Forextime.com Daily Market Analysis

[FXTM Official]

Forextime.com Daily Market Analysis

Fed outlook turns hawkish

The US economy was thrown back into the spotlight today as the FOMC minutes were released and the dovish FED of the past certainly looked a thing of the past, with some of the most upbeat and hawkish minutes that have been seen in a long time. Almost all of the officials present in the meeting expected that with Trumps appointment growth was expected to pick up in line with his expansionary policies. One thing that also stood out was the FED's own expectation around inflation with expectations that it will increase to the magic 2% mark in the medium term, and the recent lift in quarterly inflation was further credit to this theory. Regardless of the trump effect the FED looks to be singing the same tune as the market and that can only be positive for the bulls in the short term. The real question will be around what Trump can actually do with congress in order to get the US economy moving again and the economy expanding further - even when it's almost at full capacity when it comes to employment.

Regardless of how you viewed the FOMC minutes, the recent economic data out of the US has been positive with the construction spending m/m lifting to 0.9% (0.5% exp) and ISM manufacturing PMI also lifting to 54.7 (53.8 exp). All of this has boded well for traders and the markets have responded accordingly with the S&P 500 lifting back up to a strong level of resistance in anticipation of tomorrows economic data due out on the employment sector and the services sector as well. Even with resistance currently sitting at 2272 the expectation of further highs is fresh on traders' minds and they will be looking to push the boundaries further in the current climate. A push upwards to 2300 is very much on the cards if the market sees further positive US economic data tomorrow.

One thing that is also worth watching out for in tomorrow's trading is oil markets, previously they have been moving quite rapidly in the low volume trading and volatility is certainly ever traders friend. The recent build up in private storage showed that perhaps oil markets still needed a little more time to correct and we saw prices fall accordingly down to the 20 day moving average before finding dynamic support. Expectations are for a decline in overall oil inventories, but after the recent private reading the market may have altered its expectations.  

Technically speaking though oil is looking very strong with resistance sitting tight at 54.46, to get past this level we would need to see a large drawdown in crude oil inventories, and this may be a bit of an ask just after Christmas. Any further falls are also likely to struggle past the 20 day moving average, and even more so the 50 day moving average which is acting as dynamic support for market movements at present. 

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By Alex Gurr, Guest Analyst

Edited January 5, 2017 by FXTM Official

[FXTM Official]

Forextime.com Daily Market Analysis

Asian equities retreat as investors shift to cautious mode

After a strong start for the year, equity markets started to cool down in the second trading week of 2017. Most Asian major indices are in red today, as Wall Street failed to make new highs and the Dow retreated further from the key psychological 20,000 mark, while oil suffered a steep selloff on Monday. 

Investors who built their positions based on Trump’s victory are likely to start cashing out for the time being and shift their focus on fundamentals with the earning season kicking off later this week when U.S. big banks release their fourth quarter results. I’m not confident to call a correction yet, but certainly many investors got ahead of themselves betting on fiscal stimulus, and while business usually tends to under promise and over deliver, this doesn’t seem to be the case with the U.S. new President.   

Although Kuwait’s Oil Minister Essam Al-Marzouk who is chairing the committee to oversee compliance of OPEC’s output assured the markets that OPEC and non-OPEC members will abide to the planned cuts, still both oil benchmarks dropped 4% on Monday.  This clearly indicates that it’s not just an OPEC game, and the expected increase in U.S. and Canadian supplies are likely to threaten the oil rally. Data from the U.S. on Friday showed rig counts rose for ten consecutive weeks and it’s just about some time for this to translate into additional production, suggesting that downside risk may remain in play, and rather than just focusing on implementations of OPEC production cuts, investors should be looking at the bigger picture on whether supply will meet demand in the second half of 2017.

The U.S. dollar fell for a second day, extending its slide from the 14-year high hit on January 3. The pull back in the dollar came despite hawkish speeches from Fed officials suggesting that the central bank is getting closer to achieving its dual mandate. Both Fed presidents, Charles Evans and Patrick Harker aren’t ruling out three rate hikes in 2017, while Eric Rosengren called for stepping up the pace of interest rates hikes to prevent inflation from overshooting. However, traders are still not yet completely convinced and pricing in only two hikes for 2017 according to CME’s Fed Watch. With no tier one economic data on the calendar until Friday, U.S. bond yields will remain to be the key driver for the greenback.

The Pound remained under pressure after Monday’s steep selloff on comments from UK’s Prime Minister Theresa May which intensified fears of “Hard Brexit”. Although the pound looks undervalued, the risk of further selloff may remain in play as we get closer to triggering article 50. Meanwhile comments from Scotland’s First Minister on BBC that she’s not bluffing about her vow to hold a second referendum on Scottish independence if Britain leaves the single market is another factor to worry about on the medium-term.   

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By Hussein Sayed, Chief Market Strategist (Gulf & MENA)

[FXTM Official]

Forextime.com Daily Market Analysis

President-elect leaves dollar bulls unimpressed

The long-awaited first press conference by President-elect Donald Trump left many investors with more questions than answers as he failed to justify the current premium priced in the dollar and equity markets.

We already knew that Trump wants to build a border wall with Mexico, bring back U.S. production onshore, and that he’s willing to be the best job creator America ever knew, but what’s his plans on corporate tax reforms? How and when is he planning to spend on roads, bridges, and other infrastructure projects? Is he going to impose tariffs on imported goods from China, Mexico and the rest of the world? Unfortunately, no updates were revealed.

Thus, the greenback was dragged, falling against all major currencies on Wednesday with the dollar index falling to lowest levels since Dec 14 at 101.28. The selloff continued until early Thursday suggesting that dollar bulls are no more willing to price any additional premium until we get more clarity on his promised fiscal plans.

The continued fall in U.S. treasury yields is another factor dragging the dollar. U.S. 10 year yields have been in a down trend since Dec 14, losing 11.8% in value after spiking 42% since the election results were revealed.

U.S. stocks were less impacted, and managed to close higher despite the volatility and sharp selloff in pharma stocks which were attacked by Trump. Whether the rally can be sustained will depend on two factors, earning growth and actions from Trump’s administration as his words and tweets are clearly starting to show less influence.

The combination of dollar weakness, lower U.S. yields and doubts in Trump's policies offered gold a boost, with the yellow metal posting a high of 1,199. So far gold has recovered 6.8% from December lows, and trader higher in 11 out of 13 days. Fed Chair Janet Yellen’s speech will probably decide whether we’re going to see a break and hold above 1,200 today. 

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By Hussein Sayed, Chief Market Strategist (Gulf & MENA)

[FXTM Official]

Forextime.com Daily Market Analysis

Volatility elevated ahead of May’s Brexit speech; Pound recovers

It’s Sterling’s day.

Financial markets are anxiously awaiting U.K.’s Prime Minister Theresa May speech later today where she will lay out a detailed divorce plan from the EU. Lot of reports were leaked since Sunday on what to expect her to say, and the most interesting part is that she has no interest in partial departure which suggests we’re heading towards a “Hard Brexit”. Traders were very fast to react, sending the pound 1.6% lower on Monday to trade below 1.20. However, the recovery in early Asian trade Tuesday indicates that lot of the bad news are already priced in, and for the pound to fall substantially lower it requires more than just signs of a hard Brexit plan.  

If the Supreme court decided that May needs to secure the consent of Parliament before triggering article 50, potentially delaying Brexit for couple of months, this is likely to provide sterling a boost by unwinding many short positions. Traders should be aware that sterling won’t be a one way play and volatility could be elevated to extreme levels.

On the data front, UK CPI is expected to hit 1.4% in December, up 0.2% from November and 0.5% from October’s reading. This will not only mark the highest inflation rate since mid-2014 but the pace of inflation escalation is pulling U.K.’s real interest rates even lower.  Of course, this is going to be a challenge for the BoE, but if it indicates anything, it’s interest rates next move is only upward, leaving monetary policy with very few options to support the economy if needed.

The safe haven Yen is the major beneficiary of the heightened uncertainty over U.K.’s Hard Brexit scenario and Trump’s policies. USDJPY has fallen for the seventh straight day, and declined by more than 4.3% from January 3 peak. The fall in bond yields worldwide will continue to lend some support for the Yen, but whenever this trade is over I expect the Yen to weaken again.

The U.S. dollar is falling against all its major peers with the index dropping below 101. There’s no fundamental reason for the selloff and I don’t think the dollar’s rally is over yet, but the “Trump trade” has clearly cooled down in the past couple of days as markets still have many answered questions regarding future fiscal policies. Let’s hope we get some answers on Fridays inauguration. 

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By Hussein Sayed, Chief Market Strategist (Gulf & MENA)

[FXTM Official]

Forextime.com Daily Market Analysis

Aussie dollar cracks major levels

The Australian dollar swung heavily today as US bulls finally looked to sell off in the wake of economic uncertainty around the United Kingdom. Volatility was most certainly the key player for the day, and traders took full advantage. Yesterday there were strong comments that the AUD was currently overvalued, but it would seem that the market had other ideas as it raced up the charts knocking out some key levels along the way. The market is further poised for today consumer sentiment, which will give some indication if the Trump effect has spread to Australia in the wake of recent events. Expectations have previously been very low and I would expect this to be the theme going forward but with the possibility of a surprise in economic data as we have previously seen.

For the AUDUSD traders resistance was not a problem today as it smashed through 0.7531 on the charts and looked to climb even higher, coming up just short of 0.7567. The 0.7567 level is very strong and I would expect to see some stiff resistance unless we see some positive fundamental data come out in the next few hours. In the event of a pullback I would expect that the 100 day moving average could act as dynamic resistance if it is a strong pullback, otherwise I would anticipate that former resistance level at 0.7531 looking to hold out in the long run.  

One of the interesting things about a stronger USD has been the flow on effect to metals, none more so than silver which has so far seen a solid bullish trend appear in the short term and has briefly pushed through resistance at 17.133. The strong sell off today in USD certainly had a big impact in helping making this progress, but the real test is set to come as it sizes up resistance at 17.308, which I would expect to be a very strong level. The 200 day moving average is also intersecting with this strong level of resistance and has previously acted as a strong dynamic level for market movements. However, the trend is certainly your friend and this could be the case as silver looks to climb higher in the build up to Trumps inauguration on Friday.

Lastly, the NZDUSD has managed to also climb up the charts, but recent reports around the dairy auction paint a messy picture that shows that New Zealand's economy may not be as strong as recent economists had predicted. The jump higher today to resistance at 0.7222 has shown there is strong demand during patches of weakness, however this level has proved time and time again to also fight back and push prices lower.

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By Alex Gurr, Guest Analyst

[FXTM Official]

Forextime.com Daily Market Analysis

Aussie dollar cracks major levels

The Australian dollar swung heavily today as US bulls finally looked to sell off in the wake of economic uncertainty around the United Kingdom. Volatility was most certainly the key player for the day, and traders took full advantage. Yesterday there were strong comments that the AUD was currently overvalued, but it would seem that the market had other ideas as it raced up the charts knocking out some key levels along the way. The market is further poised for today consumer sentiment, which will give some indication if the Trump effect has spread to Australia in the wake of recent events. Expectations have previously been very low and I would expect this to be the theme going forward but with the possibility of a surprise in economic data as we have previously seen.

For the AUDUSD traders resistance was not a problem today as it smashed through 0.7531 on the charts and looked to climb even higher, coming up just short of 0.7567. The 0.7567 level is very strong and I would expect to see some stiff resistance unless we see some positive fundamental data come out in the next few hours. In the event of a pullback I would expect that the 100 day moving average could act as dynamic resistance if it is a strong pullback, otherwise I would anticipate that former resistance level at 0.7531 looking to hold out in the long run.  

One of the interesting things about a stronger USD has been the flow on effect to metals, none more so than silver which has so far seen a solid bullish trend appear in the short term and has briefly pushed through resistance at 17.133. The strong sell off today in USD certainly had a big impact in helping making this progress, but the real test is set to come as it sizes up resistance at 17.308, which I would expect to be a very strong level. The 200 day moving average is also intersecting with this strong level of resistance and has previously acted as a strong dynamic level for market movements. However, the trend is certainly your friend and this could be the case as silver looks to climb higher in the build up to Trumps inauguration on Friday.

Lastly, the NZDUSD has managed to also climb up the charts, but recent reports around the dairy auction paint a messy picture that shows that New Zealand's economy may not be as strong as recent economists had predicted. The jump higher today to resistance at 0.7222 has shown there is strong demand during patches of weakness, however this level has proved time and time again to also fight back and push prices lower.

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By Alex Gurr, Guest Analyst

[FXTM Official]

Forextime.com Daily Market Analysis

The Week ahead: Politics to take center stage

Donald Trump is finally in power, a new era has arrived, and his policy plans in the first couple of weeks will override fundamentals. Markets spent more than two months pricing in growth policies promises, lowers corporate taxes, and deregulations, now it is time to deliver as markets will no more move on words but actions.

U.S. dollar bulls were not really impressed in the new Presidents’ inauguration speech, as it was focused more on protectionism and lacked any concrete plans to drive growth. Repealing Obamacare, building a Mexican border wall, and withdrawing from the Trans Pacific Partnership are not the kind of news investors want to hear, they need to know when pro-growth fiscal policies will come into play and more importantly whether congress will approve them.

The days and weeks ahead will likely see volatility increase in equities, fixed income, and currency markets. Investors are already buying exchange-traded products that track volatility, this explains the level of expected uncertainty going forward.   

The week ahead will also see U.S. earnings season move into high gear with more than 20% of S&P 500 companies reporting fourth quarter results including Alphabet, Amazon, Microsoft, McDonald’s, Verizon, Johnson & Johnson, Boeing, EBay, and AT&T. According to Factset, 61% of the companies that reported results so far managed to beat profit estimates, while only 47% managed to beat on revenues.

On the U.S. economic data front, all eyes will be on Friday’s U.S. Q4 GDP release. Growth is anticipated to slow significantly from Q3 3.5% to only 2.2%, as net trade expected to turn negative. Homes sales, services PMI’s, trade balance, and durable goods are also on the agenda for next week.

It will also be an interesting week for sterling as U.K.’s supreme court will eventually deliver its ruling on Tuesday on whether Prime Minister Theresa May can activate the process for Brexit without parliamentary approval. We highly expect that the court will rule in favor of Parliament’s approval to trigger article 50, but any spike in sterling likely to be short lived.

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By Hussein Sayed, Chief Market Strategist (Gulf & MENA)

[FXTM Official]

Forextime.com Daily Market Analysis

Yen continues to strengthen

Despite all the global economic indicators and central bank movements the Yen continues to be one of the major players in the FX market. So far the Bank of Japan has been keen to hold off any further action as the market continues to offer up a stronger USD, which in turn helps push their agenda of weakening the exchange rate. While not ever country in the G8 is in agreement with the tactics taken by Japan previously, this lends weight to the US economy forcing the changes, and it's likely we will continue to see strong fluctuations in the USDJPY. The only major thing this week on the Japanese side is the CPI data, with market expecting below average CPI compared to what Abenomics has so far promised - so there is potential for movement if it beats estimates.

On the charts the USDJPY continues to show case a strong trending mentality. So far the bears looking to be taking control and forcing it down the chart in a strong channel which has so far faced very little resistance. The 20 day moving average has also been acting as dynamic resistance in the market so far, preventing any further movements higher and I would expect this to remain the case until USD strength looks to continue on a global scale. Any movements lower however, are likely to find support quite strong at 112.442 and 111.688 - with market expectations looking very strong after the recent reversal in the previous days.

Regardless of all the global attention the US economy has been getting the S&P 500 has so far been one of the largest benefactors with it set to make a large move if technical patterns are anything to go off. New home sales and consumer sentiment are likely to help drive the market in the coming days, and the market will be looking for further positive news to help push the S&P 500 higher, despite it touching record highs as of late.

Technically speaking the S&P 500 is looking very strong as of late from a bullish perspective, with the 20 day moving average acting as dynamic support all the way up on the daily chart. The tightness of the current band on the chart gives weight to the fact that a breakout is set to occur and I would be looking at the bulls for them to take control. However, resistance at 2278 continues to impede the bulls from rallying higher and may cause further issues in the coming days until we see further positive data. 

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By Alex Gurr, Guest Analyst

[FXTM Official]

Forextime.com Daily Market Analysis

Equity markets hit new heights

Equity markets have been the major benefactor market movements today with the Dow finally breaking above the 20K mark for the first time. The S&P 500 has also rallied heavily today and is just shy of the magic 2300 mark which I've talked about in previous articles - which is of course a big benefactor of the Trump effect which is going through the markets at present. 2017 could very much be the year of the bull, but it will take time and a wait and see approach to see if it all comes true, as it is very much early days for equity markets in the new year. Equity markets in the US still have hurdles to jump through from a fundamental point of view as unemployment claims is due out tomorrow, and consumer sentiment will also be released the following day after that. All of these have the power to impact equity markets sharply, but the spotlight will most certainly fall on anything that Trump has to say at present.

Right now resistance for the S&P 500 is around the 2300 mark, with the market looking to move sharply further higher if given the right opportunities. This key psychological level is likely hold in the short term, but for any movements higher a move to 2350 and 2400 is likely to be the next major levels of resistance in the long run, as it's very much uncharted territory. Any movements lower are likely to find dynamic support on the 20 day moving average, which continues to trend up with the market and is likely to be the first line of defence of any brave bears do come into the market.

The New Zealand economy has managed to hit rock star economy status as usual, with the CPI figures coming in better than expected at 0.4% Q/Q (0.3% exp). Helping to push the annual figure to 1.3%; still below the 2% mark but nevertheless moving back in the right direction and something the Reserve Bank of New Zealand will have to take into consideration. Many economists are now expecting that the RBNZ will likely hold rates at steady at present as inflation is lifting, and if it continues to do so though then the RBNZ may even be forced to increase the OCR quicker than anticipated.

As previously mentioned the NZDUSD has been very bullish on the charts, and the trend is very much still the markets friend. Expectations still are quite bullish with the results seen today, and with a weaker USD I would expect the NZD to continue to resistance levels at 0.7343 and 0.7402. If it can continue to gather momentum, we could see it breach through the 80 cent level, however the market may look to claw back some gains well before then and the Trump effect on the USD can be quite strong as well.

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By Alex Gurr, Guest Analyst

[FXTM Official]

Forextime.com Daily Market Analysis

AUD leads Asian trading session

The Australian dollar is taking the spotlight as the Reserve Bank of Australia is set to have its decision about the current interest rate levels, and the market thus far is not expecting anything much from the RBA. With the interest rate held at 1.50% it still remains one of the highest in the developed world, but the Australian economy is currently waiting to see what the outcome will be from the Trump effect, and while things have been rocky it does seem that the economy is starting to look slightly better. However, yesterdays retail sales showed that it's not all smooth sailing as it dipped to -0.1% m/m (0.3% exp), this result lends weight to the fact that the RBA may touch on the consumer economy not picking up as expected. But the real weight will be focused I feel on the economy as a whole and the commodity sector which has been recovering in recent months in anticipation of the global economy picking up.

Markets have been very much a fan of commodity currencies in recent weeks, with global risk appetite picking up the demand for yield has lead to large jumps in the NZD and of course the AUD, with the AUD looking very much the stronger of the two. So far the AUDUSD has been on a very bullish trend and it certainly has not seemed to lose any steam at present. The 20 day moving average has acted as dynamic support as it has moved up the chart, and this looks likely to be the first real test as comes under pressure. After all markets can't remain bullish forever, especially when it comes to FX markets. At the same time resistance at 0.7680 has so far stifled the bulls in there run up the charts, but the recent bearish movement has found strong bullish sentiment so expectations are building for further movements past this level onto the next major level at 0.7730.

Global up turn has so far been talked about, but not come through just yet. However, oil markets have been looking more and more uncertain when it comes to direction for the majority of traders. One thing that does remain clear is that oil is coming under further pressure in the markets to find some direction. At present the 20 day moving average continues to act as dynamic support and is pushing the bears out of the market as it looks to take on the key level of resistance at 54.46. As the two come together expectations will build for a bullish breakout, or if we had a reversal we could see some strong bearish pressure. Pressure will build though, and the bulls have the advantage in this sort of scenario and fundamentals starting to lean in their favour.

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By Alex Gurr, Guest Analyst

[FXTM Official]

Forextime.com Daily Market Analysis

Oil looks to break out

Over the last  few months hedge funds and traders have been seen placing large bets that OPEC will indeed come through with its production cuts and oil will accordingly jump higher, so far it has been positive on the production cut front, and we are starting to see oil markets looking like they may trend again - instead of the ranging behaviour we have seen over the last few months. One thing worth noting in all of this is how important Russia is, given that it just become the world's largest producer of oil as it overtook Saudi Arabia. But so far so good as 90% of the production cuts that were outlined have been implemented. However, US inventory data has been not positive for oil traders as since Trump has taken to office there has been a build up of supply, something that many were expecting not to happen. Despite all of the pros and cons oil has looked to jump back to life.

The 20 day moving average was key for oil as it looked to trend slowly up the chart, it had a few breakdowns previously but seems to still respect the level and as of now is sitting just below resistance at 54.36. What will be key here will be if oil can push above this level and look to extend higher; breaking out of the ranging phase and looking to trend again as it has historically been so good at. Above the current resistance level the next level will be found at 55.19 which was where the market looked to extend to earlier in December after the OPEC cuts were announced I would expect to see this area already priced in with the cuts, but it would also be pushed higher if we saw a reduction in US oil inventory data.

One of the other interesting commodities as of late has been silver, as it has charged up the chart much like gold on the back of speculation around Trump uncertainty. While not as popular as gold it has been a stand out performer in recent months and should not be discounted as it's prone to large movements on the c harts. And with preliminary GDP and unemployment claims still on the horizon for the US economy this week there is certainly room for further large movements. Also the USD weakness could be something that looks to push silver higher in the short term.

From a technical point of view silver has been quite bullish as of late, with large movements upwards since December in a constantly trending pattern. The 20 day moving average has largely been shadowing silver on the charts, with large bearish movements being pushed back by the silver bulls upon touching this level. The 200 day moving average has also been heavily respected, but the focus right now is on resistance at 18.091 with the market treating this like the level to beat. Long tails on the candles are also pointing that the bulls have not given up and further extensions higher may indeed be quite possible.

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By Alex Gurr, Guest Analyst

[FXTM Official]

Forextime.com Daily Market Analysis

Greek debt negotiations cause EUR volatility

It could be a return to instability if the Greek issues rear there ugly head again. Recent reports out of Brussels over the Greeks and their handling of debt has been slightly worrisome, and markets are a little on edge over the discussions. Currently Greece needs another tranche in June in order to prop up its finances, and so far it has been working hard with some protest. But markets have not forgotten the previous ordeal when Greece almost collapse, and the turmoil it can cause on European markets. Certainly, the IMF and the EU will be looking to make sure they don't see a repeat of that and a resulting downturn in the Euro-zone, but it's always worth watching the Greek drama unfold with both eyes open as markets can be quite volatile. This has been reflective of the EURUSD which has had some large swings today on the back of rumours on Greece.

The question now for traders is if this Greek tragedy is over and the Euro can fly higher. So far it looks good for traders with a strong level of resistance likely to rear its head soon at 1.1298. The band between that level and 1.1366 will set the tone I feel for further bullish movements if there are more in store. Even if we did see a strong pull back at this level there is a bullish trend line at play in the market which is likely to add a strong layer of support which can't be ignored by any technical trader out there. I would also be quick to watch the 20 day moving average, as it managed to safe guard against some bearish movements a few weeks back and could come into play again if we do see a bounce back to earth at 1.1298.

Oil markets have also been showing great resolve recently as the bulls look to take control once again. This in part has been led by Iraq looking to extend its oil production cut by another 9 months in order to control prices. The market believes it is a done deal as it's the same as agreed originally back in December to help boost prices. However, with shale oil producers being more aggressive than ever it will be hard to tell if we will see prices look to drift into the high 60s anytime soon. Certainly not so until we see large drawdown's on current oil inventories.

On the charts it's clear that Oil is looking to rush up, but has been pushed back down by the bears at the 100 day moving average which has acted as resistance. It will be interesting to see if oil can break through resistance at 51.48 or if it will instead run out of steam and go one to retest support levels and the 20 day moving average. 

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By Alex Gurr, Guest Analyst

[FXTM Official]

Forextime.com Daily Market Analysis

UK poll results lift cable

The UK has been most of the talk today, as Theresa May continues to talk up Brexit in the face of looming UK elections. Both sides have thus far presented some of the arguments, but there is still a large amount of the unknown which is causing issues for the market and politicians as well. Some of the negative economic costs for leaving the free-market are starting to weight on the currency despite the resurgence. And with every whisper about it out of Brussels we will continue to see the cable jumping to the tune of the Euro-zone, as the UK looks to head to the negotiating table and get a deal that will provide some benefit despite the steps that are being taken.  One gleaming hope for cable traders is that recent polls have shown Theresa May as being in a comfortable lead still and this has lead in turn to some bullish sentiment in the market thus far - despite all the negative talk.

For the cable bulls there is two key levels of resistance slowing them down at this stage, as 1.2861 and 1.3042 continue to be major bearish points. Support can be also found around 1.2743 but for the bulls, the key here as if we do see the Tories continuing to dominate polls in the coming week, then we will see further bullish movements and targeting of key resistance levels. The question will be, how high can we go and how long until Brexit takes its toll again.

Gold has been an interesting play in the market as of late. With equity markets lifting higher, it's unusual to see gold move in the same direction, but in this instance that is exactly what we are seeing. It's quite clear that parts of the market are hedging quite hard, while the bulls in other areas believe the rally will continue. Who is going to be wrong is impossible to tell, but there is certainly a lot of volatility on the horizon over the next four years with a Trump government. For me, what is interesting to see for gold movements, is that the bulls have started to slow down as they approach the long term trend line - so it will be interesting to see if they respect the bearish nature of it, or try and push through.

When it comes to key support levels in the event that the trend line does hold, I would expect to see it drop to 1256.35, with further potential to drop even lower to 1227.00 if the bears can truly take hold of the gold market. The 20 day moving average between the two is also one to watch as gold has a habit of using it as dynamic support and resistance on the daily chart. 

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By Alex Gurr, Guest Analyst

Edited May 30, 2017 by FXTM Official

[FXTM Official]

Forextime.com Daily Market Analysis

Gold set to take center stage

The markets have been quite interesting over the last 24 hours as the middle east has seen an alliance between Egypt, Saudi Arabia and the UAE over Qatar and it's claims of funding terrorism. This has seen tensions rise in this volatile part of the world and markets have started to get that worried again as a result; no surprise was the fact that commodities as a result have jumped. Further adding pressure to this is the ongoing US political issues which keep arising over Trump and his handling of the FBI and Department of Justice, all of which are likely to drag on for some time. One of the key movers in all of this thus far has been Gold which is starting to look very interesting as a result.

The major reason gold has become so appetising to traders out there, is the recent technical movements it has been under. Traders will be aware of the long term bearish trend line that has been in play for some time on the daily. Movements today have seen the new candle jump above that level and we could see either a sharp movement higher with a breakout or a pushback through and below the trend line. One other possibility, with some of the recent low volatility, is the market may look to treat it as support and look to hold the ground it has gained. In the event we do see gold look to move higher I would expect 1292 and 1307 to be likely candidates for strong resistance, with the 1300 level being a strong psychological level for gold to cross.

The Australian dollar has shown some strong volatility with the market opening as company operating profits lifted 6.0 q/q and ANZ Job Advertisements m/m were up 0.4% which was stronger than many had expected. Recently markets have been hammering the AUD as the economy has been under pressure, so traders were positive about the results and the expectation that further news may be positive in the coming week with GDP on the horizon and also the all important Rate Statement due out today. Where some will certainly be looking for some positive words and expectations around when we could potentially see further rate rises.

For the AUDUSD moving across the charts, the bears have been in control for some time now. But recently we have seen some strong support at 0.7343 and a resurgence in the AUDUSD. This in part I feel has been caused by USD weakness more than anything else, but the positive Aussie economic spin is now pushing it higher and the recent touch of resistance at 0.7498 was not a strong pullback. Further movements higher could be on the cards as a result, and I would be watching that level closely to see if traders make another run and try and get to resistance at 0.7568.

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By Alex Gurr, Guest Analyst

Edited June 6, 2017 by FXTM Official

[FXTM Official]

Forextime.com Daily Market Analysis

The U.S. Dollar moving in tight range, what to expect from the Fed?

Four major central banks are meeting this week: the Federal Reserve, Bank of England, the Swiss National Bank, and Bank of Japan. The Fed is the only central bank poised to hike rates for the second time this year; meanwhile, all other central banks will remain on a standstill.

Traders are expecting a 100% chance of a rate increase according to CME’s Fedwatch tool, so another 25-basis points hike seems a done deal, but whether the U.S. dollar moves higher or lower after the announcement on Wednesday depends on a couple of factors.

Economic Outlook

Despite unemployment rate falling to a 16-year low, U.S. job growth slowed in May and the gains in April and March were revised lower. However, the three-month average is still above 120,000  jobs which is sufficient to keep up with the working-age population growth, so not too much to worry about. Interestingly the tight labor market is still not accelerating wage growth, meaning the Fed will not be forced to tighten aggressively, and the long run U.S. yields are likely to remain under pressure. Consumer prices and retail sales are due to be released tomorrow before the announcement, and although it won’t affect the decision, these figures will impact the timing of the following rate hikes. The Fed’s quarterly projections on growth, unemployment, and inflation will be released along with the statement on Wednesday, so markets will closely monitor any changes in the projections.

Guidance

The dots on the dot plot are unlikely to change much. The previous chart showed two more rate hikes in 2017, with nothing significant occurring to alter this view. We’ll be left deciphering Janet Yellen’s tone to determine whether a rate hike will be considered a dovish or hawkish hike. Another key element that’s expected to move the U.S. dollar is any signs of when and how the Fed will start reducing the $4.5 trillion balance sheet. Selling assets on its balance sheet will provide a much stronger signal than just choosing not to reinvest the proceeds of treasuries and mortgage-backed securities.

Although the Fed is the only major central bank tightening monetary policy, the Greenback had been in a downtrend since the beginning of the year and fell below post-election levels. This explains that monetary policy, although having substantial influence on currencies’ direction, is still one of many factors.  If in the long run U.S. treasuries remain under pressure, it means investors do not believe that inflation is returning, and more importantly, it’s a clear signal that market participants are growing more skeptical towards the reflation trade, hence keeping the U.S. dollar under pressure.

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By Hussein Sayed, Chief Market Strategist (Gulf & MENA)

Edited June 13, 2017 by FXTM Official

[FXTM Official]

Forextime Daily Market Analysis

Oil nears key levels

Oil continues to struggle on the charts as last week's expectation for oil failed to show any real signs that there was a drain on the US oil inventories. While there was at least some drain on the inventories of -1.66M the expectation of a drop to -2.74M led many to continue to be bearish on oil markets. This has also been further pushed by recent developments in the US market, namely shale continuing to produce a large surplus of oil for the US economy despite the fact many wrote it off after the price drops. OPEC as well has struggled to reign in prices as the market sees it as less of a threat now days given the move to renewables and also the fact that economies are not consuming oil at any great speed anymore.

For oil markets the bears are looking very much in control. Most pull-backs we have seen thus far on the daily chart instead look more like unwinding in the marketplace and traders looking to take profit. What is also very clear is that the trend is strong and does not look like it has run of steam and support at 44.01 is looking very close. Further support at 43.10 is a very strong level and could be the line in the sand that traders are looking to hit before we see any bulls come back into the market. In the event we do see them swing back in (and they will)expectations for resistance can be found at 45.80 and 47.75. In the event the market does finally turn and we see a strong bullish run in oil I would also be aware of the long term trend line on the daily chart which will be a hard ask in present times.

The Australian economy is not having a good day to day, with Moody's downgrading it's banking sector, sighting weakness in the local economy and over supply in iron ore at present to the Chinese market. Last week's Westpac consumer sentiment report also showed strong weakness in the Australian economy at -1.8%. And even while unemployment may have shifted lower to 5.5%, the jitters are certainly still there for any Aussie bulls left in the market. One thing is clear is that the market will be heavily focused on the Reserve Bank of Australia minutes which are due out shortly.

Traders so  far have struggled to break through at resistance at 0.7622, and all daily candles looking to move higher have started to look weaker and weaker. If the AUDUSD can move higher, then a next level target at 0.7677 would be ideal. If the market does look to push lower then strong levels of support can be found at 0.7556 and 0.7502. I would also look to focus on the 20 day moving average as potential, given that the market has looked to use it as dynamic support/resistance previously as well. 

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By Alex Gurr, Guest Analyst

Edited June 20, 2017 by FXTM Official

[FXTM Official]

Daily Fundamental ForexTime ( FXTM )

The week ahead: Draghi’s turn to drag the Euro?

Last week the greenback was the biggest loser among all major currencies. The dollar index slipped to a 10-month low, while the Euro, the Pound, the Lonnie, and the Aussie all posted new 2017 highs.

The dollar has been falling since the beginning of 2017 despite the two rate hikes which occurred in March and June, and the many hawkish comments from FOMC members. Part of the blame falls upon the delay of President Trump’s economic agenda. However, most recently it was the poor economic data that led investors to question the trajectory and speed of interest rates hikes.

Janet Yellen’s testimony to Congress on Wednesday and Thursday did not help the dollar either. She did not seem confident that inflation is on the right path and Friday’s flat consumer price index raised concerns that the Fed may be done with hiking rates this year. U.S. retail sales figures added salt to the wound after recording the biggest drop in more than a year in May falling by 0.3%. The sluggishness in consumer spending, wage growth and inflation will likely to worry Fed officials. Furthermore, if the weakness persists in the next couple of month, it will prove that the slowdown in the economy is not due to transitory factors but probably structural problems. Until data takes a U-turn, dollar bulls will remain reluctant to jump in and the dollar weakness may resume in Q3.

Next week investors will shift their focus to the European Central Bank and Bank of Japan. It has been almost three weeks since Mr. Draghi said, “Deflationary forces have been replaced by reflationary ones.” His confidence and bullish assessment of the euro zone recovery sent the Euro above 1.13 and despite the ECB officials attempts to dampen investors’ expectations over tightening policy the Euro still appreciated by more than 2.5% since June 27.

I think Mario Draghi will choose his words more carefully when the ECB meets on Thursday. The last thing he wants is a strong Euro and tightened financial conditions for now. Since no changes are expected on current monetary policy the tweaks in the statement and Draghi’s tone are all what matters to traders. It is a complicated process to start normalizing policy without disrupting markets and so while the ECB wants to prepare investors for gradual wind-down of asset purchases, policy makers are likely to hint that rate hikes will remain low for a prolonged period. However, I prefer buying the Euro on dips then selling on rallies with end year target around 1.18.

The dollar’s weakness drove Sterling to a 10-month high to trade above 1.31 for the first time this year. The pound also found support from BoE’s Ian McCafferty who said the central bank should consider unwinding its 435-billion-pound quantitative easing program earlier than planned and he’s looking to vote for a rate rise again in August. It seems that monetary policy is having more weight than the Brexit talks and if Tuesday’s inflation figures from the U.K. surprised to the upside, expect GBP to continue rallying. However, traders should also keep a close eye on Brexit negotiations which are going to resume on Monday. 

China’s GDP release on Monday will be monitored very closely by Aussie traders. Markets are expecting a 1.7% rise in Q2 from 1.3% in Q1. The RBA minutes are scheduled for release on Tuesday followed by the employment report on Thursday. It requires another set of positive reports to further widen the differentials in bond yields; however, without a shift in monetary policy stance the Aussie gains are likely to be limited. 

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Edited July 17, 2017 by FXTM Official

[FXTM Official]

Forextime Daily Market Analysis

Dollar gasps for air while Euro bulls take a breather

The Greenback received a thorough pummelling on Tuesday after reports of Republican legislators failing to pass a revised healthcare bill rekindled concerns over Trump’s ability to implement tax cuts and infrastructure spending. Sentiment was already turning increasingly bearish towards the Dollar following last week’s soft US inflation reading, with sellers swiftly exploiting the fresh setback to Trump’s domestic agenda, in order to attack prices further. With the Greenback displaying signs of sensitivity to monetary policy speculations and the probability of a 25-basis-point rate increase in December dropping to 43% according to CME FedWatch Tool, further downside could be on the cards.

As the US economic calendar is fairly thin today, with only US building permits and housing starts in focus, price action is likely to dictate where the Dollar Index trades. Technical traders could be tempted to utilize the technical bounce on the daily time frame to drive the Index lower. A solid breakdown and daily close below 94.60 may encourage a further selloff towards 94.00.

Euro bulls wait for Draghi

Thursday’s main risk event for the Euro will be the European Central Bank meeting, which is widely expected to conclude with monetary policy left unchanged in July. Investors will closely scrutinize the meeting and press conference for clues on whether the central bank may announce plans to reduce its bond-buying program in September. With ECB President Mario Draghi’s optimistic speech in Sintra sparking speculations of QE tapering and also playing a role in the current Euro rally, he may choose his words carefully on Thursday. Although the economic conditions in Europe continue to stabilize, inflation is still far from the 2% target and it will be interesting to hear Draghi’s thoughts on this. While the improving macro-fundamentals and absence of political risk in Europe have heavily supported the Euro, bulls may need further inspiration in the form of QE tapering expectations. It becomes a question of whether Draghi will offer the bulls what they crave or will end up clipping their wings.

From a technical standpoint, the EURUSD is heavily bullish on the daily charts. The breakout and daily close above 1.1500 could encourage a further incline higher towards 1.1615.

Commodity Spotlight – WTI Crude

WTI Crude Oil edged slightly lower on Tuesday after API reported US inventories increased by 1.63 million barrels last week. Although prices ventured towards $46.55 during Wednesday’s trading session this had nothing to do with a change of bias, but rather profit taking, as sentiment remained bearish. Recent reports of Ecuador publicly admitting that it will not meet OPEC’s cut commitments, presents a threat to the production cut deal, with fears of a domino effect exposing oil prices to further downside risks. The bias towards oil remains bearish and further downside may be expected as the supply overhang erodes investor attraction towards the commodity. Much attention will be directed towards the pending report from the US Energy Information Administration (EIA) this afternoon, which could compound to oils woes if there is a build in crude inventories.

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Edited July 20, 2017 by FXTM Official

[FXTM Official]

Daily Fundamental ForexTime ( FXTM )

FOMC disappoints US bulls

It's been another round of FOMC today and the USD bulls have been left disappointed again by Yellen as the hawkish comments they had hoped for were not forthcoming at all. The FED is looking to unwind its balance sheet in the near future, but market expectations are that a rate hike is sometime off - most likely in December at the present rate. Additionally, the FED believes inflation to be rising to the magic 2% mark, but that it may slack off as food prices and fuel have been stagnating over the past few months. So it looks like the FED wants to raise rates in the future, and has strong business demand and a robust labour market, but is missing the last magical ingredient which is inflation. If we see stronger readings in the near future then we could see expectations increase that a potential rate rise could take us off the current 1.25% and help drive the USD bulls again.

When it comes to markets that benefit from the USD weakness look no further than the EURUSD which has been steadily climbing the charts for some time now. I spoke a while back about how well it has been doing in recent times in its bullish channel, and the fact opportunities still remain. Well today's push through resistance at 1.1719 are very positive and the market will be looking to see if this candle can close above. At present it's slightly above and we could see it look to treat that resistance level as support. If we do see that hold above 1.1719 I would look for the potential of a further move higher to 1.1915 which is likely to be a key level for traders to target. I would also pay attention to the 20 day moving average, which has been looking very strong for bullish support as of late as well.

Another big benefactor of the USD weakness has been commodity currencies and in particular the AUDUSD cross which has been rising high for some time. Yesterdays inflation reading was in line with the trimmed reading forecasts so there was a slight dip, but this has been shrugged off in trading today. The market will now be looking at Australian export and import forecasts due out shortly to see if they can beat estimates and send the AUD higher. A boost in import prices would certainly help the case for further inflation which has been Australia's weakness thus far; but also more so a global problem.

AUDUSD has been trending in a bullish manner for some time and there is still plenty of room for it to move upwards. At present its struggling to break through the 80 cent mark which is a psychological level, but it looks poised to make the move if it ever will. If we do see a push through here I would expect to see a battle between the bears and bulls, and if we do see the bulls take control then a potential run to 0.8154 at the 50.0 fib level. 

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Edited July 27, 2017 by FXTM Official

[FXTM Official]

Daily Fundamental ForexTime ( FXTM )

European currencies dominate trading

European currencies have dominated in today's trading as the EURUSD was crowned king of volatility amongst the major pairs, when North American traders came into the fray, while at the same time the GBPUSD continued to take a beating in the currency markets. It's somewhat remarkable to have two currencies intertwined yet going in opposite directions based on the current political events, but for traders it's just another day in the field.

The EURUSD continues to be a big favourite of mine and despite the pullback we saw on Friday it has failed to stimulate the USD bulls to come back into the marketplace. Currently, the Trump effect has faded and despite some outlets of media saying otherwise there seems to be movements to try and investigate further the Russian influence in the US elections. All of this is weighing down on the markets  which believed that a Trump administration would be pro-business. Additionally, the FED continues to send mixed messages unless we see inflation lifting and has even cut back growth forecasts going into 2018 and 2019. US PPI and CPI will be a major focus this week and I would expect the markets to look gleefully on those figures in the long run, but at present the focus is very much on dollar selling based of the current market information and the EURUSD has been one of the largest benefactors.

Chart wise the EURUSD is still in its bullish trend. Fridays sell-off was on the back of some positive fundamental news, but it has not managed to carry through into the new week thus far. Support was quick to hold any downward momentum at 1.1719 and continues to look like a strong level, this was further reinforced by the 20 day moving average warding off the dollars bulls in the EURUSD. So far however momentum has stalled as trading has been light with the Monday opening, and it's held up at resistance at 1.1799, but not before testing it today. There is potential to slide further down, but also plenty of potential to climb higher on the back of the US political mess. If we do see a strong push through resistance I would anticipate further climbing to 1.1915 in the current market environment.

The GBPUSD has been the other mover today after recently looking stronger against the USD, it has struggled to gain any momentum in the last three trading days and looks to be sliding back down the charts again. Support levels will be key here and 1.2972 is looking like a key level to be focused on as well as 1.2843 to see if this is really a strong sell off. If we do see a big jump in the charts for the GBPUSD you can be sure that resistance at 1.3224 will be the target, and we could potentially see a double top if the bears look to strike there again. 

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Edited August 8, 2017 by FXTM Official

[FXTM Official]

Daily Fundamental ForexTime ( FXTM )

RBA poised to act in current market

The Australian dollar continues to be in a bit of a freefall as traders rally on the back of a resurging USD as well as a risk-off attitude when it comes to commodity currencies as of late. One of the major developments though around the Australian economy has been the rise in household debt which is being fed by low interest rates in Australia. Now the Reserve Bank of Australia (RBA) is getting a bit worried and today's wage growth figures are likely to be quite major, on the basis that if the figures are showing sluggish growth then the RBA may be forced to act in the market. If the RBA does act it will be in the form of a rate rise and this would certainly be a double edged sword for the AUDUSD. It could be the case that it does help reduce debt levels, but fixed interest rate traders would look to jump back on board the AUDUSD train in a hurry, and a weak result today with wage growth could actually trigger a jump for the pair.

On the charts the AUDUSD has cruised lower recently as the bears take hold, and it's looking very much like a classic retracement on the charts. So far it has pushed through the 20 day moving average and is looking like it will test support at 0.7761 and 0.7657 in the future if this slide continues. In the event it does look to push back upwards resistance levels can be found at 0.7901 and 0.8000, but a push through the psychological 80 cent level would be a very hard ask for the AUDUSD unless we saw a major turn in its economic good fortunes in the near future.

One of the more interesting developments has been the movements of the S&P 500 which had a large pull back in the previous week, but has managed to find some legs this week on the chart. American data was positive today on the basis that retail sales jumped to 0.6% m/m (0.3% exp) which is a positive for the US economy. However, there is still a large amount of worry in the markets around the current state of American politics which can swing on a day to day basis. This in turn has seen equity markets a little coy, and also a resurgence in speculative metal markets where traders are looking to hedge.

The S&P 500 though has struggled to gain momentum today after a strong Monday opening. The push upwards today to come through the trend line was met with resistance and the likelihood of pushing through resistance at 2484 continues to be problematic as the market has show time and time again that any movements to this region seem to encounter bears who believe that we need a lot more information to go higher. If it does fall I'm still watching for that 100 day moving average to act as the first target level for traders and support levels at 2406 and 2353.

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Edited August 16, 2017 by FXTM Official

[FXTM Official]

Daily Fundamental ForexTime ( FXTM )

Equity markets struggle to hold off the bears

The markets have been in minor turmoil today as US equities continued to dip on each rise. This in part was brought on by more bearish weakness in the US economy over the last few days, but also disappointing economic surveys carried out by the New York Fed, which showed that there were more people looking for work, and wage growth was not picking up at all. This comes at a somewhat interesting time, as the labour market has been the cornerstone of the US rebound after the financial crisis, so markets are fearful of anything bad happening to it - especially with a consumer based economy. The trump effect is also continuing to wear off, with neither congress or the administration working together it seems it's very hard for Trumps economic policies to be advanced at present.

This in turn has spilled over into equity markets in a rather ferocious way, the concern with many is that if the market does indeed start to turn and pull-back we could in turn see more aggressive bearish behaviour - as a number of analysts continue to feel it's overbought. On the charts at present the only thing holding back  the S&P 500 is continuing to be the 100 day moving average, which has so far slowed down the bears on two occasions now. The clear rejection is a good sign if you're bullish, however I am still expecting the bears to strike as Trumps grip looks to weaken (unless anything drastic changes). Support levels below the current 100 day moving average can be found at 2406 and 2353 and I would expect to see a lot of volatility around these levels as it moves lower, so expect big swings. Also, the 200 day moving average is trending up the charts and this will be a key target as well for bears.

Gold traders are having a field day at present on the back of this uncertainty, and it's clear that with any weakness in the equity markets we will see people look to hedge against the bad times in speculative metals and of course safety currencies. Gold has thus far trended strongly, with the bulls looking very strong with the potential to breakout. Previous movements where hindered by strong resistance at 1295 and a double top sent gold tumbling for some time. Fridays test though showed there is certainly a large amount of resolve to push through and look to touch higher resistance levels at 1313 and 1338, all of which are looking strong targets - 1338 being the strongest level at present. If Gold does a reversal then certainly support at 1258 and 1233 are likely to be where the bears look to aim, however the bulls have thus far been quite promising and the trend is generally every traders friend. 

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Edited August 22, 2017 by FXTM Official

[FXTM Official]

Daily Fundamental ForexTime ( FXTM )

Oil set to turn on data

Crude oil has been doing the rounds on media as it sits at a key turning point according to various analysts, and it's easy to see why given that market trending seems to have slowed down. Many in the market now believe that we are going to see the bulls make some sort of resurgence and they point at the current drawdown's from private and public data as the catalyst for further surges in the future. Tonight's drawdown of -3.5M barrels was to be expected by most, however the surge in gasoline is still a little worrying at this stage and it will be interesting to see how markets treat that tomorrow with the Department of Energy (DOE) figures. I also believe that in the long run oil prices are likely to rebound given OPEC's recent efforts, but it will come about when the US shale industry actually slows down, and does not keep boosting production further. Many believed that shale would die off with low prices; nevertheless they become more efficient, meaner and aggressive than ever before and have survived thus far as a result.

Crude on the charts has seriously slowed down and the DOE data due out tomorrow will give it some serious movement as usual. Today's market is responding to a weak US dollar, and if we do see a strong US dollar well you can expect that to impact oil as well with further tests on support at 46.50 and 45.47. When the bulls do come back into the market and they will, I expect to see large tests on resistance at 48.82 and of course the level to beat which is 50.21, but encompasses that psychological 50 dollars a barrel zone. With a large push on here markets could quickly rally behind the bulls in the short term, especially if the US continues to post drawdown's with its crude oil inventory.

The Canadian dollar has been a strong against the USD in Q2 and is looking to further extend that going into Q3 this year. This has been underpinned by USD weakness, but also by a resurgence in the Canadian economy as of late with retail sales lifting to 0.7% m/m (0.1% exp) - a positive sign for an economy so underpinned by its resources and the fluctuations in the markets. While the Trump effect wearing off will have a positive effect and oil prices starting to look a little more bullish, it could be a good chance for the CAD to claw back further ground against the USD.

Chart wise the USDCAD has been in a bearish trend for some time, and the trend is always your friend. After a brief pull-back led in part by USD shorts being oversold, the CAD looks poised to make some strong moves again and is currently held up at support at 1.2553, with the potential to extend further to 1.2429. Given the recent movements we could see a bounce higher to resistance, but the potential for a double top certainly exists at 1.2757 in the current market environment. 

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Edited August 23, 2017 by FXTM Official

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Daily Fundamental ForexTime ( FXTM )

Risk aversion reigns supreme in markets

Markets continue to be risk off today, as commodity currencies took a beating - no more so than the NZD. Recently markets had been piling into fixed interest rate currencies as economic optimism boomed, however that has recently turned as Trumps allure has worn off, and the markets remain more cautious than ever.  The Reserve Bank of New Zealand has not helped as they attempted to jawbone the NZDUSD last week as well; this is not really much of a surprise though anymore as the governor tends to every chance he gets. However, it's not all doom and gloom for the pair with trading balance data due out shortly and markets expecting to see -200M (NZD) as a reading, which will certainly be negative compared to the previous surplus. A fall here would be bearish signal, however trade balance data has shown in recent times to be quite resilient and could easily surprise the markets here as well. Exports will also be a key focus for traders, as a jump here would also boost the case for a stronger NZD.

So far the NZDUSD has had a very rough day with a sharp fall on today's attack on anything risky. At present it's held up on support at 0.7219 ahead of today's trade balance data reading. If we see a negative result, I would expect it to drop down to 0.7157 over the course of the evening. If we do see a positive result them a jump higher to 0.7323 would not be far off and even the possibility of further extensions to resistance at 0.7400. A push past the 74  cent mark may be a bit of a struggle though with the current conditions and the Jackson Hole meeting giving the potential to cause surprises in the markets.

Crude oil I touched on yesterday and for good cause as Department of Energy data came through and showed another drawdown of -3.33M barrels, just under expectations of -3.48M. However, it also showed a drawdown in gasoline reserves of -1.22M barrels as well, so the market has taken this as a positive. It's likely that analysts will take this as a positive sign and that OPEC which has imposed production cuts efforts are likely to be working. I am inclined to agree, but at the same time US production is increasing, and if it does taper off then we could see markets naturally relax a little more and the bulls take control.

For crude bulls resistance at 48.82 is the target to look to break with further extension at 50.21 likely to be the strong point and key area to break into going forward. If we do see USD strengthening however this could slow things down and even force oil down lower. In that event support levels at 46.50 and 45.47 are likely to be the key targets here and would most likely be the line in the sand for bulls with the recent trends. 

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Edited August 24, 2017 by FXTM Official

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Daily Fundamental ForexTime ( FXTM )

Gold surges on U.S. hurricane woes

It's been a quiet day today globally, with little in the way of movements on the currency markets and in equities. However, gold has jumped into action and broken through the 1300 barrier for the first time since November. This is quite unusual given it's a bank holiday in the UK and that the market has been quiet, but it could be a case of traders hedging their bets on further issues with the hurricane, which is causing so much damage to Texas at present. What is abundantly clear, is that there has been a double top in the gold market and for some time and it has been itching to get higher on the charts; and after breaking through it looks like the upside may actually win here. The only way I can really see it being pulled back down is by either a stronger USD in the market, or the next FOMC being hawkish on the possibility of a rate rise.

Either way gold is looking remarkably bullish on the charts and was shortly stopped by resistance at 1313. Tomorrow with London and NY open will be the real test to see if gold can sustain above the 1300 mark, but I am certainly a believer in it with all the uncertainty. For bullish traders looking for new targets then 1338 is likely to be the next big line in the sand to target, but it may take some time or worsening economic information to push it that high. If the bears do take back some control and look to push it lower and I would be focused on the 20 day moving average. Thus far it has acted as dynamic support on a number of occasions and there is every reason for this to continue in the long run given traders bullish temperament in the market.

Oil has also been one to watch today with the hurricane causing issues in Huston, well known as an important oil region where a large amount of oil is refined the flooding has caused oil prices to drop. As a result traders are now expecting to see a rise in oil surpluses in the upcoming Department of Energy (DOE) inventory data over the next few weeks, and a likely possibility of a drawdown in gasoline supplies.

On the charts oil has certainly been pushed lower and is showing continuing signs of a bearish trend despite the recent drawdown's from the DOE. Thus far the push through the bearish level at 46.50 has failed and pulled back slightly, however if the current trend is anything to go by we could indeed see another movement lower and the possibility of a further extension to 45.47. 

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Edited August 29, 2017 by FXTM Official