Forex Analysis 2018.02.23

23-02-2018 08:47:56
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EUR/USD

Forex Analysis EUR/USD | February 23, 2018 | sgtmarkets.com | SGT Markets Forex Broker and CFD

Eyes on today German GDP data and Eurozone CPI.

EUR came into pressure on Wednesday, after a flurry of muted PMI data across the Eurozone including Germany, which casts a shadow on the narrative of reflation.

The Federal Reserve should continue to raise U.S. interest rates this year in response to faster economic growth fueled by recent tax cuts as well as a stronger global growth.

U.S. Core CPI ticked up for the second month in a row, while U.S. Retail Sales in contraction.

ECB President Draghi said he does not expect the ECB to raise interest rates in 2018. “Based on today’s data I can see very few chances that interest rates could be raised at all this year”. And he noted that underlying inflation remained subdued.

Now we expect a re-test of 1.238 area. 1.223 and 1.217 constructing a very important 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 2012:

Weekly Trend: Neutral
1st Resistance: 1.2385
2nd Resistance: 1.2552
1st Support: 1.2250
2nd Support: 1.2170

EUR

Recent Facts:

31st of August, German Unemployment + CPI (Preliminary release)
German Unemployment Worse than Expected, CPI Better than Expected

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

14th of December, German Manufacturing PMI
Better than Expected

3rd of January, German Unemployment
Better than Expected

5th of January, Eurozone CPI (Preliminary release)
As Expected

24th of January, German Manufacturing PMI
Worse than Expected

31st of January, German Unemployment + Eurozone CPI
Better than Expected

14th of February, Eurozone GDP data
As Expected, Industrial Production Better than Expected

21st of February, French and German Manufacturing PMI
Worse than Expected

Today release: German GDP

Today release: Eurozone CPI

USD

Recent Facts:

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.

14th of December, Core Retail Sales
Better than Expected

21st of December, GDP
Worse than Expected

22nd of December, Core Durable Good Orders
Worse than Expected

3rd of January, ISM Manufacturing data
ISM Manufacturing Better than Expected

5th of January, Nonfarm Payrolls + Unemployment Rate
Nonfarm Payrolls Worse than Expected, Unemployment Rate as Expected

11th of January, Production Price Index
Worse than Expected

12th of January, CPI
Better than Expected

19th of January, Building Permits
Better than Expected

19th of January, Philadelphia Fed Manufacturing Index
Worse than Expected

26th of January, GDP (Preliminary release) + Durable Goods Orders
Worse than Expected, Durable Goods Orders way better than expected

1st of February, ISM Manufacturing PMI
Better than Expected

2nd of February, Nonfarm Payrolls + Unemployment Rate
Nonfarm Payrolls Better than Expected

14th of February, Core CPI, Retail Sales
CPI better than expected, Retail Sales Worse than Expected

 

GBP/USD

Forex Analysis GBP/USD | February 23, 2018 | sgtmarkets.com | SGT Markets Forex Broker and CFD

UK data showed a GDP lower than expected.

In the ongoing Brexit saga, the UK official said they are in a broad alignment with the EU on the transition period. Meanwhile, UK Prime Minister Theresa is facing pressure after 62 Tory hardliners demand clean Brexit, with lawmakers challenging Theresa to take a harder approach on how far the UK rules should move away from the EU after Brexit and the nature of the transition period.

Last UK Retail Sales came lower than analysts’ expectations while last UK CPI (inflation data) ticked up.

The Federal Reserve should continue to raise U.S. interest rates this year in response to faster economic growth fueled by recent tax cuts as well as a stronger global growth.

Now we are again in overbought and, as we wrote previously, we forecasted a correction down to 1.392, first important Demand area and now we can only witness a consolidation around 1.39, before the construction of the technical pivots for the next break (below 1.38).

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: Overbought
1st Resistance: 1.4125
2nd Resistance: 1.4315
1st Support: 1.3920
2nd Support: 1.3750

GBP

Recent Facts:

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

14th of December, UK Retail Sales
Better than Expected

22nd of December, GDP
Better than Expected

2nd of January, UK Manufacturing PMI
Worse than Expected

3rd of January, UK Construction PMI
Worse than Expected

4th of January, UK Services PMI
Better than Expected

10th of January, Manufacturing Production
Better than Expected

16th of January, UK CPI
As Expected

19th of January, Retail Sales
Worse than Expected

24th of January, Job Market
Worse than Expected

26th of January, GDP (Preliminary release)
Better than Expected

1st of February, Manufacturing PMI
Worse than Expected

13th of February, CPI
Higher than Expected

16th of February, Retail Sales
Worse than Expected

21st of February, Job Market
Better than Expected

22nd of February, GDP
Worse than Expected

USD

Recent Facts:

 

See above.

 

AUD/USD

Forex Analysis AUD/USD | February 23, 2018 | sgtmarkets.com | SGT Markets Forex Broker and CFD

Australia construction work done relevantly lower than expectations. Last Australia CPI (inflation release) ticked down. Also last Australia GDP data were worse than expected, deteriorating the hopes of a future hawkish RBA behaviour.

The Fed signaled its confidence about inflation and growth in the U.S. The Fed said that inflation is likely to rise this year, boosting expectations for further interest rate hikes under incoming central bank head Jerome Powell.

We expected a crash down to 0.783 area and that is occurring. If confirmed, the violation of 0.7828 level can trigger a long-term bearish cycle.

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: 0.7916
2nd Resistance: 0.7980
1st Support: 0.7735
2nd Support: 0.7680

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

11th of January, Retail Sales
Better than Expected

18th of January, Employment Change
Australia Employment change better than expected, Unemployment Rate worsens

1st of February, AIG Manufacturing Index
Better than Expected

1st of February, Building Approvals
Worse than Expected

6th of February, Australia Retail Sales
Worse than Expected

9th of February, Home loans
Worse than Expected

15th of February, Employment Change
Better than Expected

USD

Recent Facts:

See above.