No announcement yet.

Forex Fundamental Analysis & Forecast by RoboForex

  • Filter
  • Time
  • Show
Clear All
new posts

  • Forex Fundamental Analysis & Forecast by RoboForex

    The Euro couldn’t keep momentum. Overview for 21.08.2019

    EURUSD was moving upwards last night influenced the Italian news, but couldn’t continue the momentum.

    EURUSD is under slight pressure on Wednesday morning. The current quote for the instrument is 1.1094.

    The Italian Prime Minister Giuseppe Conte resigned from his position and the country’s President accepted his resignation. The reason is internal political turmoil that split the governing coalition consisted of two parties, “Five Star Movement” and “Northern League” (Italian “Movimento 5 Stelle” and “Lega Nord” respectively). Conte shifted the responsibility for this onto Matteo Salvini, the Deputy Prime Minister of Italy and the Secretary of Lega Nord.

    It appears that the parliament will be dissolved and the President will call new elections.

    For Italy, it’s an opportunity to erect a new government, which will try to solve the budget issue. The European Union warned Rome on several occasions about the consequences of the budget deficit the country had. They might be fines from the EU, at least, or suspend the country from the alliance, at most. The first scenario is quite neutral for the European currency, while the second one is extremely negative.

    Market players’ attention is still focused on the Jackson Hole Symposium this Friday, where they expected a speech from the FOMC Chairman Jerome Powell.

    Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

  • #2
    EURUSD is waiting for what Powell has to say. Overview for 23.08.2019

    On Friday, the major currency is under pressure again; investors are focused on events in Jackson Hole.

    EURUSD changed the direction once again on Friday afternoon; right now, it is moving downwards. The current quote for the instrument is 1.1069.

    Today at 5 PM Moscow time, the US Fed Chairman Jerome Powell will deliver a speech in Jackson Hole. He is widely expected to make some announcements on further prospects of the US monetary policy. The regulator may say something about the QE. Or Powell may confirm that the USA is going to continue the procedure of cutting the rate and explain why. If he does speak of softening the regulator’s monetary policy, the USD will get under serious pressure.

    The FOMC Meeting Minutes published earlier confirmed that the USA set a course for loosening, that’s why market players want Powell to say about this as much as possible.

    The current fundamental background for the European currency is quite mixed, although yesterday’s numbers were quite good. Westpac believes that the European Central Bank is ready to cut the rate and Governor Mario Draghi did a great job to prepare market players for that. In addition to that, the QE revival is also possible.

    There are some complications with Spain and Italy and their finances. Most likely, the ECB will keep this issue in sight, because uncertainty with budgets of these countries may be pretty risky for the Euro Area and the ECB’s monetary policy.

    Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


    • #3
      The Euro couldn't hold its positions. Overview for 27.08.2019

      On Tuesday afternoon, the major currency pair stopped falling but is still rather unstable.

      EURUSD reached stability after falling on Monday. The current quote for the instrument is 1.1101.

      All market players are still focused on trade wars. On the sidelines of the G7 summit, US President Donald Trump said that Chinese officials were trying to resume negotiations. Rumor has it that China want to use diplomatic officials to solve the problem instead of politicians.

      It would be good, but the fact that diplomatic officials and economists haven’t been able to handle many tense situations and come to terms after 8 months is pretty alarming. Both parties did a great job in exchanging additional tariffs, slowly destroying all possible “leftovers” of trading relations that they had before.

      The economic calendar is rather empty, just like it always is at the end of the month.

      Today, investors should pay attention to the statistics on the real estate market. The USA is going to report on the HPI, which is expected to add 0.2% m/m in June, better than the month before (+0.1% m/m). consumers are still active, despite an off-season.

      Later, the USA will publish the CB Consumer Confidence for August, which may be a rather unpleasant surprise. Market expectations are 129.3 points after 135.7 points in July. Partly, it may be just a correction after the high reading in the previous month, so before drawing far-reaching conclusions one should check the components of the report.

      Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


      • #4
        The Euro is trying to find support. Overview for 29.08.2019

        The major currency pair slowed down its decline again; all eyes are on the statistics.

        On Thursday morning, EURUSD is making another attempt to keep balance and avoid freefall. The current quote for the instrument is 1.1083.

        Today, market players will be focused on statistics. In the morning, they should pay attention to the Unemployment Change in Germany for August: it may well be that the indicator will increase. Not to say it’s too negative for the European currency, but there is nothing good in it as well.

        In the afternoon, the USA is scheduled to publish the revised GDP report for the second quarter. The indicator is expected remain the same in comparison with the preliminary reading at +2.4% q/q. Any deviations from market expectations may force investors to be more active.

        It will be interesting to check the preliminary report on the Wholesale Inventories in July, which may add 0.2% m/m. If actual and expected reading s match, it will be a good signal for the USD. Apart from this, there will be another interesting report, the Pending Home Sales, which may add only 0.1% m/m in July after skyrocketing by 2.8% in June. The contracts signed in the reporting months are considered to be fulfilled in 4-8 weeks, that’s why this decline will surely influence the real estate market numbers later and that’s an unpleasant surprise. The weaker the indicator, the worse for the real estate market and the USD in the future.

        Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


        • #5
          The Euro reached the lowest levels over the last 36 months. Overview for 02.09.2019

          The major currency pair updated the lows of May 2017 and is pretty ready to continue its decline.

          Early in September, EURUSD is under quite significant pressure. The current quote for the instrument is 1.0989.

          Last Friday, “greenback” improved against a lot of major traded currencies, the Euro in particular. The key reason for such high demand for the American currency is a new phase of trade wars: new tariffs earlier announced by both parties, China and the USA, came into effect on September 1st. They cover a lot of different goods, from technologies to clothing and footwear. Step by step, the wars are switching from politicians to consumers.

          Most likely, this topic, I mean fears of an escalation of mutual import tariffs, will be the most important for market players at the beginning of September. Needless to say that this situation is in favor of the USD.

          This week, investors will focus on the US labor market numbers: the country will release them starting from Wednesday with the ADP Non-Farm Employment Change report for August to Friday with all other important readings. The Unemployment Rate is expected to remain unchanged at 3.7%, while the above-mentioned indicator from ADP may show 159K after being 164L the month before.

          Another report to be closely watched by market players is the Average Hourly Earnings, which may add 0.3% m/m in August, the same as in July. These are good numbers, which may significantly support the USD.

          Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


          • #6
            The Australian Dollar continues rising. Overview for 04.09.2019

            AUDUSD remains "in the black" and may continue recovering.

            On Wednesday morning, the Australian Dollar is rising against the USD. The current quote for the instrument is 0.6772.

            The Aussie remains positive the statistics published in the morning were rather neutral, but it was good given the current situation. The Australian GDP added 0.5% q/q in the second quarter, the same as expected. The country’s economy didn’t regress and that’s a good point.

            At the same time, the GDP outlook is quite questionable. If the economy of China, which is Australia’s key trade and economic partner, continues slowing down, Australian numbers will be affected sooner or later.

            There are issues with Export. Due to the decline in global demand for energy commodities, Australian coal may not be sold as well as in the past and that’s a serious impact on the budget. It’s bad news, but may be only a theory so far.

            This week, Australia will report on the Trade Balance for July, which may provide answers to some of the questions.

            Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


            • #7
              The Yen stopped plunging. Overview for 06.09.2019

              On Friday, USDJPY stopped its active growth; right now, it is starting to consolidate.

              The Japanese Yen is no longer weakening against the USD. As soon as global financial tensions reduced, demand for "safe haven" assets also went down and the yen got under pressure. Right now, market players are starting to adjust their positions and analyze what is happening. The current quote for the instrument is 106.99.

              The statistics published in the morning showed that the Average Cash Earnings lost 0.3% y/y in July after adding 0.4% y/y in the previous month and against the expected reading of +0.1% y/y. It's a bad signal, which means that the state of things in Japanese companies and enterprises are so shaky that they not only stop competing for workers but also reduce expenses on them.

              The Household Spending in Japan expanded by 0.8% y/y after adding 2.7% y/y in June and against the expected reading of +0.9% y/y.

              This indicator shows how the country's population spends their money and can be considered as an objective leading indicator of economic activity. So far, it remains positive, but there are signals that the current situation is rather unstable and mixed. It's not good news for the Yen.

              Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


              • #8
                The Aussie stopped rising. Overview for 10.09.2019

                On Tuesday afternoon, AUDUSD took a short break after 6 consecutive trading sessions of stable growth.

                The Australian Dollar slowed down its growth against the USD on Tuesday. The current quote for the instrument is 0.6860.

                The statistics published in the morning showed that the NAB Business Confidence went from 4 points in July to 1 point in August. The indicator describes the sentiments of employees of the largest Australian companies except for the agriculture sector. Readings above and below zero imply improvement and deterioration of business sentiment respectively.

                So far, the indicator is still above zero, but the decline prevents the Aussie from further growth.

                In the morning, China reported on the CPI and PPI. Numbers from this country are very important for the Aussie because it’s Australia’s key trade and economic partner. So, the Chinese Consumer Price Index remained unchanged at 2.8% y/y in August, which is pretty good, although it was expected to drop to 2.6% y/y. The Producer Price Index, in its turn, plummeted by 0.8% y/y in August after losing 0.3% y/y in July and against market expectations of -0.9% y/y.

                It is apparent that the September report on inflation may show slowdown, which is not very good for the country’s economy in current conditions. Weak inflation may indicate competitive environment slump for manufacturers and weak domestic demand.

                Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


                • #9
                  The Yen is surrendering. Overview for 12.09.2019

                  USDJPY is keeping positive momentum and getting close to its six weeks highs.

                  The Japanese Yen continues falling against the USD on Thursday afternoon. The current quote for the instrument is 107.92.

                  In the morning, Japan published a lot of numbers. The first one, the Producer Price Index, lost 0.9% y/y in August after reducing by 0.6% y/y in July and against market expectations of -0.8% y/y. The indicator describes the wholesale market prices and if there is a decline in it, there will be the same in the retail prices later.

                  The Tertiary Industry Activity added 0.1% m/m in Japan in July, which is quite good, because it was expected to lose 0.3% m/m.

                  The Core Machinery Orders became weaker as it lost 6.6% m/m in July. The indicator is rather volatile: In June, it added 13.9% m/m, but this month investors expected it to drop by 9.0% m/m. As a rule, this indicator is estimated as investments in the production sector. In case of decline, the amount of money invested in production is decreasing, which is not good for the Japanese economy.

                  The Yen seldom responds to the statistics, but, of course, the numbers should be closely monitored, because they may help to predict further activities of the Bank of Japan. The current decline of the Yen rate is mostly connected with contraction in demand for “safe haven” assets.

                  Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


                  • #10
                    EURUSD will wait for decisions from the Fed. Overview for 16.09.2019

                    Early in another September week, EURUSD is quite stable; major news and events are ahead.

                    The major currency pair is barely moving at the beginning of another September week as investors are totally focused on the oil market. The current quote for the instrument is 1.1070.

                    Only China published several macroeconomic reports this morning; no new numbers are expected from both the USA and the Euro Area.

                    This week’s major focus will be on the September meeting of the American regulator, which is scheduled to start on Tuesday and last until Wednesday evening, September 18th. The FOMC is expected to cut the rate by 25 basis points. The White House’s pressure is too great for the regulator to continue resisting. Most likely, there will be one more rate cut by the Fed this year, probably in December. The country’s economy is surely in no need of such stimulus right now, but it may happen for political reasons.

                    After that, the Fed is highly likely to take a long pause and watch the economy both inside and outside the country.

                    It will be very interesting to check the comments that follow the meeting: if there must be any hints at future fiscal measures, the comments will have them. For the USD, the rate cut will be neutral, just because it is being discussed for several weeks; hence, it’s no news for investors.

                    Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


                    • #11
                      EURUSD is standing still in anticipation of the Fed's decisions. Overview for 18.09.2019

                      On Wednesday, the major currency pair is barely moving; investors are saving strengths in anticipation of news from the US Federal Reserve.

                      EURUSD is standing still on Wednesday morning and waiting for the FOMC meeting to be over. The current quote for the instrument is 1.1065.

                      Yesterday, the USD weakened a little bit as market players were adjusting their positions before the Fed's highly anticipated decision to cut the rate. The regulator's September meeting will be over tonight and investors are expecting the Fed to cut the benchmark rate by 25 basis points. As for CME (Current market expectations) that imply another rate cut until the end of this year, they are 80%. The White House is putting a lot of pressure on the Fed, hammering it for lack of activities, and believes that there should more significant rate cut than 25 basis points. Anyhow, tonight we will learn the regulator’s stance on this.

                      Yesterday's numbers from Germany supported the European currency pretty well. The ZEW Economic Sentiment went up from -44.1 points in July to -22.5 points in August. Of course, the indicator remains negative and the current correction doesn’t mean any bright future in the next 6 months, but the fact of recovery is surely positive.

                      Numbers from the USA were also quite good. The Industrial Production added 0.6% m/m in August after losing 0.1% m/m the month before and against the expected reading of +0.2% m/m. major contribution was made by machinery (+1.6%, primary metalы (+1.3%), and nonmetallic mineral products (+1.1%). However, the key problem is the same: everything in this area is very difficult to predict as long as there are trade wars between the USA and China.

                      Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


                      • #12
                        The Pound intends to rise. Overview for 20.09.2019

                        On Friday, GBPUSD is growing towards July’s highs.

                        The British Pound is trading upwards against the USD on Friday afternoon. The current quote for the instrument is 1.2570.

                        Yesterday, the Bank of England left its interest rate unchanged at 0.75%, just as expected. The regulator’s September meeting was over and the results were rather neutral: all 9 members voted in favor of keeping the regulator’s current monetary policy intact. The BoE Quantitative Easing remained at £435B.

                        In the comments, the BoE said that the inflation might weaken in case of uncertainty around the Brexit deal. In the future, the regulator is planning to shape its monetary policy based on the Pound exchange rate and the Brexit influence on the country’s economy. As they say in the BoE, prospects of global economic growth deteriorated due to trade wars. The British labor market looks quite tight, but not weak, and that’s good.

                        According to expectations, the third-quarter GDP may add 0.2%, while the CPI may remain slightly below 2.0%.

                        Market players decided that this time the BoE’s comments were too soft and, given all these Brexit influences, concluded that the regulator might consider cutting the rate in the future if necessary. The Pound’s response to that was quite positive.

                        Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


                        • #13
                          The Yen slowed down its recovery, but may resume it at any moment. Overview for 24.09.2019

                          On Tuesday morning, USDJPY stopped falling, but demand for the Yen may revive very soon.

                          After yesterday's recovery, the Japanese Yen is consolidating against the USD on Tuesday morning. The current quote for the instrument is 107.52.

                          In the morning, Japan reported on the Manufacturing PMI for September, which was only 48.9 points after being 49.3 points the month before and against the expected reading of 49.5 points. The last time the indicator surpassed 50 points, the level that separates optimists from pessimists, this May, but couldn't fix above it.

                          The key reasons for the current slowdown are the decline of the global economy and the expansion of trade tensions. Everything is very simple: the export-oriented Japanese economy can't operate at 100% with global trade wars around it.

                          The components of the report show that new order declined at a weaker pace with the export and import as well. All this proves that external factors are more significant than meets the eye.

                          The next meeting of the Bank of Japan is scheduled for October 31st, and the weak statistics may increase market expectations relating to the introduction of new stimulus measures.

                          Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


                          • #14
                            The USD strengthened significantly. Overview for 26.09.2019

                            On Thursday, the major currency pair remains under pressure after the statistics and talks about Trump's impeachment.

                            EURUSD is trying to recover on Thursday, but quite unsuccessfully so far. The current quote for the instrument is 1.0954.

                            Speculations of the US President Donald Trump's impeachment ahead that appeared yesterday resulted in the drawdown of all USD-related assets. Needless to say that under such circumstances the USD was doing great.

                            Another stressful factor was Trump's aggressive rhetoric against China because market players really counted on the quick resumption of trade talks between the parties, but it was in vain.

                            The statistics published by the USA yesterday were positive and provided additional support to the American currency. The New Home Sales went up to 713K in August after being 666K the month before and against the expected reading of 652K. Investors could have been more restrained in their response to the report, but the components showed that the sales of new single-family houses improved significantly, meaning that the real estate sector was reviving: people have no problems with creditworthiness, loans are available, and the economy is feeling fine. In this light, the USD is doing more than safely and happily.

                            Today, one should pay attention to the final report on the US GDP for the second quarter, which is highly expected to remain unchanged at 2%.

                            Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.


                            • #15
                              The Australian Dollar is getting cheaper. Overview for 30.09.2019

                              AUDUSD is retreating under pressure of the strengthened "greenback"

                              The Australian Dollar is losing positions against the Usd early in the week. The current quote for the instrument is 0.6752.

                              The statistics published by China in the morning were mostly positive. The Caixin Manufacturing PMI rose to 51.4 points in September, which is much better than 50.4 points the month before. The Manufacturing PMI added 0.3 points this month, going from 49.5 points to 49.8 points. The Non-Manufacturing PMI dropped a little bit, from 53.8 points to 53.7 points.

                              Numbers from China are very important for Australia, because China is its key trade and economic partner.

                              The key highlight in the financial world right now is the non-resumption of US-China trade talks. While these two giant economies are dividing the world’s sales market, other participants of the global trade are suffering as well.

                              Tomorrow, the Reserve Bank of Australia is scheduled to have another meeting, where it is highly anticipated to cut the rate from 1.00% to 0.75%. in general, the Aussie is ready for this scenario, but may fall at the time of market emotions in response to the RBA's comments.

                              Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.