Forex Signals US Session Brief, September 28 – Risk Currencies and Stocks Decline As Market Sentiment Deteriorates

Posted on September 28, 2018September 28, 2018 by Skerdian Meta

The situation in Italy regarding the budget deficit is getting investors scared today. They have been trying to ignore it and be optimistic in recent weeks and the stock markets have been rallying as political leaders in Italy have stressed many times that investors don’t have to worry about the deficit. But today, everyone is getting cold feet as the deadline for the budget proposal which will go to the EU approaches. EU’s affairs minister Moscovici commented early today that Italy must cut its explosive debt which stands at 130% of the GDP and that rules must be respected.

Italy is not breaking any rules since they are aiming for a 2.4% deficit in this budget, which includes the citizens’ income plan. Italian deputy Prime Minister Di Maio added that he is not worried about the market reaction and he will meet with investors soon to calm things down. But, his countryman politician who is the President of the European parliament, Tajani added more fuel to the panic saying that Italy’s budget plan goes against the people and it will cause trouble to Italian savings. All these are weighing on European indices, particularly on Italian bank stocks. To round it all up, Salvini popped up a while ago saying that Italy’s rights come before bureaucrats in the EU. The Euro is also very much on the slide today as worries from Italy and a decline in core inflation has pushed it nearly 100 pips lower against the USD.

The European Session

Italy’s Moscovici on Italian Budget – The EU affairs Minister was the first to comment on Italian debt/GDP today saying that Italy must cut its explosive debt and respect the rules, which they are not breaking as we explained above.

Spain GDP – The Q2 final GDP reading showed that the economy grew by 0.6% as expected, but the year-on-year GDP came at 2.5%, down from 2.7% previously. Not welcomed by markets when the Euro is already sliding fast.

ECB’s Lane on Interest Rates – The ECB member Lane said today that next summer we will see a more precise debate on rate hikes. He adds that inflation pressure isn’t that strong right now. So, low inflation and no rate hike debate until next summer. Two dovish remarks from Lane.

UK Final GDP and Current Account Balance– The final reading for the Q2 GDP came at 0.4% as expected but the year-on-year GDP was revised lower to 1.2% from 1.3% previously. The current account deficit increased to -£20.3 billion. Business investment also declined by 0.7%, so this was a negative round of data for the GBP.

DI Maio is Not Worried by Market Reactions – Italian deputy PM Di Maio said that he will meet with investors soon, but he is not worried by the market’s reaction. Well, we are as forex traders, damn it, so stop that. He added that markets will come to terms with the current budget and it will help growth, which will help pay off debt.

Eurozone Inflation – The CPI (consumer price index) inflation came at 2.1% as last month, but core inflation fell back below 1%, coming at 0.9% when it was expected to come at 1.1%. The German inflation was pretty upbeat yesterday, but the decline in French and Italian CPI numbers have hurt the overall inflation in the Eurozone.

EU’s Tajani is Concerned About Italy’s Budget – The president of the European Parliament Tajani commented on the issue saying that Italy’s budget goes against the people, it won’t raise employment, and it will cause trouble for Italian savers. Well, the citizens’ income surely goes in favour of the people, Mr Bureaucrat, and it has proven to help the economy in Spain and Portugal. Besides, it is still well below the 3% ceiling, so I don’t get all the fuss in the stock markets.

The US Session

Italy’s Salvini Stands Up for the People – The Italian interior minister and the leader of the Lega Nord said that the interest of Italian citizens comes before the EU bureaucrats. He said “Enough now!” to threats from EU bureaucrats. Italy’s rights to jobs and pensions comes first and he is not pleased with an EU which threatens to place Italy under its control. Those comments have the indices and stocks pushed down, which have just stalled at the moment.

Canadian GDP – The monthly GDP came at 0.2% in Canada aginst 0.1% expected and up from 0.0% last month. The yearly GDP remained unchanged at 2.4% against an expected decline to 2.2%. Although, we saw this coming since wholesales inventories jumped by 1.5% on Monday.

US Core Price Index – The US core price index was expected to decline to 0.1% after growing by 0.2% in the last several months. But, prices remained flat at 0.0% which is not a good sign for the FED.

US Personal Spending – The growth in personal spending ticked lower to 0.3% as expected, down from 0.4% last month, but it is still stable.

US Personal Income – The pace of growth for personal income in the US used to be 0.4% in May and June, but in July it cooled off to 0.3%. This month, it was expected to get back to 0.4% but it missed expectations and remained at 0.3% again.

US Chicago PMI – The Chicago PMI index which measures the economic health jumped above 60 points in May. It has remained above there since then but today it is expected to cool off a little to 62.3 points from 63.6 points last month.

Revised US UoM Consumer Confidence – The consumer confidence has cooled off a little in the last two months, but it is expected to jump above the 100 level today, which would give the USD another boost, but let’s see the report first.

Trades in Sight

Bearish AUD/USD

The trend has turned bearish this week
The 50 SMA is catching up with the price
The 100 and 200 SMAs are waiting to provide resistance
The retrace seems very weak

M0ving averages have turned into resistance now

AUD/USD has turned pretty bearish this week as did all other risk currencies. Today though, we are seeing a bullish retrace higher which seems pretty weak to me. The stochastic indicator is almost overbought and the price is still some distance away from the batch of moving averages. These moving averages have turned into resistance now that they have been broken. The 50 SMA (yellow) is quickly catching up, so once it reaches the price, we will try to open a sell forex signal in this pair.

In Conclusion

The stock market had a little period of panic today as Italian worries hurt the market sentiment. The Euro has been beaten down pretty bad as well. The USD is in strong demand but the CAD is seeing even stronger bids on the back of positive GDP numbers today, but it might change soon as the price action is showing now, so hang around for more updates guys.

Forex Signals US Session Brief, September 27 – Market Confused after FED but Impressive Data Gives it a Boost

Posted on September 27, 2018September 27, 2018 by Skerdian Meta

Financial markets were a bit hungover during the European session from the FED meeting yesterday. The US Dollar initially declined when the statement was released together with the rate hike, which took interest rates to 2.25% from 2.00%. The comment about the FED being accommodative has been removed, which means that the FED is heading towards or has reached a neutral stance regarding the monetary policy now. At first glance, this looks bullish for the USD because it means that the economy has reached a phase where it doesn’t need the FED to be accommodative. But at the same time, it means that the pace of future rate hikes might be slower now.

The FED chairman Jerome Powell sounded sort of hawkish in his press conference but he also added that the FED can increase interest rates, then stay on hold for some time and then hike again if the economic data supports it. But, this also raises the question of whether the FED is going to pause soon, which would be bearish for the USD. Anyway, the market was a bit confused but the impressive retail sales number in the US session got the market moving again and the USD found some more bids.

The European Session

China Says US Undermines it – Chinese officials commented early this morning that China’s economy won’t collapse under US tariffs and threats and that China doesn’t interfere with other countries’ internal affairs.

Italian Budget Deficit – Lega Nord, one of Italy’s governing coalition said today that Italian Finance Minister Tria could be let off if he doesn’t fall in line. Tria wants the deficit to remain under 2% and his spokesman said that Tria won’t resign over disputes with two leading parties, but the citizen plan will likely push the ceiling above 2%.

German CPI Inflation – The German regional CPI (consumer price index) numbers started coming out this morning and they all were well above expectations. So, it wasn’t a big surprise when the overall German CPI number came at 0.4% against 0.1% expected. The yearly CPI number jumped to 2.3% from 2.0% previously.

Eurozone M3 Money Supply – The M3 money supply, which represents cash in circulation and bank deposits, declined from 4.5% last month and this month it was expected to decline to 3.8%, but it fell even more to 3.5%.

Saudi Arabia and Other OPEC Members Discuss Output Increase – Saudi officials commented that they have discussed increasing Oil output with other OPEC members. Iran doesn’t like that other OPEC members share its quotas after the US sanctions come into effect, but Saudi Arabia is an eternal foe so they might go ahead with the increase.

Brexit Comments From EU – EU’s Brexit negotiator said a while ago that they are continuing to work for an orderly Brexit, but the European Commission spokesman said that the EU is prepared for any Brexit scenario. A deal looks very difficult now.

The US Session

US GDP – The final GDP reading came as expected at 4.2% for Q2. This is the fastest rate of growth for any quarter in the last four years. But, the USD ignored the GDP report as the retail sales report was released at the same time.

US Unemployment Claims – US unemployment claims increased slightly to 214k against 210k previously. The 4-week average was also revised a bit higher but nothing to hurt the US Dollar.

US Wholesale Inventories – Wholesales inventories increased by 0.8% in August against 0.3% expected. This will likely increase the GDP for Q3.

US Trade Balance – The US trade deficit was expected to decrease from $72 billion to $70.6 billion. But it increased to $75.8 billion. It seems that the trade war that Trump has opened on many fronts is not working out that good.

US Durable Goods Orders – Last month, durable goods orders declined by 1.7% which was revised lower today to -1.2%. This month they were expected to grow by 1.9% but they posted a massive 4.5% increase. Core durable orders missed expectations coming at 0.1% against 0.5% expected, but the USD went with the headline number.

US Pending Home Sales – Pending home sales were expected to decline by 0.5% this month but they posted a 1.8% decline, so it has been a mixed bag regarding the US data today.

Trudeau is Confident About NAFTA – The Canadian Prime Minister Justin Trudeau said that he is still very positive about a good NAFTA deal. Although, the Canadian Dollar has declined on the NAFTA fallout and I think that it will be difficult to reach such a deal.

Trades in Sight

Bearish EUR/GBP

The trend has turned bearish this week
The 50 SMA is catching up with the price
Waiting for the retrace up to complete

The 50 SMA has turned into resistance now

EUR/GBP has turned bearish this week after jumping higher last Friday. Although, we won’t just sell this pair right now because it is making a retracement higher right now. We will wait until the retrace is complete which will be when the stochastic indicator becomes overbought. The 50 SMA (yellow) has turned from support to resistance now and once it catches up, the price will reverse back down.

In Conclusion

The FED meeting is over now but the effect is still lingering in the forex market. The USD is in slight demand right now but that is due to the positive retail sales report. Overall, the market is still confused as to what direction it must take now.

Forex Signals US Session Brief, September 26 – Everything on Hold Ahead of the FED Meeting

Posted on September 26, 2018September 26, 2018 by Skerdian Meta

Today is Wednesday, so the big day is finally here. The FED meeting is scheduled for 18:00 GMT today and they are widely expected to hike interest rates again. This will be the third time they increase interest rates this year. They are expected to increase rates from 2% to 2.25%. The market is totally expecting that and another rate hike is expected this year as well, most probably in December. But, the projections for economic growth, inflation and the monetary path from the FED are a major uncertainty for forex traders since the White House administration is taking its own path regarding trade and that might alter the FED’s path somewhat.

That is the biggest concern for this meeting, so the economic projections and the press conference from the FED are pretty important today. In the Asian session, Commodity Dollars jumped higher on negative economic numbers from New Zealand believe it or not, but they reversed back down during the European session. It seems that the Italians are coming together on the budget and they will also include citizens income, while the EU chief Brexit negotiator Barnier said that they are still working on a Brexit deal. Too bad that the French think that a good Brexit deal will be disastrous for Britain, tough life.

The European Session

A Positive Brexit Deal Would be Suicide for the EU, says France – French Finance Minister La Maire said early in the morning that the EU has more important matters to take care of than the future of the UK and that any decision which gives the impression that you can leave the EU and keep all the benefits would be suicide. He is right about that.

EU’s Moscovici Wants Italian Budget Deficit Below 2% – The European Affairs Minister Pierre Moscovici said early in the morning that the 2019 budget deficit must be well below 2%. I don’t think that will happen if the citizens income plan is implemented. Rules are for a 3% deficit and I think Italians will get as close to the ceiling as possible.

Italian Finance Minister Backs Off – The “populists” of Lega Nord and Cinque Stelle in Italy who are in power and are normal citizens trying to make things right in Italy, have pushed for a higher budget deficit, something close to 3%. But the finance minister who is a technocrat wants a lower deficit, which would leave out the citizens income. Today, he said that the budget will include citizens income, but I’m not sure they can keep it below 2%. Tomorrow they will present a draft of it so we will see.

China to Cut Import Tariffs – The Chinese cabinet has decided to cut import tariffs on some products which involve US goods as well. They said it will lower costs for Chinese people by around 60 billion Yuan, but it might also be that they are folding their hand in the trade war with the US.

Barnier Is Working on An Orderly Brexit – Michel Barnier said that about an orderly Brexit and a new partnership that respects UK’s sovereignty. But he added that they are also working on a partnership that respects the principles and sovereignty of the EU, such as the single market. So, if the UK wants sovereignty, it will be out of the EU single market.

The US Session

US Mortgage Application – The US mortgage applications for last week increased by 2.9% against 1.65% previously. All components are higher, such as the market index, the purchase index and the refinancing index.

EU Worried About Brexit – There are rumors in Brussels that the EU wants to intensify plans in case of no Brexit deal. The EU will discuss emergency preparations today if negotiations fall apart. Barnier and Jeremy Corbyn of the Labor party are to meet tomorrow, just in case Theresa May is thrown off.

US New Home Sales – New home sales are expected at 630k today. But last month’s number was revised down to 627k from 643k. The trend has been decreasing because new home sales used to be at around 700k several months ago.

US Crude Oil Inventories – US Crude Oil reserves are expected to fall by 0.7% today. They have been decreasing for the last five weeks, so this won’t be new.

FED Meeting – The Federal Reserve is meeting today and they will increase interest rates to 2.25% from 2.00%. Everyone is expecting that, so I don’t think there will be much action on that. There will definitely be action although not from the rate hike. Donald Trump doesn’t want the FED hiking interest rates so that might have an effect on the statement and the press conference, which will be very interesting to follow.

Trades in Sight

Bullish AUD/USD

The larger trend is bullish
The retrace down is complete
The previous candlesticks is pointing to a bullish reversal
The 100 SMA is providing support

The 100 SMA is providing solid support

AUD/USD jumped around 40 pips this morning on some economic data from New Zealand which was negative, but not as bad as last month. But it has reversed down, completing a retrace now as stochastic has become oversold. Although, this might be the end of the retrace since the 100 SMA (red) is providing strong support. The previous candlestick formed a hammer which is another bullish reversing signal.

In Conclusion

With the FED meeting approaching, the markets will get stranger and probably quieter until the evening. Although, we are still here so let’s see what we can trade until then. I expect a lot of volatility after the meeting and during the press conference from Powell though.

Forex Signals US Session Brief, September 25 – The USD Continues the Downtrend on A Quiet European Session

Posted on September 25, 2018September 25, 2018 by Skerdian Meta

The US Dollar has been trying to recuperate after the decline during the European session yesterday. It claimed some of the losses during the US session yesterday and in the Asian session, but the downtrend resumed again in the European session. The Euro and the GBP are still on a bull run and commodity Dollars and the JPY have joined them in the last several hours.

Earlier today we heard the ECB economist Peter Praet trying to talk down Draghi’s hawkish comments from yesterday. If you remember yesterday, the ECB president Mario Draghi sounded pretty upbeat about the economic growth, job growth and to some extent, on inflation as well. The Euro jumped around 50 pips higher which the ECB doesn’t like much. SO, we have Praet today saying that Draghi’s comments are not something new. Nonetheless, the Euro is still on the bullish run after a small tumble on those comments. Overall, it has been a quiet session without major moves, but there has been some nice action.

The European Session

German Wholesale Price Index – The wholesale price index fell flat at 0% points last month which was a bit worrying, but it was reversed higher to 1% today. This month was expected at 0.2% but wholesale prices rose by 0.3%, so inflation is back on track in Germany.

US-Japan Rate Differentials Should Send USD/JPY Higher Says Kuroda – The head of the Bank of Japan Kuroda said that the difference in interest rates between the FED and the BOJ would lead to the USD to increase against the JPY: Japan still holds interest rates at -0.10%. We know Kuroda would love a weak JPY but that is just not going to happen, despite rate differences.

Praet Trying to Calm Euro Buyers – The ECB economist Praet said today that the pickup in economic growth needs further accommodation, meaning no rate hikes in sight and the increase in wages is still moderate. He added that it will take time for wages to impact inflation. Well, he is seeing the glass half empty, as opposed to Mario Draghi who was seeing it half full yesterday, but the market trusts Draghi more than Praet and the Euro continues to be bullish.

BOE’s Vlieghe Wants More Rate Hikes – The Bank of England board member Vlieghe said today that according to his economic projections, the BOE should increase interest rates 1-2 times a year. If there is no Brexit deal, I think that we won’t see any rate hikes from the BOE in quite some time.

No Meeting Between Trump and Rouhani – US President Donald Trump tweeted that he is not going to meet with the Iranian president Rouhani. Oil prices continue to be bullish today and USD/CAD is turning bearish.

More Tariffs From the US If China Retaliates – The director of the US National Trade Council Peter Navarro said today that the US will add more tariffs on Chinese products if China retaliates on the $200 billion US tariffs. China has placed tariffs on $60 billion worth of US goods, but might fight its battle on other grounds, as I explained over the weekend.

The US Session

Canada Might Join US-Mexico Deal – A NAFTA deal between US, Mexico and Canada seems far as Canada and the US don’t meet in the middle, but the US is completing a deal with Mexico and Canadian PM Justin Trudeau said that Canada might build on on that deal. I’m not exactly sure what he means but it is slightly positive for the CAD.

Philly FED Manufacturing Index – This manufacturing index fell from 41.7 points to 37.4. New orders came lower as well but other components such as wages, employment and firm level activity rose, so it is a mixed report overall.

US FHFA House Price Index – The growth in the house price index was pretty weak in May and June, increasing by only 0.1%. But, the growth increased to 0.2% in the following months including in today’s report.

US Consumer Confidence – The consumer confidence is expected to cool off slightly in the US to 132.2 points from 133.4 points last month. Increasing interest rates doesn’t really help the consumer confidence since it makes borrowing from loans and credit cards more expensive and the FED is expected to hike interest rates tomorrow. But first, let’s see today’s number if it will show any weakness in the confidence of the US consumer.

UN Meeting – The UN meeting started yesterday and it will last all week. We heard some rumours that Donald Trump might pull the US out of some previous agreements which might shake the forex market, but I don’t know when Trump is going to speak so we have to keep an eye on that meeting.

Trades in Sight

Bullish USD/JPY

The trend turned is strongly bullish
The retrace down is complete
The previous candlesticks is pointing to a bullish reversal
The 50 SMA is providing support

The 100 SMA is providing solid resistance

We didn’t open a forex signal in USD/JPY since we have quite a few open at the moment. But if we were to open a trade in this pair, we would go long on it because the trend is bullish and the price is making new highs. The retrace down is nearly complete since stochastic is almost oversold and the previous candlestick closed as a doji which is a bullish reversal signal after the retrace. The 50 SMA also provided support even though the price didn’t touch it.

In Conclusion

The price action has been getting pretty slow in the last few hours but the US consumer confidence report is about to get released soon, which might make things a bit more interesting during the US session. So, we are posting this update now and will concentrate on the economic calendar until that report has been published.

Forex Signals US Session Brief, September 24 – GBP Recuperates As A Brexit Deal Is Not Dead Yet

Posted on September 24, 2018September 24, 2018 by Skerdian Meta

Today the markets were a bit hungover from last week’s fallout over the Chequers Brexit plan that the UK Prime Minister Theresa May had so much hope on. The GBP lost around 250 pips last Friday, which pulled EUR/USD down as well, since the Euro is also involved in the Brexit process. Today we heard some news from the UK that the British parliament wants to go forward with a Canada-style trade deal. The UK Brexit Secretary Dominic Raab tried to sound optimistic for a good deal, but we have heard him say the same thing many times before.

The GBP is trying to see the positive side of things and it has shaken off some of the negativity from last Friday, climbing around 100 pips higher so far against the USD. In the US session, the President of the European Central Bank, Mario Draghi, seems to be taking all the attention as he is testifying at the European Parliament about the economy and inflation. He is sounding quite optimistic about the domestic economy and inflation, and despite mentioning the turmoil in emerging markets, his speech leans more on the positive side. The Euro has rallied around 50-60 pips so far. The UN meeting is also taking place today and Donald Trump is expected to make things interesting, but let’s see if his comments will move the financial markets later in the evening.

The European Session

May’s Cabinet Supports Canada Style Brexit Deal – There was a report on The Guardian today that Theresa May’s cabinet supports a trade deal like the one that Canada has with the EU. It is likely to exclude services and leave Northern Ireland within the EU. It will be a tough one to swallow for May.

Silent Majority in UK Wants to Push Ahead with Brexit, Says Raab – Dominic Raab said early that ending up with no deal is not an easy walk in the park but he is confident about a Brexit deal. He added that the silent majority in UK wants to push ahead with Brexit. I’m not sure about both points; it looks increasingly likely that Britain might end up with no deal and the silent majority might have changed its mind in the UK.

German Ifo Business Climate – The business climate index in Germany jumped two full points higher last month and it was revised even higher today. Today, this index was expected to cool off at 103.2 points, but it beat expectations coming at 103.7 points. It seems that the business climate has improved since the US auto tariffs have been put off for the time being.

Big Statement From UK PM May – More rumours about Brexit this morning saying that Theresa May was about to give a big statement on Brexit. This was the third sign that the Chequers Plan was out the window. Her office quickly denied the big statement rumour, but the market got the idea.

Oil Prices Will Surge on Iran Sanctions Says, Well Iran – Iranian energy officials said today that other OPEC producers can’t make up for Iran Oil after sanctions, and that they will have to tap on their reserves. He also added that prices will surge in the long term. They are already increasing.

The US Session

No EU Summit on Brexit in November for Macron – French Prime Minister Emanuel Macron commented on the issue as the US session started that Brexit talks should not drag on to November. We heard rumors in the morning that Macron would boycott the November meeting and in fact, it doesn’t make much sense. If there is no agreement until then, it is almost certain there won’t be any changes in November.

Progress has been made on Budget Deficit for Conte – The Italian Prime Minister Conte said after the government meeting today that progress has been made on this important issue. This goes in line with earlier comments from Salvini’s party Lega Nord economic adviser who said that a 2.55 deficit would be credible and leaving the Euro would be out of the question. Let’s hope they reach an accord.

Bexit Negotiation to Get Tougher Towards the End for May – Well, NSS. We all know that these sorts of negotiations get pretty nasty towards the deadline, but we must cope with it, especially when trading the GBP. It has become pretty tough to trade all the headlines and it is expected to get even crazier in the next couple of months.

Canadian Wholesale Sales MoM – Wholesale sales jumped by 1.5% after the surprise decline by 0.95 that we saw last month. This month’s jump more than makes up for last month’s decline, so we are back on the uptrend.

Belgian Business Climate – The business climate index rose to 1.2 points this month against -0.5 expected and up from last month’s 0.3% decline. Just like in Germany, the business climate improved strongly this month

ECB President Draghi Speaks – The ECB president testified in front of the European Parliament a while ago, which we covered in the economic calendar and he sounded pretty hawkish. Inflation is increasing and the labour market is tightening. The Euro jumped 50 pips higher on these comments.

UN Meeting – The UN meeting which will last all week starts today. I don’t know if US President Donald Trump will speak today, but if he does, it is likely that markets might go crazy for some time, so we must keep an eye on it.

Trades in Sight

Bearish GBP/USD

The trend turned bearish last Friday
The retrace up is complete
The previous candlestick is pointing to a bearish reversal
The 100 SMA is providing resistance

The 100 SMA is providing solid resistance

We just opened another sell signal in GBP/USD. This pair reversed to bearish last Friday after the Chequers plan failed, but it has retraced higher today. Although, the retrace seems complete now as stochastic is oversold on the H1 chart. The 100 SMA (green) is also providing solid resistance on top, helped by the 50 SMA (yellow) as well. The previous candlestick closed as an upside-down hammer which is another reversing signal.

In Conclusion

OK, the GBP/USD signal just hit take profit now as this pair started to reverse. We have had some nice price action today, but the major event might still be coming as the UN meeting gets underway. If Donald Trump speaks today, then financial markets will take notice, otherwise, we will wait for his speech as the week gets underway.

Forex Signals US Session Brief, September 21 – Brexit Back to Ground Zero?

Posted on September 21, 2018September 21, 2018 by Skerdian Meta

In recent weeks and months, we have heard many positive comments about Brexit, promising an orderly exit from the EU. These comments have mainly come from the British side but also from the EU side, so they increasingly looked credible as time passed by and the Brexit deadline approached. The Irish border remained a big issue nonetheless, but we thought that both sides were pretty close to reaching a deal and the Chequers plan proposed by the British PM Theresa May was the closest and most credible plan for a deal. Today, we hear that Theresa May will have to rewrite her Chequers Plan.

We haven’t heard the EU reject it, although the failure to reach an agreement this week in the informal EU-UK meeting in Salzburg gave us a sign that the plan might fall apart. If they weren’t able to come to a conclusion informally, then the chances were slim that they would reach a formal deal. Today, May’s office denied that she was about to give a big statement, but the statement came from the Brexit Secretary Dominic Raab. He is blaming the EU for failing to reach a deal in Salzburg yesterday so everything has gone to the rubbish bin then, all these months of negotiations and positive comments from both sides. Well, back at the start, right?

The European Session

Chequers Plan Dead? – There were rumours this morning from a senior UK minister apparently who said that PM May will have to write a new Chequers deal. This was the first major news today pointing to a fallout between EU and the UK.

Scotland’s Sturgeon Urges May to Drop Her Act – The Scottish MP Sturgeon commented on the situation earlier saying that PM May has to stop pretences of a Chequers deal. Guess Sturgeon knew that the deal was off.

German Foreign Minister on Turkey – The German Foreign Minister said that Germany has a great interest that Turkey remains stable. He added that Turkey has played a positive role in Syria. Those comments won’t change the situation in Turkey though.

Italian Government Meeting on the Budget Went Well for Salvini – Italian interior minister Salvini said that the meeting was useful and went pretty well. We still don’t know how big the debt will be for Italy’s 2019 budget.

FED to Hike 2 More Times This Year? – the rating agency Fitch sees two more interest rate hikes this year from the FED and three more next year. If that’s the case, then the FED should hike in October and in December because they’re expected to keep interest rates unchanged next week.

May Has Promised New Irish Border Proposal to Irish Counterpart – Apparently, Theresa May promised the Irish PM Varadkar that the UK will issue another proposal on the border issue to the EU and Ireland. No details from this, so we will have to see.

The US Session

Brexit Secretary Blames the EU for the Failure – As always, the UK keeps blaming the EU for all its fallouts. At least, Dominic Raab accepted that the Chequers Plan has failed. He said that May was treated badly in Salzburg, quite the opposite of what we heard from European officials yesterday. He added that the EU is making noises that Northern Ireland is the price the UK has to pay for Brexit, but that is not going to happen. The EU is stonewalling UK and has tried to ambush Theresa May. It’s all coming out now, isn’t it? Although he did say that the light will shine again on EU-UK Brexit talks. So, here we are, back again at the beginning.

Theresa May to Hold A Speech – Now we are hearing rumours again that Theresa May will deliver a big speech and according to BBC sources, she will stand her ground and won’t change track on Brexit. Donald Tusk is surely making fun of Theresa May’s plan to have the cake and eat it, cherry picking for the deal.

Canadian CPI Inflation – The CPI (consumer price index) report from Canada was released a while ago and the number for August core CPI came at -0.1%. Although, the yearly numbers for core median, trimmed, and common CPI all ticked higher to 2.0%, 2.1%, and 2.2% respectively from slightly lower in the previous month.

Canadian Retail Sales – Retail sales increased by 0.3% last month while core retail sales jumped by 0.9% against 0.6% expected and up from 0.1% in the previous month, which was revised higher from -0.1%. The CAD jumped 50 pips higher on the data.

US Flash Manufacturing PMI – The US manufacturing PMI is expected at 55.1 points today, up from 54.7 points previously. The last number was revised higher from 54.5 points. Last month was expected at the same level, but it missed, so let’s see how today’s numbers will be.

Trades in Sight

Bullish USD/JPY

The trend is still bullish
The retrace down is almost complete
The previous candlesticks formed two pins
The 20 SMA is providing support

The two previous candlesticks are strong reversal indicators

We just opened another buy signal in USD/JPY after the successful trade we had in this pair yesterday. The chart setup is pretty much the same. The trend in this pair is bullish, so the bearish move today is just a retrace of the bigger uptrend. Stochastic is almost oversold on the H1 chart, so the retrace is almost complete. Besides that, the 20 SMA (grey) is providing support at the bottom. The last two H1 candlesticks closed as dojis which are also reversing signals.

In Conclusion

The Chequers Plan of UK PM May has been rejected by the EU and the Brits are accepting it publicly now. The GBP has taken a massive bearish turn and it is continuing to slip lower, so be careful. Theresa May is speaking right now so let’s see what she has to say and what path the UK will take from here.

Forex Signals US Session Brief, September 20 – Another Positive Surprise for the GBP

Posted on September 20, 2018September 20, 2018 by Skerdian Meta

The European session started with the Swiss National Bank meeting. They kept the interest rates unchanged at -0.75% as expected. The monetary policy assessment paper was pretty dovish, also as expected. As a result, the CHF lost some ground, but not against the USD, since the USD is the weakest currency today. The CHF experienced a period of sell-off yesterday ahead of the SNB meeting, since forex traders were aware that the SNB would be dovish today, so the damage had already been done.

We also saw another positive economic report from the UK, again. Yesterday, the CPI (consumer price index) jumped to 2.7% from 2.5% previously, which was a bit of a surprise considering that inflation has been cooling off since the beginning of the year. The GBP jumped on that report but comments on Brexit sent it back down. Today, the retail sales report offered another positive surprise for GBP buyers as it came much higher than expected and last month’s numbers were revised higher as well. The GBP has entered a bullish period now and it doesn’t seem to be turning down anytime soon.

The European Session

China Hopes the US has the Goodwill to Resolve Trade Dispute – Really? The US has started it. The commerce ministry added that China won’t use Yuan depreciation as a tool to respond to US tariffs. Again, really? They have already done so this year.

Iran Will Veto OPEC Deal That Harms Its Interests – Iran’s output is expected to fall due to US sanctions and OPEC+ countries are keen to take Iran’s share. Iran is trying to keep its place saying that OPEC+ can’t decide on quotas in Algiers meeting this weekend. They added that Oil is at a suitable place at $80/barrel.

Dovish SNB – The Swiss National Bank was expected to be dovish today given the strength of the recent months in the CHF. They kept interest rates unchanged at -0.75% and sounded pretty bearish indeed. They said that the Franc is highly valued and added that they will keep intervening in the FX market. Chairman Jordan added later on that the rise in the Franc requires expansionary monetary policy.

Bitcoin Is A Bubble for Villeroy – Those were the words of ECB member Villeroy and he added that Bitcoin raises money laundering issues. Bitcoin fell to $6,090 quickly, but it was just as quick to recover. The $6,000 level has become the line in the sand for Bitcoin, hasn’t it?

UK Retail Sales for August – Retail sales were expected at -0.2% but they grew by 0.3% in August. July’s numbers were revised higher as well, so it was a very decent report and the upside in GBP/USD doesn’t seem to stop now.

Ireland Wants the UK to Give Way on Irish Border Issue – The Irish foreign minister said today that the UK hasn’t given any written proposals on the issue and that Britain needs to get into the nuts and bolts on how the backstop can work. So, no deal so far then.

No Backstop Deal For October – The UK Prime Minister said that there is no backstop proposal for the EU summit in October, after having rejected EU’s proposal. It seems that another summit will be held in November on Brexit.

The US Session

US President Trump Doesn’t Want OPEC Increasing Oil Prices – OPEC is a monopoly and Donald Trump has pointed that out. He tweeted that the Middle East countries will fall apart without the help they get from the US, but they are responding by hiking Oil prices. I continue to agree more with Donald Trump as time goes by.

Special EU Brexit Summit in November – According to the Austrian news agency, the EU will hold a special summit on 18-19 November. It seems like the hopes to reach a Brexit deal by the October meeting have fainted. But, let’s see what they will come up until the October meeting before jumping ahead.

Philly FED Business Outlook – This indicator jumped to 22.9 points after falling to 11.9 points in August. New orders and employment also jumped higher but prices pair declined. Looks decent, but it is still below July’s levels.

US Unemployment Claims – US unemployment claims came at 201k against 210k expected. It seems that the trend now has shifted lower to the 200k region from 210k previously.

Eurozone Consumer Confidence – The consumer confidence is expected to remain unchanged at -2 points. It used to be flat at 0 points until a few months ago, but it has declined in the last few months to -2 points.

US Existing Home Sales – The existing home sales are expected to increase to 5.36 million from 5.34 million previously. Still, they are way below the 5.50-60 million level that we were seeing in the first half of this year.

Trades in Sight

Bullish USD/JPY

The trend is still bullish
The retrace down is almost complete
The previous candlestick formed a hammer
The 20 SMA is providing support

The previous candlestick is a strong reversal indicator

We just opened a buy signal in USD/JPY. The trend in this pair is bullish, so the bearish move today is just a retrace of the bigger uptrend. Stochastic is almost oversold, so the retrace is almost complete. Besides that, the 20 SMA (grey) is providing support at the bottom. The area around 112.00-10 used to be resistance, so now it has turned into support. The previous H4 candlestick formed a hammer which is also a reversing signal.

In Conclusion

Right now, the Greenback is on a steep bearish trend. So far, this still is part of the bigger downtrend, so it is still a retrace. But, if the USD continues to fall, then we have to reconsider the major USD uptrend and probably start looking to sell the Buck. Although, let’s wait until the day closes today to see where it will end up.

Forex Signals US Session Brief, September 19 – GBP Jumps on Inflation, then Trembles on Brexit

Posted on September 19, 2018September 19, 2018 by Skerdian Meta

The main forex events today were the UK inflation report and the meeting in Salzburg between EU leaders and the British Prime Minister Theresa May. The Bank of Japan meeting and the statement that followed didn’t offer much to the market, pretty much the usual stuff, which left JPY trades on the sidelines. The ECB president Mario Draghi has a speech scheduled for later today and I think it might have a big impact on the Euro because this meeting is about the future of the monetary policy.

Although, we already had plenty of action today during the European session, especially in GBP pairs. The consumer price index (CPI) inflation beat expectations fair and square as the annualized number came at 2.7% against 2.4% expected. The core number also jumped higher and moved above 2% once again. The GBP jumped 60 pips higher on that report, but Brexit news keep running things for GBP traders.

Shortly after that, we heard news from the EU-UK meeting in Austria that the British PM May refused the improved offer from EU’s Brexit negotiator Barnier regarding the Irish border. The GBP made a bearish turnaround and lost around 100 pips on that news. EUR/USD has reversed down as well, so here we are, unchanged on the day. Although, risk currencies such as commodity Dollars are still on the rise.

The European Session

Kuroda Still Wants Inflation at 2% in Japan – The Bank of Japan governor Kuroda commented early in the morning that inflation is taking longer than expected to pick up. Well, it has taken decades and it is not going anywhere. He added that the BOJ will continue with the current monetary policy until that happens, so another decade probably?

Davis Says UK Must Wait Until the Last Minute For A Brexit Deal – Ex Brexit Secretary David Davis said that the EU is softening its stance regarding the Irish border and that is true. He also added not to take anything too seriously until the last minute and he is right about that too.

Eurozone Current Account Balance – The current account balance for the EU came at €31.9 billion, up from €28.5 billion. We got a signal for this from the Italian trade balance earlier in the week though.

UK CPI Inflation – The UK CPI (consumer price index) report was pretty great today. The main yearly number came at 2.7%, up from 2.5% previously, while core inflation increased to 2.1% from 1.9% last month. The monthly number also came higher at 0.75% from 0% last month, so it was a really positive report and the GBP jumped.

Eurrozone Construction Output – The construction output of the Eurozone for August was expected to grow by 0.2% but it grew by 0.3%. It is not a major move, but the revisions were much better. The previous month was revised from 0.2% to 0.7% and the annualized number was revised to 3.0% from 2.6%.

The Goal of the Italian Budget Is Not to Reassure Markets for Di Maio – The Italian Deputy Minister Di Maio said those words exactly and added that the goal is to improve conditions for Italians and they will find room for pensions reform and citizens income. Hmmm, the Finance Minister Tria was confident about a 1.6% deficit for next year’s budget, but no one believes it, close to 3% is more likely.

No Crisis in Turkey for Erdogan – We could believe that if he didn’t add that all rentals will be in the domestic currency.

Iran Doesn’t Want Other Oil Producer to Take Its Spot – Iran’s OPEC Envoy said that the US sanctions on Iran could leave a gap of 1.3 million barrels which other OPEC countries must not fill and that would increase the prices to above $80. Oil remains unchanged on the day though.

The US Session

US MBA Mortgage Applications – Mortgage applications increased by 1.6% after having declined by 1.85% last month. The purchase index, the market index and refinancing index also came higher than last month.

Theresa May Rejects Barnier’s Irish Border Offer – The British PM May is said to have rejected an improved offer on the Irish border from the EU. This is an informal meeting, so if they can’t agree in principle, then there’s little hope that they will agree when the official meeting comes and that leaves us with no Brexit deal.

US Ready to Move With NAFTA Without Canada – These were the comments from the White House economic adviser Hasset. He added that the end of September is the last deadline for Canada, but it seems as though Canada might not join after all.

US Current Account Deficit – The US current account deficit decreased to $101.5 billion from $103.4 billion. Not much, but it’s a step on the right direction.

US Housing Starts – US housing starts increased to 1,282k in August, against from 1,238k expected and up from 1,168k previously. That means a 9.2% increase month-on-month.

ECB President Draghi Speaks – The ECB president Mario Draghi is holding a speech in Germany today. Unlike yesterday when he didn’t talk about the monetary policy, today he will have to since the summit is exactly about that. Let’s see where he will take the Euro today.

Trades in Sight

Bullish EUR/USD

The trend is bullish
The retrace down is almost complete
The previous candlestick formed a hammer
The 100 SMA is providing support

The previous candlestick is a strong reversal indicator

We went long on EUR/USD a while ago as this pair was retracing down after the bullish move in the morning. We decided to do so because the price was finding support at the 100 SMA (green) and the previous candlestick closed as a hammer which is a reversing signal. Stochastic is almost oversold, so the retrace down should be over soon, unless Draghi slaps the Euro down, which we hope doesn’t happen.

In Conclusion

So, we are back were we started regarding Brexit. The GBP jumped on the inflation numbers but Theresa May rejected the offer from the EU regarding the Irish border so no deal so far. The ECB President Mario Draghi is speaking right now so let’s get this brief posted and concentrate on his speech.

Forex Signals US Session Brief, September 18 – Markets Stay Calm As US Hits China With $200 Billion of Tariffs

Posted on September 18, 2018September 18, 2018 by Skerdian Meta

The US administration has officially imposed tariffs on another batch of Chinese goods worth $200 billion this time, in addition to the $50 billion already in place. The trade war rhetoric calmed down in the last couple of months as China and the US agreed to negotiate on trade. But late last week, we heard rumours that the US might go ahead with more tariffs on China and it wasn’t a coincidence.

Last night, Donald Trump’s administration introduced the new round of tariffs which will start at 10% and go up to 25% by the end of the year. The statement that came with the tariffs said that the US administration doesn’t want to constrain China’s growth and development, it only wants to change China’s attitude. There was a meeting planned between the US and China this weekend which I don’t think is going to happen.

The Chinese have replied by saying that they will retaliate, but it won’t all be in a similar fashion because China doesn’t import more than $150 billion from the US, so it will have to come either by devaluing the Yuan or by trying to prevent/make it difficult for US companies to do business in China, which already has a massive market.

The European Session

UK Already Made Major Compromises for Raab – UK Brexit secretary said that the UK has already made major compromises and there is a good chance of a Brexit deal, but the EU must see it that way as well. He added that if there is no deal, there could be short term tremor. He was very confident a few days ago, but now we see once again that nothing has been decided. There’s no solution on the Irish border yet, so it seems that Raab has just been trying to be positive about all this.

US Imposes Tariffs on $200 Billion of Chinese Goods – Donald Trump went ahead with more tariffs on China. This batch is worth $200 billion worth of Chinese exports. The Chinese have been trying to negotiate but it seems that negotiations will fall apart now. The market has taken them quite well, apart from a small spike in safe havens early in the morning.

China Replies to New Tariffs – Chinese officials commented on the US tariffs today saying that they will levy retaliatory measures simultaneously but didn’t give any details. It is difficult to keep the tit-for-tat retaliation when you have a massive surplus on your side. They said that unilateral trade actions cannot be accepted and the US has not been sincere.

EU Ministers Hope for a Brexit Deal by November – German and Austrian ministers said today that no one wants to punish the UK, but the EU is clear on its position and it’s up to Britain to find a way to deal with the EU. They also touched the Irish border issue saying that more should be done to solve it, so there you go Raab. They added that they won’t issue a statement on Brexit after tomorrow’s meeting in Salzburg.

Draghi’s Speech – The ECB president Mario Draghi held a speech in Paris today but he didn’t touch the monetary policy, so no action in the Euro. He is speaking in Germany tomorrow, so maybe he will give us some clues then.

Oil Jumps on Comments From Saudis – Crude Oil is 150 pips up today after Saudi Arabia said that they like London Brent Crude at $80. Brent is at around $78 now. Not much detail, but Oil buyers jumped on the news and pushed Oil prices higher.

The EU Doesn’t Agree With US Tariffs – EU Trade Commissioner said that this is an unfortunate escalation and that trade wars are not good. Let’s see how it will go when the auto tariffs probe is completed in several months.

The US Session

Trump Tweets on China – Donald Trump tweeted earlier today saying that China is trying to affect US midterm elections by targeting US farmers and industrial workers. He said that they are patriots and loyal to him, but if China tries to retaliate on them, then he will retaliate back. Let’s see the details of Chinese response first.

No More Stimulus from the ECB for Vasiliauskas – The Lithuanian member of the ECB said that the slowdown in the Eurozone economy was expected this summer. He added that there won’t be any more stimulus, as if we didn’t know. When is the rate hike coming, Vasiliauskas?

China Responds – China said to impose tariffs on $60 billion of US goods as of September 24. Tariffs will be on more than 5,000 US products and will vary between 5% and 10%. At last we have some details, but I’m sure this is not all, they will surely try to weaken the Yuan. On the other hand, the US consumers have increased demand for Chinese goods this year despite tariffs.

Canadian Manufacturing Sales MoM – Manufacturing sales increased by 0.89% in Canada in August, which is slightly below expectations at 1.0%. Last month’s number was revised higher to 1.3% from 1.1%, so this is a good report overall.

New Zealand GDT Price Index – The global dairy trade auction will be held today. We have seen a decline in four out of the last five months, so it remains to be seen how it will affect the NZD if we see another negative number today.

Trades in Sight

Bearish EUR/CHF

The trend is bearish
The retrace up is almost complete
The previous candlestick formed a doji

The last two candlestick point to a bearish reversal

We just went short on EUR/CHF as this pair has been trying to retrace higher in the last few hours, fuelled by the bullish move in the Euro. Although, now it seems as the retrace higher is almost complete as the stochastic indicator shows. The previous H1 candlestick closed as a doji, which is a bearish reversal signal after the bullish move. We also have the 100 SMA (green) standing above which is likely to provide resistance.

In Conclusion

The trade war is escalating as the US increased the Chinese products being targeted by tariffs to $250 billion so far. We have to see what measures China will take besides placing tariffs on an additional $60 billion of US goods. This is not good for global trade, but perhaps China will back down and accept some of its own faults.

Forex Signals US Session Brief, September 17 – Tariffs Tweet Gets Markets Moving Again

Posted on September 17, 2018September 17, 2018 by Skerdian Meta

Today was pretty quiet during the Asian session and the beginning of the European session. As a Monday morning, traders were careful to embark on any trades, especially considering the President of the European Central bank (ECB) Mario Draghi will hold two conferences in the next two days and the fact that during the weekend, we heard some news that Donald Trump still wants new tariffs on China.

Today, we got a tweet from the US President praising the tariffs and their positive effect on the US economy. This doesn’t exactly mean new tariffs tomorrow, but it is an indication of an escalating trade war. China and the US are to meet on September 20, but China might withdraw if the US administration introduces new tariffs before then. That tweet got the financial markets moving in the last few hours. In Europe, there were Brexit comments coming from all sides over and over again, but nothing is clear. Some officials sound quite optimistic for a good Brexit deal, others not so much.

The European Session

It Is Chequers Plan for May or No Deal At All – The British Prime Minister Theresa May made this announcement early in the European session on the BBC. She will meet with EU leaders on Wednesday in an informal meeting which can go either way. But, she is standing between the EU and her own party, both of which stand apart in this matter.

Italian Finance Minister Confident About Budget Rules – Giovanni Tria commented today that the 2019 budget deficit won’t go above 1.6%. But, the two parties that are heading the Italian politics right now want more spending and the citizens’ income plan alone stands at 1.55% of the budget deficit. So, until they finalize the budget, we won’t know for sure. Nonetheless, Italian stocks jumped on those comments.

China Says That It Will Take Necessary Response if US Puts New Tariffs – China and the US are to have a meeting on trade on September 20. But we heard rumours during the weekend that the US might impose additional tariffs on another $200 billion worth of Chinese goods. China wants to go into this meeting as equals, but not if there are new tariffs.

Italian Trade Balance – The trade balance surplus was expected at 4.82 billion Euros but it came at 5.68 billion. Last month was revised higher as well, so despite political troubles in Italy, the economy is not doing that bad.

Eurozone Final CPI – The inflation report was released today and it came as expected at 2.0%. This is a slight cool off from the 2.1% YoY inflation that we saw last month, but it remains within the ECB range, hence no effect on the Euro.

BUBA Confident on German Economy – The Bundesbank released the report today and they sounded pretty confident. They said that the softening of growth during summer was due to car emissions. Despite that, growth is fundamentally intact for them and they expect it to pick up in the coming months.

The US Session

Trump Hints At More Tariffs? – Donald Trump tweeted earlier today about tariffs. He didn’t directly say that he will increase tariffs on China but he did praise tariffs saying that they brought back billion of Dollars and many jobs to the US, while costs have been minimal. This comes ahead of US-China meeting and after rumors over the weekend that Trump will add another $200 billion worth of Chinese products on his tariffs book.

No More Stimulus from the ECB for Vasiliauskas – The Lithuanian member of the ECB said that the slowdown in the Eurozone economy was expected this summer. He added that there won’t be any more stimulus as if we didn’t know. When is the rate hike coming, Vasiliauskas?

Canadian Home Sales – Home sales increased by 0.9% in Canada in August. House prices rose by 2.5% compared to August last year. Not a major data release but that goes in line with the trend.

US Empire State Manufacturing Index – The US manufacturing index was expected at 23.2 points but came at 19 points, down from 25 points last month. This indicator increased considerably in Spring and it remained around the 25 point level during Summer but it took a dive this month, which is not a good sign, but let’s wait for the next month to get a clear idea.

Trades in Sight

Bullish USD/JPY

The trend is up
The retrace down will be complete soon
The 50 SMA is still providing support despite being broken

The 50 SMA is still holding its ground

We didn’t go long on USD/JPY this morning when it retraced down to the 50 SMA. The stochastic indicator was oversold and the 50 SMA (yellow) was providing support. Now the price is back here after pulling back lower in the last few hours. The stochastic indicator has been pierced but the price is hanging around it still, so this moving average hasn’t been broken yet. The Dollar is under a bit of pressure now, but the market sentiment remains positive, so we should see a bullish reversal soon.

In Conclusion

The markets started moving after Donald Trump tweeted about how great tariffs are working for the US economy. As we said, the deficit with China has been growing to record highs this year, so it is the US consumers which are paying more. Anyhow, we will see in the next week or so if there will be new tariffs on China.