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USD/SEK, USD/NOK Watching FOMC, Norges Bank Meeting

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NOK, SEK TALKING POINTS – FOMC MEETING, NORGES BANK

  • Light economic dockets in Sweden and Norway
  • Norwegian Krone eyeing Norges Bank meeting
  • USD/SEK, USD/NOK eyeing US data, FOMC

See our free guide to learn how to use economic news in your trading strategy!

Last week, the Swedish Krona and Norwegian Krone were (surprisingly) left relatively undisturbed by headlinebreaking Brexit developments. The UK-EU divorce saga looks to continue as officials from both sides attempt to reach an agreement that will not compromise each respective party’s political agenda. To gain greater insight on the political and economic impact of Brexit, sign up for my webinar here.

OUTLOOK FOR USD/SEK, USD/NOK

The economic calendar for Sweden this week remains light, which will likely result in most of the Swedish Krona’s price action being directed by event risk coming from whatever currency it is paired with. In the US, the much-anticipated FOMC meeting minutes will likely dominate headlines and grab traders’ attention. While it is expected the Fed will hold rates, investors are also interested in commentary from officials.

Since early-February, US economic data has been underperforming relative to economists’ expectations according to the Citi Group Economic Surprise Index. A possible contribution to the decline was the result of the longest government shutdown on record which trimmed GDP growth and cost the economy billions of dollars.

Chart Showing Outlook for US Economy

Last week, the US Dollar-weighted index (DXY) was down almost one percent as key economic indicators – such as core CPI – undershot forecasts. Even the better-than-expected report from the University of Michigan sentiment indicator failed to buoy the index. This might explain why USD/SEK and USD/NOK rapidly declined after reaching 17-year and 3-month highs, respectively.

Fed Chairman Jerome Powell has repeatedly stated that they are on a “data-dependent path” and that they can afford to be “patient” when it comes to raising rates. This may result in a weaker Dollar in the short-run, but if the Fed is cutting rates and economic conditions appear to be worsening, that realization may cause a flood of capital into the US Dollar and Treasuries as investors seek haven above profit.

NORGES BANK, WILL THEY RAISE RATES?

The Norwegian Krone does have one potentially market-moving event this week: a rate decision from the Norges Bank. Despite outperforming economist’s expectations since January, slower global growth and greater weakness in Europe and China may impact what many analysts anticipate will be a rate hike this month.

Because of Norway’s reliance on the petroleum sector, fears of slower global growth will likely weigh on oil prices as world demand fades. As a result, Norwegian exports and the Krone may take a hit. This downturn may be further exacerbated if the central bank raises rates at a time when global credit conditions are tighter, and risk in financial markets is higher now than it was last year.

If the Norges Bank does raise rates, it will likely cause USD/NOK to have a sharp decline for the day, but it is unlikely it will cause a long-term reversal of the pair’s current uptrend. If global economic performance continues to disappoint and poor US data lingers, there may be a shift in risk appetite which may cause traders to flee the oil-linked currency and instead run into the arms of the anti-risk US Dollar.

USD/NOK, DXY – 4-Hour Chart

Chart Showing USD/NOK, DXY

Click here to view my 2019 Swedish Krona Norwegian Krone outlook!

SWEDISH KRONA, NORWEGIAN KRONE TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter



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Weekly Trade Levels for US Dollar, Euro, Sterling, Loonie, Gold & Oil

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New to Forex Trading? Get started with this Free Beginners Guide

DXY, Euro, Loonie Monthly Opening-Ranges Intact

The US Dollar Index is trading into the monthly opening-range highs into the start of the week and the focus is a reaction around the 98.05/10 resistance zone- note that the monthly ranges in Euro and Loonie also remain intact. In this webinar we review updated technical setups on DXY, EUR/USD, USD/CAD, GBP/USD, Crude Oil (WTI), Gold, USD/JPY, AUD/USD, EUR/AUD & SPX.

Why does the average trader lose? Avoid these Mistakes in your trading

Key Trade Levels in Focus

DXY – Immediate focus is on topside resistance at 98.05/10. Initial support at 97.87 with near-term bullish invalidation raised to 97.71.

EUR/USD – Euro is coiling into the monthly opening-range just above slope support. Immediate focus is on support at 1.1140. Initial resistance at 1.1187 with near-term bearish invalidation at monthly-open resistance at 1.1215– look for a bigger reaction there IF reached. A break lower would expose 1.1110.

GBP/USD – Sterling broke below multi-month slope support last week with price responding to near-term pitchfork support into the open. Initial resistance at 1.2798 with bearish invalidation at 1.2859. Downside support objectives at the August low-day close at 1.2697 and the 100% extension at 1.2662.

Gold – Risk for near-term recovery while above the yearly / monthly low-day close at 1270. Initial resistance at 1280 with near-term bearish invalidation with the monthly open a 1283.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Key Event Risk This Week

Economic Calendar- Key Data Realeses

Economic Calendar – latest economic developments and upcoming event risk

Active Trade Setups:

Learn how to Trade with Confidence in our Free Trading Guide

—Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex



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AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop

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MARKET DEVELOPMENT – AUD Soars on Shock Election, Apple Shares Slump, Risk to S&P 500

DailyFX Q2 2019 FX Trading Forecasts

AUD: The Aussie outperforms following a shock election outcome, in which Prime Minister Scott Morrison secured re-election (full story). In reaction, the Aussie gapped higher at the Asia open, reclaiming the 0.69 handle against the greenback. However, as equity markets have headed lower throughout the European morning, risks are for gains to be faded. Alongside this, key headwinds in the form of trade war tensions and a potential RBA June rate cut are likely to limit upside. Reminder, RBA Governor Lowe due to speak tonight after RBA meeting minutes (calendar)

Crude Oil: Oil prices surged at the Asia open as Saudi Arabia signalled that cuts could be extended throughout the remainder of 2019 at the JMMC meeting, while President Trump had also stepped up his critical rhetoric towards Iran. Although, with equity prices beginning to push lower, oil prices have pared the majority of its initial gains.

Equities: US equity futures have headed lower amid the continued crackdown by the US on China’s Huawei, which in turn has chipmakers come under pressure, while Google also stated that they are to restrict the company’s use on android services. Elsewhere, Apple’s price target had been cut by HSBC to $174 (median street price target = $220), citing concerns over China, while tariff led price increases on Apple products could also have dire consequences on demand. Apple shares currently lower by 2.4% in pre-market.

AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop - US Market Open

Source: DailyFX, Thomson Reuters

DailyFX Economic Calendar: – North American Releases

AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop - US Market Open

IG Client Sentiment

AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low” by Nick Cawley, Market Analyst
  2. COT Report: Japanese Yen and Euro Shorts Collapse, USD Longs Reduced” by Justin McQueen, Market Analyst
  3. Crude Oil Price May Be Carving Out a Top” by Paul Robinson, Currency Strategist
  4. Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX



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Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low

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Gold (XAU) and Silver (XAG) Price Analysis and Charts.

  • Gold (XAU) eyes a cluster of support.
  • Silver (XAG) makes afresh 2019 low as buyers disappear.

DailyFX Q2 Forecasts and Top 2019 Trading Opportunities.

Gold (XAU) Needs to Support to Hold

The sell-off on gold continues with the precious metal down around $30 in less than a week. Gold is under pressure from a resurgent US dollar, buoyed by last Friday’s Uni of Michigan data which smashed expectations and hit a multi-year high. The important 61.8% Fibonacci retracement level at $1,287/oz. failed to provide any support when broken last week, while the $1,287 – $1,281/oz. zone made up of old horizontal support is being tested now. A clear break and close below opens the way to the recent double bottom around $1,266/oz. which is currently being guarded by the 200-day moving average at $1,268.6/oz. Below here the 50% Fibonacci retracement level at $1,262/oz heaves into view.

How to Trade Gold: Top Gold Trading Strategies and Tips

Gold (XAU) Daily Price Chart (August 2018 – May 20, 2019)

Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low

Silver (XAG) Nears a Fresh Six-Month Low

Another precious metal under heavy selling pressure. Silver is now at levels last seen in early December last year and is over 11% lower since making its recent high of $16.21/oz. in late February. The downtrend since the late-February high continues to be respected and it is possible that silver completely retraces all the way back down to the November 14 low at $13.89/oz. Psychological support at $14.00/oz. may slow the decline, while the CCI indicator shows that the market is extremely oversold.

Silver (XAG) Daily Price Chart (August 2018 – May 20, 2019)

Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low

Trading the Gold-Silver Ratio: Strategies and Tips.

IG Client Sentiment data show that retail traders are 79.1% net-long gold, a bearish contrarian indicator. Recent daily and weekly sentiment shifts give us a stronger bearish contrarian bias.

— Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1



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