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  • MartinWilliams
    The sell-off across the markets

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    The week has started with a cautious note, as the news surrounding coronavirus combined with the attack of the US embassy in Baghdad increased the risk-off sentiment in the markets.
    Coronavirus is spreading

    What is a coronavirus and how it affects the markets? You can read more about it in our recent article. Long story short, it is a deadly pneumonia-like disease that started in the food markets of middle China. China has already reported more than 2,700 cases of coronavirus. The country even extended the Lunar New year holiday after the reports of 80 confirmed deaths. And while the doctors are looking for a cure, the spread of the virus continues.
    The attack of the US embassy

    Five rockets crashed near the US embassy in Iraq amid the wide protests in the country. The demonstrators have been demanding the removal of the ruling elite and an end to foreign interference in Iraqi politics.
    The market reaction

    The risk-weighted assets reacted immediately to the news. Of course, the initial reaction has been visible on the USD/CNH chart. The pair gapped up towards the crossover of the 200- and 50- day SMA at 6.9795. At the moment, bulls are targeting the next key resistance at 7.014. The key level on the downside will be placed at 6.9525. The next one is 6.92.

    Against the USD, the Australian dollar gapped down towards the 0.6770 level on the daily chart. Strong bearish pressure may pull the pair lower to the 0.6750 level. The upside momentum will be limited by the 0.6820 and 0.6855 levels.

    USD/JPY has been showing a mixed performance. After the opening below the 50-day SMA and the 109 level, bulls have been trying to take back their positions. On the other hand, bears are still trying to pull the pair as low as the 200-day SMA at 108.47. The next key support will lie at 108.25.

    Gold has retested the highs of early January around the $1,585 level. Increased risk-off sentiment may push it higher towards $1,600. On the downside, there is support at $1,538.

    Oil prices opened much weaker, too. The price of Brent fell to the lows of last October, looking forward the support at $58.2. The next key level for bears will lie at $57.3. Bulls need to push the price above the $60 level to get back their positions.

    WTI inched lower, too. Right now the price is moving down towards $51.85. The next support in focus will be placed at $51. The key level for bulls is placed at $54.

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  • MartinWilliams
    Retail data may shake the loonie

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    Canada will publish the headline and core retail sales on January 24 at 15:30 MT time.

    Retail indicators show the change in the total value of sales at the retail level. The main difference between the headline and core indicators lies in the fact, that the latter excludes automobile sales due to their volatility. Last time both indicators came out much lower than the projections. While the forecasts were quite optimistic, the actual figures showed a decline. The retail sales fell by 1.2%, and core retail sales - by 0.5%. As a result, the Canadian dollar moved down. Will we see a different outcome this time?

    • If the indicators are greater than the forecast, the loonie will rise;

    • If the indicators are lower than the forecasts, the loonie will fall.

    Check the economic calendar

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  • MartinWilliams
    Important events this week will bring us

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    How does the year begin for Australian consumers?

    Westpac Consumer Sentiment will be announced at 01:30 MT time on Wednesday (Tuesday, 23:30 GMT). This indicator shows the overall economic activity status in the country through polling more than 1000 households and obtaining their feedback on past and future economic conditions. The December release was at -1.9; if this week’s indicator comes higher than forecast, it will mean an improved economic outlook.

    Jobs data will be released at 02:30 MT time (00:30 GMT) on Thursday. Almost 40K jobs added referring to November were much more than what the market expected, for December analysts look for 11.2K new jobs. If the actual figure outperforms the forecast again, the AUD will be supported.
    BOC takes the word

    The Canadian interest rate will be announced at 17:00 MT (15:00 GMT) on Wednesday. No change is expected to the current level of 1.75%, so the main focus will be at the BOC’s press conference following at 18:15 MT (16:15 GMT). If there are dovish notes, CAD may be under pressure down.
    How long quantitative easing will continue?

    ECB’s press conference will be at 15:30 MT time (13:30 GMT) on Thursday, after the interest rate announcement at 14:45 MT time (12:45 GMT) the same day. Also, a separate speech by the ECB president Christine Lagarde is scheduled at 11:30 MT time (09:30 GMT) on Friday. As there is no change foreseen for the rate itself, the audience will wait for the hints in the speech of the ECB President, particularly to outline the quantitative easing that the policymakers have been pressing on. Continuation of this line drives the EUR down.
    The Brexit year begins for the British economy

    The British PMI will be released at 11:30 MT time (09:30 GMT) on Friday. While the ECB President is unveiling the economic outlook for the Eurozone, the GBP will receive something to move on. The forecast referring to the month of December is slightly higher than the figures of the previous release for both the manufacturing and service sectors. If the results outperform what the market expects on Friday, the GBP will receive a boost.

    Using these events, you may trade AUD/USD and USD/CAD, referring to the Australian and Canadian indicators, and EUR/GBP within the context of the announcements from the UK and European economic authorities. However, other pairs with the mentioned currencies will be affected as well. That's why we welcome you to follow the news with FBS and see particular trade ideas offered daily.

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  • MartinWilliams
    Important events this week will bring us

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    American and British consumer prices

    The market awaits the US consumer prices on Tuesday at 15:30 MT time (12:30 GMT) and the British CPI on Wednesday at 11:30 MT time (9:30 GMT). No major surprises are expected by analysts: while the American headline and core CPIs are anticipated to advance by 0.2%, the British consumer price index may reach the same level as during the previous release, showing the increase by 1.5%. As usual, higher-than-expected figures will bring positive momentum to the USD.
    In the end, it needs a sign

    Donald Trump plans to meet with the Chinese side on Wednesday, where he is going to sign the “phase one trade deal”. Despite the optimism on the agreement, the details of the document have still not been announced and reportedly remain under review. We expect the comments by both sides and the final details of the deal. As it may fail to meet the market’s expectations, Wednesday’s trade will largely depend on the risk sentiment.

    The risk may also be affected by the US-Iran tensions after the latter admitted it shot down a Ukrainian airliner by mistake.
    Retail sales of the US

    The week will be highlighted by yet another important indicators for the United States, which are retail sales and core retail sales. The indicators will be published on Thursday at 15:30 MT (12:30 GMT). Analysts are optimistic in their forecasts; both headline and core indicators are anticipated to rise by 0.5% and 0.3% accordingly.
    Earning reports by the US banks

    This will be the first earnings week of 2020 with Citigroup and JPMorgan releasing their financial results on Tuesday and Alcoa with the Bank of America on Wednesday. While JP Morgan is forecast to release the revenue of $27.96 billion and EPS equaled 2.37, experts suggest Citigroup posting EPS of 1.86 and the revenue of $73.9 billion. At the same time, the earnings of Alcoa are expected to decline, with a revenue of $2.48 billion and EPS of -0.21.
    Exotic currencies are under the spotlight

    The Bank of Turkey and the South African Reserve banks will hold their meetings on Thursday. The decisions by the regulators may affect the TRY and the ZAR.

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  • MartinWilliams
    Main currency pairs: closing the week

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    Friday rolls in, closing the first market week of the year 2020. Below, we briefly go through the opportunities this day offers for some key currency pairs in view of important events of the previous and coming days.
    USD: all set for the NFP

    Of course, markets wait for the Non-Farm Payrolls (out at 15:30 MT time). The overall situation for the US dollar looks positive for various reasons. First, the fears of the conflict escalation with Iran have subsided, losing the focus of the audience and letting the risk appetite get back from safe-havens. Second, the US-China deal is on the way, with the Chinese officials planned to visit Washington DC next week and finally sign the deal on January 15. Third, the recent economic indicators released by the US authorities give a good impression, not to mention surprisingly strong data on the previous NFP.

    Hence, let’s see if USD manages to break some of the local barriers after the obstacles get removed from its way up. Against the JPY, 109.70 has been the resistance level capping the bullish moods since May 2019. Last, two months show that the currency pair has been testing this line again and again. Will today be the breakthrough?

    Against the EUR, the price is testing the support of the 200-period Moving Average. Also, that is where the bottom line of the December uptrend is located – EUR/USD went into consolidation there at 1.1106. Will this trend be broken as well, leading to the reversal upwards? Let’s see what the NFP brings.

    EUR/GBP: dotting the “I’s” for Brexit

    The future is finally decided. Boris Johnson’s EU Withdrawal Agreement has been approved in the House of Commons and passed to the House of Lords. 31Jan confirming the end of the relationship is now merely a formality. Now, all eyes will be on the course of negotiations between the UK and the EU. The European Commission President Ursula von der Leyen said it will be almost impossible to have all the points negotiated until the end of 2020, so the fears of a bad Brexit are amassing. On the other side, the Eurozone’s own economic indicators are not that good, although there are signing of the European economy picking up the pace. That’s why we see EUR/GBP struggling to decide where to go, right in the crossing area of the Moving Averages at the level of 0.8500. Which direction it will choose? So far, the table is tilted towards the EUR more.

    AUD: lands on fire, currency rising

    Against all odds, the AUD is rising. While the bushfires keep damaging the Australian economy and the rumors of the RBA going dovish in February are voiced out among the observers, the AUD/NZD grows to 1.038 to test the 50-period Moving Average. If that resistance is broken and the currency manages to climb above 1.0400 to challenge the 100-MA, it will move into the upper part of the downtrend prevailing during the last month and possibly challenging it later on.

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  • MartinWilliams
    GOLD: bullish move on US-Iran conflict escalation

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    Missiles landing, plane crashing

    Missiles have landed today at US airbases in Iraq. This was Iranian retaliation for the killing of elite Quds Force commander Qassem Soleimani by American forces. Another piece of news was that a plane bound to Ukraine crashed in Iran with all passengers and staff dying. No surprise, gold rose to $1,600 as investors seek refuge and hedge their risks against market drawdowns.

    Broader consequences

    $1,600 may not be the end of it. Analysts at Goldman Sachs say that gold may reach $1,625 this quarter if the Middle East crisis persists. Notice though that even this forecast may be too modest: if the price fixes above the Fibonacci level at $1,585, the next one will be as high as at $1,730 – that’s $145 above the current price!

    What's next

    The US President Donald Trump did not specify the losses of the US bases. On the contrary, he tweeted “so far, so good!” and promised to give a speech today. Hence, this seems to be the major event to look forward to. At this moment, gold is correcting to the downside a bit, but the situation has all the prerequisites to put further pressure down on the USD and keep pushing the precious metal higher. The medium-term outlook for gold will remain positive as along as the price remains above the 2019 high at $1,557. Therefore, it’s a good moment to buy the precious metal and look forward to what the US president says.

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  • MartinWilliams
    TESLA: up to $500 per share or not so fast?

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    What happened

    On December 30, Tesla celebrated its first Model-3 vehicle moving off the company’s first overseas plant in Shanghai, China.
    What does it mean

    Tesla is trying to conquer the Chinese market, being an electric vehicle production pioneer. This goal is pursued because the company sees the strategic importance and vast potential of the Chinese consumer demand. Reaching a success here would mean that Tesla is truly going global.

    However, there are various factors against that: a general drop in the Chinese domestic consumer demand as a trade war echo, a mid-term drop in the electric vehicles demand among the population, the vehicles may be affordable for a narrower market segment than what the company expects, the company’s own financial bumps, competitors and others.
    Where are we now

    The company stock price broke through the previous all-time high of $390 in the middle of December. On the daily chart, $435 per share was reached in one leap, followed by a brief correction down to $403. However, the mentioned first Model-3 appearing from the Tesla Shanghai factory gates pushed the price up again. Consequently, it is now at the current all-time high of $443 per share.

    Where is it going

    Now, all eyes will be on Tesla’s Chinese sales dynamics. If these go well, eventually, that will prove that the company’s strategic decision to tap into China’s market was the right one. If it happens, the company stock will indeed has all it takes to reach $500 per share as analysts forecast. If not, we will see what else Elon Musk has up his sleeve.
    Before you go

    You can trade Tesla stock in line with other stocks FBS offers.

    To do that, you need to:

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  • MartinWilliams
    Cautious moods entering the market

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    A shattered hope for a quiet start

    As we have observed in the previous article, the escalation of the chronic US-Iran conflict put the Middle East unrest into the focus of the world’s political and economic news. Since the death of the Iranian military commander, general Soleimani, the countries only exchanged mutual threats. That pushed the markets away from the outright positive moods to the risk-aversion scenarios with the corresponding currencies and commodities.

    Brent is already trading at $70 per barrel. We mentioned this level as the expected maximum of the price movement for this year in the 2020 forecast for oil. On the daily chart below, the price reached this high with confidence, having now $73 as the next target. If no better news comes from the US-Iran front, there will be a high probability of the price getting there quite soon.

    In general, the oil will be the first item to react to any Middle East news. As it is produced in this region, any shaky movement will push its price upwards (to the joy of OPEC+ and other oil-exporting countries, including the US, by the way).

    Gold rose to where it has not been since 2013. On the weekly chart, it broke the August-2019 high of $1530 per ounce to the levels of $1570. The next resistance lies at $1610 at the level of the March-2013 high. The supports may be kept at $1483 and $1453. However, these are likely to stay untouched if the situation in the Middle East keeps evolving in the same direction.

    Swiss franc

    On the H1, January 3 is where the local downtrend starts – that’s when the news about the Iranian military commander was released. Before that, the USD/CHF was mostly rising. Now, the currency pair is traded at 0.9713, going into consolidation at the 50-period Moving Average level. That reflects the inner logic of the situation: the otherwise positive market mood waiting to see the US-China deal signed tripped at the sudden Middle East tension surge. If things go the same direction, the Swiss franc will keep gaining strength as the primary safe-haven currency, in line with the other ones.


    No one expected the US-Iran relations to receive this sudden blow, but this is how things work. However, it would be an overstatement to say that the market seriously trembled. Yes, we saw related currencies and commodities react to the US-Iran worrying news, but nothing extraordinary happened so far. Now, it will be safe to assume that the market shrugs off an openly positive mood and enters a more cautious mode to receive more news about the Middle East situation and weigh them against the US-China trade deal confirmations.

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  • MartinWilliams
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  • MartinWilliams
    Where will EUR/USD head to?

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    Morgan Stanley forecasts EUR/USD at 1.16 at the end of March 2020, ahead of a further rise to 1.18 by the end of June 2020. According to the bank, Eurozone growth will pick up as US growth starts to slow. In addition, the euro will be supported by political factors. A 2020 resolution to Brexit should reduce economic uncertainty for the UK and its major trading partners, including the euro area.

    Rabobank reminds, however, that the USD is still the only dominant currency on the global payments system and that the US economy continues to perform well relative to other major countries.” The bank foresees EUR/USD at 1.09 in a three month period and at 1.11 in nine months.

    BNP Paribas is somewhere in the middle. Its analysts think that the Fed will cut its official rate twice in the first half of 2020 in reaction to a slowing economy, moderate inflation, and high uncertainty. At the same time, the ECB will also keep the accommodative policy and this won’t let the euro strengthen much against the USD. As a result, there will be little change in EUR/USD even though the euro’s fair value is quite higher than current pricing.

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  • MartinWilliams
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  • MartinWilliams
    Will the US crude oil inventories push the USD up?

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    The American Crude Oil inventories will be announced at 18:00 MT time on December 27.

    In view of the OPEC’s last meeting and the ongoing discussions around the world oil production and prices, the American crude oil inventories are an important figure to watch out for. Although it is not a prime indicator like a total US crude oil output, still, it has an impact on the market, especially on the CAD after the USD, due to the robust energy sector of Canada connected with the US. While the USD rises on the expansion of this indicator, the influence on the CAD is inverted; decreasing American oil inventories would put the USD under pressure down and support the CAD.

    If the figures are higher than expected, the USD will be supported;

    If the figures are lower than expected, the USD will be under pressure down.

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  • MartinWilliams
    With this app your investment life could be easier!

    The FBS mobile personal area is no exception. Imagine – you can access your essential trading account info from one place wherever you are. You are on vacation – great! You sip a refreshing lemonade and feel the urge to check on your transactions or track statistics – you are welcome.
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  • MartinWilliams
    The undone victory for the GBP

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    Yesterday, we were fearing that a strict Brexit deadline announced by the UK PM Boris Johnson and other ministers may put excessive pressure downwards on the GBP in the short-term and the long-term.

    Now, we see that all the gains that the GBP won on the Conservatives’ victory are undone. Moreover, the British pound seems to be preparing to continue falling against the major currencies in the observable future.

    Against the euro

    On the H4, the upsurge of EUR/GBP reached higher than where it dropped from on the day of the UK elections. More so, it crossed the 50-period and 100-period Moving Averages, now testing the resistance of 200-MA. The next big step would be the high of 0.8600, reached in November.

    However, we see the consolidation and the slowdown of the current steep rise right at the resistance of the 200-period Moving Average. The Awesome Oscillator also shows that a high may have been reached, and the momentum for this particular upsurge has been exhausted.

    Climbing further up requires additional power and most probably additional confirmation from the Conservatives side that they would not back down on their strict agenda. If such news comes in, we may witness the start of a gradual change in the overall trend. In addition, given the context of the situation and the commentaries already provided by the UK PM Mr. Johnson and his colleagues, the absence of any information disproving the rigidity of their plan may also serve as a confirmation of the looming hard Brexit. In this case, it will cause further weakening of the GBP.
    Against the USD

    Against the USD, the GBP has dropped to the level of 1.3100 where it started its leap on December 12, breaking through the 50-period Moving Average. On the H4, the price is currently testing the support of the 100-period MA, showing signs of consolidation. Same as in the case with the euro, it is likely that the price will stay at the current support level for a while, waiting for additional information to guide the market movement. It may show a slight movement upwards or go sideways. If it does cross the 100-period Moving Average, it would be a sign that the market indeed has little hope for the GBP in the context of hard Brexit.

    Against other currencies

    Most of the GBP currency pairs show a very similar dynamic, with certain variations. On the H4 of GBP/CHF, the price has crossed the 50-period, 100-period, and 200-period Moving Average on the way down. Currently, it is testing the support of 1.2813, left at the beginning of December. Crossing that line would mean the price aims at the level of 1.2680, along which it has been trading in October-November.


    The impact of the announced Brexit agenda by the Conservatives is visible at the market. Now, the question is whether it will be a short-term disappointment or a start of a larger trend change.

    To answer that, we need to follow the news and keep an eye on the price movement against the mid-term and long-term thresholds.

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  • MartinWilliams
    Did Trump impeachment affect the currency market?

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    Good Thursday, world! We’ve got plenty of news and important releases since yesterday. Did they have a major impact on the market, though? Let’s see.
    Tough time for the US presidency?

    During yesterday’s American trading session, the US House of Representatives voted to impeach US President Donald Trump. Trump was charged with abusing of power. That decision made him the third US president in US history to be impeached. However, the support of impeachment in the House does not immediately remove the 45th US president from the office, as the final word still belongs to the Senate. As the Republicans (Donald Trump’s party) have a majority in that chamber, the vote supported by the Democrats will barely change anything.

    The currency market was not affected by the impeachment process with no effect on the USD.
    Australian labor market gets stronger

    During the Asian trading session, the Australian dollar was boosted by the release of Australia’s job data. The employment change showed a solid growth by 39.9K (vs. 14.5K expected), and the unemployment rate declined from 5.3% to 5.2%. AUD/USD has risen by around 35 pips since the start of the day.
    Bank of Japan: no hurry needed

    The Bank of Japan kept its interest rate unchanged at -0.1% during today’s meeting. The BOJ Governor Haruhiko Kuroda expressed the positive views on the economy but noted that the global uncertainties remain. The bank will continue monetary policy easing until the economic conditions get better.
    What is ahead

    The main focus will be on the Bank of England monetary policy summary at 14:00 MT. It would be interesting to hear the comments by Governor Mark Carney after the election is over. Follow the news and stay updated.

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