Daily Forex Fundamental Analysis – April 19, 2018

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USD
The dollar scored another winning day thanks to higher US bond yields. Optimistic remarks from Fed officials, along with improved sentiment from the Beige Book, revived rate hike expectations even as some medium-tier reports previously missed expectations. Initial jobless claims and the Philly Fed index are due next.
EUR
The euro struggled to hold its ground as ECB tightening hopes dipped on the downgrade in final headline CPI. The figure was lowered from 1.4% to 1.3% instead of being unchanged as expected. There are no major reports due from the region today so the shared currency could be more sensitive to risk flows and its counterparts’ movements.
GBP
The pound took a hit when UK CPI disappointed, following through on the reaction from the weaker average earnings index earlier in the week. The headline figure fell from 2.7% to 2.5% instead of holding steady while the core figure dipped from 2.4% to 2.3%. UK retail sales is due next and a 0.5% drop in consumer spending is eyed.
CHF
The franc continued to slide lower as traders renewed their demand for the dollar versus other lower-yielding currencies. The improvement in risk appetite also took its toll on the Swiss currency. There were no reports out of Switzerland then and none are due today, so sentiment could remain in play.
JPY
The yen was also in a weak spot as dollar demand picked up on account of higher US bond yields. There were no reports out of Japan then and none are due today, so sentiment could push yen pairs around.
Commodity Currencies (AUD, NZD, CAD)
The Loonie slumped hard after the BOC was considerably less upbeat than expected. The central bank kept rates unchanged at 1.25% but did not signal any eagerness to hike again anytime soon, citing trade risks as a source of uncertainty. In Australia, the headline unemployment change came in weaker than expected at 4.9K versus 20.3K for March while the earlier reading was downgraded to -6.3K. There are no major reports due from the comdoll economies in the next sessions.

GBPJPY Forex Technical Analysis – April 19, 2018

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GBPJPY continues to trend higher but has bounced off the top of its long-term ascending channel visible on the 4-hour time frame. Price could be gearing up for a pullback to support at the 151.50 minor psychological mark.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 38.2% level is closest to the channel support and might be enough to keep losses in check. The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside or that the rally could still resume.
In addition, the 100 SMA coincides with the 50% Fibonacci retracement level, adding to its strength as a potential floor in the event of a larger dip. The gap between the moving averages is widening to reflect stronger bullish momentum. Stochastic is moving down but is nearing oversold conditions to show that sellers are feeling exhausted.
UK CPI came in weaker than expected as the headline figure fell from 2.7% to 2.5% instead of holding steady while the core figure dipped from 2.4% to 2.3%. Prior to this, the jobs report came in mostly stronger than expected but traders focused on the miss in the average earnings index, which would dampen inflationary pressures.
There have been no major reports out of Japan but the yen has been weakening on account of improving risk appetite and dollar strength. US bond yields have been on the rise, reviving the appeal of the US currency as a safe-haven. Japan’s national core CPI and tertiary activity index are due on Friday.

Daily Forex Fundamental Analysis – April 18, 2018

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USD
The US dollar has been able to regain some ground recently thanks to strong medium-tier data and a pickup in bond yields on cooling geopolitical risks. Industrial production and capacity utilization beat expectations, as well as building permits and housing starts. FOMC members have also dropped some optimistic remarks on economic growth and inflation, as well as the labor market.
EUR
The euro returned some of its recent gains as ZEW economic sentiment readings fell short. Germany’s ZEW reading tumbled from 5.1 to -8.2, way worse than the estimated -0.8 figure. The region’s reading fell from 13.4 to 1.9 versus the 7.4 forecast. Final CPI readings are due next but no changes are eyed.
GBP
The pound also returned some of its winnings when the average earnings index fell short of estimates. Claimant count was better than expected at an 11.6K gain in joblessness versus the estimated 13.3K figure while the earlier reading enjoyed an upgrade. UK CPI is due next and stronger figures could revive BOE tightening hopes and sterling rallies.
CHF
The franc was one of the weaker performers as the improvement in risk appetite and the rise in US bond yields dampened demand for this lower-yielding currency. There were no reports out of the Swiss economy then and none are due today so sentiment could push franc pairs around.
JPY
The yen was also in a weak spot thanks to the pickup in risk-taking and dollar demand. There were no major reports out of Japan then and none are due today, which suggests that yen pairs could take their cues from geopolitical risks or the lack thereof.
Commodity Currencies (AUD, NZD, CAD)
The Loonie extended its gains on another round of oil rallies stemming from a reduction in API stockpiles. This could lead to a similar drop in EIA crude oil inventories data, easing oversupply concerns. New Zealand has its CPI report due next and a 0.4% gain in price levels is eyed. The BOC has its rate statement lined up, along with a presser by Governor Poloz which could contain more upbeat remarks.

USDJPY Forex Technical Analysis – April 18, 2018

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USDJPY previously broke below support around the 109.00 major psychological level and has dipped to a low of 105.25 before pulling up.
Applying the Fibonacci retracement tool on the swing high and low on the daily time frame shows that the 50% Fib lines up with the broken support.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside or that the selloff is likely to resume. Stochastic is turning lower from the overbought zone to show that selling pressure is picking up.
The US dollar has been able to regain some ground recently thanks to strong medium-tier data and a pickup in bond yields on cooling geopolitical risks. FOMC members have also dropped some optimistic remarks on economic growth and inflation, as well as the labor market.
FOMC members Quarles and Dudley still have speeches lined up in today’s US session that could further stoke tightening expectations. Japan has its national core CPI and tertiary industry activity index due before the end of the week, likely adding volatility to this pair as well.

Daily Forex Fundamental Analysis – April 17, 2018

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concept - breakfast trader - coffee and forex chart.
USD
The dollar barely reacted to upbeat retail sales data as traders remained doubtful about Fed tightening plans and worried about geopolitical risks. Headline retail sales rose 0.6% versus the 0.4% consensus while the core reading posted a 0.2% gain as expected. The Empire State manufacturing index and NAHB housing index both came in below expectations. Industrial production data is due today, along with building permits and housing starts.
EUR
The euro regained some ground against some of its rivals late in the day but couldn’t establish a clear direction on the lack of top-tier reports. Today’s release of ZEW economic sentiment figures from Germany and the entire region could lead to more sustained moves. The former could see a drop from 5.1 to -0.8 while the latter could slide from 13.4 to 7.4.
GBP
The pound was the top-performer of the day as it was lifted by hawkish BOE expectations. The UK jobs report is due today and larger increase of 13.3K in joblessness compared to the earlier reading. Traders would likely pay closer attention to the average earnings index which could tick up from 2.8% to 3.0% and boost inflation expectations.
CHF
The franc was still in a weak spot as PPI came in below expectations. Producer prices fell 0.2% instead of posting the expected 0.4% uptick. There are no reports due from the Swiss economy today so sentiment could push franc pairs around.
JPY
The yen was also on weaker footing as risk appetite and dollar support remained in play. There were no major reports out of Japan then and none are due today so sentiment could continue to push yen pairs around.
Commodity Currencies (AUD, NZD, CAD)
The comdolls returned some of their recent wins on news of another airstrike in Syria. Data from China was also mostly weaker than expected, with industrial production falling from 7.2% to 6.0% and fixed asset investment dipping from 7.9% to 7.5%. GDP came in line with expectations while retail sales was stronger than expected at a 10.1% year-over-year gain. New Zealand has its GDT auction lined up next.

EURAUD Forex Technical Analysis – April 17, 2018

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EURAUD recently broke below its head and shoulders neckline to confirm that a downtrend is underway. Price is pulling up to this broken resistance for a retest, and holding as resistance could send the pair down to fresh lows.
The 100 SMA is still above the longer-term 200 SMA, though, to indicate that the path of least resistance is to the upside. This suggests that the longer-term uptrend could still resume from here. Stochastic is nearing overbought levels, however, so sellers could return as price finds resistance at this 61.8% Fibonacci retracement level.
Economic data from China came in mostly in line with estimates, with only the industrial production report falling short. The figure slid from 7.2% to 6.0% versus the estimated dip to 6.4% to signal potentially weaker demand for raw material commodities from Australia.
Meanwhile, the quarterly GDP still reflected a 6.8% growth figure as expected. Fixed asset investment fell from 7.9% to 7.5% versus the 7.7% forecast while retail sales jumped from 9.7% to 10.1% instead of holding steady.
There are no major reports from the euro zone but commentary from ECB officials has mostly been hawkish, which could keep the shared currency supported. A return in risk-off flows stemming from geopolitical tensions could also be negative for the Aussie.

Are Cryptocurrency Markets Moribund?

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Cryptocurrency

In December 2017, the price of cryptocurrency hit an all-time high. Bitcoin led the way as it briefly breached the $20,000 per unit barrier before speculators cashed out and became overnight millionaires. At the time, the cryptocurrency market capitalization was inching towards $1 trillion. Since then, markets have cooled spectacularly. Bitcoin is now trading around $6,700 per unit, with a circulating supply of 16.967 million BTC. The top 5 cryptocurrencies and their market capitalizations now comprise the following (approximate values mid-April 2018):

  • Bitcoin – market capitalization of $114.4 billion
  • Ethereum – market capitalization of $39.140 billion
  • Ripple – market capitalization of $18.957 billion
  • Bitcoin Cash – market capitalization of $10.875 billion
  • Litecoin – market capitalization of $6.438 billion

Closer inspection of the cryptocurrency market reveals an interesting reality: The top 5 cryptocurrencies comprise 74% of the entire cryptocurrency market, at a value of $189.89 billion. This is a amazing statistic given that there are some 1,562 cryptocurrencies operating across 10,164 markets. Bitcoin makes up 44.4% of the total market cap, which is also an upward correction for the world’s premier cryptocurrency. With prices as depressed as they are right now, it’s easy to lose track of the 1-year performance of the top 5 cryptocurrencies:

  • Bitcoin was trading at $1,191.78 per unit in April 2017 and is now $6,746 per unit
  • Ethereum was trading at $43.30 per unit in April 2017 and is now $396.50 per unit
  • Ripple was trading at $0.03348 per unit in April 2017 and is now $0.48490 per unit
  • Bitcoin Cash did not exist in April 2017, but opened at $555.89 on July 23, 2017, and is now $637 per unit
  • Litecoin was trading at $8.84 in April 2017 and is now $120 per unit

It’s easy to lose track of the stellar gains made by cryptocurrency over the past year, but these comparative statics put everything into perspective. All 5 of the ranking digital currencies have displayed strong growth trends, particularly Ethereum, Ripple, Litecoin, and Bitcoin. Only Bitcoin Cash has shown limited growth potential in that time.

*Note: Volatility can cause dramatic price fluctuations. These prices were only accurate at the time of writing.

What is Really Going on in the Cryptocurrency World?

Wilkins Finance trading specialist, Montgomery Sewell Jr, explains that a cryptocurrency definition must extol the virtues of the blockchain technology as well as the potential pitfalls. According to Sewell,

‘…Cryptocurrencies can be used as mediums of exchange, much like money, or they can be invested and traded on cryptocurrency exchanges. Cryptocurrency exchanges are platforms where digital assets are traded for other digital assets (cryptocurrency), or fiduciary currency. The cryptocurrency markets are like securities, but they are not traded on the world’s bourses. It’s important to follow the latest cryptocurrency news to understand what drives these digital assets.

Regulation is a big factor in the cryptocurrency markets – any talk of increased regulation tends to have a dampening effect on Bitcoin and altcoin, while strong drivers of cryptocurrency include its adoption in the financial and e-commerce world, and from leading industry aficionados like Mark Cuban. It is important to point out that there is extreme volatility in cryptocurrency markets. Prices can rise or fall sharply within an hour – and only traders with access to disposable income should dabble in this wild market.

Daily Forex Fundamental Analysis – April 13, 2018

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USD
The US currency was able to draw a bid in recent sessions thanks mostly to improving investor sentiment on cooling geopolitical risks from China and Syria. Still, it’s worth noting that a source reported that the US is targeting eight zones in Syria. US preliminary UoM consumer sentiment and inflation expectations are lined up today and these could allow the Greenback to extend its climb if the numbers turn out stronger than expected.
EUR
The euro returned some of its recent gains, likely on profit-taking from the recent surge stemming from hawkish ECB commentary. Improved risk sentiment also dampened demand for the currency, which typically enjoys some safe-haven demand. The ECB minutes were also failed to give the shared currency a boost. German final CPI and the region’s trade balance are due next.
GBP
The pound was able to hold its ground in recent sessions thanks to upbeat remarks from Brexit minister Davis. He noted that both sides are aiming to iron out the details by October, which lessens the uncertainty for businesses. There are no major reports due from the UK today so Brexit updates could drive pound pairs around.
CHF
The franc lost ground as risk appetite returned to financial markets on easing geopolitical tensions. There were no reports to support the Swiss currency yesterday and none are due today so sentiment could stay in play.
JPY
The yen was also in a weak spot on improving risk appetite and rising US bond yields. There were no reports to prop up the yen yesterday and none are lined up today so sentiment could push yen pairs around until the end of the trading week.
Commodity Currencies (AUD, NZD, CAD)
The comdolls continued to rake in gains on improving risk sentiment thanks to easing concerns about a trade war with China and a military strike in Syria. Crude oil dipped slightly in anticipation of an increase in oil rig counts but the Loonie managed to hold its ground. China reported a surprise trade deficit of 30 billion CNY, weighing slightly on AUD and NZD in the Asian session.

EURUSD Forex Technical Analysis – April 13, 2018

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EURUSD has formed lower highs and higher lows to create a symmetrical triangle on its 4-hour time frame. Price is approaching the peak of the formation so a breakout could be due soon.
Note that the chart pattern spans 1.2150 to 1.2550 so the resulting breakout could lead to either a 400-pip rally or a 400-pip drop.
The moving averages have been oscillating so it’s tough to tell which direction it could take at this point. Stochastic is on the move down, though, which suggests that sellers have the upper hand.
Dollar demand has ticked higher in recent sessions thanks to higher US bond yields. Easing geopolitical risks from Syria and China have also contributed to improved investor sentiment, but there has been talk of a potential US military strike on eight areas in Syria.
US preliminary UoM consumer sentiment and inflation expectations are lined up today and these could allow the Greenback to extend its climb if the numbers turn out stronger than expected.
As for the euro, German final CPI and the regoin’s trade balance are up for release.

Daily Forex Fundamental Analysis – April 12, 2018

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USD
The dollar drew some support during the release of the FOMC minutes, which turned out more hawkish than expected. Fed policymakers agreed that gradual rate hikes should be maintained as the economic outlook has improved in recent months and annual inflation could keep rising. However, CPI data hasn’t been so impressive as the headline figure posted a 0.1% dip instead of staying flat, keeping tightening doubts in play. Initial jobless claims and import prices data are due next.
EUR
The euro had a mixed run as it caved to the comdolls but advanced to the yen and dollar. Draghi also had some hawkish remarks to say as he expressed confidence that inflation will hit their targets soon, adding to upbeat remarks from other ECB officials earlier in the week. Italian retail sales beat expectations with a 0.4% uptick and the ECB minutes are due next.
GBP
The pound took hits on weaker than expected manufacturing and industrial production data. The former showed a 0.2% drop versus the estimated 0.2% gain while the previous reading was downgraded. The latter posted a meager 0.1% uptick versus the 0.4% consensus. MPC member Broadbent has a speech lined up and the BOE Credit Conditions Survey is due.
CHF
The franc gave up ground as risk appetite returned on cooling trade tensions but the lower-yielding currency managed to draw a bit of support from geopolitical tensions in Syria. There are no reports due from the Swiss economy today so sentiment could keep pushing franc pairs around.
JPY
The yen also drew some support from geopolitical risks but was still no match to comdoll strength on easing trade war jitters. BOJ Governor Kuroda maintained an optimistic view on inflation in his latest testimony and the lack of other top-tier catalysts could keep risk sentiment in play.
Commodity Currencies (AUD, NZD, CAD)
The Loonie was among the top performers as it was boosted by risk appetite and higher crude oil. Tensions in Syria spurred speculations of supply outages in the Middle East, which propped price up despite the surprise build in US stockpiles. Australia’s MI inflation expectations and home loans data were slightly weaker. Canada’s NHPI and New Zealand’s Business NZ manufacturing index are lined up next.

AUDUSD Forex Technical Analysis – April 12, 2018

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AUDUSD is trending lower on its 4-hour time frame and is currently on its way to the resistance. Applying the Fib retracement tool on the swing high and low shows that this lines up with the 50% correction level around .7800.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the downtrend is more likely to continue than to reverse.
Stochastic is also turning down from the overbought zone to indicate that sellers are ready to take control once more, possibly sending price back down to the swing low or the channel bottom.
Cooling tensions between the US and China when it comes to tariffs appears to have led to a relief rally for the Aussie, but fresh geopolitical risks on Syria are in play. This could once again revive demand for the safe-haven dollar, especially as the FOMC minutes were more hawkish than before.
Fed policymakers agreed that gradual rate hikes should be maintained as the economic outlook has improved in recent months and annual inflation could keep rising. However, CPI data hasn’t been so impressive as the headline figure posted a 0.1% dip instead of staying flat.

Daily Forex Fundamental Analysis – April 11, 2018

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USD
The dollar drew some support to its lower-yielding rivals but caved to comdoll strength on signs of cooling tensions between China and the US. PPI figures beat expectations at 0.3% gains for both the core and headline figure, spurring positive expectations for the CPI release. The FOMC minutes are also up for release and could bring extra volatility for dollar pairs.
EUR
The euro was on weaker footing owing to downbeat data, with both Italian and French retail sales missing expectations. However, the shared currency drew some support from ECB commentary as Coeure mentioned that the QE program could be wound down by the end of the year. ECB head Draghi has a speech coming up.
GBP
The pound was also supported by upbeat central bank commentary as hawkish member McCafferty said in an interview with Reuters that they shouldn’t take their time with tightening. There were no reports out of the UK then while today has manufacturing and industrial production numbers. A 0.2% uptick is seen for the latter while the former could show a 0.4% increase.
CHF
The franc gave up ground as risk appetite improved in recent sessions. There were no reports out of the Swiss economy yesterday and none are due today so sentiment could continue to push franc pairs around.
JPY
The yen was also on weaker footing, particularly against the commodity currencies. Data from Japan was mostly upbeat as the core machinery orders report printed a 2.1% gain versus the estimated 2.6% slide. Looking ahead, yen pairs could take their cues from sentiment and bond yields.
Commodity Currencies (AUD, NZD, CAD)
The comdolls drew support from the conciliatory tone of both China and the US as leaders seemed more open to trade talks. Crude oil stayed supported on talks of $80 per barrel oil despite the surprise build in API stockpiles. Chinese CPI was weaker than expected while Australia reported a 0.6% drop in Westpac consumer sentiment, but this didn’t deter the Aussie from its climb. There are no major reports from the comdolls next.