Forex Analysis For December 14: EUR/USD, GBP/USD, AUD/USD
SGT Markets | Dec 14, 2017 04:39AM ET
EUR/USD
Eyes on today U.S. Core CPI data.
Fed raised Interest Rates but expressed a dovish view about next moves for accompanying a not-so-convincing U.S. economic expansion.
Eurozone CPI inflation data (Preliminary release) ticked down while U.S. GDP preliminary release ticked upper than expected. Last U.S. Nonfarm payrolls and ADP Nonfarm Employment data also surpassed consensus once again.
German Ifo and Manufacturing PMI data came again higher than expected.
President Draghi said the ECB was becoming increasingly confident that the euro zone's economic recovery would continue but sluggish growth in wages meant monetary policy needed to remain easy.
We expect another correction down from 1.185 area. Possible target: 1.176.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Neutral
1st Resistance: 1.1856
2nd Resistance: 1.1990
1st Support: 1.1756
2nd Support: 1.1655
EUR
Recent Facts:
30th of June, German Unemployment Change + Eurozone CPI
German Unemployment Change Better than Expected, Eurozone CPI higher than Expected
3rd of July, German Manufacturing PMI
Better than Expected
5th of July, French Services PMI + German Services PMI + Eurozone Retail Sales
Better than Expected
18th of July, German ZEW Economic Sentiment
Worse than Expected
24th of July, German Manufacturing PMI + Eurozone Manufacturing PMI + Eurozone Services PMI
Worse than Expected
28th of July, German CPI
Better than Expected
31st of July, Eurozone CPI (Preliminary) + Unemployment Rate
Eurozone CPI (Preliminary) as Expected, Unemployment Rate Better than Expected
1st of August, German Manufacturing PMI + Unemployment Change
Worse than Expected
15th of August, German GDP (Preliminary release)
Worse than Expected
17th of August, Eurozone CPI
As Expected
22nd of August, German ZEW Economic Sentiment
Worse than Expected
23rd of August, German Manufacturing PMI
Better than Expected
25th of August, German Ifo Business Climate
Better than Expected
31st of August, German Unemployment + CPI (Preliminary release)
German Unemployment Worse than Expected, CPI Better than Expected
Get The News You Want
1st of September, Manufacturing PMI
Worse than Expected
7th of September, ECB Press Conference
Draghi said that growth projections were made considering EURUSD @1.18 level (the current or higher levels are considered due to excessive volatility and this is considered to be slowing down CPI measures) and in October some clearer actions will be taken in order to push inflation upwards (possibly by monitoring EURUSD and reducing overshooting in EUR currency levels).
13th of September, Eurozone Employment Change
Better than Expected
15th of September, Eurozone Wages, Trade Balance
Better than Expected
18th of September: Eurozone CPI
As Expected
19th of September: German ZEW Economic Sentiment, German ZEW current conditions
Better than Expected
22nd of September, German Manufacturing PMI
Better than Expected (at its highest since May 2011)
28th of September, Eurozone Inflation data
Worse than Expected
29th of September, German Unemployment Change
Better than Expected
25th of October, French and German Manufacturing PMI
Better than Expected
26th of October, ECB Interest Rate Decision and Press Conference
Dovish: ECB will extend those purchases to the end of September 2018, or beyond, if necessary
31st of October, Eurozone CPI
Worse than Expected
2nd of November, German Manufacturing + German Unemployment
Better than Expected
14th of November, German GDP
Better than Expected
23rd of November, German Manufacturing PMI
Better than Expected
30th of November, Eurozone CPI (Preliminary release)
Lower than Expected
USD
Recent Facts:
7th of July, Nonfarm Payrolls + Unemployment Change
Nonfarm Payrolls Better than Expected, Unemployment Change Worse than Expected
13th of July, PPI
Better than Expected
14th of July, U.S. Core Retail + U.S. CPI
Worse than Expected
20th of July, Philadelphia Fed Manufacturing Index
Worse than Expected
25th of July, Conference Board Consumer Confidence
Better than Expected
27th of July, Core Durable Goods Orders
Worse than Expected
28th of July, U.S. GDP (Preliminary release)
As Expected
1st of August, ISM Manufacturing PMI
Slightly Worse than Expected
2nd of August, ADP Nonfarm Employment Change
Worse than Expected
3rd of August, ISM Non-Manufacturing PMI
Worse than Expected (at the lowest since October 2016)
4th of August, Nonfarm Payrolls + Unemployment Rate
Job Market Better than Expected
8th of August, Job Openings
Better than Expected
10th of August, PPI
Worse than Expected
11th of August, U.S. CPI
Worse than Expected
15th of August, U.S. Core Retail Sales
Better than Expected
23rd of August, Manufacturing PMI and New Home Sales
Worse than Expected
29th of August, CB Consumer Confidence
Better than Expected
30th of August, ADP Nonfarm Employment Change + GDP
ADP Nonfarm Employment Change Better than Expected, GDP relevantly better than expected
1st of September, U.S. Nonfarm Payrolls + Unemployment rate
Worse than Expected
1st of September, ISM Manufacturing
Better than Expected
6th of September, ISM Non-Manufacturing PMI
Worse than Expected
13th of September, PPI
Worse than Expected
15th of September, Retail Sales
Worse than Expected
15th of September, Manufacturing Production + Industrial Production
Worse than Expected
19th of September, Building Permits
Better than Expected
20th of September, FOMC Statement + FOMC Press Conference
Fed confirmed inflation view, labour market growth and scheduled rate hikes
26th of September, Fed Chair Yellen speech
Federal Reserve to continue gradual interest rate hikes despite uncertainty about the path of inflation. It "would be imprudent to keep monetary policy on hold until inflation is back to 2%," she said.
28th of September, U.S. GDP + U.S. job market
Better than Expected
2nd of October, ISM Manufacturing PMI
Better than Expected
4th of October, ISM Non-Manufacturing PMI + ADP Nonfarm Employment Change
Better than Expected
6th of October, Nonfarm Payrolls + Unemployment Rate
Worse than Expected
12th of October, Core PPI
Higher than Expected
13th of October, Core CPI + Retail Sales
Lower than Expected
27th of October, GDP (Preliminary release)
GDP Higher than Expected
1st of November, FOMC Statement
Slightly Hawkish
3rd of November, Nonfarm Payrolls + Unemployment Rate
U.S. Job Creation Surges But Misses Consensus; U.S. Wage Inflation flat
14th of November, PPI
Higher than Expected
30th of November, U.S. GDP (Preliminary release)
GDP Higher than Expected
8th of December, Nonfarm Payrolls + Unemployment Rate
Better than Expected
13th of December, U.S. Interest Rates
Fed raised Interest Rates but expressed a dovish view about next moves for accompanying a not-so-convincing U.S. economic expansion.
Eyes on today release: CPI
GBP/USD
Eyes on today U.S. Core CPI data.
Fed raised Interest Rates but expressed a dovish view about next moves for accompanying a not-so-convincing U.S. economic expansion.
UK CPI inflation data and UK Manufacturing Production came higher than consensus.
Sterling rose amid hopes that a deal on Brexit would be reached. Nonetheless, we think the sentiment will turn negative very soon, as this deal will be delayed and Pound will discount this heavily overbought speculative situation.
UK Retail Sales came better than expected and last UK job market data also better than expected.
As written previously, Pound is inside an overbought area. 1.336 – 1.346 area represents a strong Resistance area. Now, either a breakout of 1.346 with target in 1.36 area, or a test in 1.329 Demand area.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2001:
Weekly Trend: Neutral
1st Resistance: 1.3460
2nd Resistance: 1.3610
1st Support: 1.3362
2nd Support: 1.3285
GBP
Recent Facts:
15th of June, Retail Sales
Retail Sales Worse than Expected,
20th of June, BoE Gov Carney Speech
Carney ruled out imminent rate hikes, warning of weak wage growth and a likely hit to incomes as Britain prepares to leave the European Union.
30th of June, GDP
UK GDP as Expected, with improving Current Account
3rd of July, UK Manufacturing PMI
Worse than Expected
4th of July, Construction PMI
Slightly Worse than Expected
5th of July, Services PMI
Slightly Worse than Expected
7th of July, Manufacturing Production
Worse than Expected
12th of July, UK Job Market
Better than Expected
18th of July, CPI
Worse than Expected
20th of July, UK Retail Sales
Better than Expected
26th of July, UK GDP release (Preliminary)
As Expected
1st of August, Manufacturing PMI
Better than Expected
2nd of August, Construction PMI
Worse than Expected (at the lowest since October 2016)
3rd of August, Services PMI
Better than Expected
10th of August, Manufacturing Production
As Expected
15th of August, UK CPI
Worse than Expected
16th of August, UK Job Market
Better than Expected
17th of August, Retail Sales
Better than Expected
24th of August, GDP (Preliminary release)
UK GDP (Preliminary release) as expected but Business Investment (Preliminary release) Worse than Expected
1st of September, Manufacturing PMI
Better than Expected
4th of September, Construction PMI
Worse than Expected
5th of September, Services PMI
Worse than Expected
8th of September, Trade Balance and Manufacturing Production
Better than Expected
12th of September, CPI
Higher than Expected
13th of September, Job Market
Better than Expected
14th of September, BoE Meeting Minutes
The BoE’s monetary policy committee voted 7-to-2 to leave interest rates at their current record low of 0.25% following its policy meeting but the bank said in its rate statement that the economy is looking slightly, so an interest rate hike move is likely “over the coming months” if the economy performs broadly in line with officials’ expectations
18th of September, Governor Carney Speech at IMF headquarter
De-integration effects of Brexit are likely to be inflationary but any rate hikes are expected to be gradual and limited
20th of September, Retail Sales
Better than Expected
29th of September, UK GDP
Worse than Expected
2nd of October, Manufacturing PMI
Worse than Expected
3rd of October, Construction PMI
Worse than Expected
4th of October, Services PMI
Better than Expected
10th of October, Manufacturing Production
Better than Expected
17th of October, UK CPI
Slightly Worse than Expected
18th of October, Job Market data
Wages Higher than Expected, Claimant Count Worse than Expected
19th of October, UK Retail Sales
Worse than Expected
25th of October, UK GDP (Preliminary release)
Better than Expected
1st of November, UK Manufacturing PMI
Better than Expected
2nd of November, Interest Rate Decision
Dovish Bank of England raised interest rates but said that any further hikes would be at a gradual pace and to a limited extent
10th of November, Manufacturing Production
Better than Expected
14th of November, UK CPI
Higher than Expected
15th of November, Job market
Better than Expected
16th of November, Retail Sales
Better than Expected
1st of December, UK Manufacturing PMI
Better than Expected
5th of December, UK Services PMI
Worse than Expected
8th of December, Manufacturing Production
Better than Expected
12th of December, UK CPI data
Higher than Expected
USD
Recent Facts:
See above.
AUD/USD
Eyes on today U.S. Core CPI data.
Fed raised Interest Rates but expressed a dovish view about next moves for accompanying a not-so-convincing U.S. economic expansion.
The Australian dollar gained recently as jobs data lent a hand and despite weaker than expected retails sales and industrial output from top trading partner China. Australia GDP worse than expected is deteriorating the hopes of a future hawkish RBA behaviour, though Retail Sales were higher than expected.
During last meeting, RBA’s Lowe said no strong case for near-term change in interest rates but more likely next move in rates is up rather than down. Weakening case for lower rates as the economy picks up.
"Inflation and wage growth remain low. Both are expected to increase only gradually over time," Governor Phil Lowe said.
We expect a consolidation phase starting around 0.757 Demand area.
Our special Fibo Retracements are confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Overbought
1st Resistance: 0.7680
2nd Resistance: 0.7735
1st Support: 0.7570
2nd Support: 0.7480
AUD
Recent Facts:
4th of May, Australia New Home Sales + Trade Balance
Worse than Expected
9th of May, Australia Retail Sales
Worse than Expected
18th of May, Australia Employment Change
Better than Expected
24th of May, Australia Construction Work Done
Worse than Expected
24th of May, Moody’s Credit Rating on China
Moody's Investors Service downgraded China's credit rating to A1 from Aa3, changing its outlook to stable from negative
25th of May, OPEC Meeting
OPEC decided to extend production cuts by nine months to March 2018
30th of May, Building Approvals + Private House Approvals
Better than Expected
1st of June, Australia Retail Sales
Better than Expected
6th of June, Reserve Bank Of Australia Interest Rate Decision and Statement
In the last meeting, the Reserve Bank of Australia held Interest Rates at 1.5% as expected, reporting that the current account’s deficit widened
7th of June, Australia GDP
Better than Expected
15th of June, Australia Employment Change
Better than Expected (3rd month in a row)
29th of June, HIA New Home Sales
Better than Expected
4th of July, Retail Sales
Better than Expected
4th of July, Reserve Bank of Australia Interest Rate Decision
RBA holds Rates at 1.5%
6th of July, Australia Trade Balance
Better than Expected
11th of July, Home Loans + NAB Business Confidence
Home Loans Worse than Expected, NAB Business Confidence Better than Expected
12th of July, Westpac Consumer Sentiment
Better than Expected
20th of July, Employment Change + Unemployment Rate
Employment Change Worse than Expected, Unemployment Rate as Expected
25th of July, CPI + RBA Governor Lowe Speech
Worse than Expected
3rd of August, Trade Balance
Worse than Expected
4th of August, Australia Retail Sales
Better than Expected
9th of August, Westpac Consumer Sentiment + Home Loans
Worse than Expected
17th of August, Employment Change
Better than Expected but Full Employment Change negative
30th of August, Australia Building Approvals + Construction Work Done
Better than Expected
1st of September, AIG Manufacturing Index
Better than Expected
6th of September, Australia GDP
Worse than Expected
7th of September, Trade Balance + Retail Sales
Worse than Expected
14th of September, Employment Change
Better than Expected
19th of September, House Price Index
Higher than Expected
5th of October, Retail Sales
Worse than Expected
19th of October, Employment Change
Better than Expected
25th of October, CPI
Lower than Expected
1st of November, AIG Manufacturing Index
Worse than Expected
3rd of November, Australia Retail Sales
Worse than Expected
16th of November, Australia Employment Change
Worse than Expected
5th of December, Retail Sales
Better than Expected
5th of December, RBA Interest Rate decision and Statement
Economy is growing
6th of December, GDP
Worse than Expected
14th of December, Employment data
Better than Expected
USD
Recent Facts:
See above.
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