Technical Analysis: EUR/USD

Forex Analysis EUR/USD | August 23 2017 | sgtmarkets.com | SGT Markets Forex Broker and CFD

Eyes on today ECB President Draghi Speech and German Manufacturing PMI.
From the U.S., eyes on today Manufacturing PMI and New Home Sales.

German ZEW Economic Sentiment again worse than the expectations (for the 4th time in a row): the ZEW research institute said its monthly survey showed its economic sentiment index fell to 10.0, the weakest reading since October.

In the U.S., Chicago manufacturing data undershot economists’ forecasts.

Fed’s policymakers agreed a fall in longer-term inflation expectations would be undesirable. They disagree on whether inflation expectations were well-anchored. Most of them expected inflation to pick up in next few years, but many saw rising chances of inflation remaining below target (2%).

Another hit to U.S. administration following an exodus from and eventual disbanding of U.S. President Donald Trump’s manufacturing council and strategic policy forum. Turbulence surrounding U.S. President Donald Trump’s administration following the backlash over his statements on the white supremacist rally in Charlottesville.

Eurozone CPI data came as expected while last German GDP (Preliminary release) was worse than expected.

Last U.S. Core Inflation figures ticked down again (for the fourth time in a row). Also, U.S. PPI (another Inflation data) worse than expected.

On the other hand, the ECB’s big dilemma is that while the euro zone economy has grown for 17th straight quarters and employment is rising faster than expected, wage growth remains anaemic, keeping a lid on consumer prices. Economists are now trying to figure out whether wages are showing an unexpectedly delayed response or whether wage setting dynamics may have fundamentally changed in the post-crisis, globalized economy.

We are now on an important Resistance area. As we wrote previously, we expect both a re-test back to 1.1756 and the continuation of this retracement down to 1.1655 (First important Support, tested first time on the 17th).

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: 1.1756
2nd Resistance: 1.1856
1st Support: 1.1655
2nd Support: 1.1590

 

EUR

Recent Facts:

27th of April, ECB Interest Rate decision + ECB Press Conference
Unchanged, eyes on next Inflation data

28th of April, CPI (Preliminary)
Higher than Expected

2nd of May, German Manufacturing PMI
As Expected

3rd of May, German Unemployment Change + Eurozone GDP (Preliminary)
German Unemployment Change Better than Expected (for the 5th time in a row)
Eurozone GDP (Preliminary) As Expected

7th of May, French Elections
Centrist pro-EU Macron Won French Elections

12th of May, German GDP (Preliminary release)
As Expected

16th of May, Eurozone GDP (Preliminary release) + Trade Balance + ZEW Economic Sentiment
Better than Expected

17th of May, Eurozone CPI
As Expected

23rd of May, German Manufacturing PMI
Better than Expected

30th of May, German CPI (Preliminary release)
Worse than Expected

31st of May, German Unemployment Change + Eurozone CPI (Preliminary)
German Unemployment Change better than Expected (for the 8th time in a row), Eurozone CPI Worse than Expected

1st of June, German Manufacturing PMI
Slightly Better than Expected

8th of June, GDP, Interest Rate Decision + ECB Press Conference
GDP Better than Expected, ECB moving closer to an exit from its stimulus program

13th of June, French Non-Farm Payrolls
Better than Expected

13th of June, German Zew Economic Sentiment
Worse than Expected

23rd of June,
German Manufacturing PMI Better than Expected
German Services PMI Worse than Expected
Eurozone Manufacturing PMI Better than Expected
Eurozone Services PMI Worse than Expected

26th of June, German Ifo Business Climate
Better than Expected

29th of June, German CPI
Better than Expected

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

Eyes on today release: ECB President Draghi Speech and German Manufacturing PMI

 

USD

Recent Facts:

13th of June, Producer Price Index
Core PPI (ex food and energy) Better than Expected

14th of June, CPI + Retail Sales
Worse than Expected

14th of June, FOMC Interest Rates Decision + Statement
Interest Rate hike as Expected (to 1.25%)

23rd of June, Manufacturing PMI
Worse than Expected

26th of June, Durable Goods Orders
Worse than Expected

28th of June, Pending Home Sales
Worse than Expected

29th of June, U.S. GDP + U.S. Job Market
GDP Better than Expected, Job claims slightly worse than expected

3rd of July, ISM Manufacturing PMI
Better than Expected

5th of July, FOMC Minute Meeting
U.S. Federal Reserve members insisted that expectations are that inflation will rise to 2% target in 2019

6th of July, ADP Nonfarm Employment Change + ISM Non-Manufacturing PMI
ADP Nonfarm Worse than Expected, ISM Non-Manufacturing Better than Expected

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

Eyes on today release: Manufacturing PMI and New Home Sales

 

Technical Analysis: GBP/USD

Forex Analysis GBP/USD | August 23 2017 | sgtmarkets.com | SGT Markets Forex Broker and CFD

Uncertainty over the economic agenda of U.S. President Donald Trump and doubts that the Federal Reserve will deliver a third rate hike this year have fed into recent dollar weakness. Furthermore, Federal Reserve policymakers were split on the outlook for future rate hikes, as Fed members struggled to balance concerns about the slowdown in inflation with the growth in the labor market.

On the other hand, ongoing expectations that the Bank of England will keep interest rates on hold in the coming months amid concerns over the economic fallout from Brexit. UK Retail Sales better than expected and UK Job Market better than expected too: UK unemployment falls to lowest since 1975.

As we expected, the break below 1.2978 led GBP/USD straight down to our Support 1.2830. We still are bearish until 1.27 area, but a consolidation around 1.283 is occurring.

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: Bearish
1st Resistance: 1.2978
2nd Resistance: 1.3099
1st Support: 1.2830
2nd Support: 1.2705

 

GBP

Recent Facts:

11th of May, UK Manufacturing Production + Trade Balance + BoE Interest Rate Decision
Manufacturing Production + Trade Balance Worse than Expected
The Bank of England made no changes to monetary policy but warned that living standards will fall this year as the headwinds from Brexit mount

16th of May, UK CPI (Inflation data)
Higher than Expected

17th of May, UK Job Market
Worse than Expected

18th of May, Retail Sales
Better than Expected

25th of May, GDP (Preliminary)
Worse than Expected

1st of June, UK Manufacturing PMI
Slightly Better than Expected

2nd of June, Construction PMI
Better than Expected (Highest level since February 2016)

5th of June, UK Services PMI
Worse than Expected

8th of June, UK General Elections
British Prime Minister Theresa May’s Conservative Party lost its parliamentary majority in a general election, throwing the country’s politics into turmoil and potentially disrupting Brexit negotiations.

9th of June, industrial production + manufacturing production
Worse than Expected

13th of June, UK CPI
Higher than Expected

14th of June, UK Job Market
Claimant Count Change Better than Expected, Average Earnings Index Worse than Expected

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

 

USD

Recent Facts:

 

See above.

 

 

Technical Analysis: AUD/USD

Forex Analysis AUD/USD | August 23 2017 | sgtmarkets.com | SGT Markets Forex Broker and CFD

Last Australia Employment Change was seen better than Expected but Full Employment Change was negative. The Reserve Bank of Australia minutes painted a possible stronger than expected growth spurt in the coming year in an otherwise light data day with North Korea a bit toned down on firing missiles at or near U.S. territory Guam.

Market players have recently registered OPEC’s difficulties in holding to their production cut agreement as those members exempt from the reduction accord such as Libya or Nigeria continue to increase output. Recent data on overall compliance hit its lowest percentage this year.

The Reserve Bank of New Zealand held its official cash rate at a record low 1.75% as expected and said that it expects a neutral view to persist with inflation projections well anchored around 2%. Australia Retail Sales were better than expected. Australia Trade Balance was again on the downbeat but building approvals for June jumped 10.9%, far outpacing a 1.5% gain seen month-on-month.

Turbulence surrounding U.S. President Donald Trump’s administration following the backlash over his statements on the white supremacist rally in Charlottesville. Market players see the recent political turmoil as an obstacle to Trump being able to follow through on infrastructure spending and tax reforms.

As we wrote previously, breakout of 0.7916, important level, led down to 0.783 area, our first target. Now 0.7916 Resistance area should push price down again. We are still bearish until 0.774 area, but first 0.783 has to be successfully violated again.

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: 0.8034
1st Support: 0.7828
2nd Support: 0.7735

 

AUD

Recent Facts:

26th of April, Australia CPI
Lower than Expected

2nd of May, RBA Interest Rate Statement
RBA holds Rates at 1.5%

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

 

USD

Recent Facts:

 

See above.