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Daily Fundamental ForexTime ( FXTM )

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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Wed Jan 25, 2017 4:37 am

Forextime.com Daily Market Analysis

Yen continues to strengthen

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Despite all the global economic indicators and central bank movements the Yen continues to be one of the major players in the FX market. So far the Bank of Japan has been keen to hold off any further action as the market continues to offer up a stronger USD, which in turn helps push their agenda of weakening the exchange rate. While not ever country in the G8 is in agreement with the tactics taken by Japan previously, this lends weight to the US economy forcing the changes, and it's likely we will continue to see strong fluctuations in the USDJPY. The only major thing this week on the Japanese side is the CPI data, with market expecting below average CPI compared to what Abenomics has so far promised - so there is potential for movement if it beats estimates.

On the charts the USDJPY continues to show case a strong trending mentality. So far the bears looking to be taking control and forcing it down the chart in a strong channel which has so far faced very little resistance. The 20 day moving average has also been acting as dynamic resistance in the market so far, preventing any further movements higher and I would expect this to remain the case until USD strength looks to continue on a global scale. Any movements lower however, are likely to find support quite strong at 112.442 and 111.688 - with market expectations looking very strong after the recent reversal in the previous days.

Regardless of all the global attention the US economy has been getting the S&P 500 has so far been one of the largest benefactors with it set to make a large move if technical patterns are anything to go off. New home sales and consumer sentiment are likely to help drive the market in the coming days, and the market will be looking for further positive news to help push the S&P 500 higher, despite it touching record highs as of late.

Technically speaking the S&P 500 is looking very strong as of late from a bullish perspective, with the 20 day moving average acting as dynamic support all the way up on the daily chart. The tightness of the current band on the chart gives weight to the fact that a breakout is set to occur and I would be looking at the bulls for them to take control. However, resistance at 2278 continues to impede the bulls from rallying higher and may cause further issues in the coming days until we see further positive data.


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By Alex Gurr, Guest Analyst

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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Tue Feb 07, 2017 4:00 am

Forextime.com Daily Market Analysis

AUD leads Asian trading session

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The Australian dollar is taking the spotlight as the Reserve Bank of Australia is set to have its decision about the current interest rate levels, and the market thus far is not expecting anything much from the RBA. With the interest rate held at 1.50% it still remains one of the highest in the developed world, but the Australian economy is currently waiting to see what the outcome will be from the Trump effect, and while things have been rocky it does seem that the economy is starting to look slightly better. However, yesterdays retail sales showed that it's not all smooth sailing as it dipped to -0.1% m/m (0.3% exp), this result lends weight to the fact that the RBA may touch on the consumer economy not picking up as expected. But the real weight will be focused I feel on the economy as a whole and the commodity sector which has been recovering in recent months in anticipation of the global economy picking up.

Markets have been very much a fan of commodity currencies in recent weeks, with global risk appetite picking up the demand for yield has lead to large jumps in the NZD and of course the AUD, with the AUD looking very much the stronger of the two. So far the AUDUSD has been on a very bullish trend and it certainly has not seemed to lose any steam at present. The 20 day moving average has acted as dynamic support as it has moved up the chart, and this looks likely to be the first real test as comes under pressure. After all markets can't remain bullish forever, especially when it comes to FX markets. At the same time resistance at 0.7680 has so far stifled the bulls in there run up the charts, but the recent bearish movement has found strong bullish sentiment so expectations are building for further movements past this level onto the next major level at 0.7730.

Global up turn has so far been talked about, but not come through just yet. However, oil markets have been looking more and more uncertain when it comes to direction for the majority of traders. One thing that does remain clear is that oil is coming under further pressure in the markets to find some direction. At present the 20 day moving average continues to act as dynamic support and is pushing the bears out of the market as it looks to take on the key level of resistance at 54.46. As the two come together expectations will build for a bullish breakout, or if we had a reversal we could see some strong bearish pressure. Pressure will build though, and the bulls have the advantage in this sort of scenario and fundamentals starting to lean in their favour.


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By Alex Gurr, Guest Analyst

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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Tue Feb 14, 2017 8:14 am

Forextime.com Daily Market Analysis

Traders look to hedge in Gold

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The world and the markets continue to struggle to focus on economic data as Trumps economic policies take centre stage. This should come as no surprise these days given the power one man can wield on an economies; as we saw with Abenomics. But that was just Japan and the US market is the world's largest free market and is Trump is throwing his weight around, which in turn has led to strong movements and volatility being one of the major themes of the market. Commodities have so far been a mixed bag for most traders in the market, however trending is become a key theme and the metals market is looking tradable in its present form.

Gold has been on the upside in the recent weeks as Trump continues to put pressure on the market, especially around his comments on currencies and the fact that a number of countries should stop manipulating their currency. There is further speculation that Trump may in fact also start a currency war globally, however how that would look is still unknown and also comes with large risks for the US economy - large fluctuations might be good for traders, but for an established economy it can cause a world of pain. If exports are winners in the long run, then importers and the general consumer are worse off and vice versa.

Gold has so far but in a very bullish trend for a few weeks and it looks set to continue as people look for a hedge in the event of a currency war. Resistance at 1245 held up quite nicely when pushed over the last few days, but after the quick drop gold has found support on the 100 day moving average. Any further drops for Gold are likely to find support at 1208, but even before that the 20 day moving average would also be something to consider and watch. If Gold continues to run higher then I would expect the next major level of resistance to be found at 1262 and it may look to take a breather at this key level.

Oil has also been another major player in the market that everyone is taking a tough look at, after last week's oil inventory data shocked the market coming in at 13.83M barrels (2.53M exp). This was a quite a large inventory build up and was somewhat unexpected after the recent cuts from OPEC back a few months to help bolster prices. Additionally America picking up pace was also expected to cause further increases in demand.

Technically speaking, Oil on the charts though has so far failed to breach through the resistance level at 54.46 and unless we see further cuts of even a pick-up in demand then it could actually slide further down the charts. So far the 20 day moving average and the 50 day moving average have been slowing down any bearish movements, but it's only a matter of time before it slips lower unless we see some changes.



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By Alex Gurr, Guest Analyst
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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Tue Feb 21, 2017 5:35 am

Forextime Daily Market Analysis

Global risk appetite remains strong


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The Australian economy continues to be a roller coaster for any Aussie bulls, but one thing is certain the markets are not paying too much attention at present with the AUDUSD being one of the stand out performers in 2017 so far. However, markets should be paying attention to what is going on with the consumer economy with the weekly consumer confidence reading coming at 113.7 (previous 116.4). With the 3rd week of drops for the consumer economy the Reserve Bank of Australia may be starting to squirm slightly, especially as they head into a new year with an uncertain global economy focused on Trump and Brexit.

On the charts the AUDUSD has been a trail blazer as of late as the bulls have taken full control to run it up the charts. This has been on the back of risk sentiment being very strong in the wake of Trumps elections, but for the fundamental side of the Australian economy it's not making a lot of sense. Either way the technical's so far have been very positive with the 20 day moving average acting as dynamic support as it pushes the AUDUSD higher. Resistance has been quite strong around 0.7730 and 0.7754 and the market will certainly have to work hard to break through these levels. Consolidation between 0.7680 and 0.7730 is likely to be the next few days of trading before the market may look to retest previous levels, it would be with a degree of caution at present as there is still not a lot of clear direction globally.

Risk sentiment is not only driving the commodity currencies, but also the US equity markets which in turn saw another sharp spike today as it continued to make record highs on the back of positive economic data. Last week's Philly manufacturing index data took the market by surprise with a very strong reading of 43.3 (exp 18.0). This large jump is in part to the market believing that the Trump administration will look to boost the US domestic economy, and is likely to stimulate it and in turn give the manufacturing sector a much needed boost. Even with the threat of further rate rises the US equity markets have so far not faltered and look ever more bullish, even as the economic data points to another one right around the corner.

For the traders looking to cash in on the S&P 500 the bulls look to be in control. How long momentum can be sustained is hard to see at this stage, but the psychological levels become important as you go up the charts into new territory. With the market now sitting just above 2350 it's likely to look for the next level higher and this is looking likely to be 2400 for resistance. Past history has shown that these levels are major points for the market, and as the bulls look to see if the sky is the limits, you can expect to see some major levels of resistance around these round numbers.


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By Alex Gurr, Guest Analyst

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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Wed Mar 08, 2017 10:44 am

Forextime.com Daily Market Analysis

WTI bulls struggle above $52.50

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WTI Crude breached $53 during trading on Tuesday after industry data pointed to a potential ninth straight week of inventory builds which revived some oversupply concerns. Although OPEC members have made an effort to stabilizing the oil markets by cutting output, the growing threat of U.S shale ramping up production continues to limit gains on the commodity. While oil markets may be seen to be trapped in a fierce tug of war, a resurgent Dollar from the prospects of higher US rates could expose WTI to further downside shocks. From a technical standpoint, WTI Crude bulls are struggling around $52.50 with weakness below this level opening a path towards $51.50.

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Gold pressured by rate hike expectations

Gold was exposed to further downside losses during early trading on Wednesday as expectations heightened over the Federal Reserve raising US interest rates next week. A strengthening Dollar from the improving sentiment towards the United States has fuelled the metals selloff with prices trading around $1213 as of writing. From a technical standpoint, Gold is under pressure on the daily charts with sellers eyeing $1200. Previous support around $1220 could transform into a dynamic resistance that offers that encourages a selloff towards $1200 and potentially lower.

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EURUSD bears eye 1.0500

The growing political risks in Europe have left the Euro vulnerable to sharp losses. Although the economic fundamentals of the Eurozone continue to look encouraging, it is the uncertainty revolving around the French elections that has haunted investor attraction towards the currency. Market participants may direct their attention to Thursday ECB meeting which most anticipate concluding with the central bank leaving monetary policy unchanged. From a technical standpoint, the EURUSD is bearish on the daily charts. The downside momentum could encourage bears to drag prices towards 1.0500 in the short term and 1.0350 in the medium to longer term.

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GBPUSD struggles above 1.2200

Sterling remains gripped by the Brexit developments and the rising anxiety ahead of the Article 50 invoke should create a foundation for bears to install repeated rounds of selling. In a technical perspective, prices are trading below the daily 20 SMA while the MACD has crossed to the downside. With the pair creating lower lows and lower highs on the daily charts, the prerequisites of a bearish trend have been firmly achieved. Technical traders may observe how prices react below 1.2200 with further weakness opening a path towards 1.2100 and 1.2000 respectively.

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GBPJPY breaks below 139.00

The bearish combination of Sterling weakness and Yen's resurgence from risk aversion has left the GBPJPY vulnerable to heavy losses this week. This pair may come under renewed selling pressures in the medium to longer term as uncertainty heightens from the Brexit developments. From a technical standpoint, the pair is bearish on the daily charts as prices are trading below the 20 simple moving averages. A decisive break down below 138.50 could open a path lower to the next relevant support level at 137.00.

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By Lukman Otunuga, Research Analyst
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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Mon Mar 13, 2017 8:37 am

Forextime.com Daily Market Analysis

U.S. rate hike is coming, but the U.S. dollar is not responding


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The greenback is weakening for a third consecutive day in early Asian trade ahead of Wednesday’s most awaited Fed meeting. Investors are almost convinced that the Fed will move forward in tightening monetary policy, with speculators pricing in 89% chance of a rate hike according to CME’s FedWatch Tool. Friday’s robust non-farm payrolls report removed all doubts and now even skeptical investors believe that three rate hikes are the base scenario for 2017. So why is the dollar not benefiting from the shift in expectations?

I believe the answer to this questions is simply based on “buy the rumor, sell the news” adage. The U.S. economy added 235,000 jobs in February and unemployment dipped to 4.7% from 4.8%, meanwhile wages were revised up 2.8% year-on-year from 2.6%. Despite wage growth not being robust enough, the continuous improvement in hiring will force wage growth to accelerate and diminish the slack in labor market.

The divergence in monetary policy and aggressive expected U.S. fiscal plans have been the key factors which sent the Dollar’s index to a 14-year high back in January. But recent reports indicated that European Central Bank policy makers have raised the possibility of increasing interest rates before the asset purchases come to an end, indicating that this divergence will not last much longer and investors might require to adjust their expectations.

I would rather focus on U.S. treasury yields for now as a break above 2.64% on 10-year treasuries might not only indicate that the dollar’s slide is temporary, but could be a sign that the three-decade bull bond market has come to an end, which will eventually increase the risk-free rate required by investors. And if U.S. corporate earnings growth can’t catch up, then we’re likely to see the beginning of U.S. equity markets correction.

In Europe, the U.K. divorce from the EU might become official as soon as Tuesday if the Brexit bill clears parliament later today. This will be the beginning of a very complicated two-year process, and much of it will be felt in the pound. Meanwhile Dutch voters are heading to the polls on Wednesday providing an indication on how strong the populist movement is in Europe ahead of upcoming polls in France and Germany.


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By Hussein Sayed, Chief Market Strategist (Gulf & MENA)

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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Wed May 10, 2017 9:42 am

Forextime.com Daily Market Analysis

U.S. equities touch new highs, still boring!


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The best way to describe recent market price action is boring. Although S&P 500 touched a new record-high on Tuesday, the index has been trading in a range of less than 0.5% for the past ten days, and when excluding the rise of 0.41% on 5th May, it was a trading range of less than 0.2%.



Low volatility indicates that investors seem to be relaxed for now. Although they’re not willing to take much risk, they aren’t worried about a sharp correction. Multiple factors may explain the low volatility: steady earnings, stable economic indicators, and a decline in equities correlation, limiting a one-sided move. One of the questions I hear all day, is how long can this prolonged period of low volatility last? But the more important question should be, what direction are equities going to take when volatility returns?



First, let’s examine how markets reacted in the immediate aftermath of historic low volatility levels:



July 1993: The VIX fell to 9.11, S&P 500 gained 3.6% in the following eight weeks.



December 1993: the VIX dropped to a low of 8.89, four weeks later the S&P 500 surged 2.6%, then fell by more than 7% in two months.



December 2006: the VIX fell below 10. S&P 500 posted gains of 3.25% in ten weeks, followed by a 6.7% correction.



The takeaway from these samples is that for the most part, when the VIX falls below the 10 benchmark, equities make short-term gains, followed by a correction. On the longer-term, it’s much different. For example, in 1995 the S&P 500 surged 37.2% and in 2008 crashed 36.55%, suggesting that the VIX is a poor indicator of long-term trends.



A period of very low volatility doesn’t persist for long, and it only needs little surprises, whether it's macro factors, a change in earnings expectations, or a political shock to change investors’ behavior.



I still believe that valuations are overstretched, and if not supported by stronger earnings in the next two quarters, it will be hard to justify current price levels, especially considering that fixed income instruments will become more attractive as the Fed and other central banks start tightening monetary policies. I will also keep a close eye on oil prices, although I believe that we’ll be ending the year above $50. Any sharp move to the downside from current levels will drag equities with it.


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By Hussein Sayed, Chief Market Strategist (Gulf & MENA)


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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Wed May 17, 2017 7:19 am

Forextime.com Daily Market Analysis

AUDUSD bears look to strike


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The Australian dollar has been under a fair amount of pressure as of late, as a mixed bag out of China and recent weakness has got the Reserve Bank of Australia worked up. The weakness in China saw industrial production y/y dip to 6.5% (7.1% exp) and fixed asset investment y/y was also slip to 8.9% (9.1% exp) - worrying signs for one of the world's largest economies. This obviously has a flow on effect for the Australian economy as China is one of its largest trading partners. Additionally, the recent monetary policy meetings saw the RBA focus on the labour market and in particular growth in the jobs market and wage growth; all of which has been far too slow for the RBA and continues to be a headache. The market thus far has been accordingly putting pressure on the Australian dollar, and this will be somewhat welcomed by the RBA as a way to alleviate pressure and help stoke inflation. One of the main things to watch will be to see if this inflation flows over into wage growth to help the economy grow.


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AUDUSD bears have been in control over the last month as the market enjoys a resurgence in USD bulls and plays of the weakness of the Australian economy. So far daily movements have been consolidated bullish movements followed by aggressive bearish plays to push the currency pair lower. The 20 day moving average has been tracking the movement lower and thus far has been acting as strong guidance for the direction and acting as a dynamic level on the way down. Resistance levels are currently being pressure around 0.7439 with the possibility of further out breaks touching on 0.7498 and 0.7568. However if the market does decide to follow the current trend this pressure on support levels at 0.7343 and 0.7178 are likely to be the main targets for traders on the way down. All in all though it seems that the AUDUSD is likely to find plenty of volatility in the coming months with a mixed bag from China and the US recently.

Oil has once again come under the pump, as private inventory figures have shown a build up in oil reserves. This should not be a surprise given how back and forth it is, but the market has been quick to turn its toes on the recent bullish run and drive oil prices lower. It does feel however that clean energy is starting to make its mark amongst shale oil and causing issues for oil bulls who have been betting big for some time.


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So far Oil has struggled to break through resistance at 49.32 with each push through being pulled back by the market. Support levels are likely to be the next targets if we continue to see surpluses and I would expect 47.75, 45.78 and 44.02 to be the most likely candidates for large price action movements lower.


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By Alex Gurr, Guest Analyst

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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Tue May 23, 2017 4:42 am

Forextime.com Daily Market Analysis

Greek debt negotiations cause EUR volatility


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It could be a return to instability if the Greek issues rear there ugly head again. Recent reports out of Brussels over the Greeks and their handling of debt has been slightly worrisome, and markets are a little on edge over the discussions. Currently Greece needs another tranche in June in order to prop up its finances, and so far it has been working hard with some protest. But markets have not forgotten the previous ordeal when Greece almost collapse, and the turmoil it can cause on European markets. Certainly, the IMF and the EU will be looking to make sure they don't see a repeat of that and a resulting downturn in the Euro-zone, but it's always worth watching the Greek drama unfold with both eyes open as markets can be quite volatile. This has been reflective of the EURUSD which has had some large swings today on the back of rumours on Greece.

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The question now for traders is if this Greek tragedy is over and the Euro can fly higher. So far it looks good for traders with a strong level of resistance likely to rear its head soon at 1.1298. The band between that level and 1.1366 will set the tone I feel for further bullish movements if there are more in store. Even if we did see a strong pull back at this level there is a bullish trend line at play in the market which is likely to add a strong layer of support which can't be ignored by any technical trader out there. I would also be quick to watch the 20 day moving average, as it managed to safe guard against some bearish movements a few weeks back and could come into play again if we do see a bounce back to earth at 1.1298.

Oil markets have also been showing great resolve recently as the bulls look to take control once again. This in part has been led by Iraq looking to extend its oil production cut by another 9 months in order to control prices. The market believes it is a done deal as it's the same as agreed originally back in December to help boost prices. However, with shale oil producers being more aggressive than ever it will be hard to tell if we will see prices look to drift into the high 60s anytime soon. Certainly not so until we see large drawdown's on current oil inventories.

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On the charts it's clear that Oil is looking to rush up, but has been pushed back down by the bears at the 100 day moving average which has acted as resistance. It will be interesting to see if oil can break through resistance at 51.48 or if it will instead run out of steam and go one to retest support levels and the 20 day moving average.

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By Alex Gurr, Guest Analyst
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Re: Daily Fundamental ForexTime ( FXTM )

Postby FXTM Official » Tue May 30, 2017 5:31 am

Forextime Daily Market Analysis

UK poll results lift cable

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The UK has been most of the talk today, as Theresa May continues to talk up Brexit in the face of looming UK elections. Both sides have thus far presented some of the arguments, but there is still a large amount of the unknown which is causing issues for the market and politicians as well. Some of the negative economic costs for leaving the free-market are starting to weight on the currency despite the resurgence. And with every whisper about it out of Brussels we will continue to see the cable jumping to the tune of the Euro-zone, as the UK looks to head to the negotiating table and get a deal that will provide some benefit despite the steps that are being taken. One gleaming hope for cable traders is that recent polls have shown Theresa May as being in a comfortable lead still and this has lead in turn to some bullish sentiment in the market thus far - despite all the negative talk.

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For the cable bulls there is two key levels of resistance slowing them down at this stage, as 1.2861 and 1.3042 continue to be major bearish points. Support can be also found around 1.2743 but for the bulls, the key here as if we do see the Tories continuing to dominate polls in the coming week, then we will see further bullish movements and targeting of key resistance levels. The question will be, how high can we go and how long until Brexit takes its toll again.

Gold has been an interesting play in the market as of late. With equity markets lifting higher, it's unusual to see gold move in the same direction, but in this instance that is exactly what we are seeing. It's quite clear that parts of the market are hedging quite hard, while the bulls in other areas believe the rally will continue. Who is going to be wrong is impossible to tell, but there is certainly a lot of volatility on the horizon over the next four years with a Trump government. For me, what is interesting to see for gold movements, is that the bulls have started to slow down as they approach the long term trend line - so it will be interesting to see if they respect the bearish nature of it, or try and push through.

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When it comes to key support levels in the event that the trend line does hold, I would expect to see it drop to 1256.35, with further potential to drop even lower to 1227.00 if the bears can truly take hold of the gold market. The 20 day moving average between the two is also one to watch as gold has a habit of using it as dynamic support and resistance on the daily chart.


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By Alex Gurr, Guest Analyst

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