UNIQUE FOREX NEWS FROM A VERY UNIQUE FOREX BROKER CTRADER | FIX API | PAMM | CUSTOM LIQUIDITY | MT4

USEFUL MUSINGS

brought to you by your favorite forex broker | FXPIG™

Trying to figure out what to trade? Check out Market Analysis for a selection of financial forecasts from around the web or Mr. Markets for a unique perspective on the financial world from the PIG that knows it all. Looking for the latest PIG News and Promos? Check out the Company News section to see what’s new and exciting here at FXPIG™. Maybe you just want to read something fun? A quick laugh about how ridiculous all this ridiculousness can really be? For a quick fix trot on over to Obsessed.

GBP low

FOREX_GBP-low-before-BOE-meeting

The pound sank to a seven-month low on Thursday before a Bank of England monetary policy meeting where officials could indicate if interest rates will be raised this year despite a weak spell for the economy.

No economists polled by Reuters expect the BoE to raise rates and some are getting cold feet about their forecasts for a rate rise in August, which would be only the second increase by the central bank since the 2008 financial crisis.

Market expectations are for a less than 40 percent likelihood of the Bank of England’s Monetary Policy Committee (MPC) raising interest rates by August, with about an 80 percent chance of one more rate hike by the end of 2018.

Sterling on Thursday fell to $1.3125, its lowest since mid-November 2017.

Against the euro, the British currency traded flat at 87.92 pence reflecting reluctance among investors to take out big positions before the BoE meeting.

Sterling rebounded modestly against the dollar and the euro on Wednesday after Prime Minister Theresa May won a crucial Brexit vote in parliament, averting a rebellion that could have undermined her authority.

May needed the lower House of Commons to pass her EU withdrawal bill - legislation that will prepare Britain for a divorce next March that will end its more than four-decade-old trading and political partnership with the rest of Europe.

Traders are divided as to whether May’s victory will boost her chances of securing a more favourable Brexit deal with the European Union given that many more months of negotiations remain.

Source:fxstreet.com

The pound sank to a seven-month low on Thursday before a Bank of England monetary policy meeting where officials could indicate if interest rates will be raised this year despite a weak spell for the economy.

READ MORE

Forex Trading Quote

FOREX_Trading-quote_wisdom-Buffett_FXPIG

...If your facts and reasoning are right, you don’t have to worry about anybody else...

-WARREN BUFFETT

READ MORE

FOREX Tech Targets

FOREX_tech-targets_daily-analysis_bulls-and-bears_FXPIG

EUR/USD: Neutral (since 05 Jun 18, 1.1700): Dip below 1.1505 not ruled out but weakness unlikely to be sustained.

As highlighted yesterday, despite the recent weakness, we are not convinced that EUR has reentered a bearish phase. However, a dip below the year-to-date low of 1.1505 is not ruled out but at this stage, we do not expect any weakness to be sustained (1.1450 is the next strong support). All in, EUR is likely to stay under pressure until it can reclaim the ‘key resistance’ at 1.1680 (level previously at 1.1710).

GBP/USD: Bearish (since 20 Jun 18, 1.3175): Major 1.3040 level is likely out of reach. No change in view.GBP plummeted below the previous year-to-date low of 1.3205 yesterday and hit 1.3151. The break of the key 1.3205 level suggests that GBP has reentered a bearish phase. However, after the sharp decline last month, indicators have to fully unwound and any weakness from here is likely to be grinding and last November’s low of 1.3040 is likely out of reach this time round (1.3100 is already a strong support). That said, the outlook for GBP is deemed as bearish until the ‘stop-loss’ at 1.3290 is taken out.

AUD/USD: Bearish (since 20 Jun 18, 0.7385): Decline reaching oversold, weakness likely limited to 0.7330, 0.7300.

As highlighted yesterday, while the outlook for AUD is bearish, the decline that started last week is already approaching oversold levels. However, further weakness is not ruled but at this stage, we are seeing strong support at 0.7330 followed by 0.7300. In view of the oversold conditions, any weakness is expected to be slow and grinding and the two levels mentioned earlier are expected to offer solid support. In other words, we do not expect AUD to ‘accelerate’ lower. On the upside, only a break of the ‘stop-loss’ at 0.7455 (level previously at 0.7490) would indicate that a short-term low is in place.

NZD/USD: Neutral (since 22 May 18, 0.6945): Shift to bearish if NY close is below 0.6850.

The continuing sharp decline in NZD yesterday came as a surprise (NZD closed lower for the fifth straight day, down by -0.55%). Downward momentum has improved considerably and the odds for a sustained break below the year-to-date low of 0.6850 have increased. In other words, a clear break of 0.6850 (say a NY close below this level) would indicate that NZD has entered a bearish phase (targeting a move to the 2017 low of 0.6780). This scenario appears likely unless NZD can reclaim the ‘key resistance’ at 0.6945 (level previously at 0.6990).

USD/JPY: Neutral (since 21 Feb 18, 107.35): USD has likely moved into a broad consolidation phase. No change in view.In a last update on 14 Jun (spot at 110.25), we held the view that USD has room to move higher and ‘test’ the 111.00 resistance. USD subsequently touched a high of 110.90 but has since eased off. From here, there is no change to the neutral outlook and USD has likely moved into a broad consolidation phase and is expected to trade sideways to lower, likely between 109.10 and 110.65.

Source:efxdata.com

As highlighted yesterday, despite the recent weakness, we are not convinced that EUR has reentered a bearish phase. However, a dip below the year-to-date low of 1.1505 is not ruled out but at this stage, we do not...

READ MORE

Forex Today

FOREX_market-analysis-and-comment_FXPIG

Forex Today witnessed good two-way trading in Asia this Thursday, as a risk-on rally in the equities lifted the sentiment while weak fundamentals and US-China trade rhetoric kept the investors on the edge.

The USD/JPY pair dipped to 110.30 levels before staging a solid rebound to three-day tops near 110.70, as the US dollar ruled the roost. The Aussie’s rebound from 0.7350 region lost legs at the daily pivot of 0.7382, as markets await the approval of the Australian tax cuts, as proposed in this year’s budget. The Kiwi emerged the biggest loser and hit fresh 2018 lows at 0.6833 after New Zealand’s Q1 GDP annualized figures ticked lower.

Besides, the Euro and GBP traded with moderate losses along with the Swiss Franc, as markets look forward to the Swiss National Bank (SNB) and Bank of England (BOE) monetary policy announcements for the next direction.

On the commodities front, both crude benchmarks traded on the back foot ahead of the OPEC-JMMC Meetings while gold prices on Comex weakened further to hit six-month lows near $ 1266 levels on the back of higher Treasury yields.

Main topics in Asia

New Zealand GDP comes in at expectations, domestic household spending flat

New Zealand GDP came in at expectations, with the q/q figure printing at 0.5% (previous 0.6%), and the y/y/ figures coming in at 2.7% (previous 2.9%).

BoJ’s Funo: Uncertainty is high on other countries' trade policies, warrants attention

More comments flowing in from the BoJ board member Funo, via Reuters, as he continues to speak about the economy and trade barriers.

Irish PM Varadkar: Need much more Brexit progress from the UK

The Irish Prime Minister (PM) Leo Varadkar was on the wires earlier today, via Reuters, speaking about the Brexit issue ahead of his meeting with the European Union (EU) President Juncker.

China’s CommerceMin: China’s Vice Premier Liu to attend meeting with Europe delegation

China’s Commerce Ministry is out with a statement on Thursday, announcing that the country’s Vice Premier Liu will attend the upcoming meeting with Europe delegation in Beijing.

China’s CommerceMin: If US releases new tariffs list, China fully prepared to respond

Reuters reports further headlines from the Chinese Commerce Ministry, this time highlighting the US-Sino trade spat.

Key Focus ahead

Today’s macro calendar is centered on the SNB and BOE monetary policy decisions due later at 0730 GMT and 1100 GMT respectively. Both the central banks are expected to make no changes to its monetary policy settings and therefore, are likely to be a non-event. However, the minutes of the BOE monetary policy meeting will be closely eyed for any fresh hints on an August rate hike.

On the data front, there is nothing of note, except for the second-tier Swiss trade balance and the UK public sector net borrowings for May. Also, in focus will be the speech by the ECB Governing Council member Weidmann due at 0945 GMT.

In the NA session, the Canadian ADP jobs data will be watched alongside the US Philly Fed manufacturing index and jobless claims. Towards NY close, the BOE Governor Carney’s speech will be eyed for further insights into the central bank’s policy outcome, as he is scheduled to speak at the Mansion House dinner, in London.

EUR/USD headed back to 1.1535/30 amid notable USD demand

Having consolidated briefly around the 1.1575 region in early Asia, the EUR/USD pair came under fresh selling pressure, as the US dollar recovery regained traction amid better risk appetite.

GBP/USD struggling to lift away from 1.3150 ahead of BoE rate call for Thursday

Thursday's big event is the Bank of England's (BoE) rate call, due at 11:00 GMT, and the central bank is widely expected to remain on hold on rates. The BoE was knocked off their hawkish stance recently … 

The Bank of England Preview: MPC to hold rates steady as the inflation outlook remains anchored

The Bank of England (BoE) nine members strong Monetary Policy Committee (MPC) is expected to hold the Bank rate at 0.50% and the volume of the asset purchasing unchanged this Thursday.

Source:fxstreet.com

Forex Today witnessed good two-way trading in Asia this Thursday, as a risk-on rally in the equities lifted the sentiment while weak fundamentals and US-China trade rhetoric kept the investors on the edge.

READ MORE

PAMMs Daily Updates

FOREX_Daily-managed-accounts2006_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

The Return of “Influence”

FOREX_trump-desperate-to-make-friends2006_FXPIG

Central Bankers Starting to flex

If last week taught us anything it was a reminder that Central Banks still exert a major influence over markers when they choose to do so.

Since the financial crisis and the Bank’s efforts to ensure that there was lasting no global recession, they have allowed markets to find their own level. This was probably the wisest thing to do and was most likely agreed by them all. The subtle manipulation of FX levels was considered to be of secondary importance.

It is a trait of the U.S. Treasury and Federal Reserve that they get twitchy when not influencing markets as was seen in the days of Greenspan, Bernanke, Summers, O’Neill and Paulson, they like to dabble, just a little.

During Geithner and Yellen’s time, markets were left to their own devices but that isn’t the Trump way either so the new Powell/Mnuchin administration has decided that markets need guidance and that has been delivered and strengthened the dollar which was Trump’s wish if not Mnuchin’s

The Bank of England tried to make the markets think that they were about to hike rates again despite the dovish hike last November was considered to be the last “for a while”. The hedge fund industry won’t have thanked Mark Carney as his subsequent denial sent the pound tumbling when the “hedgers” had built significant long positions. The Moral? Do your own analysis guys!

The ECB has proven to be wily, managing to lower the currency to encourage exports without incurring the wrath of the “manipulation police”.  

Bitcoin market already mature?

One of the reasons that Bitcoin rallied as it did last year was that it was considered a “frontier market” where large profits and losses could be made trading off factors that didn't exist as the market “matured”.

Since the rapid rise then equally rapid decline, the entire market has, for me, changed. The speculative element has been shaken out leaving those who believe in Bitcoin as an alternative exchange of value remaining as holders of the coins.

However, longer term what will the effect be of inflation on cryptocurrencies like Bitcoin? Will there be a further flight when after holding a coin which barely fluctuates (when compared to its recent past) actually costs money? Obviously, that is what happens when you hold a high yielder too, but the differential is made up in the interest rate differential. It is the very antithesis of the carry trade (the non-carry trade).

The pace at which the entire industry has grown has overtaken the tradability of bitcoin. Yes, there are plenty who want to trade it but the “real entrepreneurs” want it to become an alternative not a toy or plaything to be passed from player to player.

In the growth of the cryptocurrency world, Bitcoin has reached a certain level of maturity in that there is no real innovation to take place, it is more tweaking of what is already developed. That should mean that liquidity grows, volatility falls, and it is able to fulfil the purpose for which it is designed. But, will that bring speculators back? Possibly but it will need a sea change or giant leap forward in acceptability before puberty is finally attained.

Sterling still has a long way to go.

Parity is a word, like stagflation, that we all talk about but virtually no one has seen. Not quite as rare as the Loch Ness Monster or Bigfoot but rare enough. It is the FX equivalent of the Halloween mask from Scream, scary but unlikely.

Well that may not always be the case. The pound has two chances to see parity and may even see stagflation if the economy continues as it is.

Brexit!

Yes, that word again. Is the UK heading for a hard, or no deal Brexit? If the past two years are anything to go by, that looks to be becoming a real possibility.

Since two years have gone by and the main political parties haven’t even decided on their internal policies, just how the Government can cobble together a cogent set of proposals for Brussels is hard to imagine. And with Parliament unable to pass a law making “upskirting” illegal, what chance does Brexit have?

We could see parity versus the dollar, we could see parity versus the common currency. The latter is unlikely given the headwinds that the Eurozone faces but if Brexit talks really do bring no agreement and the Fed continues to raise rates at the same pace (imagine if the U.S. really does see an uptick in inflation) the 1.00 could be on the cards.

READ MORE

AUD trading

FOREX_aud-trading-like-an-emerging-market-currency2006_FXPIG

AUD has been hard hit along with Asian EM markets from imposition of US trade tariffs on China and is often viewed as a proxy for Chinese economic and financial risks, according to Greg Gibbs, Analyst at Amplifying Global FX Capital.

Key Quotes

“The effective borrowing costs for AUD in FX forward markets are even more elevated than BBSW.  This reflects wider cross-currency basis swap, implying that Australian bank funding costs from offshore money markets are hitting new high spreads over domestic cash rates.”

“On the one hand, higher bank funding costs raise the carry from long AUD FX positions and might be regarded as supporting the AUD.  On the other hand, it cuts into Australian bank profits and creates pressure for banks to tighten credit conditions in Australia, potentially dampening economic growth, and delaying RBA rate hikes.”

“If anything it appears that rising bank funding costs in Australia are undermining the AUD.  This may reflect a view that rising bank funding costs represent a vulnerability in the Australian financial system to tightening global credit conditions. This is making the AUD trade more like an emerging market asset.”

Source: fxstreet.com

AUD has been hard hit along with Asian EM markets from imposition of US trade tariffs on China and is often viewed as a proxy for Chinese economic and financial risks, according to Greg Gibbs, Analyst at Amplifying Global FX Capital.

READ MORE

Sterling pinned

FOREX_GBP-pinned_FXPIG

Sterling slid to a fresh seven-month low against the dollar on Wednesday as concerns over the latest round of Brexit negotiations sapped demand for the British currency before a central bank meeting on Thursday.

Prime Minister Theresa May will ask the lower House of Commons to pass her Brexit blueprint, or EU withdrawal bill. This legislation will prepare Britain for a divorce next March that will end its more than four-decade-old trading and political partnership with the rest of Europe.

On Wednesday, sterling edged 0.1 percent lower at $1.3145, its lowest since mid-November 2017. The currency has fallen 8.6 percent since hitting a 22-month high above $1.4370 in mid-April.

Against the euro, the British currency was broadly flat at 87.96 pence.

No economists polled by Reuters expect the BoE to raise rates on Thursday, and some are getting cold feet about their forecasts for a rate rise in August, which would be only the central bank’s second increase since the 2008 financial crisis.

Market expectations are for a less than 40 percent likelihood of the Bank of England raising interest rates by August, with about an 80 percent chance of one more rate hike by the end of 2018.

Source:reuters.com

Sterling slid to a fresh seven-month low against the dollar on Wednesday as concerns over the latest round of Brexit negotiations sapped demand for the British currency before a central bank meeting on Thursday.

READ MORE

FOREX Trading Quote

FOREX_Trading-wisdom_Playing-the-market_Jesse-Livermore_FXPIG

...Play the market only when all factors are in your favor...

-JESSE LIVERMORE

READ MORE

Dollar catches breath

USD-recovering-after-trading-concerns_FXPIG

The dollar paused on Wednesday after hitting a 11-month high in the previous session as investors consolidated bets after a recent rally, though concerns over a widening trade dispute between the United States and China kept sentiment on edge.

Currency markets also heaved a sigh of relief after Beijing signalled its comfort with a stronger currency by fixing its daily midpoint stronger than market expectations.

On Wednesday, the dollar was flat against a basket of its rivals at 95.13, slightly below 95.30 hit in the previous session, its highest since mid-July 2017.

Markets also turned their focus to Sintra in Portugal where U.S. Federal Reserve Chair Jerome Powell, European Central Bank chief Mario Draghi, Bank of Japan Governor Haruhiko Kuroda and Reserve Bank of Australia Governor Philip Lowe are all scheduled to speak at a conference on Wednesday.

Emerging currencies won some reprieve, with the Mexican peso slightly stronger on the day along with the Taiwan dollar and the South African rand.

The euro was down 0.15 percent at $1.1574, shaky after slipping to a two-week low of $1.1528 overnight after Draghi called for a patient approach to European monetary policy.

The Australian dollar, considered sensitive to shifts in sentiment towards China, fell to a 13-month low of $0.7347 on Tuesday before pulling back slightly to $0.7391.

The Swiss franc slipped 0.1 percent to 0.9953 franc per dollar, handing back the previous day’s gains.

Before Thursday’s Bank of England policy decision, the pound struggled near a seven-month low of $1.3151 brushed overnight.

No economists polled by Reuters expect the BoE to raise rates on Thursday, and some are getting cold feet about their forecasts for a rate rise in August, which would be only the central bank’s second increase since the 2008 financial crisis.

Prior to market opening on Wednesday, the People’s Bank of China lowered the midpoint rate by 0.54 percent to 6.4586 per dollar though traders said the daily fixing came in much stronger than their models suggested, an attempt to stabilise sentiment and prevent the yuan from sinking further.

Source:reuters.com

The dollar paused on Wednesday after hitting a 11-month high in the previous session as investors consolidated bets after a recent rally, though concerns over a widening trade dispute between the United States and China kept sentiment on edge.

READ MORE

Forex Today

FOREX_market-analysis_daily-news_FXPIG

Improved risk appetite offered a sigh of relief across the fx board in Asia this Wednesday, as markets shrugged-off the renewed tensions over the US-Sino trade spat. However, most majors held onto tight trading ranges, as markets took a breather ahead of the key panel discussion at the European Central Bank (ECB) Sintra Forum.

Amongst the Asia-pac currencies, the USD/JPY pair managed to take on the recovery above the 110 handle, but lacked further upside momentum amid subdued US dollar and flattening US yield curve. The Antipodeans also staged a minor comeback, with the Aussie extending its bounce from 2018 lows. The Kiwi is back above the 0.69 upside barrier, having ignored downbeat New Zealand’s current account data.

Looking at the related markets, the Asian equities attempted a tepid bounce, but the sentiment was roiled by losses in China stocks. Also, mixed trading seen in oil prices, despite a drawdown in the US crude inventories while gold prices continued to flirt near the $ 1275 support area.

Main topics in Asia

New Zealand current account deficit hit 9-year high

Stats New Zealand reported a seasonally adjusted current account deficit for the March 2018 quarter at $3 billion- the highest level since the 2008 global financial crisis. 

BOJ Minutes: members ditch timeframe for achieving price target

Some Bank of Japan (BOJ) board members feel it is appropriate to ditch the timeframe for achieving the inflation target because investors are linking the timeframe to changes in the monetary policy, the minutes of the BOJ's April policy meeting revealed on Wednesday. 

US treasury yield continues to flatten, could invert soon

The US Treasury yield curve continues to flatten and could invert as early as next week. The spread between the 10-year yield and the 2-year yield fell to 34 basis points today - the lowest level since August 2007.

S. Korea ForeignMin: Sanctions on N. Korea will remain in place until "complete denuclearisation" achieved

South Korea’s Foreign Minister Kang Kyung-wha is on the wires now, via Livesquawk, commenting on the North Korean issue.

Asian stocks rebound, but Shanghai remains in the red as China equities suffer

Asian equities dipped in early Wednesday action as the US' tariffs on Chinese goods, with promises of more on the way, continued to eat away at market sentiment …

Key Focus ahead

There is nothing of note to be reported from today’s macro calendar, except for the second-tier releases in the German PPI, UK CBI industrial order expectations and US current account data. Besides, the ECB-speaks by the Governing Council members Lautenschlaeger and Coeure will be delivered at 0800 GMT and 1030 GMT respectively.

Markets look forward to the ECB Central Banking Forum held in Sintra, Portugal. The day 2 sees the top central banks’ Heads participating in a Panel Discussion on the topic – ‘Microeconomics of price and wage-setting’.

The Policy panel discussion scheduled at 1330 GMT includes: 

  • ECB President Draghi
  • Bank of Japan (BoJ) Governor Kuroda
  • Reserve Bank of Australia (RBA) Governor Lowe
  • Federal Reserve (Fed) Chairman Powell
  • Moderator: Stephanie Flanders, Bloomberg Economics

Following the panel discussion, the US existing home sales and EIA crude inventories report will be published, which could offer some fresh trading impetus to the NA traders, as the focus shifts towards New Zealand’s Q1 GDP figures slated for release at 2245 GMT.

EUR/USD could find bids on increased odds of treasury yield curve inversion

The EUR/USD is on the defensive, having failed to take out the bearish (falling) 5-day moving average (MA) in Asia, however, the pair may pick up a bid in Europe on fears the US treasury yield curve could invert soon.

GBP/USD continues to drip towards 1.30 with a quiet day ahead

Wednesday is another thin showing for the GBP on the economic calendar, and traders' focus will remain locked on the upcoming Bank of England (BoE) rate decision, due on Thursday at 1100 GMT, where the BoE is expected to hold off once again on a rate increase.

How to trade the US Existing Home Sales with EUR/USD

Existing Home Sales serve as an indicator for the important housing sector and it has a significant impact on markets. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.

BOE to stand pat this Thursday - Barclays

The Barclays Research Team offers a sneak peek at what to expect from the Bank of England (BOE) ‘Super Thursday’.

OPEC Meeting: Will oil production rise and by how much?

On June 22nd and 23rd, energy ministers from the OPEC (Organization of the Petroleum Exporting Countries) and ministers from countries outside the organization will meet in Vienna to discuss future oil policy. 

Source:fxstreet.com

Improved risk appetite offered a sigh of relief across the fx board in Asia this Wednesday, as markets shrugged-off the renewed tensions over the US-Sino trade spat. However, most majors held onto tight trading ranges, as markets took a breather ahead of the key panel discussion at the European Central Bank (ECB) Sintra Forum.

READ MORE

PAMMs Daily Update

FOREX_managed-daily-results1906_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

AUD/USD Technical Outlook

FOREX_audusd-technical-outlook1906_FXPIG
  • AUD/USD reversal from weekly resistance in focus- risk is lower sub-84.25
  • Check out our 2018 projections in our Free DailyFX Trading Forecasts
  • Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT

The Australian Dollar has plummeted more than 9% off the yearly highs (nearly 6% year-to-date) with the decline now approaching initial support targets of interest. While the immediate risk remains lower in the Aussie, we’re on the lookout for near-term exhaustion in price. These are the updated targets & invalidations levels that matter for AUD/USD.

Technical Outlook: In last week’s Technical Perspective on the Australian Dollar, we revisited the Aussie setup we’ve been track since the start of the month after price pulled back from the 2016 trendline. We noted that, “From a trading standpoint, the immediate threat may still be higher for the Aussie in the days ahead but ultimately I’ll favor fading strength closer to structural resistance.”

That tuned out to be the high with the subsequent reversal breaking below the monthly opening-range to fresh yearly lows. The next daily support target of interest rests at the 61.8% retracement of the entire 2016 advance at 7327 with parallel support just lower around ~7290s.

Source: dailyfx.com

The Australian Dollar has plummeted more than 9% off the yearly highs (nearly 6% year-to-date) with the decline now approaching initial support targets of interest. While the immediate risk remains lower in the Aussie, we’re on the lookout for near-term exhaustion in price. These are the updated targets & invalidations levels that matter for AUD/USD.

READ MORE

NZD/USD struggles

FOREX_nzdusd-struggles-to-recover-above1906_FXPIG
  • GDT Price Index drops 1.2% in the latest auction.
  • Risk aversion continues to dominate the price action.
  • US Dollar Index sticks to daily gains, stays below 95.

On Tuesday, the NZD/USD pair broke below the 0.69 mark to refresh its lowest level since late May and failed to stage a recovery afterward. As of writing, the pair was trading at 0.6895, losing 0.65% on the day.

Earlier in the session, the GDT price index in New Zealand dropped by 1.2% in the bi-weekly auction following the 1.3% reduction seen in the previous auction, making it difficult for the kiwi to retrace its losses against the greenback.

Furthermore, the risk-sensitive NZD faces further selling pressure in the risk-off environment on Tuesday. Commenting on the market sentiment, "the NZD/JPY, which tends to decline when risk aversion permeates the markets, gave back half of the gains achieved in recent weeks, and the lofty 80.00-ish figure seems now toast," writes Gonçalo Moreira, research expert at FXStreet.

On the other hand, following the mixed macroeconomic data releases from the United States, the US Dollar Index failed to push above the critical 95 mark. Nonetheless, the index remains on track to close the day higher as it consolidates in the 94.70/80 region.

Technical levels to consider

The immediate support for the pair aligns at 0.6850 (May 16 low) ahead of 0.6800 (psychological level) and 0.6775 (Nov. 17 low). On the upside, resistances could be seen at 0.6940 (Jun. 19 high), 0.6990/0.7000 (50-DMA/psychological level) and 0.7060 (Jun. 6 high).

Source: fxstreet.com

Earlier in the session, the GDT price index in New Zealand dropped by 1.2% in the bi-weekly auction following the 1.3% reduction seen in the previous auction, making it difficult for the kiwi to retrace its losses against the greenback.

READ MORE

GBP/USD consolidates

FOREX_gbpusd-consolidates-daily-losses1906_FXPIG

GBP/USD looks to end the day below 1.32 for the first time this year.US Dollar Index fails to break above 95.

Risk appetite remains weak on Tuesday.

The GBP/USD pair slumped to its worst level since November of 2017 at 1.3150 in the early NA session and went into a consolidation phase. As of writing, the pair was trading at 1.3165, losing 0.6%, or 80 pips, on the day.

The USD valuation remains as the main driver of the pair's price action in the FX markets on Tuesday. After retracing a portion of last week's gains on Monday, the US Dollar Index gathered momentum on Tuesday as the lack of fundamental catalysts allowed investors to stay focused on Fed's monetary policy outlook. However, with the demand for the US T-bonds rising amid the risk-off environment, the yield on the 10-year reference lost nearly 2% and made it difficult for the greenback to preserve its strength. At the moment, the DXY is up 0.35% on the day at 94.75.

Today's data from the U.S. showed that the housing starts increased by 5% in May while building permits contracted by 4.6%.

On the other hand, earlier today, a draft of the EU summit conclusion statement showed that EU leaders were concerned about the lack of progress regarding the Ireland border issue.

There won't be any other macroeconomic data releases in the remainder of the day, and the pair is unlikely to make a sharp move in either direction before closing the day.

Technical outlook

The pair could encounter the first technical support at 1.3135 (Nov. 16, 2017, low) before 1.3100 (psychological level) and 1.3040 (Nov. 3, 2017, low). On the upside, short-term resistances align at 1.3200 (psychological level), 1.3270 (daily high) and 1.3334 (20-DMA).

Source: fxstreet.com

The USD valuation remains as the main driver of the pair's price action in the FX markets on Tuesday. After retracing a portion of last week's gains on Monday, the US Dollar Index gathered momentum on Tuesday as the lack of fundamental catalysts allowed investors to stay focused on Fed's monetary policy outlook.

READ MORE

KKR explores sale

FOREX_kkr-explores-sale-european-telecom1906_FXPIG

KKR & Co. KKR, +0.21%   is exploring the sale of European telecom operator United Group B.V. in a transaction that could value the company at up to €3 billion ($3.47 billion), including debt, according to people familiar with the matter.

The auction comes amid a flurry of deal activity in Europe’s communications and broadcasting sector, with companies such as wireless giant Vodafone Group PLCVOD, -1.01%   buying assets across Europe to offer packages of cable, internet, wireless and landline-phone services in a bid to win more customers. Meanwhile, a potential bidding war for Britain’s Sky PLC between Comcast Corp.CMCSA, -3.84%   and 21st Century Fox Inc. FOX, -1.28%   shows the value of telecom operators owning sports and other programming to distribute through their networks.

Fox and News Corp, which owns The Wall Street Journal and MarketWatch, share common ownership.

Based in Amsterdam, United Group serves south east Europe, describing itself as the largest alternative telecom provider in the countries that comprised the former Yugoslavia.

Source: marketwatch.com

The auction comes amid a flurry of deal activity in Europe’s communications and broadcasting sector, with companies such as wireless giant Vodafone Group PLCVOD, -1.01% buying assets across Europe to offer packages of cable, internet, wireless and landline-phone services in a bid to win more customers.

READ MORE

Draghi’s speech at ECB

FOREX_draghi-speech-at-ecb_FXPIG

The European Central Bank (ECB) President Draghi’s speech is likely to hog the limelight in a data-light European session ahead. Draghi is due to deliver an introductory speech at 0800 GMT, as the two-day ECB Forum on Central banking begins in Sintra, Portugal.

Markets eagerly await his comments on the monetary policy at the event, especially after the ECB announced last week that it would end the quantitative easing (QE) programme at the end of December 2018. Also, markets are reminded about the market reaction to the Draghi’s speech at the same event last, where his remarks on tapering triggered an extensive rally in the Euro. year.

Key notes

ECB: Markets keeping an eye on Draghi today – TDS

“The ECB was forced to come out with "sources" stories issuing clarifications afterwards, saying that Draghi's comments were over-interpreted.”

EUR should stay focused on ECB event – Danske Bank

Chief Analyst at Danske Bank Jens Sorensen noted the EUR will be under pressure in light of the upcoming ECB Forum in Sintra.

EUR/USD eases from tops, back around 1.1620

President Draghi is expected to speak today at the ECB Forum in Sintra (Portugal), although market participants appear to have ruled out any surprises at his speech.

About Draghi’s speech

As part of his job in the Governing Council, he gives press conferences in the back of how the ECB observes the current European economy. President's comments may determine positive or negative the Euro's trend in the short-term. Usually, if he shows a hawkish outlook, that is seen as positive (or bullish) for the EUR, while a dovish is seen as negative (or bearish).

Source: fxstreet.com

The European Central Bank (ECB) President Draghi’s speech is likely to hog the limelight in a data-light European session ahead. Draghi is due to deliver an introductory speech at 0800 GMT, as the two-day ECB Forum on Central banking begins in Sintra, Portugal.Markets eagerly await his comments on the monetary policy at the event, especially after the ECB announced last week that it would end the quantitative easing (QE) programme at the end of December 2018

READ MORE

PAMMS Daily Update

FOREX_Daily-managed-accounts1806_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

Gold attempts rebound

FOREX_gold-attempts-rebound-after-marking1806_FXPIG

Gold futures edged higher early Monday, aiming for a rebound from a drop that took the commodity to the lowest close of 2018, as U.S. government bond rates retreated and as trade tensions elevated global uncertainty, providing support for bullion prices.

August gold GCQ8, +0.37%  picked up $4.90, or 0.4%, to $1,283.40 an ounce, after booking the lowest settlement since December and producing a roughly 1.9% weekly decline on Friday.

Benchmark Treasury rates were retreating. The 10-year Treasury note yieldTMUBMUSD10Y, -0.28%  slipped to 2.911% on Monday, from 2.926% late Friday in New York, offering some support to gold, which doesn’t offer a yield. Lower yields can make gold comparatively more attractive.

Friday’s drop for the metal came as the U.S. dollar marked a 1.3% weekly gain, following a series of central-bank gatherings. A key move was the European Central Bank’s policy decision on Thursday to eventually unwind its crisis-era, easy-money programs but hold its benchmark rates at lower levels for a longer period than the market had expected. That resulted in a tumble for the euroEURUSD, +0.0861%  against the buck.

The ICE U.S. Dollar Index DXY, -0.15% a measure of the dollar against a half-dozen major currencies, most recently was little changed at 94.796, but holding near 2018 highs.

In recent trade, however, global markets have focused on an import tariff spat between the U.S. and China. The hostilities have shown signs of devolving into a full-blown trade war, raising questions about the outlook for economic global growth if the two largest economies, China and the U.S., lock horns.

On Thursday, President Donald Trump announced levies of 25% on $50 billion worth of Chinese imports, drawing an in-kind response from Beijing.

“Last week’s dollar strength broke the bull’s back, hip and wrists, with a significant decline on Friday...” wrote Rick Bensignor, president at Bensignor Strategies, in a Monday research note.

Bensignor said that after gold flirted with prices around $1,350 without breaking out, it implied that the metal might struggle and could be vulnerable to a “catalyst.” That now leaves gold with a drop to around $1,250 or $1,235 possible, he said.

Meanwhile, July silver SIN8, +0.70% rose 13 cents, or 0.8%, at $16.615 an ounce, after registering a 1.6% weekly decline on Friday.

Source: marketwatch.com

Friday’s drop for the metal came as the U.S. dollar marked a 1.3% weekly gain, following a series of central-bank gatherings. A key move was the European Central Bank’s policy decision on Thursday to eventually unwind its crisis-era, easy-money programs but hold its benchmark rates at lower levels for a longer period than the market had expected.

READ MORE

Forex Trading Quote

FOREX_Trading_quote-piginsider_FXPIG

...Because trading seems difficult today, it was not for someone else. Stick with it, the roles may reverse tomorrow...

READ MORE

US Dollar gathers

FOREX_usdollar-gathers-pace-flirting1806_FXPIG
  • The greenback extends its momentum near the 95.00 mark.
  • US 10-year yields find support near 2.90%.
  • NAHB index, speeches by Bostic, Dudley in the limelight.

The greenback, in terms of the US Dollar Index (DXY), has started the week on the right footing and trades in the area of daily highs around the 95.00 milestone.

US Dollar looks to US-China, Draghi

The index seems to have recovered the smile at the beginning of the week and is now reverting Friday’s pullback, hovering over the 95.00 neighbourhood against the backdrop of a weaker tone in the risk-associated space.

The greenback so far manages to leave behind another round in the US-China trade conflict, all amidst the recently imposed US tariffs on Chinese products and the subsequent retaliatory measures from the Asian economy.

It is worth mentioning that the greenback’s performance remains decoupled from yields in the US money markets, where the key US 10-year note is navigating the area of recent lows in the 2.90%-2.91% band.

News from the speculative community notes USD net longs climbed to the highest level since early July 2017 during the week ended on June 12, as per the latest CFTC report.

In today’s US calendar, the NAHB index is only expected ahead of the speeches by Atlanta Fed R.Bostic (voter, centrist) and New York Fed W.Dudley (permanent voter, centrist).

US Dollar relevant levels

As of writing the index is up 0.20% at 94.98 facing the next hurdle at 95.14 (2018 high Jun.15) seconded by 95.15 (high Nov.6 2017) and finally 96.51 (high Jul.4 2017). On the other hand, a breach of 94.04 (21-day sma) would open the door to 94.02 (10-day sma) and then 93.21 (low Jun.6).

Source: fxstreet.com

The index seems to have recovered the smile at the beginning of the week and is now reverting Friday’s pullback, hovering over the 95.00 neighbourhood against the backdrop of a weaker tone in the risk-associated space. The greenback so far manages to leave behind another round in the US-China trade conflict, all amidst the recently imposed US tariffs on Chinese products and the subsequent retaliatory measures from the Asian economy.

READ MORE

GBP/USD in a

FOREX_gbpusd-in-bearish-mood-as-last-weeks-selloff1806_FXPIG
  • The Sterling finds itself in a defensive pattern as market sentiment draws the GBP/USD pair down on multiple fronts.
  • GBP traders' focus will be set on Thursday's BoE rate decision with a thin calendar in the lead-up.

The GBP/USD is flat in thin Monday trading, remaining steady near 1.3270 ahead of a Monday session that is likely to see little action as markets brace for developments on Brexit and potential trade wars.

Last week's Brexit voting in the UK's House of Lords handed a solid win to Prime Minister Theresa May, however that win carries a cost: managing to keep the UK's Parliament out of the ongoing Brexit negotiation process has increased the chances of a hard Brexit scenario, which is sapping what's left of any potential bullish momentum for the Sterling.

This week is a thin schedule for the GBP on the economic calendar, and the first mentionable event this week comes on Thursday, with the Bank of England's (BoE) next rate decision. The BoE is expected remain steady on interest rates for the foreseeable future with economic figures for the UK's economy continuing to waffle on forecasts, and growth continues to stumble over roadblocks.

On the US side,  Monday is a likewise thin schedule, though traders will be keeping an eye on a couple of speeches from the US Fed's William Dudley at 12:45 GMT, FOMC Member Raphael Bostic at 17:00 GMT, and FOMC Member John Williams at 19:45 GMT.

GBP/USD levels to watch

As noted by FXStreet's own Haresh Menghani, "from a technical perspective, the pair managed to settle just above the 1.3200 handle and hence, it would be prudent to wait for a follow-through weakness before favouring any further near-term downside. A convincing break below the mentioned support is likely to accelerate the fall towards 1.3135 horizontal support before the pair eventually breaks below the 1.3100 handle and aim towards testing its next support near the 1.3075 region.

On the upside, recovery beyond the 1.3300-1.3310 immediate hurdle is likely to confront immediate resistance near mid-1.3300s, above which the pair is likely to make an attempt towards reclaiming the 1.3400 handle. Any subsequent up-move might remain capped near the 1.3425-30 supply zone ahead of this week's key event risk."

Source: fxstreet.com

Last week's Brexit voting in the UK's House of Lords handed a solid win to Prime Minister Theresa May, however that win carries a cost: managing to keep the UK's Parliament out of the ongoing Brexit negotiation process has increased the chances of a hard Brexit scenario, which is sapping what's left of any potential bullish momentum for the Sterling.

READ MORE

PAMMs Weekly Results

FOREX_Weekly-managed-accounts1706_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

Forex Week Ahead

FOREX_WEEK-AHEAD-DOLLAR-HIGHER_FXPIG

The US dollar gained against all major pairs this week. A hawkish Fed and a dovish European Central Bank (ECB) gave the edge to the American currency. Donald Trump scored diplomacy points in Singapore by meeting with North Korean leader Kim. Trade war fears were once again at the forefront as the Trump administration announced new tariffs on Chinese goods on Friday. Oil prices plunged as supply might be on the rise with heavy anticipation on the Organization of the Petroleum Exporting Countries (OPEC) meeting on Friday.

  • Major Central Bank Governors to meet in Portugal
  • Bank of England (BoE) expected to keep rates on hold
  • OPEC states its Summit on June 22

Central Bank Divergence Gives USD Edge Over EUR

The EUR/USD lost 1.37 percent in the last five days. The single currency is trading at 1.1606 after the Fed and the ECB both announced tightening monetary policies. The US central bank hiked its benchmark rate as expected by 25 basis points. The dollar support from the Fed did not stop there with more optimistic projections and Fed Chair Powell sharing his confidence in the US economy. The report that the White House was readying the list of tariffs on Chinese goods capped the rise of the USD on Wednesday.

The ECB also made a monumental announcement this week to end its QE program but it was also accompanied by a dovish assessment of the economy by saying that rates will be on hold at least a year. The move is in line with the reality of the European economy, as much as the Fed hike is an endorsement of the pace of the growth of America. Next week will offer more chances for central bankers to spout their diverging views when they meet in Portugal for the ECB Forum on Central Banking.

The tariffs against Chinese goods weighted on the USD on Friday ahead of an economic calendar that will be heavy with central bank rhetoric. US data will be largely absent with building permits and the Philly Fed manufacturing index the stand out indicator releases. The European data calendar looks thin until the end of the week with flash PMI data to give a more forward looking insight into the European economy.

Canadian Dollar Lower After Fed and Trade War Concerns

The USD/CAD surged 2.01 percent during the week. The currency pair is trading at 1.3185 after the double whammy of a Fed hike and US trade tariffs. Although the higher duties are not applied to Canada directly the fate of NAFTA remains cloudy. Canadian officials did their best to remind everyone that the deal is still on the table and nudged US negotiators to get back on the table. The biggest hurdle going forward would be the political interference as the preferred window of negotiations is now closed. Mexican presidential elections will take place on July 1, which could mean a new team on the Mexican side.

The Canadian dollar is near a one year low against the USD. Fundamental indicators have softened north of the American border with manufacturing sales falling 1.3 percent on Friday. Oil prices offered little positive support as the upcoming OPEC meeting on Friday will shape the face of global crude supply. Analysts are expecting higher production which are not being priced with a tumble in crude.

OPEC Meeting to Keep Oil Prices Under Pressure

Oil fell in the last week. The price of West Texas Intermediate is trading at $64.90 far from the weekly highs at around the $67 level. The Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna on June 22 and ahead of that meeting there are rumours circling about that Russia and Saudi Arabia point to a softening of the production limits. The deal did in fact stabilize prices that were in free fall, but producers are divided on the need to relax the supply limits.

The OPEC is divided internally as Iran and Venezuela have had disruptions to their supply and would prefer the group maintains lower levels across the board. Saudi Arabia could find common ground and compromise in a smaller increase.

The US dollar gained against all major pairs this week. A hawkish Fed and a dovish European Central Bank (ECB) gave the edge to the American currency. Donald Trump scored diplomacy points in Singapore by meeting with North Korean leader Kim. Trade war fears were once again at the forefront as the Trump administration announced new tariffs on Chinese goods on Friday. Oil prices plunged as supply might be on the rise with heavy anticipation on the Organization of the Petroleum Exporting Countries (OPEC) meeting on Friday.

READ MORE

PAMMs Daily Update

FOREX_Managed-daily-results-1506_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

GBP/USD remains near 1.3300

FOREX_GBPUSDremains-near_FXPIG
  • GBP/USD rebounds from 2-week lows but remains under 1.3300.
  • A stronger US dollar boosted weekly gains amid Fed rate hike expectations and Brexit concerns.  

Cable is rising modestly on Friday, recovering ground after yesterday’s slide. GBP/USD has been moving in a small range, still unable to recover the 1.3300 handle, between 1.3295 and 1.3260.

Rebounds but still sharply lower

The pair bottomed today at 1.3208, a 2-week low located slightly above year-to-date lows. It rebounded and during the US session hit at 1.3297 a fresh daily high.

Over the last hours the pair recovered a hundred pips but on a weekly basis is still down a hundred pips and headed toward the lowest close weekly close since November.

The combination of a stronger US dollar, supported by US data and Fed rate hike expectation and Brexit concerns pushed the pair back near 2018 lows. The area around 1.3200 capped the downside but the bearish pressure still persists. All the advance of the pound during the last two weeks was lost in a few hours.

Next week, will be the Bank of England meeting. Is one of the meetings with no Inflation Report so not much impact is expected. The political developments in the UK and the US are likely to be followed by market participants.

Levels to watch

To the upside, resistance levels might be located at 1.3305, 1.3350 (20-day moving average) and 1.380/90. On the flip side, supports areaseen at 1.3245, 1.3200/10 (2018 low) and 1.3155.

Source: fxstreet.com

Cable is rising modestly on Friday, recovering ground after yesterday’s slide. GBP/USD has been moving in a small range, still unable to recover the 1.3300 handle, between 1.3295 and 1.3260.The pair bottomed today at 1.3208, a 2-week low located slightly above year-to-date lows. It rebounded and during the US session hit at 1.3297 a fresh daily high...

READ MORE

AUD/USD struggles to recover

FOREX_AUDUSD-struggles-to-recover_FXPIG
  • AUD/USD looks to close the week with a loss of more than 100 pips.
  • US Dollar Index stays in the range below 95.
  • Mixed macroeconomic data releases from the US fail to provide a catalyst.

After closing the previous day below the critical 0.75 mark with a daily loss of nearly 100 pips, the AUD/USD pair failed to make a meaningful recovery on Friday and continued to edge lower. As of writing, the pair was trading at its lowest level since mid-May at 0.7455 and losing 0.3% on the day.

The first data from the United States on Friday showed that the New York Fed's Manufacturing Index improved to 25 in June from 20.1 in May to beat the market expectations. In the meantime, a separate report released by the Board of Governors of the Federal Reserve revealed that the monthly industrial production in May contracted by 0.1% with the capacity utilization edging lower to 77.9% from 78.1%.

Following the mixed macroeconomic data, the US Dollar Index continues to consolidate its gains. After touching its highest level in more than 11 months at 95.15, the DXY is moving sideways below the 95 mark and was last seen at 94.85, where it was down 0.07% on the day.

On a weekly basis, the pair retraced all of its earning from the previous three weeks and is looking to close with a loss over 150 pips.

Technical outlook

0.7500 (psychological level) now aligns as the first technical resistance ahead of 0.7550 (50-DMA) and 0.7610 (Jun. 13 high). On the downside, supports are located at 0.7410 (May 8 low), 0.7370 (Jun. 1, 2017, low) and 0.7330 (May 9 low).

Source: fxstreet.com

After closing the previous day below the critical 0.75 mark with a daily loss of nearly 100 pips, the AUD/USD pair failed to make a meaningful recovery on Friday and continued to edge lower. As of writing, the pair was trading at its lowest level since mid-May at 0.7455 and losing 0.3% on the day. The first data from the United States on Friday...

READ MORE

AUD/USD off lows

FOREX_audusd-off-lows1506_FXPIG

   •  A modest USD retracement helps ease the bearish pressure.    

   •  Weaker commodities do little to provide any additional boost.

   •  Traders eye US economic data for some short-term impetus.

The AUD/USD pair managed to recover early lost ground to one-month lows and refreshed session tops in the past hour, albeit lacked any strong follow-through.

The pair extended overnight slump and dropped to an intraday low level of 0.7453, the lowest level since May 16, during the Asian session on Friday. However, the latest US-China trade-related headlines prompted some US Dollar profit-taking and helped ease the bearish pressure. 

   •  US readies second tariffs list on Chinese goods worth $100 bn - Reuters

Meanwhile, a weaker tone around commodity space did little to provide any additional boost to the commodity-linked Australian Dollar, with the pair failing ahead of the key 0.7500 psychological mark and quickly retreating around 15-pips from highs.

Moving ahead, today's second-tier US economic data - Empire State Manufacturing Index, Industrial Production, Capacity Utilization and Prelim UoM Consumer Sentiment, will now be looked upon for some fresh trading impetus later during the early North-American session.

Technical levels to watch

A sustained weakness below mid-0.7400s is likely to accelerate the fall back towards the 0.7415-10 region (11-month lows set on May 9th). On the flip side, the 0.7500 handle is likely to cap any immediate recovery move, above which a fresh bout of short-covering could lift the pair back towards the 0.7560-65 supply zone.

Source: fxstreet.com

Meanwhile, a weaker tone around commodity space did little to provide any additional boost to the commodity-linked Australian Dollar, with the pair failing ahead of the key 0.7500 psychological mark and quickly retreating around 15-pips from highs.

READ MORE

Forex Trading Quote

FOREX_Trading_quote-piginsider_FXPIG

...You will always remember the trades that could have been and forget about the risks that were involved...

-PIG INSIDER

READ MORE

USD/JPY fails

FOREX_usdjpy-fails-ahead1506_FXPIG

 •  Follow-through USD upsurge was seen supporting the early up-move.   

 •  JPY further weighed down by BoJ’s weaker view on inflation/status quo.   

 •  Profit-taking kicks in amid a modest revival in safe-haven demand.

The USD/JPY pair stalled its bullish momentum ahead of the 111.00 handle and has now retreated towards the lower end of its daily trading range. 

The pair initially built on overnight sharp rebound from sub-110.00 level and continued gaining traction on the last trading day of the week following a dovish BoJ assessment on inflation, signalling that policymakers are in no hurry to scale back the stimulus.

In its June monetary policy meeting, the Bank of Japan opted to leave the key interest rate steady at -0.1% and pledged the yield target for 10-year Japanese government bonds around 0%.

Adding to this, a follow-through greenback buying interest, with the key US Dollar Index hitting its best level since July 2017, remained supportive of the ongoing bullish momentum to over three-week tops. 

Against the backdrop of Wednesday's hawkish Fed rate hike, Thursday's dovish ECB statement and BoJ's weaker view on inflation outlook reinforced monetary policy divergence between the US and other major central banks and is turning out to be positive for the buck.

Meanwhile, escalating US-China trade tensions largely offset a positive opening across European bourses, and was seen lending some support to the Japanese Yen’s safe-haven appeal. Traders opted to take some profits off the table and seemed to be the only factors behind the pair’s retracement of around 40-pips from session high.

Today’s second-tier US economic data - Empire State Manufacturing Index, Industrial Production, Capacity Utilization and Prelim UoM Consumer Sentiment, is unlikely to prove to be a game-changer but will still be looked upon to grab some short-term trading opportunities. 

Technical outlookValeria Bednarik, FXStreet's own American Chief Analyst writes: “The USD/JPY pair 4 hours´ chart shows that it holds around its weekly highs, resulting in a limited upward momentum in technical indicators that anyway hold within bullish territory and with positive slopes. In the same chart, the pair is well above still directionless moving averages, also above the 61.8% retracement of its latest decline, and poised to extend its rally up to the 111.40 region on a break above 111.00. The downside is now being limited by a Fibonacci support at 110.15.”

Source: fxstreet.com

Meanwhile, escalating US-China trade tensions largely offset a positive opening across European bourses, and was seen lending some support to the Japanese Yen’s safe-haven appeal. Traders opted to take some profits off the table and seemed to be the only factors behind the pair’s retracement of around 40-pips from session high.

READ MORE

GBP/USD drifting

FOREX_gbpusd-drifting-below-ahead-thin-friday-session1506_FXPIG
  • The Sterling is trading on the downside for Friday after a crushing Thursday wipes out recent gains.
  • The week caps off with a thin calendar for the GBP/USD, and risk flows are firmly in the driver's seat.

The GBP/USD is still hanging about 1.3250 ahead of a thin London session for Friday, with a clear calendar and a large chunk of traders' attention focused on other things.

The Sterling isn't having much luck recovering from Thursday's tumble from 1.3446, making a bullish false break above the current descending channel, and the GBP/USD is now shuffling its feet near the last technical bottom of 1.3202.

Thursday started off bullish for the Pound, with UK Retail Sales printing better than expected, with the m/m Retail Sales for May coming in at 1.3% versus the expected 0.5%. But the bull run sputtered out quickly, after the European Central Bank pushed out hopes of any rates hikes until after the summer of 2019. Markets recoiled at the dovish statements from the ECB, with broader markets piling into safe havens like the Yen and the Greenback, and the safety flights continued further after US economic data cleared expectations, spiking inflation fears into broad markets once again.

GBP/USD levels to watch

The Sterling faces further losses at the hands of soured market sentiment, and as Mohammed Isah noted in his GBP/USD Analysis, "the pair faces further weakness as it closed lower on sell off on Thursday. Support lies at the 1.3200 level where a break will turn attention to the 1.3150 level. Further down, support lies at the 1.3100 level. Below here will set the stage for more weakness towards the 1.3050 level. Its daily RSI remains biased to the downside suggesting more declines. Conversely, resistance stands at the 1.3300 levels with a turn above here allowing more strength to build up towards the 1.3350 level. Further out, resistance resides at the 1.3400 level followed by the 1.3450 level. On the whole, GBPUSD remains biased to downside pressure on trend resumption."

Source: fxstreet.com

Thursday started off bullish for the Pound, with UK Retail Sales printing better than expected, with the m/m Retail Sales for May coming in at 1.3% versus the expected 0.5%. But the bull run sputtered out quickly, after the European Central Bank pushed out hopes of any rates hikes until after the summer of 2019.

READ MORE

PAMMs Daily Update

FOREX_managed-daily-results1406_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

Gold climbs

FOREX_gold-climbs-toward-highest-finish-in-month1406_FXPIG

Gold futures gained Thursday, headed toward their highest finish in a month in the wake of monetary policy decisions by the European Central Bank and U.S. Federal Reserve.

The leading dollar index, which typically moves inversely to gold, also gained Thursday after spending the early part of the day in the red. Forex investors assessed the European Central Bank’s plan to end in December its post-crisis bond-buying program, which has for years helped prop up an economic recovery that officials increasingly believe can now stand on its own.

The Fed on Wednesday, meanwhile, indicated that it will likely raise interest rates more aggressively in 2018 than previously signaled.

Higher interest rates lift the appeal of holding dollars. That also means that a stronger dollar cuts the worth of holding non-yielding gold that’s priced in this denomination.

Against this backdrop, August gold GCQ8, +0.51%  was up $7.70, or 0.6%, to $1,309.60 an ounce. A settlement around this level would be the highest since for a most-active contract since May 14, according to FactSet data. Gold prices settled with a modest gain on Wednesday, then fell back under the closely monitored $1,300-an-ounce level in electronic trading, in the immediate wake of the Fed’s decision to lift a key interest rate.

For its part, the Fed voted Wednesday to raise its benchmark federal-funds rateby a quarter-percentage point to a range of 1.75% and 2%. The central bank also said it expects to raise rates four times this year, up from a forecast of three in March. See the live blog/recap and video of the event here.

A flurry of economic reports early Thursday, including upbeat retail sales, largely backed the Fed’s stance.

The rate differential between the U.S. and the ECB remained in the spotlight on Thursday and had most gold watchers keeping their eyes on a longer horizon.

Aside from the central banks, trade worries continued to be on investors’ minds on Thursday. President Donald Trump’s administration is preparing to announce tariffs on tens of billions of dollars in Chinese goods as early as Friday, a move that is feared to trigger retaliatory action by China. Trade concerns can be supportive for haven gold, although its direct impact has been limited so far.

In other metals trading, July silver SIN8, +1.32%  added 1.7% to $17.275 an ounce. July copper HGN8, -1.01%  fell 0.8% to $3.228 a pound. July platinumPLN8, +0.80%  changed hands at $910.10 an ounce, up 0.8%, while SeptemberPAU8, -0.21%  fell 0.2% to $1,005.50 an ounce.

Among exchange-traded funds, SPDR Gold Shares GLD, +0.32%  rose 0.5% and the iShares Silver Trust SLV, +0.78%  tacked on 1.1%. The VanEck Vectors Gold Miners ETF GDX, +0.44%  rose 0.6%.

Source: marketwatch.com

Aside from the central banks, trade worries continued to be on investors’ minds on Thursday. President Donald Trump’s administration is preparing to announce tariffs on tens of billions of dollars in Chinese goods as early as Friday, a move that is feared to trigger retaliatory action by China. Trade concerns can be supportive for haven gold, although its direct impact has been limited so far.

READ MORE

GBP/USD retreats

FOREX_gbpusd-retreats1406_FXPIG
  • Cable clinches fresh multi-day peaks near 1.3450.
  • UK’s Retail Sales came in on the strong side in May.
  • Softer greenback lends support to today’s upside.

The Sterling is trading on the right foot for yet another session, lifting GBP/USD to test the area of fresh 5-day tops in the vicinity of 1.3450.

GBP/USD bid after data, looks to ECB

Cable is advancing for the second session in a row on Thursday, deriving support from the renewed selling bias around the greenback and auspicious results from the UK calendar.

In fact, the US Dollar Index (DXY) has retraced yesterday’s up tick to the 94.00 handle and is now posting losses for the second straight session following Wednesday’s FOMC meeting and somewhat dovish comments by Chief Powell.

Furthermore, UK’s Retail Sales during May expanded more than expected 1.3% MoM and 3.9% over the last twelve months. In addition, Core sales rose 1.3% inter-month and 4.4% on an annualized basis.

Looking ahead, Cable thus appears poised to target tops seen earlier in the month in the 1.3480 zone amidst a softer buck and some constructive headlines from the Brexit negotiations.

Later in Euroland, the ECB will hold its key meeting and the British Pound could be under some pressure via EUR/GBP.

GBP/USD levels to consider

As of writing, the pair is gaining 0.35% at 1.3423 facing the next resistance at 1.3446 (high Jun.14) seconded by 3474 (high Jun.7) and then 1.3605 (200-day sma). On the other hand, a break below 1.3310 (low Jun.13) would expose 1.3205 (2018 low May 23) and finally 1.3039 (low Nov.3 2017).

Source: fxstreet.com

The Sterling is trading on the right foot for yet another session, lifting GBP/USD to test the area of fresh 5-day tops in the vicinity of 1.3450.Cable is advancing for the second session in a row on Thursday, deriving support from the renewed selling bias around the greenback and auspicious results from the UK calendar.

READ MORE

Forex Trading Quote

FOREX_Trading_quote-exhkratdt_FXPIG

...Focus instead on those things you want least to happen and on what your response will be...

-WILLIAM ECKHARDT

READ MORE

Euro climbs, dollar slips

FOREX_euroclimbs-dollarslips_FXPIG

The euro firmed up against the dollar on Thursday, ahead of a policy announcement from the European Central Bank, which may outline the bank’s plans for winding down its bond-buying program.

Meanwhile, a popular gauge for the U.S. dollar continued to decline in the wake of an interest-rate hike by the Federal Reserve on Wednesday. The dollar initially climbed after that decision, but then slipped as the upbeat mood faded. The Fed’s key interest rate now sits within a range of 1.75% to 2%, after the seventh hike since December 2015.

In addition, the Fed indicated a shift in its thinking, projecting a total of four rate increases this year, instead of the three previously seen.

Trade worries, which have weighed on the dollar in the past, may be contributing to the buck’s tug lower as well. President Donald Trump’s administration is readying to announce tariffs on tens of billions of dollars in Chinese goods as early as Friday, a move that could trigger retaliatory action by China.

ECB in focus

In a busy week for central banks, ECB policy makers are meeting in Riga, Latvia. The central bank is scheduled to release its monetary policy statement at 12:45 p.m. London time, or 7:45 a.m. Eastern Time. That will be followed by a press conference with ECB President Mario Draghi at 1:30 p.m. London time.

Analysts expect the central bank to gradually taper its asset purchases starting from September, halting them altogether by as early as the end of this year. Economists’ forecasts for the timing of an ECB rate hike, the first since 2011, have vacillated between 2019 and 2020.

Given the anticipation surrounding the ECB meeting, the decision could prompt a significant reaction from the market, cautioned analysts.

There is “universal agreement” that the ECB will end its asset purchases this year, said Kit Juckes, global macro strategist at Société Générale, in a note to clients.

“That doesn’t mean the ECB will outline the details of the pace at which they buy bonds in Q4 today, but maybe it gives Mr. Draghi a chance to leave markets largely unmoved,” he said.

“The bigger questions for investors and traders surround the economic data (a move back above EUR/USD requires better data) and the Italian political situation (currently calm, but probably bubbling up below the surface),” added Juckes.

The ICE U.S. Dollar Index DXY, -0.17% a gauge that measures the dollar against six rivals, was down 0.2% at 93.483, versus a level of 93.669 late Wednesday. The broader measure of the WSJ Dollar Index BUXX, -0.25%  was off 0.1% to 87.08, down from 87.25 late Wednesday.

The euro EURUSD, +0.2375% strengthened to $1.1804, up from $1.1791 late Wednesday. The greenback also fell against the British pound, which was trading at $1.3394, from $1.3377.

The Japanese yen was also strengthening against the greenback, with the Bank of Japan scheduled to reveal its monetary policy decision on Friday. Most analysts aren’t expecting the bank to shift policy, even as it continues to ease up on monthly buys of Japanese bonds. The dollar USDJPY, -0.30%  slipped to ¥110.18 from ¥110.34.

The Aussie dollar was slipping across the board, after slightly softer-than-expected unemployment data. Against the U.S. dollar, the Australian dollar AUDUSD, -0.2244%  bought $0.7558, down from $0.7577 late Wednesday.

Source: marketwatch.com

The euro firmed up against the dollar on Thursday, ahead of a policy announcement from the European Central Bank, which may outline the bank’s plans for winding down its bond-buying program.Meanwhile, a popular gauge for the U.S. dollar continued to decline in the wake of an interest-rate hike by the Federal Reserve on Wednesday. The dollar initially climbed after that decision, but then slipped as the upbeat mood faded. The Fed’s key interest rate now sits within a range of 1.75% to 2%, after the seventh hike since December 2015.

READ MORE

Asian markets swing lower

FOREX_Asian-markets-swings-lower_FXPIG

Asian stock markets were down in early trading Thursday, after the U.S. Federal Reserve raised interest rates and indicated two more rate hikes were coming later this year.

Japanese stocks opened lower, with just the fishery/ag/forestry and marine transportation sectors up. The Nikkei NIK, -0.99%   was down 0.4%, though few big caps were moving sharply. Nintendo 7974, -5.09%  , however, was down 3.7% and tractor maker Kubota 6326, -2.43%   eased 2.3% amid the dollar’s USDJPY, -0.26%   pullback. Elsewhere, Toshiba 6502, +2.67%   was up a further 2% to again be the best-performing large cap after Wednesday’s 6.6% jump on its stock-buyback plans.

South Korean stocks were notably lagging after Wednesday’s day off for elections, with the Kospi SEU, -1.73%   down more than 1%. Construction names, which have surged since late April amid a Korean Peninsula thaw, continued the pullback seen during Tuesday’s Trump-Kim summit. Hyundai Engineering 000720, -8.48%   was off 6% while construction-materials maker Busan Industrial 011390, -15.54%   slid 11%.

Hong Kong stocks were little changed, with the Hang Seng Index HSI, -1.02%   off 0.4%. Financial stocks slipped after the Fed’s latest rate hike, with China Construction Bank 0939, -1.13%   down 1%. The Hong Kong Monetary Authority raised its base rate a quarter-point to 2.25%, matching the overnight interest rate hike by the Fed. A day after ZTE 0763, +0.40%   shares sank 42% in their second day of resumed trading, they were up 3% Thursday.

The Shanghai Composite SHCOMP, -0.02%   was down slightly, as was Australia’s S&P/ASX 200 XJO, -0.11%   as well as stocks in Singapore STI, -1.01%   and Taiwan Y9999, -1.43%  .

Source: marketwatch.com

Asian stock markets were down in early trading Thursday, after the U.S. Federal Reserve raised interest rates and indicated two more rate hikes were coming later this year.Japanese stocks opened lower, with just the fishery/ag/forestry and marine transportation sectors up.

READ MORE

PAMMs Daily Update

FOREX_managed-accounts-daily1306_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

Fed will raise

FOREX_fed-will-rise-interest-rates1306_FXPIG

The Federal Reserve will raise its short-term target rate while trying to keep markets calm by signaling future interest-rate hikes will come at an “unhurried” pace.

The Fed, which ends two days of talks Wednesday , will make few wrinkles because “it is in a good spot,” said Ellen Zentner, chief U.S. economist at Morgan Stanley. “The data since March is pretty much in line with the outlook and the rate path clearly remains a gradual one,” she said in an interview.

Most of the year-on-year growth in core services inflation since last fall owes to two categories, financial services and hospitals, she said.

On Tuesday, the Labor Department released consumer price inflation data for May that showed year-on-year headline inflation accelerated to a six-year high led by higher gasoline.

But analysts said the data would not change the trajectory of monetary policy as the year-on-year gains should top out in coming months.

Even though growth in the second quarter is looking strong, with some tracking estimates as high as 4.6%, the Fed will be cautious, concerned with the ongoing G-7 trade conflict, the recent bout of market stress over Italy, and disappointing growth in other advanced economies, said Krishna Guha, Fed watcher at Evercore ISI.

The market has already priced in a decision by the Fed to raise the target range of the federal funds rate by 25 basis points to a range of 1.75% to 2%. This will be the second rate hike this year and the seventh move since the start of the tightening cycle.

The interest-rate decision will come at 2 p.m.. The Fed will also released updated economic forecasts for the economy and interest-rate policy, and Chairman Jerome Powell will hold a press conference.

Analysts say any changes to the Fed’s forecast and policy statement may get in the way of its plans for a calm message.

Markets will be focusing on the central bankers updated “dot-plot” projections for interest rates. If only one official decides to raise their forecast for rates, that would send a signal of four more moves this year, complicating the unhurried message.

At the moment, traders see a 38% chance of four rate hikes this year. That is down from over 50% before the bond market selloff in view of political turmoil in Italy.

The yield on the 10-year Treasury yield TMUBMUSD10Y, -0.09%   has fallen to 2.96% after topping 3% last month.

Another hurdle is that Fed officials, in the last few weeks, have expressed an interest in updating the policy statement.

Source: marketwatch.com

The market has already priced in a decision by the Fed to raise the target range of the federal funds rate by 25 basis points to a range of 1.75% to 2%. This will be the second rate hike this year and the seventh move since the start of the tightening cycle.

READ MORE

DAX moves higher

FOREX_dax-moves-higher-ahead1306_FXPIG

The DAX index has posted gains in the Wednesday session. Currently, the DAX is at 12,898, up 0.44% on the day. On the release front, Eurozone employment change edged up to 0.4%, above the estimate of 0.3%. Eurozone industrial production declined 0.9%, weaker than the forecast of -0.6%. In the U.S, the Federal Reserve is expected to raise the benchmark rate by a quarter-point. On Thursday, Germany releases CPI and the ECB is expected to maintain rates at a flat 0.0%.

All eyes are on the Federal Reserve, which is expected to raise rates by a quarter-point at its policy meeting on Wednesday. The odds of a quarter-point move stand at 96% percent, according to the CME Group. Although a rate hike has been priced in by the markets, such a significant move could still boost the stock markets. Investors are still uncertain whether the Fed will raise rates three or four times in 2018. Fed policymakers seemed divided on this question, and the rate statement could provide clues about future monetary policy.

Central banks will be in the spotlight this week, with rate statements from the Federal Reserve on Wednesday and the ECB on Thursday. The Fed is widely expected to raise rates, with odds of a quarter-rate hike at 94%. Although the rate increase has been priced in, the U.S dollar could still make some gains against its major rivals. In Europe, the ECB will be looking for any clues with regard to the ECB’s asset-purchase program. Currently, the bank is purchasing EUR 30 billion/mth, and the scheme is scheduled to wind up in September. However, some ECB policymakers want to phase out the program slowly, rather than turn off the tap completely in September. ECB chief economist Peter Praet recently said that the ECB board members would conduct a detailed discussion about the fate of the stimulus package at the June meeting. Mario Draghi will likely make mention of the program at his press conference, so we could see some movement in the stock markets on Thursday.

Source: marketpulse.com

Central banks will be in the spotlight this week, with rate statements from the Federal Reserve on Wednesday and the ECB on Thursday. The Fed is widely expected to raise rates, with odds of a quarter-rate hike at 94%. Although the rate increase has been priced in, the U.S dollar could still make some gains against its major rivals. In Europe, the ECB will be looking for any clues with regard to the ECB’s asset-purchase program.

READ MORE

Pound at Risk

FOREX_Round-at-risk_FXPIG
TALKING POINTS – UK CPI, BRITISH POUND, FOMC, US DOLLAR, NAFTA, CANADIAN DOLLAR
  • British Pound may fall as UK CPI data falls short of expectations
  • US Dollar might rise as the FOMC adopts a more hawkish stance
  • Canadian Dollar and Mexican Peso lower amid NAFTA worries

UK CPI data headlines the economic calendar in European trading hours. The headline inflation rate is expected to print at 2.4 percent on-year in May, unchanged from the prior month. Leading PMI surveys argue for softer price growth however, echoing a string of recent disappointments on UK data outcomes relative to consensus forecasts. Such a result is likely to weigh on the British Pound.

The spotlight then turns to the FOMC policy announcement. A rate hike is widely expected, making the accompanying forward guidance the primary market mover. Activity surveys point to brisk pickup in growth and swelling inflationary pressure in the first two months of the second quarter, suggesting baseline forecasts as well as the tone of official comments might lean hawkish. That bodes well for the US Dollar.

The markets may be pre-positioning for just such an outcome. The greenback traded broadly higher against its G10 FX counterparts in Asia Pacific trade. The anti-risk Japanese Yen and Swiss Franc bore the brunt of its advance as S&P 500 futures edged upward, signaling an uptick in risk appetite. APAC shares traded lower in what looked like give-back of yesterday’s gains after the impact of the Trump/Kim summit fizzled.

The Canadian Dollar likewise fell as markets worried about NAFTA renegotiation prospects. This follows a contentious G7 leaders’ summit over the weekend that devolved into a series of insults lobbed at Canadian Prime Minister Justin Trudeau by White House officials including President Trump. The Mexican Peso fell in tandem. The British Pound corrected lower after yesterday’s Brexit-inspired gains.

Source: dailyfx.com

UK CPI data headlines the economic calendar in European trading hours. The headline inflation rate is expected to print at 2.4 percent on-year in May, unchanged from the prior month. Leading PMI surveys argue for softer price growth however, echoing a string of recent disappointments on UK data outcomes relative to consensus forecasts. Such a result is likely to weigh on the British Pound.

READ MORE

Gold May Break

FOREX_Gold-Oil-may-break_FXPIG

GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices vulnerable as the Fed dials up hawkish rhetoric
  • Crude oil prices at risk on USD upswing, EIA inventory data
  • Key multi-year chart support levels might finally be broken

Gold prices retreated as the US Dollar posted the largest increase in two weeks, extending its winning streak to a fourth consecutive day and undercutting the appeal of anti-fiat alternatives. An upshift in the priced-in 2019 interest rate hike path implied in Fed Funds futures looks to have accounted for the move. In-line US CPI data passed largely unnoticed, as expected.

Crude oil prices edged down as a monthly report from OPEC flagged uncertainly about on-coming supply and demand dynamics while the EIA upgraded its forecast for US output. Meanwhile, unnamed sources claimed Russia wants to scale back production curbs to October 2016 levels. API also reported US inventories added 833k barrels last week.

HAWKISH FED MAY HURT COMMODITY PRICES

Looking ahead, the FOMC monetary policy announcement is firmly in focus. Leading survey data points to a steep pickup in economic activity and accelerating inflation since the March forecast update, which might make for a hawkish tilt. That is likely to bode ill for gold prices as the US Dollar continues to march higher while broader capital flows move away from non-interest-bearing assets.

The official set of EIA inventory flow statistics is also due. It is expected to show that crude stockpiles shed 1.09 million barrels last week. A print closer in line with the API projection might pressure oil prices downward. A stronger greenback might amplify any such move since the commodity is priced in USD terms on global markets.

GOLD TECHNICAL ANALYSIS

Gold prices await clarify at support set from December 2016, now at 1294.89. A breakdown confirmed on a daily closing basis initially exposes the May 21 low at 1282.27, followed by the 1260.80-66.44 area. Alternatively, a push above the 1302.97-07.32 area aims for the upper layer of trend support (1312.82) and a chart inflection point at 1323.60.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are trying to resolve a clear directional bias at support set from June 2017. A break of its outer layer, now at 65.12, opens the door for a test of the April 6 low 61.84. Alternatively, a rebound back above resistance in the 66.22-67.36 area targets the 68.64-69.53 region next.

Source: dailyfx.com

Gold prices retreated as the US Dollar posted the largest increase in two weeks, extending its winning streak to a fourth consecutive day and undercutting the appeal of anti-fiat alternatives. An upshift in the priced-in 2019 interest rate hike path implied in Fed Funds futures looks to have accounted for the move. In-line US CPI data passed largely unnoticed, as expected.

READ MORE

PAMMs Daily Update

FOREX_managed-daily-accounts1206_FXPIG

Find out more about our Managed PAMM Accounts here.

READ MORE

Where do we go from here?

FOREX_where-do-we-go-from-here1206_FXPIG
Innovation; where are we going and how fast can we get there?

In 1968, Bob Beamon long jumped 8.90 metres in the Olympics in Mexico City. He broke the world record by 55cm. That was simply unbelievable at the time and it was said that it was the limit of human ability in that discipline. Yet in 1991 Mike Powell jumped 5cm further. That was twenty-six years ago so have we now reached the limit of human achievement in that discipline?

In 2007 Asafa Powell ran one hundred metres in 9.735 seconds. The world record had been being lowered in tiny increments. Then in 2009, along came Usain Bolt who ran one hundred metres in 9.572 seconds.

That 0.163 seconds is at latest equivalent to what Beamon did, but the question remains, is that the limit of human achievement?

I can already see you scratching your head, asking what is he on about now? Well the fact is that the pace of human achievement getting faster and faster and the sporting metaphor shows that it is true in all walks of life.

Take Cryptocurrencies. Ten years ago,…..ok we all know the pizza story, so I won’t repeat it. But have we now reached a Beamon or Bolt moment? What’s next? Can we afford to expect that in a dark cave somewhere late in the second decade of the twenty first century a latter-day Satoshi Nakamoto is about to take us even further into the digital and crypto age?  

When does the Banking Challenge begin?

For the man in the street, Bitcoin is little more than a generic name for all the cryptocurrencies that have sprung up over the past few years?

Will it fade away as its use falls and retailers decide that acceptance of Bitcoin is not going to be a panacea for their business?

The same man in the street will also probably have heard tales of pizzas and big houses and not be able to grasp what has gone on in between so he hasn’t yet been galvanized to get into the “crypto revolution”.

He or She prefers to keep his or her funds in a bank.  Such actions are not particularly safer, if at all, than a blockchain secured currency or simply under his mattress where he can at least feel its presence.

One of the surprises of Bitcoin Ethereum, Ripple et-al is the lack of conversation around interest rates. Cryptocurrencies have no time value as they have no monetary base other than as an exchange of value. How many Bitcoins or now fractions thereof are you prepared to pay for a cup of coffee?

Obviously, investors realize that when they invest in Bitcoin etc., they are considering capital gain and not income and this has been smoothed by the fact that cash deposits earn nothing now in any case.

Banks only appear to consider the time value of money on one side of their balance sheet and see only risk premium even though the depositor is also taking a risk in a “too big to fail” bank.

When you or I go to a bank and ask for a loan, we are asked to tell them what the funds will be used for.

Are we not entitled to the same courtesy?

Imagine going to your bank and paying in, say, ten thousand Euros, pounds, Zloty or whatever and asking what they intend to do with these funds. Quite apart from the fact they won’t pay you interest, would you lend it to them if they intended to invest in CDO’s or some other similar high-risk venture?

Probably not, which is why an alternative exchange of value makes sense.

In the Fiat world it’s about monetary policy again

Those of us still trying to earn an honest living trading Yen, Swiss Francs and Euros have been spared the deliberations of Central Banks for some considerable time as they lit the blue touch paper on QE and sat back to see if it really would bring hyperinflation as the Keynesian theorists feared.

Well, as Gloria Gaynor said, “so now you’re back, from outer space, I just walked in to find you here with that sad look upon your face”. Well, Messrs Draghi, Powell and Carney are maybe not fans of disco, but they are certainly making a comeback as their economies start to need a little tweaking.

Don’t tell the Bundesbank but inflation is starting to creep up, although in the UK, which is a special case, it is starting to creep down.

Next week The FOMC will hike rates again and Jay Powell will say the next hike will depend of the source and direction of inflation despite having hiked twice at the prospect of higher inflation.

Mario Draghi will cause uproar whether he mentions tapering or not. If he does the euro goes above 1.2000 if he doesn’t, the ECB are accused, like the MPC of crying wolf.

It’s rarely dull is it?

One of the surprises of Bitcoin Ethereum, Ripple et-al is the lack of conversation around interest rates. Cryptocurrencies have no time value as they have no monetary base other than as an exchange of value. How many Bitcoins or now fractions thereof are you prepared to pay for a cup of coffee? Obviously, investors realize that when they invest in Bitcoin etc., they are considering capital gain and not income and this has been smoothed by the fact that cash deposits earn nothing now in any case.

READ MORE

FTSE 100 pulls back

FOREX_ftse-100-pulls-back1206_FXPIG

U.K. stocks fell Tuesday after a historic meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un resulted in an agreement that critics said was too broad in nature when it comes to denuclearization in the Korean Peninsula.

The pound declined as attention to the Brexit debate among British lawmakers. Meanwhile, British wage-growth figures fell slightly short of expectations.

How markets are performing

The FTSE 100 index UKX, -0.22% pulled back 0.3% to 7,714.24, with the basic materials and oil and gas groups leading the sectors losing ground. But the utility and consumer goods sectors were among those moving higher. On Monday, the London benchmark rose 0.7%.

The pound GBPUSD, -0.1644% declined to $1.3368 from $1.3280 late Monday in New York. Against the euro GBPEUR, -0.1761% sterling fetched €1.1338, down from €1.1354 in the prior session.

What’s driving markets

U.K. stocks turned lower and the broader European equity market SXXP, -0.03% pared gains as the summit between U.S. and North Korea was wrapping up in Singapore. The meeting was unprecedented as it was the first between a U.S. sitting president and a North Korean leader.

The Trump and Kim signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but the statement was criticized as lacking detail on the verification of the process. The document does not use the words “irreversible” and “verifiable” to describe the denuclearization process, two things the U.S. has long pursued.

Brexit debate

Meanwhile, the pound moved lower as the Brexit issue returned to the fore. Lawmakers in the House of Commons were debating amendments from the House of Lords to the bill that takes the U.K. out of the European Union. The 15 amendments include a measure to keep the country in the EU’s customs union.

Prime Minister Theresa May’s Conservative government runs the risk of losing its bid to overturn some of the amendments if enough Conservative lawmakers decide to vote alongside opposition parties. The government’s Justice minister Phillip Lee resigned Tuesday, citing the government’s handling of the U.K.’s pending exit from the EU.

Economic data in focus

Basic wages in the U.K. rose 2.8% in the three months to April, the Office of National Statistics said Tuesday. Analysts polled by FactSet were looking for a 2.9% rise in wages excluding bonuses. The unemployment rate remained at 4.2%, meeting expectations.

Central banks in motion

The Federal Reserve begins its two-day meeting on Tuesday and markets expect an interest-rate hike on Wednesday. On Thursday, European Central Bank policy makers are expected to announce the timing for unwinding its bond buying. The Bank of Japan will release a policy update Friday.

Stock movers

Shares of home builders fell as Crest Nicholson Holdings PLC said its margins were hurt in the first half of the year by house prices that were flat and rising building-cost inflation. Crest Nicholson shares CRST, -4.30%  fell 3.4% on the FTSE 250 mid-cap index. Leading FTSE 100 decliners, shares of Barratt Developments PLC BDEV, -2.87%  lost 2.7%, while rival home builders Persimmon PLC PSN, -2.13%   and Taylor Wimpey PLC TW., -1.77%  declined 1.9% and 1.6%, respectively.

U.K. stocks fell Tuesday after a historic meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un resulted in an agreement that critics said was too broad in nature when it comes to denuclearization in the Korean Peninsula. The pound declined as attention to the Brexit debate among British lawmakers. Meanwhile, British wage-growth figures fell slightly short of expectations. How markets are performing

READ MORE

Gold prices drop

FOREX_gold-prices-drop-in-wake-of-trump-kim-pack1206_FXPIG

Gold prices slipped Tuesday when little ripple moved through so-called risk markets in the wake of the U.S.-North Korea developments, muting demand for haven metals.

The move came as a report showed U.S. consumer inflation is trending higher, a signal that markets believe will push the Federal Reserve into raising interest rates this week and possibly again later this year.

August gold GCQ8, -0.12%  fell $1.30, or 0.1%, to $1,301.00 an ounce. That recouped some of the loss earlier in the session, when the metal dropped to $1,298.70 an ounce, below the closely watched $1,300 line.

Stocks were sluggish but largely held their ground in the wake of the geopolitical headlines.

U.S. President Donald Trump and North Korean leader Kim Jong Un signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but the statement was criticized as lacking detail on the verification of the process.

Competition for market attention also fixed on interest-rate policy. The Federal Reserve is expected to raise interest rates after its two-day meeting, which begins Tuesday. European Central Bank policy makers are expected to announce the timing of a reduction of its crisis-era asset-purchase initiative when it meets on Thursday.

Ahead of those events, the ICE U.S. Dollar Index DXY, -0.04% a measure of the dollar against a half-dozen major currencies, was little changed. It has climbed by nearly 4% so far this quarter, helping to put pressure on dollar-denominated gold prices, which have lost roughly 2% for the quarter, according to FactSet Data.

As for Tuesday’s economic developments, government data showed that the consumer price index has risen 2.8% in the past 12 months, up from 2.5% in April. That’s the highest level since early 2012. The yearly increase in the core rate edged up to 2.2%. Inflation can be a mixed bag for gold; it can put pressure on central banks to hike rates, hurting nonyielding bullion, but gold has historically maintained a role as an inflation hedge for long-term investors.

Also reported, the index of small-business optimism from the National Federation of Independent Businesses soared to 107.8 in May. The three-point gain took the index to its second-highest level in its 45-year history, the NFIB said.

Meanwhile, July silver SIN8, -0.19%  fell 3 cents, or 0.2%, to $16.92 an ounce. July copper HGN8, -0.31%  changed hands at $3.2465 a pound, down 0.3%.

Source: marketwatch.com

U.S. President Donald Trump and North Korean leader Kim Jong Un signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but the statement was criticized as lacking detail on the verification of the process. Competition for market attention also fixed on interest-rate policy. The Federal Reserve is expected to raise interest rates after its two-day meeting, which begins Tuesday. European Central Bank policy makers are expected to announce the timing of a reduction of its crisis-era asset-purchase initiative when it meets on Thursday.

READ MORE

Blow to Theresa May

FOREX_teresa-may-resigns-ahead1206_FXPIG

A British minister resigned unexpectedly Tuesday citing the government’s approach to Brexit, hours ahead of a showdown in Parliament over whether lawmakers can wrest some control from the government of the deal to leave the European Union.

The votes in the House of Commons, the elected chamber, could influence negotiations over the future relationship between the European Union and the U.K. after Brexit. The results could also deliver a further blow to Prime Minister Theresa May’s authority, which was severely damaged when she lost her parliamentary majority after calling a general election last year.

The outcome of the votes hangs in part on how many lawmakers in May’s Conservative Party rebel against the government. As many as 11 Conservatives have opposed key parts of the government’s Brexit legislation in previous votes, enough to inflict defeat on May.

The resignation of Phillip Lee, a junior minister in the Justice Department who supported remaining in the EU during the 2016 referendum on membership of the bloc, further complicates the government’s effort to win the support of Parliament. Lee said he would side with fellow Conservative Party rebels in a vote Tuesday to give Parliament power to reject any Brexit deal it deems unsatisfactory.

Source: marketwatch.com

The votes in the House of Commons, the elected chamber, could influence negotiations over the future relationship between the European Union and the U.K. after Brexit. The results could also deliver a further blow to Prime Minister Theresa May’s authority, which was severely damaged when she lost her parliamentary majority after calling a general election last year.

READ MORE

European stocks step lower

FOREX_european-stocks_FXPIG

Gains for European stocks largely faded Tuesday, with investors considering results of U.S. President Trump’s unprecedented summit with North Korean leader Kim Jong Un in Singapore.

How markets are performing

The broader Stoxx Europe 600 Index SXXP, +0.07% slipped by less than 1 point to 387.80 after rising as much as 0.4%. The basic materials and oil and gas groups led declining sectors, but the utility and tech groups moved higher. On Monday, the index rose 0.7%, the first rise in five sessions.

Germany’s DAX 30 index DAX, +0.05%  flipped down, losing 0.1% to 12,827.12. France’s CAC 40 index PX1, -0.19% reversed course and fell 0.3% to 5,454.63.

In London, the FTSE 100 UKX, -0.26%  fell 0.3% to 7,712.46, also giving up early gains.

But Spanish and Italian stocks advanced. Spain’s IBEX 35 IBEX, +0.32%  was up 0.5% to 9,943.00, and Italy’s FTSE MIB index I945, +0.48% rose 0.3% to 22,148.03. That extended Monday’s 3.4% leap, seen after Italy’s economy minister said the country’s new coalition government is committed to eurozone membership.

Investors continued to snap up Italian debt, driving down the yield on Italy’s 2-year note TMBMKIT-02Y, -17.06% by 24 basis points to 0.84%, according to Tradeweb. Yields fall when bond prices rise. The yield on 10-year TMBMKIT-10Y, -1.10%  fell 8 basis points to 2.7%.

The euro EURUSD, -0.0170% traded at $1.1796, slightly higher than $1.1785 late Monday in New York.

What’s driving markets

European bourses started to retreat after posting gains at the open. When trading got underway, Trump and Kim had signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but the statement was criticized as lacking detail on the verification of the process.

The meeting was unprecedented as it was the first between a U.S. sitting president and a North Korean leader.

“The lack of a response [in the markets] though may be a reflection of the fact that the agreement still lacks some detail and given the unpredictable and volatile nature of the two leaders, there’s no guarantee that it won’t run into significant difficulties. Still, progress is important which makes today a big success,” said Craig Erlam, senior market analyst at Oanda, in a note.

Meanwhile, the Brexit issue returns to the fore, as U.K. lawmakers in the House of Commons will begin debating amendments by the House of Lords to the bill that takes the U.K. out of the European Union. The 15 amendments include a measure to keep the country in the EU’s customs union.

Prime Minister Theresa May’s Conservative government runs the risk of losing its bid to overturn some of the amendments if enough Conservative lawmakers decide to vote alongside opposition parties.

Central banks in motion

Beyond geopolitics, traders are focusing on central-bank meetings this week. The Federal Reserve begins its two-day meeting on Tuesday and markets expect an interest-rate hike on Wednesday. On Thursday, European Central Bank policy makers are expected to announce the timing for unwinding its bond buying. The Bank of Japan will release a policy update Friday.

“There seems to be suggestions that the ECB is going to reduce QE, but I’m scratching my head on how they can actually do that. Industrial production in Germany and France has slowed, credit growth has slowed, retail sales are slowing,” said Kully Sumra, vice president of international services at Charles Schwab, in an interview.

“And the Bank of Japan ... looks like they’ve may have reached a cyclical corner and things might be slowing down a little. This week is really going to be marked by a continuing divergence between the three big central banks. The Fed has a very clear path in terms of hiking rates and the ECB and the Bank of Japan, much less so.”

Stocks in focus

French retailer Casino Guichard-Perrachon SA CO, +0.79%  climbed 3%, but pared bigger gains, after it revealed plans to sell non-core assets worth about 1.5 billion euros ($1.77 billion) to accelerate its debt-reduction efforts in France.

Economic data

Basic wages in the U.K. rose 2.8% in the three months to April, the Office of National Statistics said Tuesday. Analysts polled by FactSet were looking for a 2.9% rise in wages excluding bonuses. The unemployment rate remained at 4.2%, meeting expectations.

Source: marketwatch.com

Gains for European stocks largely faded Tuesday, with investors considering results of U.S. President Trump’s unprecedented summit with North Korean leader Kim Jong Un in Singapore.The broader Stoxx Europe 600 Index SXXP, +0.07% slipped by less than 1 point to 387.80 after rising as much as 0.4%. The basic materials and oil and gas groups led declining sectors, but the utility and tech groups moved higher. On Monday, the index rose 0.7%, the first rise in five sessions.

READ MORE

Forex Trading Quote

FOREX_Trading-Quotes-Kovnerr_FXPIG

...Novice traders trade 5 to 10 times too big. They are taking 5 to 10% risks on a trade that should be taking 1 to 2 percent of risk...

-BRUCE KOVNER

READ MORE

AUD/USD Trendline Resistance

FOREX_AUDUSD-resistance_FXPIG
AUSTRALIAN DOLLAR TALKING POINTS

AUD/USD retraces the decline from late last week even as the G7 Summit does little to ward off the threat for a global trade war, and the pair may continue to catch a bid over the next 24-hours of trade as the recent pickup in market sentiment appears to be gathering pace.

AUD/USD OUTLOOK MIRED BY FAILED ATTEMPT TO BREAK TRENDLINE RESISTANCE

Following the reaction to the Australia’s 1Q Gross Domestic Product (GDP) report, recent developments in AUD/USD raises the scope for a more meaningful recovery as the pair breaks out of a near-term range.

Even though the Reserve Bank of Australia (RBA) remains in no rush to lift the cash rate off of the record-low, indications of stronger-than-expected growth may push the central bank to gradually change its tune in the second-half of the year, with the improvement in risk appetite likely to keep AUD/USD afloat ahead of the meeting minutes due out on June 18 as the rebound from the May-low (0.7412) continues to unfold.

Keep in mind, a marked slowdown in Australia Home Loans may rattle the aussie-dollar exchange rate as Governor Philip Lowe and Co. warns that ‘the level of household debt remains high,’ but the RBA Minutes may heighten the appeal of the Australia dollar as ‘members agreed that it was more likely that the next move in the cash rate would be up, rather than down.’ With that said, AUD/USD may make another attempt to threaten the downward trend from earlier this year as bullish momentum appears to be gathering pace, with a break of trendline resistance raising the risk for a more meaningful recovery in the exchange rate.

AUD/USD DAILY CHART
  • String of lower-highs may produce a larger pullback in AUD/USD as the near-term rebound appears to be stalling ahead of trendline resistance, with a break/close below 0.7590 (100% expansion) bringing the downside targets back on the radar.
  • However, the 0.7650 (38.2% retracement) remains on the radar as the Relative Strength Index (RSI) extends the bullish formation carried over from the previous month, with a close back above the stated region raising the risk for a run at the Fibonacci overlap around 0.7720 (23.6% retracement) to 0.7770 (61.8% expansion).
  • Next region of interest comes in around 0.7850 23.6% retracement) to 0.7860 (61.8% expansion) followed by the overlap around 0.7930 (50% retracement) to 0.7940 (61.8% retracement), which sits just above the March-high (0.7916).

Source: dailyfx.com

AUD/USD retraces the decline from late last week even as the G7 Summit does little to ward off the threat for a global trade war, and the pair may continue to catch a bid over the next 24-hours of trade as the recent pickup in market sentiment appears to be gathering pace.

READ MORE
Load More

OH SH*T CALENDAR

UPCOMING FOREX NEWS EVENTS
  • LOADING...

  • DATE

    CURRENCY

    EVENT

    IMPACT

  • Loading events...