4 July, 2017
This week, the dollar is starting off on a strong note as US interest rates continue their increase from Friday. For example, 10-year yields were around 2.33%, up by 0.03% from Friday afternoon.
Even though EU CPI beat all the predictions, still EUR/USD failed to make another 2017 high on Friday and USD/JPY rose on Friday as US interest rates moved up (the yen weakened).
This week started with several significant indicators in Asia. Tankan, the Bank of Japan’s short-term survey of economic conditions exceeded all expectations on most of the major indicators. In addition, PM Abe’s Liberal Democratic Party (LDP) had a tragic defeat during the election for Tokyo’s assembly. They lost more than half of their seats and ended up with only 24 in the 127- seat assembly. Weirdly enough, this caused the yen to strengthen momentarily on risk aversion.
The yen quickly resumed its trend downwards with USD/JPY resuming its uptrend, making the yen as the biggest currency loser among other currencies today.
Oil prices rose after the weekly Baker Hughes data showed that the number of oil rigs in the U.S decreased in the last week. This happened for the first time after 24 weeks.
Trading activity is expected to be limited in the afternoon as the US Independence Day Holiday is on Tuesday and most people are going to take Monday off as well to make it a long weekend.
The European day will start with the final PMIs from Germany, France and the EU. Even though the figures are sometimes revised, investors don’t usually react to the revisions much.
Therefore, the first major indicator on the European schedule for today is the UK manufacturing PMI which is expected to have a slight decline but this isn’t expected to cause any problems as it is going to decline from a relatively high level.
In the US today, the final version of the Markit manufacturing PMI is expected to be released today. This will be released 15 minutes before the closely watched Institute of Supply Management (ISM) index (the original PMI), and therefore, its implications on the market are quickly eradicated.
The ISM index is predicted to have a slight increase as the five regional Fed surveys plus the Chicago PMI were in general higher and oil prices are weighing on sentiment. If the higher ISM index prediction becomes a reality, this could convince investors to join in and push the dollar even higher.
US construction spending is expected to rebound slightly on a month-on-month basis but still remain relatively weak. As the graph below demonstrates, even after the sharp decline in April, the May figure is expected to go below the average level of growth for the last six months.
The H4 the price was unable to consolidate below 1.1400 (or see a 23.6% correction) of course this doesn’t mean that the currency pair won’t see a correction soon. If the pair surpasses 1.1400 near the intersection with the limit of the upper fan...
Compounding the effect was a slip in retail sales fell continuing last month’s trend. Estimates gauge the possibility of another rate hike at under 50%., of course this is a disparate position from FOMC’s plan to commit 4 increases by 2018...
The currency strengthened opposite the JPY and EUR, but slipped opposite AUD and GBP. Janet Yellen head of the FRS went on record in front of Congress pointing out the US economy’s positive trend which in turn will affect the Fed’s interest rate stance...
The US Dollar floundered against most other FOREX currencies yesterday. The only currency that fared worse than the dollar (resulted in the USD strengthening against it) was the EUR...
Our four-hour chart is showing Tenkan-sen under the Kijun-sen, both while being horizontal. Chikou Span confirmative line bisects the chart from below, indicating a descending cloud reversing into ascension. XAU seems to be trading over both the Tenkan-sen and Kijun-sen...
Mario Draghi shook up markets on Tuesday by announcing victory against deflation and stating that policy needs to gradually normalize...
It seems that investors confidence in commodity currencies were renewed as their prices grew while the safe-havens...
The four-hour chart above clearly shows the Tenkan-sen line crossing the Kijun-sen from the bottom of the chart, we also see the blue line moving downwards, while the red is holding horizontally. The Chikou Span confirmative line is moving towards the bottom of the chart, indicating a descending cloud...
CAD was the biggest mover on Friday with a sharp fall after the Canadian CPI slowed even more than expected...