Category: US/Midday Session Brief

Forex Signals US Session Brief, July 13 – The USD Continues Its Climb in A No-Drama Day

Posted on by Skerdian Meta

In recent weeks we have seen so many market moving events. The financial markets have reacted, although it seems as they are getting used to such events now. Yesterday, we heard Donald Trump threaten to pull the US out of NATO as well as place tariffs on European cars if he doesn’t like the outcome of the trade talks with the EU which will be held next weekend. The trade war with China has started and it will likely get much worse before it gets any better as China retaliates.

Today, our ears are relaxing, thank God. The markets are quiet, albeit leaning towards the USD. Risk currencies such as the GBP and the commodity Dollars have been declining and safe-havens are getting battered too. The JPY and the CHF are lower even against risk currencies, while Gold has lost around $10 from top to bottom. So, it is all about the US Dollar today and the Dollar index USDX chart tells the picture pretty clearly as it heads towards the highs.

The European Session

German Wholesale Price Index – The German wholesale price index grew by 0.5% month-on-month against 0.8% expected. The yearly number though ticked higher at 3.4% from 2.9% previously. This shows that domestic demand in Germany remains robust.

BOJ Might Through the Towel on Inflation – The Bank of Japan has done almost everything to help pick up inflation, but it continues to remain very soft, showing no signs of life. I heard some rumours today that the BOJ might give up and call it a losing battle. That might be positive for the Yen as traders will think that the BOJ will stop injecting cash in the markets.

Spain Final CPI MoM – The CPI inflation in Spain came at 0.3% MoM, as expected. All the other components came exactly as expected, apart from the yearly core CPI (consumer price index) which ticked lower from 1.1% to 1.0%.

Swiss PPI – The producer price inflation in Switzerland came at 0.2% MoM as expected. The yearly number though came higher at 3.5% from 3.2% previously. Although, this is not as important as the CPI inflation because it takes time to translate into higher consumer prices.

German Economy Picked Up In Q2 – According to the German Economy Ministry, indicators point to a pickup in Q2 compared to Q1, although international trade policies remain a risk. All the economies of Europe picked up in Q2, even Britain.

Russia Wants to Extend OPEC – Russian officials said that the OPEC+ deal is right and successful. They added that they want the OPEC+ institutionalised, which means that they want to get into OPEC now.

Trump Arrives in UK – Donald Trump moved to the UK today from Brussels. He said that the relationship with the UK is very strong, but at the same time he threatened to reject a trade deal with Britain. No one will ever understand Trump, but the Brits should understand something, that the UK is not the big empire of 200 years ago and it surely can be bullied around by major forces such as the US, Russia’s spies and mass migration. So, the EU now doesn’t seem like the villain the Brexiteers said it was, does it?

The US Session

BOE Says Soft Q1 Was Because of Weather – The Bank of England member Cunnlife said that the bad winter weather is to blame for the soft economy in Q1. But he didn’t sound too confident about the Q2 or Q3 either, which means that rate hikes are still far.

US Import and Export Prices – The import prices declined by 0.4% in June, while they were expected to grow by 0.1%. Export prices increased by 0.3%, against 0.2% expected. You’d think that the tariffs are already having an impact, but it is the decline in Oil prices which is to blame for the overall decline in import prices.

US Prelim UoM Consumer Confidence – The consumer confidence report from the University of Michigan is expected at 98.1 points. Last month’s was revised lower to 98.2 points from 99.3 points. Although not too steep, the trend looks dovish regarding consumer confidence in the US.

Trump-May Press Conference – US President Trump ignored the article about rejecting a trade deal with Britain as fake news. The main line was about immigration of course. Trump said that immigration is bad for Europe as it changes the culture and demographics; look at the terror attacks. He has a point there and that was the main reason why Britain voted Brexit in my opinion, which doesn’t address the issue actually.

Trades in Sight

Bearish AUD/USD

  1. The trend is bearish
  2. The USD bulls remain in charge
  3. The 50 SMA is providing resistance

The 50 SMA has been pushing EUR/CHF higher

Yesterday we had a sell trade on NZD/USD. That pair was retracing higher when we opened that signal but I trusted the bearish trend and particularly the 50 SMA (yellow) which provided solid resistance there. Today, we have a similar situation in AUD/USD. This pair has been bearish for days and at the moment it is making a retrace higher. But, the 50 SMA is providing resistance again while the situation looks pretty bearish still. So, we decided to sell AUD/USD below the 50 SMA.

In Conclusion

The price action has been really slow today and I expect it to grow quieter as the week draws to a close. Although, we must keep an eye on Trump’s tweets because he might drop a bomb anytime since he is in the UK. The economic data is pretty light as well, so don’t expect much from the calendar.

Forex Signals US Session Brief, July 12 – Trump Pushes his Agenda but Markets Remain Calm

Posted on by Skerdian Meta

Today is the second day of NATO summit in Brussels. Donald Trump has gone into the summit with a clear agenda and he is pushing it forward. He is pushing the European allies to increase military spending to meet the 2% criteria. Yesterday, Trump said that he wanted the European countries to increase spending to 4% and we heard rumours this morning that Trump threatened to walk out of NATO, but we knew that was a bluff to force them to at least get to 2%.

By the way, the European leaders have agreed to get to 2% on military spending and I agree too, not that I’m a leader. It is about time that the EU started to get an army together, because if Germany goes in full steam building a massive army, that would raise many eyebrows. I don’t know if Trump knows history, but the deal after WW2 was that Germany, Japan and to some extent Italy, would not build an army, the victorious would protect them if anything.

Anyhow, Trump is said to be getting back at Europe regarding trade on July 25th. If he doesn’t like the dialogue, then he will surely threaten the EU with new tariffs, that’s what he said basically. But at least, there is some sort of dialogue between the US and the EU, unlike with China. Trump also said that China and Iran will come begging for a deal.

The European Session

German Final CPI MoM – The German consumer price index inflation came as expected at 0.1%. CPI inflation has been around 0.4%-0.5% in recent months, so this dovish turn doesn’t look too good, although it is just one month, we have to see next month’s figures as well.

French Final CPI MoM – The French CPI number was expected at 0.1%, but it came flat at 0.0%. Like in Germany, this month looks bad but the previous months have been promising, so maybe this is just a one off.

Eurozone Industrial Production MoM – The industrial production grew by 1.3% this month. That looks particularly good since in the last four months, we have seen three negative readings.

UK to Publish Brexit White Paper Today – Foreign Secretary Hunt said he expects a lively debate in the parliament today after the Brexit Whitepaper is published. He said that if the UK cannot cherry pick, the EU cannot either. The EU isn’t asking for anything from Britain, it is Britain that wants to have the cake and eat it too. We don’t even know if the EU will accept it either.

China Standing Firm – The Chinese Commerce Minister said earlier this morning that the US accusation of IP (intellectual property) theft is groundless. He said that the US brought the trade deficit with China on itself and that China will fight a trade war, even though it doesn’t like it.

2 More Rate Hikes for FED’s Mester – FED’s member Loretta Mester said this morning that the economic growth remains solid, unemployment is low and inflation is stable. That warrants two more interest rate hikes this year, although she is a hawk. Nonetheless, the Dollar began creeping higher on her comments.

Trump’s Comments on Europe – Donald Trump seems happy with the commitment of the European leaders to increase military spending to 2% of respective budgets. But, good times never last for him. He said that trade talks with the EU will begin next week and “if they don’t negotiate in good faith, action will be taken on cars”.

The US Session

ECB June monetary Policy Minutes – The ECB minutes were more or less the same as what we already know by now, but what stood out is the comment about the QE. “Given the uncertainty, it is prudent to leave the end of QE conditional to incoming data”. Everyone is expecting the QE to end at the end of this year, so this comment should be dovish for the Euro.

White Paper Means Brexit – The Whitepaper was finally released a few minutes ago. According to it, the UK will end free movement of people with EU member countries and the ECJ rule. It also plans to diverge from EU rules for services, which means lower level of access to EU markets post Brexit. UK-based banks shouldn’t like this too much.

US CPI MoM – The US CPI report which includes the core CPI figures will be released shortly. Both are expected to come at 0.2%. A tick higher will be welcomed by the markets and the USD bulls, while they need to miss expectations by 2 ticks to have a negative impact on the USD.

US Unemployment Claims – US unemployment claims have remained in the 220k region for many months but last month they increased to 231k. This month they are expected to come back to the previous trend.

Trades in Sight

Bearish EUR/USD

  1. The trend is bearish
  2. The bearish trend has picked up pace today
  3. The QE programme from the ECB might be extended

EUR/USD is already approaching the moving averages where I plan to sell

EUR/USD has turned bearish in the last few days and yesterday it made the decisive bearish move as the US bulls took control of the situation. This morning, EUR/USD completed another bearish move. One of the reasons for this bearish move was the comment at the ECB minutes which said that the QE (quantitative easing) programme will be dependent on the incoming economic data. Everyone is expecting the QE programme to end at the end of the year, so this came as a bit of a surprise. Hence, the situation has become a bit more bearish for this forex pair. Although, I would love to see a retrace to the 100 or 200 SMAs before going short on EUR/USD. That retrace is beginning by the way.

In Conclusion

One comment I missed from the Chinese officials is that the US trade war is really bad for international business and might bring another recession to the world. That’s what really scares me. If the trade war escalates, then that is really possible. Considering that the global economy is barely back on its feet after a decade of economic trouble which came from the financial troubles in the US in 2008, this is a great danger which would hurt everyone and probably bring the world economy on its knees once again.

Forex Signals US Session Brief, July 11 – Stocks Dive Amid Trade War Fears and a Possible NATO Breakup

Posted on by Skerdian Meta

The European trading session opened on an environment of negative sentiment. The market sentiment turned sour in the Asian session and USD/JPY had lost around 50 pips in the early hours of the morning. The negative sentiment spilled into the European session, with commodity Dollars leading the way down.

The stock market in particular took a hit today. Nikkei 225 and DAX 30 opened with a big gap lower and they haven’t been able to close it. In fact, European indices are still sliding at the moment.

The reason for the decline was the comment from the Chinese officials that China will take measures to retaliate against the US tariffs. The market has been waiting for China to announce the measures and the risk here is that this might escalate the trade war. After all, Trump has threatened China with another round of tariffs on $200 billion of Chinese goods.

Another risk is the NATO summit. Trump has been bashing the European members for not spending enough on defence and Donald Tusk has responded saying that the US doesn’t have many allies, so it should stay close to those who are left. I suppose there will be plenty of tensions in the NATO meeting which will be held today.

The European Session

ECB President Draghi Speaks – The president of the European Central Bank Mario Draghi held a speech this morning although he didn’t touch the monetary policy. Nonetheless, this appearance was enough to send the Euro around 40 pips lower.

US PPI – The US producer price index report was released in the European session. Both the headline and the core number were expected at 0.2% but came at 0.3%. That’s positive for the USD, particularly the core number.

Italian Government Not Planning Leaving the Euro – Italy’s Di Maio for the 20th time that Italy is not planning on leaving the Euro. But, the ECB must modify its statute to have more powers. That could be a positive thing for the Eurozone and for the Euro.

ECB Not Hiking Rates Anytime Soon – ECB’s Villeroy said that the first rate hike won’t be any sooner than next summer and even then, it will depend on inflation and economic data. No help there for the Euro.

China Will Take Measures to Retaliate the US Tariffs – The Chinese Foreign Minister said that China will protect its interests and that this is a war between unilateralism and multilateralism. They’re still words though and the market is waiting anxiously to see what measures China will take. They have already decreased the soybean purchases dramatically from the US.

The US Session

US Wholesale Sales MoM – The US Wholesale trade sales grew by 2.5% against 0.5% expected. Inventories came a bit higher than expected as well. This is good news for the USD as this report will help the GDP reading for Q2.

BOC Hikes Interest rates – Bank of Canada increased interest rates from 1.25% to 1.50%. That was expected but the CAD is climbing up nonetheless and as a result, USD/CAD is declining.

US Crude Oil Inventories – US crude Oil inventories will be released soon and they are expected to have declined by 4.1 million barrels. That would give the CAD another push higher since the CAD is closely correlated with Oil prices.

BOC Press Conference – The press conference from the Bank of Canada will follow shortly. BOC Governor has confused traders lately so we don’t know whether he will sound dovish or hawkish today. We will have to watch him live then, don’t we?

BOE Governor Carney Speaks – The Bank of England Governor Mark Carney will speak later in the afternoon. The GBP is prone to the Brexit process right now but Carney is likely to move the markets. Will he signal a rate hike soon?

Trades in Sight

Bullish EUR/CHF

  1. The trend is bullish
  2. The 20 SMA is pushing the trend up
  3. Stochastic is heading up

The 20 SMA has been pushing EUR/CHF higher

EUR/CHF has been on an uptrend for more than two weeks. First the 50 SMA (yellow) and now the 20 SMA (grey) has been pushing the price higher. The 20 SMA has come into play strongly now and the trend has picked up pace. Stochastic has oversold a while ago and it is turning higher now, which is another bullish sign. Although, I would wait for a retrace lower before going long here.

In Conclusion

The NATO meeting will be underway soon and I expect lots of tension. The tensions will be mostly about money obviously. It will likely increase the negative sentiment in financial markets while we still wait for China’s measures to fight its battles against the US tariffs, so it will be a lively session I hope.

Looking to Sell EUR/USD After the Bounce off the 100 SMA Fades

Posted on by Skerdian Meta

As a result, EUR/USD extended the decline in the European session. But, it reached a certain level where the sellers decided to call it a day and close their trades. That level was 1.1690, which doesn’t really hold much importance by itself.

But, the 100 SMA (red) is standing right there and this moving average has provided support before. It appears that the sellers saw the chart history and decided to close their trades, for now. The previous hourly candlestick closed as a doji which is a reversing signal. So, that indicator also played a role in the latest turnaround.

Now, EUR/USD is around 30 pips higher, but I don’t see this as a bullish move. Looking at the daily chart below, you can see that yesterday the price formed an upside down hammer. That is a reversing signal after an uptrend.

The upside down hammer points down in the daily EUR/USD chart

Today’s candlestick looks pretty bearish as well, which reinforces the bearish turnaround in this pair. Besides, the stochastic indicator is overbought and turning down now, so the bullish move is complete and EUR/USD is now entering a bearish phase.

With this chart setup in mind, I will wait for the latest bounce to be over on the H1 chart and then will look to open a sell trade. Perhaps, the 50 SMA would be a great place to sell, but only if the buyers manage to push that far.

Forex Signals US Session Brief, July 10 – All Aboard the USD Train

Posted on by Skerdian Meta

The USD has been on the backfoot for the last couple of weeks. EUR/USD led the way higher after this pair failed to break the 1.15 level. Since then, the USD has lost considerable ground. But last afternoon, the USD made a turnaround which didn’t seem like a big deal. Today, the turnaround seems a lot more serious as most of the major currencies have been declining against the US Dollar.

The Dollar index formed a hammer candlestick on the daily chart yesterday right above the 200 SMA, after trending down for several days. That was a bullish signal and it is working out fine today as the Buck keeps climbing. Indices are marching higher as well, although we can’t consider this as a risk-on sentiment in financial markets because risk currencies such as the commodity Dollars are declining. But so are the safe-haven assets such as the JPY and Gold. So, the conclusion we draw from the price action in all markets today is that the USD bulls are back in charge.

The European Session

French Industrial Production – Industrial production was expected to grow by 0.7% in France last month, but instead, it declined by 0.2%. This is the fifth decline in seven months, which makes the trend look pretty bad for industrial production in France.

Italian Industrial Production – The industrial production grew by 0.7% in Italy. That’s lower than the expected 0.9%, but it is growing nonetheless, which looks much better than the French figures.

UK GDP MoM – The UK GDP increased by 0.3% as expected. The 3M/3M GDP rose by 0.2%, also as expected. It’s not much but it is keeping steady at least which is positive as Brexit approaches.

UK Manufacturing and Industrial Production – Manufacturing production grew by 0.4% but that’s far from a 1% increase that was expected. The industrial production, on the other hand, fell by 0.4% which wipes out the increase in manufacturing.

Eurozone ZEW Economic Sentiment – The economic sentiment took a dive last month as Trump started imposing tariffs. This month, the sentiment deteriorated even further in the Eurozone, although not as much as in Germany. This is not good news for business in general and for the Euro of course.

The US Session

US JOLTS Jobs Openings – JOLTS jobs opening have been increasing steadily this year. They are expected to increase further this month by 6.88 million, up from 6.70 million last month. That would be a good sign for the FED and would be positive for the Dollar.

Canadian Housing Starts – The housing starts took a bearish turn in May after being on a bullish trend in the previous 4-5 months. In June, the pace of housing starts slowed again and it is expected to slow further this month. That would be another negative economic data from Canada in recent weeks, which puts further pressure on the Canadian economy after Trump’s tariffs on Canadian Steel.

Brexit White Paper to Be Published on Thursday – The UK Government will publish the Brexit whitepaper on Thursday. The first time they meet a Brexit deadline. The UK government is for a no-deal Brexit as well, because there is no guarantee that the EU will accept it, especially some dodgy proposals from the UK.

Iran Oil to Fall by 500k Barrels on Sanctions – The US will start implementing tariffs on Iran and a recent report showed that Iran’s Oil exports will likely fall by 500k barrels. That’s lower than the expectations which were above 1 million barrels. Although, it seems as the EU, China and India won’t follow the US with sanctions, so we will see how it goes.

Trades in Sight

Bullish S&P500

  1. The trend is bullish
  2. The 20 SMA is pushing the trend up
  3. The market sentiment is positive
  4. Stochastic is heading up

The 20 SMA looks like a strong support indicator

I was thinking about going long on S&P500 a while ago when the price was leaning against the 20 SMA (grey). The price bounced off that moving average, but it is now back there. This moving average has provided solid support during the uptrend this week and it is doing the same now. Although, the price might pull back a bit lower, so I am also looking at the 50 SMA (yellow) as a possible entry level.

In Conclusion

The market remains heavy on the USD side today but there might be a retrace coming up in major pairs. USD/JPY is starting to turn lower at the moment, so I think it will be better to wait until this pullback is complete before going long on the USD later today.

Forex Signals US Session Brief, July 6 – Positive Sentiment in the Markets Before Employment Reports

Posted on by Skerdian Meta

Despite the beginning of a trade war, the sentiment has been mainly positive in today’s financial markets. The US tariffs on Chinese products, worth $34 billion, came into effect this morning. The Chinese Foreign Minister said in a conference today that China will impose similar tariffs on US goods. I have the feeling that they will target agricultural products, weighing heavily on Trump’s voting base. Soybeans are one of the biggest agricultural products that the US exports. China has already decreased soybean imports from the US and the price of soybeans has already fallen considerably.

Equities opened higher this morning but they have been sliding slowly during the European session. Risk currencies, such as the Euro, the GBP, and the commodity Dollars have been finding some decent bids today, despite the trade war. Safe haven assets, on the other hand, have been declining, which seems like the end of the war, not the beginning.

 

The European Session

German Industrial Production MoM – The industrial production was expected to grow by 0.3% in May, but instead it grew by 2.6%. That’s a massive jump and a nice turnaround since we have seen mainly negative numbers this year.

Halifax HPI MoM – The Halifax house price index grew by 0.3% this month as expected. It is a small increase but last month was pretty good and it was revised higher too.

Italian Retail Sales – Retail sales grew by 0.8%. This is the biggest increase this year and the second positive number. All other months we have seen a decline in sales. So, another positive turnaround in Europe as we leave winter behind.

China Retaliates – After comments from Chinese officials, who repeated today that China doesn’t want a trade war, the Chinese are left with no choice but to impose tariffs as well. The Chinese tariffs came into effect at 12:01 pm today and agricultural products are the main targets, I assume.

EU Against the US-China Tariffs – EU’s Trade Commissioner Malmstrom said that trade wars are bad and there is no real winner. Soon, the US and the EU will supposedly start imposing tariffs on cars.

 

The US Session

Canadian Trade Balance – The trade deficit increased in Canada, from 1.9 billion to 2.8 billion. That’s even bigger than the expectations for the deficit, so it seems like Trump’s tariffs are already impacting Canada.

Canadian Employment Report – New jobs increased by 31.8k this month, but the unemployment rate increased from 0.2% to 6%. It looks contradictory, but these two reports are not directly linked. An increase in the unemployment rate is always a negative thing.

US Employment Report – Similarly, new jobs increased more than expected in the US. They were expected at 195k but grew by 213k and last month’s number was revised more than 20k higher as well. But, the unemployment rate increased too, from 3.8% to 4%. Tariffs and the trade war is starting to have an effect on all parties and we see how the effects look like.

Average Hourly Earnings – The average hourly earnings, or wages as we know them, are more important than the unemployment rate at this moment because inflation is dependent on them. They were expected to grow by 0.3% but missed expectations. The actual number came at 0.2%. This sent the USD lower and most majors just spiked higher.

CAD Ivey PMI – This is the index of purchase managers of Canadian firms. This indicator declined considerably last month but it is expected to be a bit better this time. Although, after the negative economic data from Canada, I’m afraid that this will be another bad number.

 

Trades in Sight

Bullish USD/JPY

  1. The main trend is bullish
  2. Moving averages are holding this pair afloat
  3. The dips are finding quick buyers

The 50 and 100 SMAs are keeping the buyers in control

We opened a buy forex trade on this pair a few days ago. USD/JPY dived lower earlier this week, but I see that as a retrace of the bigger bullish trend. Yesterday, the 100 simple MA (green) was providing strong resistance. Today it was broken, although we have dipped below it again.

The main trend still remains bullish and the other moving averages (yellow, red and purple) are keeping it afloat. The dips are finding buyers who are quick to jump in an push this pair higher. So, according to this price action, we have a bullish bias for USD/JPY

 

In Conclusion

The trade war has already started and we are seeing some negative signs from the global economies. The unemployment rate increased in the US and Canada. All those comments that trade wars are bad for everyone and that there is no real winner in a war are starting to make sense now. I expect things to get even worse if this nonsense escalates.

Forex Signals US Session Brief, July 5 – Central Bankers and Merkel Help Lift Market Sentiment

Posted on by Skerdian Meta

The US Independence Day is over but the markets seem to have a hangover from yesterday. The price action looks very similar to yesterday apart from the 50 pip pop this morning. Although, we saw a similar move yesterday in the evening so the market behavior looks very similar. The US traders might extend their Independence Day holiday and turn it into a long weekend, so there is the possibility that the markets turn really quiet in the afternoon, again just like yesterday. But, we have to see the price action when the US session starts.

One thing which differentiates from yesterday is the market sentiment. It feels like the sentiment has improved since the risk assets are climbing while the safe havens are sliding lower. Gold, the JPY and the CHF are all down, while commodity Dollars, the Euro and the GBP are higher. Central bankers from the ECB and the BOE also helped in this with some hawkish comments, so let’s see what they said.

 

The European Session

Swiss CPI MoM – Consumer inflation CPI which is the main inflation report was expected at 0.1% but it fell flat at 0%. This turnaround looks pretty bad after CPI has increased by 0.4% in the last three out of four months.

Eurozone Retail PMI – Te retail sector started expanding again in May after contracting in April as this indicator fell below 50 points. This month came at 51.8, so the worries are left behind for now.

Hawkish Carney – The Bank of England Governor Mark Carney held a speech earlier today and he sounded pretty hawkish. The odds for an interest rate hike in August increased after his speech as he touched the rate hike case again, although he said that they will be gradual and smooth. He said that the recent data gives confidence that the weak period in 1 was due to the weather. Still, there won’t be rate hikes in my opinion unless the economic data really improves.

China Tries to Avoid Trade War As Much As Possible Chinese officials repeated today that China doesn’t want a trade war. They said that yesterday too, but it is not China who is starting the war. It takes two to tango and the other party has already started to tango.

German Factory Orders MoM – The factory orders grew by 2.6% against 1.1% expected. This is good news for the next few months as new orders push companies to increase purchases.

Confident Nowotny – ECB’s Nowotny said today that he expects the Eurozone economy to remain solid and grow considerably in the coming quarters and years. These comments came after Praet said earlier that the risk of deflation has vanished in the UE and inflation is expected to remain strong. These words helped improve the market sentiment today.

 

The US Session

Optimistic Merkel – Merkel just said that she will back cuts in EU tariffs on cars, not only for the US cars. This is helping improve the sentiment as well and the shares of car makers are surging today. But, I don’t think it will persuade Trump to call the trade war off.

US ADP Non-Farm Employment Change – The ADP employment change will be released with unemployment claims at the same time. Last month, the ADP employment change came at 179k, falling below 200k for the first time this year. Unemployment claims also increased, so it will be interesting to see whether this turns into a trend this time. If it does, then it will be the first sign that Trump’s trade war is having the opposite effects.

US ISM Non-Manufacturing PMI – This indicator is expected at 58.3 points after falling to 58.6 points last time. ISM non-manufacturing has cooled off a bit because it used to be at around 59-60 a few months ago, but it still remains in a solid position.

US Crude Oil Inventories – It will be interesting to see the impact that Oil inventories will have on oil prices. Iranian officials said earlier today that trump’s tweets have increased Oil prices by $10 lately and they are correct to some degree. Also, OPEC decided to increase the Oil output.

FOMC Meeting Minutes – The FOMC minutes from FED’s last meeting are due this evening, but I doubt they will have much impact on the markets knowing that they are focused on Trump’s actions at the moment.

 

Trades in Sight

Bullish GBP/USD

 

  1. The trend has turned bullish this week
  2. The 20 SMA is supporting the uptrend
  3. Economic data has improved
  4. BOE’s Carney sounded hawkish

The 20 SMA is pushing the price higher

We have been bearish on this pair for quite some time. But, the trend of the last several days has turned bullish and fundamentals are helping its cause. The economic data from the UK has been positive this week and today Mark Carney sounded hawkish as he said that the weakness in Q1 was due to bad weather. So, the BOE will get going with rate hikes. The 20 SMA (grey) is also providing solid support to GBP/USD, pushing the price higher. For this reason, I will wait for a retrace down to the 20 SMA before going long on this pair.

 

In Conclusion

Risk currencies are still grinding higher today as the sentiment has improved. Central bankers and Merkel are helping the markets with their comments. The economic data from the US might reverse the sentiment again though, so we will be watching the numbers closely as they get released.

Forex Signals US Session Brief, July 3 – One of Few Good Days for the GBP As Economic Data Improves in UK

Posted on by Skerdian Meta

Financial markets have been relatively quiet in the European session and they are expected to get even quieter as we head into the US session. Remember that tomorrow is the 4th of July, which is a national holiday in the US, so many traders have already left their desks.

Although, we have had some nice price action in GBP pairs. The GBP has been on a strong bearish trend as the economic data has deteriorated this year. But yesterday, the manufacturing figures showed that this sector remains in decent shape and today the construction PMI report turned positive as well. Besides that, we heard some hawkish comments from Bank of England (BOE) members. As a result, the GBP has climbed around 90 pips from the lows.

The European Session

UK Construction PMI – The UK construction PMI report was expected at 52.6 points, similar to last month, but came at 53.1 points. This is a positive turnaround after the decline that we saw in April. Perhaps the winter weather had some effect on construction after all.

Eurozone PPI – The Eurozone producer price index came at 0.8% against 0.4% expected. This indicator has been at 0.1%-0.2% the entire year, so this is such a big number today. It remains to be seen whether it will translate into better consumer inflation (CPI) later in the year.

Eurozone Retail Sales – Retail sales have been pretty weak in Europe this year. They have been growing by 0.1% or haven’t grown at all. This month retail sales were flat again as the actual number came at 0.0%. So, the economic slowdown continues.

BOE’s Saunders Turns Hawkish – The BOE member Saunders said this morning that the softening economy in the UK has been largely affected by bad weather. He added that the BOE might have to raise interest rates faster than expected. Those comments sent the GBP higher but I don’t think there will be any rate hikes anytime soon.

Italy Minister of Economy Is Optimistic – The Italian Minister of Economy said that the Italian economy and public finances are in good shape but the GDP is tilted to the downside as the data for Q1 and Q2 show. We have seen some sectors of the Italian and the Eurozone economies weaken in recent months.

The US Session

Trump Says North Korea Is on the Right Path – Donald Trump tweeted that the talks with North Korea are going great and thanks to him the world is safer. Well, he has been doing a good job on the North Korea issue, too bad he is going the other way with Iran. Although, North Korea is not yet denuclearized so perhaps the round ball that is the NK supreme leader might be trying to play tricks.

PBOC Denies Currency Intervention – The Yuan has been weakening in recent weeks as Trump introduced tariffs. But, the People’s Bank of China denies any interventions. They said that it is due to market expectations as trade war grows. They might be right, or they might be covering their battle, which is weakening the Yuan to fight Trump’s tariffs back.

EU-UK Relation Details after Brexit to Be Set on Friday – A UK Government spokesperson said that the UK officials will set out a package for the future relationship with the EU. If they don’t reach a consensus, then it is goodbye to the White Paper that PM Theresa May promised for this month.

Saudi Arabia Is Ready to Increase Oil Output – Saudi officials said earlier today that they are ready to use the spare capacity to increase Oil production. This has helped Oil prices as they continue to climb higher today.

US Factory Orders MoM – US factory orders are expected to have grown by 0.1%. Although, this indicator is very volatile so I wouldn’t trust the forecast too much.

GDT Price Index – Today is that time of the month when the Global Dairy trade Auction takes place in New Zealand. Last month, dairy prices fell by 1.2% so that is an increased risk for the NZD.

Trades in Sight

Bearish NZD/USD

  1. The trend has been bearish for three weeks
  2. The downtrend has picked up additional pace
  3. The retrace higher is complete
  4. The 50 SMA is scaring the buyers
  5. Stochastic is overbought
  6. The previous H1 candlestick closed as an upside-down hammer

The price seems to be turning bearish at the 50 SMA

The technical analysis looks pretty bearish to me. The downtrend is quite strong and it has picked up pace this week. Although, the price has retraced higher this morning on the back of some USD weakness. But the retrace up seems complete now because the stochastic indicator is overbought. Besides that, the 50 SMA is scaring the buyers away. The GDT auction is another added risk for the NZD and the traders don’t want to get caught on the wrong side by it. So, they are closing their buy trades that they opened this morning. We went short on this pair a while ago and that trade seems to be going well. The upside down hammer is a reversing signal and NZD/USD has already started to reverse lower.

In Conclusion

As I mentioned above, I don’t expect much action this evening as the US heads into the 4th of July holiday. But, Trump is tweeting and the NZD is moving, so we will follow the market closely. Maybe the GDT auction will give us a nice bonus later.

Forex Signals US Session Brief, July 2 – Manufacturing and Risk-off Day

Posted on by Skerdian Meta

The market sentiment has taken another hit today. Risk currencies are sliding lower with commodity Dollars leading the way. AUD/USD has lost 50 pips while NZD/USD has lost around 70 pips so far and is still declining. The USD and safe-havens are taking advantage of the current sentiment and they have been advancing all morning. The situation in Gold is different. It should gain in the current environment, but it is still declining.

Besides the market sentiment which is always a factor, another factor today has been manufacturing. We had a number of manufacturing reports being released from Europe this morning. The Swiss and Italian manufacturing figures were pretty upbeat, while the whole Eurozone manufacturing remained at decent levels. The unemployment rate also ticked lower in Europe as the Italian unemployment rate declined from 11.1% to 10.7%.

The European Session

Swiss Manufacturing PMI – The manufacturing PMI from Switzerland was expected at 61.2 PMI points but came at 61.6 points. The trend has been negative because this indicator was at around 65 points at the beginning of the year. But it beat expectations and the current levels are very decent nonetheless.

Spanish Manufacturing PMI – The Spanish manufacturing number came 0.2% lower than expectations at 53.4 PMI points and in line with last month. The trend here has been bearish too, but at least this month was unchanged from the previous one.

Italian Manufacturing PMI – The trend for Italian manufacturing has been bearish too, but this month came at 53.3 PMI points against 52.6 points expected and 52.7 points last month. So, perhaps this will be the turning point.

German Manufacturing PMI – Just like in other European countries, the German manufacturing used to be at around 58-59 points at the beginning of the year but it has declined constantly since then. This month it remained unchanged though. Maybe summer will turn things around for manufacturing in Europe.

UK Manufacturing PMI – British manufacturing came at 54.4 points, just a tick above last month and three ticks better than expectations. This is one of the few positive things for the GBP at the moment but it is not really helping it since the sentiment in the markets is negative.

Eurozone Unemployment Rate – The unemployment rate ticked lower today from 8.5% previously to 8.4%. The trend has bearish and today’s number pushes it lower still. That’s a good thing but I have a feeling that the decline in Italian unemployment rate has made the biggest contribution to it since it fell from 11.2% to 10.7%.

German Interior Minister Resigns – The German Interior Minister who comes from Merkel’s coalitio0n party CSU resigned today. He had threatened to do so if Merkel didn’t find a solution for immigration. The EU leaders reached a deal last week but he doesn’t seem happy with it and he is right to some degree. Might this be the beginning of the breakup between Merkel’s CSU party and her biggest coalition partner? That would mean big trouble for the EU.

The US Session

US Final Manufacturing PMI – The Chicago FED business index was expected at +0.34 points but came at -0.15 points. The miss is bad enough but this is the lowest reading since January. Well, if you disturb international trade, the business in your country will be the first to feel the consequences.

Germany’s Coalition Leaders to Meet Today – As the German Interior Minister resigns, the political situation becomes messy in Germany, which could lead to the collapse of EU as we know it. I hope that the two parties CSU and CDU get along and appoint another minister, otherwise, the Euro could start crashing lower.

US ISM Manufacturing PMI – At around 58-59 points, this indicator has been really great during this period. Although it has dipped slightly and is expected to decline a bit further today, it still remains quite upbeat.

US Construction Spending – The construction spending is a volatile indicator but it has managed to remain positive most of this year. Today it is expected at 0.5%, much lower than last month’s 1.8% increase, but it is another increase in spending for construction nonetheless.

Trades in Sight

Bullish NZD/USD

  1. The trend has been bearish for days
  2. The downtrend has picked up additional pace today
  3. The 20 and 50 SMAs should provide resistance on retraces

The 20 and 50 SMAs are waiting to provide resistance above

We had a sell forex signal in this pair which we opened last week. It survived the pullback up on Friday and it hit the take profit target today. The market sentiment has deteriorated further today as we mentioned, so I’m thinking of opening another sell signal in this pair. Although, I would rather wait for another retrace higher until the 20 or the 50 SMA catches up with the price.

In Conclusion

The governing coalition in Germany might break up since the Interior Minister resigned. The two parties, the CDU and the CSU are meeting today but if they don’t find a consensus and select another interior minister, fresh elections will be held in a couple of months. This would be terrible for the Euro so we have to keep an eye on that meeting.

Forex Signals US Session Brief, June 29 – GDP and EU Summit In Focus But Trump Wants All the Attention Again

Posted on by Skerdian Meta

Today is a GDP day as the UK and Canadian GDP reports are up on the economic calendar. The UK GDP report was released this morning and the main headline number came slightly better than expected. But, the improvement was largely due to new methods to measure the construction output. The business investment also decreased, so it wasn’t a good report overall. But the market just took the headline number and run away with it. As a result, GBP pairs are around 100 pips higher today.

Later on in the US session, we have the Canadian GDP report being released which will likely provide some decent price action for CAD pairs. The EU summit is continuing today as well and I heard that they have reached a consensus on immigration, but the steps to tackle it are still uncertain. On the other side of the Atlantic, Donald Trump never disappoints to make things even more interesting.

The European Session

German Retail Sales – Retail sales in Germany have been declining the entire year so far. Last month though, retail sales increased by 2.1% which was revised lower to 1.6% today. That was a promising sign, but sales took a dive this month declining by 2.1%. That is the biggest decline this year so it is not a good sign for the German economy.

French Consumer Spending – The consumer spending grew by 0.9% in France this month. This is the second positive month this year. It is a good sign, but it is counterbalanced by the fall in German retail sales.

EU Immigration Deal – An immigration deal has been reached in the EU summit. We don’t know yet what it exactly means. Immigration camps are supposed to be built somewhere close to the EU, whether it is in European countries that are not part of the EU yet or in North Africa. Nonetheless, the main danger for the EU that was Merkel’s ousting which could be the end of the European project is now diminished. The coalition party CSU said that they are happy with the deal and the alliance with Merkel’s party is absolute priority. This has relaxed a lot of nerves and it should be positive for the Euro in the near term.

Trump Wants to Leave the WTO – A report was published today where Trump tells his advisers that he wants the US to leave the World Trade Organisation and that the arguments that the US has benefited greatly from WTO in the past mean nothing to him. I predict a big mess in world trade and business. This is the worst time for the EU to fall apart.

UK GDP QoQ – The main number of the UK GDP report came out at 0.2% against 0.1% expected. That sent the GBP surging, but I see this climb as a good opportunity to sell since the details weren’t good. The headline number was also a bit distorted by new methods of calculation.

The US Session

Canadian GDP MoM – The Canadian GDP took a dovish turn in March and April, but it picked up nicely in May as it increased by 0.2% and 0.4% at the beginning and at the end of the month. This month, the GDP is expected to remain flat at 0%, but after Trump’s tariffs on Canadian Steel, we might as well see a negative number today.

US Core Price Index – The core price index is expected to remain unchanged at 0.2%. That means that core inflation is at around 2.5% YoY, which is above the FED’s target.

US Personal Spending and Personal Income US personal income has been growing at 0.4% a month during this year but it slowed to 0.3% last month. The spending has been weak, but it jumped higher by 0.6% last month. This month, the income is expected to grow while the spending is expected to cool off. It looks contradicting, but we have to see the numbers first before making any assumptions.

Chicago PMI – This index asks purchasing managers about the rate business conditions. They hold the most relevant insight of the economic conditions so it will be interesting to see how the trade war has affected their views.

US Revised Consumer Sentiment – The US consumer sentiment is expected at 98.0 points. It has declined in the last two months so perhaps we will see another miss today. Or perhaps things will turn around which would be positive for the USD.

BOC Business Outlook Survey – The Bank of Canada will release the business outlook survey later in the afternoon. With all the tariffs, I don’t think this will be a positive survey.

Trades in Sight

Bearish GBP/USD

  1. The main trend is down
  2. The GDP report looked better than it is
  3. The 20 SMA is providing resistance
  4. Stochastic is overbought

The 20 SMA is still pushing the price lower

As I mentioned above, the jump in GBP/USD is a good opportunity to sell this pair. The GDP report looked better than it is and the pullback up seems complete since stochastic is overbought. The 20 and the 50 SMAs are also standing around the current levels and they are making things difficult for buyers. So, we might as well open a sell forex signal up here today.

In Conclusion

The Canadian GDP report is about to be released soon and the later the business survey from the Bank of Canada will offer us some more insight into the Canadian economy. I expect some weak numbers from Canada today given the trade war that Trump has unleashed on America’s allies, so CAD traders brace yourselves.