LiteForex Analytics

[MikhailLF]

LiteForex analitics. YM: general review

 

Current trend

 

The Dow Jones index is slightly recovering and trading above support level of 24218.8 (Murrey [2/8]). Demand in the markets was caused by the news that the Vice-Premier of China and a representative of the US Treasury discussed the next stage of negotiations.

 

The US dollar is strengthening against the backdrop of political risks that are associated with Brexit. On the other hand, economists at Goldman Sachs, a major investment bank, predict that the Fed may delay the further tightening of monetary policy next year, which in turn will support the stock market and reduce USD exchange rate. However, this is only a preliminary assessment and the regulator will make its decisions based on economic data.

 

The second important event for the market is the political crisis in the United States. It became known that the former lawyer of Donald Trump may be sentenced to prison because of tax evasion and various frauds during the election campaign. As a result, Democrats can begin hearings about the impeachment of the current US president.

 

Today, data on producer price index in the United States will be published.

 

Support and resistance

 

Stochastic is at the level of 80 points and indicates the possible correction.

Resistance levels: 24609.4, 24722.0.

Support levels: 24218.8, 23982.0.

 

Trading tips

 

Short positions may be opened from the resistance level of 24609.4 with take-profit at 24218.8 and stop loss at 24722.0.

 

[MikhailLF]

LiteForex analitics. XAG/USD: technical analysis

 

XAG/USD, D1

 

On the D1 chart, the instrument is trading above the upper line of Bollinger Bands; the price range is widened, which indicates a possible continuation of the uptrend. MACD histogram is in the positive zone and has minimum volume, the signal line is about to cross the zero line from below, which will be a signal to open long positions. Stochastic is in the neutral area, and the lines of the oscillator are directed upwards.

 

XAG/USD, H4

 

On H4 chart the instrument is growing along the upper border of Bollinger Bands, and the price range is widened. MACD histogram is in the positive area keeping a signal for opening buy orders. Stochastic is on the border of the neutral zone with the overbought zone; the oscillator lines are directed horizontally.

 

Key levels

 

Resistance levels: 14.76, 14.90, 15.09, 15.23.

Support levels: 14.65, 14.59, 14.44, 14.37, 14.31, 14.22, 14.16, 14.08, 14.03, 13.93, 13.88.

 

Trading tips

 

Long positions may be opened from the current level with targets at 14.90, 15.09 and stop loss at 14.65.

Short positions may be opened from the level of 14.59 with targets at 14.44, 14.37, 14.31. Stop loss – 14.65.

Implementation time: 1-3 days.

 

[MikhailLF]

LiteForex analitics. XAU/USD: gold prices are going down

 

Current trend

 

Gold prices declined slightly on Thursday, updating the record lows of December 7.

 

Macroeconomic statistics from the US published on Thursday failed to provide significant support to USD, but investors were focused on the further development of US-China trade relations. Anyway, the published figure for the number of initial jobless claims for the week on December 7 dropped sharply from 233K to 206K, which was better than expected 226K.

 

Today, traders are focused on the US retail sales data. Analysts expect a sharp slowdown in November from +0.8% MoM to +0.1% MoM, which could have a negative impact on USD. There will also be published the November statistics on industrial production and preliminary December data on business activity.

 

Support and resistance

 

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting the emergence of ambiguous trading dynamics. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic is declining more actively, but is rapidly approaching its minimum levels, which indicates the risks associated with the oversold instrument.

 

Technical indicators do not contradict further development of the "bearish" trend in the short term.

 

Resistance levels: 1247.00, 1250.66, 1255.00.

Support levels: 1240.00, 1237.16, 1233.08, 1229.84.

 

Trading tips

 

To open long positions, one can rely on the breakout of 1247.00. Take profit — 1255.00. Stop loss — 1244.00. Implementation period: 1-2 days.

A breakdown of 1240.00 or 1237.16 may be a signal to further sales with target at 1229.84 or 1226.11. Stop loss — 1243.00 or 1245.00. Implementation period: 2-3 days.

 

 

[MikhailLF]

LiteForex analitics. EUR/USD: general review

 

Current trend

 

Today, the pair is correcting upwards, aiming at the level of 1.1352 (Murrey [2/8], the midline of Bollinger Bands).

 

The euro is strengthening, despite the weak data on inflation in the Eurozone. In November, the basic consumer price index remained at 1.0%, and the general CPI dropped from 2.0% to 1.9%, having fallen below the target level for the first time since May. Investors are more concerned about the upcoming Fed meeting. The rate is expected to be raised once again, this time from 2.25% to 2.50%; but in the future, the rate of monetary tightening may be slowed down. During the month, hints of this were made by several members of the regulator, including its chairman Jerome Powell. Currently, the market expects another three rate hikes next year, and any data on the reduction of their number could put pressure on USD.

 

Support and resistance

 

The level of 1.1352 (in the midline of Bollinger Bands) is seen as the key one for the "bulls". Its breakout will give the prospect of further growth to 1.1413 (Murrey [3/8], the upper line of Bollinger Bands) and 1.1474 (Murrey [4/8]). Otherwise, the decline will resume to the levels of 1.1291 (Murrey [1/8]) and 1.1230 (Murrey [0/8]).

 

Technical indicators do not provide a clear signal: MACD histogram is stable in the negative zone and Stochastic is directed horizontally.

 

Support levels: 1.1291, 1.1230, 1.1200.

Resistance levels: 1.1352, 1.1413, 1.1474.

 

Trading tips

 

Short positions may be opened after the reversal near 1.1352 with targets at 1.1291, 1.1230 and stop loss at 1.1380.

Long positions may be opened from the level of 1.1370 with targets at 1.1413, 1.1474 and stop loss at 1.1330.

Implementation period: 4-5 days.

 

[MikhailLF]

LiteForex analitics. USD/CAD: the pair is growing

 

Current trend

 

For two and a half months, the USD/CAD pair has been trading within an upward channel due to the ambiguous Canadian statistics and the growing demand for the American currency. In early December, the price fell to the key support level of 1.3170, failed to overcome it and sharply rose to a local maximum of 1.3450. It was followed by a correction, which was replaced by the current upward impulse with testing of new local highs.

 

This week, strong data on the US construction sector were published, but traders are waiting for new statistics that can affect the instrument. Today, special attention should be paid to inflation level data in Canada and the Fed's decision on monetary policy. In the second half of the week, GDP and Retail Sales will be released in Canada, and employment market data will be published in the USA.

 

Support and resistance

 

In the medium term, the trend will continue, as the growth rate of the economy and key US macroeconomic indicators are increasing. The price can rise to levels of 1.3595 and 1.3785, which were tested at the end of 2016 and the middle of 2017.

 

Technically, the pair stays within the upward channel, which is supported by the technical indicators’ readings: MACD volumes of long positions are growing, Bollinger bands are directed upwards.

 

Resistance levels: 1.3495, 1.3530, 1.3570, 1.3595, 1.3650, 1.3785.

Support levels: 1.3450, 1.3390, 1.3375, 1.3355, 1.3290, 1.3225, 1.3170.

 

Trading tips

 

It is relevant to increase the volumes of long positions from the current level and open pending long positions from the levels of 1.3450, 1.3390 with the targets at 1.3595, 1.3785 and stop loss 1.3310.

 

[MikhailLF]

LiteForex analitics. Brent Crude Oil: general review

 

Current trend

 

Oil quotes show negative dynamics having reached the level of 56.03, the minimum value for the last 14 months.

 

Published yesterday, official data from the US Department of Energy, indicating a reduction in oil reserves by 0.497M barrels for the week, could not support the Brent rate. Experts predicted a more significant decrease in the amount of 2.437M barrels for the week. The pressure on prices is exerted by concerns regarding oversupply in the oil market. The new OPEC agreement to reduce oil production will come into force only next month and currently the level of oil production in such countries as the USA, Saudi Arabia and the Russian Federation is at a high level. Also, additional pressure on prices is exerted by the general strengthening of USD in connection with the decision of the US Fed to raise the interest rate and to continue tightening monetary policy in 2019.

 

Support and resistance

 

Technical indicators show that downward movement potential is preserved. Bollinger Bands and Stochastic are directed downwards. MACD histogram is stable in the negative zone. One may speak about downward movement continuation after the price consolidates below the support level of 56.25. In this case, the decline may continue to the level of 55.46. If the price fails to consolidate below the level of 56.25, then an upward correction is likely to develop with the main target at 57.81, corresponding to the center line of Bollinger Bands.

 

Resistance levels: 57.03, 57.81, 58.59.

Support levels: 56.25, 55.46, 54.68.

 

Trading tips

 

Short positions may be opened from the current level with target at 54.68 and stop loss at 56.00.

Long positions may be opened above the level of 57.03 with target at 57.80–58.00 and stop loss at 56.80.

 

[MikhailLF]

LiteForex analitics. USD/CHF: general analysis

 

Current trend

 

USD strengthened slightly against CHF: the pair is now trading near the resistance level of 6/8 Murrey or 0.9948. If the currency can consolidate higher, then the next target will be the level of 7/8 Murrey or 0.9979.

 

USD may be affected negatively by a significant drop in the stock market. If there is no reversal in the near future, the current decline will be greatest since 2008: only last week, indices lost more than 6%. The leaders of the largest investment banks said that they had enough funds on their balance sheets for lending business and other market operations. On this issue, the Presidential Group on Financial Markets and the Fed will hold a working meeting under the leadership of Stephen Mnuchin.

 

The second negative point for USD is the shutdown of a part of US government since Donald Trump could not agree with the Senate about government spending. The US president planned to add to the expenditure side a project to build a wall on the Mexico border for a total of $5 billion but the Senate did not agree to sign the bill.

 

Today, there is no strong movement expected in the market, since many institutions do not conduct financial operations on Christmas Eve.

 

Support and resistance

 

Stochastic is at 68 points and does not give signals for opening positions.

Resistance levels: 0.9948, 0.9979.

Support levels: 0.9918, 0.9887.

 

Trading tips

 

Short positions can be opened from the level of 0.9979 with the target at 0.9887 and stop loss 1.0003.

[MikhailLF]

LiteForex analitics. SPX: general review

 

Current trend

 

S&P 500 has recovered slightly after reports from US President Donald Trump about excellent opportunities for buying shares of American companies, which have recently lost in price.

 

The president also noted that the US economy continues to grow, and Fed Chairman Jerome Powell does an excellent job, although information about Trump’s intention to dismiss an official appeared before. A number of experts believe that the rapid market decline is caused by computer algorithms, since about 85% of operations are automated. On the other hand, the negative dynamics was triggered by fundamental factors, such as the tightening of monetary policy, the geopolitical situation, in particular the trade war between the US and China, as well as weak data on corporate profits of American companies. Also a negative factor for the market is the government shutdown due to the fact that the President was unable to agree with the Congress on government spending. Today, the US Senate will hold another meeting on this issue, but it is likely that it will not be resolved by the end of the year.

 

Support and resistance

 

Stochastic is at the level of 86 points indicating the possible correction.

Resistance levels: 2500.0, 2524.0.

Support levels: 2421.9, 2393.8.

 

Trading tips

 

Short positions may be opened from the resistance level of 2500.0 with take profit at 2393.8 and stop loss at 2524.0.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

Morning Market Review

2019-01-10 09:49 (GMT+2)

US dollar is falling against most majors. Yesterday’s statements by the Fed representatives put pressure on the instrument. Chief executive officer of the Federal Reserve Bank of Chicago, Charles Evans, said that the regulator could postpone the next rate increase due to uncertainty about the prospects for the American economy. Eric Rosengren, the Boston Fed president, also proposes to postpone the increase in interest rates, and the current monetary policy, in his opinion, is appropriate under the current economic conditions. Investors reacted to these statements by selling the US currency. Macroeconomic events that can affect the dollar rate today include the statistics on initial jobless claims in the US (15:30 GMT+2), as well as the speech by the Fed Head Jerome Powell (19:00 GMT+2).

 

EUR/USD

 

The EUR/USD pair, supported by positive statistics on unemployment in the eurozone and the general weakening of the dollar, has risen to 1.1555. Today, investors will pay attention to the publication of ECB Account of Monetary Policy Meeting.

 

GBP/USD

 

Quotations of the pair GBP/USD rose to the level of 1.2782 due to the general weakening of USD. In the absence of news from the UK, the movement of the instrument will be influenced by the news from the United States.

 

USD/JPY

 

Quotes of the USD/JPY pair fell to 107.81 amid USD sales, triggered by statements by representatives of the US Federal Reserve.

 

AUD/USD

 

The AUD/USD pair shows a moderate positive trend against the background of the general weakening of the US dollar, having risen to the level of 0.7186.

 

Gold

 

Gold quotes returned to the weekly highs and are trading at 1296.90 due to the weakened USD.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

US dollar is showing weak negative dynamics against the majors during the Asian session. After active growth the day before, the observed decline in the dollar is correctional. In general, the pressure on the dollar continues to be exerted by the mitigated rhetoric of some representatives of the US Fed, including Jerome Powell, who said that the regulator could postpone the next increase in the interest rate in 2019. Today the statistics on the Consumer Price Index in the US (15:30 GMT+2) will be able to influence the rate. The indicator in monthly terms is expected to decrease to –0.1% in December from 0.0% a month earlier, and in annual terms it can decrease to 1.9% in December from 2.2% in the previous month. If this forecast is right, it will put pressure on the US dollar in the short run.

 

EUR/USD

 

The pair EUR/USD rose to 1.1526 due to the weakening USD. In the absence of news from the euro area, the movement of the instrument will be influenced by the news from the United States.

 

GBP/USD

 

The GBP/USD pair is growing insignificantly and is trading at 1.2756 during the Asian session. Investors are waiting for the publication of macroeconomic data from the UK on GDP, industrial production and manufacturing production (11:30 GMT+2). GDP is expected to remain unchanged at the level of 0.1% in November. Industrial production is expected to rise to 0.3% in November from –0.6% a month earlier. Manufacturing production is expected to rise to 0.4% MoM in November from –0.9% a month earlier, and YoY it can rise to –0.7% in November from –1.0% a month earlier. In general, confirmation of forecasts may support the GBP.

 

USD/JPY

 

The USD/JPY pair is moderately declining having fallen to 108.26 during the Asian session. Statistics from Japan published tonight turned out to be ambiguous and was ignored by the market. Household Spending YoY decreased to –0.6% in November from –0.3% a month earlier, and in monthly terms, the value of the indicator decreased less than expected and amounted to 1.1% in November against 1.8% a month earlier.

 

AUD/USD

 

Quotes of the pair AUD/USD show moderate positive dynamics reaching the level of 0.7210. The instrument is supported by positive data from Australia, published at night. Retail sales rose to 0.4% in November from 0.3% a month earlier.

 

Gold

 

The gold rate is growing against the backdrop of a weakening dollar, reaching 1293.00.

[MikhailLF]

LiteForex analitics. WTI Crude Oil: price is consolidating

 

Current trend

 

After an active growth at the beginning of the year, oil prices are consolidating near the level of $50 per barrel.

 

"Black gold" is supported by investors' hopes for a positive outcome of China-US trade negotiations and the end of the trade conflict in the near future. In addition, quotes are rising against the background of the Norwegian Petroleum Directorate, which reported a likely reduction in production by 4.8% to 1.42 million barrels per day in 2019, which is the minimum figure for the last 30 years.

 

Last Friday, Baker Hughes US Oil Rig Count report affected the instrument positively. During the week, the number of rigs decreased by 4 to 873 units. Over the past period, the figure also declined from 885 to 877.

 

Support and resistance

 

On the daily chart, Bollinger bands are growing steadily. The price range narrows, reflecting the emergence of ambiguous trading dynamics in the short term. The MACD indicator is growing, keeping a buy signal (the histogram is above the signal line), and is testing the zero line but is not likely to consolidate above it. Stochastic declines, reacting to the active “bearish” dynamics of the beginning of the week.

 

The current readings of the indicators do not contradict the further development of the corrective decline in the short and/or super short term.

 

Resistance levels: 52.00, 53.19, 54.43, 55.64.

Support levels: 50.00, 49.00, 48.05, 47.00, 45.80.

 

Trading tips

 

Long positions can be opened after the rebound from the level of 50.00 with the target at 52.00 or 53.19. Stop loss is 49.00.

 

Short positions can be opened after the breakdown of the level of 50.00 with the target at 48.05 or 47.00. Stop loss is 51.00.

 

Implementation period: 2–3 days.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

The US dollar is declining against the pound and the Australian currency, however, it shows a sideways trend paired with the euro and is growing against the yen. Today, investors will pay attention to the publication of PPI in the US (15:30 GMT+2). The indicator in monthly terms is expected to decrease to –0.1% in December from 0.1% a month earlier, and in annual terms it can remain unchanged at 2.5% in December. In the afternoon, speeches by members of the US Federal Reserve are expected. Speech by Neel Kashkari is planned for 18:30 (GMT+2), and speeches by Esther George and Robert Kaplan are expected at 20:00 (GMT+2). From their speeches, investors are hoping to understand the intentions of the regulator regarding the rate hike in 2019. Speeches of officials of this rank can have a significant impact on the dynamics of the dollar.

 

EUR/USD

 

The EUR/USD pair is moving within the range of 1.1449–1.1488. Investors are awaiting publication of data from the euro area on the trade balance (12:00 GMT+2), as well as the speech by the ECB President Mario Draghi (17:00 GMT+2).

 

GBP/USD

 

The pair GBP/USD continues showing positive dynamics having risen to 1.2908 during the Asian session. Today, investors are waiting for the outcome of the vote in the British Parliament on Brexit. Theresa May calls on MPs to approve the treaty, arguing that the consequences could otherwise be catastrophic. In case of failure of the vote, the Prime Minister will have three working days to prepare an alternative version of the contract.

 

USD/JPY

 

The USD/JPY pair is rising actively and has reached the level of 108.74 during the Asian session. Due to the absence of significant macroeconomic releases in Japan, the movement of the instrument is mostly technical.

 

AUD/USD

 

The pair AUD/USD is rising having reached 0.7217 during the Asian session. Against the background of the absence of macroeconomic releases from Australia, the movement of the instrument's rate is of a technical nature.

 

Gold

 

Quotes of gold demonstrate lateral dynamics and are traded near the level of 1290.00.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

The US dollar moderately strengthens against the euro and the yen, but shows a lateral trend paired with the Australian currency. Statistics from the USA, published yesterday, indicated a decline in the Producer Price Index to –0.2% in December from 0.1% a month earlier, but did not have a significant impact on the instrument. Investors continue to follow the news regarding the US government shutdown, which has been going on for the fourth week and, according to representatives of the administration, may last until the end of February. This situation threatens the market with possible negative consequences. Macroeconomic statistics, which can influence USD today, include the data on retail sales in the USA (15:30 GMT+2).

 

EUR/USD

 

The EUR/USD pair dropped to the level of 1.1410. EUR is under pressure from yesterday’s speech by the ECB President Mario Draghi at the European Parliament. The official believes that the slowdown in the economy can last longer than expected. Uncertainty about Brexit puts additional pressure on the euro. Yesterday, the British Parliament rejected an agreement on the UK leaving the EU, prepared by Prime Minister Theresa May.

 

GBP/USD

 

The GBP/USD pair showed ambiguous dynamics on Tuesday amid heightened volatility caused by the outcome of a vote in the UK Parliament on withdrawal from the EU. Quotes fell to the level of 1.2667, after which they quickly returned to the level of 1.2869, where they are trading during today's Asian session. Yesterday, the British MPs rejected an agreement prepared by the government of Theresa May and the EU. MPs voted 432 to 202 to defeat the proposal. Now the Prime Minister has three days to present an alternative to the Brexit agreement. During this time, Theresa May will probably try to get new concessions from the EU, as well as convince the Parliament to support the deal. The instrument today may be affected by the speech of the Bank of England head Mark Carney (11:15 GMT+2), as well as statistics on the CPI in the UK in December (11:30 GMT+2).

 

USD/JPY

 

After active growth on Tuesday, the USD/JPY pair corrected down to 108.47 during today's Asian session. Yesterday's statistics from Japan was ignored by investors. The movement of the instrument rate is primarily technical. Tertiary Industry Activity Index was better than expected, but worse than in the previous month and amounted to –0.3% in December against 2.2% a month earlier.

 

AUD/USD

 

The AUD/USD pair shows lateral dynamics within the range of 0.7224–0.7178 and has changed slightly on the whole.

 

Gold

 

Quotes of gold have ambiguous dynamics. After an active decline yesterday and a test of the level of 1286.56, the instrument rate returned to 1292.15 during the Asian session.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

The US dollar is moving horizontally paired with the euro, falling against the pound and the Australian currency, but is strengthening against the yen. The instrument is supported by macroeconomic statistics from the USA published yesterday. The number of initial jobless claims dropped to 213K from 216K a week earlier, which is the lowest level in the last 5 weeks. Philadelphia Fed Manufacturing Index was better than expected reaching 17.0 points in January against 9.1 points a month earlier. Today, investors are waiting for the publication of data on Industrial Production in the US. It is expected that the indicator will fall to 0.2% in December from 0.6% a month earlier. If this assumption is right, it will put pressure on the US dollar in the short run.

 

EUR/USD

 

The EUR/USD pair is moving within the range of 1.1370–1.1403. Today, the macroeconomic calendar of euro area lacks important releases, so the movement of the rate will depend on the news from the US. Investors continue monitoring the development of the situation around Brexit. After the failure of a vote in the British Parliament, Theresa May must prepare a fallback deal.

 

GBP/USD

 

The pair GBP/USD continues showing positive dynamics and rose to 1.2970 during the Asian session. Theresa May survived a vote of no confidence and is preparing an alternative Brexit deal for January 21. Macroeconomic releases able to influence the instrument today include data on retail sales in the UK (11:30 GMT+2). The indicator in monthly terms is expected to decrease to –0.8% in December from 1.4% a month earlier, and in annual terms it can remain unchanged at 3.6% in December.

 

USD/JPY

 

The pair USD/JPY rose to 109.37 due to the positive statistics from the US. Statistics from Japan published this night puts pressure on the yen. National Core CPI went down to 0.7% in December from 0.9% a month earlier.

 

AUD/USD

 

The AUD/USD pair rose to 0.7202 during the Asian session. In the absence of significant releases, the movement of AUD is technical.

 

Gold

 

Quotes of gold demonstrate lateral dynamics and are traded near the level of 1291.02.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

After active growth on Friday, the US dollar is moderately declining against most majors during today's Asian session. Due to the holiday in the US, investors correct their long dollar positions. Investors are still focused on the US-China trade negotiations. The market remains optimistic, perceiving data on a possible softening of the American position as a sign of a conclusion of a big deal.

 

EUR/USD

 

The EUR/USD pair rose to 1.1375 during the Asian session due to correction of USD. Due to the absence of important releases in the euro area, the movement of the instrument is technical.

 

GBP/USD

 

The pair GBP/USD continues showing negative dynamics having declined to 1.2856 during the Asian session. There are no significant releases planned in the British macroeconomic calendar today. Today Prime Minister Theresa May is to submit an alternative option for the country's withdrawal from the EU to the UK Parliament.

 

USD/JPY

 

Quotes of the pair USD/JPY decreased to 109.57 due to the low trading activity. Due to the absence of important releases in the US and Japan, the movement of the instrument is technical.

 

AUD/USD

 

Quotes of the AUD/USD pair went up to the level of 0.7167 during the Asian session, ignoring the weak data on HIA New Home Sales in Australia. According to statistics published tonight, the value of the index fell to –6.7% in December from 3.6% a month earlier.

 

Gold

 

During the Asian session, the quotations of gold tried to consolidate below 1281.25 several times, but failed and the rate moved to the phase of the upward correction.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

Morning Market Review

2019-01-22 10:12 (GMT+2)

USD strengthens moderately against most majors, with the exception of the yen. On Monday, the American stock exchanges were closed due to the celebration of Martin Luther King, Jr. Day, so there was a decrease in trading activity. Macroeconomic releases able to influence the instrument today include data on existing home sales in the US (17:00 GMT+2). The indicator is expected to reduce to 5.25M in January from 5.32M a month earlier. If this forecast is right, it will put pressure on the US dollar in the short run.

 

EUR/USD

 

Quotes of the EUR/USD pair went down to 1.1355 against the background of low trading activity. Investors are waiting for the publication of data from the euro area on ZEW Economic Sentiment. The indicator is expected to amount to –20.1 points in January against –21.0 points a month earlier. Despite the expected small increase in the indicator, pessimism in European business circles will continue to prevail, which could adversely affect the euro.

 

GBP/USD

 

The GBP/USD pair is moderately declining and is trading at 1.2878 during the Asian session. Yesterday, Theresa May presented an alternative Brexit plan in the British Parliament. As it turned out, the fallback is not much different from the previous one, rejected by Parliament. Among the main differences proposed there is the abolition of 65 pounds fee for EU citizens who want to stay in the UK after Brexit. A repeated referendum on the issue of the withdrawal of the United Kingdom from the EU will not be held. Also, the British Prime Minister said that the government has changed its policy and will listen more to the opinion of MPs during the work on a new Brexit agreement. Macroeconomic releases that could have an impact on the pound today include data on unemployment and average earnings in the UK (11:30 GMT+2).

 

USD/JPY

 

The USD/JPY pair is declining moderately and is testing the level of 109.37 during the Asian session. As there is lack of key economic releases, the instrument is traded under the influence of technical factors.

 

AUD/USD

 

The AUD/USD pair dropped to 0.7138 during the Asian session. The pressure on the Australian currency is still exerted by weak data on new home sales in Australia, as well as weak statistics on China's GDP for the fourth quarter.

 

Gold

 

After testing the level of 1277.20, gold quotations slightly corrected upwards, but the downward trend still persists.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

US dollar is falling against most majors. Yesterday's weak statistics on Existing Home Sales in the US exerts pressure on the instrument. The indicator went down to 4.99M in December from 5.33M in the previous month (–6.4%). The US macroeconomic calendar lacks important releases today. The movement of the USD paired with other currencies will be affected by the external factors. On the whole, the longest-lasting government shutdown continues to have a negative impact on the instrument. The parties are still far from a compromise, so it is possible that the government agencies shutdown will last until February or March. Such a scenario can lead to a weakening of the national economy by 0.5%.

 

EUR/USD

 

The pair EUR/USD rose to 1.1366 due to the weakening USD. In the absence of news from the US and the euro area, the movement of the instrument will be influenced by technical factors.

 

GBP/USD

 

Quotes of the pair GBP/USD rose to the level of 1.2939, where they are consolidating during the Asian session. Yesterday's strong data on the labor market in the UK, as well as the general weakening of the US currency, support the pound. Today, market participants are waiting for the publication of data on CBI Industrial Trends Orders. The indicator is expected to drop to 5 points in January from 8 points in the previous month. If the forecast proves right, the pound may fall under pressure.

 

USD/JPY

 

The USD/JPY pair today rose to 109.76 during the Asian session. Pressure on the yen is exerted by weak export data and All Industries Activity Index of the Japanese economy. Exports fell to –3.8% in December from 0.1% a month earlier, which is the most significant drop in the last two years. All Industries Activity Index went down to –0.3% in November from 2.1% a month earlier. As expected, the Bank of Japan left the interest rate unchanged at –0.10% and lowered its forecast for core consumer inflation from 1.4% to 0.9% in the fiscal year starting in April.

 

AUD/USD

 

Quotations of the pair AUD/USD rose to the level of 0.7141 due to the general weakening of USD. Due to the absence of important releases, the movement of the instrument is technical.

 

Gold

 

Due to the yesterday's weak US statistics, gold quotations increased to 1284.00.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

The US dollar shows ambiguous dynamics against most majors, falling against the euro, pound and the yen, but strengthening against the Australian dollar. Today, market participants expect the publication of data from the United States on Initial Jobless Claims (15:30 GMT+2), as well as on Manufacturing PMI (16:45 GMT+2). It is expected that the number of initial jobless claims will rise to 220K from 213K a week earlier. Manufacturing PMI is expected to fall to 53.5 points in January from 53.8 points a month earlier. If this forecast is right, it will put pressure on the US dollar in the short run.

 

EUR/USD

 

During yesterday's trading, the quotes of the EUR/USD pair strengthened significantly and reached the level of 1.1380, near which they are consolidating during the Asian session. Today, investors are waiting for the publication of data from the euro area on the Manufacturing PMI as well as on Services PMI (11:00 GMT+2), and also for the ECB interest rate decision. The rate is expected to remain unchanged at the level of 0.00%. Today at 15:30 GMT+2, Mario Draghi is expected to give a press conference. It is expected that the head of the ECB will describe the risks to the European economy and assess the results of the completed asset purchase program. Draghi’s opinion will be particularly important due to the potential aggravation of trade relations between the US and the EU. Manufacturing PMI is expected to remain unchanged at the level of 51.4 points in January. Services PMI is expected to grow to 51.5 points in January from 51.2 points a month before.

 

GBP/USD

 

The pair GBP/USD is showing positive dynamics having risen to 1.3070 during the Asian session. The pound is supported by the likely extension of the Brexit negotiation process and the postponement of the UK’s final withdrawal from the EU from March 29 to a later date. Today, the macroeconomic calendar of the UK lacks important releases, so the movement of the rate will depend on external factors.

 

USD/JPY

 

The pair USD/JPY dropped to 109.57 due to the general weakening of USD. As there is a lack of key economic releases, the movement of the price is of technical nature.

 

AUD/USD

 

During the Asian trading session, the quotes of AUD/USD are traded in both directions. After the publication of positive statistics on the labor market in Australia, the rate of the instrument rose to the level of 0.7165, after which it just as quickly went down to the level of 0.7103. Employment Change turned out to be better than the forecasts and amounted to 21.6K in December against 37.0K a month earlier (with the forecast of +16.5K). The Unemployment Rate dropped to 5.0% in December from 5.1% a month earlier.

 

Gold

 

Gold quotations are falling moderately having dropped to 1281.25 during Asian trading.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

The US dollar is strengthening against the euro and the yen, but is declining against the pound and the AUD. The instrument is supported by macroeconomic statistics from the USA published yesterday. Manufacturing PMI increased to 54.9 points in January from 53.8 a month earlier. Initial jobless claims dropped to 199K from 212K a week earlier. Services PMI was better than the forecast of 54.0 points, but dropped to 54.2 points in January from 54.4 points a month earlier. Fundamental events today include Durable Goods Orders data in the US (15:30 GMT+2). It is expected that the indicator will rise to 1.8% in December from –4.3% a month earlier. If this assumption is right, it will support the instrument in the short run.

 

EUR/USD

 

The EUR/USD quotes amid yesterday's weak statistics on business activity indices in the eurozone and the ECB’s decision to leave interest rates unchanged at 0.00% at least until the end of summer fell to 1.1288. However, during today's Asian session, they are corrected upwards. Investors are waiting for the publication of data on German Ifo Business Climate Index. The indicator is expected to fall to 100.7 points in January from 101.0 points a month earlier. If the forecast is implemented, the rate of the instrument will fall under additional pressure.

 

GBP/USD

 

The GBP/USD pair rose to 1.3131 during the Asian session. The pound is supported by the news about Democratic Unionist Party's intention to support the alternative Brexit deal by Theresa May next week. Today, traders are waiting for statistics from the UK gross mortgage approvals (11:30 GMT+2). The indicator is expected to decline to 38.9K in December from 39.4K a month earlier. If the forecast proves right, it could put pressure on the pound in the short term.

 

USD/JPY

 

The USD/JPY pair today rose to 109.76 during the Asian session. Statistics from Japan released at night indicated an increase in Tokyo Core CPI to 1.1% in January from 0.9% a month earlier, but could not provide support to the yen.

 

AUD/USD

 

Quotations of the pair AUD/USD are declining moderately having amounted to 0.7095 at the backdrop of the absence of macroeconomic releases.

 

Gold

 

During the Asian session, quotes of gold are growing moderately and consolidated above the level of 1280.00.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

EUR/USD

 

The EUR/USD pair rose at the Asian session and is now trading at 1.1410. The market remains optimistic after the temporary cessation of the government shutdown in the United States. On Friday, President Donald Trump signed a decree financing the government for a period of three weeks. Trump made a deal with the Democrats, who, according to the American media, promised to allocate a significant part of the budget for the construction of the border wall with Mexico. It is not excluded that in three weeks the shutdown will resume if promises are not kept. During the day, European investors will be waiting for the speech of the ECB President Mario Draghi in the European Parliament. Perhaps he will share his opinion on the state of the European economy. Last week after the regulator's meeting, Draghi noted that the risks to the growth of the European economy had become negative, which is associated with geopolitical factors and the threat of protectionism. However, the likelihood of a recession in the euro area is low.

 

GBP/USD

 

The pair GBP/USD started the week trading in the range of 1.3180–1.3210. Investors hope that within a week the issue of Brexit can be clarified. On Tuesday, a second vote is expected on a deal with the EU, but since the second version of the agreement does not differ much from the one rejected by the House of Commons, the chances for its support by the MPs are low. Repeated rejection of a deal with the EU could lead to the extension of negotiations and even to concessions from the leadership of the European Union, since neither side wants a tough Brexit. During the day, the market is waiting for the speech of Bank of England Governor, Mark Carney, who can share his opinion on the prospects of the British economy in connection with Brexit, as well as highlight the further monetary policy of the regulator.

 

AUD/USD

 

During today's Asian session, the AUD/USD pair rose to the level of 0.7202 amid reports of the resumption of the US government, but has now corrected to the area of 0.7190. However, in general, the pair is moving under the influence of technical factors, since it is a day off in Australia, the stock exchanges are closed, and trading activity is low.

 

USD/JPY

 

Quotations of the pair USD/JPY during the Asian session continued declining and reached the level of 109.30. The yen is being strengthened as a safe haven asset against the background of a possible delay in the negotiations between the US and the PRC. Last week, US Commerce Secretary, Wilbur Ross, said that the parties are still far from the deal. Today, the minutes of the last meeting of the Japanese regulator was published, but it did not give anything new to investors. Bank of Japan officials noted that in general, the Japanese economy continues to grow moderately, exports, industrial production and domestic demand increase moderately as well. Inflation continues to move to the target level of 2.0%. At the same time, the risks of world trade instability and increased protectionism remain. Under these conditions, the regulator will continue to maintain its current "dovish" monetary policy until inflation reaches 2.0%. Rates will remain at the same level for a long time.

 

Gold

 

Quotes of gold had ambiguous dynamics during the Asian session. At first, after a significant increase on Friday, they corrected to the level of 1300.00, but now they have won back their positions and are trading at the level of 1303.00.

 

[MikhailLF]

LiteForex analitics. Morning Market Review

 

EUR/USD

 

On Monday afternoon, the EUR/USD pair dropped to the area of 1.1415, but has now recovered some of the losses and is trading at 1.1434. In general, investors are concerned about the official charges by the US authorities against the Chinese corporation Huawei. The company is accused of two dozen crimes including violating the sanctions regime against Iran and stealing technology from the American company T-Mobile. This information appeared on the eve of a new round of trade negotiations between the United States and China, and may well complicate them significantly. Additional pressure on the euro was put by the speech of the ECB President Mario Draghi in the European Parliament. He said that recent economic data was worse than expected, and the reason for this was the decline in external demand and the threat of protectionism. Draghi also noted that in case of deterioration of the European economy, the regulator may use additional instruments to support it. During the day, investors are waiting for the publication in the US consumer confidence index from Conference Board. It is expected that the figure will fall for the third month in a row, this time from 128.1 to 124.7 points. The implementation of the forecast could put pressure on USD.

 

GBP/USD

 

The pair GBP/USD traded within the range of 1.3160–1.3144 during the Asian session. The market is calm, as investors are waiting for a new vote in the British parliament to be held today. The MPs would like to make a number of changes in the deal with the EU. A total of 14 amendments were proposed, including the exclusion of the possibility of no deal Brexit, a delay of several months and a temporary restriction on the backstop mechanism, according to which Northern Ireland should follow EU customs and trade rules until the parties agree on the Irish border. EU officials insisted that the backstop should be permanent, but this does not satisfy the majority of British MPs. If this amendment is adopted, the negotiations may come to a standstill, since Brussels had previously stated that they would not make any changes to the contract.

 

AUD/USD

 

During the Asian session, the pair AUD/USD showed ambiguous dynamics. After the decline to the level of 0.7137, the price recovered and is now trading at 0.7170. Australian investors are monitoring the situation around Huawei, accused in the US of economic crimes. This situation may adversely affect the trade negotiations between the United States and China, which will put pressure on the Australian economy. The speech of Prime Minister Scott Morrison, who said that Australia could expect the first in 28 years economic recession if the ruling party loses the next general election, is also in the focus.

 

USD/JPY

 

Quotations of the pair USD/JPY during the Asian session had ambiguous dynamics. After the decline to the level of 109.12, the instrument won back the losses and reached the level of 109.25. The yen is under pressure from the Cabinet of Ministers report, which lowered the estimate of exports of Japanese goods in January for the first time in three months. The reason for this was the trade conflict between China and the United States. The supplies of equipment for the production of electronics and semiconductors to the PRC suffered the most.

 

Gold

 

Gold quotes continued growth and reached the level of 1306.00. Investors are buying the asset because of the uncertainty around Brexit and the US-PRC trade negotiations.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

EUR/USD

 

During the Asian session, the EUR/USD pair has grown and is currently trading at 1.1445. Investors are encouraged by the statements of US officials regarding the upcoming trade negotiations with China. Donald Trump's economic adviser, Larry Kudlow, said that the President remains moderately optimistic about the possibility of concluding a trade agreement with the PRC by March, despite the situation with Huawei. Secretary of the Treasury, Steven Mnuchin, in turn, noted that the government expects significant progress in the upcoming negotiations, primarily in the access of American companies to the Chinese market and the protection of technology. On the other hand, negative data on Consumer Confidence Index, which fell in January for the third month in a row and amounted to 120.2 points (the worst figure since 2017), put pressure on USD. According to experts, the decline is due to the general instability of the markets and the partial closure of the US government.

 

During the day, investors are waiting for the publication of statistics on US GDP for Q4 2018 (a decrease from 3.4% to 2.6% is expected) and data on ADP Nonfarm Payrolls (a decrease from 271K to 170K is expected). However, the most important event of the day will be the Fed's decision on the interest rate and comments by representatives of the regulator. The rate is expected to remain at the same level of 2.50%. However, investors are more interested in the number of rate increases planned for the current year.

 

GBP/USD

 

During the Asian session, the GBP/USD pair corrected upwards, partly winning back the positions lost the day before. The British currency is under pressure from the results of voting in the British Parliament regarding amendments to the Brexit deal. Yvette Cooper's amendment, which allows postponing the withdrawal of Great Britain from the European Union from March 29 to December 31 2018, was rejected, and Graham Brady's amendment, changing the article on backstop, passed the vote. Now Teresa May should return to Brussels and try to get new concessions from EU officials, based on the results of the vote. However, representatives of the European Union have repeatedly stated that they will not change the text of the deal; therefore the chances of success for the British Prime Minister are quite low.

 

AUD/USD

 

During today's Asian session, the AUD/USD pair rose to the level of 0.7200 against the background of positive data on inflation in Australia. CPI rose from 0.4% to 0.5% QoQ and decreased from 1.9% to 1.8% YoY. Thus, Australian inflation remains close to the target level of 2.0%.

 

USD/JPY

 

In the Asian session, the USD/JPY pair generally declined and is now testing the level of 109.25. JPY is supported by December retail sales data, which grew by 1.3%, exceeding market expectations. It is likely that sales will continue to grow over the coming months as citizens seek to make acquisitions ahead of the planned increase in sales tax from 8% to 10% this autumn.

 

Gold

 

Gold quotes continued growth and reached the level of 1314.95. Investors are buying the asset because of the uncertainty around Brexit and the US-PRC trade negotiations.

[MikhailLF]

EUR/USD

 

During the Asian session, the EUR/USD pair continued to grow and has now risen to 1.1508. Investors positively assessed the results of the Fed meeting where it was decided to leave the interest rate in the range of 2.25% –2.50%. During the press conference, the head of the regulator, Jerome Powell, said that at the moment there are fewer arguments in favor of the rate increase, therefore the Fed will take a wait-and-see approach. Powell also noted that in the current year the growth rate of the American economy may slow down. The government shutdown may lead to a decrease in GDP in Q1 2019, but if there are no new shutdowns, then in Q2 2019 the economy will recover its losses. USD was also supported by ADP Nonfarm Employment Change data. In January, the growth rate exceeded forecasts and amounted to 213K.

 

During the day, the market is waiting for the release of data on euro area GDP (expected to decline from 1.6% to 1.2%), for Initial Jobless Claims in the US (growth is expected to 215K) and for New Home Sales (expected to increase from 544K to 560K).

 

GBP/USD

 

The GBP/USD pair was growing during the Asian session and reached the level of 1.3137. The pound strengthened against the background of a positive market reaction to the results of the Fed meeting. However, in general, the situation for GBP remains difficult. In the near future, the pound will be under pressure from the negative reaction of European officials to the British MPs backstop amendment. The President of the European Council, Donald Tusk, and French President, Emmanuel Macron, have already opposed it. EU chief negotiator, Michel Barnier, noted that the backstop rule is a realistic solution to prevent the creation of a hard border between the Republic of Ireland and Northern Ireland and therefore should remain unchanged. European Commission President, Jean-Claude Juncker, said that the last vote in the British Parliament increased the risk of a tough Brexit, but expressed the hope that the deal could still be concluded. In general, it does not seem that Brussels would make concessions to London, and this increases the likelihood of Britain leaving the EU without a deal or cancellation of Brexit in order to prevent economic losses.

 

AUD/USD

 

At the Asian session, the pair AUD/USD grew to 0.7270. In addition to the outcome of the Fed meeting, the Australian dollar is supported by positive Chinese statistics. In January, Manufacturing PMI of China grew for the first time in five months and amounted to 49.5 points. Non-Manufacturing PMI increased for the second month in a row, this time from 53.8 to 54.7 points.

 

USD/JPY

 

Quotes of the USD/JPY pair in the Asian session were falling and are now at 108.67. The yen is supported by positive Chinese statistics on Manufacturing and Non-Manufacturing PMI and the outcome of the Fed meeting. Also, the Japanese currency is supported by data on the volume of industrial production in Japan, which declined by 0.1% in December, which is much less than the market expected (decrease by 0.5%) and November figures (decrease by 1.0%). In general, the slowdown in the decline in production indicates the prospects for the recovery of the Japanese economy.

 

Gold

 

Quotes of gold at the Asian session were mainly traded in the range of 1320.30–1317.15. The pressure on the US dollar and the demand for the precious metal were the result of recent decisions by the US Federal Reserve.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

EUR/USD

 

The EUR/USD pair declined moderately at the Asian session and is now trading at 1.1430. USD is strengthening against the backdrop of statements by US President Donald Trump, who said on Twitter that trade negotiations with the Chinese delegation are going well and the parties are trying to conclude a deal without leaving a single issue unresolved. However, Trump indicated that he would not enter into a trade agreement until he met with PRC Chairman Xi Jinping again. Such a meeting may take place at the end of February in China. In general, the market remains optimistic, hoping for a resolution of the conflict between the United States and China. Also, the US currency is supported by strong November data on new home sales in the USA. The growth rate exceeded forecasts and amounted to 657K.

 

During the day the market will be waiting for the January data from the US labor market. The unemployment rate is expected to remain st the same level of 3.9%. Nonfarm Payrolls are expected to reduce from 312K to 165K. Today's data may be better than expected, as the leading indicator of ADP Nonfarm Employment Change exceeded market expectations and amounted to 213K. In this case, the strengthening of the dollar will continue.

 

GBP/USD

 

In the Asian session, the GBP/USD pair was declining and is now trading at 1.3090. The British currency is under pressure from the uncertainty of Brexit. The European Union is not going to make concessions to the UK and change the current text of the deal in accordance with the amendments of the British MPs. Under these conditions, the assumption that the UK’s exit date from the EU may be postponed to a later date does not subside. British Foreign Secretary, Jeremy Hunt, hinted at this in an interview with the BBC.

 

Today, the release of the January Manufacturing PMI in the UK is expected. After two months of growth, the indicator is expected to resume the decline and drop from 54.2 to 53.5 points, which could put pressure on GBP.

 

AUD/USD

 

The AUD/USD pair has been declining during today's Asian session and is currently trading at 0.7240. AIG Manufacturing PMI data were positive. In January, the indicator grew from 49.5 to 52.5 points. However, the Australian currency was unable to strengthen due to the weakness of the real estate market, whose condition continues to deteriorate. In January, housing prices again fell by 1%, and on an annualized basis they declined by 5.6%.

 

USD/JPY

 

Quotes of USD/JPY at the Asian session were mainly traded in the range of 108.90–108.80. The latest Japanese statistics turned out to be strong. The unemployment rate fell to 2.4% (the lowest since 1992). And Manufacturing PMI unexpectedly rose in January from 50.0 to 50.3 points.

 

Gold

 

Gold quotes are corrected downwards and reached the level of 1317.15. The decline is happening against the backdrop of investor hopes that the US and the PRC will sign a trade deal.

[MikhailLF]

LiteForex analitics. Morning Market Review

 

EUR/USD

 

During the Asian session, the EUR/USD pair was going down and has now dropped to 1.1440 (–0.12%). The dollar is strengthened against the background of positive January data from the US labor market. The unemployment rate rose from 3.9% to 4.0%. However, investors attach greater importance to employment growth: the indicator increased from 206K to 296K. Also, the positions of the US currency were strengthened by the statistics on Manufacturing PMI. In January, the indicator grew from 54.3 to 56.6 points. Finally, the head of the Federal Reserve Bank of St. Louis, a voting member of the FOMC, James Bullard hinted once again that there would be no further rate increase in the near future. In an interview to CNBC, he noted that "the level of rates is very good where it is today", and "now it’s time to wait and see how the economy develops".

 

During the day, the data on the volume of factory orders in the United States for November will be published. The figure is expected to grow by 0.3%, which may provide additional support for the American currency.

 

GBP/USD

 

The pair GBP/USD in the Asian session goes down smoothly. By now the pair has dropped to 1.3065 (–0.07%). The British currency is under pressure from the poor statistics and the uncertainty of Brexit. Manufacturing PMI, published on Friday in the UK, fell sharply in January and reached 52.8 points, the lowest in the last three months. The situation with Brexit continues to be deadlock, which negatively affects the pound. The UK is seeking to make alternative arrangement on backstop, but the EU does not intend to renegotiate the issue. British Secretary of State for International Trade, Liam Fox, called such a position of European officials "irresponsible." Meanwhile, the Prime Minister Theresa May still intends to go to Brussels and seek new concessions.

 

During the day, the data on Construction PMI in January will be published in the UK. It is expected that the figure will fall for the second month in a row, this time from 52.8 to 52.6 points. If the forecast proves right, the pound may fall under pressure.

 

AUD/USD

 

The pair AUD/USD opened trading week with the decline, dropping to around 0.7225 (–0.29%). The Australian dollar is weakening due to negative data on the number of building approvals. In December, on a monthly basis, their number decreased again (for the third month in a row), this time by 8.4%. In total, last year reduction was 22%. The decline in housing prices has resulted in the refusal of companies to construct new buildings, which leads to a reduction in the construction sector and pressure on the Australian currency.

 

USD/JPY

 

Quotes of the USD/JPY pair in the Asian session rose reaching 109.75 (+0.26%). The US dollar is strengthening against the yen due to the positive labor market data, which in general turned out to be better than expected. In addition, the confidence in the postponement of a new tightening of the Fed monetary policy is being strengthened, which also supports the US currency.

 

Gold

 

Gold quotes are corrected downwards and reached the level of 1312.15 (–0.42%). The price is falling against the general strengthening of the dollar due to strong data on the US labor market.