looks like it is pointing at the highest level of the year (0.8852).

 

In Conclusion, uncertainty is increasing within the EUR Zone. Any bad news will drive the EUR down 100 point on the contrary good news will push the EUR to its highest level if Trump will not deliver the expected reforms soon.

Hold on and keep an eye on the Supports and Resistances.

EUR Core CPI would feed BULLS

By Franc | May 17, 2017 4:49 am | 0 Comments

The level of EURUSD at 1.11 is the highest level since the USA Elections.

Further to the last Trump behaves and failures to achieve the promised targets, the market is loosing confidence in USD strength. It can be seen from the drop of 200 pips of USDCHF during the last three days, although still in range (0.98 – 1.01) from beginning of 2017. Breaking that strong support would have a high impact on USD.

 

On the other side, the Macron election in France, German regional election in favor of Merkel party and  and positive figures from EU (lower Unemployment rate and higher CPI) are driving the EUR above expectations and confirming the uptrend drawn during 2017.

The charts is showing an important resistance at 1.1120 that has already been tested tonight. Next level is at 1.1225 (a figure above).

A positive figure of CPI is crucial for the achievement of that levels, since would inject confidence in Eur Bulls, at least until UK will keep uncertainty on Brexit.

 

 

Gold defining a new trend

By Franc | May 16, 2017 4:48 am | 0 Comments

Further to 13 days of downtrend from 1276 to 1234 (42 points), Gold is starting to draw an uptrend. The movements comes from a slight devaluation of 100 points of USD (US Dollar Index 99.60 to 98.40) and positive figures coming from New Zeland.

Heiken Ashi daily charts are showing higher highs during the last 3 sessions (1227; 1231; 1237).

Is it time to buy ? Will we see again  the top of the channel registered on 17th April (1295) ?

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