Tifia Daily Market Analytics

[TifiaFX]

EUR/USD: what will Mario Draghi now say?
25/01/2018
Current dynamics
Unconditional center of attention of traders today is the meeting devoted to the issues of monetary policy and the ECB press conference. The probability that the ECB's current basic interest rates will remain at the same level (the key rate is 0%, the deposit rate is -0.4%), and the volume of purchases of European assets is at the level of 30 billion euros per month, close to 100 %.
Meanwhile, the dollar continues to scale down. This week, the dollar received additional impetus to the fall from the Institute of International Finance (IIF), which said that the US dollar, according to their calculations, is still overvalued by about 10%, from the administration of the US president who signed decrees on limiting the import of cheap Asian goods,
as well as from the US Treasury Secretary Stephen Mnuchin, who announced at the World Economic Forum in Davos, Switzerland that "a weaker dollar has a positive effect on trade".
Over the past 3 weeks, the dollar index DXY fell 3.3% to 88.8 points, to a three-year low (from December 2014). The euro strengthened over these three weeks to the dollar at the same 3.3% (the euro's share in the basket of the DXY index is about 58%).
Undoubtedly, the Eurodollar has grown in recent months not only due to the weakening of the dollar, but also due to the growth of the economy of the Eurozone, which is ahead of the growth rate of the American economy.
However, a strong euro is also not needed by the European economy, as a strong dollar - to the US economy. This, in full measure, refers to other major world economies. It is not excluded that after the strengthening of national currencies to the dollar, the world's central banks will undertake retaliatory actions.
Investors today will closely monitor what Mario Draghi will say about the strengthened euro and the prospects of the QE program in the Eurozone. Given the current strengthening of the euro against the dollar, Mario Draghi is unlikely to talk about curtailing the stimulus program for the European economy and will try to cool the zeal of euro buyers.
If "Eurobulls" will be disappointed with Draghi's speech, then the EUR / USD pair may be corrected. Nevertheless, in the medium term, the pair EUR / USD should continue to grow.
Investors will still try to understand today how much the ECB's attitude towards the strengthening of the Eurodollar will be tolerated. In any case, in the period from 12:45 (GMT), when the ECB's decision on the rates will be published, until 13:30, when the ECB press conference begins, a surge in volatility in financial markets is expected.


Support and resistance levels
Meanwhile, the EUR/USD keeps positive dynamics, has been trading in the zone of multi-month highs, above the important support levels of 1.2330 (EMA200 on the monthly chart), 1.2200 (Fibonacci level 50% of the correction to fall from 1.3900, which began in May 2014).
The pair EUR / USD broke yesterday the upper border of the rising channel on the daily chart and continues to trade in the upward channel on the weekly chart, which indicates a strong upward impulse. The target of further growth is resistance levels 1.2600 (Fibonacci level 61.8%), 1.2650 (the upper line of the rising channel on the weekly chart and the line of the convergent triangle on the monthly chart).
The target of the downward correction in case of breakdown of the support level 1.2360 will be support levels of 1.2200, 1.2060 (highs of 2017), 1.2000 (EMA200 on the 4-hour chart and the bottom line of the upward channel on the daily chart).
Nevertheless, long positions are still preferable. Only in case of breakdown of key support levels 1.1680 (EMA200 on the weekly chart), 1.1650 (EMA200 on the daily chart) we can speak about the reversal of the bullish trend of the EUR / USD.
Support levels: 1.2400, 1.2360, 1.2330, 1.2200, 1.2100, 1.2060, 1.2000, 1.1900, 1.1855, 1.1790, 1.1735, 1.1680, 1.1650
Resistance levels: 1.2500, 1.2600, 1.2650

Trading Scenarios
Sell Stop 1.2350. Stop-Loss 1.2460. Take-Profit 1.2330, 1.2200, 1.2100, 1.2060, 1.2000, 1.1900, 1.1855, 1.1790, 1.1735, 1.1680, 1.1650
Buy Stop 1.2460. Stop-Loss 1.2350. Take-Profit 1.2500, 1.2600, 1.2650

 

[TifiaFX]

S&P500: US stock indexes are still growing
26/01/2018
Current dynamics
During the US trading session on Thursday, US President Trump, in an interview with CNBC at the International Economic Forum in Davos, said that "the dollar will become stronger and stronger, and I want to see a strong dollar after all". This statement by Trump goes against his last year's statements about the usefulness of a cheap dollar for the more successful promotion of American goods to the foreign market. This, in particular, and the US Treasury Secretary Stephen Mnuchin said on Wednesday. In his opinion, "a weaker dollar has a positive effect on trade".
After yesterday's statement by Trump, the dollar jumped sharply in price, and the EUR / USD pair decreased by 120 points in a moment. Nevertheless, during the Asian session on Friday, the pressure on the dollar resumed, and its decline continued with renewed vigor.
The dollar index of the Wall Street Journal, which tracks the rate of the US currency against the basket of 16 other major currencies, fell 0.5% at the beginning of the session on Friday. Since the beginning of the year, the dollar index DXY fell by 3.3% to 88.3 points, to a three-year low (from December 2014). At the beginning of the European session DXY is near the mark of 88.70.
According to market participants, the large-scale decline in the dollar will continue. The reasons for the reversal of its bearish trend so far there.
At the same time, the US stock market continues to grow. This is facilitated by both a weak dollar and positive corporate reporting by US companies.
Rally on the US stock market continues. On Friday, the main US indices reached new record highs, having successfully started in 2018.
Investors also continue to assess the impact of the recently adopted tax bill on the US economy.
Traders are preparing for the performance of Trump in Davos, which will be held today at 13:00 (GMT).
Market participants are also waiting for preliminary data on US GDP for the 4th quarter. According to the forecast of economists, GDP growth in the 4th quarter was 2.9% - 3.0% per annum. This will be another high indicator. Data on US GDP will be published at 13:30 (GMT).
Strong growth in the US economy will be another factor in favor of further growth of US stock indices.
Support levels: 2800.0, 2740.0, 2680.0, 2610.0, 2550.0
Resistance levels: 2850.0, 2900.0

Trading Scenarios
Sell Stop 2795.0. Stop-Loss 2855.0. Objectives 2740.0, 2680.0, 2610.0, 2550.0
Buy Stop 2855.0 Stop-Loss 2795.0. Objectives 2900.0

 

[TifiaFX]

EUR/USD: there is an eventful week
29/01/2018
Current dynamics
On Monday, the dollar makes an attempt to adjust after a long day's fall. The dollar index DXY recovered to the beginning of the European session, halving the Friday's decline and reaching the level of 89.10. On Friday, the dollar closed with a decline for the seventh week in a row, and this was the longest period of decline since 2010.
The index of the dollar WSJ, reflecting the value of the dollar against the basket of 16 other currencies, also rose by 0.2% on Monday, recovering slightly after falling to new 3-year lows last week.
The large-scale decline in the dollar last week was facilitated by the decision of the White House administration to impose restrictions on the importation of a number of goods produced in Asian countries in the US, as well as the statement of US Treasury Secretary Stephen Mnuchin that "the weakening of the dollar is favorable for trade". Despite the current correction, the dollar remains vulnerable. The negative attitude of investors towards the dollar is preserved, and its bearish trend remains predominant.
A series of important economic news are expected to come out this week, beginning with the Fed meeting, ending with the publication on Friday of data from the US labor market for January. In view of this, volatility in the financial markets will continue to be increased.
With regard to the Eurozone, it is worthwhile to pay attention to the publication on Tuesday of preliminary data on Eurozone and France GDP for the 4th quarter (10:00 GMT) and consumer price inflation data in Germany for January (13:00 GMT). On Wednesday (10:00 GMT) report on inflation in the Eurozone for January, as well as data on employment in the Eurozone and Germany (09:00 GMT) for January, will be published. On Thursday, the PMI is expected for the manufacturing sector in Italy, France, Germany (08:45, 08:50, 08:55 (GMT), respectively), Euro zone (09:00) from Markit. Data on consumer inflation in Italy and producer prices in the Eurozone will come out on Friday (10:00 GMT).
However, the focus of traders will be the publication on Friday (13:30 GMT) of data from the US labor market in January. It is expected that the number of jobs outside agriculture increased by 175,000, which is above the average for six months of 166,000 (the previous value was +148,000). Unemployment remained at 4.1% in January, hourly wages of Americans increased by 0.3%.
If the data is confirmed or will be better, it is worth waiting for the strengthening of the dollar. How much the dollar will be strengthened will depend on data from the US labor market and comments from the Fed's leaders on the future plans of the US Central Bank regarding its monetary policy. The publication of comments by the Federal Reserve on monetary policy is scheduled for 19:00 (GMT) on Wednesday, along with the publication of the Fed's decision on rates.

Support and resistance levels
Last week, the EUR / USD reached another multi-month high near the 1.2535 mark, continuing to move in the upward channels on the daily and weekly charts, and trying to gain a foothold in the zone above the important level of 1.2330 (EMA200 on the monthly chart).
The closest targets in the case of continued growth in EUR / USD are resistance levels 1.2600 (Fibonacci level 61.8% of correction to the fall from 1.3900, which began in May 2014), 1.2650 (the upper line of the rising channel on the weekly chart and the top line of the convergent triangle on the monthly graphics). In case of breakdown of the level of 1.2650, the agenda will raise the question of the ECB's further plans for monetary policy and how much the ECB will tolerate against a strong euro. From a technical point of view, the next medium-term target is the resistance level 1.3900 (Fibonacci level of 100%, ie the beginning of the last wave of EUR / USD decline in May 2014).
There is a strong upward momentum and a bullish trend. Long positions are preferred.
Support levels: 1.2400, 1.2360, 1.2330, 1.2200, 1.2100, 1.2060, 1.2000, 1.1920, 1.1790, 1.1735, 1.1680
Resistance levels: 1.2500, 1.2535, 1.2600, 1.2650

Trading Scenarios
Sell Stop 1.2350. Stop-Loss 1.2440. Take-Profit 1.2330, 1.2200, 1.2100, 1.2060, 1.2000, 1.1900, 1.1855, 1.1790, 1.1735, 1.1680
Buy Stop 1.2440. Stop-Loss 1.2350. Take-Profit 1.2500, 1.2535, 1.2600, 1.2650

 

[TifiaFX]

EUR/USD: it is not easy to deploy the strong bearish trend of the dollar
30/01/2018
Current dynamics
After the growth during the Asian session on Tuesday, the dollar again began to decline at the beginning of the European session. As the data published at 10:00 GMT by Eurostat showed, the Eurozone GDP growth in 2017 was the fastest in the last 10 years (+ 2.5% vs. + 1.8% in 2016).
The index of consumer confidence in the Eurozone in January rose to 1.3 against 0.5 in December. The index of business optimism in the industry of the Eurozone in January 8.8, in the service sector 16.7 against 18.0 in December. The Eurozone economy demonstrates excellent growth rates, and the high level of consumer confidence in the Eurozone also indicates economic growth and strengthens the euro.
At the beginning of the European session, data on France's GDP were published, and according to the French national statistics agency Insee data, the GDP of the second largest economy of the Eurozone in 2017 grew by 1.9% compared to the previous year. The growth rate of the French economy accelerated sharply in 2017. The GDP of France has shown the most significant increase since 2011. The improvement of the economic situation in France was promoted by the policy of the European Central Bank aimed at stimulating the country's economy, as well as increasing consumer confidence caused by the election of Emmanuel Macron as French president. Macron spoke during his election campaign for France's further membership in the European Union and the strengthening of economic rapprochement with Germany. His convincing victory speaks of the centripetal sentiment of French citizens towards the European Union. Companies and investors have favorably taken steps to reduce taxes and eliminate bureaucratic obstacles. The revival of the French economy contributed to the growth of the economy of the entire monetary block to the highest level since 2007.
On the day when the results of the second round of elections in France became known, where the pro-European politician Macron won the victory, the euro rose sharply. This day (May 7) can rightfully be considered the starting point for the confident growth of the euro and the EUR / USD in the second half of 2017.
The data published today confirm the fact that the European economy is growing at a faster rate than the US economy.
This once again can remind investors that other major world economies outside the US are expected to grow faster, which may contribute to a more aggressive monetary policy of world central banks. All this together can contribute to the accelerated strengthening of national currencies against the dollar.
Meanwhile, the recent contradictory statements by officials and the actions of US authorities, including US President Trump, only exacerbate the negative attitude of investors towards the dollar.
So, last Thursday, after the statement of US President Donald Trump that the US currency should be "strong", the dollar grew. A day earlier, US Treasury Secretary Stephen Mnuchin said the opposite, dropping the dollar to a new three-year low.
During the economic forum in Davos, Trump again threatened to take action against trading partners. This time he hinted at a possible response to the "very unfair" EU trade policy against the United States. "I have a lot of problems with the EU," Trump said in an interview with the British media. Earlier, Trump had repeatedly said that multilateral trade agreements discriminated against the US. He threatened to take action. All this causes concern of investors in connection with the probability of imposing restrictions on trade and unleashing the world trade war. In January, the administration of the White House has already imposed such restrictions on the importation into the United States of a number of goods produced in Asian countries.
This week, the focus of traders will be the Fed meeting and the publication on Friday of data from the US labor market. On Wednesday (19:00 GMT) the Fed will publish decision on monetary policy. It is expected that the interest rate will remain unchanged at 1.5%. Monthly data on the number of jobs outside of US agriculture, the unemployment rate and hourly pay for Americans will be published on Friday at 13:30 (GMT). Strong data are expected. Nevertheless, they are unlikely to be enough to deploy a strong bearish trend of the dollar.

Support levels: 1.2360, 1.2330, 1.2200, 1.2100, 1.2060, 1.2000, 1.1920, 1.1790, 1.1735, 1.1680
Resistance levels: 1.2430, 1.2500, 1.2535, 1.2600, 1.2650

Trading Scenarios
Sell Stop 1.2350. Stop-Loss 1.2440. Take-Profit 1.2330, 1.2200, 1.2100, 1.2060, 1.2000, 1.1900, 1.1855, 1.1790, 1.1735, 1.1680
Buy Stop 1.2440. Stop-Loss 1.2350. Take-Profit 1.2500, 1.2535, 1.2600, 1.2650

 

[TifiaFX]

USD/JPY: Bank of Japan policy will remain soft
31/01/2018
Current dynamics
Dollar index DXY rose on Tuesday to 89.45, however, at the beginning of today's European session again decreases, approaching the level of 88.80. The value of US bonds continued to decline. The yield on 10-year bonds rose on Tuesday to 2.725% (the highest level in almost four years) from 2.695% on Monday. Nevertheless, this did not help the dollar and did not allow it to consolidate the upward correction, which turned out to be very short-term.
And today, against the background of the declining yield of 10-year US bonds, the dollar is becoming cheaper again. Market participants are preparing for the main event of today - publication of the Fed decision on rates (19:00 GMT). It is widely expected that the interest rate will remain unchanged at 1.5%. Nevertheless, volatility may increase if market participants find something new in the texts of comments by the Fed regarding further plans to tighten monetary policy. In the dollar quotations, there are already 2 increases in interest rates this year. The Fed outlined three increases. More bold predictions suggest 4 increases in the rate, i.е. quarterly. The bearish trend of the dollar at the moment may be break, perhaps, just by such a scenario.
The dollar is falling, as investors expect faster economic growth rates outside the US, which will contribute to a more aggressive tightening of monetary policy by the world's largest central banks. This, in turn, will lead to the growth of national currencies against the dollar.
It is noteworthy that the dollar continues to fall even today against the yen after the Governor of the Bank of Japan Haruhiko Kuroda confirmed during today's Asian session that the Japanese central bank will continue to pursue a soft monetary policy in order to further accelerate inflation. "We are striving to achieve the target inflation rate of 2% as soon as possible, and this is facilitated by the further implementation of monetary easing", Kuroda said in a speech at the country's parliamentary committee. Thus, he tried to cool down the recent assumptions about tightening the policy. Talks about a possible increase in rates in Japan later this year contributed to the strengthening of the yen recently. "... There is a long way to go to achieve the target inflation rate of 2% ...", said one of the board members at the meeting held on January 22-23, when the Bank of Japan kept its ultra-soft monetary policy unchanged, and also kept its forecasts on inflation and GDP growth unchanged. The central bank still expects to achieve an inflation rate of 2% only by March 2020.

Support levels: 108.30, 108.00, 107.30, 107.00, 106.50, 106.00
Resistance levels: 109.45, 110.15, 111.00, 111.60, 112.70, 113.10, 113.70, 114.00, 114.40, 115.00, 116.00

Trading Scenarios
Buy Stop 109.30. Stop Loss 108.50. Take-Profit 109.45, 110.15, 111.00, 111.60
Sell Stop 108.50. Stop Loss 109.30. Take-Profit 108.30, 108.00, 107.30, 107.00, 106.50, 106.00

 

[TifiaFX]

GBP/USD: amid rising price pressure
01/02/2018
Current dynamics
As the research company IHS Markit Ltd. reported today, the purchasing managers' index (PMI) for the UK manufacturing sector in January was 55.3 against 56.2 in December and the forecast of 56.5. Although the index values above 50 indicate activity in the manufacturing sector, the data suggest that growth in activity slowed to a 6-month low against the backdrop of rising price pressures on companies and consumers.
In January, the index became minimal since June, as the shortage of raw materials and rising prices on it against the background of the accelerated inflation in the UK after the referendum on Brexit negatively affected the release of finished products, and the costs again grew. Procurement prices grew at the fastest pace in 11 months. Brexit remains the main theme that affects the pound at the moment. At the same time, company IHS Markit Ltd., which calculates the index, reported that the index remains "well above the long-term average of 51.7" and still indicates the growth of new export orders.
The pound declined slightly after the publication of the PMI index. The positive dynamics of the pound was supported, in particular, by the head of the Bank of England Mark Carney, who in his speech in the upper house of the British parliament earlier this week said that he sees signs of accelerating the growth of wages in the UK due to higher demand for labor. "The demand for labor in the UK is growing, the pace of wage increases is accelerating", in his opinion, while "real income growth this year will resume." "Real incomes (households) this year may return to growth," added Carney. In his view, Brexit will have an impact on inflation rates for several more years, although the effect of the collapse of the British currency has already basically passed. Meanwhile, the pound remains stable against the dollar, which is growing today against the yen and commodity currencies, despite the fact that commodity and oil prices, again, have pushed up.
The dollar slightly reacted to the results of Wednesday's two-day Fed meeting, in which the Fed's interest rates were left unchanged in the range of 1.25% - 1.50%. The statement of the Fed was, on the whole, positive. The central bank signaled the strengthening of confidence in the optimistic outlook for the economy. Heads of the Fed expressed their hope that inflation will grow in 2018. "The level of employment, household expenses and companies' investments were marked by a significant growth, while the unemployment rate remained low", the Federal Reserve said in a statement.
Investors have already pawned in prices a 2-time rate increase this year. If the Fed will raise rates at a faster pace, then the dollar can break the already established multi-month negative trend. In a statement published on Wednesday the Fed has a hint that this year rates can be raised more than three times.
We are waiting for data from the USA today. In the period from 13:30 to 15:00 (GMT), data will be published on the number of initial jobless claims for the last week, labor productivity for the fourth quarter (preliminary release), PMI in the manufacturing sector of the US economy and gradual acceleration of inflation.
The dollar may continue its corrective growth if the data prove to be better than the forecast, while the GBP / USD will turn south, for now - in the short term while.

Support levels: 1.4200, 1.4180, 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Resistance levels: 1.4250, 1.4340, 1.4400, 1.4500, 1.4575

Trading Scenarios
Sell Stop 1.4160. Stop-Loss 1.4290. Take-Profit 1.4100, 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Buy Stop 1.4290. Stop-Loss 1.4160. Take-Profit 1.4340, 1.4400, 1.4500, 1.4575

 

[TifiaFX]

S&P500: investors are nervous, US stock indices are falling
02/02/2018
Current dynamics
After the Fed meeting this week, investors are preparing to publishing data from the US labor market for January. Publication of data is scheduled for 13:30 (GMT). Strong data are expected. Thus, unemployment, according to economists, in January remained at the level of 4.1%.
This is the lowest value in 17 years. Moreover, many economists expect that during 2018, unemployment in the US may fall below 4%. This has not been observed since 2000.
A strong US labor market is becoming the most important factor in the growth of the US economy.
According to the US Department of Labor on Thursday, the number of initial applications for unemployment benefits for the week from 21 to 27 January fell by 1,000 and amounted to 230,000 (last year it was projected 238,000 and 231,000 applications). In January, the number of applications reached the lowest level in almost 45 years. The number of applications below the level of 300,000 has been observed for almost three years. This is the longest series since the 1970s.
Low unemployment indicates an increase in demand for labor resources for US companies, which in turn will contribute to higher wages for employees. And this will lead to an increase in consumer spending, GDP and inflation, which the Fed was so eager for.
Other articles of the report of the US Department of Labor are also expected with high efficiency. So,
hourly wages of Americans increased by 0.3% (+ 2.6% in annual terms), and the number of jobs outside of agriculture in January increased by 180 thousand (previous value is +148 thousand), which is above the average for six months 166,000.
The dollar is growing with the opening of today's trading day. The dollar index DXY, reflecting its value relative to the basket of 6 other currencies, also grows after its fall to a level of multi-month lows near the mark of 88.25. At the beginning of the European session on Friday, DXY has already risen to the level of 88.70.
It seems that investors are serious about the growth of the dollar after a strong report from the US labor market. Well, in just a few hours details of the report of the US Department of Labor for January will be known. If the data really turn out to be strong, then the dollar will continue to grow, but, according to many market participants, it will continue to be limited.
Meanwhile, US and world stock markets are declining before the publication of the monthly US labor market report and after the publication of disappointing corporate reports and the sale of government bonds. Stoxx Europe 600 in the early trading lost 0.6% after the decline in the Japanese market.
Despite the fact that US indices remain at a record level, investors are beginning to get nervous against the backdrop of the growing yield of US government bonds, which reached multi-year highs. Thus, the yield on 10-year US bonds rose to 2.796% from 2.792% on Thursday and 2.712% on Wednesday (the highest level in almost four years).
Participants in the stock markets are beginning to understand that the yield of government bonds is growing, which makes the Fed easier to raise interest rates, which is a negative factor for the stock market.

Support levels: 2800.0, 2766.0, 2740.0, 2670.0, 2630.0, 2560.0
Resistance levels: 2829.0, 2877.0, 2900.0

Trading Scenarios
Sell Stop 2790.0. Stop-Loss 2835.0. Objectives 2766.0, 2740.0, 2670.0, 2630.0, 2560.0
Buy Stop 2835.0 Stop-Loss 2790.0. Objectives 2877.0, 2900.0

 

[TifiaFX]

GBP/USD: on the eve of the meeting of the Bank of England
05/02/2018
Current dynamics

After the publication today (09:30 GMT) of data indicating that the growth of activity in the service sector of the UK in January slowed to a 16-month low, the pound declined. The index of supply managers (PMI) for the services sector of the UK economy fell in January to 53.0 from 54.2 in December (the forecast was 54.3). The data on the service sector was preceded by disappointing statistics on activity in the manufacturing and construction sectors, published the previous week. As the research company IHS Markit Ltd. reported last week, the purchasing managers' index (PMI) for the UK manufacturing sector in January was 55.3 against 56.2 in December and the forecast of 56.5. The data presented indicate that the growth in activity in the manufacturing sector also slowed to a 6-month low against the backdrop of rising price pressures on companies and consumers.
The slowdown in activity growth in all important sectors of the economy signals to the Bank of England about the need for continued soft monetary policy.
The nearest meeting of the Bank of England, dedicated to interest rates, will be held on Thursday. The decision on the interest rate of the Bank of England will be published at 12:00 (GMT). Market participants take into account the 50% probability of increasing the Bank of England's key interest rate in the first half of the year and 2-3 increases by 0.25% each time for three years.
Nevertheless, the Bank of England can maintain the current soft monetary policy, given the slowdown in the most important sectors of the British economy, despite the sharp increase in inflation after the referendum on Brexit.
Meanwhile, the dollar holds the positions gained on Friday in the foreign exchange market after the strong US labor market data for January, published on Friday, strengthened expectations that inflation growth could lead to a more rapid tightening of monetary policy in the US.
The growth of hourly earnings in the private sector in January in the annual comparison was the highest since June 2009 and amounted to 2.9% (in annual terms). At the same time, unemployment in the US in January remained at the same level of 4.1%, and the number of new jobs in the non-agricultural sector of the US economy was 200,000 in January (the forecast was +180,000).
At the meeting of the Fed held in late January, its leaders expressed their hope that inflation will grow in 2018. "The level of employment, household expenses and companies' investments were marked by a significant growth, while the unemployment rate remained low", the Federal Reserve said in a statement.
Thus, if the Bank of England signals about the need to continue to maintain a soft monetary policy, the pound may weaken, and the GBP / USD pair is in danger of breaking the bullish trend that began in January 2017.
From how aggressive the statements of the members of the Committee on Monetary Policy of the Bank of England will be, the dynamics of the pound will depend after the meeting of the Bank of England.

Support levels: 1.4100, 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Resistance levels: 1.4123, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575

Trading Scenarios
Sell Stop 1.4070. Stop-Loss 1.4160. Take-Profit 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Buy Stop 1.4160. Stop-Loss 1.4070. Take-Profit 1.4200, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575

 

[TifiaFX]

NZD/USD: pending RBNZ decision on rates
06/02/2018
Current dynamics
Against the backdrop of negative events taking place in the world stock markets, today's decision of the RB of Australia to keep the current interest rate at the previous level of 1.5% remained almost unnoticed. On Tuesday, at the first meeting this year, the Reserve Bank of Australia left a key interest rate at a record low for the RBA of 1.5%. At this level, the rate has been already in place since mid-2016. The inactivity of the RBA contrasts sharply with the propensity of the Fed, the ECB and the Bank of England to tighten monetary and credit policy.
This week, two of the world's largest banks make a decision regarding monetary policy. On Wednesday (20:00 GMT), the RB of New Zealand decides on the interest rate, and on Thursday (12:00 GMT) decision on this matter will be announced by the Bank of England. As expected, both central banks will not change the current monetary policy; the rate in New Zealand will remain at the same level of 1.75%. Earlier in the RBNZ repeatedly stated that against the backdrop of "a lot of uncertainties" monetary policy "will remain soft in the foreseeable future", but "can be adjusted accordingly", if necessary. For a stable recovery in New Zealand's economy and rising inflation, "a lower New Zealand dollar rate is needed".
At 21:00 (GMT) on Wednesday the RBNZ press conference will begin, during which the representative of the RBNZ leadership Grant Spencer, who is the acting manager (his term of office in the RBNZ management came into force on September 27, 2017 and will end on March 26, 2018) , will make an explanation about the decision taken by the bank. His speeches often serve as an unofficial source of information on the further direction of the RBNZ monetary policy. In his view, the country's monetary policy should correlate with the dynamics of employment and financial stability of the state, rather than inflation.
From the news for today, we are waiting for the publication of the results of the next dairy auction (in the period after 14:00 GMT). The main part of the New Zealand economy is the timber and agricultural complex, and a significant part of the New Zealand export is dairy products, primarily milk powder. Two weeks ago, the price index for dairy products, prepared by Global Dairy Trade, came out with a value of +4.9% (against previous values of + 2.2% and + 0.4%). If the prices for dairy products rise again, the New Zealand dollar will strengthen, including in the pair NZD / USD. The decline in world prices for dairy products will hurt the quotations of the New Zealand dollar.
From the news on the United States today, it is worth paying attention to the speech (at 13:50 GMT) of the representative of the Fed and member of the FRS Committee on Open Markets, James Bullard, as well as the publication at 13:30 (GMT) of data on the US foreign trade balance for December. The deficit is expected to grow to -52 billion dollars from -50.5 billion dollars, fixed in November. This is a negative signal for the US dollar.
Thus, if data on the US foreign trade balance point to an increase in the balance deficit, while world prices for dairy products will rise again, we should expect further growth of the NZD / USD pair.

Support levels: 0.7240, 0.7200, 0.7120, 0.7000, 0.6865, 0.6800
Resistance levels: 0.7328, 0.7400, 0.7430, 0.7500, 0.7550

Trading Scenarios
Sell Stop 0.7250. Stop-Loss 0.7340. Take-Profit 0.7200, 0.7120, 0.7000, 0.6865, 0.6800
Buy Stop 0.7340. Stop-Loss 0.7250. Take-Profit 0.7400, 0.7430, 0.7500, 0.7550

 

[TifiaFX]

GBP/USD: pound declines on the eve of the Bank of England meeting, dollar - rising
07/02/2018
Current dynamics
The US stock indexes again decline on Wednesday after some recovery on Tuesday. Futures on the DJIA fell 1% to 24550.0 points, futures for the S & P 500 fell by 1.1% to 2665.0 points. Investors once again buy the dollar on unwillingness to risk after a sharp drop in shares in recent days. At the beginning of the European session, the dollar strengthened against euro-currencies, including against the pound. However, with large-scale purchases of the dollar is worthwhile to wait.
Apparently, few investors pointed out yesterday's publication of data pointing to a "significant deterioration" in the US trade balance. Data showed that in December, the foreign trade deficit amounted to 53.1 billion dollars (against the forecast of -52.0 billion and
-50.4 billion dollars in November), reaching the highest level in nine years. This is a strong structural negative factor for the US dollar in the long term.
Earlier, US President Donald Trump was extremely negative about the huge US foreign trade deficit, explaining this, in particular, by an expensive dollar. And he's right. An expensive national currency makes goods produced in a given country less competitive on the external market.
Back at the end of last month, the White House decided to impose restrictions on the importation of certain imported goods in the US produced in Asian countries. And a statement by US Treasury Secretary Stephen Mnuchin, who said that "the weakening of the dollar is favorable for trade", caused an even weaker dollar. If the upward trend in the deficit persists, then this may heighten investor fears of trade protectionism, which the administration of President Donald Trump promises to implement. And this is a negative factor for the dollar.
Meanwhile, the pound is down on the eve of tomorrow's meeting of the Bank of England. It is expected that the Bank of England will maintain the current soft monetary policy, given the slowdown in the most important sectors of the British economy, but may signal a stronger tendency of the Bank of England to tighten monetary and credit policy, including because of sharply increased inflation.
It is characteristic that today the National Institute for Economic and Social Research (NIESR) has raised the forecast for GDP growth in the UK in 2018 to 1.9% against the November forecast of 1.7%. NIESR also expects that the Bank of England will raise the key interest rate by 25 basis points in May and will continue to raise it every six months until the rate reaches 2%. It is expected that the annual inflation of consumer prices, which in December was 3%, will fall to 2% over the next eight quarters.
On Tuesday, the House of Representatives of the US Congress approved a bill that will extend government funding until March 23. Uncertainty about the approval of the lower house of the US Congress until Friday of government funding can put pressure on the dollar.
Thus, the fall of the GBP / USD against the background of the current recovery of the US dollar creates favorable conditions for buying the British pound against the dollar, already from current levels, below the level of 1.4000.

Support levels: 1.3875, 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Resistance levels: 1.3970, 1.4050, 1.4100, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575

Trading Scenarios
Sell Stop 1.3850. Stop-Loss 1.3940. Take-Profit 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210
Buy Stop 1.3940. Stop-Loss 1.3850. Take-Profit 1.3970, 1.4050, 1.4100, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575

 

[TifiaFX]

Nikkey225: The Bank of Japan will continue a large-scale economic softening program
08/02/2018
Current dynamics
As the Customs Department of Japan announced today, Japan's foreign trade surplus rose by 16.2 billion yen in December to 583.9 billion yen in annual terms (the previous value was 181.0 billion yen and the forecast was expected to increase to 567.7 billion yen). The economy of Japan is highly dependent on exports, and as a result, the growth of trade surplus indicates the growth of the country's economy. The growth in demand for Japanese exports leads to a positive growth in the trade balance, replenishment of the state budget and is a positive factor for JPY and for the Japanese stock market, although, as a rule, the yen and the stock market of Japan are moving in opposite directions.
Even today, despite the weakening of the yen, the main Japanese stock index Nikkey225 rose during the Asian session. Nevertheless, although the Japanese Nikkei has grown today, the index can still record the worst weekly dynamics in two years. Following the results of bidding in Asia, the Nikkei225 climbed 1.1% to 21890.00 points on the background of the growth of most export sectors. However, investors so far prefer to refrain from buying shares of leading export companies because of fears about volatility in the US.
"We must not allow ourselves to be influenced by the decline in the stock markets that we have just witnessed", Jens Weidman, president of the Bundesbank, said in a statement on Thursday that "the US stock indices grew for a long time without noticeable correction".
Head of the Bank of Japan Haruhiko Kuroda hastened to calm investors today, saying that the Japanese central bank will continue a large-scale mitigation program, as inflation is still far from the target level of 2%. "It's too early to discuss the timing and methods of getting out of soft politics. We will continue to buy ETF, REIT at the current pace", Kuroda added. This, in practice, is already traditional in recent months, the statement of the head of the Bank of Japan on "readiness for the most decisive measures to support the Japanese economy". In December, Kuroda also said that "the leadership of the Bank of Japan will further support the cycle of revenue growth, supporting a moderate increase in wages and prices".
The board member of the Bank of Japan Hitoshi Suzuki supported Kuroda today, noting that "the conditions necessary to further accelerate the rate of price growth" are created, thanks to a strong labor market, as well as government efforts to raise wages and increase productivity.
Meanwhile, sales in the market of long-term state bonds continued, and the yield of 10-year Japanese bonds rose by 1 point to 0.08%. The yield of 10-year US bonds is also today near the maximum of 2.825%, reached at the beginning of this week (2.858%), the maximum level for the last four years. Investors remain cautious after the strongest fluctuations in recent days in international financial markets. The CBOE volatility index is at the beginning of today's European session near the mark of 27.75, after it jumped on Tuesday to a value of 50.00, which is several times higher than the usual range near the marks of 10.00 and 19.00.

Support levels: 21720.00, 21490.00, 21140.00, 20950.00
Resistance levels: 21920.00, 22300.00, 23020.00, 23400.00, 24200.00

Trading Scenarios
Sell Stop 21600.00. Stop-Loss 22020.00. Objectives 21490.00, 21140.00, 20950.00
Buy Stop 22020.00. Stop-Loss 21600.00. Objectives 22300.00, 23020.00, 23400.00, 24200.00

 

[TifiaFX]

AUD/USD: there are no arguments in favor of raising RBA interest rates
09/02/2018
Current dynamics
Unlike the Fed, other major global central banks are in no hurry to tighten their monetary policies. After earlier this week the RB of Australia and the RB of New Zealand decided not to change their interest rates, on Thursday another central bank, the Bank of England, decided to leave the interest rate at the current level of 0.5%, which coincided with the expectations of market participants. The rhetoric of the accompanying statements and comments of representatives of these banks was also mild.
In a tone to these statements on Thursday, the leaders of the Bank of Japan also spoke. Thus, the head of the Bank of Japan Haruhiko Kuroda said that the Japanese central bank will continue the large-scale mitigation program, since inflation is still far from the target level of 2%. "It's too early to discuss the timing and methods of getting out of soft politics. We will continue to buy ETF, REIT at the current pace", Kuroda added. Board Member of the Bank of Japan Hitoshi Suzuki supported Kuroda, noting that "the conditions necessary to further accelerate the rate of price growth" are created, thanks to a strong labor market, as well as the government's efforts to increase wages and increase productivity.
During today's Asian session, the RBA published comments on its decision to keep the interest rate at the current level. The key rate of the RBA remains at a record low for the RBA of 1.5% since mid-2016, and economists believe that the central bank will not change it after 2019.
The Reserve Bank of Australia predicts the retention of slow inflation and the inability to achieve full employment over the next few years. The RBA expects that core inflation will accelerate gradually and reach the lower boundary of the target range of 2% -3% by mid-2019. And the pace of core inflation is critical for the RBA monetary policy. The main source of uncertainty for the RBA remains the slow growth of wages. Acceleration of wage growth is a prerequisite for achieving the target inflation range of 2% -3%. The RBA gave a forecast for unemployment - 5.25% by the end of 2018. Currently, the unemployment rate is 5.5%. Thus, unemployment will remain above 5%, which, according to the RBA, does not correspond to full employment and significantly reduces the need for monetary tightening, despite the fact that economic growth in the country will accelerate and by mid-2019 will be 3.5% per annum.
Thus, the RBA's forecasts reflect the comments of the managing director Philip Lowe, who on Thursday said there was no argument in favor of raising interest rates in the short term.
At the same time, the Fed, it seems, does not intend to back away from its plans to tighten monetary policy. So, the president of the Federal Reserve Bank of Kansas City and the member of the FOMC with the right to vote, Esther George, said on Thursday that the Committee on Open Market Operations now intends to raise rates three times this year and three times in 2019. According to her, "this is a logical basic scenario in case the prospects do not change significantly".
Despite the fact that many economists are skeptical about the current strengthening of the US dollar, considering that its growth will be short-term and provide opportunities for its sale at higher levels, a more accurate long-term trading strategy for the AUD / USD will be a short position.
Against the background of a different focus of monetary policy in the US and Australia, we can expect further decline in the AUD/USD.

Support levels: 0.7780, 0.7750, 0.7620, 0.7500, 0.7330
Resistance levels: 0.7820, 0.7900, 0.7950, 0.8000, 0.8130

Trading Scenarios
Sell Stop 0.7740. Stop-Loss 0.7830. Take-Profit 0.7700, 0.7620, 0.7500, 0.7330
Buy Stop 0.7830. Stop-Loss 0.7740. Take-Profit 0.7900, 0.7950, 0.8000, 0.8130

 

[TifiaFX]

S&P500: Investors are trying to understand the movements on the market
12/02/2018
Current dynamics
The main US stock indexes today continued their recovery. By the beginning of today's European session, the US stock indexes about half recovered losses suffered last week, which became the worst in the past few years. The recovery began on Friday evening.
Risks of faster monetary tightening by the Fed on the background of expectations of the intensification of inflation provoked fluctuations in the stock markets in the last two weeks.
If inflation really increases, the Fed will be forced to raise interest rates faster in order to keep the situation under control and avoid hyperinflation. And this will lead to an increase in the yield of government bonds, which may affect the growth of the market of more risky assets.
After a brief consolidation of the indices at current levels, bears can undertake a new assault. The yield of 10-year US bonds is growing again, updating the absolute highs, and is at the beginning of today's European session near the 2.900% mark, the maximum level for the last four years. The yield of government bonds is growing, which makes it easier for the Fed to raise interest rates, which is a negative factor for the stock market.
The CBOE volatility index, the so-called "Wall Street fear index," rose again on Friday to record values after the 2008 crisis, to the level of 41.00. Last Tuesday, this index jumped to the value of 50.00, which is much higher than the usual range, formed in recent months, between the marks of 9.00 and 19.00.
Investors try to understand the sharp and deep movements taking place on the market in order to evaluate them either as a technical correction after prolonged growth, or as a result of a deeper reassessment of the financial situation.
In the beginning of the week, investors will monitor the data on the state of the US budget (will be published on Monday 19:00 GMT), as well as on retail sales and consumer prices for January (on Wednesday 13:30 GMT), which could affect the dynamics of the US stock market.
Also, as usual, on Thursday (13:30 GMT) weekly data from the US labor market will be published, namely, the number of primary (forecast - 237,000 against 221,000) and secondary applications for unemployment. The result higher than expected will indicate a weakening of the labor market, which will negatively affect the US dollar in the short term.

Support levels: 2630.0, 2610.0, 2560.0, 2530.0
Resistance levels: 2695.0, 2730.0, 2800.0, 2829.0, 2877.0, 2900.0

Trading Scenarios
Sell Stop 2618.0. Stop-Loss 2670.0. Objectives 2610.0, 2560.0, 2530.0
Buy Stop 2670.0 Stop-Loss 2618.0. Objectives 2695.0, 2730.0, 2800.0, 2829.0, 2877.0, 2900.0

 

[TifiaFX]

DJIA: investors remain cautious
13/02/2018
Current dynamics
On Monday, all three major US stock indexes rose for the second consecutive session, returning some of the losses incurred during the two previous weeks. The Dow Jones Industrial Average grew by 1.7% to 24601.00 points, the S&P500 - by 1.4% to 2,666.00 points, the Nasdaq Composite rose 1.6% to 6981.00 points.
Earlier in the US, and after and in all world stock markets, there was a sharp collapse in the indices. So, S&P500 lost over 5% last week due to signs of strengthening inflation and higher yields on government bonds, and the volatility index CBOE, or VIX, rose by almost 70% in the whole week, jumping to a mark of 50.00, a record high after the crisis of 2008.
The risks of a more rapid monetary policy tightening on the part of the Fed on the background of expectations of increased inflation provoked fluctuations in the stock markets over the past two weeks. Investors were also alarmed by the growth in the yield of US government bonds. Thus, the yield on 10-year US bonds on Monday reached new absolute highs near the 2.900% mark, the maximum values for the last four years. The increase in bond yields in early 2018 was one of the reasons for the decline in world stock markets. Profitability can grow even more on the background of the normalization of monetary policy and the further strengthening of the world economy. The growth of yield of government bonds facilitates the task of the Federal Reserve to raise interest rates. The stock market would quietly transfer one or two rate hikes. Last year, the former head of the Federal Reserve, Janet Yellen, stated that an increase in the interest rate alone is not enough to turn the bull stock market, but that would be another confirmation of the strength of the US economy.
Now buyers of risky assets of the stock market are confused, as a faster rate increase could slow or stop further growth of stock indices. Investors are still cautious after the sharp sales observed last week, and world stock markets are falling again on Tuesday.
Nevertheless, US stock indices are above critical support levels. Despite the fluctuations, last week created opportunities for profitable purchases, according to optimistic investors. The principle of "buy on the rumor, sell on facts", it seems, can work and this time. At least, it has already worked in part - "sell on facts".

Support levels: 24050.0, 23800.0, 23200.0, 23000.0, 22450.0
Resistance levels: 24820.0, 25200.0

Trading Scenarios
Buy Stop 24970.0. Stop-Loss 24240.0. Take-Profit 25200.0, 26600.0
Sell Stop 24240.0. Stop-Loss 24970.0. Take-Profit 24050.0, 23800.0, 23200.0

 

[TifiaFX]

S&P500: on the eve of the publication of inflation data
14/02/2018
Current dynamics
While investors are waiting for the publication at 13:30 (GMT) of important macro data from the US, US stock indexes continue to recover after a record fall in the previous two weeks. On the eve of the leading US indices for the third time in a row completed the trading in the market in positive territory.
Among the data published at 13:30 the most important inflation indicators will be. So, it is expected that the basic inflation increased in January by 1.7% (in annual terms). If the forecast is justified, the stock indexes will continue to recover, but if inflation is higher, then tension will return to the markets.
Probably, the best scenario for buyers of the assets of the stock market today will be weak inflation data and strong - on retail sales in the US.
Moreover, according to many economists, even if the inflation data in the US prove to be strong, this will not change the negative attitude towards the dollar. Against this background, the recovery of the US stock market is likely to continue after today's publication of macro data. Against the backdrop of low inflationary pressures in 2017, US stock indexes reached new record highs.
If inflation significantly exceeds forecasts, the Fed may need to increase interest rates four times in 2018. In this case, the stock markets have a chance to confirm the worst forecasts and resume the decline.
Meanwhile, the yield on 10-year US bonds is growing again and is currently at the level of 2.842%, slightly below the 2.900% mark reached two days ago, the highest level in the last four years. With the increase in the yield of government bonds, the Fed is easier to raise interest rates.
The most cautious traders today, perhaps, prefer to go into the cache. A surge in volatility in the financial markets is expected during the publication (13:30 GMT) of the data.

Support levels: 2630.0, 2614.0, 2565.0, 2530.0
Resistance levels: 2682.0, 2723.0, 2800.0, 2829.0, 2877.0, 2900.0

Trading Scenarios
Sell Stop 2660.0. Stop-Loss 2688.0. Objectives 2630.0, 2614.0, 2565.0, 2530.0
Buy Stop 2688.0 Stop-Loss 2660.0. Objectives 2723.0, 2800.0, 2829.0, 2877.0, 2900.0

 

[TifiaFX]

Brent: oil prices have corrected after a many-day fall
15/02/2018
Current dynamics
Despite the fact that oil and oil products stocks in the US raised again last week, oil prices on Wednesday rose after a many-day drop from the level of $ 70.00 per barrel of Brent crude oil. At the beginning of the month, the oil market was under pressure amid a decline in world stock indices and an increase in oil production in the US.
As reported on Wednesday in the US Department of Energy, oil reserves in the US last week increased by 1.8 million barrels (the forecast was + 2.6 million barrels). The American Petroleum Institute (API) on Tuesday reported an increase in reserves of 3.9 million barrels. Brent crude at ICE went up $ 1.64 on Wednesday, or 2.6%, to $ 64.36 a barrel.
Growth in oil prices on Wednesday also was contributed by the media reports that Saudi Arabia confirmed its commitment to the plan to limit the supply. "We believe that it is better for us to take redundant steps (to reduce supply) and ensure the restoration of the balance of the market", Saudi Energy Minister Khaled Al-Falih said at a press conference in Riyadh. In November, OPEC extended the deal to limit the offer until the end of 2018, and the cartel agreed to reevaluate the transaction in the middle of the year.
The renewed weakening of the dollar and growth in stock exchanges also supports oil prices in the current situation. On Wednesday, the dollar showed a large decline after it published disappointing data on retail sales in the US in January. Despite the fact that inflation accelerated in January, retail sales in January fell by 0.3%, which was the strongest drop in almost a year (the forecast assumed growth of retail sales in January by 0.2%).
After the publication of disappointing data on retail sales, economists lowered forecasts for US GDP growth in the first quarter of 2018. Based on the data presented this week, it can be concluded that the budget deficit and the deficit of US foreign trade are growing, and the risks of slowing GDP growth are also increasing. This could be an important factor that increases the Fed's predilection for maintaining a soft monetary policy.
Nevertheless, on Friday, the oil market may again be under pressure if the data on the number of operating drilling rigs in the United States indicate the next increase in the number of installations, and, consequently, the growth of oil production. The weekly report from the American oil service company Baker Hughes on the number of active oil drilling rigs in the US will be presented at 18:00 (GMT). At the moment, their number is 791 units. The positive dynamics of both the growth in the number of active drilling rigs in the United States and the volume of oil production prevails, which is a strong deterrent for the further growth of oil prices.

Support levels: 64.00, 63.00, 61.50, 59.50, 56.50
Resistance levels: 64.85, 66.50, 68.00, 69.00, 70.00, 70.75

Trading Scenarios
Sell Stop 63.90. Stop-Loss 64.90. Take-Profit 63.00, 61.50, 59.50, 56.50
Buy Stop 64.90. Stop-Loss 63.90. Take-Profit 66.50, 68.00, 69.00, 70.00

 

[TifiaFX]

AUD/USD: The strength of the Australian dollar reflects the weakness of the US dollar
16/02/2018
Current dynamics
During his speech today before the parliament, the Reserve Bank of Australia's Governor Philip Lowey said that he "would prefer a lower exchange rate". In his opinion, "there is no reason to raise rates in the short term". Lowey noted that "inflation remains low", although "business sentiment is improving".
Approximately the same statements Lowey did before. Therefore, his today's speech did not bring surprises.
The Australian dollar reacted with restraint to Lowey's speech. Nevertheless, the Australian dollar is rising against the US dollar, justifying Lowey's view that "the strength of the Australian dollar reflects the weakness of the US dollar".
And, indeed, the US dollar remains under pressure, continuing to decline against its major counterparts. The dynamics of the dollar is not affected even by the macro statistics coming from the US, indicating an increase in inflation. So, on Thursday there were one more data, indicating the growth of inflationary pressure.
The producer price index (PPI), reflecting changes in prices for goods and services of American companies, in January rose by 0.4%, which is the best result since April 2017.
The consumer price index (CPI) released on Wednesday also surpassed expectations. The growth of consumer inflation in January was 2.1% (in annual terms). The CPI base index increased by 1.8% compared to the same period in 2017. According to economists, inflation will be above the target level of 2% this year already.
The growth of inflation against the backdrop of a strong labor market and a stable state of the US economy gives the Fed a reason to tighten monetary policy more rapidly. At the December meeting, the leaders of the Federal Reserve planned 3 rate increases in 2018. Now many investors believe that the Fed can implement a 4-time rate increase this year. So, according to the CME Group, investors estimate a 21% chance of 4 rate increases this year. Earlier this week, such a probability was estimated at 17%.
Nevertheless, the US dollar continues to scale down. The dollar index DXY, reflecting its value against the basket of 6 other currencies, fell on Friday to 88.18, the lowest level since December 2014, and at the beginning of the European session is near the mark of 88.35.
Of the news for today, it is worth paying attention to the publication at 13:30 (GMT) of data on the housing market in the US for January, which may increase volatility in the US dollar. However, this statistic will not have a significant impact on the dynamics of the US dollar.
The US dollar remains under pressure due to profound fundamental changes in the global financial market. Investors seem to opt for more interesting and growing financial markets outside of the US, which forces them to buy assets and the national currency of countries with a fast-growing economy, in particular the Eurozone and Japan.

Support levels: 0.7950, 0.7900, 0.7820, 0.7795, 0.7760, 0.7620, 0.7500, 0.7330
Resistance levels: 0.7990, 0.8000, 0.8100, 0.8130, 0.8200

Trading Scenarios
Sell Stop 0.7940. Stop-Loss 0.8000. Take-Profit 0.7900, 0.7820, 0.7795, 0.7760
Buy Stop 0.8000. Stop-Loss 0.7940. Take-Profit 0.8100, 0.8130, 0.8200

 

[TifiaFX]

XAU/USD: gold prospects are positive
19/02/2018
Current dynamics
After on Friday the price of gold updated the monthly maximum, having risen to the mark of 1361.00 dollars per troy ounce, then the price went to the corrective phase. The XAU / USD declined, retreating to the mark near the support level of 1348.00 (the opening price of the month). Last month, the price of gold reached the next local multi-month high near the mark of 1365.00 dollars per ounce. The last time near this mark the price was in July 2016.
Nevertheless, with regard to the further dynamics of the price of gold, there are two opposing opinions of experts. The first view is that, amid rising inflation, the Fed will begin to raise interest rates at a faster rate, which will increase the interest to the dollar purchases. Gold does not bring investment income and is used, mainly, as a hedging instrument for risks during the period of economic or political instability in the world. In periods of increasing interest rates, gold, as a rule, becomes cheaper, giving way to assets that generate revenue, such as government bonds. Due to the growth of inflation expectations, the yield of 10-year US Treasury bonds returned to almost 3%.
In this sense, the publication on Wednesday (19:00 GMT) of the minutes from the January meeting of the Fed, the latter under the leadership of Janet Yellen, will be of interest to investors this week. The minutes of the meeting may give market participants an idea that the Fed's management is thinking about the possible economic consequences of reforming the tax system and about accelerating inflation in the US.
The contrary opinion of experts is that, despite the expected increase in interest rates, gold still has good chances for growth as a means of protecting against the growth of consumer inflation.
Thus, the probability of further growth in gold prices outweighs the likelihood of their decline. Taking into account the multi-month cycles, the long-term targets for the growth of the gold price will be the levels of 1390.00, 1425.00 dollars per troy ounce.
In view of the fact that the US has a day off ("President's Day"), and American banks and exchanges are closed, the sluggish dynamics of trading on financial markets is expected until the end of the trading day.

Support levels: 1340.00, 1328.00, 1308.00, 1289.00, 1277.00, 1268.00, 1248.00
Resistance levels: 1361.00, 1365.00, 1370.00, 1390.00, 1425.00

Trading Scenarios
Sell Stop 1343.00. Stop-loss 1358.00. Take-Profit 1340.00, 1328.00
Buy Stop 1358.00. Stop-Loss 1343.00. Take-Profit 1361.00, 1365.00, 1370.00, 1390.00, 1425.00

 

[TifiaFX]

NZD/USD: Fundamental factors are on the side of US dollar sellers
20/02/2018
Current dynamics
The US dollar continues to strengthen in the foreign exchange market after it reached new lows last week. The dollar index DXY, reflecting its value against the basket of 6 other currencies, is growing for the third consecutive day. At the beginning of the European session, the futures on the DXY index traded with an increase near the mark of 89.50.
The growth of the dollar is also promoted by the growth of the yield of US Treasury bonds, which is close to the highs observed last week. The yield on 10-year Treasury bonds rose to 2.92% on the eve of the first trading day in the US this week. On Monday, US markets were closed due to the day off (President's Day).
Meanwhile, the attitude to the dollar on the part of investors remains negative. Economists and financial companies lowered forecasts for US GDP growth in the first quarter of 2018. Significant growth of the country's budget deficit, coupled with the growth of the foreign trade deficit to $ 566 billion, the highest level since 2008, leads to a further decrease in investors' interest in the dollar.
The new US tax law, which provides for a significant reduction in taxes and an increase in budget spending, will only contribute to the growth of the federal budget deficit.
Despite the positive macro statistics coming from the US, deep fundamental factors are on the side of dollar sellers.
Meanwhile, the dollar receives short-term support on the eve of the publication on Wednesday (19:00 GMT) of the minutes from the January meeting of the Federal Reserve System.
Probably, investors will wait for new signals from the leadership of the Fed regarding further interest rate increases in the US. As you know, the Fed planned 3 rate increases in 2018 and 2 more increases in 2019.
From the news for today, we are waiting for the publication of the results of the next dairy auction (in the period after 14:00 GMT). The main part of the New Zealand economy is the timber and agricultural complex, and a significant part of the New Zealand export is dairy products, primarily milk powder. Two weeks ago, the price index for dairy products, prepared by Global Dairy Trade, came out with a value of +5.9% (against previous values of +4.9%, +2.2% and +0.4%). If the prices for dairy products rise again, the New Zealand dollar will strengthen, including in the pair NZD / USD. The decline in world prices for dairy products will hurt the quotations of the New Zealand dollar.
Nevertheless, this time the reaction of market participants to this publication will likely be restrained due to the continued celebration of the New Year in China, which is New Zealand's largest partner and buyer of dairy products from this country.
*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics

Support levels: 0.7340, 0.7300, 0.7270, 0.7240, 0.7200, 0.7140, 0.7080, 0.6865, 0.6800
Resistance levels: 0.7400, 0.7430, 0.7500, 0.7550

Trading Scenarios
Sell Stop 0.7330. Stop-Loss 0.7380. Take-Profit 0.7300, 0.7270, 0.7240, 0.7200, 0.7140, 0.7080
Buy Stop 0.7380. Stop-Loss 0.7330. Take-Profit 0.7400, 0.7430, 0.7500, 0.7550

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

GBP/USD: before the release of the Fed's minutes
21/02/2018
Current dynamics
In anticipation of the publication (at 19:00 GMT) of the minutes from the Fed meeting held on January 30-31, the dollar remains stable and trades with a slight increase. In December, the Fed for the third time in 2017 increased the rate, bringing it to the current level of 1.5%. Fed leaders voted unanimously for this rate hike and showed a tendency to further tighten monetary policy in the next two years. During the January meeting, the leaders of the Fed confirmed their intention to raise the interest rate three times in 2018 and twice in 2019.
Market participants expect that the first rate increase may occur already during the March meeting of the Fed (March 20 - 21). Moreover, many investors (21%, according to the latest data from the CME Group) believe that the Fed will raise the rate four times in 2018 amid a steady growth in the US economy, the labor market and inflation. And now, investors are hoping to catch new signals from the Fed regarding further plans in the matter of monetary policy.
As usual, the national currency grows when the interest rate rises. So far, the growth of the dollar is not observed, since many investors remain negative towards him because of deep negative fundamental factors. Many economists believe that the dollar is only at the beginning of the multi-year cycle of the next decline. But everything can change if the Fed will systematically tighten monetary policy, and the positive macro data will come from the USA.
There is still no clear idea of how the macroeconomic situation in the US will change as the new tax and economic policies of the White House are implemented.
As for the pound, the positive macro statistics received during the current European session from the UK did not significantly affect its dynamics. Despite the fact that the unemployment rate unexpectedly increased in the fourth quarter of 2017 (by 0.1% to 4.4%), the overall employment rate has increased, and the number of unemployed has declined most strongly since the end of 2015. Wages also increased. Moreover, the growth of salaries in the UK has been the strongest since the end of 2016.
In January, inflation remained at 3.0%, which is 1 percentage point higher than the target level of the Bank of England. In November, the Bank of England raised its key interest rate for the first time in a decade to contain inflation. Recently, central bank officials signaled that the rate may need to be raised earlier than originally expected. This is a strong factor in favor of strengthening the pound. At the same time, the pound will remain vulnerable against the euro and the dollar against the backdrop of Brexit.
Among other important news for today regarding the pair GBP / USD, it is worth highlighting
the speech (at 14:15 GMT) of the Bank of England Chairman Mark Carney during the hearing in the British Parliament of the Bank of England's report on inflation.
And at 14:45 there will be a block of important macro statistics from the United States. Among the published data - PMI in the leading sectors of the US economy (in the services sector and in the manufacturing sector) for February (preliminary release). The growth of indicators is expected, which will give an additional bullish impulse to the dollar.
With respect to the pair GBP / USD, we can say that, in general, positive dynamics remains. However, GBP / USD is in the zone of strong resistance levels 1.4185 (EMA50 on the monthly chart), 1.4050 (EMA200 on the weekly chart), from which it is possible, if not a turn, then a deep enough rebound.

Support levels: 1.3890, 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3370, 1.3210
Resistance levels: 1.3990, 1.4050, 1.4100, 1.4185, 1.4340, 1.4400, 1.4500, 1.4575

Trading Scenarios
Sell on the market. Stop-Loss 1.4010. Take-Profit 1.3890, 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3370
Buy Stop 1.4010. Stop-Loss 1.3910. Take-Profit 1.4050, 1.4100, 1.4185, 1.4340, 1.4400, 1.4500, 1.4575