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EURUSD and Dow Bearings Rest on Jackson Hole, Trump

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Scheduled event risk is starting to give way to sentiment and systemic fundamental concerns – a prospect that threatens volatility at a time of year when quiet is supposed to prevail. Trade wars are finding guidance from headlines that President Trump regularly tops, while recession fears are tied more closely to market measures. The Jackson Hole Symposium will present an opportunity for officials to discuss all of this.

Australian Dollar Bears Rule But May Not Turn Up Heat This Week

The Australian Dollar remains close to notable lows against its US counterpart and the market is still betting on aggressive rate cuts from the RBA

Sliding Crude Oil Can’t Look to Jackson Hole For Price Support

Crude oil prices continue to drop as the economic data keep huge question marks glowering over likely demand levels.

US Dollar May Rise if Fed Minutes and Jackson Hole Spook Markets

The US Dollar may rise if the Fed meeting minutes and commentary at the Jackson Hole symposium spooks markets and boost demand for liquidity.

Sterling Price Weekly Forecast: Brexit Newsflow and Political Manoeuvres

Next week’s UK data vacuum will be filled by the latest political shenanigans with rumor and counter-rumor focusing on who is up to what, with who and why.

S&P 500, DAX Fundamental Forecast

The ominous sign stemming from the inversion of the US 2s10s provides yet another reminder that the global economic outlook is weakening.

Euro May Fall as ECB Easing Looms, Italy Flirts with Early Elections

The Euro may fall as dovish ECB meeting minutes and soft PMI data set the stage for easing in September while Italy flirts with early elections.

Currency Performance Vs USD Chart SPX Chart with DXY,Oil, and Gold

Chart Legend

Black = Oil (CL Futures)

Yellow = Gold (XAUUSD)

Green = USD (DXY Index)



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UK Markets Wait For Supreme Court Ruling, Brexit Update

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Sterling (GBP) News, Charts and Analysis – Webinar

  • UK Supreme Court ruling due shortly
  • UK PM Johnson to meet EU leaders on the sidelines at the United Nations

Q3 2019 GBP Forecasts and Top Trading Opportunities

UK asset markets are flat to slightly lower at the start of the week with traders waiting for the UK Supreme Courts ruling on whether PM Johnson’s recent shuttering of Parliament was legal or not. The judgement is expected early this week and will have a direct influence on UK assets one way or another.

This week PM Johnson will meet with European leaders at the United Nations General Assembly meeting to discuss the latest Irish backstop developments. Recent positive commentary has boosted the value of the British Pound until a report this weekend that European Commission President Jean-Claude Juncker sees a return to a hard border in Ireland pushed GBP lower.

There is a lack of front-line UK economic data this week to influence trading but speaches from BoE governor Mark Carney and other UK central bank officials should be followed closely.

GBPUSD has drifted lower through the session but has not threatened the recent 1.1959 low made earlier this month.

DailyFX Economic Calendar

GBPUSD Price Daily Chart (January – September 23, 2019)

UK Markets Wait For Supreme Court Ruling, Brexit Update - Webinar

Brexit Glossary: Brexit Jargon and Terms Explained

The IG Client Sentiment Indicator shows retail traders are 65.0% net-long, a bearish contrarian bias.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on Sterling – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.



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EUR/USD Price Slumps as Germany PMI Data Points to Recession

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EURUSD Price Charts and Analysis:

  • EURUSD may sink further as 1.1000 gives way again.
  • Germany is expected to be in recession in Q3.

Q3 2019 EUR and USD Forecasts and Top Trading Opportunities

EURUSD Sinks as German Economic Woes Continue

The German economy is likely to fall into recession in the third-quarter of 2019, ‘as the downturn in manufacturing deepened and service sector growth lost momentum’, according to data provider IHS Markit. The composite index hit its lowest level since October 2012, while the manufacturing numbers are ‘simply awful’ according to the data provider. Germany is expected to enter an official recession in Q3 and may not see any growth this year.

According to Phil Smith, principal economist at IHS Markit, “The manufacturing numbers are simply awful. All the uncertainty around trade wars, the outlook for the car industry and Brexit are paralyzing order books, with September seeing the worst performance from the sector since the depths of the financial crisis in 2009. “With job creation across Germany stalling, the domestic-oriented service sector has lost one of its main pillars of growth. A first fall in services new business for over four-and-a-half years provides evidence that demand across Germany is already starting to deteriorate.”

EUR/USD Price Slumps as Germany PMI Data Points to Recession

EURUSD continues to point lower and may re-test the two recent low prints around 1.0925 made earlier this month. Below here there is very little in the way of strong support. There is a gap in April 2017 on the weekly chart between 1.0777 and 1.0821 which is likely to be filled in the short-term, before the January 2017 low at 1.0340 comes into play. In the current environment is looks very unlikely that EURUSD will break back above the cluster of lows/highs around 1.1100 and 1.1120.

EURSUD Price Daily Chart (January – September 23, 2019)

EUR/USD Price Slumps as Germany PMI Data Points to Recession

The IG Client Sentiment Indicator shows retail traders are 65.0% net-long of EURUSD, a bearish contrarian bias.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on the Euro – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.



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US Dollar ASEAN Outlook Bullish, Trade Deal Hopes Fade, PHP at Risk

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ASEAN Fundamental Outlook

  • US Dollar remained in persistent consolidation mode against ASEAN FX
  • Drop in US-China trade deal hopes to fuel USD gains on haven demand
  • Philippine Peso also eyeing central bank rate decision, SGD to CPI data

Trade all the major global economic data live and interactive at the DailyFX Webinars. We’d love to have you along.

US Dollar and ASEAN FX Weekly Recap

At first glance, the US Dollar seemed to outperform against its major counterparts when using an equally-weighted index this past week. But the reality is that from a technical standpoint, the Greenback is still in a persistent consolidative mode since the end of July. Its lack of commitment also spread into against some of its ASEAN and Southeast-Asia fiat counterparts.

A couple of notable exclusions this past week were the Singapore Dollar and Indonesian Rupiah – see chart below. The former tends to closely trace the Greenback. The IDR saw most of its decline during the front-half of the week, when an attack on Saudi Arabian energy infrastructure caused an oil shock that triggered risk aversion. The commodity has since partially subsided as markets turned to the Fed and US-China trade talks.

The US central bank delivered its second interest rate cut, keeping the door open to “extensive cuts” should they be needed. Meanwhile, the Bank of Indonesia delivered a third reduction in benchmark lending rates this year. But the Rupiah was left unchanged as the central bank reiterated efforts to guard their currency. Prior to Friday’s close, ASEAN currencies suffered as Chinese delegation teams canceled trips to US farms.

Check out my Singapore Dollar currency profile to get acquainted with its unique character in markets!

US Dollar ASEAN Outlook Bullish, Trade Deal Hopes Fade, PHP at Risk

US-China Trade Deal Hopes Once Again Diminish

Once top-tier economic event risk passed last week, it was clear how important US-China trade talks were to financial markets. As mentioned earlier, once reports crossed the wires that Chinese officials canceled trips to farms in Montana and Nebraska, aggressive risk aversion kicked in. The MSCI Emerging Market index covered its upside gap from the onset of Friday’s session as US government bond yields tumbled.

The actions from Chinese officials were in response to comments from US President Donald Trump, who mentioned that he would not accept a partial deal, adding that ending the trade war by 2020 is not his priority. Taking a look at the next chart below, prospects of the two nations agreeing to an outcome has helped to drive capital flowing back into emerging markets since late August.

Emerging Market Capital Flows Amid Trade Wars

His lack of interest in wanting an interim deal diminished prospects of an agreement, which can be viewed by the reaction in financial markets on Friday. Talks between the two nations restarted this past week ahead of a high-level meeting anticipated between the economic powerhouses in the middle of October. This is why the US delayed imposing additional $250b in tariffs on China by two weeks to around the same time.

With trade wars still are a persistent threat to global economic health, this bodes ill for risk capital and will likely adversely impact currencies such as the Philippine Peso, Malaysian Ringgit, Singapore Dollar and Indian Rupee. Meanwhile, the highly-liquid US Dollar – still increasing its dominance as the world’s most widely-traded currency – is likely to benefit against them.

ASEAN Economic Event Risk

Focusing on ASEAN regional economic event risk in the week ahead, a top-tier item will be the Philippine central bank interest rate announcement. Much like the easing that we have seen from central banks in the world, the BSP is anticipated to continue the trend. The benchmark lending rate is widely expected to be lowered from 4.25 percent to 4.00 on Thursday.

As such, its surprise factor is diminished, with the central bank governor also hinting at further reductions in reserve requirement ratios. This does mean however that the Philippine Peso will continue to lose its yield advantage (alongside MYR, IDR) which is a long run threat for the currency. Inflation data will also be eyed out of Singapore and Malaysia.

For timely updates on ASEAN and Southeast Asia currencies, make sure to follow me on Twitter here @ddubrovskyFX

FX Trading Resources

— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter



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