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Daily Market Analysis from ForexMart

Discussion in 'Market Forecasts and Analysis' started by Andrea ForexMart, Dec 22, 2017.

  1. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    German’s Strong Economic Upswing Despite Weak Growth in Q1, says Finance Ministry


    Germany’s economy had a strong growth amid weak data from the largest economy in Europe earlier in 2018, according to the finance ministry on Tuesday. Moreover, economic output expanded by 0.3 percent in Q1 after the 0.6 percent growth in the last quarter of 2017. The finance ministry also mentioned that the downturn was caused by temporary factors such as ill-health conditions and strikes that affect industrial output alongside the above-average number of public holidays during the quarter.


    In addition to it, the ministry stated that industrial orders continued to be at an extremely high level and that export activity at German companies could take advantage of the strong development of the world economy.


    Reportedly, the combination of moderate inflation, agreed raise in pensions, robust labor market and wage hikes led to the possible solid income development and continuous support in private consumption. The government of Germany believes that the economy will grow by 2.3 percent this year.


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  2. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    GBP/USD Technical Analysis: May 22, 2018


    The British pound slightly declined at the beginning of the Monday session as it reached the level of 1.34 before finding buyers. Since there are still signs of support, it looks like it supported the fight for buyers. Yet, there are some major concerns above.


    Trading the British major currency pair slid down towards the psychological level of 1.34 before going up again. It has shown a significant amount of bullish pressure but there could also be signs of significant resistance in the previous uptrend line, established in the yellow ellipse on the chart. This gives a significant amount of resistance with a high probability of a rollover then we could look for the level 1.34 below, which was also supportive in the past. A breakdown below would allow the market for a decline up to the level of 1.33 and further to 1.30.


    We should be cautious of any rally, at least not until a successful breakout to 1.3550. For now, we could reverse the whole situation completely, but I think there will also be a continuation of dollar strengthening in the short-term, which is likely to extend for the rest of the summer and continue its rally in the U.S. When a breakdown occurs below the uptrend line, this could become a problem for the British pound. Although, it may not necessarily be a problem as much as the strengthening of the U.S. dollar. I would look for some type of exhaustive candle near the area of 1.3475 to begin shorting this pair.



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  3. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    EU Bloc Negotiates with Australia and New Zealand


    The European bloc confirmed yesterday the start of free trade negotiations with Australia and New Zealand in order to establish new relations against the increasing trade tensions with the United States. The European Commission represents the 28 EU countries and negotiates about its plans and agreement towards the AU and NZ despite the warnings on opening the EU markets to generate farm products like beef and butter.


    According to forecasts from EU, its exports towards Australia and New Zealand may expand by a third in case that trade agreements were finalized. Considering the fact that its trade partnership with the US was suspended by the presidential election victory of Donald Trump, the EU shifted its focus to build allies with open markets and struck agreements with countries on the same mind.


    The bloc also deals with the result of steel and aluminum tariffs set by the US and the sanctions they would impose against Iran, which could lead to restriction of certain foreign businesses. The EU closed the deal with Japan, Mexico and Singapore and currently working with the Mercosur bloc of Argentina, Brazil, Paraguay, and Uruguay.


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  4. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    NZD/USD Technical Analysis: May 23, 2018


    The New Zealand currency rallied during Tuesday’s trading session and further reached the level of 0.6975, prior a rollover and wiping out throughout the day. The ascending triangle was broken in the previous session and currently testing the possible support area. Nevertheless, the NZ dollar looks like to continue struggle under the hands of the US dollar since America have higher interest rates that could continue dominate the greens in general. Moreover, the commodity markets would likely to suffer also except the oil.


    Looking forward, the market has the potential to cut through the 0.70 zone based on the trend from the ascending triangle. A move closer to the 0.70 region will enable us to meet more aggressive sellers that would take advantage of the cheap greenbacks. In this regard, selling the rallies could be an option and it takes some time before the break down of the market to the 0.6850 mark again. Eventually, it will test the 0.68 zone which serves the bottom of the longer-term consolidation.


    The NZD/USD pair should be expected to be volatile but with some downward slant generally. While most rallies will not last long.



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  5. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    EUR/USD Technical Analysis: May 24, 2018


    The euro had a significant decline during the Wednesday session and broke the area below 1.17. It seems that the market will proceed to lower, which could lead to the downfall of the euro. There are other problems with the European Union, as well as, Italian concerns.


    The euro has broken lower as mentioned earlier and it seems that it goes down much lower. The major support level below would be the 1.15 level and will likely remain to be the goal. Short-term rallies could offer opportunities in selling this market against the greenback. The level of 1.1825 is slightly a ceiling although, it seems difficult to see a situation where there is a continuous short-term rally and lead to exhaustion later on.


    If the pair breaks below the area of 1.15, the market could take out quite a bit of a value in there. I suggest to be careful about relying on the rally with a lot of negativity from the European Union as a whole. As the interest rates in the United States increases, it seems that greenback will gain more attention and have an effect on the forex market. There is a tendency for the market to look for the bottom as the euro declines importantly that could easily deceive new traders. The downtrend may be significant but it seems difficult to be sustained in longer-term and at least try to reach the level of 1.15.



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  6. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    PBOC Increased the 28-repo rates by 2.85 percent


    The People’s Bank of China adjusted their rates higher on the 28-day reverse bond repurchase agreements to keep with the pace on previous increases in tenors for the past two months.


    According to the report from the online site of the PBOC, the 28-day reverse repos raised from 2.80 percent to 2.85 percent.


    This move was enacted after the U.S. Federal Reserve Bank had also raised their rates on March 21 which signifies that Beijing is keeping up with the global market trends despite all of the financial risks in their homeland.


    Moreover, the central bank added 30 billion yuan into money markets, particularly on their 7-day and 28-day rates on Monday, where the seven-day was set at 2.55 percent based on their given statements.


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  7. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    GBP/USD Technical Analysis: May 28, 2018


    The British pound against the U.S. dollar is moving higher towards the area of 1.3350 in a calm manner during the Monday session. Hence, we can expect a muted Monday session since the Memorial Day and the U.K. has also extended their Spring Bank holiday. Since most major pairs are not active at the beginning of the week, there is very low volatility for the week and less economic calendar for most of the week. The first data to be released will be on Wednesday, followed by Non-Farm Payrolls on Friday. Investors will monitor carefully for any signs that could induce volatility for the week.


    The British major pair is trading close to the cyclical lows of 1.3305 at the last week of May after scheduled data for the week failed to support against the greenback. The macroeconomic of U.K. is influenced by two significant headlines including sluggish economic growth and decelerating inflation. The inflation target of 2 percent by the central bank is moving at a faster rate in line with the bank rate. This is due to the inflation-adjusted real wage amid the stale growth in the first quarter of the year. Both actions support the argument of the Bank of England following the bank rate with the forecast of Bank rate hike by 0.25% in February next year referring to the efficiency of money market rates.


    Sluggish inflation of the Sterling is not so good as it gives them more time for the BoE before acting on the interest rates. The Bank of England Governor, Mark Carney, and the Monetary Policy Committee (MPC) external member, Gertjan Vlieghe, have the same sentiment when it comes to the monetary policy where they deem the interest rates to go up gradually in the next few years. The bearish trend resumed as exhibited on the daily chart after a period of consolidation at the beginning of the month, but has not yet found a bottom following the previous decline where the indicators showed moderate easing. We should anticipate the support level at 1.3280 / 1.3245 and resistance level at 1.3365 / 1.3400.



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  8. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    USD/JPY Technical Analysis: June 5, 2018


    Yesterday, the U.S. dollar swayed sideways and reached the level of 109.50. The next target will probably be the 110 handle given a large whole number. It has shown some amount of resistance recently.


    The greenback moved sideways against the Japanese yen during the Monday session, which was highly bullish in the past few days. As expected, the pair formed a hammer pattern on the weekly chart and the pair is likely to rise higher when it breaks the level above. It would probably reach the level of 110 and until it does, I would be cautious before placing a lot of money on it. If the pair declines from here, it would not be easy to short this pair since there is a lot of support found below.


    The market will probably be sensitive in regards to trading the pair, given the rising concern on the trade war with the United States. If the market becomes anxious on the trade war, this is likely to affect the market with the greenback have a hard time in general. I think short-term pullbacks would offer a lot of opportunities, which can be seen in the present time. Thus, I would think twice before placing trades at least until a successful breakout on the said level of 110. We should bear in mind that the pair movements will be relative to the risk appetite that is why we should give attention to the stock market especially the S&P 500. Thus, it won’t be easy to work on this pair. If it rallies on the market, then this pair will probably rise higher as well.



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  9. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    EU’s Malmström Against Trump’s Tariffs


    The European Union is trying to convince the countries Canada, Japan, and Mexico to work together against the aggressive trade policies imposed by US President Donald Trump, according to European Commissioner for Trade Cecilia Malmström today.


    Malmström further stated that EU is reaching out various countries to form alliances and arrange a trade union who believe in international laws. Last week, the EU announced levying retaliatory tariffs up to €2.8 billion-worth of U.S. exports, which includes peanut butter and motorboats. While Canada, India, Japan, and Mexico will do the same thing. The European Commissioner described Trump’s tariffs on steel and aluminum as “not legitimate” The Swedish Commissioner also cautioned regarding the potential risk towards the global economy.


    Both the United States and Europe set up the international policy and organizations to govern trade, but the US broke the rules that is why the EU has to take necessary action, Malmström said.



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  10. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    GBP/USD Fundamental Analysis: June 6, 2018


    The British pound is being traded above the 1.3400 level prior to the upcoming London market session driven by better risk sentiment. The currency has reached new highs this month after reaching as low as 1.3204 on 29th of May. It reached the levels higher than 1.3400. The dollar has further weakened amid better market sentiment which has a big impact on the Sterling Pound. The news on amenability to discuss the possibility of tapering the QE by the central bank could support the currency, yet this still remains on the hopeful list. Nonetheless, traders will probably opt to buy across the Eurozone that could push the pound higher as a consequence. There is a positive action in the previous two trading session in major macro data releases and the U.S. greenback could be on advantage today if the pound falls behind or the macro data from the U.K. turns out bearish.


    Traders are looking out for Brexit related news, yet, Prime Minister may delays the publication of the government’s plan until the leader’s summit this month. Let along the upcoming GBP data on London is insufficient to induce momentum, except for a correction to the lower boundary of the channel.


    There are speeches expected from the BOE Monetary Policy Committee member Silvana Tenreyro at 10:40 GMT and MPC member Ian McCafferty speaking at 16:00 GMT. Meanwhile, traders will center their attention to the US Trade Balance figures alongside Nonfarm Productivity and Unit Labor Costs for the first quarter to be released at 12.30 GMT. On a technical note, the pair will rise higher and a major breakout is yet to happen. Readings for short-term will give more gains in the future. We can expect the resistance level to be at 1.3420 / 1.3460 and support level at 1.3370 / 1.3335.



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  11. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    The current Money Fall contest has already started on June 4, 2018 and will end on June 8, 2018.


    You can register for the next competition which will take place from June 11, 2018 to June 15, 2018


    Note:

    Registration for the next competition finishes 1 hour before the contest starts.
     
  12. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    GBP/USD Technical Analysis: June 7, 2018


    Yesterday, the British pound rose significantly after breaking the level of 1.34. It seems that there are signs of continuing the current trend. There is a massive support found at 1.33, at least in the short-term, which has been an important level more than once.


    The British currency shows signs of strength a bit of a relief given the uptrend. The initial target would be above the level of 1.35 but if it can break higher then there is a chance for the price to reach 1.3650. Short-term pullbacks would offer a lot buying opportunities below and it seems that the market is trying to turn around for short-term. There are speculation of dollar shortage because of global liquidity that makes it unstable to be considered for long-term. Yet for short-term, it seems that buyers are leading the trend.


    If it successfully turns around then we could break the level below 1.33 to test the level of 1.3250 and potentially reach 1.30. Choppiness would still be a problem that makes it ideal to trade in small positions. Then, once the market adjusted to how we want it to be, we can increase our trades. If the price break above 1.3650, this would be highly bullish and allows the price to further move. In the given rate, I am looking for a “buy-and-hold” strategy. For now, we can expect volatility at the very least in the next few days. The market will probably continue to give emphasis on short-term trades.



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  13. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    GBP/USD Fundamental Analysis: June 11, 2018


    The pound/dollar pair continued to trade around the 1.3430 region on the back of the failure to create bullish momentum in the previous week, as it was beaten by the major handle and the markets are waiting for further progress in Brexit this week. Due to the scheduled FOMC rate hike in the upcoming week, the interest rate differential of the GBP and the USD is predicted to move in different directions which could hold the Pound on its starting position and push the British currency into the recent lows. Following the recently rejected Irish border solution, market participants await for further news within this week while the United Kingdom continue to negotiate in looking for the middle ground for the hard-line Brexiteers and the EU leadership in Brussels. Nevertheless, Prime Minister Theresa May was caught in between and trying to find fair solutions for both sides.


    The upcoming week is projected to be really busy for the Sterling pound since 4 out of 5 trading session this week brought extreme impact to the UK calendar that could support a high level of volatility for market players. Today has plenty of data for Britain which will be all published at 08:30 GMT, however, the focus will be on the Manufacturing Industrial Production data which is expected to remain unchanged at 2.9%. The US session today appears to be in smooth sailing according to the economic calendar, but traders might deal with the G7 summit blowout, wherein US President Donald Trump leave the summit earlier and depart the US’ support of the G7 communiqué, following a Tweet from POTUS aboard Air Force One heads to Singapore for the Trump-Kim summit.


    At the same time, the figures for Average Earnings Index +Bonus (Apr), Claimant Count Change (May), Core CPI & PPI input and Core retail sales in the next three consecutive trading sessions. Moreover, the daily chart indicates that the GBP/USD currency pair corrected higher from the lows of 1.3205 alongside the diverging technical oscillators. On the other hand, the Relative Strength Index (RSI) had an unexpected move towards the oversold area and bounced back to the GBP, which descends to the levels of the beginning of last week. The Slow Stochastic resumed moving in an upward trajectory. The daily chart of the 50-day and 100-day moving average formed a death star crossover, this means that there is an initial downside potential of the Cable pair to break the 1.3300 region prior attacking the area of 1.3200. The upside of the pair is necessary to break back above the 1.3380 to the 1.3450 target, which is the last week’s high.


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  14. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    U.S. Consumer Prices Rose to a Record High of 2.8 Percent Over Six Years


    The consumer price of the U.S. increased slightly in May despite the slower growth of gasoline costs, implying moderate inflation in the economy.


    The inflation report of the Labor Department was released prior to the two-day policy meeting on Tuesday. With the steady growth of inflation and anticipated tightening of the labor market, the Federal Reserve is motivated to raise interest rates for the second time this year on Wednesday.


    The CPI data rise by 0.2 percent in the previous month while the cost of food remains the same. A similar increase of CPI was seen in April. After a year in May, the CPI gained 2.8 percent, which has been the biggest growth since February 2012, following its increase of 2.5 percent in April.


    Gaining 0.2 percent of the CPI, excluding volatile food and energy components, was due to the rebound of new motor vehicle prices and a pickup in the cost of health care, after rising to 0.1 percent in April. In turn, this raised the year-on-year gain of the core CPI by 2.2 percent from 2.1 percent in April. It was the largest growth since February last year.


    After the weak reading last week, the annual inflation measures are adjusting higher. Both the CPI and core CPI growth in the previous month met the expectations of economists.


    The Federal Reserve moves on a different inflation measure which is just lower than the two percent target. Economists have different perspectives on whether policymakers will implement more rate hikes in the statement following the rate decision on Wednesday.


    Meanwhile, the dollar is moving steadily against a basket of currency which is immediately after the data fell slightly than the U.S. Treasury yields, which is trading lower compared a slightly higher U.S. stock index futures.



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  15. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    GBP/USD Technical Analysis: June 18, 2018


    The British pound was able to dodge the immediate impact of the rise of the dollar while the euro dropped by two significant points that dominate the market in the previous week. The dollar gained from the rate hike which started by the Fed and the positive outlook of the Fed in the economy.


    The hawkish sentiments gave t chance to the dollar to rise and the dollar bulls to plan ahead with two more rate hikes to look forward to. The Fed gives similar signals which still yet to be seen if they would continue the process and they would implement this in a specific period of time later on. We have witnessed that the rate hike would have minimal impact on the market, especially on the pound.


    It seems that everything is going smoothly in the UK as the Brexit negotiation starts to advance and there are no signs of risks yet. Hence, the pound maintained its position in the support area despite the strengthening of the dollar and activities in the eurozone. The European Central Bank decided to extend the easing program which in turn, weakened the euro. Although, these things did not really affect the pound as it continues to trade close to the area of 1.32.


    There are some strong purchasing in this area, as well as at the level of 1.30. Once this is achieved, the lead will be in the hands of the bulls which is likely to be maintained in short term. It seems that there is also no major event to affect the movements and we can say that the price is in consolidation and persists to be within the range for the day.


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  16. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    USD/JPY Technical Analysis: June 21, 2018


    The USD/JPY pair closed higher inside day during the Wednesday session, reflecting uncertainty and expected volatility with a tendency to move up.


    The Forex pair also underwent a transition period after the momentum changed to a downturn at the beginning of the week. However, even if the momentum changed, the main uptrend remains solid.


    On the other side, there was a short-rally to cover after sellers moved below after a sharp sell-off on Tuesday.


    The Japanese yen major pair moved higher on early Thursday with a strong compulsion in purchases from the Wednesday and Thursday highs. Hence, this northward sentiment induces the market to move their positions in the attempt to test the psychological level of 110.859 and the main top at 110.905.


    Higher demand for risky assets drove the price action of the pair and losing the Japanese Yen as a safe-haven. On a deeper perspective, the tension on trade war between the U.S. and China is the main impetus of the trend.


    The pair is being traded 110.559 and increased by +0.19% or 0.215 at 2.04GMT. It is likely to uphold its positions taking into account rising of stocks and unsettled trade war between the two big nations continues to advance peacefully.


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  17. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    The current Money Fall contest has already started on June 25, 2018 and will end on June 29, 2018.


    You can register for the next competition which will take place from July 2, 2018 to July 6, 2018.


    Note:

    Registration for the next competition finishes 1 hour before the contest starts.



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  18. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    The current Money Fall contest has already started on July 2, 2018 and will end on July 6, 2018.


    You can register for the next competition which will take place from July 9, 2018 to July 13, 2018


    Note:

    Registration for the next competition finishes 1 hour before the contest starts.



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  19. Andrea ForexMart

    Andrea ForexMart Broker Representative

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    The current Money Fall contest has already started on July 9, 2018 and will end on July 13, 2018.


    You can register for the next competition which will take place from July 16, 2018 to July 20, 2018


    Note:

    Registration for the next competition finishes 1 hour before the contest starts.


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  20. Obasi FXMart

    Obasi FXMart

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    GBP/JPY Technical Analysis: July 17, 2018

    The British pound rallied a little during the Monday session and reaches the level of 149.50 before apparent signs of exhaustion. Higher than 150 signifies exhaustion in the market with expected resistance. Thus, we could strike on the opportunity to short this pair. It looks like the market has overexpanded and faces strong psychological level above 150.

    Although it is still suggested to short this pair in a smaller move, the long-term selling will bring the rates back to 150. A break higher would give the green light to traders in applying the “buy and hold” strategy yet, the strong political tension around Britain could strengthen the Sterling pound for long-term. The pair will continue to chop around and eventually make way for some clarity that the trend lacks as of the moment. For the short term, sellers are anticipated to be present while more sellers will join in the long-term above the trend. Nevertheless, we should keep the possibilities open as it may change anytime. Noise will still be present because of the political tension in the U.K. and global risk appetite. Hence, small trades will be the ideal approach for this market since noise will be the main impulse in overall trading while headlines will likely cause sudden movements in short-term.

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