Forex Analysis: EUR/USD, GBP/USD, AUD/USD
SGT Markets | Jan 19, 2017 06:18AM ET
EUR/USD
ECB President Draghi will speak today while Fed’s Chair Yellen stated that as the economy approaches our objectives, it makes sense to gradually reduce the level of monetary policy support. Eyes also on Trump’s speech.
EU consumer prices rising at the fastest annual pace since 2013. U.S Inflation producers higher than expected.
The new trading environment between the UK and the EU can be agreed within the 2 year window set under Article 50.
Consolidation in area 1.062 occurring right now. Now we are in a resistance zone, so we expect some struggles and a correction down.
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: Overbought
1st Resistance: 1.0679
2nd Resistance: 1.0782
1st Support: 1.0555
2nd Support: 1.0462
EUR
Recent Facts:
1st of December, French and German Manufacturing PMI (it measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below indicates contraction)
French Manufacturing PMI better than expected, German Manufacturing PMI slightly worse than expected.
4th of December, Italy Constitutional Referendum
Prime Minister quits as vote defeat deepens Europe’s turmoil.
8th of December, Interest Rate Decision + ECB Press Conference
Interest Rate Unchanged but the European Central Bank wants to extend its asset purchase program for additional nine months.
13th of December, Eurozone CPI + German ZEW Economic Sentiment
Eurozone CPI pared the Expectations, German ZEW contrasted.
15th of December, German Manufacturing (Preliminary release)
Better than expected.
2nd of January, Eurozone Manufacturing PMI
Better than expected.
3rd of January, German Unemployment + German CPI
Better than expected.
4th of January, Spanish Unemployment + Eurozone Services PMI + Eurozone CPI
Higher than expected.
Eyes on today release: ECB Interest Rates + Press Conference
USD
Recent Facts:
16th of November, U.S. Producer Price Index (PPI)
Worse than expected.
17th of November, CPI + Housing Starts + Philadelphia Fed Manufacturing
CPI worse than expected, Building Permits and Housing Starts better than expected, Philadelphia Fed Manufacturing worse than expected.
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22nd of November, Existing Home Sales
Better than expected.
23rd of November, Durable Goods Orders + New Home Sales + FOMC Minute Meeting
Durable Goods Orders better than expected, FOMC Minute Meeting didn’t tell anything new (a rate hike appropriate relatively soon as long as data cooperates).
29th of November, GDP (Preliminary release) + CB Consumer Confidence
GDP better than expected, CB Consumer Confidence better than expected.
30th of November, ADP Nonfarm Employment Change
Better than expected (new high since January 2016).
1st of December, ISM Manufacturing PMI (it is based on data compiled from monthly replies to questions asked of purchasing and supply executives in over 400 industrial companies)
Better than expected.
2nd of December: Nonfarm Payrolls + Unemployment Rate
Better than expected.
14th of December, Fed Interest rate decision + FOMC Meeting
USD Interest Rate hike happened as expected.
15th of December, Core CPI + Philadelphia Fed Manufacturing Index
Core CPI slightly worse than expected, Philadelphia Fed Manufacturing Index better than expected.
22nd of December, Core Durable Goods Orders + GDP
Better than expected.
28th of December, Pending Home Sales
Worse than expected.
4th of January, FOMC Meeting Minutes
The forecast of as many as three rate hikes in 2017 is highly variable on President-elect Donald Trump getting an aggressive tax cut and spending plan through Congress.
6th of January, Nonfarm Payrolls + Unemployment Rate
Worse than expected (over the last 6 months, 4 were below the expectations).
13th of January, Producer Price Index + Retail Sales
Producer Price Index higher than expected, Retail Sales slightly worse than expected.
Eyes on today release: Trump Speech
GBP/USD
Job Market doing confirmedly well.
Final deal about Brexit will be decided by both the house of Commons and the house of Lords. In terms of the deal, she still assumes that both the divorce and the new trading environment with the EU can be agreed within the 2 year window set under Article 50.
Attention to Trump speech.
The test of the Support in area 1.217 failed. Break of 1.217 opened the ground down to 1.19 area from where it bounced violently up on the Speech by UK Prime Minister. Next target: 1.245 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: 1.2458
2nd Resistance: 1.2670
1st Support: 1.2169
2nd Support: 1.1968
GBP
Recent Facts:
4th of August, Bank of England Interest Rates decision (expected a cut)
Bank of England lowers Interest Rates as expected (record low of 0.25%) and increases purchase program.
9th of August, Manufacturing Production (measures the change in the total inflation-adjusted value of output produced by manufacturers)
Slightly worse than expected.
9th of August, Trade Balance
Worse than expected. Setting a new historical low.
16th of August, UK Consumer Price Index (measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation)
Higher than expected. Setting a new high since January 2015.
18th of August, UK Retail Sales
Better than expected. Core Retail Sales YoY at the highest since November 2015.
1st of September, UK Manufacturing PMI (key indicator of the activity level of purchasing managers in the services sector)
Better than expected. Setting a new historical high since December 2015.
5th of September, UK Services PMI
Better than expected.
30th of September, Gross Domestic Product
Pared the Expectations.
4th of October, Construction PMI
Better than expected.
18th of October, CPI (UK Price Inflation)
Higher than expected.
19th of October, Job Market (Average Earnings Index + Claimant Count Change + Unemployment Rate)
Average Earnings Index + Claimant Count Change + Unemployment Rate as expected.
Claimant Count Change better than expected.
20th of October, Retail Sales
Worse than expected.
27th of October, GDP Q3 (Preliminary release)
Better than expected.
2nd of November, Construction PMI
Better than expected.
3rd of November, Services PMI + BoE Monetary Policy votes + Interest Rates Decision
Services PMI better than expected, Interest Rates Unchanged and no clues about future change.
8th of November, ELECTION OF THE 45th PRESIDENT OF THE UNITED STATES
Donald Trump elected President.
9th of November, Trade Balance
Worse than expected.
15th of November, CPI
Worse than expected.
16th of November, Job Market
Claimant Count Change (which measures the change in the number of unemployed people in the UK during the reported month) worse than expected.
17th of November, Retail Sales
Better than expected.
1st of December, Manufacturing PMI (it measures the activity level of purchasing managers in the manufacturing sector)
Worse than expected.
7th of December, Manufacturing Production
Worse than expected.
9th of December, Consumer Inflation Expectations + Trade Balance (EU and non-EU)
Consumer Inflation Expectations higher then expected, Trade Balance better than expected.
13th of December, CPI (UK Price Inflation)
Higher than expected.
14th of December, Job Market
Better than expected.
3rd of January, Manufacturing PMI
Better than expected (setting a new high since August 2014).
4th of January, Construction PMI
Better than expected.
11th of January, Manufacturing Production
Better than expected.
17th of January, UK Prime Minister May speaks
May confirmed that the UK will leave Europe's single market, but will seek a deal that gives the greatest possible access, Both the divorce and the new trading environment with the EU can be agreed within the 2 year window set under Article 50.
18th of January, Job Market
Better than expected.
USD
Recent Facts:
See above.
AUD/USD
Employment Change rose again more than expected. Attention to Trump speech. Fed’s Chair Yellen stated that as the economy approaches our objectives, it makes sense to gradually reduce the level of monetary policy support.
Chinese Trade Balance suffers and China Inflation lower than expected (while Productions Prices at the fastest pace in 5 years). Tomorrow Chinese GDP data released.
Now we are testing a resistance in 0.752 area. An eventual overshoot can hit 0.76 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: 0.7525
2nd Resistance: 0.7597
1st Support: 0.7440
2nd Support: 0.7345
AUD
Recent Facts:
2nd of August, Interest Rates decision cut to from 1.75% to 1.50% as expected.
4th of August, Retail Sales (Jun)
Worse than expected.
11th of August, Reserve Bank of New Zealand's rate statement
Interest rates cut (to 2%) as expected.
18th of August, Employment Change
Better than expected. Highest since the beginning of this year.
15th of September, Employment Change
Worse than expected.
18th of October, Reserve Bank of Australia Meeting Minutes
RBA's Governor Philip Lowe said that Inflation Expectations declined, but not that much and that current level of AUD and rates is suitable for economy.
In the meantime New Zealand Consumer Price Index came in at 0.2%, above expectations (0%) in 3Q.
20th of October, Job Market Data
Worse than expected.
26th of October, Inflation Data (CPI)
Higher than expected.
1st of November, RBA Interest Rates Statement
RBA’s Governor Lowe signals tolerance for weak inflation and bets seem off for future rate cuts.
3rd of November, RBA Monetary Policy Statement + Retail Sales
RBA said it is focused on the medium-term inflation target.
Retail Sales better than expected.
8th of November, ELECTION OF THE 45th PRESIDENT OF THE UNITED STATES
Donald Trump elected President.
9th of November, Reserve Bank of New Zealand Interest Rate Decision + Monetary Policy Statement
Interest Rates cut to 1.75% from 2.00% as expected.
17th of November, Employment Change
Slightly worse than expected.
23rd of November, Australia Construction Work Done
Worse than expected (for the 5th Quarter in a row).
30th of November, Building Approvals + Australia Private Sector Credit
Building Approvals worse than expected, Private Sector Credit better than expected.
2nd of December, Retail Sales
Better than expected (for the 3rd Month in a row).
6th of December, Interest Rate Decision + RBA Statement
The Reserve Bank of Australia held its benchmark cash rate at a record low 1.50% As expected, while noting a stronger Aussie could complicate efforts to rebalance the economy.
7th of December, Gross Domestic Product (GDP)
Worse than expected.
15th of December, Employment Change
Better than expected.
19th of December, Mid-Year Economic and Fiscal Outlook
Scott Morrison announced lower than an original prediction of A$37.1 billion, investors see it as promising to stave off a downgrade of its AAA (triple A) rating from S&P Global.
9th of January, Retail Sales
Worse than expected.
19th of January, Employment Change
Better than expected.
USD
Recent Facts:
See above.
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