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Daily Fundamental by jimmy forex

EUR/USD Fundamental Analysis March 6, 2014 Forecast
Analysis and Recommendations:
The EUR/USD eased by 7 points to trade at 1.3735 ahead of tomorrow’s central bank meeting. At the February ECB meeting, policy was kept unchanged. During the press conference President Draghi said that there had been a broad discussion that focused on the need for additional information because of the present uncertainty. He announced that in March the ECB staff projections would include forecasts to 2016, a far earlier public release of two year ahead forecasts than previously. This suggests that the 2016 inflation projection will be a crucial element in the ECB deliberations on Thursday. GDP data met expectations today.
After the G‐20 meeting, Mr. Draghi further emphasized the importance of these new projections, saying the council will have the full set of information needed for deciding whether to act or not by its next ECB council meeting at March 6, including the staff forecasts for 2016”

February HICP stabilized at 0.8% Y/Y, while core HICP rose to 1% Y/Y from 0.8% Y/Y previously. Markets, expected headline HICP to have dropped to 0.7/0.6% Y/Y and core inflation to have stabilized at 0.8% following the release of the national inflation reports of Germany, Italy, Spain and Belgium. Inflation in these countries was all lower in Y/Y terms. This suggests that the French inflation, not yet released, has risen substantially from 0.6% Y/Y in January. The increase in VAT introduced in France in January had not impacted French inflation in January (0.6% Y/Y), but might have done so in February.

Stocks across Europe recovered slightly yesterday following Monday’s heavy selloffs as markets responded positively to Russian President Vladimir Putin’s assertion that his country “will not go to war with the Ukrainian people”. The controversial Russian leader attempted to ease tensions in the region and play down fears that a new ‘Cold War’ could break out in the former Soviet Union. Putin’s diplomatic stance was seen as optimistic for the single currency because it did nothing to suggest that Russia is considering cutting off its oil supply lines to Western Europe.

There were no significant US data releases yesterday, leaving ‘cable’ traders to mull over the latest UK Construction Purchasing Managers Index. Despite the slide in the headline rate, from 64.6 to 62.6, the report featured multi-decade highs in civil engineering activity, which was seen to portend well for future Construction output.

US ADP Employment Change data out this afternoon could have an impact on Fed taper bets. However, the correlation between the ADP report and the more highly regarded Non-farm Payrolls figure has broken down in recent months, which could reduce volatility levels following the release. Today’s release indicated a lower than expected new jobs print.
 
EUR/USD Fundamental Analysis March 10, 2014 Forecast
Analysis and Recommendations:

The EUR/USD unexpectedly continued to climb today adding 17 points remaining in the green against a stronger US dollar which gained after the US nonfarm payroll surprised traders showing that the US had created more jobs than expected and last month’s data was revised upwards. The Euro surged up the currency ladder yesterday as a neutral European Central Bank policy statement gave the single currency fresh legs. The ECB elected to hold the benchmark interest rate at 0.25% and maintain its deposit rate of 0.00%. Markets had been primed for a loosening of monetary policy, most likely through the release of around €175 billion of ‘sterilized’ ECB funds. However, the Bank opted against trying to boost liquidity in this fashion because it did not feel that economic conditions in the currency bloc had deteriorated to the extent that further stimulus was needed.

On a less positive note: US Factory Orders contracted by -0.7%, confounding expectations for a slightly less steep fall of -0.5%. The previous month’s figure was also revised lower, from -1.5% to -2.0%, which wiped out the positive sentiment from the Jobless Claims figure and allowed GBP/USD to rally by around half a cent.
 
EUR/USD Fundamental Analysis March 11, 2014 Forecast

The EUR/USD gained 5 points to trade at 1.3883 holding its gains after the ECB press conference. The euro remains over stated against its crosses especially the US dollar and is headed for a fall. European Central Bank Governing Council member Christian Noyer said a strengthening euro creates unwarranted pressure on the euro-area economy.

“It’s a very important input in the economic development and inflation development,” Noyer said in a Bloomberg Television interview with Manus Cranny in Paris. “When the euro tends to strengthen, it creates additional downward pressure on the economy and inflation, which in both cases isn’t warranted. So we’re not happy at the moment.”

The euro has climbed 6.7 percent against the dollar in the past year, curbing the price of imported goods and threatening the competitiveness of producers in the currency bloc.

The Euro continued to attract investments from traders on Friday as the European Central Bank’s decision to hold back on further stimulus bolstered demand for the single currency.

The Euro also reacted well to news from the ECB that European banks are set to repay a sizeable chunk of emergency 3-year LTRO loans next week. With banks suitably optimistic with the economic situation as to not need further support from the ECB the single currency managed to strike a 2-year high against the US Dollar

http://www.jimmyforextrader.com/fundamental-analysis/
 
EUR/USD Fundamental Analysis March 12, 2014 Forecast

Analysis and Recommendations:

The EUR/USD eased by 19 points to trade at 1.3858 on a quiet trading day, with no specific data or market movers. Sentiment shifted as traders began to worry that the strong euro would help the eurozone recovery. The confidence of investors in the Eurozone rose again this month, climbing to the highest level since early 2011 despite the announcement of poor industrial output in France.

The Sentix investor confidence index reached 13.9 in March, the highest level since the same month three years ago, before the European Central Bank’s swiftly-reversed increase in interest rates. Any figure over zero indicates that investors are generally confident. Sentiment readings have improved for the struggling currency union since a trough in mid-2012, when the score fell to below minus 30.

The European Central Bank’s decision to leave monetary policy unchanged, and its seemingly relaxed attitude to the impact of a strong euro on deflation, may have put the single currency on course to reach its highest levels in nearly three years.
If the euro zone economy shows more signs of recovery in coming months and US data remains patchy, the euro could rise towards $1.45 – a level seen in mid-2011 – before the ECB expresses discomfort with the exchange rate.
http://www.jimmyforextrader.com/fundamental-analysis/
 
EUR/USD Fundamental Analysis March 25, 2014 Forecast

The EUR/USD gave up 24 points to trade at 1.3770 as the US dollar continued to rally and overall Eurozone PMI numbers disappointed. The euro earlier jumped to a European session high after surveys showed French business activity grew in March at its fastest in more than 2 1/2-years, beating forecasts for further contraction in the bloc’s second-largest economy. The currency quickly gave up those gains after data showed the German private sector slowed in March, disappointing investors who were positioned for a better reading. The euro jumped to $1.3827 from around $1.3798 before the French data were released, pulling away from a recent two-week trough of $1.3749. It fell back to $1.3775 after the German data, which left it down 0.1 percent on the day.

It doesn’t look like the ECB will do anything. So the next leg in the euro/dollar pair has to come from the dollar’s side. And for that we need U.S. data to outperform and investors to price in expectations of Fed rate hikes. Partly supporting the euro has been the perception that the European Central Bank is reluctant to ease monetary policy any further. The euro’s resilience prompted the president of the European Council, Herman Van Rompuy, to complain on Friday that the currency was too strong for euro zone exporters.

Governing Council member Erkki Liikanen said on Monday that the ECB keeps a close eye on the euro to see how it affects inflation, ramping up efforts to talk down the currency.

http://www.jimmyforextrader.com/fundamental-analysis/
 
EUR/USD Fundamental Analysis March 26, 2014 Forecast


Analysis and Recommendations:

The EUR/USD eased by 33 points to trade at 1.36806 after German data disappointed markets once again. The German economy is now coming under the spotlight as consumer and business confidence falls along with manufacturing PMI. The euro was steady on Tuesday, holding well above recent lows after a mixed German business sentiment survey, and the dollar was flat as investor’s awaited fresh U.S. economic data. The German Ifo business morale index fell for the first time in five months in March, as expected, but current conditions sentiment edged higher, giving investors who had positioned for a weak set of readings an excuse to buy the euro at lower levels.

The euro was in the red, having rallied on Monday on talk that a large sovereign investor may have bought the single currency as part of its reserve management exercise. Other traders attributed the gains to German companies repatriating profits from overseas.

“The Ifo survey was disappointing but only slightly,” said Peter Kinsella, currency strategist at Commerzbank. “Business conditions remain robust, pointing to decent growth and a pick-up in wages. Typically the euro would have dropped if it was a very weak Ifo number. But it hasn’t.”

The euro fell to a day’s low on Tuesday after European Central Bank governing council member and Bundesbank chief Jens Weidmann said negative interest rates would be more appropriate to use to counter a higher exchange rate.

Weidmann also added that it was not ‘out of the question’ for the ECB to buy bank assets to fight deflation, in a softening of the German central bank’s strict stance on the issue.
http://www.jimmyforextrader.com/fundamental-analysis/
 
EUR/USD Fundamental Analysis March 27, 2014 Forecast


The EUR/USD continued to ease to trade at 1.3793 down by 33 points after US durable goods month over month printed better than expected. The euro eased against the US Dollar yesterday as US housing data signaled that the effects of the polar vortex were slightly more severe than initially thought.

The euro steadied today, bouncing off lows after comments from European Central Bank officials helped temper dovish comments made against the background of the currency’s recent bullishness. The single currency hit a three-week low on Tuesday after ECB governing council member and Bundesbank chief Jens Weidmann said negative interest rates were an option to temper euro strength and that quantitative easing was not out of the question to combat deflation.

But the euro, which had reached a 2-1/2-year peak against the dollar mid-March on diminished ECB easing expectations, recovered when Weidmann later said the current euro rate does not call for monetary policy action. It was reported that New Home Sales fell by -3.3% during January, which is the fastest decline for five months, as the inclement weather delayed purchases and caused sellers to reduce prices by 1.2%. However, prices are still around 13.2% higher than this time last year, according to the Case-Shiller index, and the housing market could expand further in the coming months as the effects of the storm wear off. A separate report printed more favorably for the greenback, showing that US Consumer Confidence is currently at a 6-year high of 83.2.
 
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