Hot Forex - Market Analysis and News.

[HFM.]

Date : 14th November 2019.

USD holds firm; JPY up; AUD & CAD down 14th November 2019.

Both the Dollar and Yen have continued to hold firm against most other currencies amid a backdrop of sputtering global stock markets.

AUD: The Australian Dollar dove following the release of Australia’s October employment report, which showed the unemployment rate ticking higher, to 5.3% from 5.2%. China’s industrial production growth also slowed sharply in October, to 4.7% y/y verses the median forecast for 5.4% growth, with investment growth falling to a record low. Chinese sales also underwhelmed, while preliminary Japanese Q3 GDP disappointed with growth of just 0.1% q/q, with a 0.7% q/q drop in exports shining a light on the impact of trade protectionism.

The Australian dollar dove by over 0.5%, driving AUDUSD to a one-month low at 0.6795, and the AUDNZD cross to a 10-week low, at 1.0625, which coincides with the 20-week SMA. The cross has declined by nearly 2% since the RBNZ unexpectedly refrained from cutting interest rates yesterday. A cross today below the 1.0625 could suggest further fall for the medium term, with next Support at the confluence of 50% Fib. and the 200-day SMA, at 1.0560.

EUR: On a brighter note, German Q3 GDP came in at 0.1% versus the 0.0% median forecast, though Q2 growth was revised lower. The data still helped the Euro lift moderately. EURUSD climbed back above 1.1000 after earlier carving out a fresh one-month low at 1.0994.

YEN: The Yen remained underpinned by safe-haven positioning, albeit moderate. USDJPY printed a nine-day low at 108.62, while both EURJPY and AUDJPY hit new 1-month lows, with both now amid a fifth consecutive day of decline.

CAD: USDCAD is amid a third consecutive week of ascent, and has remained buoyant after printing a 5-month peak at 1.3268 yesterday. The high extended the pronounced gains the pairing has seen since the release of Canada’s October employment report last Friday, which disappointed and caused a reappraisal in BoC monetary policy expectations. At the same time, USOIL prices have turned flat-to-softer following a 1-month up phase, removing what had been a supportive rug from under the Canadian Dollar’s feet. For now, USDCAD looks likely to remain upwardly biased, with the next Resistance at September’s peak, 1.3310, and at October’s 2 consecutive fractals at 1.3345. Support levels are set at 200-day SMA and 50-day SMA.

EURCAD: The EURCAD on the other hand, presents a continues slip pf Euro against Loonie. Intraday, the asset forms a triangle since October 25. The support around 1.4554 and 1.4520 is a key gauge that if gives way would open the lows around 1.4420-1.4450. The RSI moving around 50 and MACD lines at neutral suggesting consolidation in the short term. In the medium term meanwhile, the overall outlook remains neutral to positive, while if market holds above 1.4570-1.4580, it would be a confirmation that positive bias is strengthening, with the next daily Resistance area, 1.4670-1.4700.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Andria Pichidi
Market Analyst

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 18th November 2019.

Events to Look Out For Next Week 18th November 2019.

Welcome to our weekly agenda, our briefing on all the key financial events globally. The week ahead is expected to reveal a healthy housing sector in the US, while Canadian data could clear the way for BoC. Eurozone’s PMI are also on tab.

Monday – 18 November 2019

• ECB Financial Stability Review (EUR, GMT 09:00) – The Financial Stability Review provides an overview of potential risks to financial stability in the Euro Area.

Tuesday – 19 November 2019

• Monetary Policy Meeting Minutes (AUD, GMT 00:30) – The RBA minutes, similar to the ECB Reports, provide a detailed assessment of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision. They are usually a cause for FX turbulence.
• Housing starts and Building Permits (USD, GMT 13:30) – The September decline in starts reflected weakness in multi-family components, mainly led in the Northeast and Midwest, alongside small declines in the south and west. Permits have shown a solid growth path through Q3 alongside strength in starts, suggesting a likely solid path for both measures through Q4. Housing starts should rebound to a 1.285 mln pace in October, after the dip in September. Permits similarly are expected to rebound to 1.370 mln in October.

Wednesday – 20 November 2019

• Interest Rate Decision (CNY, GMT 01:30) – The PBoC is not expected to change its interest rates, at 4.2%.
• Inflation Report Hearings (GBP, GMT N/A) –The BOE Governor and several MPC members testify on inflation and the economic outlook before the Parliament’s Treasury Committee.
• Consumer Price Index and Core (CAD, GMT 13:30) – The Canadian CPI for October is expected to have come out higher than last month, at 2.1% from 1.9% in September, after the 0.1% dip in August, as declines in gasoline prices and tuition costs weighed. The CPI added to the backing for no change in rates from the BoC in October.
• Monetary Policy Meeting Minutes (USD, GMT 19:00) – The FOMC Minutes report provides the FOMC Members’ opinions regarding the US economic outlook and any views regarding future rate changes.

Thursday – 21 November 2019

• ECB Monetary Policy Meeting Accounts (EUR, GMT 1:30) –The ECB Monetary Policy Meeting Accounts, similar to the FOMC minutes, provide information with regards to the policymakers’ rationale behind their decisions. In the last ECB meeting, ECB kept policy settings on hold at Draghi’s last meeting, as widely expected after the comprehensive easing package announced in September.
• Philly Fed Index (USD, GMT 13:30) – The Philly Fed index is seen rising to 7.0 from 5.6 in October, versus a 1-year high of 21.8 in July and a 33-month low of -4.1 in February. The “soft data” measures have largely stabilized since June around moderate levels, though with a headline from the UAW-GM strike in recent months that seemed to have impacted some surveys but not others. The trade war headwind may subside somewhat in November, though the markets still face a wide array of troubles abroad.

Friday – 22 November 2019

• Gross Domestic Product (EUR, GMT 07:00) – German Q3 GDP expanded 0.1% q/q – boosted by consumption. Germany not just missed a technical recession, the economy actually expanded slightly in the third quarter, as Q2 was revised down. However, we expect no turnaround yet for the final Q3 GDP, despite the higher headline rate, as the balance of risks remains tilted to the downside.
• Markit Services and Composite PMIs (EUR, GMT 08:30-09:00) – The prelim. EU Markit PMI Indices are expected to continue above 50, but slightly decline to 51.9 and 50.3 respectively, according to consensus expectations. As for Manufacturing PMI, in November a slight improvement is expected at 46.0, even though the headline rate remains in contraction territory.
• Retail Sales (CAD, GMT 13:30) – Retail Sales are forecasted to have registered a flat outcome in Canada, after mild declines of 0.1% in August.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 20th November 2019.

FX Update – 20th November 2019.

EURUSD, H1
The Dollar and Yen have firmed up amid a risk-off turn in global markets as tensions between the US and China bubble up. The US Senate yesterday passed a bill in support of Hong Kong’s pro-democracy protesters, to which Beijing responded sharply, accusing Washington of being ignorant of “facts and truths” while threatening retaliation for interfering with what it sees as its internal affairs. This comes with little sign of the long since tabled, and unambitious, “Phase 1” partial trade deal coming to fruition. Sources cited by Reuters report that US President Trump is wanting deeper concessions from China in return for making a full roll back of tariffs and cancelling additional tariffs scheduled to take effect on 15 December.

Against this backdrop, the Yen has seen its risk premium rise, albeit moderately so. USDJPY ebbed to a six-day low at 108.35, with the Japanese currency outperforming an otherwise firm Dollar. EURJPY posted a six-day low, and other Yen crosses also declined. The narrow trade-weighted USD Index printed a two-day high at 97.93, putting in some distance from the 15-day low seen on Monday at 97.68. EURUSD concurrently saw a two-day low at 1.1055, and Cable a three-day low at 1.2888, with last night’s General Election debate seen as a “draw” but with the Conservatives coming under criticism for misleading the public after it rebranded one of its Twitter accounts to “factcheckUK”.

Sharp declines in oil prices, where concerns of a supply glut have run into concerns about the US-China situation, have driven underperformance in the Canadian Dollar, lifting USDCAD to a near six-week high at 1.3296. The pair is up nearly 1% from yesterday’s lows. USOil futures have dropped by 4% over the last two days, yesterday posting the biggest one-day tumble in seven weeks and testing $55.00. The Australian and New Zealand Dollars are also lower, though by a lesser extent, and most developing-nation currencies are softer.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Stuart Cowell
Head Market Analyst

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 21st November 2019.

Equities continue lower ahead of ECB – 21st November 2019.

Equities continue lower ahead of ECB – Stock markets head south on trade deal doubts, while a risk-off, or at least a risk-wary sentiment looks likely to prevail, which could keep safe-haven currencies, primarily the JPY and USD, underpinned, The high beta currencies such as the Dollar bloc and many developing-world currencies are under pressure.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.




Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 25th November 2019.

Events to Look Out For Next Week 25th November 2019.

Its a short but also busy week, as the Thanksgiving holiday will keep US markets close on Thursday and partially on Friday. From a data perspective, it will definitely be an eventful week with Wednesday and Thursday being the most data-heavy days with US GDP and Durable Goods, and Inflation releases from Europe and Tokyo.

Monday – 25 November 2019

• German IFO Business Climate (EUR, GMT 09:00) – The German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. November numbers are expected to show a decline in business climate.

Tuesday – 26 November 2019

• CB Consumer Confidence (USD, GMT 15:00) – The Consumer confidence is expected to rebound to 128.0 in November from 125.9 in October, versus an 8-month high of 135.8 in July, a 16-month low of 121.7 seen as recently as January, and an 18-year high of 137.9 last October. The present situation index is anticipated to dip to 169.0 from 172.3 in October, versus a 19-year high of 176.0 in August. The expectations index should rise to 100.6 in November from 94.9 in October, versus an 18-year high of 115.1 in October of 2018. Overall, confidence measures remain historically high.

Wednesday – 27 November 2019

• Gross Domestic Product (USD, GMT 13:30) – The Q3 GDP growth is expected to be boosted to 2.1% from 1.9%. The revised Q3 data will still depict a quarter with a wide gap between solid consumption growth but contracting business fixed investment in the face of trade uncertainty, slowing growth abroad, disruptions from the Boeing 737 MAX grounding, and the UAW-GM strike.
• Personal Consumption Expenditures Prices (USD, GMT 13:30) – A 0.3% gain is seen in personal income in October after a 0.3% increase in September, alongside a 0.4% rise in consumption that follows a 0.2% September gain.
• Durable Goods (USD, GMT 13:30) – Durable goods orders are expected to fall -1.5% in October with a -4.4% drop in transportation orders, after a -1.2% headline orders drop in September, and a 0.2% uptick in August. Boeing orders fell to just 10 planes in October from 25 in September. A continued headwind from problems with the Boeing 737 Max and disruptions from the UAW-GM strike have prompted buyers to delay new orders and vehicle assemblies to fall to an 8-year low pace.

Thursday – 28 November 2019

• United States – Thanksgiving Day – US closed.
• Harmonized Index of Consumer Prices (EUR, GMT 13:00) – The German HICP inflation could slip to -0.6% m/m for November from 0.1% m/m. The annualized outcome is expected to remain unchanged at 0.9% y/y.
• Tokyo CPI and Production Data (JPY, GMT 23:30) – The country’s main leading indicator of inflation is expected to remain at 0.4% y/y core in November, and to slip at 0.4% y/y ex Fresh Food. Industrial Production should post a 1.9% growth y/y in October, compared to 1.3% last month.

Friday – 29 November 2019

• United States – Thanksgiving Day – US early closed at 13:00.
• Unemployment Rate (EUR, GMT 08:55) – Unemployment numbers are probably nearly as important as the GDP growth figure. German unemployment rate is expected to remain unchanged in the annual basis however unemployment change for November is expected to decline to 2K from 6K.
• Consumer Price Index (EUR, GMT 10:00) – The Euro Area flash CPI for November is forecasted to rise slightly, at 0.9% y/y from 0.7% y/y last month while core is seen at 1.2% y/y from 1.1% y/y.
• Gross Domestic Product (CAD, GMT 13:30) – A sharp slowing in Canada’s real GDP growth rate to 1.2% (q/q, saar) is expected in Q3 following the surge in Q2 growth to a 3.7% clip that was driven by temporary factors. This will add to the backing for a near term rate cut for the Bank of Canada.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.




Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 26th November 2019.

Equities continue lower ahead of ECB – 26th November 2019.

Risk-on runs on – European stock markets are slightly lower in opening trade, as the stock markets run out of steam after the rally seen yesterday.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.




Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 2nd December 2019.

Events to Look Out For Next Week 2nd December 2019.

Welcome to our weekly agenda, our briefing of all the key financial events globally. Following another cautious week, after trade jitters and the prospect of further protests in Hong Kong weighed on sentiment, two interest rate decisions and NFP data stand out in the announcement schedule next week. The US-China trade tensions, upcoming UK elections and OPEC meeting in Vienna continue to dominate the week.

Monday – 02 December 2019

• Building Permits (AUD, GMT 00:30) – Building permits are a known leading indicator of the housing and the overall market. Following the moderatıon of decline in dwelling approvals in September for Australia, it will be interesting to observe whether permits will increase or pullback once again. The consensus for October is at -4.0% m/m, compared to the spike at 7.6% last month.
• Manufacturing PMIs (EUR, GBP, USD, GMT 08:55-14:45) – The UK manufacturing PMI is expected to hold below neutral at 48.1. The Euro Area PMI is expected to remain at the same levels as last month, at 46.6 and German number at 43.8, while the US ISM PMI in November is expected to increase to 50.5 compared to 48.3. The sentiment surveys have been erratic in recent months likely due to competing perspectives on the trade war, troubles abroad, and stock price gyrations.

Tuesday – 03 December 2019

• Interest Rate Decision (AUD, GMT 03:30) – No surprises are expected even though in the last RBA statement Governor Lowe admitted that there are downside risks and admitted that the bank could ease again if necessary. He also suggested that previous easing steps are already supporting the economy and while the bank is monitoring developments there was nothing to signal immediate moves.

Wednesday – 04 December 2019

• Gross Domestic Product (AUD, GMT 00:30) – Third quarter GDP for Australia is expected to have settled at 1.4% y/y.
• Employment Data (USD, GMT 13:15) – US ADP Employment Change is anticipated to grow by 138K in November from 125K last month.
• ISM Non-Manufacturing PMI (USD, GMT 15:00) – The ISM-NMI index is expected to rise to 55.0 in November from 54.7 in October. Sentiment has received ongoing support, however, from tight labor markets, high consumer confidence levels, and firm GDP and consumption growth. We should see at least some November updraft following the settlement of the UAW-GM strike.
• Interest Rate Decision (CAD, GMT 15:00) – In October, the Bank of Canada maintained the 1.75% rate setting, matching widespread expectations. However, the announcement was overall dovish and the Bank seems like it has opened the door wide open to a rate cut if the resilience of the domestic economy shows signs of faltering.

Thursday – 05 December 2019

• OPEC meeting in Vienna
• Gross Domestic Product (EUR, GMT 10:00) – Third quarter GDP s.a. for Europe is expected to have settled at 0.2% q/q, unchanged from the second quarter.
• Trade balance (USD, GMT 13:30) – The trade deficit is expected to widen in October to -$53.5 bln from -$52.5 bln in September. The exports are anticipated to hold steady at $206.0 bln, while imports should rise 0.4% to $259.6 bln. Both exports and imports face headwinds from a decline in vehicle trade with the UAW-GM strike, as well as a drop in petroleum prices following the Saudi drone bombing in September.

Friday – 06 December 2019

• Event of the Week – Non-Farm Payrolls (USD, GMT 13:30) – A 190k November nonfarm payroll rise has been forecasted, following a 128k increase in October. This reflects a November reversal of the UAW-GM strike impact that left a restrained 128k October rise, with an estimated 40k November bounce in factory jobs after the -36k October drop.
• Labour Market Data (CAD, GMT 13:30) – October employment revealed a 1.8k drop in jobs, contrary to expectations for a measured gain (median 15k), following the 53.7k jump in September. However, the November reading is anticipated to jump back to 15.9K while the unemployment rate is expected to rise as well at 5.6% m/m from 5.5% last month.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 3rd December 2019.

Sterling Awaits Election Result – 3rd December 2019.

Sunderland South and the direction of Sterling – Why the first constituency to declare its new MP could have a significant bearing on the direction of Sterling on Election night next week.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 4th December 2019.

FX Update – December 4 – Risk Off – 4th December 2019.

AUDJPY, H1
The Yen has rallied on a safe-haven bid as global stock markets turn lower after President Trump, nearly two months after announcing the limited “Phase 1” trade deal with China, said that trade negotiations may be postponed until after the 2020 presidential election. This after announcing intentions to tariff steel imports from Brazil and Argentina. Disappointing Q3 GDP out of Australia, a country that is highly exposed to the US-China trade, was also in the mix. Growth came in at 0.4% q/q in the antipodean economy, against a median of 0.5%. USDJPY printed a 13-day low at 108.43, while EURJPY and AUDJPY descended into respective one-week low territory and is the biggest moving pair today, down some -0.6%. The Australian Dollar has been the day’s biggest loser out of the main currencies. AUDUSD more than reversed gains seen yesterday on the less dovish than expected RBA statement, in making a low of 0.6814. The AUDJPY triggered lower yesterday on the Crossing EMA Strategy, H1 at 13:00 GMT (1) move down to T1 (2), retraced to Entry (3) to close T2 flat. It then triggered lower again (4) and moved to T1 (5) and T2 (6) for a net move of 47 pips for both legs lower.

The Dollar, outside the case of USDJPY, has held firm, finding its own safe haven bid. The sharpest in six months drop in the U.S. 10-year T-note yield yesterday was a reflection of this safe haven bid, which is why forex markets haven’t been trading on yield differential dynamics in the latest phase. Both EURUSD and Cable both drifted moderately lower, before a bid on Sterling saw cable breach 1.3000 and trade over 1.3040 and post a new six month high. Elsewhere, EURCHF has dropped for a third consecutive trading day, this time hitting a three-week low at 1.0923. The decline in the cross have correlated with the prevailing risk-off phase that started at Friday’s release of disappointing U.S. manufacturing ISM data.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 6th December 2019.

Happy Non-Farm Friday – 6th December 2019.

Happy Non-Farm Friday – The Dollar majors have remained comfortably within their respective ranges from yesterday, ahead of trade talks, NFP and the OPEC+ decision.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.




Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 9th December 2019.

Events to Look Out For Next Week 9th December 2019.

Following the OPEC meeting this week and the surprisingly strong US payroll data, three interest rate decisions are scheduled next week. Other than Central Banks, the event of the week is the UK Parliamentary Election on Thursday.

Monday – 09 December 2019

• RBA’s Governor Lowe speech (AUD, GMT 22:05) – Due to speak at the AusPayNet Summit, in Sydney.

Tuesday – 10 December 2019

• Consumer Price Index (CNY, GMT 01:30) – September’s Chinese CPI is seen unchanged at 0.7% while the PPI figure is expected to decline further to -1.2%. The overall reading for CPI is estimated to post a gain up to 2.9% y/y.
• ZEW Economic Sentiment (EUR, GMT 10:00) – Economic Sentiment for October is projected at -27 from the -22.5 seen last month, as the current conditions indicator for Germany turned negative. The overall Eurozone reading though is expected to decline slightly further to -33.0 from -22.4. A lower than expected outcome, ties in with the stagnation in market sentiment at the start of the month.

Wednesday – 11 December 2019

• Inflation Rate (USD, GMT 13:30) – A 0.2% November headline CPI rise is expected with a 0.2% core price increase, following respective October readings of 0.4% and 0.2%. As-expected gains would result in a headline y/y increase of 2.0%, up from 1.8% last month. Core prices should set a 2.3% pace for a second consecutive month. We expect an up-tilt in y/y gains into Q1 of 2020 due to harder comparisons and some lift from tariff increases that should leave gains in the 2.4% area, which may help ease concerns about persistent inflation undershoots of the Fed’s 2% objective.
• Interest Rate decision and conference (USD, GMT 19:00) – The FOMC is widely seen on hold even after the robust payroll data, with no shift in rate policy for the foreseeable future. Indeed, the data validated the pause and left policymakers in a state of Fed Nirvana, at least for now. Fed Chair Powell will reiterate the economy and policy are in a “good place.” There is little risk of any downside “material changes” in the outlook anytime soon given the solid path for jobs growth. And, GDP will likely continue to modestly outpace the official Fed estimates, just as a benign inflation trajectory caps risk of rate hikes from the Fed as well. Hence, the focus will be on the Fed’s quarterly forecast update (SEP) and Chair Powell’s press conference.

Thursday – 12 December 2019

• Parliamentary Election – Brexit will be a focal point with the December 12 election. While the Conservative party with a working majority is the clear odds-on favourite outcome of the election, the outcome of the general election is by no means a sure-fire certainty, however, especially in light of the predictive failures of pollsters and betting markets at elections in the UK and elsewhere in recent years.
• SNB Interest Rate Decision and Conference (EUR, GMT 08:30) – The central bank is widely expected to keep policy settings unchanged as ongoing uncertainty on the global growth outlook, along with weakness in the Eurozone economy, support the view that the central bank’s negative interest rate and the threat of ad hoc currency interventions remain necessary to keep the franc under control, and prevent inflation from falling. The central bank has kept the door to additional measures open as it keeps a close eye on geopolitical trade tensions and Brexit developments.
• ECB Interest Rate Decision and Conference (EUR, GMT 12:45 &13;30) – Lagarde’s first press conference. The “risk” is that it will be equally uneventful as her testimony before the European Parliament. It is very likely on Thursday, to be confirmed that: The ECB remains ready to act again and tweak all its measures if necessary, but has already done a lot and now needs to keep an eye on the side effects of the very expansionary monetary policy, while politicians need to do their bit to support the economy.The ECB won’t be reducing the degree of stimulus any time soon and we effectively see the central bank on hold through next year, unless there is a major change in circumstance.

Friday – 13 December 2019

• Retail Sales and Industrial Production (USD, GMT 13:30) – A gain is expected up to 0.3% November for both the retail sales headline and the ex-auto figures, following a 0.3% October headline with a 0.2% ex-auto figure. There’s considerable uncertainty, however, given seasonal distortions around the holidays, especially including Black Friday and Cyber Monday swings, and with six fewer shopping days between Thanksgiving and Christmas.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.


Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the

 

[HFM.]

Date : 10th December 2019.

FX Update – NZD & GBP remain Bid – 10th December 2019.

NZD & Sterling

The New Zealand Dollar posted a fresh four-month high versus the Australian Dollar, while NZDUSD and NZDJPY saw two-day highs. A shift in RBNZ policy expectations and an associated rise in NZ yields have been underpinning the kiwi. The 10-year US T-note yield advantage relative to the NZ 10-year yield has narrowed by some 15 bps since late November. It is expected that this trend will taper out at some point, as RBNZ monetary policy is historically sensitive to movements in the currency. The longest rallying kiwi pair is the NZDCAD which is now in its 29th day and 280 pips (4.6 x ATR) north of the key 20-day simple moving average, 19 days over the 50-day moving average and 6 days over the important long term 200-day moving average and psychological 0.8600. Next Resistance is R3 and the upper Bollinger band at 0.8750. MACD and RSI both remain positive.

Elsewhere in the forex realm, most dollar pairings and associated cross rates have remained in narrow ranges, holding within respective Monday ranges in thinned-out year-end conditions. EURUSD has remained particularly directionally challenged, seeing less than a 10-pip range during the Asia-Pacific session until the entry of the London interbank market. USDJPY managed a 12-pip range. The stellar US jobs report of last Friday has had little lasting impact on the Dollar. Markets seem non-committal, partly due to seasonal considerations and partly amid a certain anxiety ahead of the weekend’s deadline for the US to hike tariffs on a further $160 bln worth of Chinese goods. A delay in this deadline is possible, if a phase-1 deal fails to come to fruition, while an implementation of the new tariffs would mark an escalation in the trade war and cause a significant risk-off response in illiquid year-end global markets.

Sterling has settled after rallying yesterday, unaffected by the slight dip in GDP and the worse than expected trade balance, Cable holds the 1.3150 pivot point. Markets have factored in a Conservative victory with an outright majority at Thursday’s UK general election, based on public opinion polling, though political pundits have been stressing that undecided votes are making this election tricky to call. Polls have suggested most undecided voters are people who voted for Labour in 2017, suggesting there is a possibility for an unexpectedly strong showing for Labour, however, the surge in tactical voting to prevent a Johnson majority is difficult to calculate, and there have been no clear signs of this. The key YouGov MRP opinion poll will be updated later today; last time (November 27) it predicted a Conservative majority of 67 seats.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 11th December 2019.

FOMC Preview – 11th December 2019.

FOMC Preview
No policy changes or surprises are expected with today’s announcement (19:00 GMT) and Chair Powell’s press conference 30 minutes later. It will be interesting to see if, as expected, the voting is unanimous this time round. The FOMC members have expressed significant differences of opinion during 2019 as three rate cuts were implemented. The apparent paradox of low unemployment and low inflation, the new “norm”.

The two-digit unemployment rate (U-3) in November edged down to 3.53% from 3.56% in October, and a 3.52% cycle-low in September, all below the 3.58% prior cycle-low in April and a 4.00% rate at the beginning of the year. Current readings remain much lower than the 4.2% long-run unemployment rate projection noted in the September SEP, it is expected that this estimate will be trimmed today.

Headline CPI rose 0.4% in October while the core index rose by 0.2%, for respective y/y gains of 1.8% and 2.3%, versus September figures of 1.7% and 2.4%. Today the November headline is expected to fall again to 0.2% and the core remains flat at 0.2% too. The Fed’s favoured inflation gauge, the PCE chain price measure, rose 1.3% y/y in October and expectations are for an uptick to 1.4% in November. The core PCE chain price measure rose 1.6% y/y in November, versus 1.7% in September, and expectations are for the pace to hold at 1.6% in November. The FOMC’s latest median estimates for 2019 inflation are 1.5% for the headline and 1.8% for the core.

Hence, the focus will be on the Fed’s new quarterly forecasts, with expectations raised and likely to be mostly bullish results with a bump up in the median growth projection and a drop in the median dot to reflect a steady stance through 2020. However, the individual dots are likely to show both, forecasts for cuts and hikes. Chair Powell is expected to reiterate the US economy and policy are in a “good place,” (a phrase he has used a number of times lately) and could sound a little more upbeat after the strong jobs report. But, he will continue to warn of downside risks. The FOMC isn’t likely to announce any new measures on reserve management operations (QE?) or a repo facility. All steady into 2020 and beyond.

USDIndex remains biased to the down side but has support around 97.40 and the 200-day moving average. A breach of this key support zone brings in 97.00 and the October low of 96.85. A break over 97.80 (the confluence of the 20 and 50-day moving averages) and 98.00 would be required before a re-test of the recent high at 98.50 could be considered.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.




Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 12th December 2019.

Lagarde prepares ECB debut – 12th December 2019.

• Policy unchanged
• Projections unlikely to change much
• Clues about review sought
• Style in focus

Presiding over her first presser of the European Central Bank today, Lagarde is expected to confirm once again the current policy setting, giving time to ECB to focus on the planned review of its overall policy framework.

Final Eurozone GDP and PMI readings broadly supported this neutral picture, while the confidence that a deep recession can be avoided is strengthening (Figure 1) despite the fact that German manufacturing and production numbers still look weak. The exports and the overall trade are actually holding up much better than expected, which together with still strong labour markets is underpinning hopes the net exports and consumption will continue to support growth not just in Germany.

Figure 1 : December German ZEW investor confidence outcome, end the year firmly in positive territory at the highest level since February 2018.
As there is nothing in the data really to challenge the ECB’s overall policy stance, the focus firstly turns into the tone and presentation style that President Lagarde will have. The “risk” is that the presser will be equally uneventful as her testimony before the European Parliament. Lagarde’s team building exercise seems to have worked and at least in public there has been a pretty consistent message since she took over, which is very likely to be confirmed today. Additionally it will be interesting to see whether she will back fully Draghi’s package.

Citi Bank: All key interest rates will likely be left unchanged, and the forward guidance reaffirmed. The main interest at this meeting will be the new Eurosystem staff projections, extended to 2022, to gauge whether the September package will be sufficient to bring inflation back into line with the ECB’s target over the forecast horizon. If not, investors’ attention will quickly turn to the ECB’s toolbox and what instruments the Governing Council would be willing to use and when, in order to defend its credibility in the absence of large fiscal support. The upcoming strategic review of monetary policy will also likely be the focus of many questions.

Hence as reported by Citi, other than Lagarde’s style, ECB projections could also monopolize the attention. Even though, the ECB remains ready to act again and tweak all its measures if necessary, it has already done a lot and now needs to keep an eye on the side effects of the very expansionary monetary policy, while politicians need to do their bit to support the economy.

The central bank won’t be reducing the degree of stimulus any time soon with many analysts supporting that this will continue until mid-2020 unless there is a major change in circumstance.

Central bankers will be conducting a comprehensive review of the policy framework, however, with a special focus on the inflation target. A more symmetric definition, which stresses that the ECB can see through lengthy inflation overshoots as well as periods of too low headline rates is likely to come in the first quarter of next year. The inclusion of owner-occupied housing costs into the HICP number also remains a challenge especially as house prices are rising rapidly in some centres, also thanks to the low interest rate environment.

Bund yields have nudged higher over the past week, but the German 10-year so far failed to move lastingly above -0.3%. Uncertainty on trade and Brexit are keeping a lid on yields, although there is the risk that if things go the way markets want and a phase one trade deal is confirmed and in the UK PM Johnson gets his majority, there could be a sharp rise in yields, if markets price out further easing and start to look ahead to central banks removing some of the stimulus.

However this is far away for now, while central bankers are not looking eager to add further easing.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 13th December 2019.

Two Fundamental Strategies – 13th December 2019.

An in-depth discussion on how the various assets on the global markets interact with each other and how understanding the nature of these interactions can help traders gauge risk! Join our market analyst, Andria, for a demonstration on:

Commodity prices
Bond spreads
How the two could provide an effective way to discover trends in the market.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 16th December 2019.

Events to Look Out For Next Week 16th December 2019.

Following a busy week ending with a Conservative victory in the UK election and rising hopes of a potential trade deal between UK and China, attention turns to the BoJ, PBoC and BoE monetary policy meetings next week. However, the developments on the US-China trade front will remain front and centre.

Monday – 16 December 2019

• Manufacturing PMI (EUR, GMT 08-30-09:00) – The prel. November manufacturing PMI was revised up to 46.9 from 46.6, despite the signs that the weakness in manufacturing is starting to spread. The European PMI for December meanwhile is expected to released at 47.4.
• Manufacturing PMI (GBP, GMT 09:30) – The UK PMI is expected to register an upwards reading to 50.7 after the upwards revision last week at 48.9.

Tuesday – 17 December 2019

• RBA Meeting’s Minutes (AUD, GMT 00:30) – The RBA minutes provides a detailed assessment of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision. They are usually a cause for FX turbulence.
• Employment and Earnings (GBP, 09:30) – Average earnings are expected to have increased by 3.8% in October, above the 3.6% the previous month. The ILO unemployment rate (3M) for October could rise at 3.9% from 3.8%.

Wednesday – 18 December 2019

• German IFO (EUR, GMT 09:00) – The German Business Sentiment Index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. December’s numbers are expected unchanged.
• Consumer Price Index (GBP, GMT 09:30) – The UK inflation is seen unchanged to the downside in December, at 1.5% y/y, the lowest rate seen since November 2016 and after 1.7% in September. The core should be steady as well at 1.7%.
• Consumer Price Index (EUR, GMT 10:00) – Prices are expected to have eased slightly in December, with overall inflation expected to remain at 1% y/y, while core inflation at 1.3% y/y.
• Consumer Price Index (CAD, GMT 13:30) – The overall Canadian CPI and core should hold close to target, while the November Core outcome is expected to slip to -0.2% following the 0.4% jump in October.

Thursday – 19 December 2019

• Interest Rate Decision and Conference (JPY, GMT 03:00) – In the last meeting, BoJ kept its short-term interest rate target at -0.1% and its pledge to guide 10-year JGB yields around 0% while maintaining its asset buying program. The central bank signaled its commitment to keep interest rates at current levels “for an extended period of time, at least through around spring 2020”. BoJ Governor said in his statement that cutting rates further are a possible policy option, adding that he doesn’t think that Japan is near the reversal rate. He also said that he doesn’t think the BoJ needs to change the forward guidance now. Hence this is likely to remain the scenario in this week’s Monetary Policy Statement.
• Interest Rate Decision (GBP, GMT 12:00) – BoE should remain on hold until Brexit has been resolved. Thus, consensus forecasts suggest no change in the policy rate in this meeting, however an uTwo of the nine-member MPC dissented in favour of cutting the repo rate by 25 bps

Friday – 20 December 2019

• Gross Domestic Product (USD, GMT 13:30) – A Q3 GDP growth is expected up to 2.2% from 2.1%, with a -$1 bln trimming for factory inventories alongside a $4 bln hike for construction. The Q4 GDP growth estimate sits at 2.4%, with support from recent reports indicating a -4% Q4 drop in imports that adds to GDP, likely firmness in government purchases, a rebounding residential investment sector, and an expected bounce in equipment spending.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 17th December 2019.

Spectre of “No Deal” Brexit Back – 17th December 2019.

The Pound is down 0.5% on the day against both the Dollar and Euro, and is off by 0.4% versus the Yen. The catalyst was news that UK prime minister Johnson will amend the withdrawal agreement bill to outlaw an extension in the transition period beyond the end of 2020.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.




Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 18th December 2019.

FX Update – GBP loses its Johnson Jump – 18th December 2019.

GBPUSD, H4
Sterling posted fresh correction lows against the Dollar and Euro, among other currencies. Cable printed a six-day low at 1.3070, and EURGBP a two-week high at 0.8517. This follows UK prime minister Johnson’s revival of the no-deal Brexit threat yesterday, by pledging to modify the EU withdrawal agreement so that it legislates against any extension in the post-Brexit transition period beyond 2020. I doubt he’s serious, and such legislation could easily be reversed at will, given Johnson’s commanding parliamentary majority. His aim is clearly to strengthen his government’s negotiation hand with the EU, by arming it with a “walk away” option during upcoming negotiations for a new trade deal. he has no-doubt concluded that he got agreement on the his new Withdrawal agreement under a pressing timescale and both parties agreed compromises to push the October 12 document through.

What is clear is that a new trade deal should be able to be drawn up relatively quickly, though the 11 months still looks to be a tall order (witness the 17 months it took for the US and China to come up with a partial revision in the two’s trading terms). Unlike all of the other negotiations the EU has to date had with other nations and trading blocs, where they were starting a long way apart (totally different tariffs, quotas and systems), the UK and EU have 100% common features.

A fillip for Johnson was that all the ratings agencies are now more optimistic on the UK after the election. Both S&P Global Ratings and Fitch Ratings improved their assessment of the UK’s credit outlook after Johnson’s Conservative Party won a majority in last week’s election. S&P changed the country outlook to stable from negative, with analysts seeing a diminished risk of a no-deal Brexit. Analysts at S&P said “Despite the government’s current stance, we expect that the UK will seek, and the EU will grant, an extension beyond December 2020 to negotiate the future relationship between the two.” Fitch meanwhile affirmed the AA rating and took the UK off Rating Watch Negative, thus removing the immediate threat of a downgrade, but the rating agency did maintain the negative outlook. S&P affirmed its credit rating of AA/A-1+. Fitch held the country at AA.

Elsewhere, EURCHF carved out a one-week low at 1.0912, though USDCHF managed to hold above the four-month low seen yesterday. EURUSD drifted lower after closing in New York yesterday just above 1.1100, and matched yesterday’s low at 1.1129. USDJPY edged out a two-day low at 109.41, which was lower mark of a 15-pip range. AUDUSD traded moderately softer, though remained above yesterday’s one-week at 0.6838, which was seen in the wake of the release of RBA minutes from the early-December policy, which showed that policymakers are open for a possible further cut in the cash rate at the next meeting in February.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 19th December 2019.

FX Update & BOC Preview – 19th December 2019.

GBPUSD, H1

The Dollar has traded moderately softer in thinning year-end markets. This has seen the narrow trade-weighted USD Index (DXY) ebb to a low of 97.30, down from the one-week high seen yesterday at 97.47.

A rebound in Cable has weighed on the US currency, with Sterling finding a footing after plunging by nearly 3.5% from last week’s post-UK election rally high at 1.3515. Cable’s low yesterday was 1.3060, and the pair has since recovered to the lower 1.3100s, though still remains over half a big figure below the levels that were prevailing ahead of the election.

The BoE’s Monetary Policy Committee has amid its final meeting of the year, and will announce at 12:00 GMT in London today. No change to prevailing settings is widely anticipated, though there will be a focus on the two dissenters, Saunders and Haskell, who last month voted for a 25 bps cut in the repo rate, to see if they will maintain their dovish dissent in light of the strong victory of the Conservative Party at last week’s election. Either way, we expect the BoE to remain on a neutral footing heading into 2020, though, with inflation running at three-year lows at 1.5% y/y, comfortably below target, the BoE won’t be in any rush shift to a tightening bias.

Elsewhere in forex markets, EURUSD lifted out of the one-week low seen yesterday at 1.1100, but remains mired in narrow ranges in what is now the sixth consecutive session trading on a 1.11 handle. USDJPY has also continued to ply narrow ranges, pivoting through though the pair still managed to scratch out a six-day high at 109.68, which is 2 pips shy of the 17-day high seen last Friday, and 4 pips shy of the seven-month peak seen on December 2. The Australian dollar recovered the losses seen following the wake of the RBA minutes on Tuesday following an above-forecast 39.9k gain in employment, along with an unexpected dip in the jobless rate to 5.2%, from 5.3%. AUDUSD posted a two-day high at 0.6883 moving some 0.42% during the Asian session.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.




Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date : 20th December 2019.

FX Update – Holiday Consolidation– 20th December 2019.

USDJPY, H4
Narrow ranges have continued to be the norm as markets wind down into the Christmas and New Year holiday period. EURUSD has mustered a less than 10-pip range so far today, holding in the lower 1.1100s in what is now the seventh consecutive trading day the pair has been trading on a 1.11 handle. USDJPY has managed a 15-pip range, with the base marked at 109.25. The pair is consolidating below the seven-month high at 109.72 seen in early December, which is the culmination of a rally from the late-August low at 104.45, a three-year low. Rallying global equity markets and a pricing out of Fed easing expectations have been keeping USDJPY buoyant.

While equity markets have settled today, the USA500 yesterday hit a sixth-straight record high, which is the longest streak since January 2018. All three major US indexes posted new record closing highs yesterday. The Santa Rally has certainly come to life this year, The gains came after US Treasury Secretary Mnuchin said the US and China would sign their Phase-1 trade deal trade pact in early January, and the US House of Representatives having approved the new North American trade deal.

Elsewhere among currencies, the Australian Dollar managed fresh highs, building on gains seen after yesterday’s above-forecast Australian jobs report. AUDUSD printed a one-week high at 0.6900. The Pound has found a footing after tumbling to fresh lows against the Dollar just after the London book closing yesterday. Cable posted a 16-day low at 1.2989, since recouping back above 1.3000, though set to close out today with its biggest weekly loss in just over two years.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.



Stuart Cowell
Head Market Analyst
HotForex

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