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  • The Euro continues growing. Overview for 16.11.2020


    The major currency pair continues rising on Monday; market players are still interested in risks.

    EURUSD is growing early in another November week. The current quote for the instrument is 1.1864.

    The currency market is still quite interested in risks despite the fact that the second wave of the COVID-19 pandemic is spreading extremely fast around Europe and the USA. Last week, market players were pretty happy to hear the news about the vaccine but these emotions died down, just as expected.

    The Euro managed to survive even after the Euro Area reported on its GDP for the third quarter of 2020. According to Eurostat, the region’s economy showed -4.4% y/y against the expected reading of -4.3% y/y. However, on QoQ, the indicator showed 12.6% after being -11.8% the quarter before and against the expected reading of 12.7%. The components of the report showed that all major economies in the region posted record GDP expansion rates: France (18.2%), Spain (16.7%), Italy (16.1%), and Germany (8.2%).

    The USA reported on the Michigan Consumer Sentiment, which showed 77.0 points in November after being 81.8 points (the highest over the last seven months). Market expectations imply 82.0 points, that’s why such a significant decline was quite an unpleasant surprise. The components of the report show that the future economic prospects fell from 79.2 points to 71.3 points.

    This week, investors will continue monitoring twists and turns of American politics, and the country is scheduled to report on several macroeconomic indicators, including the Retail Sales.

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

    Comment


    • The Pound is rising a little bit. Overview for 17.11.2020


      GBPUSD is back to growing despite quite alarming signals from the Brexit talks.

      The British Pound remains “in the black” against the USD on Tuesday afternoon. The current quote for the instrument is 1.3222.

      Less and less time is left for the Brexit trade agreement. Yesterday, the European Union once again warned the United Kingdom that there weren’t many possible scenarios for the trade agreement left and that might be a serious problem for ratification of the agreements, which were still possible to conclude. It’s been almost five years since the popular referendum when the Brits voted to lead the European Union but the parties still haven’t been able to agree on trade and borders.

      It might well be that the parties won’t be able to arrive at a consensus, more especially as Ireland, for example, believes that only a week left for negotiations. In this case, the United Kingdom will exit the alliance without the trade agreement, i.e., without the deal it started all this drama for. The country, which is already devastated by the pandemic and multiple restrictions in business, will be hurt much more.

      The agreement-less Brexit will be a significant stress for financial markets. Trade circulation between the UK and the EU is about 1 billion USD per year and it’s still unclear how supply chains will work for British companies inside and outside of Europe.

      However, it seems like the Pound is currently ignoring risks of the “hardcore” Brexit scenario, which now seems rather inevitable, despite the fact that a year ago market players were really afraid of them.

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

      Comment


      • The Euro is looking up. Overview for 18.11.2020


        EURUSD continues growing while the USD is waiting for stimulus.

        The major currency pair is looking up and may continue moving upwards as long as the USD is pressured by the possibility of a new stimulus package for the American economy. The current quote for the instrument is 1.1880.

        Yesterday, it became known that the Republicans confirmed their approval of the possibility of a new stimulus package for the US economy. But now it's $500B, although earlier it was $1-1.5T. The amount of half a billion may even be approved by Donald Trump if required but the American economy needs more considerable support than this.

        As a matter of fact, the USD exchange rate is already including this possibility of additional stimulus, and the American currency may continue weakening while policymakers are discussing it. The USD quickly correct right after they finally decide on the exact sum.

        According to the statistics published yesterday, the Industrial Production in the USA added 1.1% m/m in October against the expected reading of +1.0% m/m. At the same time, on YoY, the indicator was -5.3% after showing -6.7% in the previous month. The Capacity Utilization Rate was 72.8% in October, which is better than market expectations of 72.3%.

        It’s quite interesting that the Manufacturing Production also improved in October – it showed +1.0% m/m.

        Yes, the Industrial Production balanced a little bit in October but the growing number of new coronavirus cases in the USA may cause a lot of problems at factories and manufacturing facilities in the future.

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

        Comment


        • The Australian Dollar is falling. Overview for 19.11.2020


          AUDUSD remains under pressure on Thursday; the employment statistics didn’t support the Aussie.

          The Australian Dollar continues falling against the USD on Thursday. The current quote for the instrument is 0.7293.

          The statistics on employment published by Australia in the morning couldn’t support the Aussie. For example, the Unemployment Rate in the country went from 6.9% in September to 7.0% in October. However, it’s still better than expected (7.1%).

          Another report, the Employment Change, showed 178.8K in October after being -42.5K in the previous month and against the expected reading of -26.7K. The components of the report showed that the number of both full-time and part-time jobs improved.

          The method of calculating the labor force has changed a little bit. From now on, it also includes those who are registered in the JobKeeper system. These people, just like other unemployed, have to look for a job and, as a result, are considered and as a full-time labor force. This is the reason why the number of people without steady jobs increased by 26K in October.

          Some components of the published statistics are a bit alarming but generally, the situation is quite okay. Australia is very experienced in the quick diversification of its labor market after switching from extractive to mixed economy and that’s very helpful right now.

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

          Comment


          • The Euro is deciding on the direction. Overview for 23.11.2020


            Early in another November week, EURUSD is rising a little bit and doing a good job in dealing with external pressure.

            The major currency pair is moving upwards and keeping its positive momentum, although market players have serious doubts about the future. The current quote for the instrument is 1.1871.

            The emotions after the presidential elections in the USA settled down, so investors switched their attention to the US Congress to follow numerous verbal battles over a new stimulus package that are going to take place for the next several weeks.

            The statistics published last Friday showed that the Consumer Confidence in the Euro Area went from -16 points in September to -18 points in October. As for the European Union, the same indicator dropped to -19 points after being -16.5 points over the same period of time.

            This week, the Euro Area and the USA are scheduled to report on the PMI. Also, the USA is going to publish the second estimate of the GDP for the third quarter of 2020, the Durable Goods Orders and the Core Durable Goods Orders for October, and the Consumer Confidence from Conference Board for November. Moreover, market players will see the FOMC Meeting Minutes.

            As usual, market players will look through the FOMC report to find any hints at the expansion of the stimulus package to support the US economy. The report is highly unlikely to offer anything dramatically new but investors always find something interesting in it.

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

            Comment


            • EURUSD is in suspense again. Overview for 24.11.2020


              EURUSD dropped yesterday but managed to reach stability today; at the moment, the pair is monitoring the external background.

              The major currency pair lost its positive momentum last night and is currently trying to restore it. The current quote for the instrument is 1.1855.

              The statistics published by the USA yesterday turned out to be better than expected and, as a result, somehow alleviated market concerns about the economic slowdown. For example, the preliminary report on the Manufacturing PMI from Markit showed 56.7 points in November after being 53.4 points the month before. The same indicator for the service industry improved up to 57.7 points after being 56.9 points in October.

              As for the Euro Area, the PMI data was rather sad. The Manufacturing PMI dropped to 53.6 points in November after being 54.8 points in the previous months. The Services PMI went from 46.9 points in October to 41.3 points this month.

              However, the optimism on the market is somehow supported by the good news about the creation of vaccines against the Covid-19 – the was some information about the third one. This news prevents the USD from strengthening and maintains an interest in the European currency despite weak macroeconomic reports.

              Today, one should pay attention to the Consumer Confidence from the Conference Board in the USA for November, which is expected to get worse.

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

              Comment


              • The Yen is deciding on the direction. Overview for 25.11.2020


                On Wednesday morning, USDJPY is falling a little bit but it seems like the Yen hasn’t decided on the direction yet.

                It looks like the Japanese Yen took a break against the USD. The current quote for the instrument is 104.50.

                Lack of the demand for the Yen is quite clear: investors aren’t looking for a “safe haven” right now as they are expecting an effective and safe (and affordable, if possible) vaccine against the coronavirus, because it may be a game-changer in the fight with the global pandemic and help the world’s economies to start recovering. These expectations put the Yen on the back burner of investors’ attention.

                Some particular improvement of the Yen is good for the Japanese exporters and the country’s overall financial system.

                The Bank of Japan Governor Haruhiko Kuroda said yesterday that financial and monetary policies were coordinated much better during this crisis than the previous ones. According to his opinion, the regulator did a great job in providing major banks with liquidity, thus helping to prevent negative associations between financial performance and economic activity.

                At the same time, the BoJ still believes that the global uncertainty remains pretty high and that’s a great risk.

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

                Comment


                • The Euro remains strong. Overview for 26.11.2020


                  The major currency pair continues growing on Thursday afternoon; investors are still interested in risks.

                  EURUSD continues rising in anticipation of a soon defeat of the coronavirus pandemic. The current quote for the instrument is 1.1938.

                  Market players remain positive – they do count that an effective vaccine against the Covid-19 will be available in the nearest future. Such expectations help the Euro to rise high.

                  The statistics published yesterday showed that the New Home Sales in the USA went up to 999K in October after being 959K in the previous month. The actual reading is better than expected and that’s a quite logical response of the country’s population to low interest rates.

                  However, there is something interesting. The Personal Income in the USA was -0.7% m/m in October after being +0.9% m/m in September. At the same time, the Personal Spending improved by 0.5% m/m after expanding by 1.4% m/m the month before and against the expected reading of +0.4% m/m. The revised report of the University of Michigan of the Consumer Sentiment showed 76.9 points in November after being 77.0 points in October.

                  If the White House and the FOMC do not expand the stimulus program, consumer spending will start declining in response to a possible slowdown in the economic recovery rate.

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

                  Comment


                  • The Euro is looking up. Overview for 27.11.2020


                    After a short pause, the major currency pair is back to growing.

                    After slowing down a little bit yesterday, EURUSD resumed its growth. The current quote for the instrument is 1.1922.

                    There were no important statistics from the USA yesterday due to Thanksgiving Day and no significant reports are expected today as well.

                    However, the data published by Germany showed a clear deterioration of indicators. For example, the GfK Consumer Climate dropped from -3.1 points in November to -6.7 points in December, which is much worse than expected (-4.9 points). But it’s no surprise as the consumer sentiment is really going down. The key reasons are the tourism sector slump and restrictions in social activities, such as the closure of restaurants, shopping malls, and multiplexes. Of course, it’s not inspiring and forces the population to save money. As a result, the consumer climate got much worse.

                    The components of the report show that the gauge for economic outlook fell from 7.3 points to -0.2 points. It’s the lowest reading since May.

                    There will be barely any important numbers today, so the market will continue “drifting along”. In Europe and the USA, starts a sales season called “Black Friday”.

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

                    Comment


                    • The Australian Dollar renewing highs. Overview for 30.11.2020


                      The Australian Dollar in pair with its American “colleague” is aiming up high, currently trading at 0.7387.

                      The Chinese statistics turned out positive. The industrial PMI in November grew to 52.1 points against 51.4 points previously. The same indicator in services grew to 56.4 points, which was still higher than the forecast 56.0 points.

                      Stability and positive moods in China are extremely important for Australia because they have long been key trade partners.

                      The Australian statistics is less important today, showing the ambiguity in individual crediting issues in October.

                      On Monday, which is the last trading day of the month and autumn, the interest in risks in the world market remains high. The USD stays depressed, letting other currencies restore.

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

                      Comment


                      • Australian Dollar failed to support the wave of growth. Overview for 01.12.2020


                        On Tuesday afternoon, the Australian dollar in pair with the US dollar is correcting upon sky-rocketing yesterday. The current quotation is 0.7365.

                        At the December meeting, the Reserve bank of Australia left the interest rate without change at 0.1% per annum. Neither it changed its credit and monetary policy. RBA representatives commented that the consequences of the pandemics would take time and effort to eliminate.

                        The RBA plans to keep the interest rate low for as long as the economy really needs it. The bank especially noted the crisis in the healthcare sector that would hold back the development of macroeconomy later on. Good news about the vaccine that emerge frequently in the media enhance social moods. However, even with such a backup the RBA remains realistic and does not expect the GDP to recuperate until the end of 2021.

                        Moreover, the RBA expects a certain increase in the unemployment levels. This is inevitable regardless of the measures taken by the regulator and the government. According to the freshest data, the unemployment rate in October amounted to 7%. The CB expects the lengthy period of high unemployment rates and excessive processing powers will together lead to an increase in earnings and prices. Simultaneously, the RBA and government realize that solving the unemployment issue is the key national priority – and are reasonable enough to say it out loud.

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

                        Comment


                        • EURUSD quotations rose to the of 36 months. Overview for 02.12.2020


                          This December, the EURUSD pair is full of optimism, renewing the highs of the last 36 months. The current quotation is 1.2005. Previously, the instrument was so expensive on April 30th, 2018.

                          The interest to risk on various platforms has increased tangibly. This is connected to the anticipation of new stimuli in the US finance and the restoration of global economies. Specifically, I mean the bill discussed in the USA yesterday: it presumes that stimulation by 908 billion USD must start right away to have a visible effect on the economy by March 31st. Inside this package, some 228 billion USD must be allocated for supporting hotel business and services, including restaurants and other small businesses. This is a very good signal for the US economy: it has always got out of the toughest crises fighting at wars and supporting small business. Naturally, the second option is safer and more appealing.

                          Also, dialog resumed between the US Secretary of the Treasury and the speaker of the House of Representatives. The politicians had held the distance for a month, creating excessive tension in society.

                          Also, the world is quite optimistic about the vaccine against the coronavirus, believing that it will soon appear. All this drowns the dollar almost literally.

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

                          Comment


                          • EURUSD is excessively optimistic. Overview for 03.12.2020


                            On Thursday morning, EURUSD is renewing more highs of the last 36 months and looks up. The current quotation is 1.2115.

                            The European statistics published yesterday demonstrated that the unemployment rate in October decreased a bit in accordance with forecasts, reaching 8.4% against 8.5% previously. This means that the situation in the employment sector is developing along with the expectations.

                            The USA started publishing labor market statistics of last month. The first index to be published is usually the ADP Non-Farm Employment Change. The number of workplaces here grew by 307 thousand places against the forecast 433 thousand and the previous increase of 404 thousand. Well, the statistics are, indeed, somewhat weaker than the forecasts and latest average but the results might be influenced by the general depression due to the pandemics, and the seasonal factor.

                            The ADP data and the NFP publication on Friday do not correlate directly but you have the idea of general moods.

                            On the whole, the market is quite optimistic, the interest to risk is huge, and investors are absolutely sure that the vaccine will fight back the virus.

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

                            Comment


                            • Euro relies upon the interest to risk. Overview for 04.12.2020


                              Yesterday EURUSD renewed another high of the last 36 months and remains strong this morning. Investors have never been so sure of what they are doing — so they keep buying. The current EURUSD quotation is 1.2151.

                              The statistics is generally positive for those who are ready to buy.

                              For example, retail sales in the EU in October grew twice as forecast — by 1.5% m/m against 0.7% m/m and a preceding slump by 1.7% m/m. This might mean that consumers are more confident than before

                              The Unemployment Claims index (USA) demonstrates a decline to 712 thousand against 787 thousand a week ago. A decline was expected, yet the forecasts were much more conservative. The market is stabilizing smoothly, improving its positions — after all, the USA have always known how to employ crowds.

                              The PMI in Services officially dropped to 55.9 points from 56.6 points earlier. Meanwhile, Markit tells us about an increase to 58.4 points against 57.7 points. The truth is normally somewhere in between.

                              Today much attention will be driven to the labor market statistics for November in the USA. The unemployment rate could have fallen a bit, while the NFP could have grown, though less prominently than earlier. As always, the devil is in the details. The dollar is weak, and any problems can become a serious blow to it.

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

                              Comment


                              • Euro remains ready for growth. Overview for 07.12.2020.


                                On Monday morning, the “euro vs US dollar” pair looks stable; it has just performed a minor technical correction and is ready for a new stage of growth. The current quotation is 1.2130.

                                Global investors remain tempted by risks regardless of the US attempts to pierce China. This time it is about possible sanctions imposed on 14 Chinese diplomats due to the members of the Legislative Council of Hong Kong having been disqualified. The situation around Hong Kong is very appealing for Washington, and Donald Trump might actually treat himself by this small attack on China before his presidency expires. He has six weeks left, and much can be done.

                                The US employment market statistics published on Friday turned out to be mixed but in the end provoked few questions.

                                The unemployment rate in November predictably decreased to 6.7% from 6.9% - this result is slightly better than forecast, still, the speed of improvement has neared its maximum. It is unlikely that we can count on a speed like this further on.

                                The NFP value has grown by 245 thousand only against forecast 480 thousand and a previous increase by 610 thousand. Next time, it is likely to be revised and increased. The average hourly earning in November fell by 0.3% m/m against the expected growth by 0.1%. On the whole, this is a normal market reaction to the decrease in the NFP.

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

                                Comment

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