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Daily Fundamental ForexTime ( FXTM )

FED lifts interst rates




The market has been somewhat stunned today as Janet Yellen announced after the FOMC that the FED was raising rates by 25 basis points to 0.75%; this was in line with the market expectation that the FED would finally look to raise rates in December. However, the rate rise is somewhat unexpected in the sense that the FED has been dovish for some time and is starting to look hawkish. The rate rise is in line with the inflation expectations that the FED has also been looking out for 2%, and also in line with the labour market expectations which have continued to improve. With the market now taking on board the rate cut the USD has rise in line with expectations, but the expectations for future rate cuts are likely to diminish given the fact the FED is looking to slow down in the wake of political change to adjust to the new fiscal policy that may be laid out by the Trump presidency.

For the S&P 500 we saw a quick retreat on the charts as a result of the rate rise, and for some time we have been talking up the reality of it happening. Obviously the fall was not massive, but rather a minor adjustment and with the FED actually looking dovish in the near future we could see the bulls still look to take control. So far resistance is likely to be found 2276 and the next level above this at the psychological level of 2300. Any retreat further on the charts is likely to find dynamic support at the 20 day moving average and also at the next major level which can be found at 2246 and 2211, both of which are likely to stifle any bearish movements lower.

One of the biggest losers on the back of the FED movement has been the gold markets which has so far suffered under the higher USD and the fact that many investors now believe with Trump in power we will see a boost to the economy. The reality has been far from satisfactory though, with gold trending down the charts aggressively, and shrugging of any fears of an increase in inflation caused by the spending that many had expected from Trump. It would seem more than ever that gold bugs are doing it tough, and could in fact be in for another round of toughing it out on the markets.

On the charts gold has fallen all the way down to a strong support level at 1141 in an increasingly bearish trend line that looks set to stay. Beyond this key level the next level of support is likely to be found around 1109 and could be an area we see gold look to take a breather. Gold has also previously reacted quite strongly to the 20 day moving average and this could easily come back into play as dynamic resistance in the event that gold swings higher.





Source : http://www.forextime.com/market-analysis

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Kiwi struggles after weak trade data




The New Zealand dollar continues to be volatile for traders despite the upbeat rhetoric from the government of New Zealand and also the Reserve Bank of New Zealand. Trade Balance data today was anything but positive though as it came in at -705M (-500M exp), putting further pressure on the NZDUSD which has been under intense pressure from bears in the recent weeks. This combined with the recent drop in global dairy auctions will put pressure back on the New Zealand economy, and it will be interesting to see the view point of the Reserve Bank of New Zealand regarding this as trade balance has always been high on its agenda. However, there has been some slight wins as the housing market looks to be cooling off after enacting aggressive measures and the NZDUSD has started losing some of its value which will certainly help turn around further trade balance issues. The key focus from here will be tomorrows GDP data, with many expecting it to be a robust figure for the quarter - despite the recent natural and market events which have caused some worries.

The NZDUSD continues to be an interesting trade with long trending runs and also large patches of ranging, but so far it has been all trend with no range as of late - a common theme across all commodity currencies since the Trump victory. The trade balance data today had little effect on the NZDUSD and the markets seemed to be positive to it; it's the USD strength though which is causing issues for commodity currency bulls. Support was certainly found at 0.6881 and traders will be looking to see if the daily candle closes out as a hammer which could indicate a swing here as USD traders may be looking to take a breather and unwind. If that is the case then resistance can be found at 0.6948 and 0.7000 as the next levels higher, however this is against the trend at present and I would expect fierce pressure around these levels from kiwi traders.

Across the 'ditch' and the Australian dollar continues to find itself under some pressure as well against the USD, but one trade that has been quite interesting has been the trading around the AUDJPY after yesterdays Bank of Japan holding fire. Recently, the AUDJPY trended up sharply before hitting and forming a strong trend line on the daily chart which is quite bearish in nature since 2014. The clear respect of this trend line will be key for a number of traders strategies, and as the Yen continues to look to get weaker the AUDJPY may see another attempt to take a higher level here.

The move higher on the daily chart as of today shows a strong candle trying to engulf all the recent loses after finding support at 84.754, and I would expect a further rise to also find resistance at 86.188 before looking to play of the trend line yet again.






Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

US consumer confidence lifts bulls higher




US markets were buoyed today by the ever increasing consumer as consumer confidence lifted to a high not seen since 2001, as it breached through 113 (exp 108) showcasing the strength of the US economy. US dollar bulls will be happy to see this as a cherry on top moment for them leading into 2017 and the likelihood of stimulus from the new Trump president. The rest of the coming week is likely to be light on the fundamentals as one would expect this time of year, however, there is still pending home sales and unemployment claims coming up and this should provide some movements. Non-farm payroll in the new year before the presidential appointment will also set the tone for the year ahead and will be closely watched to also see how the FED could kick of the new year as well.

For market movements today the S&P 500 failed to deliver on the back of the big uptick on consumer confidence. This is due in part by many in the market viewing the FED raising rates as having a negative effect on equity markets. The movement higher today though touched on strong resistance at 2272 and this looks likely to be the market level that everyone looks to beat in the short term in the new year. Obviously if we do see a pullback on the charts and the S&P trending downwards, I would expect that the 20 day moving average to act as dynamic support which it has done previously.

Gold has also been another victim of the US bull run as of late, but it had as light resurgence as of late with the market pushing higher and coming up just short of dynamic resistance at the 20 day moving average. Previous resistance at 1143 was not enough to stop the charge, but this could be on the back of low liquidity in the market for commodity trading; hence the drop shortly after the rally. Despite all of this a strong level of support has formed at 1127 and it's likely we could possible see some ranging as a result of this over the coming week so watching key levels could be ideal for precious metal traders.

Finally, the USDCAD is one trade that is worth paying close attention to as it struggles to gather momentum in the marketplace. Oil prices recently were slightly up, but so far the CAD has registered any sort of movement against the USD - the big test will instead be on Thursday with US oil inventories which is expected to show a strong draw down in the market, the question will be if oil prices do indeed rally again strongly will they be strong enough to match the market and cause change. For now the trend is certainly bullish and resistance can be found at 1.358. It will be interesting to see if the USDCAD can continue the bullish momentum and look to extend before the year closes out.





Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Oil bears pounce on initial data





Oil markets continued to be a weird mix as of late as the market expects -2.06M barrels from tomorrows reading, however private inventory data readings are initially suggesting there is the biggest build up of crude oil in over 6 weeks, leading to many rethinking tomorrows prediction. So far oil has slipped slightly as a result and this was on the back of a weakening in the USD. Predictions so far have been that OPEC will look to impose its tightening in order to bolster the market, but if the market is still showing signs of a build up it may require further action in the future to up the price of oil - something that most members will not be looking forward to the idea of.

Oil on the charts has been very bullish in recent weeks on the back of all the noise from OPEC and the market certainly believes prices will increase in the long run. So far the level that many are looking to beat and is acting as stiff resistance in the market is at 54.96 and looks likely to face further technical pressure unless there are any major fundamental announcements. Beyond this level the next leg could be found at 60.12 which also acts as a major psychological level for the most part. Any movements lower are likely to touch the 20 day moving average and in this case I would anticipate it to act as dynamic support as we have previously seen.

NZDUSD traders will be watching the events of today after it appeared that the NZDUSD was able to find some footing after recent bearish movements in the previous week. The surge today looked quite strong, but it was all on the back of USD selling and had little to do with the current economic outlook for New Zealand for the most part. While I would anticipate the NZ economy bouncing back, the stage is certainly focused on the US economy for the most part and any bullish movements should be treated as something not to focus to intently on. Commodity prices for the NZ economy continue to remain subdued and it seems this won't change in the short term just yet, but they will eventually recover and aid the current economy.

Technically speaking the NZDUSD is always a tricky one to play with, but the rise upwards towards resistance at 0.6948 is looking quite bullish in the short term. However, it would seem unlikely that it could push through psychological barrier of 0.70 which has always been a big ask for traders. Further legs back down are likely to find strong support at 0.6874, but the market is pricing in further moves lower I feel, but it could take further strong US data to really get it pushing towards the 0.65 mark.






Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

2017 Key Market Themes





Whether you consider 2016 a good or a bad year, it was by no doubt the year of surprises. Not just because Donald Trump was elected the 45th president of the United Stated or because the UK decided to leave the EU, but the markets’ reactions to these events were even more surprising and most forecasters got it wrong.

A new year has started and many questions remain to be answered; here are some of the most asked questions for 2017: Will the Trump rally carry on? How many rate hikes will the Fed deliver? What is the future of the UK and the EU? Will OPEC finally balance the oil markets?

Will the Trump rally carry on?

Following the election of Donald Trump on November 8, all U.S. major indices recorded new highs. The Dow Jones industrial average rose 8%, S&P 500 and Nasdaq composite gained 5%, and the small-cap stock market index Russell 2000 outperformed its peers rising by more than 13%.

From a market valuation perspective, very few may disagree that stocks are expensive, but the expected combination of fiscal stimulus and deregulation for some sectors under Trump’s presidency were the main catalysts for the rally. Of course, financial markets tend to price in events before they occur, but this time I believe investors have priced in most of the good news, and it requires very strong corporate profit growth to keep this bull market alive. Predicting the end of the bull market is a tough call, but the downside risk in 2017 is likely to be larger than the upside potential. If U.S. policy makers succeed in delivering the anticipated growth we can see another 5 – 10% gains in U.S. stocks, but failure to do so will cause a steep selloff that could exceed 20%.

Day traders may be luckier than investors in 2017 as a new indicator has been added to their watch list: Trump’s twitter account. On December 6, Trump tweeted “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!”, few seconds later Boeing stock wiped almost $1 billion from its market cap. We expect to see more of these tweets in 2017 and algorithms will probably require long time to put them into play, leaving retail traders with opportunities to profit from such market disruptions.

How many rate hikes will the Fed deliver?

2016 kicked off with the expectation that four rate hikes would occur, but only one was delivered in December. Although it was anticipated that the Federal Reserve will be more cautious in their forward guidance for 2017, December’s meeting took many economists by surprise as they hinted for three rate hikes.

Since the financial crisis in 2008 the Fed has got many things wrong, whether it is forecasting rate hikes, economic growth and inflation levels, and now with a new administration to take office on January 20, this could make the Fed’s projections even more complicated.

Inflation has always been the main justification for low interest rates, but now, even before Trump takes office, a couple of inflation gauges are running above 2%. The Fed did not account for any fiscal stimulus measures in their most recent projections, suggesting that huge shifts in expectations may be seen.

The rising U.S. dollar which is currently at a 14-year high is another source of worry for the Fed, and tightening too fast will lead to even stronger dollar hitting U.S. exports and multinational companies’ profits.

If Trump’s measures were passed and economic growth picked up, the Fed will have few options, either tightening monetary policy more aggressively, or to fall behind the curve and let the fixed income market lead the way, but three rate hikes in 2017 is my base case. Either way the dollar is likely to remain strong as divergence in monetary policies will continue to widen.

Future of the UK and the EU?

Hard, Soft or Grey Brexit. This was the most argued topic in the past six months, and until now there’s no clear path on what direction the UK will move. The pound ended 2016 17.5% lower against the US dollar since June 23 and there’s lot of speculation on how it will end in 2017. Of course, much will depend on the path Britain will choose. Theresa May promised to trigger Article 50 by the end of March, but we still need to hear from the Supreme Court on whether the UK government needs parliamentary approval before starting the withdrawal from the EU.

The delay in triggering Article 50 will be positive in the short term for sterling, and negotiations may last well beyond 2017 on the terms of Brexit. Meanwhile investors will be focusing on the economic developments and the direction of the Bank of England’s monetary policy, which will probably be the second major central bank to raise rates after the Fed.

Politics within the EU will rule investment decisions in 2017. Germany and France, the two largest economies will hold elections amid the rise of Eurosceptic candidates. Italy is likely to see an early vote, after the resignation of Matteo Renzi last month, and the Five Star Movement has vowed that if it wins power it will hold a referendum on whether Italy should leave the Eurozone.

Although many polls indicate that far right candidates are still behind, nothing should be taken for granted after Trump won the U.S. presidency and Britain voted to leave the EU. Expect to see more pressure on the Euro and look out for parity against the dollar in the first six months.

Will OPEC finally balance the oil market?

After hitting a low of $27 a barrel in February 2016, Brent prices more than doubled by the end of year and many investment banks still see further increase in prices for 2017.

OPEC’s decision to cut its output by 1.2 million barrels a day starting January, and non-OPEC producers to cut 558K barrels for the next six months to drain record global oil inventories led Brent prices to post its first yearly increase since 2012.

Whether more appreciation is to be seen in 2017 will depend on multiple factors, and the biggest one currently looming is compliance to production cuts. It’s in no one’s interest not to comply, but historic figures show that delivering on previous production cuts has been poor.

U.S. producers are another element to be focused on, how fast shale may come back is a key component to be considered in the price equation. Although Trump has made the energy sector part of his economic growth plan, I believe it won’t have a lot of impact if prices don’t hold up. The dollar strength will likely impact the demand side, as continued strength will make oil more expensive in other currencies.

With all these unknows we will likely see prices moving in tight ranges in the first quarter until we get a clearer picture.




Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Fed outlook turns hawkish





The US economy was thrown back into the spotlight today as the FOMC minutes were released and the dovish FED of the past certainly looked a thing of the past, with some of the most upbeat and hawkish minutes that have been seen in a long time. Almost all of the officials present in the meeting expected that with Trumps appointment growth was expected to pick up in line with his expansionary policies. One thing that also stood out was the FED's own expectation around inflation with expectations that it will increase to the magic 2% mark in the medium term, and the recent lift in quarterly inflation was further credit to this theory. Regardless of the trump effect the FED looks to be singing the same tune as the market and that can only be positive for the bulls in the short term. The real question will be around what Trump can actually do with congress in order to get the US economy moving again and the economy expanding further - even when it's almost at full capacity when it comes to employment.

Regardless of how you viewed the FOMC minutes, the recent economic data out of the US has been positive with the construction spending m/m lifting to 0.9% (0.5% exp) and ISM manufacturing PMI also lifting to 54.7 (53.8 exp). All of this has boded well for traders and the markets have responded accordingly with the S&P 500 lifting back up to a strong level of resistance in anticipation of tomorrows economic data due out on the employment sector and the services sector as well. Even with resistance currently sitting at 2272 the expectation of further highs is fresh on traders' minds and they will be looking to push the boundaries further in the current climate. A push upwards to 2300 is very much on the cards if the market sees further positive US economic data tomorrow.

One thing that is also worth watching out for in tomorrow's trading is oil markets, previously they have been moving quite rapidly in the low volume trading and volatility is certainly ever traders friend. The recent build up in private storage showed that perhaps oil markets still needed a little more time to correct and we saw prices fall accordingly down to the 20 day moving average before finding dynamic support. Expectations are for a decline in overall oil inventories, but after the recent private reading the market may have altered its expectations.

Technically speaking though oil is looking very strong with resistance sitting tight at 54.46, to get past this level we would need to see a large drawdown in crude oil inventories, and this may be a bit of an ask just after Christmas. Any further falls are also likely to struggle past the 20 day moving average, and even more so the 50 day moving average which is acting as dynamic support for market movements at present.





Source : http://www.forextime.com/market-analysis

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Analisisnya bagus gan, keep up

 

Daily Fundamental ForexTime ( FXTM )

Volatility elevated ahead of May’s Brexit speech; Pound recovers




It’s Sterling’s day.

Financial markets are anxiously awaiting U.K.’s Prime Minister Theresa May speech later today where she will lay out a detailed divorce plan from the EU. Lot of reports were leaked since Sunday on what to expect her to say, and the most interesting part is that she has no interest in partial departure which suggests we’re heading towards a “Hard Brexit”. Traders were very fast to react, sending the pound 1.6% lower on Monday to trade below 1.20. However, the recovery in early Asian trade Tuesday indicates that lot of the bad news are already priced in, and for the pound to fall substantially lower it requires more than just signs of a hard Brexit plan.

If the Supreme court decided that May needs to secure the consent of Parliament before triggering article 50, potentially delaying Brexit for couple of months, this is likely to provide sterling a boost by unwinding many short positions. Traders should be aware that sterling won’t be a one way play and volatility could be elevated to extreme levels.

On the data front, UK CPI is expected to hit 1.4% in December, up 0.2% from November and 0.5% from October’s reading. This will not only mark the highest inflation rate since mid-2014 but the pace of inflation escalation is pulling U.K.’s real interest rates even lower. Of course, this is going to be a challenge for the BoE, but if it indicates anything, it’s interest rates next move is only upward, leaving monetary policy with very few options to support the economy if needed.

The safe haven Yen is the major beneficiary of the heightened uncertainty over U.K.’s Hard Brexit scenario and Trump’s policies. USDJPY has fallen for the seventh straight day, and declined by more than 4.3% from January 3 peak. The fall in bond yields worldwide will continue to lend some support for the Yen, but whenever this trade is over I expect the Yen to weaken again.

The U.S. dollar is falling against all its major peers with the index dropping below 101. There’s no fundamental reason for the selloff and I don’t think the dollar’s rally is over yet, but the “Trump trade” has clearly cooled down in the past couple of days as markets still have many answered questions regarding future fiscal policies. Let’s hope we get some answers on Fridays inauguration.




Source : http://www.forextime.com/market-analysis

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Sedang mencari penyebab harga kemarin gbpusd dan gbpjpy yang naik tinggi banget
mungkin itu karena pidato mentri inggris ternyata news memang perlu diwaspadai juga

 

Daily Fundamental ForexTime ( FXTM )

Sterling remains in the spotlight





The Sterling/Dollar exploded into extreme gains on Tuesday with prices clipping above 1.2400 after Prime Minister Theresa May’s optimistic Brexit speech signaled that the United Kingdom was seeking a deal which would satisfy both parties. A critical comment that played a role in the Pound’s sharp rally was how Theresa promised a parliamentary vote on Britain’s deal to leave the EU which suggested that she had acknowledged that the pro-EU parliament would be involved in the negotiations.

Although markets were initially unreactive to the fact that May stated that Britain was not seeking partial membership of the EU nor will be proposing for membership of the EU single market, this may pressure Sterling in the future as investors re-evaluate the ramifications. While a transitional deal may be enacted to avoid a Brexit cliff edge on business, there is still a threat of the hard Brexit negatively impacting the UK economy in many dimensions.

PM Theresa can be commended on her ability to temporarily transform the hard Brexit fears to Brexit optimism but uncertainty could still limit upside gains on the Sterling in the medium to longer term. The fact that the government will put the final Brexit deal to vote in Parliament may buoy Sterling in the short term with Dollar weakness prompting buyers to send the GBPUSD towards 1.2500.

Investors may direct their attention towards the UK labor market report which could illustrate how the UK economy has fared in the Brexit gripped environment. While a positive report has the ability to elevate the Sterling higher, the main driver behind the Pound’s movement this week should continue to revolve around the lingering impacts of Theresa’s Brexit speech.

There still remains a strong likelihood that Sterling comes under renewed selling pressure if uncertainty resurfaces in March when the article 50 will be invoked. Technical traders may continue to observe how prices react to the pivotal 1.2350 level which if bulls conquer could open a path higher towards 1.2500.

Dollar sinks lower

The rising anxiety and uncertainty ahead of Donald Trump’s inauguration this coming Friday has exposed the Greenback to heavy losses with the Dollar Index trading towards 100.60 as of writing. Sellers have attacked the Greenback incessantly with bears exploiting comments from the President-Elect on how “the Dollar is too strong” to pressure the currency further. With optimism slowly fading over the series of interest rate hikes under Trump and the lack of clarity provided on the proposed fiscal stimulus measures weighing on sentiment, the Dollar may find itself vulnerable to further losses.

The Greenback could turn extremely sensitive ahead of Friday’s inauguration with bears utilising the anxiety to pressure the Dollar Index further. Weakness below 100.00 could signal the end of the Trump fueled bull rally on the Dollar Index.





Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Trump vs Yellen & Draghi vs Weidmann




The U.S. dollar has been on a roller-coaster this week. After dropping by more than 1% on Tuesday the dollar index recovered 0.9% from its lows. The steep drop in the currency came after comments from Donald Trump suggesting that the dollar is too strong, and this led some traders to believe the recent rally could have come to an end, but comments from Fed Chair Janet Yellen on Wednesday brought back hopes to the bulls.

Ms. Yellen did not specify the timeline or the pace of projected interest rates hikes, but she indicated the Fed will raise rates few times a year until 2019 and warned of a nasty surprise if the central refrained from acting. Although there’s no precise definition of “few” but reasonably means two to three times a year, which leave many central banks behind.

Recent economic data supports Yellen’s views as inflation rose in 2016 at fastest pace in five years. U.S. CPI jumped 0.3% in December to breach the 2% benchmark, and if oil prices held above $50 the trend is not likely to reverse. This leaves only the Fed's preferred gauges of inflation, the PCE and Core PCE Price Index below 2%. However, there is a high risk of these indices overshooting the Fed’s target if fiscal policies came into play and the Fed will be left with little options but to fasten the pace of monetary policy tightening, thus keep supporting the dollar.

On the shorter run, Trump will remain the center focus for traders and his inauguration on Friday will play a major role in the dollar’s direction. It’s highly unlikely to reiterate that the strong dollar is hurting the economy, but if his speech contains more of protectionist policies than stimulus measures, it could harm the dollar, at least in short term.

The European Central Bank is meeting today and most likely keep monetary policy unchanged after the central bank extended and reduced the monthly bond purchases to €60 from €80 in their last meeting. Although it might be considered a non-event, we’ll be carefully listening to Draghi to see if the recent improvement in Eurozone data especially when it comes to inflation, will force the ECB to start considering unwinding their QE policies.

PMI’s across the Eurozone reached 5.5 years high in December and inflation climbed to 1.12, the highest since August 2013. Meanwhile German inflation jumped to 1.7%, thanks to higher oil prices. This will undoubtedly create a battle between Bundesbank's Weidmann and Draghi on when to end the loose monetary policy. Of course, Mr. Draghi has his reasons, especially that political risks will intensify in the next couple of months with presidential elections in France, Germany and Netherland’s, but once we’re over it, I believe the ECB will start ending their untraditional QE policies. This suggests the Euro is likely to remain under pressure until probably mid-2017.





Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Equity markets hit new heights




Equity markets have been the major benefactor market movements today with the Dow finally breaking above the 20K mark for the first time. The S&P 500 has also rallied heavily today and is just shy of the magic 2300 mark which I've talked about in previous articles - which is of course a big benefactor of the Trump effect which is going through the markets at present. 2017 could very much be the year of the bull, but it will take time and a wait and see approach to see if it all comes true, as it is very much early days for equity markets in the new year. Equity markets in the US still have hurdles to jump through from a fundamental point of view as unemployment claims is due out tomorrow, and consumer sentiment will also be released the following day after that. All of these have the power to impact equity markets sharply, but the spotlight will most certainly fall on anything that Trump has to say at present.

Right now resistance for the S&P 500 is around the 2300 mark, with the market looking to move sharply further higher if given the right opportunities. This key psychological level is likely hold in the short term, but for any movements higher a move to 2350 and 2400 is likely to be the next major levels of resistance in the long run, as it's very much uncharted territory. Any movements lower are likely to find dynamic support on the 20 day moving average, which continues to trend up with the market and is likely to be the first line of defence of any brave bears do come into the market.

The New Zealand economy has managed to hit rock star economy status as usual, with the CPI figures coming in better than expected at 0.4% Q/Q (0.3% exp). Helping to push the annual figure to 1.3%; still below the 2% mark but nevertheless moving back in the right direction and something the Reserve Bank of New Zealand will have to take into consideration. Many economists are now expecting that the RBNZ will likely hold rates at steady at present as inflation is lifting, and if it continues to do so though then the RBNZ may even be forced to increase the OCR quicker than anticipated.

As previously mentioned the NZDUSD has been very bullish on the charts, and the trend is very much still the markets friend. Expectations still are quite bullish with the results seen today, and with a weaker USD I would expect the NZD to continue to resistance levels at 0.7343 and 0.7402. If it can continue to gather momentum, we could see it breach through the 80 cent level, however the market may look to claw back some gains well before then and the Trump effect on the USD can be quite strong as well.





Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Traders look to hedge in Gold





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

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

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

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

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






Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

NZD looks to weaken





The New Zealand dollar has found itself under pressure in recent days as the market has started to hedge a little while it waits on the next steps for the US economy. Trumps term has seen large speculation around fiscal stimulus and tax changes, which so far have not materialised and in turn the market looks to be taking a breather and nowhere is this more apparent than with commodity currencies. The New Zealand dollar has so far tried to bounce back in recent days but has not been helped by the RBNZ putting out headlines that it believes upward pressure is weakening, and also today's drop in retail sales q/q to 0.8% (1.0% exp) has pushed back on the market. It seems unlikely that the RBNZ will even consider looking to move rates any higher until it hits the inflation target of 2.0% and that is certainly some time off at this stage.

For the NZDUSD on the charts the trend has always been your friend, but it's lost a lot of momentum over the past week with the NZDUSD dipping through the 20 day moving average before finding some support around 0.7167. From here the bulls have tried to wrestle back some control to push the NZDUSD higher but the push upwards came up short of the 20 day moving average and resistance at 0.7238. Unless we see any further momentum here we could see some strong waves lower on the chart, but the 50 day and 100 day moving average will likely act as dynamic support and it will be interesting to see what levels it looks to respect.

Recently I touched on gold as well in the current market climate and it's continued role in the current market environment. Certainly with some investors slightly worried about the political turmoil gold seems like a safe bet and an easy one for when the markets are spooked, and investors so far have more than taking a liking to it. The rise has also been lead in part by the weakening of the USD - despite the recent positive unemployment claims figure of 239K (245K exp). With further turmoil likely to occur the Trump administration announces its fiscal and tax plans, there is a possibility we could see further gains for gold.

Resistance has so far held back the advances of gold with a strong level forming around 1245.50 which has so far defeated the majority of bullish movements. Further drops lower for gold have been aggressively defended at the 20 day moving average, showcasing a strong willingness for the bulls to keep the precious metal in play. With the 20 day moving average still pushing higher we could see consolidation followed by a break out to the next level at 1262.18. However entry points are likely only to be found on key levels as the market seems very prone to pivoting.





Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Global risk appetite remains strong





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

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

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

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






Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Oil gets hammered on US inventory data




Oil markets have shown they are more than capable of large movements but today's movement is the largest we've seen since July and showed that the bears are still very much alive and in control as they took 5% of the price of Oil in one day. OPEC nations have been cutting production in an effort to boost oil prices to sustainable levels, but at the present rate it would seem the global market as a whole is not consuming enough Oil. US crude inventories shocked the market today showing a strong surplus of 8.21M (1.97M exp), this is at odds with the current market thinking that Oil markets will be bullish in the wake of OPEC. The reality it would seem is that with a mild winter consumption has not been very strong and as a result OPEC nations may be forced to extend cuts in the long term in an effort to bolster prices. The question will be if those OPEC nations have the stomach for further production cuts, as a large number of them are currently struggling as it stands internally.




For Oil traders it's a technical dream as the bears have crushed lower on the back of today's news. Right now oil is trying to claw back some of those losses and the bulls are mounting some resistance on the new daily candle. So far it's come up short and the 100 day moving average looks to be holding back any further momentum. If we do see a further fall lower I would expect to see the 50.0 fib level be the ideal target for traders looking for a strong support level in the market. This also coincides with a key support area around 49.00, so I would anticipate this would be a key holding area and somewhere that the bulls will look to take control of. However, the only minor caveat is that I would expect OPEC to come out swinging if they thought they were losing momentum or to at least add some comments.

Moving across to the US markets and positive economic data continues to be strong for the US economy, with the ADP non-farm payroll change coming in much stronger than expected at 298K (190k exp). This shows there is a large amount of positive sentiment in the market for the economy and labour market will likely be a key driver as Trumps policies come into act. With non-farm payroll due at the end of the week it will be interesting to see if there is a strong correlation.





For the technical aspect of the S&P 500 there is of course the strong channel which has formed in the market and continues to look key for trading. The 20 day moving average continues to act as dynamic support and is currently riding against the bearish channel trend line. Despite the recent fall down to the trend line this could by the market waiting to see regarding Trumps policies, but the bulls will still be out there looking for a chance to strike.





Source : http://www.forextime.com/market-analysis

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Daily Market Analysis

Gold becomes more attractive




It seems almost surreal that another war might be on the horizon for the United states, but that could be very much be the case in the near future. Markets are responding as a result and risk hedging has been the main theme thus far and this can be seen on a variety of markets. Despite all of this the US economy continues to do well, and there is no uncertainty around the fact that it will likely improve at the present rate with the recent FED vote being realised showing that 9 out of 12 voted to push interest rates higher. This points to many members of the Federal Reserve realising that the US economy is likely to continue to grow and that inflation is likely to be a problem in the near term. However markets have been risk adverse as mentioned above.

Looking at the current state it's clear to see that gold is being used as a hedge against another war that the US may look to enter. The recent rise today was one of the strongest movements we have seen since Trump become president, and for the traders this is a very strong sign that there is still a need for a commodity like gold as it climbs the charts. At present there is a bearish trend line which has been around since July and the market is looking to push higher and treat it as dynamic resistance at this stage. However, it would likely require more sabre rattling from the Trump camp in the near future, otherwise the market could become more rational and look to push lower.




From a technical stand point support at 1263.39 and 1241.23 is likely to be very strong at this stage. While resistance is likely to be found around 1290 if the market decided to be aggressive and rise higher. The 20 day moving average is also worth watching as it continues to provide dynamic support in the case of brief pull backs and should be treated with respect by traders who are acting bullish.

Oil markets continue to lift higher as OPEC looks to follow through and cut production in the long term in an effort to boost prices. This has so far been received moderately and the price effects have not flowed though. However the US economy finds itself using more and more oil in the lead up to summer and this is having a strong long term effect.





Thus far oil has moved up the charts, but has failed to crack through the long term bullish trend line from previously. There is also a bearish trend line which has been in motion since December that the market is also focused on, so it would be interesting to see the outcome of these movements and if they have a large impact. I would expect a continuous drawdown, but how fast is another thing.





Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

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





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



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



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



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



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



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



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



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



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





Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

AUDUSD bears look to strike




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




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

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





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






Source : http://www.forextime.com/market-analysis

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Daily Fundamental ForexTime ( FXTM )

Greek debt negotiations cause EUR volatility




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



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

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



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





Source : http://www.forextime.com/market-analysis

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