Tifia Daily Market Analytics

[TifiaFX]

GBP/USD: on the eve of the meeting of the Bank of England

05/02/2018

Current dynamics


After the publication today (09:30 GMT) of data indicating that the growth of activity in the service sector of the UK in January slowed to a 16-month low, the pound declined. The index of supply managers (PMI) for the services sector of the UK economy fell in January to 53.0 from 54.2 in December (the forecast was 54.3). The data on the service sector was preceded by disappointing statistics on activity in the manufacturing and construction sectors, published the previous week. As the research company IHS Markit Ltd. reported last week, the purchasing managers' index (PMI) for the UK manufacturing sector in January was 55.3 against 56.2 in December and the forecast of 56.5. The data presented indicate that the growth in activity in the manufacturing sector also slowed to a 6-month low against the backdrop of rising price pressures on companies and consumers.

The slowdown in activity growth in all important sectors of the economy signals to the Bank of England about the need for continued soft monetary policy.

The nearest meeting of the Bank of England, dedicated to interest rates, will be held on Thursday. The decision on the interest rate of the Bank of England will be published at 12:00 (GMT). Market participants take into account the 50% probability of increasing the Bank of England's key interest rate in the first half of the year and 2-3 increases by 0.25% each time for three years.

Nevertheless, the Bank of England can maintain the current soft monetary policy, given the slowdown in the most important sectors of the British economy, despite the sharp increase in inflation after the referendum on Brexit.

Meanwhile, the dollar holds the positions gained on Friday in the foreign exchange market after the strong US labor market data for January, published on Friday, strengthened expectations that inflation growth could lead to a more rapid tightening of monetary policy in the US.

The growth of hourly earnings in the private sector in January in the annual comparison was the highest since June 2009 and amounted to 2.9% (in annual terms). At the same time, unemployment in the US in January remained at the same level of 4.1%, and the number of new jobs in the non-agricultural sector of the US economy was 200,000 in January (the forecast was +180,000).

At the meeting of the Fed held in late January, its leaders expressed their hope that inflation will grow in 2018. "The level of employment, household expenses and companies' investments were marked by a significant growth, while the unemployment rate remained low", the Federal Reserve said in a statement.

Thus, if the Bank of England signals about the need to continue to maintain a soft monetary policy, the pound may weaken, and the GBP / USD pair is in danger of breaking the bullish trend that began in January 2017.

From how aggressive the statements of the members of the Committee on Monetary Policy of the Bank of England will be, the dynamics of the pound will depend after the meeting of the Bank of England.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics



Support levels: 1.4100, 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210

Resistance levels: 1.4123, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575



Trading Scenarios

Sell Stop 1.4070. Stop-Loss 1.4160. Take-Profit 1.4050, 1.4000, 1.3970, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210

Buy Stop 1.4160. Stop-Loss 1.4070. Take-Profit 1.4200, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

NZD/USD: pending RBNZ decision on rates

06/02/2018

Current dynamics

Against the backdrop of negative events taking place in the world stock markets, today's decision of the RB of Australia to keep the current interest rate at the previous level of 1.5% remained almost unnoticed. On Tuesday, at the first meeting this year, the Reserve Bank of Australia left a key interest rate at a record low for the RBA of 1.5%. At this level, the rate has been already in place since mid-2016. The inactivity of the RBA contrasts sharply with the propensity of the Fed, the ECB and the Bank of England to tighten monetary and credit policy.

This week, two of the world's largest banks make a decision regarding monetary policy. On Wednesday (20:00 GMT), the RB of New Zealand decides on the interest rate, and on Thursday (12:00 GMT) decision on this matter will be announced by the Bank of England. As expected, both central banks will not change the current monetary policy; the rate in New Zealand will remain at the same level of 1.75%. Earlier in the RBNZ repeatedly stated that against the backdrop of "a lot of uncertainties" monetary policy "will remain soft in the foreseeable future", but "can be adjusted accordingly", if necessary. For a stable recovery in New Zealand's economy and rising inflation, "a lower New Zealand dollar rate is needed".

At 21:00 (GMT) on Wednesday the RBNZ press conference will begin, during which the representative of the RBNZ leadership Grant Spencer, who is the acting manager (his term of office in the RBNZ management came into force on September 27, 2017 and will end on March 26, 2018) , will make an explanation about the decision taken by the bank. His speeches often serve as an unofficial source of information on the further direction of the RBNZ monetary policy. In his view, the country's monetary policy should correlate with the dynamics of employment and financial stability of the state, rather than inflation.

From the news for today, we are waiting for the publication of the results of the next dairy auction (in the period after 14:00 GMT). The main part of the New Zealand economy is the timber and agricultural complex, and a significant part of the New Zealand export is dairy products, primarily milk powder. Two weeks ago, the price index for dairy products, prepared by Global Dairy Trade, came out with a value of +4.9% (against previous values of + 2.2% and + 0.4%). If the prices for dairy products rise again, the New Zealand dollar will strengthen, including in the pair NZD / USD. The decline in world prices for dairy products will hurt the quotations of the New Zealand dollar.

From the news on the United States today, it is worth paying attention to the speech (at 13:50 GMT) of the representative of the Fed and member of the FRS Committee on Open Markets, James Bullard, as well as the publication at 13:30 (GMT) of data on the US foreign trade balance for December. The deficit is expected to grow to -52 billion dollars from -50.5 billion dollars, fixed in November. This is a negative signal for the US dollar.

Thus, if data on the US foreign trade balance point to an increase in the balance deficit, while world prices for dairy products will rise again, we should expect further growth of the NZD / USD pair.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 0.7240, 0.7200, 0.7120, 0.7000, 0.6865, 0.6800

Resistance levels: 0.7328, 0.7400, 0.7430, 0.7500, 0.7550



Trading Scenarios

Sell Stop 0.7250. Stop-Loss 0.7340. Take-Profit 0.7200, 0.7120, 0.7000, 0.6865, 0.6800

Buy Stop 0.7340. Stop-Loss 0.7250. Take-Profit 0.7400, 0.7430, 0.7500, 0.7550

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

GBP/USD: pound declines on the eve of the Bank of England meeting, dollar - rising

07/02/2018

Current dynamics

The US stock indexes again decline on Wednesday after some recovery on Tuesday. Futures on the DJIA fell 1% to 24550.0 points, futures for the S & P 500 fell by 1.1% to 2665.0 points. Investors once again buy the dollar on unwillingness to risk after a sharp drop in shares in recent days. At the beginning of the European session, the dollar strengthened against euro-currencies, including against the pound. However, with large-scale purchases of the dollar is worthwhile to wait.

Apparently, few investors pointed out yesterday's publication of data pointing to a "significant deterioration" in the US trade balance. Data showed that in December, the foreign trade deficit amounted to 53.1 billion dollars (against the forecast of -52.0 billion and

-50.4 billion dollars in November), reaching the highest level in nine years. This is a strong structural negative factor for the US dollar in the long term.

Earlier, US President Donald Trump was extremely negative about the huge US foreign trade deficit, explaining this, in particular, by an expensive dollar. And he's right. An expensive national currency makes goods produced in a given country less competitive on the external market.

Back at the end of last month, the White House decided to impose restrictions on the importation of certain imported goods in the US produced in Asian countries. And a statement by US Treasury Secretary Stephen Mnuchin, who said that "the weakening of the dollar is favorable for trade", caused an even weaker dollar. If the upward trend in the deficit persists, then this may heighten investor fears of trade protectionism, which the administration of President Donald Trump promises to implement. And this is a negative factor for the dollar.

Meanwhile, the pound is down on the eve of tomorrow's meeting of the Bank of England. It is expected that the Bank of England will maintain the current soft monetary policy, given the slowdown in the most important sectors of the British economy, but may signal a stronger tendency of the Bank of England to tighten monetary and credit policy, including because of sharply increased inflation.

It is characteristic that today the National Institute for Economic and Social Research (NIESR) has raised the forecast for GDP growth in the UK in 2018 to 1.9% against the November forecast of 1.7%. NIESR also expects that the Bank of England will raise the key interest rate by 25 basis points in May and will continue to raise it every six months until the rate reaches 2%. It is expected that the annual inflation of consumer prices, which in December was 3%, will fall to 2% over the next eight quarters.

On Tuesday, the House of Representatives of the US Congress approved a bill that will extend government funding until March 23. Uncertainty about the approval of the lower house of the US Congress until Friday of government funding can put pressure on the dollar.

Thus, the fall of the GBP / USD against the background of the current recovery of the US dollar creates favorable conditions for buying the British pound against the dollar, already from current levels, below the level of 1.4000.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics



Support levels: 1.3875, 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210

Resistance levels: 1.3970, 1.4050, 1.4100, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575



Trading Scenarios

Sell Stop 1.3850. Stop-Loss 1.3940. Take-Profit 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3300, 1.3210

Buy Stop 1.3940. Stop-Loss 1.3850. Take-Profit 1.3970, 1.4050, 1.4100, 1.4270, 1.4340, 1.4400, 1.4500, 1.4575

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

Nikkey225: The Bank of Japan will continue a large-scale economic softening program

08/02/2018

Current dynamics

As the Customs Department of Japan announced today, Japan's foreign trade surplus rose by 16.2 billion yen in December to 583.9 billion yen in annual terms (the previous value was 181.0 billion yen and the forecast was expected to increase to 567.7 billion yen). The economy of Japan is highly dependent on exports, and as a result, the growth of trade surplus indicates the growth of the country's economy. The growth in demand for Japanese exports leads to a positive growth in the trade balance, replenishment of the state budget and is a positive factor for JPY and for the Japanese stock market, although, as a rule, the yen and the stock market of Japan are moving in opposite directions.

Even today, despite the weakening of the yen, the main Japanese stock index Nikkey225 rose during the Asian session. Nevertheless, although the Japanese Nikkei has grown today, the index can still record the worst weekly dynamics in two years. Following the results of bidding in Asia, the Nikkei225 climbed 1.1% to 21890.00 points on the background of the growth of most export sectors. However, investors so far prefer to refrain from buying shares of leading export companies because of fears about volatility in the US.

"We must not allow ourselves to be influenced by the decline in the stock markets that we have just witnessed", Jens Weidman, president of the Bundesbank, said in a statement on Thursday that "the US stock indices grew for a long time without noticeable correction".

Head of the Bank of Japan Haruhiko Kuroda hastened to calm investors today, saying that the Japanese central bank will continue a large-scale mitigation program, as inflation is still far from the target level of 2%. "It's too early to discuss the timing and methods of getting out of soft politics. We will continue to buy ETF, REIT at the current pace", Kuroda added. This, in practice, is already traditional in recent months, the statement of the head of the Bank of Japan on "readiness for the most decisive measures to support the Japanese economy". In December, Kuroda also said that "the leadership of the Bank of Japan will further support the cycle of revenue growth, supporting a moderate increase in wages and prices".

The board member of the Bank of Japan Hitoshi Suzuki supported Kuroda today, noting that "the conditions necessary to further accelerate the rate of price growth" are created, thanks to a strong labor market, as well as government efforts to raise wages and increase productivity.

Meanwhile, sales in the market of long-term state bonds continued, and the yield of 10-year Japanese bonds rose by 1 point to 0.08%. The yield of 10-year US bonds is also today near the maximum of 2.825%, reached at the beginning of this week (2.858%), the maximum level for the last four years. Investors remain cautious after the strongest fluctuations in recent days in international financial markets. The CBOE volatility index is at the beginning of today's European session near the mark of 27.75, after it jumped on Tuesday to a value of 50.00, which is several times higher than the usual range near the marks of 10.00 and 19.00.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 21720.00, 21490.00, 21140.00, 20950.00

Resistance levels: 21920.00, 22300.00, 23020.00, 23400.00, 24200.00



Trading Scenarios

Sell Stop 21600.00. Stop-Loss 22020.00. Objectives 21490.00, 21140.00, 20950.00

Buy Stop 22020.00. Stop-Loss 21600.00. Objectives 22300.00, 23020.00, 23400.00, 24200.00

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

AUD/USD: there are no arguments in favor of raising RBA interest rates

09/02/2018

Current dynamics

Unlike the Fed, other major global central banks are in no hurry to tighten their monetary policies. After earlier this week the RB of Australia and the RB of New Zealand decided not to change their interest rates, on Thursday another central bank, the Bank of England, decided to leave the interest rate at the current level of 0.5%, which coincided with the expectations of market participants. The rhetoric of the accompanying statements and comments of representatives of these banks was also mild.

In a tone to these statements on Thursday, the leaders of the Bank of Japan also spoke. Thus, the head of the Bank of Japan Haruhiko Kuroda said that the Japanese central bank will continue the large-scale mitigation program, since inflation is still far from the target level of 2%. "It's too early to discuss the timing and methods of getting out of soft politics. We will continue to buy ETF, REIT at the current pace", Kuroda added. Board Member of the Bank of Japan Hitoshi Suzuki supported Kuroda, noting that "the conditions necessary to further accelerate the rate of price growth" are created, thanks to a strong labor market, as well as the government's efforts to increase wages and increase productivity.

During today's Asian session, the RBA published comments on its decision to keep the interest rate at the current level. The key rate of the RBA remains at a record low for the RBA of 1.5% since mid-2016, and economists believe that the central bank will not change it after 2019.

The Reserve Bank of Australia predicts the retention of slow inflation and the inability to achieve full employment over the next few years. The RBA expects that core inflation will accelerate gradually and reach the lower boundary of the target range of 2% -3% by mid-2019. And the pace of core inflation is critical for the RBA monetary policy. The main source of uncertainty for the RBA remains the slow growth of wages. Acceleration of wage growth is a prerequisite for achieving the target inflation range of 2% -3%. The RBA gave a forecast for unemployment - 5.25% by the end of 2018. Currently, the unemployment rate is 5.5%. Thus, unemployment will remain above 5%, which, according to the RBA, does not correspond to full employment and significantly reduces the need for monetary tightening, despite the fact that economic growth in the country will accelerate and by mid-2019 will be 3.5% per annum.

Thus, the RBA's forecasts reflect the comments of the managing director Philip Lowe, who on Thursday said there was no argument in favor of raising interest rates in the short term.

At the same time, the Fed, it seems, does not intend to back away from its plans to tighten monetary policy. So, the president of the Federal Reserve Bank of Kansas City and the member of the FOMC with the right to vote, Esther George, said on Thursday that the Committee on Open Market Operations now intends to raise rates three times this year and three times in 2019. According to her, "this is a logical basic scenario in case the prospects do not change significantly".

Despite the fact that many economists are skeptical about the current strengthening of the US dollar, considering that its growth will be short-term and provide opportunities for its sale at higher levels, a more accurate long-term trading strategy for the AUD / USD will be a short position.

Against the background of a different focus of monetary policy in the US and Australia, we can expect further decline in the AUD/USD.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 0.7780, 0.7750, 0.7620, 0.7500, 0.7330

Resistance levels: 0.7820, 0.7900, 0.7950, 0.8000, 0.8130



Trading Scenarios

Sell Stop 0.7740. Stop-Loss 0.7830. Take-Profit 0.7700, 0.7620, 0.7500, 0.7330

Buy Stop 0.7830. Stop-Loss 0.7740. Take-Profit 0.7900, 0.7950, 0.8000, 0.8130

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

S&P500: Investors are trying to understand the movements on the market

12/02/2018

Current dynamics

The main US stock indexes today continued their recovery. By the beginning of today's European session, the US stock indexes about half recovered losses suffered last week, which became the worst in the past few years. The recovery began on Friday evening.

Risks of faster monetary tightening by the Fed on the background of expectations of the intensification of inflation provoked fluctuations in the stock markets in the last two weeks.

If inflation really increases, the Fed will be forced to raise interest rates faster in order to keep the situation under control and avoid hyperinflation. And this will lead to an increase in the yield of government bonds, which may affect the growth of the market of more risky assets.

After a brief consolidation of the indices at current levels, bears can undertake a new assault. The yield of 10-year US bonds is growing again, updating the absolute highs, and is at the beginning of today's European session near the 2.900% mark, the maximum level for the last four years. The yield of government bonds is growing, which makes it easier for the Fed to raise interest rates, which is a negative factor for the stock market.

The CBOE volatility index, the so-called "Wall Street fear index," rose again on Friday to record values after the 2008 crisis, to the level of 41.00. Last Tuesday, this index jumped to the value of 50.00, which is much higher than the usual range, formed in recent months, between the marks of 9.00 and 19.00.

Investors try to understand the sharp and deep movements taking place on the market in order to evaluate them either as a technical correction after prolonged growth, or as a result of a deeper reassessment of the financial situation.

In the beginning of the week, investors will monitor the data on the state of the US budget (will be published on Monday 19:00 GMT), as well as on retail sales and consumer prices for January (on Wednesday 13:30 GMT), which could affect the dynamics of the US stock market.

Also, as usual, on Thursday (13:30 GMT) weekly data from the US labor market will be published, namely, the number of primary (forecast - 237,000 against 221,000) and secondary applications for unemployment. The result higher than expected will indicate a weakening of the labor market, which will negatively affect the US dollar in the short term.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 2630.0, 2610.0, 2560.0, 2530.0

Resistance levels: 2695.0, 2730.0, 2800.0, 2829.0, 2877.0, 2900.0



Trading Scenarios

Sell Stop 2618.0. Stop-Loss 2670.0. Objectives 2610.0, 2560.0, 2530.0

Buy Stop 2670.0 Stop-Loss 2618.0. Objectives 2695.0, 2730.0, 2800.0, 2829.0, 2877.0, 2900.0

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

DJIA: investors remain cautious

13/02/2018

Current dynamics

On Monday, all three major US stock indexes rose for the second consecutive session, returning some of the losses incurred during the two previous weeks. The Dow Jones Industrial Average grew by 1.7% to 24601.00 points, the S&P500 - by 1.4% to 2,666.00 points, the Nasdaq Composite rose 1.6% to 6981.00 points.

Earlier in the US, and after and in all world stock markets, there was a sharp collapse in the indices. So, S&P500 lost over 5% last week due to signs of strengthening inflation and higher yields on government bonds, and the volatility index CBOE, or VIX, rose by almost 70% in the whole week, jumping to a mark of 50.00, a record high after the crisis of 2008.

The risks of a more rapid monetary policy tightening on the part of the Fed on the background of expectations of increased inflation provoked fluctuations in the stock markets over the past two weeks. Investors were also alarmed by the growth in the yield of US government bonds. Thus, the yield on 10-year US bonds on Monday reached new absolute highs near the 2.900% mark, the maximum values for the last four years. The increase in bond yields in early 2018 was one of the reasons for the decline in world stock markets. Profitability can grow even more on the background of the normalization of monetary policy and the further strengthening of the world economy. The growth of yield of government bonds facilitates the task of the Federal Reserve to raise interest rates. The stock market would quietly transfer one or two rate hikes. Last year, the former head of the Federal Reserve, Janet Yellen, stated that an increase in the interest rate alone is not enough to turn the bull stock market, but that would be another confirmation of the strength of the US economy.

Now buyers of risky assets of the stock market are confused, as a faster rate increase could slow or stop further growth of stock indices. Investors are still cautious after the sharp sales observed last week, and world stock markets are falling again on Tuesday.

Nevertheless, US stock indices are above critical support levels. Despite the fluctuations, last week created opportunities for profitable purchases, according to optimistic investors. The principle of "buy on the rumor, sell on facts", it seems, can work and this time. At least, it has already worked in part - "sell on facts".

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 24050.0, 23800.0, 23200.0, 23000.0, 22450.0

Resistance levels: 24820.0, 25200.0



Trading Scenarios

Buy Stop 24970.0. Stop-Loss 24240.0. Take-Profit 25200.0, 26600.0

Sell Stop 24240.0. Stop-Loss 24970.0. Take-Profit 24050.0, 23800.0, 23200.0

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

S&P500: on the eve of the publication of inflation data

14/02/2018

Current dynamics

While investors are waiting for the publication at 13:30 (GMT) of important macro data from the US, US stock indexes continue to recover after a record fall in the previous two weeks. On the eve of the leading US indices for the third time in a row completed the trading in the market in positive territory.

Among the data published at 13:30 the most important inflation indicators will be. So, it is expected that the basic inflation increased in January by 1.7% (in annual terms). If the forecast is justified, the stock indexes will continue to recover, but if inflation is higher, then tension will return to the markets.

Probably, the best scenario for buyers of the assets of the stock market today will be weak inflation data and strong - on retail sales in the US.

Moreover, according to many economists, even if the inflation data in the US prove to be strong, this will not change the negative attitude towards the dollar. Against this background, the recovery of the US stock market is likely to continue after today's publication of macro data. Against the backdrop of low inflationary pressures in 2017, US stock indexes reached new record highs.

If inflation significantly exceeds forecasts, the Fed may need to increase interest rates four times in 2018. In this case, the stock markets have a chance to confirm the worst forecasts and resume the decline.

Meanwhile, the yield on 10-year US bonds is growing again and is currently at the level of 2.842%, slightly below the 2.900% mark reached two days ago, the highest level in the last four years. With the increase in the yield of government bonds, the Fed is easier to raise interest rates.

The most cautious traders today, perhaps, prefer to go into the cache. A surge in volatility in the financial markets is expected during the publication (13:30 GMT) of the data.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 2630.0, 2614.0, 2565.0, 2530.0

Resistance levels: 2682.0, 2723.0, 2800.0, 2829.0, 2877.0, 2900.0



Trading Scenarios

Sell Stop 2660.0. Stop-Loss 2688.0. Objectives 2630.0, 2614.0, 2565.0, 2530.0

Buy Stop 2688.0 Stop-Loss 2660.0. Objectives 2723.0, 2800.0, 2829.0, 2877.0, 2900.0

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

Brent: oil prices have corrected after a many-day fall

15/02/2018

Current dynamics

Despite the fact that oil and oil products stocks in the US raised again last week, oil prices on Wednesday rose after a many-day drop from the level of $ 70.00 per barrel of Brent crude oil. At the beginning of the month, the oil market was under pressure amid a decline in world stock indices and an increase in oil production in the US.

As reported on Wednesday in the US Department of Energy, oil reserves in the US last week increased by 1.8 million barrels (the forecast was + 2.6 million barrels). The American Petroleum Institute (API) on Tuesday reported an increase in reserves of 3.9 million barrels. Brent crude at ICE went up $ 1.64 on Wednesday, or 2.6%, to $ 64.36 a barrel.

Growth in oil prices on Wednesday also was contributed by the media reports that Saudi Arabia confirmed its commitment to the plan to limit the supply. "We believe that it is better for us to take redundant steps (to reduce supply) and ensure the restoration of the balance of the market", Saudi Energy Minister Khaled Al-Falih said at a press conference in Riyadh. In November, OPEC extended the deal to limit the offer until the end of 2018, and the cartel agreed to reevaluate the transaction in the middle of the year.

The renewed weakening of the dollar and growth in stock exchanges also supports oil prices in the current situation. On Wednesday, the dollar showed a large decline after it published disappointing data on retail sales in the US in January. Despite the fact that inflation accelerated in January, retail sales in January fell by 0.3%, which was the strongest drop in almost a year (the forecast assumed growth of retail sales in January by 0.2%).

After the publication of disappointing data on retail sales, economists lowered forecasts for US GDP growth in the first quarter of 2018. Based on the data presented this week, it can be concluded that the budget deficit and the deficit of US foreign trade are growing, and the risks of slowing GDP growth are also increasing. This could be an important factor that increases the Fed's predilection for maintaining a soft monetary policy.

Nevertheless, on Friday, the oil market may again be under pressure if the data on the number of operating drilling rigs in the United States indicate the next increase in the number of installations, and, consequently, the growth of oil production. The weekly report from the American oil service company Baker Hughes on the number of active oil drilling rigs in the US will be presented at 18:00 (GMT). At the moment, their number is 791 units. The positive dynamics of both the growth in the number of active drilling rigs in the United States and the volume of oil production prevails, which is a strong deterrent for the further growth of oil prices.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 64.00, 63.00, 61.50, 59.50, 56.50

Resistance levels: 64.85, 66.50, 68.00, 69.00, 70.00, 70.75



Trading Scenarios

Sell Stop 63.90. Stop-Loss 64.90. Take-Profit 63.00, 61.50, 59.50, 56.50

Buy Stop 64.90. Stop-Loss 63.90. Take-Profit 66.50, 68.00, 69.00, 70.00

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

AUD/USD: The strength of the Australian dollar reflects the weakness of the US dollar

16/02/2018

Current dynamics

During his speech today before the parliament, the Reserve Bank of Australia's Governor Philip Lowey said that he "would prefer a lower exchange rate". In his opinion, "there is no reason to raise rates in the short term". Lowey noted that "inflation remains low", although "business sentiment is improving".

Approximately the same statements Lowey did before. Therefore, his today's speech did not bring surprises.

The Australian dollar reacted with restraint to Lowey's speech. Nevertheless, the Australian dollar is rising against the US dollar, justifying Lowey's view that "the strength of the Australian dollar reflects the weakness of the US dollar".

And, indeed, the US dollar remains under pressure, continuing to decline against its major counterparts. The dynamics of the dollar is not affected even by the macro statistics coming from the US, indicating an increase in inflation. So, on Thursday there were one more data, indicating the growth of inflationary pressure.

The producer price index (PPI), reflecting changes in prices for goods and services of American companies, in January rose by 0.4%, which is the best result since April 2017.

The consumer price index (CPI) released on Wednesday also surpassed expectations. The growth of consumer inflation in January was 2.1% (in annual terms). The CPI base index increased by 1.8% compared to the same period in 2017. According to economists, inflation will be above the target level of 2% this year already.

The growth of inflation against the backdrop of a strong labor market and a stable state of the US economy gives the Fed a reason to tighten monetary policy more rapidly. At the December meeting, the leaders of the Federal Reserve planned 3 rate increases in 2018. Now many investors believe that the Fed can implement a 4-time rate increase this year. So, according to the CME Group, investors estimate a 21% chance of 4 rate increases this year. Earlier this week, such a probability was estimated at 17%.

Nevertheless, the US dollar continues to scale down. The dollar index DXY, reflecting its value against the basket of 6 other currencies, fell on Friday to 88.18, the lowest level since December 2014, and at the beginning of the European session is near the mark of 88.35.

Of the news for today, it is worth paying attention to the publication at 13:30 (GMT) of data on the housing market in the US for January, which may increase volatility in the US dollar. However, this statistic will not have a significant impact on the dynamics of the US dollar.

The US dollar remains under pressure due to profound fundamental changes in the global financial market. Investors seem to opt for more interesting and growing financial markets outside of the US, which forces them to buy assets and the national currency of countries with a fast-growing economy, in particular the Eurozone and Japan.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 0.7950, 0.7900, 0.7820, 0.7795, 0.7760, 0.7620, 0.7500, 0.7330

Resistance levels: 0.7990, 0.8000, 0.8100, 0.8130, 0.8200



Trading Scenarios

Sell Stop 0.7940. Stop-Loss 0.8000. Take-Profit 0.7900, 0.7820, 0.7795, 0.7760

Buy Stop 0.8000. Stop-Loss 0.7940. Take-Profit 0.8100, 0.8130, 0.8200

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

XAU/USD: gold prospects are positive

19/02/2018

Current dynamics

After on Friday the price of gold updated the monthly maximum, having risen to the mark of 1361.00 dollars per troy ounce, then the price went to the corrective phase. The XAU / USD declined, retreating to the mark near the support level of 1348.00 (the opening price of the month). Last month, the price of gold reached the next local multi-month high near the mark of 1365.00 dollars per ounce. The last time near this mark the price was in July 2016.

Nevertheless, with regard to the further dynamics of the price of gold, there are two opposing opinions of experts. The first view is that, amid rising inflation, the Fed will begin to raise interest rates at a faster rate, which will increase the interest to the dollar purchases. Gold does not bring investment income and is used, mainly, as a hedging instrument for risks during the period of economic or political instability in the world. In periods of increasing interest rates, gold, as a rule, becomes cheaper, giving way to assets that generate revenue, such as government bonds. Due to the growth of inflation expectations, the yield of 10-year US Treasury bonds returned to almost 3%.

In this sense, the publication on Wednesday (19:00 GMT) of the minutes from the January meeting of the Fed, the latter under the leadership of Janet Yellen, will be of interest to investors this week. The minutes of the meeting may give market participants an idea that the Fed's management is thinking about the possible economic consequences of reforming the tax system and about accelerating inflation in the US.

The contrary opinion of experts is that, despite the expected increase in interest rates, gold still has good chances for growth as a means of protecting against the growth of consumer inflation.

Thus, the probability of further growth in gold prices outweighs the likelihood of their decline. Taking into account the multi-month cycles, the long-term targets for the growth of the gold price will be the levels of 1390.00, 1425.00 dollars per troy ounce.

In view of the fact that the US has a day off ("President's Day"), and American banks and exchanges are closed, the sluggish dynamics of trading on financial markets is expected until the end of the trading day.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 1340.00, 1328.00, 1308.00, 1289.00, 1277.00, 1268.00, 1248.00

Resistance levels: 1361.00, 1365.00, 1370.00, 1390.00, 1425.00



Trading Scenarios

Sell Stop 1343.00. Stop-loss 1358.00. Take-Profit 1340.00, 1328.00

Buy Stop 1358.00. Stop-Loss 1343.00. Take-Profit 1361.00, 1365.00, 1370.00, 1390.00, 1425.00

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

NZD/USD: Fundamental factors are on the side of US dollar sellers

20/02/2018

Current dynamics

The US dollar continues to strengthen in the foreign exchange market after it reached new lows last week. The dollar index DXY, reflecting its value against the basket of 6 other currencies, is growing for the third consecutive day. At the beginning of the European session, the futures on the DXY index traded with an increase near the mark of 89.50.

The growth of the dollar is also promoted by the growth of the yield of US Treasury bonds, which is close to the highs observed last week. The yield on 10-year Treasury bonds rose to 2.92% on the eve of the first trading day in the US this week. On Monday, US markets were closed due to the day off (President's Day).

Meanwhile, the attitude to the dollar on the part of investors remains negative. Economists and financial companies lowered forecasts for US GDP growth in the first quarter of 2018. Significant growth of the country's budget deficit, coupled with the growth of the foreign trade deficit to $ 566 billion, the highest level since 2008, leads to a further decrease in investors' interest in the dollar.

The new US tax law, which provides for a significant reduction in taxes and an increase in budget spending, will only contribute to the growth of the federal budget deficit.

Despite the positive macro statistics coming from the US, deep fundamental factors are on the side of dollar sellers.

Meanwhile, the dollar receives short-term support on the eve of the publication on Wednesday (19:00 GMT) of the minutes from the January meeting of the Federal Reserve System.

Probably, investors will wait for new signals from the leadership of the Fed regarding further interest rate increases in the US. As you know, the Fed planned 3 rate increases in 2018 and 2 more increases in 2019.

From the news for today, we are waiting for the publication of the results of the next dairy auction (in the period after 14:00 GMT). The main part of the New Zealand economy is the timber and agricultural complex, and a significant part of the New Zealand export is dairy products, primarily milk powder. Two weeks ago, the price index for dairy products, prepared by Global Dairy Trade, came out with a value of +5.9% (against previous values of +4.9%, +2.2% and +0.4%). If the prices for dairy products rise again, the New Zealand dollar will strengthen, including in the pair NZD / USD. The decline in world prices for dairy products will hurt the quotations of the New Zealand dollar.

Nevertheless, this time the reaction of market participants to this publication will likely be restrained due to the continued celebration of the New Year in China, which is New Zealand's largest partner and buyer of dairy products from this country.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 0.7340, 0.7300, 0.7270, 0.7240, 0.7200, 0.7140, 0.7080, 0.6865, 0.6800

Resistance levels: 0.7400, 0.7430, 0.7500, 0.7550



Trading Scenarios

Sell Stop 0.7330. Stop-Loss 0.7380. Take-Profit 0.7300, 0.7270, 0.7240, 0.7200, 0.7140, 0.7080

Buy Stop 0.7380. Stop-Loss 0.7330. Take-Profit 0.7400, 0.7430, 0.7500, 0.7550

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

GBP/USD: before the release of the Fed's minutes

21/02/2018

Current dynamics

In anticipation of the publication (at 19:00 GMT) of the minutes from the Fed meeting held on January 30-31, the dollar remains stable and trades with a slight increase. In December, the Fed for the third time in 2017 increased the rate, bringing it to the current level of 1.5%. Fed leaders voted unanimously for this rate hike and showed a tendency to further tighten monetary policy in the next two years. During the January meeting, the leaders of the Fed confirmed their intention to raise the interest rate three times in 2018 and twice in 2019.

Market participants expect that the first rate increase may occur already during the March meeting of the Fed (March 20 - 21). Moreover, many investors (21%, according to the latest data from the CME Group) believe that the Fed will raise the rate four times in 2018 amid a steady growth in the US economy, the labor market and inflation. And now, investors are hoping to catch new signals from the Fed regarding further plans in the matter of monetary policy.

As usual, the national currency grows when the interest rate rises. So far, the growth of the dollar is not observed, since many investors remain negative towards him because of deep negative fundamental factors. Many economists believe that the dollar is only at the beginning of the multi-year cycle of the next decline. But everything can change if the Fed will systematically tighten monetary policy, and the positive macro data will come from the USA.

There is still no clear idea of how the macroeconomic situation in the US will change as the new tax and economic policies of the White House are implemented.

As for the pound, the positive macro statistics received during the current European session from the UK did not significantly affect its dynamics. Despite the fact that the unemployment rate unexpectedly increased in the fourth quarter of 2017 (by 0.1% to 4.4%), the overall employment rate has increased, and the number of unemployed has declined most strongly since the end of 2015. Wages also increased. Moreover, the growth of salaries in the UK has been the strongest since the end of 2016.

In January, inflation remained at 3.0%, which is 1 percentage point higher than the target level of the Bank of England. In November, the Bank of England raised its key interest rate for the first time in a decade to contain inflation. Recently, central bank officials signaled that the rate may need to be raised earlier than originally expected. This is a strong factor in favor of strengthening the pound. At the same time, the pound will remain vulnerable against the euro and the dollar against the backdrop of Brexit.

Among other important news for today regarding the pair GBP / USD, it is worth highlighting

the speech (at 14:15 GMT) of the Bank of England Chairman Mark Carney during the hearing in the British Parliament of the Bank of England's report on inflation.

And at 14:45 there will be a block of important macro statistics from the United States. Among the published data - PMI in the leading sectors of the US economy (in the services sector and in the manufacturing sector) for February (preliminary release). The growth of indicators is expected, which will give an additional bullish impulse to the dollar.

With respect to the pair GBP / USD, we can say that, in general, positive dynamics remains. However, GBP / USD is in the zone of strong resistance levels 1.4185 (EMA50 on the monthly chart), 1.4050 (EMA200 on the weekly chart), from which it is possible, if not a turn, then a deep enough rebound.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 1.3890, 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3370, 1.3210

Resistance levels: 1.3990, 1.4050, 1.4100, 1.4185, 1.4340, 1.4400, 1.4500, 1.4575



Trading Scenarios

Sell on the market. Stop-Loss 1.4010. Take-Profit 1.3890, 1.3835, 1.3800, 1.3700, 1.3630, 1.3550, 1.3420, 1.3370

Buy Stop 1.4010. Stop-Loss 1.3910. Take-Profit 1.4050, 1.4100, 1.4185, 1.4340, 1.4400, 1.4500, 1.4575

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

USD/CAD: much depends on the dynamics of the US dollar

22/02/2018

Current dynamics

At the beginning of today's trading day, the dollar continued to rise after on Wednesday (19:00 GMT) the minutes from the January meeting of the Fed were published. From the text of the protocols, investors learned that the leaders of the Fed confirmed their intentions to support plans for further tightening of monetary policy in the US. At the December meeting, when the rate was raised for the third time in 2017, it became known about the Fed's intentions to raise the rate three times in 2018 and make two more increases in 2019.

During the January meeting, the US Federal Open Market Committee voted to maintain the key interest rate range of 1.25% -1.5% unchanged, but market participants expect that in March, when the first rate hike is expected to take place this year, the leaders of the Fed will add another increase in rates to the three planned.

And if this really happens, then the dollar will receive a strong support, despite the fact that there are a number of negative factors of a fundamental nature that cause investors to be wary of the dollar.

Among these negative factors - the growth of the federal budget deficit and the deficit of the foreign trade balance, which in December amounted to a record $ 566 billion, the highest level since 2008.

Meanwhile, at the beginning of the European trading session, the US dollar is once again declining.

To resume the growth of the dollar, additional signals from the Federal Reserve and macro statistics are needed. Important news from US is not expected until the end of the week, but it should pay attention to the publication at 13:30 (GMT) of such an important inflation and macro statistical indicator as the level of retail sales in Canada. According to the forecast, in December retail sales in Canada are expected to grow by 0.2% after growing by 0.2% in November. The index of retail sales is often considered an indicator of consumer confidence. At the same time, retail trade is one of the most important components in filling the country's budget and GDP growth. A weak or negative value of this indicator is a negative factor for the Canadian dollar. If the value of the indicator is worse than the forecast, the Canadian dollar will decrease, including in the pair USD / CAD. And, conversely, an indicator exceeding the forecast value will help strengthen the Canadian dollar.

Also worth paying attention to the speeches of a number of representatives of the Fed, scheduled for 15:00, 17:10, 20:30 (GMT), which may have a short-term effect on the dynamics of the US dollar, and may for a short time cause a rise in volatility in US dollar trading .

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 1.2655, 1.2600, 1.2535, 1.2500, 1.2430, 1.2400, 1.2360, 1.2300, 1.2170, 1.2100, 1.2050

Resistance levels: 1.2715, 1.2740, 1.2835, 1.2900



Trading Scenarios

Sell Stop 1.2670. Stop-Loss 1.2720. Take-Profit 1.2655, 1.2600, 1.2535, 1.2500, 1.2430, 1.2400, 1.2360, 1.2300, 1.2170

Buy Stop 1.2720. Stop-Loss 1.2670. Take-Profit 1.2740, 1.2780, 1.2835, 1.2900

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

S&P500: markets continue to recover

26/02/2018

Current dynamics

Last week, the main US stock indexes completed in positive territory. The main increase of the indices in the previous week was due to strong growth on Friday. While indices are growing, investors are still in a state of confusion after the recent stock market crash observed earlier this month. Market participants are trying to understand - what is happening in the market: the markets resumed growth to new record highs or it is a temporary rebound before a new jerk down.

The recent collapse in the stock markets was triggered, mainly, by increased inflation in the US, which could lead to more active actions of the Fed in the matter of tightening monetary policy. Against the backdrop of stable economic growth in the US and because of increased inflation, the Fed will be forced to raise rates at a faster pace in order to avoid overheating of the economy.

And this is a strong negative factor for the stock markets, which usually grow against the backdrop of soft monetary policy and fall, if the rates have started to rise. Much also depends on the speed and scale of tightening monetary policy.

In this regard, it is worth recalling the words of the former head of the Fed, Janet Yellen, that only raising rates is not enough to break the bullish trend of the US stock market, and a gradual increase in the rate indicates the strength of the American economy.

Now market participants will wait for the first speech of the new head of the Fed, Jerome Powell, before the congress, which will be held on Tuesday (13:30 GMT). Investors want to hear from Powell, what is the probability that this year rates will be raised more than 3 times.

At the same time, many investors believe that during his first speech with a report on the results of the first half of the year, the new head of the Federal Reserve, Jerome Powell, will point to a good form of the US economy, however, he will not say anything new about the tightening of the monetary policy of the Fed. It is likely that Powell will try to emphasize the need for a gradual increase in the rates of the Fed, avoiding any hint of the possibility of a faster rate hike.

If Powell only hints at the possibility of raising rates more than 3 times this year, then the reaction of the markets can follow immediately: the dollar will jump in price, and the stock indexes will again fall down.

Meanwhile, the S&P500 index is trading higher for the third day in a row, adding to the price from the opening of today's trading day.

After the strongest collapse in early February, from February 9 futures on the S&P500 steadily adds to the price, gradually restoring positions, and at the beginning of today's European session S&p500 is trading near the mark of 2760.0. The index finished in positive territory 8 of the last 11 sessions since February 9 began recovery after the fall. Over the past two weeks, the S & P500 has gained about 5.0%, which was the strongest two-week increase since February 2015.

The S & P500 grew almost fourfold from the 2009 low, and the yield of 10-year US government bonds in 2016 dropped to 1.336% from a level above 4% recorded in 2008. Now, another increase in the yield of 10-year US government bonds above 3% may provoke another decline of not only the S & P500 index, but the entire US stock market, followed by other global stock markets.

From the news for today, which can cause the growth of volatility in the financial markets, we are waiting for the speech (at 13:00 GMT) of the member of the FRS Committee on Open Markets, James Bullard and ECB President Mario Draghi (at 14:00 GMT).

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 2725.0, 2682.0, 2630.0, 2580.0, 2530.0

Resistance levels: 2800.0, 2829.0, 2877.0, 2900.0



Trading Scenarios

Sell Stop 2740.0. Stop-Loss 2688.0. Objectives 2630.0, 2614.0, 2565.0, 2530.0

Buy in the market. Stop-Loss 2740.0. Objectives 2780.0, 2800.0, 2829.0, 2877.0, 2900.0

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

***We are happy to invite you to join our amazing IB Challenge with stunning prizes!***

​

• Asus ZenBook Pro 1st place
  
• iPhone X 2nd place
  
• Samsung Note 8 3d place
  

All our active partners can take part on this contest. Just register on the contest page by indicating your partner UID and choosing a nickname.

To get the one of the stunning prize and climb the TOP of this IB challenge you need to attract as much referrals as you can. Just show your business acumen and loyalty to Tifia broker.

Attract new clients, compete with other IBs from all round the world, earn on partner commission and get additional rewards from Tifia!

Join the contest now! Registration is already open!​

The contest is held from 01.03.2018 to 01.06.2018.

Just register and become the best IB in the world of trading!

*) For more information contact your manager any time or visit Tifia's official website.

 

[TifiaFX]

XAU/USD: Positive dynamics, on the whole, persists

27/02/2018

Current dynamics

While market participants are waiting for the beginning of the speech of the new head of the Fed, Jerome Powell, who speaks for the first time before the Congress, trading activity in the financial markets remains low. Nevertheless, in the first half of the European session, the dollar is gradually turning into an offensive.

During the December Fed meeting, when the interest rate was again raised, the leaders of the US central bank announced the need for 3 interest rate increases in 2018 and 2 increases in 2019 to avoid overheating of the economy. At the January meeting, the leaders of the Fed confirmed their intentions to support the previously planned plans to tighten monetary policy. Judging by the minutes published last week from the January meeting, the leaders of the Federal Reserve decided that the economy will grow at a faster pace.

The expected strong increase in budget spending in the US, as well as the stimulation of the economy by lowering taxes on the activities of US corporations against a background of low unemployment, will contribute to the growth of inflationary pressures. This, in turn, can force the Fed to accelerate the pace of normalizing monetary policy.

The first rate increase under the new chairman Jerome Powell this year is likely to happen already at the March meeting of the Fed, and now market participants expect that in March, the leaders of the Fed will add another rate hike to the three planned this year.

And it is precisely such signals that market participants will wait for today and tomorrow from Powell. From him, investors want to hear what the probability of a more rapid increase in interest rates.

If Powell signals to market participants that there is a high probability of 4 interest rate increases this year, then the dollar quotations will rise and another US stock market collapse may occur.

As a rule, with an increase in the interest rate, the quotes of the national currency are growing. So far, there is an opposite picture - the dollar is under pressure. The growth of the federal budget deficit, the growing deficit of the foreign trade balance, which reached an impressive amount of 566 billion dollars in December, the highest level since 2008, causes a negative attitude of investors towards the dollar.

Neither the Fed's efforts to tighten monetary policy, nor verbal intervention by representatives of the Federal Reserve and the White House on the desirability of a strong dollar, do not yet cause a response from buyers of the dollar.

So yesterday's statement by the US Treasury Secretary Stephen Mnuchin that "in the long term the United States needs a strong dollar" did not affect the dynamics of the dollar.

Now all the attention of investors today and tomorrow will be focused on the speech of the head of the Fed, Jerome Powell. On how tough his speeches will be, the dynamics of the dollar for the near future will depend.

During periods of increasing interest rates, gold usually becomes cheaper, giving way to assets that generate revenue, such as government bonds.

Meanwhile, the price of gold keeps positive dynamics. Many economists believe that, despite the expected increase in interest rates, gold still has good chances for growth as a means of protecting against the growth of consumer inflation.

The likelihood of further growth in gold prices outweighs the likelihood of their decline. The long-term targets for the growth of the gold price will be the mark of 1390.00, 1425.00 dollars per troy ounce. However, these goals can be set only after the price of gold overcomes the mark of $ 1365.00 per troy ounce (the maximum of this year).

Recall that the speech of Jerome Powell will start today at 13:30 (GMT).

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 1332.00, 1329.00, 1308.00, 1290.00, 1277.00, 1268.00, 1248.00

Resistance levels: 1341.00, 1361.00, 1365.00, 1370.00, 1390.00, 1425.00



Trading Scenarios

Sell Stop 1328.00. Stop-Loss 1342.00. Take-Profit 1308.00, 1290.00

Buy Stop 1342.00. Stop-loss 1328.00. Take-Profit 1361.00, 1365.00, 1370.00, 1390.00, 1425.00

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

EUR/USD: The euro is under pressure before the weekend

28/02/2018

Current dynamics

As reported on Wednesday (10:00 GMT) by the European Statistical Agency (Eurostat), consumer prices in the Eurozone in February rose by 1.2% (in annual terms). The data suggest that inflation growth rates were the weakest since December 2016 and well below the ECB target level (just below 2%). In February, the rate of inflation slowed for the third month in a row. This index is a key indicator for the ECB in assessing inflation. The current value of the index indicates that the leaders of the ECB will continue to be cautious when considering the issue of reducing the stimulation of the European economy.

As ECB President Mario Draghi said on Monday, it is too early to talk about curtailing the quantitative easing program, since inflation is still far from the target level.

At the same time, the Eurozone economy continues to grow at a good pace (it is expected that GDP growth in 2017 was 2.5%). In 2017, the economy of the Eurozone grew at the fastest pace over the past 10 years, and, apparently, will keep momentum this year.

Mario Draghi again stressed that the ECB will continue its course on monetary policy without any changes. At a recent meeting of the ECB in 2017, it was decided that the program for the purchase of European assets will continue, at least until September 2018. At the same time, ECB interest rates will remain at the same low level for a long time after the end of the QE program.

Meanwhile, optimistic statements by Fed Chairman Jerome Powell on the US economy, made by him on Tuesday, supported the dollar. The dollar index DXY, reflecting its value against the basket of 6 other currencies, reached the highest level since early February, rising to around 90.40, completely closing the decline for the last two weeks.

Jerome Powell drew attention to improving economic prospects, which was considered by investors as an indication that this year the central bank can raise interest rates 4 times. Investors have corrected the forecasts for interest rates. According to CME, the probability of 4 rate increases this year is estimated at 34%. On Monday, this probability was 24%, and a month ago - 23%.

The EUR / USD fell 350 points from the peaks in February to a minimum in seven weeks near the 1.2200 mark.

The euro remains under pressure also because of investors' preoccupation before the elections in Italy and voting in the Social Democratic Party of Germany on the establishment of the ruling coalition this weekend.

Today, market participants will closely monitor the macro data that will be published today in the US (13:30 GMT).

Among the published data - annual GDP (for the 4th quarter), the index of expenditure on personal consumption and the price index of personal consumption expenditure. The growth of indicators is expected. Thus, GDP in Q4 is expected to grow by 2.5%, and for the entire 2017 GDP growth was also + 2.5%, which is higher than the average of 2% observed in the early 2000s.

When confirming the data, the dollar is likely to continue to strengthen, including in the EUR / USD.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support and resistance levels

After in the middle of this month the EUR / USD has reached the next multi-month maximum near the mark of 1.2555, the last two weeks there has been a decline in EUR / USD.

As a result of yesterday's decline against the background of the strengthening of the dollar after the statements of Jerome Powell, EUR / USD broke through the support level 1.2280 (EMA200 on the 4-hour chart) and at the beginning of today's European session is trading near support level 1.2200 (low in February, lower mid-January consolidation zone, EMA50 on day chart and the Fibonacci level 50% of correction to the fall from the level of 1.3900, which began in May 2014).

This is a strong level of support, the breakdown of which will significantly worsen prospects for the bullish trend EUR / USD.

Long-term upward dynamics persists as long as EUR / USD is trading above the key support levels 1.1790 (Fibonacci 38.2% and EMA200 on the daily chart), 1.1700 (EMA200 on the weekly chart).

The signal for the resumption of purchases will be a return to the zone above the resistance level 1.2280. In this case, EUR / USD will again move towards the recent highs near the level of 1.2555.

Support levels: 1.2200, 1.2100, 1.2060, 1.2000, 1.1920, 1.1790, 1.1700

Resistance levels: 1.2280, 1.2330, 1.2340, 1.2400, 1.2535, 1.2555, 1.2600



Trading Scenarios

Sell Stop 1.2180. Stop-Loss 1.2220. Take-Profit 1.2100, 1.2060, 1.2000, 1.1920, 1.1790, 1.1700

Buy Stop 1.2220. Stop-Loss 1.2180. Take-Profit 1.2285, 1.2330, 1.2340, 1.2400, 1.2535, 1.2555, 1.2600

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

GBP/USD: pound remains vulnerable

01/03/2018

Current dynamics

The pound on Thursday slightly strengthened after the publication (at 09:30 GMT) of data on business activity in the manufacturing sector and the number of approved mortgage loans in the UK in January. As shown by the data provided by the Bank of England, the number of approved mortgage loans in the UK in January reached a six-month high after a fall in December (67,478 versus 61,692 in December). The January figure was the highest since July 2017 and significantly exceeded the average for six months.

The index of business activity of purchasing managers (PMI) in the manufacturing sector for February was 55.2 versus 55.3 in January (the forecast was 50.0).

The pound received little support after the publication of the data, but, economists believe, for a short while. On Wednesday, the pound declined significantly in the foreign exchange market after some details of the draft agreement on the exit of the UK from the EU became known, according to which, in particular, the creation of a customs border between Northern Ireland and the rest of the UK is envisaged.

Thus, the dynamics of the pound in the coming months will strongly depend on news about Brexit. Although the collapse of the British economy after the referendum on Brexit in June 2016 did not happen, however, the pound fell sharply, which contributed to a significant acceleration of inflation in the UK. In this regard, the income of the British and their purchasing power declined, which affected domestic trade and retail sales. Since, the British economy is focused, first of all, on the domestic market; the decrease in domestic trade has a negative impact on the country's GDP.

In November, the Bank of England raised its key interest rate for the first time in a decade to contain inflation. Recently, central bank officials signaled that the rate may need to be raised earlier than originally expected. This is a strong factor in favor of strengthening the pound. At the same time, the pound will remain vulnerable against the euro and the dollar against the backdrop of Brexit.

The dollar, on the other hand, receives strong support both from the growing expectations for a faster rate of tightening of the monetary policy of the Fed, as well as from strong macro data coming from the US recently.

Today, the focus of traders will be the publication of a block of important macro data on the US (from 13:30 to 15:00 GMT), as well as the speech of the head of the Federal Reserve Bank Jerome Powell in the banking committee of the Senate (at 15:00 GMT). If he more specifically signals about the high probability of 4 interest rate increases this year, the dollar will receive an additional impetus for growth, including in the GBP / USD.

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 1.3725, 1.3630, 1.3550, 1.3420, 1.3390, 1.3210

Resistance levels: 1.3890, 1.3970, 1.4050, 1.4100, 1.4185, 1.4340, 1.4400, 1.4500, 1.4575



Trading Scenarios

Sell on the market. Stop-Loss 1.3810. Take-Profit 1.3700, 1.3630, 1.3550, 1.3420, 1.3390, 1.3210

Buy Stop 1.3810. Stop-Loss 1.3690. Take-Profit 1.3890, 1.3970, 1.4050, 1.4100, 1.4185, 1.4340, 1.4400, 1.4500, 1.4575

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com

 

[TifiaFX]

S&P500: indexes continue to decline

02/03/2018

Current dynamics

Major US stock indexes continue to decline, receiving a negative impulse at the beginning of the week from the speech of the head of the Fed, Jerome Powell.

As you know, during his first official speech before Congress on Tuesday, Powell drew a very positive picture of the state of the American economy, confirming the Fed's intention to gradually tighten monetary policy.

"Economic prospects remain strong. A further gradual increase in the rate of federal funds will best contribute to the achievement of the goals of the Fed", in his opinion.

Jerome Powell said that the Fed "will continue to seek a balance between avoiding overheating of the economy" and the achievement of annual inflation of 2%. Many investors considered Powell's speech as a signal to the Fed intending to hold 3 interest rate increases planned at the December meeting. Some market participants felt that the Fed could implement even 4 increases instead of the previously planned 3 increases. According to CME, the probability of 4 rate increases this year is estimated by investors at 34%. On Monday, this probability was 24%, and a month ago - 23%.

The tightening of monetary policy negatively affects the dynamics of the stock markets, since it leads to an increase in the cost of borrowing. Investors in this case prefer the dollar as a more reliable form of investment in comparison with highly risky assets.

On Friday, the major US stock indexes are down for the fourth consecutive day.

On Thursday, President Donald Trump, who announced that next week he will approve the plan to introduce new import duties on steel and aluminum by 25% and 10%, respectively, contributed to this decline. Market participants are afraid of accelerating inflation and slowing the growth of US GDP due to new import tariffs. From China and Europe, statements from the authorities have already followed that they will take counter measures to protect their interests.

Since the beginning of the week, the DJIA dropped 3.3% to 24510.0 points, the S & P500 fell 3.1% to 2670.0 points. Thus, DJIA for 2018 decreased by 0.4% and the S & P500 - by 0.2%, again moving into the correction zone. European stock markets also fell. STOXX Europe 600 fell 1.3%, German DAX fell 2.0%, and the British FTSE and French CAC fell 0.8% and 1.1%, respectively.

World trade wars have not brought long-term benefits to anyone. The yield of 10-year US government bonds fell to 2.802% from 2.870% on Wednesday, showing the most significant drop since September and indicating that investors are buying safer assets.

Today, important news on the US is not expected. It is likely that the stock indexes, including the S & P500, will finish today's trading session in negative territory. While the S & P500 is below the short-term resistance level of 2725.0 (200-period moving average on 1-hour and 4-hour charts), it is necessary to consider only short positions with objectives at support levels 2630.0 (Fibonacci level 23.6% of the correction to growth from February 2016 and EMA144 on the daily chart), 2580.0 (EMA200 on the daily chart).

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics


Support levels: 2672.0, 2630.0, 2580.0, 2530.0

Resistance levels: 2725.0, 2785.0, 2800.0, 2829.0, 2877.0, 2900.0



Trading Scenarios

Sell in the market. Stop-Loss 2686.0. Objectives 2630.0, 2614.0, 2585.0, 2530.0

Buy Stop 2686.0. Stop-Loss 2665.0. Objectives 2725.0, 2785.0, 2800.0, 2829.0, 2877.0, 2900.0

*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com