Andrea ForexMart

USD/CAD Technical Analysis: May 15, 2017 The USD/CAD moves like from pillar to post last Friday and continuously grinding above 1.37 handle. Meanwhile, the oil markets appeared to be disorganized as of the moment. We are directly standing above the channel while a pullback is inessential, however, when this price movement occurred then a move to the lower area would likely follow. Possibly down to the region 1.35 and moving through the mark 1.3250. Contrarily, a break over the channel, particularly in the 1.38 handle, will cause the market to trail atop of the level 1.40. Mainly, the oil markets should be given much consideration as it extensively weighs to the Canadian dollar. Moreover, the commodity-linked pair is expected to be choppy but it looks like that the oil is in action at this time. The housing market in Canada shows some uncertainties while concerns may arise since the history of the US housing bubble were still remembered clearly by many traders. The markets should consider sustaining a volatile session, however, the general uptrend will continue to drive through the upside in the longer-term. It further allows the longer-term and steady traders to acquire gains on top of the 1.40 range. It is recommended to seek for pullbacks which provide value upon getting the chance as the greenbacks continued to be favored by the North American currency.

AUD/USD Technical Analysis: May 12, 2017 The Australian currency showed some interesting trading session and had an initial downturn corresponding with the actions of the New Zealand dollar. A bit of rally had started as we look forward to found further resistance within the 0.7380 handle. The Aussie appeared to be caught off guard as of the moment because of the rally occurred in the gold markets along with the partial decline of the US dollar. In case that the precious metal would reverse and drop, the AUD will continue to weaken as well. The commodity currencies may not be so attractive at this time since some of them are quite falling considering the CAD and NZD to have a softer stance while the Norwegian Krona also appeared to be dull. Not to mention the Mexican peso which starts to be weak again. In order to initiate the selling, exhaustion and near-term rallies are to be found that may allow for a successful break above the region 0.7425. Moreover, the volatility would extend that will offer value for the greens in which seems favorable for us. In case that we create a gap under the lows once again, the market is projected to move near the 0.72 handle, en route 0.70.

Ireland’s Household Debt Has Fallen but Remains Fourth in the Most Indebted Nation in EU The household debt of Ireland had collapsed for more than 20 times which appeared to be much apace than Europe in 2016, underlining the amount of Ireland’s recovery from the debt-induced financial crisis. Based on the statistics showed by the Irish Central Bank, Sweden ousts the Irish island on the ranking of the most indebted nation in EU as the Swedish region have low-interest rates which gave rise to concerns about the overheating in the housing market of the country. The household credit serves as the disposable income percentage further weakened by 10.2 percent point in the previous year, reaching 140.9 percent versus the 0.5 pp overall downturn in the European Union. The bank also mentioned that the contraction has weighed on the reduction in debt and improvement in the household incomes. The indebtedness has declined by 52.9 percentage point as the year 2012 ends versus with the decreased in the broader EU by 3.3 percent. Moreover, the Irish government was compelled to agree with the Europe and IMF program for economic stabilization in 2010 as the property bubble suddenly broke causing the string of banks to fall down. Despite the strong rebound, the economy remains to become one of the rapid-growing states in EU.

India’s Consumer Price Inflation Abates this April Inflation rate of India narrowed down because of lower food cost for the month of April. However, this would make it tough to ease rates in the near future. Consumer price inflation is anticipated to persist lower than the 4.0 percent medium target of the Reserve bank of India for the past six months. It is forecasted from a survey of economist that inflation in April will decline to a three-month low of 3.40 percent this month compared to the 3.81 in March. Yet, the central bank raised its inflation rate for the fiscal 2017 to 2018 to attain 4.5 percent for the first half and 5.0 the second half of the year. An economist described the situation that even if the interest rate cut exceeded the 4 percent level in the next few months, the RBI will be cautious and would not cut rates since the current situation is stable already.

EUR/USD Fundamental Analysis: May 11, 2017 The EUR/USD pair continues to exhibit an intermittent trading action, which has been the pair’s dominant price trend ever since the beginning of this week. The market had initially expected the currency pair to start off this week with a bang and consistently exhibit a positive trading stance throughout the week due to Macron’s recent victory in the French polls, but as of now the currency pair is on the backfoot as its bulls have decided to retreat and take out profits in order for them to purchase the EUR/USD pair lower as it continues its correction. In addition to the EUR/USD pair’s weakness, the greenback has also been strengthening across the board as traders are now about to conclude their June rate hike pricing. All of these factors has caused the EUR/USD pair to exhibit corrections at under 1.0900 points. However, during the past two days, the currency pair has been either ranging and consolidating or exhibiting a choppy price action, which is an indication that the market is attempting to create its own base. The currency pair is expected to create a base for another bullish attempt as the after-effects of the most recent rate hike is now losing its relevance and the improvements in the EU economy is now starting to become more evident in the market. For today’s session, there are no major news releases from the EU although the US economy will be releasing its unemployment claims and PPI data, although these are not expected to make a significant dent in the current status of the currency pair. The EUR/USD pair can be safely expected to remain its choppy action at the 1.0850 trading range throughout the day.

High Demand for Bitcoin Hit a Record High $1,760 The Bitcoin attained a record high on Tuesday because of an upsurge demand for crypto-assets and the production of new tokens to increase stake for new establishment through blockchain technology which implies the dispensability of a central regulator. The digital currency rose on the day by 6 percent reaching $1,760.40 from $1,747.89 on the BTC=BTSP BitStamp platform. Currently, it surged to almost 80% percent for the year and a significant expansion of market capitalization up to $52.5 billion, reported by coinmarketcap.com. However, Federal Reserve of Minneapolis Bank President Neel Kashkari is not convinced of a positive bitcoin probable future, saying that the blockchain technology will progress more in the future compared to the digital currency. Also, considering the shift in the market interest where majority of the bitcoin rallied was influenced because of high demand for the initial coin offerings (ICOs).

Demonetisation Slowed Down Indian Economy The International Monetary Fund issued a regional forecast for India this month and predicted that the South Asian country will slow down because of the cash crunch bring about by the demonetization despite the fact that its economic growth would likely remain strong within the Asia Pacific region compared with the previous outlook in October. According to the report of National Accounts Statistics, the economic impact of the cash insufficiency may be downplayed in the least short term. In addition to it, an analysis made by the staff of IMF states that the projections in October 2016, the negative cash flow seems slow amid the financial year 2016-17 nearly four to five percentage points. While the growth in FY 2017-18 was almost half of its percent point.

USD/CAD Technical Analysis: May 10, 2017 The U.S. dollar paired against the Canadian dollar started flat during the Tuesday session as the oil market being calm but not too long. It was reversed and directed downwards. Another factor is the Canadian building permits that brought movement following its negative reports. On the other hand, the U.S. dollar surged against the Canadian dollar as it breaks over the 1.37 level. The Resistance level was retested at 1.37 region and the 1.3750 level is being strongly resistive that prevents the pair to climb higher. The market has been very bullish for a long term and it won’t take long before the market reaches the 1.38 handle. A few days ago, there has been a selloff of this pair and if this occurs again, the pair could further go up. The pair will continue its downtrend from 1.3793 and the uptrend from 1.3641 is a form of consolidation in the downtrend. This could be followed by consolidation towards the next target of 1.3550 level. A break over the 1.3793 region could trigger the price to go up towards 1.3900. Reversals could attract buyers in the lower channel especially towards the 1.37 handle which has been a resistance before. It is possible for this level to turn into support region for the pair. The long-term trend becomes bullish although the oil market has uncertainty. The crude oil inventories are about to be released to say which would most likely affect the trend. Reversals could serve as buying opportunities for this pair although the greenback is more favored over the Canadian dollar. Concerns in Canadian housing would add more hesitancy to the interest of the market to Loonie.

USD/JPY Technical Analysis: May 10, 2017 The U.S. dollar against the Japanese yen rallied as it broke at 114 handle. This would most likely move higher towards the 115 level which has been the peak of the last consolidation region and it would not take that long before the market reaches it. It is anticipated for a reversal to occur from now and then which will serve as buying opportunities in the market, most especially that there is a tone of bullishness seen in the trend. Volatility fluctuations is also expected that determines the weakness of the yen. Price reversals could turn into an opportunity for this pair especially since the Japanese yen performs well in the market. Although, It may not be favorable to go short in this pair. The 113.30 region is being strongly supportive but there is a lesser possibility to go low to this level. It wouldn’t take long for buyers to return. If the price breaks higher than the 115 level, this could move towards 118 handle. Although, it needs more momentum from the traders to reach this level. Hence, it may not be good to sell this pair for now.

GBP/JPY Technical Analysis: May 10, 2017 The British pound paired with the Japanese yen rallied during the Tuesday session. The market reached the 147.50 level and tries to reach the 148 handle. There is still a lot of space to climb higher towards the next target of 150 handle. Later on, the 147 level could become a support level. Amongst a basket of currencies, the Japanese yen sells off the most and sensitive to risk appetite as a whole. Traders should not forget the pair to be volatile and long-term deals is predominant in traders. The market should also monitor the stock market which is performing well relative to indices such as the S&P 500. Although, traders should expect volatility as it climbs higher and it seems that there is sufficient buying pressure to push the price higher. Nevertheless, reversals open opportunities to gain for this pair, especially for yen related market. It may not be advisable to sell this for now with buyers leading the market. There is still risk appetite which could induce the pair to further go up.

Euro Fell Against the Dollar in the Post-French Election The common European currency tumbled on Monday from its highs due to the triumph of centrist wing Emmanuel Macron. As investor received an estimate of 3% of profit after Macron won a couple of weeks ago. The loss of the populist candidate, Marine Le Pen ended the worries of investors about the radical change subsequent to Brexit and Trump’s election last year in case that Le Pen won. Based on opinion polls, Macron had a consistent point which is roughly 20 percent and his triumph on Sunday was a great surprise. During the early trades of Asia, the euro surge reaching $1.1024 which is its highest rate since November 9. It further increased on its one-year high touching 124.58 yen versus its Japanese peer while hitting a five-month high jumping to 1.0886 against the Swiss franc. However, amid morning session of Europe, it declined by 0.4 percent to $1.0953 vs the greens and 0.6 percent to 123.26 against the yen. The political risk linked with Le Pen were already removed, the risk involves the pledge that France will be taken out from the European region. As the risk was eliminated, the focus turned to the economic fundamentals along with the monetary policy normalization of EU and U.S.

Oil Cut Production May Extend Beyond 2017, Says Minister of Saudi Khalid Al-Falih, oil minister of Saudi Arabia showed confidence with regards to the deal to limit output for crude oil and the oversupply reduction is going to be extended within 6 months or more. Al-Falih further discussed during the Asia Oil and Gas Conference held in Kuala Lumpur last Monday that the growth of U.S shale production together with the closure of refinery maintenance have lessened the effect of cutback led by the Organization of Petroleum Exporting Countries along its associates. Moreover, manufacturers are driven enough to achieve their target to drop in their bloated gasoline supplies. Nevertheless, he believes the world oil supply could still realign and revive its former healthy state. The increasing U.S production place worries towards OPEC and its allies as it fails to minimize the market glut and expansion of prices. The gains of oil were erased since the agreement made in the previous year to curb output. The OPEC meeting held in Vienna attended by various nations further supported the 6-month deal for the extension which will start in January. It would be the first time that the minister of Saudi to propose the extension beyond 2017.

As Unemployment Rate Drops, US Economy on its Way to Recovery The US Labor Department has released its US job report for April, wherein it indicated that business had topped up a total of 211,000 jobs last month, a far cry from March’s reading of only 79,000 jobs. This upward trend in hires has confirmed market projections that the country’s overall economic growth is well on its way towards a significant recovery. Economists are now saying that this evidently very strong economic data for the country signals that consumers might soon have the power to amplify their spending habits during the second quarter of 2017.

NZD/USD Technical Analysis: May 8, 2017 The New Zealand dollar against the U.S. dollar initially rallied for the past week. The 0.69 level was seen to give significant resistance which hints the possible continuation of the uptrend. However, this is not a good indication for commodities which highly influences the currency. On a good side, the crude oil surge for a while during the Friday session. Yet, the commodity market could remain subdued which would then decreased the demand for kiwi. It won’t take long that this pair would further decline. If the pair breakdown lower than the 0.6850 level, the next level would be at 0.67. Short-term rallies for this pair opens more opportunities which will soon push forward. The pair hovers at 50% Fibonacci retracement level and it is anticipated to have a lot of noise down beloW. However, if the pair breaks down from the expected level, this implies that the pair is not strong enough. On the other hand, if the pair breaks more than the 0.7030 level, the price could extend up to 0.73 handle or higher. The pair is much more directed to the go downward instead. Traders should look out for commodity market which will influence the currency in the next trading sessions and it may be difficult to go long for long-term in this pair.

Stronger Indian Rupee Provided Positive Impact to Masala Bonds The Indian Rupee (INR) strengthened against the American dollar, while the masala bonds could take advantage with Indian firms who are looking to increase funds. The masala bonds had a considerable growth even the latest fiscal together with the ICRA projected that the trend will persist particularly for firms without any natural hedge that could reduce risk from foreign currencies engaged in the external commercial borrowings (ECBs). During the 2017 fiscal year, the rupee-linked bonds hold at t Rs 30,620 crore by which other country’s currency dropped to Rs 1,740 crore compared with the previous FY with Rs 2,440 crore. According to Karthik Srinivasan, Senior VP of ICRA said: “With their cash flows denominated in Indian Rupees, many of the borrowers of ECBs don’t have a natural hedge against foreign currency risks inherent in that instrument." Moreover, the national currency of India rose by more than 5% versus its U.S peer, this caused for theIR to be the top performer among its rivals. The commercial banking company further anticipates an aggregate FII debt inflows worth $5-10 billion inclusive of RDBs amid FY18.

USD/JPY Fundamental Analysis: May 4, 2017 The USD/JPY pair traded just within the reaches of its six-week high as the Fed refused to remove the possibility of a June rate hike, although the country’s economic growth weakened during the previous quarter. The Fed chose to maintain its current interest rates and had highlighted the positive outlook for the labor market during its two-day meeting, which could possibly be an indicator that at least two more interest rate hikes are scheduled to be carried out within the year. The USD/JPY pair closed down the previous trading session at 112.759 points after increasing by +0.69% or 0.0770 points. The current Fed statement and the previous statement do not have any stark contrasts except for the central bank choosing to ignore the GDP data this time. The futures markets are now pricing in a 93% probability that the Fed will be implementing an interest rate hike this coming June. The next FOMC meeting is set on June 13-14 which will be followed by a press conference from Janet Yellen. Based from the Fed’s meeting minutes released yesterday, the Fed could possibly raise its interest rates by up to 25 basis points up to three times in a row before the year ends. If this indeed happens, then the US dollar would eventually become a very attractive and a very lucrative investment for market players. For today’s session, market volatility will not be expected to to increase since the majority of market players will be saving their energies for the release of the NFP report this Friday.

GBP/USD Fundamental Analysis: May 4, 2017 The GBP/USD pair was unable to move past its resistance level of 1.2950 points, causing the pair to retreat under this region where it is currently situated. The construction PMI data was released yesterday, and this particular bit of data had exceeded initial market expectations, adding up to the string of positive economic data coming in from Tuesday’s session. These series of data was able to help keep the sterling pound under its bid price and traded in a relatively steady trading manner during the first few hours of yesterday’s session. The ADP employment report as well as the non-manufacturing data came in next, and these helped to further strengthen the stance of the USD as they both were able to meet expectations. The FOMC minutes were then released hereafter, wherein members of the central bank chose to snob the results of the Q1 GDP data, which was taken as a bullish mark for the USD since a large-scale buy was triggered during the NY session. The GBP/USD pair then plummeted through 1.2900 points and is now trading at 1.2875 points. The pair’s support levels are situated at 1.2850 points and since the NFP is expected to come in during yesterday’s session, the cable pair is expected to be able to maintain its hold on this particular region while it continues to consolidate. For today’s session, we have the UK economy’s services PMI data as well as the US economy’s unemployment claims data, both of which are expected to induce volatility in the currency pair. The market is not expected to have much activity today as there is an influx of economic data scheduled for tomorrow.

EUR/USD Fundamental Analysis: May 4, 2017 The USD had a very positive trading session yesterday as a result of a positive economic dollar-related news. This then helped the dollar to eclipse the value of other currencies, and the EUR/USD pair was no exception. The currency pair had started out yesterday’s session on a somewhat slower pace as the market anticipated the release of important economic readings and had spent the majority of yesterday trading within its range highs. However, as the said financial data started coming in, the dollar was able to capitalize on this slew of good news and prop itself up higher, putting significant downward pressure on the currency pair which is now trading at just under 1.0900 points. The first bit of good news came in the form of the ADP employment report, which surprisingly came out as expected, considering the fact that last month’s NFP report had failed to meet market expectations. Up next was the manufacturing report which also came out as positive, and this increased the USD’s value even more. However, by this point, the dollar was still somewhat at par with the value of the euro since the market chose to standby for the release of the FOMC meeting minutes. The said minutes were released halfway during the NY session, and since there was no accompanying press conference the market had no choice but to pick on the results of the minutes itself. The Fed did not give any indication of the schedule of the next rate hike, however it pointedly ignored the somewhat tame economic growth in the Q1, which the market took as a signal that the central bank might be preparing for another June rate hike. This triggered a dollar buy which pushed down the EUR/USD pair towards under 1.0900 points. As of this point, the market is starting to price in a June rate hike although there are still no definite hints as of the moment. For today’s session, the market is expecting the release of the US unemployment claims data while Draghi will be speaking during the latter part of the NY session. There is little volatility expected today as the NFP report is due to be released tomorrow. The EUR/USD pair is expected to trade with bearish undertones for the rest of today’s sessions.

NZD/USD Technical Analysis: May 3, 2017 The New Zealand dollar against the U.S. dollar was traded with high volatility during the Tuesday session. The pair consolidated higher than the 0.69 handle that is a significant psychological level. It is traded in a very tight trading range with highs around the 0.6935 level and it is apparent that there is not much changes in the trading activity. It may not be practical to go long on this pair as it cannot be predicted is the 0.69 level will be sustained. For now, it is best to short this pair and be prepared for choppiness in the market. Another option is just to wait in the sidelines although the next move higher than the 0.6935 level could indicate a short-term bullish. A break lower than the 0.69 level could move the pair towards the 0.6850 mark in the lower channel that is being supportive enough for the pair. Traders could wait in the sidelines until this pair stabilizes as it continues to move downward although this is still uncertain as seen in the forming trading sessions. A breakdown in the current psychological level could push the price lower towards the 0.65 handle but could take place in a longer period. The pair opens selling opportunities as seen in the short-term charts but traders should still be cautious as it might fluctuate unexpectedly or wait afterwards.

EUR/USD Technical Analysis: May 3, 2017 The EURUSD remained steady on its position as it trades in a comparably tight range regardless of the massive data from the European region such as unemployment and PMI. While the agreement made in Greece together with IMF and EMU is expected to maintain the pair in a higher stand. While central bankers were on the news and brought challenges towards Mario Draghi in pursuing a dovish sentiment. The pair extends its consolidation on the first day of Europe’s long weekend and created a bull flag pattern which serves as the pause to stimulate. Traders are anticipated to postpone its action prior to the U.S Non-Farm Payrolls scheduled on Friday or the fulfillment of second-round election in France preceding the major to reach its renewed highs. Resistance lies at 1.0955 close on its previous week’s high while the support came in at 1.0843 next to the 10-day moving average. The momentum kept a favorable stance since the MACD were printed in black along with an upward sloping path reflected in the histogram. This event had influenced to the advancing positive trajectory pointing to a greater exchange rate. An upward trend of the Relative Strength Index is seen at 67 posted on the upper side of the neutral range.

USD/CAD Technical Analysis: May 3, 2017 The U.S. dollar against the Canadian dollar broke at 1.37 level during the Tuesday session. The oil market is not performing well which pulls the Canadian dollar along. The psychological level between 1.3.63 and 1.37 is strongly resistive as seen in the weekly chart which may not be favorable in selling the pair. Besides oil concerns, the Canadian housing market is along being problematic particularly in Toronto and Vancouver area. There is a bubble market over the summer housing market with some of the shadow lenders starting to be affected as it drops to lows. This put the currency under pressure added to the oil market which complicates the situation further. Pullbacks in the trend could open buying opportunities for the pair with the target of 1.40 level and may reach even up to 1.45 which is already expected for this summer. However, if the pair breaks lower than the 1.36 handle, it is a sign to sell the pair but could be far from happening. Traders should catch on pullbacks which is would be a wise decision for this pair considering the oil market to trigger the pair to break lower.

U.S Economy Probably Expand by 3% in Two Years, Says Mnuchin According to Steven Mnuchin, U.S Treasury Secretary, the economic growth of the United States could possibly grow by 3 percent in two years upon implementing the restoration of the regulatory reform and tax system and offering better trade agreements. The job market of U.S revived gaining 12 percent increase in the prices of stock considering the fact that the election of Trump coupled with the consumer sentiment reached the highest peak in 16 years have painted a positive illustration of the economy. In spite of that, the economy improved on its weakest pace within three years acquiring 0.7 percent in Q1 as it highlighted the dispute that the government dealt with as it aims to attain an annual growth higher than 3 percent. Moreover, the administration of Trump had established the overhauling of the tax rate system labeled as the largest revision in history, since this is on the top list of their legislative program. The plan was already published previously, it further contains the proposal for trimmed taxes intended for the citizen and businesses, creating comprehensive filer system and prohibiting the rich from loopholes. The package is expected to be signed and put into law within the current year. On the other hand, the International Monetary Fund have given its forecast that the world's largest national economy will bolster hitting 2.3 percent in 2017 while 2.5 percent for next year.

RBA Maintained Current Rates Amid Wage Risks The Reserve bank of Australia kept their rates unchanged for nine succeeding months on Tuesday which is not surprising following the risks of household debt, meek progress in inflation and wage. The RBA decided to maintained the rates at a rock-bottom of 1.5 percent after the decline in August and May last year while most economists have foreseen that will be sustained this week. The central bank is sanguine in the economy but maintains a mixed labor market. Although the wages growth anticipated being sluggish for some time. The price inflation lingers above 2 percent in the previous quarter for the first since 2015 although the objective of the RBA is to keep inflation rates below 2 to 3 percent but higher than 3 percent in the next few years. RBA Governor Philip Lowe mentioned that there is no need for further stimulus since the low cash rates have affected household debt which will not be favorable for the “national interest”.

GBP/USD Fundamental Analysis: May 2, 2017 Yesterday was a very slow trading day for the GBP/USD pair as the market holidays in Europe and Asia left several trading desks vacant, thereby decreasing the amount of market volatility. The currency pair had briefly attempted to test its range highs at 1.2945 points but then eventually dropped in value as the day progressed before finally closing down yesterday’s session at 1.2900 points. There is little market volatility nowadays in spite of Trump being as crass as usual with regards to his public comments on Twitter regarding US relationships with other countries such as Russia and China, mostly because market players have somehow gotten used to the President’s attitude. As a result, the GBP/USD pair was largely affected since it still has no definite course of action as of late. However, it is only a matter of time before the expected surge of economic data which usually occurs during the first week of a new month. The GBP/USD pair is expected to exhibit more consolidation until all the scheduled economic reports are released within the week, starting from the FOMC minutes this coming Wednesday. For today’s session, the UK economy will be releasing its Manufacturing PMI data during the EU session, with the said reading expected to follow the recent slew of positive economic data from the region during these past few months. If this indeed happens, then the cable pair could possibly test its range highs yet again within today’s session.

EUR/USD Fundamental Analysis: May 2, 2017 The EUR/USD pair exhibited a ranging and consolidation during the duration of yesterday’s session. It was a market holiday yesterday in several parts of Europe and Asia, and this is why the market volatility and liquidity levels were on a low during the previous session. In addition, traders are also proceeding with caution since the first week of the month is usually characterized by an influx of economic readings from last month. These factors were the main reason why the currency pair consolidated within a small range of less than 50 pips. Today could be considered as the legitimate start of the week, and now that there is an expected surge of data coming from last month, the market is expected to undergo some significant volatility for today. The EUR/USD pair ran at 200 pips during the previous week following the results of French national elections, and this is why the currency pair could possibly be subject to corrections, although it has yet to be seen just how significant these corrections would be. The 1.0850 trading range is expected to ward off any corrections at least for the time being while the market waits for the release of economic data this week. The FOMC meeting minutes, the NFP report, and a speech from Yellen will be released within the week which could induce volatility in the pair. However, the market will be looking out for any hints of a Fed rate hike this June and if this does not happen, then the EUR/USD pair could possibly test the 1.1000 trading range. For today’s session, there are no major economic releases from both the EU and US economy for today, and the EUR/USD pair is expected to undergo a consolidation with bearish undertones for the rest of today’s session.