Andrea ForexMart

USD/CAD Fundamental Analysis: May 23, 2017 The USD/CAD pair has been exhibiting a very disappointing price action ever since it was able to test its range highs at 1.3800 points during the start of this month. The currency pair has been suffering from the repercussions brought about by the greenback’s weakness and the strength of the loonie which was mostly due to an oil price surge. This oil price increase was able to cover up the actual occurrences within the Canadian economy and has provided enough leverage for the loonie to advance, and this is why the USD/CAD pair has been consistently dropping value during the last two weeks. As of the moment, the currency pair is now within a very critical region of 1.3500 points, where it continues to look very weak. The weakness of the greenback has been the dominant market trend as of the moment, with the dollar getting adversely affected by Trump’s political woes, which in turn has affected the US economy as well as its monetary policy. The market had initially priced in a rate hike this coming June, but with the recent slew of dismal events, it looks like the market’s players might have to put off this interest rate hike at least for now. In addition, the rising oil prices has helped the loonie to retain its positive image amidst Canadian banking concerns, wherein the majority of Canadian banks have been given the thumbs-down by ratings agencies. The loonie strength has also helped to offset the concerns surrounding the HCG and the housing sector. For today’s session, there are no major news releases coming from both the US and the Canadian economy, although some Fed officials will be making statements today with regards to the US monetary policy. All these are expected to add downward pressure on the USD/CAD pair and cause the pair to test its support levels.

Debt Relief for Greece Still in Progress, No Deal Yet Intercontinental lenders in Greece has a comprehensive meeting discussing debt sustainability on Monday. The meeting ended failing to reach an agreement about additional debt relief for Greece. Ministers disagreed to grant new loans to Athens but the head of Eurogroup, Jeroen Dijsselbloem says otherwise. He said that they are deliberating and making progress on the next disbursement targeting before summer to be able to pay due debts in July. In their next meeting, they are optimistic that they will settle a deal in doling out bailout funds to the country on June 15. They are aiming for a more sustainable agreement which the International Monetary Fund commended and hoping that E.U. governments will support this deal. Although, the deal is not yet ready and will most likely be implemented once the current bailout program has ended next year.

Food Stamp Program in Peril from Trump’s Tax Cuts The Supplemental Nutritional Assistance Program or SNAP is currently in peril as Trump’s budget plan could possibly slash over $190 billion from the said food stamp program. These cuts on SNAP will be representing a funding cut of over 29%, since the US government spent over $70 billion on the food stamp program last year. Prior to this particular cut, the Trump administration had recently proclaimed that it will be able to strike a budget balance within a decade without altering the US government’s biggest spending drivers, namely social security and medical assistance. Trump had previously stated that there will be no changes made to these factors during his campaign period.

The current Money Fall contest has already started on May 22, 2017 and will end on May 26, 2017. You can register for the next competition which will take place from May 29, 2017 to June 2, 2017 Note: Registration for the next competition finishes 1 hour before the contest starts.

Japan Exports Rallied for 5 Months Exports from Japan notably increased for five consecutive months indicating a strong offshore demand and increased shipments of semiconductors and steels that boost economic growth. In April, exports climbed up to 7.5 percent compared with the previous year and lower than the median estimate of 7.8 percent yearly growth. On the other hand, its trade surplus with the U.S. also decreased by 4.2 percent from a year ago while the exports jumped by 2.6 percent and continuously grows in the past three months because of high volume of car and auto parts shipments. An economist predicts that this upsurge will continue including domestic imports but the protectionist trade policies of Donald Trump raises concerns with Japan being an export-reliant country.

USD/JPY Technical Analysis: May 22, 2017 The U.S. dollar against the Japanese yen broke in the upper than stabilize the currency pair during the Friday session. This indicates that the market had adjusted with the minimal risk this weekend which is a positive thing.The trading has been strong which is being monitored by traders and they try to bring the price higher than the 112.50 level. Although, as of the moment, the trend is currently in accumulation. If the market could break higher than the 112.50 level would give a bullish tone in the market and would move the price continue to 114 level. This would even go higher when the Federal reserve decided to bring the interest rates higher and this possibility of raising rates caused selling early this week. The U.S. jobless claims declined which is one of the major directives of Federal reserve that would most likely impede the interest rate hike. Others would want to be dovish or totally forget about it but it is not plausible to do so as the U.S. has eased monetary for the past years and is not exemplifying expected results. On the other hand, the employment is being tight indicating the strengthening of the economy which would bring the interest rates higher as expected.

GBP/USD Technical Analysis: May 22, 2017 During the Friday session, the pair GBPUSD remarkably did well since an extreme and rapid price decline occurred on Thursday. While an uptrend is tested, however, a turnaround was carried out promptly. As the traders calm down, the market eventually break out in the upside hitting the top of the 1.30 region. In the previous trades, a renewed highs were formed and the Britain’s currency would likely look forward through the 1.3450 area that has consolidated in the longer term. A break on top of the range 1.30 seems significant and the flash crash happened on Thursday still not clear which brought fears to many people. Moreover, the uptrend line amid that sudden drop matters a lot and it appears that the 1.29 mark can be the acting basement of this market. The choppiness was still expected to continue but the market may indicate a bullish attitude. The pullback eyes some support within the level 1.30 but a breakout towards a fresh peak would trigger a buying behavior. The GBP attempted to change its general trend in the upside which could go a long way throughout establishing trend confidence.1 In addition, the uptrend will continue since the moving averages drove to the upside and selling is not an option at all. While a move forward would pave the way for the “buy on the dips”.

NZD/USD Technical Analysis: May 22, 2017 The New Zealand currency experienced a volatile session amid Friday trades as it broke on top of the 0.69 handle. A grasp to the level 0.6950 was highly resistive which is better than all the range for the previous weeks. A break on top this region is considered significant looking forward through the top of 0.70 mark, this also allows the market to drive higher. Moreover, the market would likely maintain its volatility and choppiness. The kiwi was highly sensitive against the risk appetite which appeared to be unpredictable at this moment. With that being said, the thought that the NZD will be one of the complicated currencies to trade is possible. The “risk on” sentiment has returned in the market favoring the profits for the buyers. Moreover, the market will remain choppy and volatile for the next hours and the 0.6880 region below contains a massive support. The “buy on the dips” will further extend, however, headwinds on top of it are within reach. In this case, the market has to provide lots of trading opportunities intended for the scalpers but the short-term traders will remain to draw attention towards this. There will be some struggle that longer-term traders will experience, in order to search for a suitable position. Therefore, holding a trade for a lengthy period is difficult as there could probably some real size ongoing.

Extended OPEC Output Cuts Raise Oil Prices The extension of production output cut from big oil producing countries caused the oil prices to rise. Oil future climbed to the highest in almost a month and key benchmarks reaching gains for two weeks. Brent crude LCOc1 increased by 0.5 percent adding 28 cents at $52.79 while the U.S. crude oil CLc1 rose by 0.6 percent equivalent to 29 cents at $49.64 a barrel which is the highest since 26th of April. Investors are optimistic that production will reach an estimated 1.8 million barrels per day by the end of March 2018. OPEC leaders and other oil producing countries will have a policy meeting on May 25 in Vienna. Although, there are signals indicating sufficient supplies from the Saudi Arabia being the biggest oil producer. Investors have mixed sentiment with conflicting concern from the drop in U.S. oil stocks and OPEC oil cuts.

U.S Labour Market Declined Despite Positive Economic Outlook Applications for U.S unemployment benefits had fallen circumstantially during the previous week, while the total of jobless Americans declined to a 28-1/2-year low which could lead to a sudden failure on the labor market slack. The economic development was supported by the data released on Thursday that showed an abrupt expansion towards the manufacturing activity within the Mid-Atlantic states this month. The report says that the shipments for goods accelerated and more working hours for laborers. Further measure for the economic activities increase again in the month of April. The positive data favors the expected hike in interest rates for the following month, even if the decision of the Fed Reserve depends on the condition of the financial markets, which recently been shaken by the scandals of US President Donald Trump. Jobless claims benefits were lessened by 4,000 with a seasonal adjustment of 232,000 within the week that finished on May 13 as it experienced a three-weeks consecutive decline, as mentioned by the Labor Department. Economists penciled last week that claims will reach 240,000 but it currently obtained less than 300,000 by which the threshold is linked with a stabilized job market for 115 successive weeks. This is the longest period recorded since the year 1970 which historically appeared that the market was smaller. The employment sector reached full employment with the jobless rate gained a 10-year low to 4.4 percent. The U.S economy was able to produced 211,000 number of jobs in April.

Congress Rift Might Dampen Trump’s NAFTA Dream The Trump administration has already started the first part of its renegotiations with regards to the North American Free Trade Agreement with Canada. But this first step towards NAFTA adjustments has created a rift between some Republican and Democrat senators, with the backers of the said agreement clashing with dissenters. These negotiations are expected to corner Trump especially now that his political policies are being put at stake by a political crisis within the US economy.

USD/CAD Fundamental Analysis: May 19, 2017 The USD/CAD pair continues to exhibit a very steady trading manner during the previous session and seems to be largely unaffected by the currently very high volatility levels in the market. In spite of the recent turmoil affecting the US government and a spike in oil prices, the loonie seems to be unaffected by this and remains trading on both sides of 1.3600 points in a very choppy price action with no indications of a possible change in direction. The recent surge in oil prices has kept the USD/CAD pair buoyant, and this is why the currency pair has stayed within the reach of 1.3550 points. The pair’s consolidation is expected to continue until the next few days since oil prices have already increased in the short-term. Meanwhile, the greenback could possibly backfoot across the board since the possibility of a June Fed rate hike has dimmed somewhat. If this indeed happens, then the 1.3550 range will become a very critical region to surpass and until the USD/CAD pair goes past this range, then it can be safe to say that the pair’s uptick is most likely to remain in the short-term. Otherwise, the currency pair could possibly revert to its previous range and could resort to a bearish consolidating price action. For today’s session, the Canadian economy will be releasing its CPI data and retail sales data, both of which are expected to induce volatility in the pair’s price action.

GBP/USD Technical Analysis: May 19, 2017 The national currency of Britain climbed higher as the data of retail sales presented stronger figures beating expected result. The level 1.30 contained some amount of psychological significance. A break out on top of it provides signs of bullishness. With that being said, the market is expected to move higher on a longer-term however the overall place appeared to be complex. There is a likelihood that the market will trail upwards hitting the region above 1.3450. The stronger statistics of the retail sales could be linked on some side of inflation because the figures and U.K suddenly gained greater strength. We could still experience pullbacks occasionally and it should provide buying opportunities intended for longer-term traders. A huge increase throughout the day indicates a bullish sign while trends could possibly break and when it happen, the market may need to take some time to rest. The downtrend is over for the GBPUSD however, plenty of noise are needed to beat amidst the current range together with the mark 1.3450 which requires patience and diligence.

AUD/USD Technical Analysis: May 19, 2017 The Australian currency experienced a volatile session yesterday due to an initial shot higher with gold. But decided to sell off as the market needs for another leg found at the 0.74 handle, the support was found but rebounded. The market appeared to be slightly mixed-up as of the moment and attempted to estimate the risk of the political uncertainties in Washington DC. Based on a longer-term perspective, the market needs to maintain a bullish attitude only when the gold markets engage in the rally. It remains to have lots of noise though, a smaller position would be better while the Aussie continued to accelerate. Meanwhile, charts showed some activity of buying on the dips which could be a good idea in trading in the market. The level below 0.74 must provide a massive support because a breakdown under this range will generate a negative signal. Consider the potential gap within the upward bias, so it is advisable to hold for small positions on near-term charts generating short-term gains. In case that we cut through above the mark 0.75, it will favor for a longer-term position. In this point in time, riding the market would let you experience emotional highs and lows. As indicated in the previous charts and sessions, making money is easy in both directions but the market is currently choppy. It does not offer any signs as of now, causing the participant to endure difficulty in driving the market.

New Fintech Rules will be Imposed by Brazilian Central Bank Brazil’s central bank is interested in implementing regulations to the FinTech sector to provide support for the industry startups and other firms in engaging and improving the Brazilian nation that is currently suffering from a recession. As published in the recent report of Reuters, the monetary authority of the country, Banco Central do Brasil (BCB) is planning to put into effect such rules for this year to sustain growth to FinTech companies and further services available in the Federative Republic of Brazil According to Otavio Damaso, the BCB’s Chief of Staff, the advancement of FinTechs and innovative products seems positive for improving the financial system of the country since the economy is experiencing a worst depression. The economy of Brazil got an 8 percent rate in March 2017 which is lower during December 2014. In the past, the country is known to be one of the fastest growing economies around the globe, then political controversies and mismanagement of funds arise creating jobless 13 million individuals. During the former years, the traditional financing options caused banks to charge borrowers higher interest rates, this open doors for many fintechs to influence the Latin America’s biggest economy to offer loans at a cheaper price.

Australia’s Record Low Wage Growth at 1.5% The household debt climbed to an all-time high that affects spending and inflation that moved Australian wages sluggishly. This raised concern to the Reserve Bank of Australia and lower than the target of 2 to 3 percent leading to two rate cuts last year to a record low of 1.5 percent. The wage price index climbed to 0.5 percent in the first quarter compared to the quarter before while the annual wage growth maintained at 1.9 percent which is significantly half less a decade ago. Although the central bank is pointing out that the wage growth decreases indicating less pressure to labor costs. It is anticipated that inflation will recover early next year while wages rises slowly with the progressing jobs market. Data shows that the public sector to be gaining more appeal to investors with 2.4 percent increase compared to the 1.8 percent in the private sector. recovery of mining investments following a stagnant growth.

AUD/USD Technical Analysis: May 17, 2017 The Australian dollar closed higher than the U.S. dollar during Tuesday session. Investors responded to the raising concerns in U.S. with lower U.S. Treasury yields, feeble U.S. housing data and a lesser possibility for a Fed rate hike in June. The overall direction of the pair will depend on the Treasury yields. Traders reacted pessimistically to Westpac Consumer Sentiment dropping up to 1.1.%. There are no major U.S. economic reports to be released today. Traders continuously keep an eye on problems with Trump regime and they have the chance to react to the most recent weekly inventories data of U.S. Energy Information Administration. The main trend is directed downward as shown in the daily chart. The pair is trying to move higher from the .7329 low on May 9 although the momentum remains the same. To reverse the trend, traders need to impede the short-retracement zone between .7442 and .7469. Traders should also look out for the resistance level as a strong resistance region is formed at .7454 with major 50% level. The closest support resides at .7384 key Fibonacci region followed by .7329 down below. The current price level set at .7419 and stays between the resistance and support levels which means that traders have uncertainty and expected volatility in the market. If buyers try to oppose the trend, the next psychological would be at .7443 and .7446 region then moves to .7449 and .7454 and will most likely gain momentum at .7454 towards the next target at .7469 level. The .7469 Fibonacci level at .7469 would be the turning point for the next downtrend towards .7501 angle. Underneath, the initial support target would be at .7389 uptrend angle followed by a major Fibonacci level at .7384 and lastly towards the .7329 as the probable bottom support angle. However, if the market fails to attain this level, there is a high possibility for a breakout at .7359. Until buyers return in the market and exceed the .7469 level, there will be least resistance and rallies will be fruitful in the market. This will affect the price trend whether it will be reversed or not. Currently, the market gives off a neutral stance.

GBP/USD Fundamental Analysis: May 17, 2017 The sterling pound’s bulls experienced a very harrowing trading day yesterday after the GBP/USD pair was unable to make any significant progress even after all the other major currency pairs were able to take advantage of the greenback going on backfoot. The cable pair remained within a very limited trading range and was unable to even advance towards its range highs, much less surpass this particular range. Several geopolitical issues has caused the dollar to drop, however, the GBP/USD pair did not have enough fuel for it to actually gain from the dollar losses. The US housing data fell short of initial market expectations, and this proved to be somewhat damaging for the interest rate bulls who had already priced in the possibility of a June rate hike from the Fed. However, the market was more affected by news that Trump had apparently leaked top-secret information to the Russian government straight from the Oval Office, in addition to reports that Trump has apparently been caught dipping his fingers into a certain continuing investigation. These series of events triggered a massive dollar selloff, and while other major currencies such as the EUR were able to make use of this particular development, the sterling pound barely moved from its original position. The GBP/USD pair only slightly advanced from 1.2900 points and is now placed at just under 1.2950 points and does not look like it could induce a rally anytime soon. This is an indicator of just how weak the currency pair as of the moment and it could only be a matter of time before things take a turn for the worse. For today’s trading session, there are no expected releases coming from the UK economy although international geopolitical events could possibly dominate the market for today. However, the GBP/USD pair is not expected to exhibit that much volatility given its recent weakness, and the pair should start a rally soon in order to placate any risk of the pair’s current standing taking a turn for the worse.

EUR/USD Technical Analysis: May 17, 2017 The EURUSD raise higher because of the support of a strong growth and below-than-expected data in the housing number of the United States which brought an impact towards the U.S Treasury yields, hence placing a downward pressure to the American dollar. The sales of US chain stores keep worsening that caused for the greens to move lower. The Europe started to gain more confidence with hopes that the European Central Bank is going to remove the quantitative easing. The pair climbed upwards reaching 0.9% near the mark 1.1080. The price was cut into the downtrend sloping line moving close to the support region 1.0990. Further support is found alongside the 10-day moving average approaching the 1.0940 level. The target resistance can be spotted at 1.1299 touching its November peaks. Moreover, the momentum was positive since the moving average convergence divergence (MACD) histogram formed a crossover signal to buy. This is the result of the spread that crossed over the 9-day EMA of the spread. The histogram shifted from negative to positive area indicating a buy signal. It also printed in the black along with an upward sloping trajectory and turns to a higher rate.

USD/JPY Fundamental Analysis: May 16, 2017 The USD/JPY pair experienced a turnaround during yesterday’s trading session after a sudden high demand for high-risk assets manifested during the earlier parts of the Monday session. The JPY was initially boosted by flight-to-safety buys but immediately disappeared as market investors chose to shift their focus to the surge in US equity markets. The USD/JPY pair closed down yesterday’s session at 113.787 points after increasing by +0.41% or 0.464 points. Investors were generally worried with regards to Trump’s unexpected firing of FBI Director James Comey, the cyber-attack which made headlines last Friday, and the ballistic missile launch from the DPRK. The currency pair then began to hit rock-bottom after traders were practically unresponsive to these recent developments. This price action from the USD/JPY shows that investors might have become somewhat oblivious to these said developments. In fact, the cyber-attack was able to benefit the market after tech giants such as Cisco posted gains following the said online attacks. For today’s trading session, investors will be waiting for the release of industrial production data, mortgage delinquencies data, building permits, capacity utilization data, and housing starts data from the US economy. If this specific set of data comes out as a market disappointment, then the chance of the Fed implementing more rate hikes in the future might be lessened, although the June rate hike has been pretty much priced in by the market already. In any case, this could also cause the US dollar to drop further in value.

Economic Data of China Indicates Slow Growth The economy of China further provided below-expected results of its economic indicators as the fixed-asset investment (FAI), manufacturing output and retail sales in the month of April declined. The output of the industrial sector gained 6.5% in the earlier year, compared with the 7% projection of polling analysts of Bloomberg while 7.1% predicted by Reuters. While factor output rose by 7.6% during March which is the fastest in two years. Fixed investments expanded by 8.9% in the months of January to April 2017, figures are based on the data released by the National Bureau of Statistics, as polls projected 9.1% The sales of retail boosted by 10.7% in April from the first quarter of the year. According to forecasts of experts, the rise will reach 10.6% which is lower versus the past period of 10.9% development. Whereas, the growth in private investment that accounts for an approximately 60% of the national sum value, dropped to 6.9% and acquired 7.7% in Q1.This indicates that the small and medium-sized private companies will remain to experience difficulty in finances. The target growth of China is close to 9% allocated for the FAI’s 2017 while there are expectations that the retail sales will surge to 10% generally. The second largest economy in the world had obtained a 6.9% expansion in the first quarter which is the most powerful since 2015. China had lessened its economic objective to give way to the policymakers in boosting reforms and to control financial risks.

April Retail Sales Data for US Increases by 0.4% A highly positive retail sales data for the US economy has further reaffirmed speculations that the country’s economic status is regaining its momentum following a previously weak slew of data last winter. However, these positive economic reports were pockmarked by a drop in earnings reports. But economists are saying that the country’s economy could possibly be in for stronger consumer data in the second quarter of 2017, which is apparently not surprising since the US labor market is continuously showing signs of steady improvement.

Thailand’s Strong First Quarter GDP growth The export data of Thailand for first quarter moved at its most rapid “quarterly pace” in the past four years and eases the monetary policy to support low key investment activities. Although it faces uncertainties with capital outflow and global trading protectionism, the U.S. Fed is taking signifying that it is gaining momentum to recovery. The agency reduced its monetary projection from 3.0 - 4.0 percentage to 3.3 - 3.8 percentage economic advancement forecasts while its export progress has been elevated to 3.6 percent from 2.9 percent. The rise in exports is mainly due to steep costs of commodities more than the volume of trades. The central bank retained its key percentage interest rate at 1.50 percent since April 2015 and the upcoming policy review is scheduled on May 24 and expected also kept unchanged. Yet, there is a possibility for the Thai central bank to increase its rates by 25 basis points later in the year because of both sturdy growth statistics and probable augmented U.S. rates.

EUR/USD Technical Analysis: May 15, 2017 The EURUSD edged upwards amid Friday sessions as it cleared up the top of Wednesday and Thursday candles followed by the release of the less than stellar figures of United States. In light of this, the market would likely touch above the 1.10 region which the resistance. A gap over the mentioned area indicates a bullish tone, probably moving towards the 1.13 range trailing to 1.15 eventually. The market consolidated in the midst of 1.05 and 1.15 levels in the past years. We are currently located in middle of the trading range which is close to the “fair value” which results for a complex trading setting in the near future. The back and forth trading in the near-term is highly anticipated for the next few sessions. While short-term charts will also lead forward since consolidation is required in the overall region. A gap overhead the 1.10 area will trigger further purchasing interest. However, a break below the 1.0750 mark will drove to 1.05 handle. The market is projected to be very volatile and uneasy to trade, mainly because of the concerns that the European Union are currently involved with the United Kingdom together with other nations. Despite the results, it is vital to maintain your stop loss take, and take note that the market is somewhat aimless in the long-term.

GBP/USD Technical Analysis: May 15, 2017 The Cable decline within the week as it tested the bottom of the hammer in the past week. The range 1.2950 appeared to be resistive, moving near the 1.3 region. A break over the mentioned level will push the market around 1.3450, wherein a previous resistance was seen. A cut through in that area would likely be bullish, however, there is a significant level of support found at 1.2750 range. To be honest, it will be a tedious job to grind below just like breaking upwards. The short-term trading could possibly the simplest thing to accomplish since the market has high possibility to consolidate amid the two regions. A move in the long-term is anticipated and a needs to break out within area to execute the trade. Meanwhile, a range bound short term is predicted as it will remain to take notice. Moreover, a breakdown underneath 1.2750 will cause the market to continue to slide. A significant amount of support can be found below, however, it would appear like the longer term downtrend resumption. The British currency is currently surrounded by lots of dynamic strains, hence expect for a complex trend over here. In light of this, we decided to allow the market to take an action deliberately.