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EUR/USD Fundamental Analysis: November 9, 2018

The euro major pair has been moving steadily after the release of the FOMC report since there is a bearish pressure on both currencies. Aside from rising tensions in Europe, the hawkish sentiment remains with market expectations that adds pressure on the common currency. Various political tensions such as Brexit, tensions between Brussels and Rome are anticipated to heighten tension in the next few weeks, yet Brexit is likely to move in a sluggish pace. The issue between EU and Italy influence the spread between Italy and Germany to 300 bps. Other than that, the two major coalition partners in Italy proceeds to take action in limiting immigration that also affects the euro across markets. 

These economic events limit the progress of the euro while in the US, uncertainty has pushed investors to side on the US-dominated assents and the greenback. The EUR/USD pair grew modestly after the release of the FOMC statement and rise to 1.1409. It declines immediately and broke the previous slows. The price declined below 1.1350 during the Asian trading session as the US central bank kept the funds' rate at 2.25% to 2.00. At the same time, the recent statement remained the same from the September meeting, providing a solid bullish support. Meanwhile, the Italian bond yields yesterday night after the EU commission’s forecast saying that Italy has undergone inadequate and partial analysis. 

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GBP/USD Fundamental Analysis: November 12, 2018

Brexit remains to be the center for today’s Asian session since UK Prime Minister Theresa May canceled the emergency meeting to approve the Brexit deal this week. The meeting was postponed but the resistance from the cabinet remains strong, added to Brussels concerns, which delays the Brexit talks and lessen the possibility of the expected meeting in November. In this case, the Sterling bulls are on the less favorable situation. Market hopes for a miracle to relieves the pressure amid the heavy headlines with the Brexit as the main concern over the weekend causing more tension in the market. It seems that the market declined by 0.46% from this morning price level of 1.2911. 

There is no major economic event for the UK, hence, traders can expect for thin trading volumes given that there is less US money market for the long Thanksgiving weekend but Tuesday seems to offer UK Average Earnings and GBP/USD traders are looking for something an early event to the headlines prior to major economic data. The dollar was strengthened by last week’s gains and grew to a 16-month high on Monday as traders anticipate for the US Federal Reserve to tighten monetary policies and the bullish tone of the greenback with the ongoing Brexit talks to further escalate the bullish situation. As for the technical perspective, the implied volatility premium grew sharply while an increasing demand for the British pound puts a bearish pressure while traders are anticipating for a much bigger decline of the currency. The risk appetite has also lessened during the Asian trading session as the EU’s situation worsened. 

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EUR/USD Fundamental Analysis: November 13, 2018

The euro influenced the appreciation of greenback during Monday trading session with political uncertainty affecting the European market. The euro major pair dropped to 1.1239 soon after the opening of the London session in the background of tension with the Italian budget as rejected by the EU commission in the previous week. The Italian government submitted again a fiscal plan in correspondence with the EU rules and risk an economic sanction. Yet, it seems that there is no intent to change the budget. The pair is declining across the European and North American hours reaching a fresh 16-month low due to the bearish pressure from both sides of Atlantic. 

Lack of progress in the Brexit negotiation adds pressure on the bearish tone to the common currency added to the Italian budget concerns. The White House also intends to reconsider auto tariffs against Europe which gives a dovish sentiment for the investors, further adding a bearish pressure to the common currency in the future. Reconsideration of tariffs on the European market despite ending it a few months after meeting between the US and Europe, which can be because of various reasons such as the global trade war and renewed Iran sanctions and criticism of “America first” in the Trump administration. 

There are bids for the EUR/USD pair in Asia and an optimistic view of the renews US-China trade. Yet, the change in budget still questions the Italy that could affect the spread between the high-spend budget to the European Union today will likely increase the spread between the Italian 10-year government bond yield and its German counterpart to the recent high of 325 basis points. Om case that market expectations. If Italy submitted an unchanged budget for euro, traders can anticipate the resumption of a bearish pressure. As for the fundamental data, investors are eyeing on the German CPI data scheduled today which is expected to remain the same. However, in case it turns out positive, this could drive momentum for a relief rally on the euro major pair. 

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EUR/USD Fundamental Analysis: November 16, 2018

The euro major pair did not have an optimistic trading overnight with UK ministers exiting their roles attesting as a protest in the negotiation deal of Prime Minister Theresa May with the EU not meeting UK’s electorate vote. Being against the authority of Theresa May raising uncertainty in the European politics that further raises the chance for the Brexit to be no deal that affects both economies. Nevertheless, the euro major pair rise despite higher forecast of 0.8% by the  U.S. Census Bureau US retail sales data in October, higher than the 0.5% market expectation. Meanwhile, the action moves with the reversal on Wall Street that resulted in a rally of the euro and retreating of long yen as the EUR/JPY pair recovered. 

Moreover, the greenback also received more bearish pressure after the profit taking on the trade talk news between the US and China, giving America the lead and raising risk appetite. Investors now wait for the speech from ECB president Draghi and a drive on strong bid can take place if Draghi is able to act on the Italy budget crisis and confirm plans on ending the QE program. If Draghi becomes heedful, the price may drop below 1.30 and bet on a delay of the rate hike in 2019.  The Eurozone CPI data is anticipated to be released, as well as the data on Industrial production. 
 

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EUR/USD Fundamental Analysis: November 19, 2018

The euro major pair retreated back higher than 1.14 level after the headlines on US President said to make a trade deal. Although no agreement has been set yet, which in turn, raised risk appetite with investors and kickstart momentum across the market on Friday last week. Thus, the pair gained 200 pips from the low level of 1.1215 on Monday and closed in favor of the euro and grew by 0.81% on the day. 

It has been trading close to the Friday high at 1.14 at the beginning of the Asian session as investors became heedful following the dovish comments from ed’s newly appointed vice chair, Richard Clarida, saying a global economic slowdown is important for the US economic outlook and a similar to the interview from the Fed Dallas President Robert Kaplan who sees a slowdown in China and Europe. Nevertheless, analysts see this as an acceptable risk factor given that the Fed is reliant on rate hikes while the investors reacted to the dovish rhetorics resulted in US dollar weakened. 

Yet, it is unlikely for the euro to hold on the gains for long-term as headlines directed differently after a poor output from the European macro data. Despite the weakened outlook from the PPI data from Germany and PMI of Eurozone give a steady trend in medium- to long-term while analysts anticipate Fed rate hike and suggest a hawkish outlook in the future. 

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GBP/USD Fundamental Analysis: November 20, 2018

The British pound major pair is trading in a range-bound at 1.285 at a similar level for the week after Sterling traders had a rest from busy buying schedule who are hopeful of Brexit and selling short on a bearish Brexit situation. Exiting the European Union continues to be a concern for both Sterling investors and Prime Minister Theresa to strengthen the draft for no Brexit deal with her own party who have lost confidence in her office with risks continues to be high with the possibility for the House of Commons to reject the present Brexit offering despite the Prime minister’s efforts that could push the major responsibilities on the works. 

Investors are now waiting for the upcoming EU Brexit Summit as traders expected to receive the Brexit plan positively. If there is no confidence vote and the prime minister will be able to keep the position, a no Brexit deal can be avoided. On Tuesday, a speech from Bank of England Governor Mark Carney is expected regarding the British parliament on the latest Inflation report hearings which would have the influence to support the dovish sentiment of the central bank. In the meantime, traders can take a rest from the Brexit worries. 
 

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EUR/USD Fundamental Analysis: November 21, 2018

The euro major par declined abruptly during the US session and reached a fresh new low at 1.1359. The greenback has strengthened across the market in the last hours of trading especially equity in Wall Street paired against yen and euro and consolidated losses due to a bearish decline. Earlier, the price peaked at 1.1472, which has been the highest since November 7 but pulled back and lost momentum, resulting in a correction and lose over 100 pips. The risk-off sentiment yesterday lead the financial markets with the greenback standing strongly against the common currency as well as other main competitors 

The decline is not just about the risk-off sentiment with the euro which also had its weakness that was primarily because of the tension between EU Commission and Italy on the 2019 budget. Moreover, the rhetoric by ECB’s Weidmann saying that policy normalization may take a long time.

This adds high bearish pressure on the common currency with concerns on the possible sanction for the Italian government from EU being lenient to France on budget concerns. Italy pointed out that growing out may lead to an economic slowdown that may affect the whole of Europe. 

How the EU reacted may add a bearish pressure to the euro if it turns out against Italy, that could add political tension and reach new highs. However, the yields differential may decline abruptly, raising again the euro to yesterday’s high of 1.1472 if the EU becomes more dovish. As for the headlines,  there is no data to be released from the Eurozone but existing homes sales data and core durable goods from the US are scheduled today, as well as the weekly crude oil inventory. 

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EUR/USD Fundamental Analysis: November 23, 2018

The euro major is moving steadily upward higher than the 1.14 during the Asian session as the sentiment on the common currency shifted by the Brexit optimism and general weakness of the US dollar as markets prepare for the Markit preliminary of November PMI scheduled later from the EU and the US. The euro gained early bids amid thinned market due to holidays. The Asian market supports the Brexit declaration as talked about by the UK and the European Commission for the night that lays out trade relationship prior to the Brexit summer this Sunday. 

The weakened US dollar across the market amid trading concerns of the Fed may tighten and slowed down the pace but keeps the currency afloat. Moreover, the euro supported the ECB minutes that showed the central bank pursuing the QE easing program in December in the background of sluggish Eurozone economic growth. On the headlines, the Eurozone flash manufacturing and services PMI reports will boost and Italian budget concern will still have an influence over the euro in the next few days. 

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NZDUSD

As a short-term trading strategy for today we can look for sell signals if there is a correction to the area of 0.68118. The target potential is in the range 0.67707. Please aware of big news today

[Guest Obasi FXMart]

EUR/USD Fundamental Analysis: November 26, 2018

The euro is facing various problems including political problems and negative economic data as greenback gains momentum which causes the price movement to be bearishly followed by a weaker Eurozone PMI data and decline from 1.14 to 1.1345. The trading session closed this week with chances to end the latest bullish momentum as price closes lower than the 20-day SMA in favor of the common currency.  Various trading factors continue to put pressure on the pair, reaching a 10-day low of 1.1326 during the early Asian session signaled by the drop in Friday to be the sin in ending Euro’s latest recovery rally. 

The pair continues to trade range bound close to the weekly lows. Losses during the Friday session can be recovered if the spread between the Italian 10-year government bond yield and its US counterpart continues to minimize. The European Commission promoted an excessive deficit procedure against Italy after the country changed the budget proposals. Concerns on the Italian budget remains to be the main attention of investors amid the minor reduction on budget plans. On the other hand, the greenback resumes having a positive price flow as a boost in equities are anticipated to get better on holidays. 

On the fundamentals, there are no major reports from the US that could have a big impact on European markets from ECB President Draghi but releases from eurozone including the German Ifo business climate, German business expectations, and current assessment data, as well as, speeches from ECB President Draghi, Praet, Coeure & Nowotny are likely to affect trading. 

[Guest Obasi FXMart]

EUR/USD Fundamental Analysis: November 29, 2018

Traders reacted as shown on the sharp price reversal of the euro major pair after the dovish rhetorics of the Fed chair Jerome Powell. The rebound was influenced by the decline in the US Treasury yields after the speech of Powell saying interest rates are just lower than the neutral which may translate as the rate hike cycle will almost end. 

The chances to postpone the Fed rate hike in 2019 increases sharply which resulted in a decline of the greenback across the market in the core PCE comes out lower than anticipated. In the second half of the day, the market’s attention will be on the release of Fed minutes. On the technical aspect, the euro major pair added a bullish trend outside the candle given the intraday high and price movement on Tuesday. A bullish reversal would confirm if everything turns out positive and needed to close higher than 1.1388. The short-term trades are also seen to be on a bullish trend but traders remain heedful since the price movement today will rely on the data and it isn’t new to trades for any unforeseen events. 
 

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EUR/USD Fundamental Analysis: December 3, 2018

The euro major pair is trading close to a fresh midline at 1.1340 during the Monday session after the momentum of risk appetite after the G20 summit over the weekend that allows the broad recovery after the US and China put on hold the tariff increase for another three months as they come to an agreement again. Meanwhile, Italy has been open to negotiating budget plans which can be an obstacle for the euro bulls.  

Over the weekend, Italy’s Prime Minister Conte and European Commission’s Jean-Claude Juncker discussed the deal between Italy and the EU while investors are still uncertain about the deficit spending of Italy and growth forecast until solid data has come out. On the headlines, traders should look out for the Eurozone PMI for the month of November while a drop of the German PMI is anticipated right before it. 

[Guest Obasi FXMart]

EUR/USD Fundamental Analysis: December 7, 2018

The movement of the global trades has affected the US dollar being the safe haven and added downward pressure on the euro major pair. Recent headlines about the arrest of top executive and add worries about the US-China relation that reduces appetite for riskier assets on Thursday. The dollar didn’t gain a leverage on the early uptrend but was instead brought down by the negative US employment report, failing to meet the expected figure. It seems that the USD bulls wasn’t swayed as much with optimistic US  ISM non-manufacturing PMI data with its sudden uprise. 

Moreover, the shift in the US Treasury bond yield curve that signals potential recession that adds pressure to the dollar and adds momentum to the pair’s intraday positive momentum. The price rose higher than 1.1400 handle, close to the weekly high on Tuesday. It has been moving steadily and oscillating in a narrow trading band during the Asian session. Now, investors are monitoring the US NFP monthly jobs reports that could drive a significant momentum today. Yet, trades still have to be heedful with nearing OMC monetary policy decision in the latter days of the month. Thus, there are less expectations for the day and resume its trading range-bound in a broader trading range. 

[Guest Obasi FXMart]

EUR/USD Fundamental Analysis: December 10, 2018

The US dollar dropped below Friday session that has further lower by the unexpected monthly jobs report and shows the economy gained only 155,000 new jobs in November. Dovish comments by the Fed governor Lael Brainard and St. Louis Fed President James Bullard support the comments of the postponement of the Fed rate hike cycle in 2019. Selling greenback has boosted the economy over signs of weaker economic growth in the eurozone and pushed for a steady ascent of the euro major pair, ending the week with optimism, just higher than 1.1400 handle. Another report of the third quarter GDP revision shown an annual growth rate of 1.6 percent, slightly lower than the forecast of 1.7 percent. Nevertheless, this had a few impacts on sales. 

Reports on China import and export growth figure published over the weekend that instilled fears of global growth slowdown and chances to postpone the Fed rate hike in 2019. Moreover, worsening trade tension between the US and China, as well as the arrest of top Chinese executive in Canada, has added weight to the sentiment of investors and cap the rally despite important economic reports from the euro or the US. The dollar sell-off will probably continue until the European market hours given the dovish turn of Fed expectation that is favorable for US dollar denominated global currencies in depreciating exchange rate. 

Both of the US and European markets are subdued but we can anticipate for the release of job openings reports to be hawkish that could boost the US greenback broad-based market sentiment. On a technical aspect, the pair was able to clear a significant descending resistance trend line and a part of the symmetrical triangle on the daily chart was established.  

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EUR/USD Fundamental Analysis: December 11, 2018

The euro major pair induced a bearish outside reversal on Monday and was not successful to breakthrough the symmetrical triangle on another Brexit uncertainty. The UK Prime Minister Theresa May postponed the vote on the exit deal which was already anticipated. The added pressure pushed the British currency since April last year and adds pressure to the risky assets resulted in picking up momentum to the safe haven bidding of the US dollar in the broad market.  Furthermore, the possibility of a hard Brexit to continue in the past 24 hours. Hence, risky assets may gain more pressure at least until the uncertainty of Brexit was removed. Euro was also pushed down in the broad market yesterday as French President Macron announced economic emergency regarding the yellow vest protests. 

The spread between the US 10-year yield and its German counterpart was 260 basis points, which was the lowest level since October 1. On a technical aspect, the sudden overnight retracement resulted in a short-term bullish breakout that may lead to a fake-out. The weakness lower than the area of 1.1350-45, it strengthens the possibility of a breakout and hastens the movement towards another ascending trend-line support. A continuous weakened movement will push the pair in returning to the yearly lows of 1.1215. On the other hand, a breakout in the solid resistance will likely move the pair towards the 1.1500 level.   
 

 

 

[Guest Obasi FXMart]

EUR/USD Fundamental Analysis: December 12, 2018

The euro major pair is trading within a range after the sudden drop to the overnight lows at 1.1400 below the middle of 1.13. The US dollar reversed the majority of its early losses following the release of the core PPI data which is one of the main factors to influence the overnight decline of the pair. The currency was further pushed lower bu the Italian finance minister Giovanni Tria’s rhetorics over the fixed budget of Italy within the European Commission. Yet, the pair has gotten steady caused by the positivity of the Sino-US session trade talk and reaches close to the previous low. 

The US President Donald Trump has said Reuters would get involved if these will support the trade deal with China. Moreover, further negotiations are already taking place via the phone but if necessary, he is willing to meet with President Xi Jinping once again. Consequently, the US dollar weakened as a safe haven in Asia the puts a stop to yesterday’s sharp decline. 

On the headlines, the European markets anticipate for the release of the Industrial production data while on the US, the Core CPI & Crude Oil Inventories data are scheduled today. The price action will be highly affected by the ongoing political issues in Europe and US macro data, which will highly likely bring in volatility in the market. Considering the technical perspective, calm bidding was seen during the Asian session after the Nov 13 and 28 lows yesterday. Meanwhile, the rising trend line resulted in a deeper sell-off and a bullish reversal is established when the price goes above the 55-day moving average. 
 

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EUR/USD Fundamental Analysis: December 17, 2018

The euro major pair had a reduction triangle breakdown on Friday after the rise of global growth fears, resulting for traders to shift to equities to minimize risks. The pair is currently trading in the flat as investors are looking forward to FOMC as guidance. 

Traders continue to draw bids, sending the euro major pair at as lower rate towards the latest low of 1.1215 if the global equities continue to be the solution amid the rising uncertainty of growth internationally. On Friday, weak economic data from China has awakened fears for a global economic slowdown and lessens investor’s appetite for riskier assets. People looking for safety has strengthened the US dollar as a safe-haven that increases the dollar by 1 and a half year high, inducing a strong selling of the EUR/USD pair. The common currency was further dampened by the weakened German and eurozone PMI in December, indicating a prominent slow down from both manufacturing and services. These data confirmed the dovish sentiment of ECB on Thursday and pushed traders to lessen expectation for next year’s rate hike. It further pushes the common currency to break through lower than 1.13.  

Yet, the mixed result from the US macro calendar resulted to a decline of both Industrial/Manufacturing production data and PMI despite the retail sales data, prompting sluggish business growth and reduces prospect for fed rate hike in 2019, limiting the euro decline and triggers a rebound from below and hover above 1.13 as market closed for the week. Meanwhile, the broad-based market for the dollar pushes the euro lower. It was able to trade flat during the Asian session starting the trading session for the week. Currently, the euro major pair is trading flat at 1.1307 with an apparent increase of 0.015 on the day. Meanwhile, the pair is showing a positive trend while the upside continues to be restricted by the FOMC update being the major event for the week, which will influence the future trading of the dollar. 

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EUR/USD Fundamental Analysis: December 19, 2018

The euro major pair stays higher than the mid-level of 1.13 during the Asian session today. Early morning the price grew by 100 pips from Friday last week low of 1.1270 and rebounded from a two-week low and continues to move forward on Tuesday, despite the not-so-good data on German Ifo business climates in December due to broad-based USD sell-off momentum. Meanwhile, Italy has reached an agreement with the European Union regarding the controversial issue on the budget which supported the positive drive for the euro bulls but was not able to induce a bullish breakout. 

The dollar sell-off was from the retracement from 1.5 years last  Friday that further worsened by the concerns of the slow rate from the Federal Reserve or put on hold with the sharp drop of the dollar index reaching one week low yesterday. The Bearish pressure grew higher after the intervention of the US president on the Fed’s monetary policy that influenced further the weaker sentiment. The pair grew to 1.1400, gaining 40 pips over one week but soon began its decline from highs and settled to 40 pips from a daily swing high. The pair was able to hold range-bound trading in the upper half of 1.13 across the Asian market. On the headlines, traders will give their attention to the anticipated US FOMC interest rates decision while the US Fed is presumed to raise their rates by 25 bps, which was the fourth rate hike this year and look forward to the increase in 2019 on a “dot-plot” which will determine the short to medium term sentiment on greenback and possible give a new direction for the major currency. 

[Guest Obasi FXMart]

EUR/USD Fundamental Analysis: December 26, 2018

The euro major pair began with a lead over the dollar for this week due to various negative reasons such as high tensions with the US government tension concerning the White House and the Federal Reserve. Trading has been calmed during the Asian session amid the holiday season with the majority of the market are closed. Yet, bull traders are heedful given various factors such as geopolitical concerns and a sluggish economy that prompts investors to be careful with the thin market trading and European markets closed and internal crisis with the US.     

There is no expected macroeconomic data to influence trading even for just a short period of time that has also put a limit to liquidity in the market. The EUR/USD pair is presumed to resume its bullish trading in favor of the greenback across the trading hours. Meanwhile, investors are focus on the US CB Consumer Confidence data and new home sales data scheduled to be released on Thursday, followed by the German CPI data on Friday that may give short-term opportunities. 

The pair continues to move higher for the week on a broad-based weaker dollar but may face a strong resistance that may be difficult to surpass because of lack of momentum in the market. Technical trading continues to move with not much changes since the beginning of the week. 

 

 

[Guest Obasi FXMart]

EUR/USD Fundamental Analysis: December 27, 2018

After the holidays, the pair has moderate gains while the pair undergoes pressure on Wednesday, removing weekly gains. However, despite no macroeconomic data releases and thin trading sessions, the dollar strengthened amid the rising US Treasury bond yields. It was able to move steadily above the level of 96.50, which supports the greenback and declined lower than 1.14 and further moved as low as 1.34. The risk appetite has restricted the losses after the Wall Street rally and optimistic Asian equity market by the year-end trading session. To some level, this sustains the volatility and recoup from losses and return to the level of 1.38. 

Fundamental data are expected from the ECB and two economic data namely the dovish CB Consumer Confidence and new home sales data that is anticipated to give a rising forecast for the month of November. Nonetheless, no matter how the data came out, the pair is likely to move range-bound amid the thin market for holidays which may limit any major upward movement. Next week’s forecast will probably be the same during the holidays for this week. 

On a technical aspect, the price continues to have a bearish pressure in the present and future trading. Short-Term support was found close to the 200-SMA and base of the weekly range with some sort of bearishness to 20-SMA. However, below the midlines lacking any strength gives a neutral stance with uncertain direction.