Archive for Forex and Currency News

The Week Ahead: Currency Point – Adding to our positions, knocking a pair out

By Evan Lucas, FPMarkets.com

Currency Point – Adding to our positions, knocking a pair out

Our USD thesis is very much holding true. In fact, the fait accompli around the cut to the Federal Funds Rate has been strengthened further by several events of the past week.

These been:
– New York President John Williams confirming that its ‘better to take preventative measures’
– Vice Chair Richard Clarida followed this comment in an interview with Bloomberg with this comment: ‘When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress’
– Chair Jerome Powell: “Uncertainties about this outlook have increased, particularly regarding trade developments and global growth…[We] will act as appropriate to dustain the expansion”

The fait accompli of the July FOMC meeting has moved to a debate about how much will the Board cut on the 31st? Will it be 25-basis point (bps) or a hard faster 50bps.

As of last week, there was a growing trend from traders that a 50bps cut was now becoming a possibility. Since the remarks above the probability of a 50bps cut have moved from 17% at the start of the week to 40% at time of writing, the momentum suggests it will go past 50% before the meeting.

This all but locks in USD weakness over this period; thus we again highlight ‘choice’ as the USD will tends to ‘overpower’ in all pairs.

However, will need to single out GBP and EUR as possible numerators to ignore for the following reasons:

GBP:

– Final week of the ‘mini-election’ for the PM role. Boris Johnson looks the most likely however Jeremy Hunt is still very much in the mix.
– A Brexit ‘no deal’ risk is building rapidly
– Bank of England is becoming dovish
All are risks on the GBP side

EUR:
– ECB meeting this week, likely to signal further accommodation
– Could cut Deposit and Lending rates as early as this week.
Risks on the EUR side

The trade here is in the USD, thus look for pairs where the opposite currency is in a ‘neutral’ or ‘rising’ bias. It why we are adding to our AUD/USD long positions we have taken over the period weeks.

By Evan Lucas, FPMarkets.com

Technical Analysis 19.07.2019 (EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, USDRUB, GOLD, BRENT)

Article By RoboForex.com

EURUSD

The pair suggests an alternative to hitting 1.1290. Even if this level is overcome, the whole wave may be regarded only as a correction. The main scenario still implies declining to 1.1180.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD

The instrument have amplified the consolidation area upwards and suggests amplification of the correction to 1.2570. Today we are expecting a decline to 1.2470, followed by growth to 1.2570 ad further decline along the trend towards 1.2400.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF

The instrument has formed yet another matrix of decline towards 0.9830. The market is trading in the growth impulse today. The goal is at 0.9860. Upon breaking this level potential for hitting 0.9898 may appear. The aim is first.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY

The pair is trading in the impulse for growth. This is regarded as the beginning of a correction. Today the instrument may reach 107.80, at least; then it may decline to 106.62. The goal is first.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD

The pair is declining towards 07040 today. Growth to 0.7080 may follow, then another decline to 0.7000. The goal is first.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDRUB

The instrument keeps trading inside the consolidation area under 63.20. Today a decline to 62.30 looks possible, followed by growth to 64.00.

USDRUB
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GOLD

Gold has jumped up and hit 1444.44. Today the market is trading in an impulse for decline. A breakthrough of 1430.00 is possible, which may open the way to 1408.15. The goal is first.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

Oil has reached the local goal of the correction at 62.40. Today growth towards 64.40 seems possible, followed by a decline to 61.20 and growth to 65.00. The goal is first.

BRENT

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The US Dollar Is Recovering After a Decline a Day Earlier

by JustForex

The US dollar fell yesterday against a basket of major currencies after a speech by the head of the Federal Reserve Bank of New York, John Williams. The official said yesterday during the banking conference that in case low rates and inflation, the regulator would have to take the necessary measures to stimulate the economy. Investors took his words as a signal to lower interest rates at the next Fed’s meeting. The US dollar index (#DX) closed yesterday in the red zone (-0.42%).

Despite this, today the US dollar is recovering losses. Positive economic statistics, which was published yesterday, supported the American currency. Thus, the Philadelphia Fed Manufacturing Index counted to 21.8, while experts expected 5.0. The number of initial jobless claims was 216K, which coincided with forecasts. Also, US Treasury Secretary Steven Mnuchin said yesterday that negotiations with China were continuing, and one shouldn’t believe everything the media says. Earlier, some publications have reported that negotiations are actually suspended due to the fact that the US government has not weakened sanctions against Huawei Technologies.

The British pound strengthened against the US dollar. Optimistic economic data in the UK was published yesterday. Thus, the volume of retail sales rose in June by 1.0%, while experts expected a decline by 0.3%. The core retail sales index (yoy) rose by 3.6% in June instead of 2.7%.

The “black gold” prices are rising after lowering the day before. At the moment, futures for WTI crude oil are testing the mark of $55.90 per barrel.

Market Indicators

Yesterday, in the US stock markets, a variety of trends was observed: #SPY (+ 0.37%), #DIA (-0.00%), #QQQ (+ 0.11%).

The yield on 10-year US government bonds is at 2.04-2.05%.

The news feed 2019.07.19:

– The core index of retail sales in Canada is at 15:30 (GMT+3:00);
– Michigan consumer sentiment and expactations at 17:00 (GMT+3:00).

by JustForex

EURUSD: a mixed picture

By Alpari.com

Previous:

On Thursday the 18th of July, trading on the euro closed significantly up to completely recover the losses incurred earlier in the week. The 1.1280 mark was reached once again, revisiting the high set on Monday. In the Asian session, the pair reached 1.1241, while the euro tumbled to 1.1205 during trading in Europe. This was brought about by very strong retail sales data from the UK. Growth across the retail sector increased by a factor of 1.5 – 3, both in monthly and annual terms.

The euro’s decline was also helped along by the Bank of England’s credit conditions survey. It’s worth remembering, however, that the tensions in the UK surrounding the change in government and Brexit still reign supreme. In the US session, the single currency began its recovery. Jobs data and the Philadelphia Fed manufacturing survey weakened the dollar, allowing the euro to rise, while FOMC members Rafael Bostic and John Williams added to the downside pressure on the greenback later on.

Day’s news (GMT+3):

  • 11:30 UK: public sector net borrowing (Jun).
  • 15:30 Canada: retail sales (May).
  • 18:05 US: Fed’s Bullard speech.
  • 23:30 US: Fed’s Rosengren speech.

EURUSD H1Current situation:

Yesterday’s range, in which the EURUSD pair continues to trade today, will most likely remain intact. The current situation is uncertain, however. We can’t rule out breakouts of both the upper (1.1287) and lower (1.1194) boundaries of this range. A breakout to either side will set the tone for the near future.

By Alpari.com

Currency Crises – Causes, Effects & Examples

By Orbex

A currency crisis is when there is a sharp depreciation (or at times, an appreciation) in the value of a currency.

When a currency crisis occurs, it can have a significant impact which can affect all spheres of the economy, including the day to day lives of regular people.

A currency crisis is something that is not new. There are many examples of it in recent history, from the Russian ruble to the Turkish lira and many more. Despite the numerous incidents, the reasons behind currency crises can vary significantly.

When a currency crisis occurs, there is extreme volatility. This often draws the attention of speculators as well as central banks. Reasons range from a monetary policy that follows a fixed exchange rate, to economic failures and political crisis.

When a currency crisis occurs, it comes unannounced. One could draw a relation to a currency crisis as a black swan event. Yet, in most cases, in hindsight, the causes for it can be easy to explain.

Some currency crises tend to have a short-term impact, while many other types tend to last longer, sometimes for years.

Most Common Types of Currency Crises

There are a number of reasons for a currency crisis to occur. They can be categorized into the following:

Inflation

Inflation remains the single biggest threat to currencies. Typically, central banks are mandated to maintain price stability. But, depending on the circumstances, inflation can start to creep higher. Examples of inflation leading to currency crisis include the famous inflation in Zimbabwe and the more recent episode in Venezuela.

Debt

It is often said that debt fuels the economy. Under general circumstances, governments tend to keep a close watch on the amount of borrowing in the economy. When lenders learn about potential factors that could lead to a cut in the credit ratings, the borrowing costs rise. This can eventually lead to a freeze in borrowing due to the higher interest rate demand by lenders.

Political stability

Currency crisis can occur due to political reasons as well. An economy needs to have a stable political environment. This is good for overseas investors as well as for the economy to grow. When there is political infighting or riots against the government, it can lead to instability. This, in turn, spurs foreign investment coming into the economy, resulting in an indirect impact on the currency’s value.

Economic Factors

The global economy also plays a role in the currency crisis. When there is a faltering economy, central banks respond by lowering interest rates. The open markets set the value of an exchange rate in a free-floating exchange rate policy. This can get difficult in case an economy is following a fixed rate regime. Defending the exchange rate peg can become a costly affair.

Examples of Currency Crisis

1998, RUB Crisis

In 1998, the currency crisis hit Russia. Known as the ruble crisis, the nation had to devalue its exchange rate. One of the reasons that led to the crisis was falling productivity amid a higher fixed exchange rate. The Russian central bank had to intervene in the markets to devalue its currency as a result. The crisis got to a point that Russia had to seek loans from the International Monetary Fund.

2015, CHF De-peg

In 2015, the Swiss National Bank shocked the FX markets by announcing that it will de-peg the EUR and the CHF exchange rate. The SNB had, for years, maintained a floor on the EURCHF exchange rate. For a currency that was pegged to the euro, the CHF appreciated more than 30% on the day. This was unprecedented because currency crises typically lead to a devaluation of the currency.

eurchf
EURCHF Currency depeg

2018, TRY Devaluation

In 2018, the Turkish lira made headlines. With high inflation and rising borrowing costs, the Turkish lira was embroiled in a currency crisis. Alongside the economic factors, the government was also partly responsible.

The Turkish government began to wield its influence on the Turkish central bank, further adding to the chaos. The TRY became strongly devalued as it fell to 4 USD per Turkish lira. The exchange rate was about 1.34 USD/TRY back in 2005.USDTRY Currency Crisis, 2018

USDTRY Currency Crisis, 2018

The impact of the devaluation in the Turkish lira also reached across shores into Europe. Because Europe had a significant amount of investment in Turkey, the currency crisis led to a decline in European equities as well.

In conclusion, currency crises can impact any economy, regardless of it being a developed or an emerging market. However, one could always look back in history to see how the economies have handled their respective currency crises.

While volatility is often low in the FX markets, a currency crisis can deeply affect the exchange rate. Money is the basis for the financial world. And, as a result, the impact is felt far and wide.

By Orbex

 

Japanese Candlestick Analysis 18.07.2019 (GOLD, NZDUSD)

Article By RoboForex.com

GOLD

Gold keeps forming an ascending trend. On H4 the instrument has formed a Dark Cloud Cover at the horizontal resistance level. Currently, we are contemplating the signal for a reverse pattern start realizing. In case of further decline the price may reach 1385.27. At the same time a reverse scenario is not impossible: a breakthrough of the resistance line and a renewal of the maximum of 1441.75 may follow.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD

On H4 the pair formed a Harami upon testing the horizontal resistance level at 0.6730. In the present situation a realization of the signal for a reverse pattern is not highly possible; further growth and testing of the next resistance level at 0.6800 are more likely. What is more, a vice versa scenario is not to be excluded: a bounce off the resistance line and a drop to 0.6662 may follow.

NZDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Ichimoku Cloud Analysis 18.07.2019 (AUDUSD, NZDUSD, USDCAD)

Article By RoboForex.com

AUDUSD

The instrument is trading at 0.7032 above the Cloud, which suggests an ascending trend. Testing of the signal lines of the indicator near 0.7005 is expected, followed by growth to 0.7110. Yet another signal of growth may be a bounce off the support line. The scenario may no longer be valid in case the lower border of the Cloud is broken and trading closes under 0.6950, which may be followed by a further decline below 0.6875.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD

The instrument is trading at 0.6744 above the Ichimoku Cloud which suggests an ascending trend. A test of the upper border of the Cloud near 0.6725 is expected, followed by growth to 0.6820. Yet another signal of growth may be a bounce off the support line. The scenario may no longer be valid in case the lower border of the Cloud is broken and trading closes under 0.6700, which may be followed by further decline to 0.6625.

NZDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCAD

The instrument is trading at 1.3049 below the Ichimoku Cloud which suggests a descending trend. Testing of the upper border of the Cloud near 1.3065 is expected, followed by a decline to 1.2925. Yet another signal of decline may be a bounce off the upper border of the descending channel. The scenario may no longer be valid in case the upper border of the Cloud is broken and trading closes above 1.3125, which may be followed by further growth to 1.3205.

USDCAD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2019.07.18

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.12099
  • Open: 1.12239
  • % chg. over the last day: +0.12
  • Day’s range: 1.12238 – 1.12420
  • 52 wk range: 1.1111 – 1.2009

Yesterday, the greenback weakened against a basket of world currencies. The EUR/USD quotes updated local highs. Demand for the US currency weakened after the release of weak data on the real estate market, as well as a decrease in the yield of US government bonds. The IMF statements put additional pressure. The regulator said that the US dollar was overvalued by 6-12%, based on short-term economic indicators. At the moment, the EUR/USD quotes are consolidating in the range of 1.12250-1.12450. We recommend opening positions from these marks.

The news feed on 2019.07.18:

  • – The number of initial jobless claims in the US at 15:30 (GMT+3:00);
  • – Philadelphia Fed Manufacturing Index at 15:30 (GMT+3:00).
EUR/USD

Indicators do not send accurate signals: the price has fixed between 50 MA and 100 MA.

The MACD histogram is in the positive zone and above the signal line, which gives a strong signal to buy EUR/USD.

Stochastic Oscillator is located near the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.12250, 1.12000, 1.11500
  • Resistance levels: 1.12450, 1.12750, 1.12850

If the price fixes below 1.12250, the EUR/USD currency pair is expected to decline. The movement is tending to 1.12000-1.11800.

An alternative could be a further recovery of the EUR/USD quotes to 1.12700-1.12850.

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.24075
  • Open: 1.24313
  • % chg. over the last day: +0.20
  • Day’s range: 1.24243 – 1.24478
  • 52 wk range: 1.2397 – 1.3385

The GBP/USD currency pair has begun to recover after a prolonged fall. The trading instrument has updated local extremes. This movement was largely caused by technical factors. At the moment, the GBP/USD quotes are testing a local resistance of 1.24500. The mark of 1.24200 is already a “mirror” support. The pound has the potential for further correction. We recommend keeping track of current information on Brexit. Positions must be opened from key levels.

At 11:30 (GMT+3:00), the UK retail sales statistics for June will be published.

GBP/USD

Indicators do not send accurate signals: the price has fixed between 50 MA and 100 MA.

The MACD histogram has started to rise, which signals a further correction of the GBP/USD quotes.

Stochastic Oscillator is located near the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.24200, 1.23850
  • Resistance levels: 1.24500, 1.24800, 1.25100

If the price fixes above the local resistance of 1.24500, a further correction of the GBP/USD quotes is expected. The movement is tending to the round level of 1.25000.

An alternative would be reduction of the GBP/USD currency pair to 1.24000-1.23800.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.30830
  • Open: 1.30520
  • % chg. over the last day: -0.25
  • Day’s range: 1.30421 – 1.30556
  • 52 wk range: 1.2727 – 1.3664

During the last trading sessions, the USD/CAD currency pair is quite active. At the same time, a unidirectional trend is not observed. At the moment, the loonie is consolidating. Investors expect additional drivers. Local levels of support and resistance are: 1.30350 and 1.30600, respectively. The trading instrument is tending to recover. We recommend paying attention to the dynamics of oil prices. Positions must be opened from key levels.

Today, the news feed on the Canadian economy is calm.

USD/CAD

Indicators do not give accurate signals: the price has crossed 50 MA and 100 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations
  • Support levels: 1.30350, 1.30200, 1.30000
  • Resistance levels: 1.30600, 1.30750, 1.30900

If the price consolidates above 1.30600, a correction in the USD/CAD currency pair is expected. The movement is tending to 1.30800-1.31000.

An alternative could be a fall of the USD/CAD quotes to 1.30200-1.30000.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 108.226
  • Open: 107.942
  • % chg. over the last day: -0.28
  • Day’s range: 107.618 – 107.980
  • 52 wk range: 104.97 – 114.56

On the USD/JPY currency pair the bearish sentiment is prevailing. During yesterday’s and today’s trading sessions, the drop in quotes has exceeded 50 points. The trading instrument has updated key lows. A negative dynamics of the yield of US government bonds puts additional pressure on the “greenback”. The demand for “safe” assets is still high due to the uncertainty in trade relations between the United States and China, as well as the situation around Brexit. At the moment, the USD/JPY quotes are consolidating in the range of 107.600-107.800. The trading instrument is tending to further decline. Positions must be opened from key levels.

In the Asian trading session, ambiguous data on the trade balance of Japan was published.

USD/JPY

The price has fixed below 50 MA and 100 MA, which indicates the power of the sellers.

The MACD histogram is located in the negative zone and below the signal line, which gives a strong signal to sell USD/JPY.

Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 107.600, 107.300, 107.000
  • Resistance levels: 107.800, 108.100, 108.350

If the price fixes below 107.600, a further fall in the USD/JPY quotes is expected. The movement is tending to 107.300-107.000.

An alternative could be the growth of the USD/JPY currency pair to 108.000-108.200.

by JustForex

The Dollar Index Has Moved from Local Highs

by JustForex

The US dollar is falling against a basket of major currencies amid weak economic reports, as well as a sharp drop in US government bond yields. Thus, the number of building permits issued in June fell to 1,220M instead of the forecasted value of 1,300M. The Fed’s Beige Book was also published yesterday, having stated that the growth rate of economic activity in the United States remained modest. The yield of 10-year US government bonds has updated weekly lows. The pressure on the US currency is also put by prolonged trade negotiations between the United States and China. The US dollar index (#DX) closed yesterday in the red zone (-0.19%).

The British pound has recovered some losses against the US dollar. This movement is caused largely by technical factors. Investors have begun to partially fix positions on the pound after a long fall. Optimistic data on retail sales in the UK in June supports the pound. Financial market participants expect new information on Brexit. Earlier, the EU coordinator at the Brexit talks, Michel Barnier, noted that Britain would face serious consequences if it decided to break ranks with the EU.

The single currency has updated local highs against the US dollar. Yesterday, the consumer price index in the eurozone was published, the figure of which was 1.3% in June instead of 1.2%.

Also in the Asian trading session weak data on the labor market in Australia were published. Thus, the level of employment rose in June by only 0.5K instead of the forecasted value of 9.1K.

The “black gold” prices show a negative trend. At the moment, the WTI crude oil inventories are testing $56.65 a barrel.

Market Indicators

Yesterday, the bearish sentiment was observed in the US stock markets: #SPY (-0.66%), #DIA (-0.42%), #QQQ (-0.49%).

The yield on 10-year US government bonds fell significantly. Currently, the indicator is at the level of 2.04-2.05%.

The news feed 2019.07.18:

– The number of initial jobless claims in the US at 15:30 (GMT+3:00);
– Philadelphia Fed Manufacturing Index at 15:30 (GMT+3:00).

by JustForex

EURUSD: markets looking to revisit the 1.1287 high

By Alpari.com

Previous:

On Wednesday the 17th of July, trading on the euro closed up against the dollar, recovering about half of the losses incurred on Tuesday. The pair inched upwards during the Asian session, before dropping sharply to 1.1199 ahead of ECB member Benoît Cœuré’s speech. Reaction to the economist’s comment subsequently strengthened the euro against the dollar.

The UK’s inflation report showed consumer inflation unchanged at 2%, as had been predicted by experts. Core inflation in the Eurozone rose by 0.4%; 0.1% higher than the previous month. The euro continued to rise throughout the day, continuing into the US session. The pair closed day 0.1% up, which was undoubtedly facilitated in part by the Fed’s Beige Book.

Day’s news (GMT+3):

  • 11:30 UK: retail sales (Jun), BoE credit conditions survey (Q2).
  • 15:30 US: initial jobless claims (12 Jul), Philadelphia Fed manufacturing survey (Jul).
  • 16:30 US: Fed’s Bostic speech.
  • 21:15 US: Fed’s Williams speech.

EURUSD H1Current situation:

In the short term, the EURUSD is likely to move within a range of 1.1194 to 1.1287. A breakout of 1.1194 will provide good reason to open short positions. We also shouldn’t rule out the possibility of revisiting the 1.1287 high.

By Alpari.com