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Official FxPro Forex Broker Blog. Professional daily Forex market reviews and analysis. Economic calendar.
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24 мая, 15:26

USD/CAD Tests 1.3500 Support Ahead of BoC, FOMC and OPEC

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The Bank of Canada (BoC) will announce its rate decision and monetary policy statement this afternoon at 15:00 BST. Be aware that it will likely cause volatility for CAD and USD crosses. Market consensus is that the BoC will keep rates unchanged at 0.5%. USD/CAD has seen a substantial 1.7% retracement since May 5th caused by rising oil prices. USD/CAD bulls retreated after testing the significant resistance level at 1.3800. The downtrend has held above the significant support line at 1.3500 since Tuesday May 23rd helped by the USD rebound after the release of the 2018 US budget plan. 1.3500 is likely to provide a stronger support. The daily Stochastic Oscillator is below 20 suggesting a rebound. The resistance level is at 1.3540, followed by 1.3570 and 1.3600. The support line is at 1.3500, followed by 1.3450 and 1.3400. Keep an eye on the FOMC Minutes, to be released at 19:00 BST. We will likely get further clues about a June rate hike and updated economic outlook. Be aware that it will likely cause volatility for USD/CAD. If USD keeps on rallying, we can expect USD/CAD to rebound at this level. Conversely, if USD falls again, it will likely weigh on USD/CAD and test supports. OPEC meeting will be held tomorrow May 25th in Vienna discussing whether to extend the existing output cut agreement. Market consensus is that OPEC will extend it so be aware that the outcome will likely cause volatility to USD/CAD.

24 мая, 11:42

USD Bounces From 6-1/2-Month Low, Eyes on FOMC Minutes

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The Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion in government spending over the next decade, mainly reducing the funding for healthcare and social benefits (such as Medicaid, SNAP, pensions for government staff) and Environmental Protection Agency funds. The cuts are to be used for funding to boost economic growth and to reduce the US deficit. Nevertheless, it will result in numerous needy American citizens losing vital benefits. The plan forecasts economic growth will be increased to 3% after passing the budget cuts, tax reform, regulation reform and infrastructure plans. However, following the performance of Trump’s administration since taking office, it seems difficult for any of Trump’s plans to be passed smoothly. Markets forecast US economic growth is ranging between 1.9% – 2.2%, a 3% target seems to be a big challenge to achieve. The scale of the budget cut is substantial with a distinct possibility that Congress will reject the plan in its entirety or pass only portions of it. The dollar index has fallen approximately 2.67% since May 12th, hitting its lowest level of 96.68, post the US presidential election, on May 22. On Tuesday May 23rd, following the announcement of the budget cuts, the dollar index moved higher breaking the resistance level at 97.00 and touching a 3-day high of 97.35 early on Wednesday morning. On Tuesday, EUR/USD retreated from a 6-and-a-half-month high of 1.1267, breaking the psychological level at 1.1200 as corrective pressures intensified with consolidation around 1.1180 on Wednesday trading. USD/JPY rebounded around 0.68% from the support at 111.00, hitting a 1-week high of 112.04 on Wednesday morning. USD/JPY is currently consolidating below the psychological resistance level at 112.00. FOMC May Meeting Minutes will be released at 19:00 BST this evening. Per the CME FedWatch tool, the probability for a rate hike in June rose to 83.1% after the release of the 2018 budget plan. That said, markets are assuming the Fed will stick to its rate hike pace regardless of Trump’s Russia leak scandal and soft economic data. Keep an eye on the Minutes, we will likely get further clues about a June rate hike and updated economic outlook. Be aware that it will likely cause volatility for USD and USD crosses. Moody’s has downgraded China’s sovereign credit rating from Aa3 to A1 due to fears over rising debt levels. The new rating is same as the ratings of Czech Republic, Estonia, Israel, Japan and Saudi Arabia. The adjustment has weighed on Chinese yuan and the Chinese stock markets.

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23 мая, 15:43

GBP/USD Bears Test Uptrend Line Support Post Manchester Terror Attack

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GBP/USD has been trading above the downside uptrend line support since mid-March. Cable rallied around 3.5% since Theresa May announced a snap general election on April 18 as markets have largely priced in a Tory victory. GBP/USD hit a high of 1.3047 on May 18, last seen on September 29, breaking a significant resistance level at 1.3000. However, the bullish momentum has waned since Monday, because of the drop in the approval rating for the Conservative Party caused by Theresa May’s plans to cancel free school lunches and reduce free healthcare services for wealthy senior citizens. The terror attack last night in Manchester further weighed on GBP/USD resulting in Cable falling below the significant level at 1.3000. Currently, GBP/USD still holds above the downside uptrend line support. However, on the 4-hourly chart, the 10 SMA is crossing over the 20 SMA, indicating bearish sentiment is increasing. If the downside uptrend line support is broken, we will likely see a further fall in GBP/USD. The resistance level is at 1.3000, followed by 1.3020 and 1.3050. The support line is at 1.2950, followed by 1.2920 and 1.2900. We will see a set of US economic data to be released between 14:45 – 15:00 BST this afternoon. It will likely affect GBP/USD.

23 мая, 11:33

How will FOMC Minutes Affect USD Post Slump on Trump’s Scandal ?

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Recently Trump’s leak scandal has been leading the USD move instead of economic performance. Last week USD had its biggest weekly fall since the US presidential election because of the scandal. The markets are concerned it will result in Trump’s plans not being able to be executed and worsen the economic slowdown. In addition, North Korea launched its second ballistic missile towards Japan on Sunday further lifting regional tension. The dollar index hit a new post presidential low of 96.68 on Monday, due to extended market concerns over the FBI investigation on Trump’s Russia leak scandal. On Tuesday, during early European session, it rebounded, however then followed by a retracement after testing the resistance level at 97.00. On Tuesday, EUR/USD hit a new high of 1.1267 last seen on November 9. Per CFTC data released last Friday Euro long positions have reached a 3-year high. Gold has rebounded over the past two trading sessions touching a 3-day high of $1263.64 this morning. The next move of USD will likely depend on the FOMC, the progress of the FBI investigation into Trump’s Russia leak scandal, and upcoming economic data. If there are further adverse findings from the FBI’s investigation USD will likely see a further fall. Conversely, without further adverse findings, we will likely see a rebound of USD. Despite the Trump scandal and soft economic data, per the CME FedWatch tool, the probability for a rate hike in June only saw a modest drop to 78.5%. That said, markets are assuming the Fed will stick to its rate hike pace regardless of political turmoil and economic slowdown. The FOMC May Meeting Minutes will be released at 19:00 BST on Wednesday May 24, we will likely get further clues about a June rate hike and economic outlook. We will see a set of US economic data to be released between 14:45 – 15:00 BST this afternoon. It will likely affect USD and USD crosses.

Выбор редакции
22 мая, 14:58

USD/JPY Hovers Above Significant Support Post Trump’s Scandal

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Last week USD had its biggest weekly fall since the US presidential election, caused by Trump’s Russia leak scandal. This week markets’ risk-off sentiment has been slightly eased. On May 18th USD/JPY hit a low of 110.22, last seen on April 25th. Notably, the downtrend has held above the significant support line at 110.00. Bulls have further recovered to the the next psychological resistance level at 111.00, indicating bullish momentum has been increasing. The daily Stochastic Oscillator is around 30 which suggests a rebound. The resistance level is at 111.70 followed by 112.00 and 112.20. The support level is at 111.00 followed by 110.70 and 110.50. If there are further adverse findings from the FBI’s investigation on Trump‘s Russia leak scandal it will likely restrain the bullish momentum of USD/JPY. Conversely, without further adverse findings, we will likely see a rebound of USD/JPY. Keep an eye on the US economic data on Tuesday at 15:00 BST and the FOMC Minutes on Wednesday at 19:00 BST as it will likely affect USD and USD crosses.

22 мая, 11:37

Conservative’s Approval Rating Drops Ahead of General Election

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The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211 a level not seen since November 9th of last year. On Monday morning, during the European session, the dollar index experienced a moderate rebound, touching 97.29, as the market is aware of a strong support level at 97.00. GBP/USD hit a high of 1.3047 on May 18, last seen September 29, breaking a significant resistance at 1.3000. On Monday morning, during the early European session, GBP/USD saw a retracement falling below 1.3000 as a result of the dollar rebound. GBP/USD has rallied 3.75% since Theresa May announced a snap general election. Consensus about GBP has turned to bullish from bearish with many shorts being closed out as Cable has rallied higher. The UK general election will be held on June 8th – less than 3 weeks away. Per recent polls (conducted by Business Insider and GFK) 48% of Brits will vote for the Conservative Party, seeing an increase of 7% comparing to the previous polls, 28% will vote for the Labour Party, in line with the previous polls. Per polls conducted by the tabloid newspaper The Daily Mail on May 20th, the approval rating for the Conservative Party is 46% whereas with Labour it is 34%. The Brexit negotiation is one of the focuses of the election, the Conservative Party has pledged a smooth and orderly Brexit. To attract Labour party voters the Conservatives changed their policies; focusing more on the needs of workers and middle classes, enhancing NHS’ financial conditions (by reducing free services offered to wealthy elders) and controlling the number of immigrants into the UK. These new policies are expected to help the Conservative Party to obtain 56 seats from other parties, especially from UKIP. Per recent polls, the Conservative Party is expected to win a landslide victory in the election. Polls forecast the Conservative Party will win 390 seats, out of the 650 seats in the Parliament, becoming the outright majority with a 130 seats lead. On May 20th it was reported that Theresa May plans to cancel school free lunches as it is not necessary for those families which can afford it, taking government spending reallocation into consideration. The announcement caused a slide in approval rating for the Conservative Party. Per the latest polls conducted by YouGov, the difference of approval rating between the Conservative and the Labour now narrows to 9% (the approval rating for the Conservatives dropped to 44%, whereas with the Labour it increased to 35%). Regardless of this fall the Conservative Party is still expected to win the General Election.

Выбор редакции
19 мая, 14:52

EUR/USD Bulls Approach Major Resistance at 1.1200

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EUR/USD has remained bullish and has rallied notably around 2.7% since May 15, helped by the recent slump in the USD. EUR/USD saw a correction on May 18, as a result of the rebound of USD. During Friday’s early European session EUR/USD rallied again and approached the significant psychological resistance level at 1.1200. Bullish momentum remains strong with the short term moving averages edging higher. If the 1.1200 resistance level is broken, we can expect that EUR/USD will move higher. Conversely, if the bulls fail to break the resistance, we will likely see a correction. The resistance level is at 1.1170, followed by 1.1200. The support line is at 1.1130, followed by 1.1100.

19 мая, 11:28

Markets Priced In OPEC Output Cut Extension

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There are two upcoming events that are expected to impact the price of Oil; firstly, the Iran presidential election will be held today (May 19th) and secondly, the OPEC meeting will be held on May 25 in Vienna. The result of the Iran presidential election and the associated geo-political risks will likely affect its oil production. Overall, the execution of OPEC’s output cut agreement has been sound. However, some OPEC member states exempted from the agreement, such as Iran, Libya, and Nigeria, have been increasing their production. Some non-OPEC oil producers, such as Russia and Kazakhstan, also attempt to enlarge their production. In addition, the US shale oil industry has seen a marked recovery since February last year because of higher oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week. Since May 2016 the US has added more than 400 new rigs. In general, the oil supply remains high, which has and will offset OPEC’s output cut effort to an extent. If OPEC announces that the output cut is to be extended we will likely see a moderate rally in oil prices, instead of a surge, as markets have priced in the extension to an extent. Oil prices have rebounded approximately 7% since May 5th. On Thursday, WTI spot hit a 4-week high of $50.29 a barrel. Brent crude spot hit a 4-week high of $53.29 a barrel. USD/CAD has seen a 1% retracement since May 5th because of the oil price rebound. The level at 1.3500 will likely provide a stronger support. Today we will see the release of a set of Canadian economic data for March and April, including; CPI, core CPI and retail sales. These data releases will likely affect CAD and CAD crosses. On Thursday, the dollar index hit a post presidential election low of 97.26, then experienced a moderate rebound, touching 97.96 then retraced, as there is heavy pressure at the level at 98.00. USD/JPY hit a 3-and-a-half week low of 110.22 with the downtrend holding above a significant support line at 110.00. Gold has seen a 1.19% correction after hitting a 2-and-a-half-week high of $1264.92 because of the dollar rebound. It was reported that the Trump Camp had contacted Russian officials 18 times by phone and emails before the presidential election (from April to November 2016). Some election staff pointed out that it is not unusual for presidential candidates to contact foreign officials. However, liaison with a non-aligned country (Russia) with high frequency seems to be unusual. The downtrend of USD has been temporarily held; the next move of USD will likely depend on upcoming economic data, FOMC minutes and the progress of the FBI investigation into Trump’s Russia leak scandal.

Выбор редакции
18 мая, 15:26

NZD/USD Tests Downtrend Line Resistance

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NZD/USD has seen a substantial 6.22% retracement since February 7. Since the end of April, the downtrend has held above a significant support line at 0.6800, suggesting the bearish momentum has been waning. The price further broke the next psychological level at 0.6900 on Wednesday, as a result of the weakening of USD caused by Trump’s Russia leak scandal. On the daily chart, NZD/USD bulls are currently testing the mid-term major downtrend line resistance. If the trend line is broken, we can expect that the price will go further up. Conversely, if the bulls fail to break the resistance, we will likely see a pullback. The resistance level is at 0.6950, followed by 0.6970 and 0.7000. The support line is at 0.6900, followed by 0.6870 and 0.6840.

18 мая, 11:36

Trump Faces Biggest Political Crisis Since Taking Office

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The Department of Justice has appointed former FBI head Robert Mueller to investigate whether Russia intervened during the 2016 presidential election. Recent reports from the US are indicating that the probability that Trump’s presidency will end this year is around 29% following the Russia leak scandal. Trump is now facing his biggest political crisis since taking office. Opinion polls, conducted by Politico and Morning Consult, that were released on Wednesday showed that Trump’s approval rating has hit a new low of 42% with half of the registered voters disapproving of Trump’s performance as a president. Polls, conducted by Public Policy Polling, are showing 48% of Americans and 81% of Hilary’s voters hope to see Trump’s presidency to end. With the lack of support from his own Republican Party, Trump’s political career and USD prospects become even more gloomy. Following the firing of FBI director James Comey it was reported that the two candidates to replace him, Judge Merrick Garland and Senate John Cornyn, both showed no interests to take over the position. The leak scandal hit USD and US stock markets, pushing safe havens up. The VIX index (volatility index) rallied more than 20% on Wednesday. On Wednesday, the dollar index saw its fourth straight loss hitting a low of 97.30 (last seen November 9 2016). The Index has retraced around 2.22% from May 12 to 17. USD/JPY saw its biggest intra-day loss this year hitting a 3-week low of 110.51. EUR/USD saw its fourth straight gain hitting a high of 1.1171 (again last seen November 9 2016). Spot gold surged hitting a 2-and-a-half week high of $1263. The Dow Jones index fell by 1.76%, hitting a low of 20591.80 & the S & P 500 index fell by 1.82%, hitting a low of 2353.33 (both lows not seen since April 21). During the early European session, on Thursday, the dollar index saw a moderate rebound with bulls attempting to recover the 97.50 level. The disappointment with Trump’s administration, some soft economic data and profit-taking has resulted in USD giving up almost all its post presidential gain. Since Trump took office in January, apart from passing the new healthcare bill, there are hardly any other worthy achievements. Instead, most of his policies have caused substantial controversy and turmoil. In addition, lack of enough support from the Republican Party makes Trump’s political career and USD prospects even more gloomy.

17 мая, 15:11

WTI Below $50 Ahead of EIA Inventory Data

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There are two upcoming events that are expected to impact the price of Oil; firstly, the Iran presidential election will be held this Friday, May 19th and secondly the OPEC meeting will be held on May 25. The result of the Iran presidential election and the associated geo-political risks will likely affect its oil supply. On May 8th, at the Asia Oil and Gas Conference in Malaysia, Saudi Arabia’s Oil Minister, Khalid al-Falih, stated that “the output cut could be extended another 6 months or even further into 2018”. Oil prices have retraced 12.88% since April 12th and have experienced a 3.74% rebound since May 5th, due to technical correction and market expectations on OPEC’s output cut extension in the Vienna meeting. Last Wednesday’s EIA crude oil inventory data saw a drop of 5.247 million barrels hitting the lowest level this year, in turn, pushing oil prices higher. Oil Bulls have backed off recently after testing the significant psychological resistance level at $50. There appears to be Bullish momentum, but WTI will likely see selling pressure again at $50. The US EIA Crude Oil Inventories data (for the week ending May 12) will be released at 15:30 BST this afternoon with a consensus of -2.360M. Please be advised that this release is likely to cause significant volatility in oil prices. With a higher-than-expected figure, we will likely see a retracement lower and support areas tested. With a lower-than-expected figure, we will likely see the price test higher resistances again. The resistance level is at 49.30, followed by 49.60 and 50.00. The support line is at 49.00, followed by 48.70 and 48.40.

17 мая, 11:47

USD Hit Post Election Low on Trump’s Russia Leak Scandal

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It was widely reported that President Trump shared highly sensitive information with the Russia Ambassador at a recent meeting at the White House putting further pressure on USD. During today’s early European session the dollar index hit the lowest level of 97.74 last seen November 09 2016, EUR/USD traded as high as 1.1121 a level last seen November 09 2016. In line with the continued weakness in USD, spot gold had a fifth day of gains trading at a 2-week high of 1244.91. To date the dollar index has almost given up all of the post presidential election rally, retracing about 1.4% over the past 4 trading sessions. Per CFTC data (Commodity Futures Trading Commission), Hedge funds’ USD long positions have reduced to the lowest level since August 2016. Japanese Q1 GDP first reading will be released at 00:50 BST on Thursday. The Japanese economy has seen a recovery since last year. The global economy also saw a recovery, helping exports. However, as inflation has not yet seen a stable upswing the Japanese economic recovery is still fragile. The performance of the Q1 GDP will likely affect JPY and the JPY crosses. USD/JPY has retraced in the past week as a result of the weakening of USD. USD/JPY hit a 1-week low of 112.24 on Wednesday during early European session. There are two upcoming events that will likely affect oil markets; firstly, the Iran presidential election will be held this Friday, May 19th and secondly the OPEC meeting will be held on May 25. The result of the Iran presidential election and the associated geo-political risks will likely affect its oil supply. Iran has greatly increased its oil output after the US sanction was removed. The US shale oil industry has seen a marked recovery since February last year because of higher oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week. The increase in shale oil supply has offset OPEC’s recent output cut effort to an extent. However, the Saudi Arabia Oil Minister, Khalid al-Falih, stated on May 8th at the Asia Oil and Gas Conference in Malaysia that “the output cut could be extended another 6 months or even further into 2018”. OPEC will hold a meeting in Vienna on May 25 where the decision whether to extend the output cut agreement will likely be announced. Oil prices have retraced substantially around 12.88% since April 12th and have experienced a 3.74% rebound since May 5th. Last Wednesday’s EIA crude oil inventory data saw a drop of 5.247 million barrels hitting the lowest level this year helping push oil prices higher. WTI and Brent crude oil will likely see selling pressure at $50 and $53 respectively. The US EIA Crude Oil Inventories data (for the week ending May 12) will be released at 15:30 BST this afternoon. Please be advised that this release is likely to cause significant volatility in oil prices.