2019-11-11 • Updated
The US dollar index recovered last week from 96.45 (the lowest point since November 2016) to the levels above 97.00. The Federal Reserve is expected to raise the federal funds rate on Wednesday, June 14. The 25-basis-point rate hike is completely priced in and is no longer able to be a bullish driver for the American currency. The future fate of the greenback will depend on the hints from the Fed about its further moves, so pay great attention to Chair Janet Yellen’s press conference. Before the Fed’s meeting, the US will release economic statistics (PPI, CPI, retail sales). The figures are not likely to be impressive and may hurt USD. In addition, political turmoil in the United States continues after fired FBI Director James Comey’s testimony last Thursday. A shooting star on the daily chart means that the US dollar index (DXY) may test 96.70/50. Further support is located at 96.00. At the same time, the odds are that the Fed won’t alter its policy stance at this point and the US dollar will strengthen after the rate hike. This lets us believe that the DXY can end the week in 97.50/70 area.
EUR/USD keeps consolidating around 1.1230. The ECB has made a few slightly hawkish changes to its statement, but the regulator’s president Mario Draghi talked the euro down making traders believe that the central bank won’t start tapering its monetary stimulus in the upcoming months. The first round of French parliamentary elections showed that President Emmanuel Macron’s party is on its way to getting an overwhelming majority. Support in the Parliament will allow Macron to implement his policies and thus will be positive for the euro. In terms of economic data, pay attention to German and Eurozone ZEW economic sentiment surveys on Tuesday, the region's industrial production data on Wednesday and its final inflation figure for May on Friday. All in all, European fundamentals are quite good, so news out of the US should represent the main driver of EUR/USD. Support lies at 1.1145 and 1.1100. Resistance is at 1.1264 and 1.1330.
GBP/USD opened the week with a bearish gap. The political position of the British Prime Minister Theresa May has worsened after last week’s general election as her Conservative Party lost the majority. Brexit negotiations are to start on June 19, and it will now be much more difficult for May to stand her ground while dealing with the EU authorities. Apart from political news, the pound will be affected by the economic releases – inflation on Tuesday, labor market figures on Wednesday and retail sales on Thursday. In addition, on Thursday we’ll hear from the Bank of England. Despite high inflation, Q1 GDP growth was weak and May services PMI disappointed. Retail sales in May are expected to contract in May after an impressive increase in April. As a result, it’s hard to expect hawkish comments from the central bank that would have lifted the sterling. As a result, GBP/USD is vulnerable for a decline to 1.2550 (bottom of the daily Ichimoku Cloud) and then to 1.2440/00. EUR/GBP has potential to strengthen to 0.8600/90.
USD/JPY tested 109.10 last week before recovering above 110.00. 100-week MA at 110.80 is an obstacle on the upside, while 50-week MA is supporting the pair on the downside. On the daily chart, there are several moving averages above the price in the 110.50-112.00 area. These lines are horizontal and show that the pair doesn’t have much of directional bias, although lower levels are likely in the short term. Data showed that Japan’s economy grew at an annual rate of 1% in Q1, but inflation remains far away from the BOJ’s 2% target. No changes are expected from Japanese regulator this week.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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