Daily Market Analysis from ForexMart (Fundamentals)

[Andrea ForexMart]

USD/CAD Fundamental Analysis - September 21, 2016


Yesterday, Governor Poloz of the Bank of Canada discussed about the need of the monetary stimulus for the country in order to bolster its economy, however the US and Canadian dollar seems impassive as it performed a steady-going movement.


As it was stated in the yesterday's forecast, the USDCAD traded within a high range near the 200 SMA and possibly to become a firm resistance for the pair and the forecast were already proven right. Buyers attempted to drove the price beyond the resistance level which resulted a fall back to its previous range.


The 200 SMA breaks through the 1.3253, the high is positioned around the 1.3242. Due to a sharp decline of the high, the price settled down at 1.3176 and further changes down to 1.3100 is still anticipated. Moreover, the FOMC announcement will determine if the pair could make an increase within the level of 1.2850.


The USD and CAD appeared to be bearish within a short and medium term. There is also a prediction regarding the oil prices consolidation subsequent to the recession happened few months ago. Part of the forecast is the continuous ranging of the pair between 400-500 daily pip range.

 

[Andrea ForexMart]

GBP/USD Fundamental Analysis: September 22 2016


The activity of GBPUSD yesterday resulted the pair to be considered as volatile currency pair in the market.The pound and dollar trades in a tight range with a firm support set in the level of 1.2950. The resistance level maintained 1.3000 even after the Fed announcement regarding the retain the price of current rates, however, they did not issued a specific date for the rate hike.


The vague announcement from Fed rendered an uncertain state of volatility and subsequent to this statement, other pair related to USD have been affected also. The concerned pairs concluded a moderate upward trend followed by the GBPUSD as well.


The USD established a weak position because the market were a little disappointed since Fed did not presented anything hawkish. The pair fluctuated with a resistance level of 1.300 but the movement continued on an advanced level of 1.3035.

In view of the instability of the USD that is expected to prevail until the succeeding session but with a conforming and secure target ranges from 1.3140 to 1.3170.

 

[Andrea ForexMart]

EUR/USD Fundamental Analysis: September 23 2016

The EUR/USD persist an upward grind movement since the trading day yesterday. The said activity started subsequent to the FOMC's announcement.

Bearish investors tried to pass through the support level of 1.1145 but failed to accomplish their plan. When the announcement were already made, bullish investors are able to manage the price actions that moved in an ascending manner. They are capable to broke the yesterday's forecast with a level of 1.1250.

The European market look forward for the announcement of the ECB president, Mr. Mario Draghi regarding the Euro economy. This is why the economy had experienced a price delay in selling. Consequent to the major announcements made by the BoJ, Fed and other central banks, Draghi did not disclose any special information because he does not want to aggravate them.

After the grind and FOMC statement, the USD moderately increased and started to acquire strength together with the its related pairs. This development negatively affected the Euro and demonstrated a decreasing grind that last in one night.

The grind of EUR gained a support towards 1.1200. In case that the dollar stick on its actions, the EURUSD has the tendency to draw back a main support in the 1.1200 level.

 

[Andrea ForexMart]

Fundamental Analysis USD/JPY: September 26, 2016


Investors in the Japanese yen were disappointed with the Bank of Japan’s plans to reexamine its monetary policies. The reaction to the central bank’s announcement caused an initial double-sided volatility. Investors have since decided that this particular decision will have no bearing on the economy and on the Japanese currency.


The BoJ’s announcement caused the JPY to increase significantly on September 21, but the USD had already started bouncing back by September 23. The USD/JPY closed Friday’s trading session at 100.971 points, going up by 0.211 points or +0.21%. The pair however still closed the week lower by 1.26%.


The USD/JPY pair was also further weakened by the Fed’s interest rate and monetary policy statement, which turned out to be less hawkish than expected. The Federal Reserve did not increase its interest rates this month, but there is still a possibility of an interest rate hike in December.


The USD experienced a downward pressure.due to the Fed’s lowered expectations and the decreased possibility of future rate hikes, which can lead to a lowered appreciation of the USD since the central bank’s decision indicates a slow-moving US economy.

 

[Andrea ForexMart]

GBP/USD Fundamental Analysis: September 26, 2016


The GBP/USD pair endured the similar fate with the EURUSD since both pairs are stucked in the same range, however the range spot of the euro and dollar are doubled resulting the GBPUSD to have a greater volatility. The trading range is identified subsequent to the Brexit decision and set between the 1.29 and 1.34. The given range presents a price consolidation because the UK market are still waiting for the official price of the sterling after the Brexit ruling. Considering the fact that the EU exit proceeding has not yet initiated again thus the details continued to be unclear making the pound to settled within the uncertain position. In addition to it, the data of UK have presented a better-than-expected results throughout the referendum which bolster the European economy, for all that they still awaits for the detailed activity for better comprehension of the policy effect. As indicated in the weekly chart, the pair is regarded as safe for the investor to use in trading even on the extreme ranges.


A major news regarding Europe is the update of its current account to be issued on 30th of September. Other news from the United States were assumed not to make any impact to the GBPUSD range.


The pair is expected to trade and set a resistance level of 1.3150. If there is a break occurred, it will enable to move in the 1.3300 up to 1.3400 region.

 

[Andrea ForexMart]

Fundamental Analysis for GBP/USD: September 27, 2016


The GBP/USD pair continues to trade at the bottom of its range, closing Monday’s trading session at 1.2950 points. The pair has not yet been able to make a proper recovery from its past price lows. The value of the currency pair will be most likely be decided by the impending adjustments between other currency pairs, particularly the expected EUR/GBP flows towards the end of September.


The GBP/USD pair had strong resistance levels at 1.3140 last week and has plummeted back to the support levels at 1.2950 after failing to go above the resistance level. The pair also momentarily decreased to 1.2910 before going back above 1.2950 points. Analysts are expecting the pair to be bullish for the rest of the daily trading session, possibly going up to the resistance level of 1.3000 points. If the pair manages to go over this resistance level then this would enable the pair to go in the range of 1.3080-3100, where a lot of sells happened during the last time the pair has reached this level.


However, it is still yet to be seen whether the pair would be able to maintain its current value at 1.2950, and could possible lead to a low on Friday at 1.2910 and then 1.2870. The EUR has a somewhat stable bullish stance, and the GBP is also expected to follow this bullish bearing of the EUR, since there are no major UK news that is expected to come out within this period.

 

[Andrea ForexMart]

USD/JPY Fundamental Analysis: September 27, 2016

The USD/JPY stopped at 0.665 or -0.66% at 100.306. Financiers of the Japanese yen attacked the US investors on Monday as they kept arguing about the BoJ's plan to change the monetary policy.

Despite of the preparation by many investors for the upcoming OPEC meeting and the first presidential debate of the United States, the Yen merchants awaits for the statement of the central bank Japanese Governor Kuroda. As he affirmed last Monday about the readiness of Nichigin regarding the usage of policy tool for the accomplishing the 2% target of inflation.

Furthermore, news released some information during the meeting by which the bank is confident that they will reach their goal, but there are some uncertainties which might leave an impact for accommodating the renewed policy.

The movement of price can be identified upon the debate outcome, considering that this is the major news at this moment.

In case that Mr.Trump got the victory then stocks presumably would be sold-off whereby investors of yen would be safe because it will settle on a higher position.

 

[Andrea ForexMart]

Technical Analysis for GBP/USD: September 28, 2016

The sterling pound is currently experiencing a downward pressure following a decrease in oil prices. The buying interest for the GBP/USD went down a few pips to have a current value slightly above the 1.3200 range. The currency’s value dropped significantly from the last trade high and went down between the 1.3200 and and 1.2940 trading range during the last session. The GBP/USD has now dropped beneath the moving averages while the 50, 100, and 200 EMAs is still experiencing a steady decline. Resistance levels are now at 1.3000 points, while support levels are at 1.2900.

MACD levels are currently in the negative but remained in its previous level which indicates that sellers are now increasing their strength. The RSI is sustained at the neutral territory while oscillator levels are expected to decrease.

Sellers would be able to break below the 1.2900 range if the GBP/USD pair would be able to stay within the negative trading range. Analysts are also expecting more sideway trades in the next few hours.

 

[Andrea ForexMart]

Fundamental Analysis for USD/JPY: September 29, 2016


The Japanese Yen decreased its value during Wednesday’s trading session, causing the USD/JPY pair to increase its value by up to 0.257 points or +0.26% to close at 100.67 points. The increased demand for commodity currencies and stocks was caused by a report that OPEC had already consented to decreasing its overall output, which last occurred in 2008. Reliable sources from OPEC are saying that the organization would be reducing its oil outputs to 32.5 million barrels daily from its current output of 33.24 million barrels a day.


The USD started strengthening earlier during the session after a recovery of European equity markets increased the risk appetites of investors which then removed their focus from the safe haven currency. The USD/JPY benefitted from the wide-range risk-on sentiment after the statement from OPEC increased activity in the US stock market.


The US market surged primarily due to statements from Fed and a highly durable US goods report. Core Durable Goods Orders data decreased by 0.4% in August, going way below the expected reading of 0.5% and even lower than the expected July reading of 1.3%. However, DGO data was slightly better than the estimate of -1 and went significantly lower than July’s prediction of 3.6%.

 

[Andrea ForexMart]

Fundamental Analysis for GBP/USD: September 30, 2016

The GBP/USD pair continued to sway between 1.2950 and 1.3050 with no definite direction. This indefinite stance of the GBP/USD was mainly caused by an expected break on both sides by traders but has not since occurred. However, the value of the currency seemed to be controlled by EUR/GBP cash flows than any other fundamental factors.

The issues surrounding Deutsche Bank also added uncertainties to the GBP/USD pair’s stance. Deutsche Bank’s recent issues caused stock markets to have a risk-off sentiment and caused the S&P and other technical indexes to drop in value. Moreover, this has caused the pound to decrease its support levels at 1.2950 during the last trading session. Traders should take extra precautions as this might cause major shifts in the financial market and may also cause the USD to increase its value in general.

Speculators are expecting added volatility to the market due to the London fix, as well as a major news announcement from the UK government which is scheduled to be released today.

 

[Andrea ForexMart]

Fundamental Analysis for USD/CAD: September 30, 2016


The USD/CAD pair finished last trading session with its resistance levels resting at 1.3120 points and support levels at 1.3060 points, with the currency pair merely consolidating during the rest of the trading session since there was no major event that came from Canada yesterday. However, the GDP output for Canada will be released today, and this is expected to create a significant insight with regards to the performance of the Canadian economy. Canada’s economy has been steadily weakening during the past few months, although recent data from the nation has not yet been reflecting these changes.


However, the Bank of Canada has been hinting at this particular weakening in their economy, as well as the effect of lowering oil prices on the nation’s economic output and speculators are saying that this might ultimately lead to the BOC cutting back on its interest rates.


The USD/CAD continues to be bullish, mainly because of the current state of the Canadian economy. The USD strengthened as Deutsche Bank’s issues were brought up during the US session which caused the USD to rally at 1.3180 points and is now currently at 1.3153. Support levels are at 1.3060 while resistances are within the range of 1.3200 and 1.3255 points.

 

[Andrea ForexMart]

Fundamental Analysis for USD/JPY: October 3, 2016


The USD/JPY pair had a double-sided trading session on Friday after investors had split reactions to reports of an alleged settlement between the US Department of Justice and banking firm Deutsche Bank. The currency pair finished the last trading session at 101.318 points, going up by +0.29% or 0.288 points, with the USD finishing higher against the Japanese yen.


The BoJ’s decision on its monetary policy is now settled, and investors are now shifting their focus on investor sentiment when it comes to the general direction of the market. Analysts are expecting this particular trend to continue up until Monday’s session especially due to lack of important economic data to be released this week and because of limited speculations prior to the release of the US Non-Farm Payrolls Report this coming Friday.


Traders are now becoming particularly conscious with various economic events and news as they await the next announcement from Bank of Japan. The direction of the USD/JPY was influenced by the US Presidential Debate last week, the Deutsche Bank issue, and the statement released by the OPEC. For this week, speculators are expecting that the USD/JPY would most likely be influenced by the release of the US stock indices and the US jobs report which is set for the end of the week.

 

[Andrea ForexMart]

Fundamental Analysis for USD/CAD: October 3, 2016


The USD/CAD pair continued to trade within the broad range but market players are expecting the currency pair to be on the bullish side. The USD/CAD has proved to be one of the most volatile currency pairs with its 2-way movement but still in the wider trading range between 1.3050 and 1.3280. The release of the retail sales data last Friday turned out to be bad for the market, causing the CAD to decrease earlier this week. However, the bullish stance of the pair was still not able to break through the 1.3280 trading range.


The CAD then bounced back after the release of the OPEC statement, where oil producers have agreed to cut down oil production in order to increase oil prices. The currency pair then decreased in value. But Canada’s GDP data came out way above the expectations of investors, increasing the USD/CAD’s value but not enough to break through the bottom range, therefore settling within the neutral territory.


For this week, investors are awaiting the release of the Canadian employment report as well as the NFP report which is both slated to come out this Friday. Market players are expecting increased volatility once the mentioned economic data are released, together with the strengthening of the US economy due to an impending rate hike and the weakening of the Canadian economy due to the OPEC report.

 

[Andrea ForexMart]

Fundamental Analysis for USD/JPY: October 5, 2016

The USD increased in relation to the Japanese yen during the last trading session, with the USD/JPY pair closing the session at 102.90 points after increasing by +1.24% or 1.265 points. The pair’s current value is its highest trading level since September 15, putting pressure on the currency pair to exceed its highest level last September 14 at 103.351 points.

The increase in the USD was mostly due to a significant increase in US Treasury yields. The positive ISM Manufacturing PMI data released on Monday triggered an upsurge in Treasury yields, increasing the possibility of an interest rate hike this coming December. Comments from Fed officials also strengthened the US dollar, after Federal Reserve President Jeffrey Lacker stated that there is a high probability that interest rates would be increased and that inflation rates would be put under control by increasing borrowing costs.

The CME Group’s FedWatch indicator also showed that traders are seeing a 63% chance that the Federal Reserve would increase its interest rates during its meeting on December 13-14, an 11% increase from the previous reading after the last Fed meeting on September. This was also cemented by comments from the Federal Reserve Bank of Cleveland’s President Loretta Mester, who called for higher interest rates from the Fed. Fed officials, however, are keeping their respective profiles low as of the moment.

 

[Andrea ForexMart]

Fundamental Analysis for USD/CAD: October 5, 2016

The recent increase in value of the USD has caused certain currency pairs like the USD/CAD to move forward with their bullish runs, a move that has long since been anticipated for the currency pair during the past week. The USD/CAD pair was able to push through its resistance levels at 1.3140 points, even going beyond 1.3170 where it was met with marginal resistance and went with support levels after a gain of 1.3140 points.

The Canadian and US trading sessions saw the USD increase its value by a significant margin and has caused the USD/CAD to go through the 1.3200 trading range, and market players are expecting that the pair will be able to reach its short-term targets at 1.3240 and 1.3280 with relative ease in just a few days. The currency pair is now at the support level of 1.3173 but is still expected to go above its present trading range.

Market players are now awaiting the release of the Canadian trade balance data and the ADP Non-Farm Employment data from the US. These economic data should give traders an idea of the relative strength of the two economies, as well as the possible impact of lowered oil prices on both countries. This could then lead to an increased volatility towards the end of the next trading session.

 

[Andrea ForexMart]

Fundamental Analysis for EUR/USD: October 5, 2016


The EUR/USD pair had increased volatility levels and was able to break through the small-scale trading range and went through the larger-scale trading range of 1.1145 and 1.1245 points. The early part of the trading session saw the USD gaining strength after it lost a significant amount of its value last week. The euro was also able to break through its previous support levels of 1.1200 to gain new support levels of 1.1145 before going as low as 1.1137 points. The EUR/USD pair was also affected by the news that the ECB is currently studying the tapering of the QE.


The EUR/USD went back at 1.1200 after the ECB rumors and went as far as 1.1238 before another headline was released, saying that this particular rumor with regards to the QE was not discussed in any of the ECB’s meetings, prompting the currency pair to go back down at 1.1200 points.


This highly volatile movement of the currency pair is a positive sign for traders who are currently looking for market volatility. The market is currently not expecting any major news announcements from the EU, with the US ADP Non-Farm Employment data the only announcement expected from the US market. The ADP data will act as a precursor for the NFP announcement on Friday which is expected to provide a useful insight on the current state of the US economy.

 

[Andrea ForexMart]

GBP/USD Fundamental Analysis: October 7, 2016

The sterling pound continued to plummet during Thursday’s trading session, after the GBP/USD pair dropped to 1.2601, its lowest ever in 31 years. The currency pair also decreased by 400 pips or roughly 5% during the Asian trading session in just a matter of minutes. Prior to the Tokyo session, the GBP/USD pair traded with a 10-pip spread and the currency’s charts portraying lows at 1.2000 and below. However, there is no clear reason yet as to what caused the currency pair to suddenly backslide. Analysts are expecting that the currency pair would further drop in the coming sessions due to massive political and economic uncertainties, as well as deterioration of the UK economy.

The GBP/USD was able to immediately revert back to the 1.2400 trading range. However, the technical indicators for the pair is presently erratic due to its recent activity. However, if the GBP/USD manages to maintain its risk levels below 1.2500 points then the currency pair would be able to recover even up to 1.2600. Market analysts are however warning traders that more sharp declines and sudden surges are to be expected in the upcoming trading sessions, particularly during this period that traders and investors are awaiting the release of the US Non-Farm Payrolls data in order to gauge the level by which they would resume their selling based on the stance of the pair.

 

[Andrea ForexMart]

USD/CAD Fundamental Analysis: October 7, 2016

The USD/CAD pair continued to consolidate for the duration of today’s trading session although it initially attempted to break through resistance levels at 1.3250 points following a late onset of the US dollar’s strength but was immediately countered by a sudden wave of sellers, causing the pair to drop below 1.3200.

Support levels for the pair came in at the 1.3180 trading range with resistance levels at 1.3250. These indicators are expected to maintain the USD/CAD’s price action for today’s session. The price action for the pair is largely dependent on economic data to be released today, such as the US non-farm payrolls data which is scheduled to be released today together with employment reports from Canada. The USD/CAD pair is then expected to have increased volatility compared with other currency pairs due to the release of these highly relevant data.

Traders are advised to keep out of today’s session since the economic data from Canada and US are expected to come out at opposite terms, which can make it hard for traders to predict the pair’s future price actions. Traders are also reminded to avoid the high volatility levels of the currency pair and wait for the increased activity to die down before going to trading on the USD/CAD.

 

[Andrea ForexMart]

USD/JPY Fundamental Analysis: October 10, 2016

The JPY went higher in relation to the USD after a long losing streak in nine trading sessions after the release of a somewhat negative US Non-Farm Payrolls report disappointed investors and traders. The USD/JPY pair traded at 102.906, decreasing by -1.00% or 1.042 points.

The US Non-Farm Payrolls report came out at 156,000, way below the expected 177,000 prediction for the NFP in September. Unemployment rates also increased by 5.0% from the previous data release of 4.9%. However, the data for the Average Hourly Earnings increased from 0.1% to 0.2%, with limited trader reactions since the data met its previous expectations.

Investors are now speculating that the disappointment in the US payrolls report makes it impossible for a Fed rate hike in November, but is still strong enough for an interest rate hike in December. Market buyers were also compelled to book their profits due to a slight drop in US Treasury Futures data.

The decrease in the USD/JPY came as a surprise to some investors since the economic data release, although on the negative side, is still strong enough to maintain speculations for an interest rate hike before 2016 ends. The pair is seen to further weaken since Monday is a bank holiday, and the absence of major market players could cause the pair to lose some of its current trading value.

 

[Andrea ForexMart]

USD/JPY Fundamental Analysis: October 12, 2016

The USD/JPY pair closed the last trading session at 103.516 points during the last trading session, dropping by -0.08% or 0.085 after investors flocked to the safe haven currency due to a break in crude oil and stock prices, wiping out the currency pair’s gains during the earlier part of the trading session.

The USD was backed by support from statements that the 10-year yields for the US were at its highest levels in over four months. Due to positive interest rate differentials, the dollar consistently appreciated against the JPY during the past eleven trading sessions, however, the carry trade exhibit last Tuesday proved to be crucial for the US dollar.

Analysts are saying that this particular scenario might be could possibly occur again on Wednesday’s trading session due to the impending release of the Federal Reserve’s meeting minutes. These minutes will be of use to market players in order for them to gauge the overall sentiment of Fed officials with regards to the expected interest rate hike in December. Although the meeting minutes from the Fed usually only cause little volatility in the market, analysts are saying that this particular report might become an exception, especially since the USD/JPY is expected to have a reaction to Treasury yields movement and might reflect its price action in the previous trading session.