Thread: Daily Market Analysis from ForexMart

GBP/USD Fundamental Analysis: November 12, 2018





Brexit remains to be the center for today’s Asian session since UK Prime Minister Theresa May canceled the emergency meeting to approve the Brexit deal this week. The meeting was postponed but the resistance from the cabinet remains strong, added to Brussels concerns, which delays the Brexit talks and lessen the possibility of the expected meeting in November. In this case, the Sterling bulls are on the less favorable situation. Market hopes for a miracle to relieves the pressure amid the heavy headlines with the Brexit as the main concern over the weekend causing more tension in the market. It seems that the market declined by 0.46% from this morning price level of 1.2911.


There is no major economic event for the UK, hence, traders can expect for thin trading volumes given that there is less US money market for the long Thanksgiving weekend but Tuesday seems to offer UK Average Earnings and GBP/USD traders are looking for something an early event to the headlines prior to major economic data. The dollar was strengthened by last week’s gains and grew to a 16-month high on Monday as traders anticipate for the US Federal Reserve to tighten monetary policies and the bullish tone of the greenback with the ongoing Brexit talks to further escalate the bullish situation. As for the technical perspective, the implied volatility premium grew sharply while an increasing demand for the British pound puts a bearish pressure while traders are anticipating for a much bigger decline of the currency. The risk appetite has also lessened during the Asian trading session as the EU’s situation worsened.

EUR/USD Fundamental Analysis: November 13, 2018





The euro influenced the appreciation of greenback during Monday trading session with political uncertainty affecting the European market. The euro major pair dropped to 1.1239 soon after the opening of the London session in the background of tension with the Italian budget as rejected by the EU commission in the previous week. The Italian government submitted again a fiscal plan in correspondence with the EU rules and risk an economic sanction. Yet, it seems that there is no intent to change the budget. The pair is declining across the European and North American hours reaching a fresh 16-month low due to the bearish pressure from both sides of Atlantic.


Lack of progress in the Brexit negotiation adds pressure on the bearish tone to the common currency added to the Italian budget concerns. The White House also intends to reconsider auto tariffs against Europe which gives a dovish sentiment for the investors, further adding a bearish pressure to the common currency in the future. Reconsideration of tariffs on the European market despite ending it a few months after meeting between the US and Europe, which can be because of various reasons such as the global trade war and renewed Iran sanctions and criticism of “America first” in the Trump administration.


There are bids for the EUR/USD pair in Asia and an optimistic view of the renews US-China trade. Yet, the change in budget still questions the Italy that could affect the spread between the high-spend budget to the European Union today will likely increase the spread between the Italian 10-year government bond yield and its German counterpart to the recent high of 325 basis points. Om case that market expectations. If Italy submitted an unchanged budget for euro, traders can anticipate the resumption of a bearish pressure. As for the fundamental data, investors are eyeing on the German CPI data scheduled today which is expected to remain the same. However, in case it turns out positive, this could drive momentum for a relief rally on the euro major pair.

EUR/USD Fundamental Analysis: November 16, 2018





The euro major pair did not have an optimistic trading overnight with UK ministers exiting their roles attesting as a protest in the negotiation deal of Prime Minister Theresa May with the EU not meeting UK’s electorate vote. Being against the authority of Theresa May raising uncertainty in the European politics that further raises the chance for the Brexit to be no deal that affects both economies. Nevertheless, the euro major pair rise despite higher forecast of 0.8% by the U.S. Census Bureau US retail sales data in October, higher than the 0.5% market expectation. Meanwhile, the action moves with the reversal on Wall Street that resulted in a rally of the euro and retreating of long yen as the EUR/JPY pair recovered.


Moreover, the greenback also received more bearish pressure after the profit taking on the trade talk news between the US and China, giving America the lead and raising risk appetite. Investors now wait for the speech from ECB president Draghi and a drive on strong bid can take place if Draghi is able to act on the Italy budget crisis and confirm plans on ending the QE program. If Draghi becomes heedful, the price may drop below 1.30 and bet on a delay of the rate hike in 2019. The Eurozone CPI data is anticipated to be released, as well as the data on Industrial production.

EUR/USD Fundamental Analysis: November 16, 2018





The euro major pair did not have an optimistic trading overnight with UK ministers exiting their roles attesting as a protest in the negotiation deal of Prime Minister Theresa May with the EU not meeting UK’s electorate vote. Being against the authority of Theresa May raising uncertainty in the European politics that further raises the chance for the Brexit to be no deal that affects both economies. Nevertheless, the euro major pair rise despite higher forecast of 0.8% by the U.S. Census Bureau US retail sales data in October, higher than the 0.5% market expectation. Meanwhile, the action moves with the reversal on Wall Street that resulted in a rally of the euro and retreating of long yen as the EUR/JPY pair recovered.


Moreover, the greenback also received more bearish pressure after the profit taking on the trade talk news between the US and China, giving America the lead and raising risk appetite. Investors now wait for the speech from ECB president Draghi and a drive on strong bid can take place if Draghi is able to act on the Italy budget crisis and confirm plans on ending the QE program. If Draghi becomes heedful, the price may drop below 1.30 and bet on a delay of the rate hike in 2019. The Eurozone CPI data is anticipated to be released, as well as the data on Industrial production.

EUR/USD Fundamental Analysis: November 19, 2018





The euro major pair retreated back higher than 1.14 level after the headlines on US President said to make a trade deal. Although no agreement has been set yet, which in turn, raised risk appetite with investors and kickstart momentum across the market on Friday last week. Thus, the pair gained 200 pips from the low level of 1.1215 on Monday and closed in favor of the euro and grew by 0.81% on the day.


It has been trading close to the Friday high at 1.14 at the beginning of the Asian session as investors became heedful following the dovish comments from ed’s newly appointed vice chair, Richard Clarida, saying a global economic slowdown is important for the US economic outlook and a similar to the interview from the Fed Dallas President Robert Kaplan who sees a slowdown in China and Europe. Nevertheless, analysts see this as an acceptable risk factor given that the Fed is reliant on rate hikes while the investors reacted to the dovish rhetorics resulted in US dollar weakened.


Yet, it is unlikely for the euro to hold on the gains for long-term as headlines directed differently after a poor output from the European macro data. Despite the weakened outlook from the PPI data from Germany and PMI of Eurozone give a steady trend in medium- to long-term while analysts anticipate Fed rate hike and suggest a hawkish outlook in the future.

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GBP/USD Fundamental Analysis: November 20, 2018





The British pound major pair is trading in a range-bound at 1.285 at a similar level for the week after Sterling traders had a rest from busy buying schedule who are hopeful of Brexit and selling short on a bearish Brexit situation. Exiting the European Union continues to be a concern for both Sterling investors and Prime Minister Theresa to strengthen the draft for no Brexit deal with her own party who have lost confidence in her office with risks continues to be high with the possibility for the House of Commons to reject the present Brexit offering despite the Prime minister’s efforts that could push the major responsibilities on the works.


Investors are now waiting for the upcoming EU Brexit Summit as traders expected to receive the Brexit plan positively. If there is no confidence vote and the prime minister will be able to keep the position, a no Brexit deal can be avoided. On Tuesday, a speech from Bank of England Governor Mark Carney is expected regarding the British parliament on the latest Inflation report hearings which would have the influence to support the dovish sentiment of the central bank. In the meantime, traders can take a rest from the Brexit worries.

EUR/USD Fundamental Analysis: November 21, 2018





The euro major par declined abruptly during the US session and reached a fresh new low at 1.1359. The greenback has strengthened across the market in the last hours of trading especially equity in Wall Street paired against yen and euro and consolidated losses due to a bearish decline. Earlier, the price peaked at 1.1472, which has been the highest since November 7 but pulled back and lost momentum, resulting in a correction and lose over 100 pips. The risk-off sentiment yesterday lead the financial markets with the greenback standing strongly against the common currency as well as other main competitors


The decline is not just about the risk-off sentiment with the euro which also had its weakness that was primarily because of the tension between EU Commission and Italy on the 2019 budget. Moreover, the rhetoric by ECB’s Weidmann saying that policy normalization may take a long time.


This adds high bearish pressure on the common currency with concerns on the possible sanction for the Italian government from EU being lenient to France on budget concerns. Italy pointed out that growing out may lead to an economic slowdown that may affect the whole of Europe.


How the EU reacted may add a bearish pressure to the euro if it turns out against Italy, that could add political tension and reach new highs. However, the yields differential may decline abruptly, raising again the euro to yesterday’s high of 1.1472 if the EU becomes more dovish. As for the headlines, there is no data to be released from the Eurozone but existing homes sales data and core durable goods from the US are scheduled today, as well as the weekly crude oil inventory.

EUR/USD Fundamental Analysis: November 21, 2018





The euro major par declined abruptly during the US session and reached a fresh new low at 1.1359. The greenback has strengthened across the market in the last hours of trading especially equity in Wall Street paired against yen and euro and consolidated losses due to a bearish decline. Earlier, the price peaked at 1.1472, which has been the highest since November 7 but pulled back and lost momentum, resulting in a correction and lose over 100 pips. The risk-off sentiment yesterday lead the financial markets with the greenback standing strongly against the common currency as well as other main competitors


The decline is not just about the risk-off sentiment with the euro which also had its weakness that was primarily because of the tension between EU Commission and Italy on the 2019 budget. Moreover, the rhetoric by ECB’s Weidmann saying that policy normalization may take a long time.


This adds high bearish pressure on the common currency with concerns on the possible sanction for the Italian government from EU being lenient to France on budget concerns. Italy pointed out that growing out may lead to an economic slowdown that may affect the whole of Europe.


How the EU reacted may add a bearish pressure to the euro if it turns out against Italy, that could add political tension and reach new highs. However, the yields differential may decline abruptly, raising again the euro to yesterday’s high of 1.1472 if the EU becomes more dovish. As for the headlines, there is no data to be released from the Eurozone but existing homes sales data and core durable goods from the US are scheduled today, as well as the weekly crude oil inventory.

EUR/USD Fundamental Analysis: November 23, 2018





The euro major is moving steadily upward higher than the 1.14 during the Asian session as the sentiment on the common currency shifted by the Brexit optimism and general weakness of the US dollar as markets prepare for the Markit preliminary of November PMI scheduled later from the EU and the US. The euro gained early bids amid thinned market due to holidays. The Asian market supports the Brexit declaration as talked about by the UK and the European Commission for the night that lays out trade relationship prior to the Brexit summer this Sunday.


The weakened US dollar across the market amid trading concerns of the Fed may tighten and slowed down the pace but keeps the currency afloat. Moreover, the euro supported the ECB minutes that showed the central bank pursuing the QE easing program in December in the background of sluggish Eurozone economic growth. On the headlines, the Eurozone flash manufacturing and services PMI reports will boost and Italian budget concern will still have an influence over the euro in the next few days.