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Asian equity markets continued to build on last week’s gains, after U.S. stocks capped their best week since 2013. Investor sentiment has gradually improved after fears of rising inflation sent most global indices into correction territory. The Cboe’s Volatility Index (VIX) ended Friday’s session below 20, suggesting that indictments from Special Counsel Robert Mueller against 13 Russian nationals for alleged interference in the 2016 elections did little to impact investor decisions. With the U.S. markets closed on Monday for President’s Day and the Greater China region remaining offline for the Lunar New Year, expect trading volumes to be below average.

The U.S. Dollar’s weakness remained a bit of a mystery for many currency traders, as it is supposed to follow differential in yields. The gap between U.S. and German 10-year yields widened to 217 basis points, and had gained 28% since mid-July 2017. Similarly, U.S. – Japan 10-year yields widened 285 basis points, the highest increase since 2007. Still, the Dollar declined against the Euro, Japanese Yen and all other major currencies.

One explanation for why the correlation between the Dollar and yield differentials has broken recently, is that financial market participants are forward-looking. Investors believe that rising inflation in the U.S. will spread to other economies, leading to tighter monetary policies elsewhere. When major central banks such as the European Central Bank, Bank of England and Bank of Japan begin normalizing policies, rate differentials will narrow at a fast pace, given that they are starting from a very low base.

Yields in the U.S. are not just rising because of higher inflation expectations, but also due to rising twin deficits – the fiscal and current account. This should make U.S. debt less attractive, and gold will likely become the primary beneficiary as it continues to benefit from inflationary pressures and budget deficit worries.

However, this view may change if the Fed decides to take a more aggressive approach in fighting inflation. Wednesday’s FOMC minutes will likely reveal fresh hawkish insights, but for the dollar to make a U-turn, it requires the Fed to tighten policy faster than previously estimated. Any indication of four rate hikes instead of three in 2018 will do the trick, but this is unlikely to appear in Wednesday’s minutes, and investors will probably need to wait until the March meeting.



Source : http://www.forextime.com/market-analysis

 

Daily Fundamental ForexTime ( FXTM )

PDB Inggris Mengecewakan, Dolar Menguat dan Rupiah Melemah






Sebagian besar mata uang Asia tertekan pada sesi perdagangan hari Kamis karena Dolar AS menguat. Rupiah melemah terhadap Dolar yang secara umum menguat pada perdagangan hari Kamis. USDIDR melonjak menuju 13680 pada saat laporan ini dituliskan. Notulen rapat FOMC yang hawkish pada bulan Januari memicu ekspektasi kenaikan suku bunga AS, dan mata uang pasar berkembang termasuk Rupiah mungkin semakin melemah. Perhatian investor akan tertuju pada rilis data pertumbuhan kredit Indonesia di hari Jumat yang dapat memberi gambaran tentang total kredit dan sewa sepanjang bulan Januari. Kenaikan pertumbuhan kredit yang solid akan meningkatkan sentimen positif terhadap Indonesia dapat meningkat pula.

PDB Inggris mengecewakan, Pound tergelincir

Sentimen terhadap Pound merosot pada hari Kamis karena pertumbuhan Produk Domestik Bruto Inggris di kuartal terakhir 2017 di luar dugaan direvisi menjadi lebih rendah.

Office of National Statistics melaporkan bahwa ekonomi Inggris Raya hanya tumbuh 0.4% di Q4 2017, turun dibandingkan estimasi awal pada bulan lalu yaitu 0.5%. Pertumbuhan tahunan 2017 juga direvisi dari 1.8% menjadi 1.7%. Laporan PDB yang mengecewakan hari ini tidak akan mengubah arah hawkish yang diambil Bank of England saat ini, namun dapat menimbulkan tanda tanya baru di benak para investor mengenai prospek ekonomi Inggris tahun ini. Ini dapat meningkatkan ketidakpastian yang membuat Pound rentan mengalami penurunan.

Dolar yang menguat dapat memberi inspirasi untuk bears mengantarkan GBPUSD menuju di bawah 1.3900. Penurunan berkelanjutan di bawah 1.3900 dapat menyebabkan depresiasi lebih lanjut menuju 1.3850 atau bahkan lebih rendah lagi.



Notulen FOMC hawkish, Dolar menguat

Bulls memegang kendali pada Rabu petang karena notulen rapat FOMC Januari yang hawkish mendukung ekspektasi pasar mengenai kenaikan suku bunga AS tahun ini.

Notulen rapat Fed menunjukkan optimisme mengenai prospek ekonomi Amerika Serikat. Para pengambil kebijakan semakin optimis bahwa inflasi dapat menyentuh target 2%. Poin penting dari notulen rapat Januari adalah sebagian besar anggota Fed sepakat bahwa “ekonomi yang menguat dewasa ini meningkatkan kemungkinan bahwa suku bunga akan semakin ditingkatkan secara bertahap”. Investor bullishmenyambut gembira pernyataan hawkish ini. Indeks Dolar melonjak menuju 90.20 pada Kamis pagi. Dari aspek teknis, Indeks Dolar berpotensi menantang level 90.55 setelah penutupan harian di atas 90.00.

Sorotan Komoditas - Minyak Mentah WTI

Sungguh menarik mencermati turunnya harga minyak pada hari Kamis walaupun American Petroleum Institute (API) melaporkan di hari Rabu bahwa persediaan minyak mentah AS menurun di luar dugaan.

Penurunan harga minyak saat ini sangat mungkin disebabkan oleh Dolar AS yang menguat dan prospek kenaikan suku bunga AS. Sebagian mungkin berpendapat bahwa minyak mentah WTI tetap terdukung oleh komitmen OPEC untuk memperketat pasar, namun aksi harga sepertinya tidak mendukung hal itu dan bearstetap menunggu untuk unjuk diri. Produksi minyak serpih AS yang terus meningkat dikhawatirkan akan menjegal upaya OPEC untuk mengatasi masalah oversuplai, dan harga minyak tetap terpapar pada risiko penurunan.

Perhatian investor akan tertuju pada data persediaan yang dirilis oleh Energy Information Administration (EIA) hari ini untuk mengetahui apakah produksi AS terus meningkat. Peningkatan persediaan dapat menyulut kekhawatiran oversuplai dan memukul harga WTI. Dari aspek teknis, WTI dapat tergelincir menuju $60 apabila bears dapat mencapai penutupan harian yang solid di bawah $61. Sebaliknya, breakout di atas $61.80 dapat membuka jalan menuju $62.50.


Source : http://www.forextime.com/market-analysis

 

Daily Fundamental ForexTime ( FXTM )

Testimoni Powell dan data makro dominasi pergerakan pasar






Pasar saham Asia dimulai dengan bergairah, mengikuti arah positif Wall Street di hari Jumat lalu.

Bulls sepertinya memegang kendali setelah S&P 500 mengalami reli 1.6% di hari Jumat dan imbal hasil Treasury bergerak semakin jauh dari level kritis 3%. Reli yang luas di hari Jumat dipimpin oleh sektor utilitas, energi, dan teknologi, dan ini menyiratkan bahwa investor mulai mengabaikan kekhawatiran tentang kenaikan suku bunga. Penurunan VIX Cboe sebesar 11.9% di hari Jumat juga mengindikasikan bahwa volatilitas terburuk mungkin telah berlalu. Walau demikian, investor tidak boleh bersantai dulu, karena pekan ini adalah pekan yang sibuk, didominasi oleh testimoni Ketua Dewan Gubernur Fed baru, Jay Powell, di hadapan Kongres serta rilis data penting dari AS dan Eropa.

Notulen FOMC terbaru menunjukkan bahwa para pengambil kebijakan kini semakin hawkish, namun rute kenaikan suku bunga belum berubah signifikan berdasarkan FedWatch CME. Investor memperkirakan probabilitas 62% tiga kenaikan suku bunga di tahun 2018, dan ini menandakan bahwa pasar menganggap bahwa Powell tidak banyak berbeda dengan Yellen.

Normalisasi kebijakan secara bertahap dengan tiga kenaikan suku bunga di tahun 2018 mungkin menjadi skenario yang paling mungkin dalam pesan Powell. Isyarat kenaikan suku bunga keempat akan mengguncang pasar, sama seperti aksi jual yang terjadi bulan lalu.

Bentuk kurva imbal hasil juga menjadi indikator risiko yang penting. Walaupun kurva imbal hasil yang mendatar menandakan bahwa pertumbuhan ekonomi melambat, tapi selalu disambut gembira oleh investor selama beberapa tahun terakhir. Sejak November 2013 hingga akhir Januari 2018, spread swap Treasury 30-5 tahun merosot ke 41 bps, level terendah sejak 2007. Ini diikuti oleh rekor baru di sektor saham. Indikasi dari Powell bahwa kebijakan fiskal Trump harus diiringi dengan suku bunga jangka panjang yang lebih tinggi juga dapat menjadi tantangan bagi saham. Walau begitu, melihat imbal hasil Treasury saat ini, sepertinya para trader obligasi tidak khawatir.

Beralih ke rilis data, Belanja Konsumsi Personal (PCE) Inti AS di hari Kamis akan sangat diperhatikan karena ini adalah tolok ukur inflasi favorit Fed. Kenaikan di atas 0.3% akan kembali memperhebat kekhawatiran bahwa Fed perlu meningkatkan suku bunga dengan laju yang lebih cepat. Investor juga akan mengamati data PDB kedua AS, pemesanan barang tahan lama, penjualan rumah, pendapatan & belanja personal, PMI manufaktur, dan level keyakinan konsumen.

Rupiah menguat terhadap Dolar, IHSG turun

Rupiah membuka pekan trading ini dengan gemilang. USDIDR turun menuju 13655 karena Dolar melemah.

Walaupun seperti mata uang pasar berkembang lainnya Rupiah tertekan oleh ekspektasi kenaikan suku bunga, namun penurunan ini dapat ditahan oleh prospek ekonomi Indonesia yang menjanjikan. Sinyal pertumbuhan ekonomi yang positif di Indonesia meningkatkan optimisme terhadap negara ini, sehingga Rupiah dapat semakin menguat. Menariknya, Indeks Harga Saham Gabungan merosot 0.98% dan ditutup di 6554.673 pada hari Senin. Saham global menguat di sesi perdagangan hari Senin setelah pantulan yang dialami Wall Street di hari Jumat, jadi sepertinya aksi jual yang dialami IHSG mungkin dipengaruhi oleh upaya ambil untung.



Source : http://www.forextime.com/market-analysis

 

Daily Fundamental ForexTime ( FXTM )

Trade war fears keep investors on the defensive





Global equities are likely to slide on Monday as concerns about a global trade war continue to weigh on investor sentiment. The E.U. was fast to respond to Donald Trump’s threatening tariff talk by calling a meeting this week to discuss protective measures, in case the U.S. proceeds with imposing tariffs on steel and aluminum. European Commission President Jean-Claude Juncker is expected to hit back by proposing countermeasures against the U.S. and similarly, Canada and China are wowing to retaliate.

I expect that this trade fight on will be messy and cause more volatility in equities, fixed income, and currency markets in the short run. However, I believe this may end up with the E.U. and China being less protectionist than the U.S. being more protectionist. After all, there is no winner from a trade war in the long term, and policymakers know that very well. Until this scenarios fully plays out, I expect to see a further selloff in equities and even fixed income markets, with the primary beneficiaries being the Japanese Yen and gold.

The Euro found no support after Germany’s Social Democrat party voted for a coalition deal with Angela Merkel’s CDU party. The muted Euro reaction is mainly due to worries that the Italian elections delivered a hung parliament. The European Union would have a new headache to deal with if Italy formed a euro-skeptic coalition which would undoubtedly challenge E.U. budget rules. Expect to see a sharp fall in Italian equities today.

On the data front, eurozone services PMI’s are likely to show a little bit of slowdown later today, similar to what we saw in the manufacturing sector last week, but the figures are unlikely to have a significant impact on the Euro.

Investors have lot of news to digest this week.

Monetary policy meetings

The European Central Bank meeting on Wednesday is not expected to result in any change to the asset purchase program or interest rates. Traders will be focusing mainly on the language of the statement, particularly any changes in the forward guidance. Given the strong performance in the Eurozone’s economic recovery, many investors are waiting for signals for when the ECB will quit buying bonds. At this stage I think no clear signal will be given. However, the potential of upscaling of QE is likely to be removed from the statement. Thus, the meeting is likely to be slightly positive for the EUR.

Bank of Canada and Reserve Bank of Australia are also meeting this week. Given the slight slowdown in recent economic data, I expect both central banks to keep policy unchanged and the meetings are likely to be a non-event for currency traders.

U.S. Jobs Report

Traders will closely watch the U.S. non-farm payrolls reports. Although hiring is expected to have picked up slightly in February and employment to remain at 4.1%, both these figures will be ignored. Investors are mainly concerned about the average hourly earnings figure. After increasing at the fastest pace in almost a decade, wage growth is expected to fall 0.4% YoY. If this materializes, then previous inflation fears which caused the steep drop in equities beginning of February, will likely ease.



Source : http://www.forextime.com/market-analysis

 

Daily Fundamental ForexTime ( FXTM )

Tech selloff drags down global equities





The steep losses in U.S. technology stocks were carried into Asian markets today with all major indices tracking Wall Street declines. Facebook made the headlines on Monday as reports over the weekend claimed that data from 50 million users was accessed without their permission. The stock fell 6.8% and wiped out almost $37 billion from its market cap. The news will undoubtedly scare advertisers, especially if it leads to regulators changing Facebook’s business model in a way which it may impact the company’s revenues.

Investors should not only be worried about the drop in Facebook equities but also FAANG stocks which have been leading the bull market for many years. Alphabet dropped 3% yesterday, while Apple, Netflix, and Amazon declined 1.53%, 1.56%, and 1.7% respectively. While the fall in Facebook might have impacted the sector negatively, it does not explain the full picture. Concerns that the European Commission will impose new taxes on Tech firms in retaliation for U.S. steel and aluminum tariffs, is an early indication that the trade war should be taken more seriously. If markets decided to turn on FAANG stocks, we would likely see a similar reaction to last February’s correction.

Jay Powell Fed & the dots

The newly appointed Fed Chair, Jay Powell will hold his first press conference tomorrow when the U.S. central bank is expected to raise interest rates for the first time in 2018. Markets have fully priced in a 25-basis point rate increase, so do not expect this to have any influence on the dollar’s direction.

The key to dollar traders is how Fed officials, led by the new Chair, will act on recent economic data and whether the fiscal stimulus will eventually lead to tighter monetary policy in 2018. Market participants are split on whether the Fed will project four rate hikes in 2018 compared to three in the last meeting. An upward shift in the dot plot should support the dollar, although it is likely to lead to further flattening in the U.S. yield curve.

Brexit transition deal sends Sterling higher

The pound was the best performing currency on Monday rising 0.6% against the USD to trade back above 1.40. A Brexit deal was thought to be more positive for Sterling, but given that no agreement was reached on the Irish border, gains were capped. I believe that Sterling may still have further room to appreciate against its peers especially if Consumer prices today and wage data tomorrow provide new signs of inflationary pressure before Bank of England meet on Thursday.



Source : http://www.forextime.com/market-analysis

 

Daily Fundamental ForexTime ( FXTM )

Markets continue to look unsettled





Markets were looking a little unsettled today after yesterdays bullish rise in equity markets. Many had expected that potentially today would see equity bulls look to retake further ground after the recent loses but they were hampered by economic data, as US consumer confidence missed expectations coming in at 127.7 (131 exp). Many had expected a slight rise, as the US economy has been booming and unemployment continues be at record levels, but perhaps the recent political turmoil's are weighing down on the American people. For the most part traders will be eagerly watching tomorrows US GDP results and of course US home sales, to try and gauge the strength of the economy over the last quarter, and for home sales to see if they're improving in line with analysts expectations. Any strong bearish signals could send the equity markets into a bit of a spin, but it's definitely worth watching as right now volatility is very high.



For me the S&P 500 continues to be the one to watch, right now the technical's are very strong and the market is not keen to just lurch forward like previously in some sort of bullish trance. The traders have woken up and are very keen to make the most of it! So far resistance at 2664 is holding back further movements higher after today's disappointing result. In the event of the bears looking to take hold we could see a push down to 2628, but weak economic news could see the all important 200 day moving average retested. In the event we see a push upwards I would be watching the 2693 resistance level and the 100 day moving average, as it sets up a strong technical challenge for the bulls in the present climate. All in all US equities and the S&P 500 continue to be for me the one to watch, especially when playing the technical's as of late.

Spare a thought for the Australian dollar, as lately it has lost the spring in its step. It continues to struggle against the USD as of late, even when it's weaker. So far things are not looking up either economically, and with no economic news this week things could be a little tough as technical traders and USD bulls take hold of things.



On the chart it's clear to see that we're sitting in a bearish wedge, further down the line we could see a potential breakout to the upside. However, for the time being the feeling is quite bearish and resistance today at 0.7760 continues to look quite intimidating for any bulls in the market. When you throw in a 100 day moving average which has been quite tough then things seem almost insurmountable for any bulls in the market. If the bears do get their way then a fall to 0.7546 looks on the cards, but I would also watch the walls of the wedge for dynamic support of course. Any breakthrough and close through the wedge wall should be treated as a very bearish signal.



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Daily Fundamental ForexTime ( FXTM )

USD pairs back in focus






The Yen has been a hot topic for traders as of late, as the Abenomics devaluation looks to have vanished into thin air with the recent bearish movements. But many analysts are making a case now for the USDJPY to come back into fashion and potentially we could see some bullish moves. The recent flights to safety has caused the Yen to rise sharply against most major trading pairs, but with markets enduring volatility and not looking too dangerous, it could be a case of the USD coming back into vogue as interest rates rise. One thing that is clear is that the USDJPY has been falling for some time and while the bears may be in control, there are a lot of bulls out there waiting to pounce on this opportunity when it comes.



The USDJPY has recently come to pause after sliding as low as 104.622, and we've seen some bullish movements. The push upwards had some legs and cracked through resistance at 106.028, however it has failed to really get into the 107 resistance band we see and test that. For me that continues to be one of the key areas that traders will square off with the bears. As we have failed to reach a higher high on this wave it's still a bearish signal. And traders should be aware of this, as the trend is something to be very much aware of in this situation. A push below 106.028 would signal to me that the bears are still in control, albeit not as strong previously.

The Canadian economy quickly came back into focus today as GDP data was worse than expected for the previous month coming in at -0.1% (0.1% exp), showcasing that although the US economy may be booming Canada was having some struggles. One of the major reasons would have been the impact from NAFTA negotiations at this time, which will be of course weighing on consumers and businesses in Canada at present.



While in most circumstances you would expect the USDCAD to obviously rally as the USD would be stronger in this sense, it was quite the opposite as the USDCAD was bearish. It seems USD bulls are still not a major concern for USDCAD traders and the bullish momentum is still lacking at present with the USD bulls missing. Resistance at 1.2923 continues to be a major blocking point on the chart, and it's hard to see the USDCAD getting past this level unless the USD starts to strengthen globally. If we do see them come back into the market then I would expect markets to potentially target resistance at 1.3093 in the long run. On the bearish side that 1.2807 level continues to be the main support level and I would anticipate a bounce after the Canadian weakness, especially with how much this pair loves to play between technical levels.



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Daily Fundamental ForexTime ( FXTM )

Inflasi Indonesia meroket di bulan Maret, Rupiah menguat





Harga konsumen di Indonesia meningkat di bulan Maret karena kenaikan harga BBM dan bahan makanan.

Inflasi Indonesia melonjak menjadi 3.4% YoY di bulan Maret, lebih tinggi dari 3.18% di bulan Februari. Laju inflasi Indonesia di level 3.4% masih berada dalam target tahunan Bank Indonesia sebesar 2.5%-4.5%, sehingga kebijakan moneter BI mungkin mengalami status quo. Upaya berkelanjutan BI untuk mempertahankan stabilitas makroekonomi dan finansial mungkin dapat mendukung konsumsi domestik sehingga menstimulasi pertumbuhan ekonomi.

Rupiah menguat terhadap Dolar setelah data inflasi diumumkan. USDIDR bergerak di kisaran 13749 pada saat laporan ini dituliskan. Rupiah yang menguat dapat mengantarkan USDIDR menuju 13730 di waktu dekat.

Data kembali jadi sorotan utama pekan ini

Saham Asia membuka Q2 dengan positif, diawali dengan reli Wall Street di hari Kamis. Kenaikan ini terjadi walaupun China menetapkan tarif balasan terhadap impor AS dan data PMI Manufaktur gagal mencapai proyeksi ekonom.

Sejauh ini China baru membalas tarif aluminium dan baja yang diumumkan Gedung Putih bulan lalu, dan belum membalas pengajuan tarif tahunan $60 miliar terhadap produk China. Hal ini menyiratkan bahwa Beijing tidak ingin membuka perang perdagangan dengan AS dan mengetahui bahwa perang justru akan lebih merugikan. Walau begitu, sengketa perdagangan masih sangat memengaruhi keputusan investor memasuki Q2.

Banyak trader yang masih libur di hari Senin, jadi kecuali ada pengumuman mengejutkan dari Gedung Putih, sepertinya pasar akan sepi hari ini.

Data makro kembali jadi fokus utama

PMI Manufaktur dan Jasa dari Eropa, Inggris, dan AS akan sangat diperhatikan investor pekan ini. Di bulan Maret, sektor swasta Eropa berkembang dengan laju paling lambat sejak 2017. Ini menimbulkan pertanyaan apakah kinerja ekonomi Zona Euro yang kuat di tahun 2017 hampir berakhir. Apabila ada indikator utama yang gagal mencapai ekspektasi lagi, maka akan mendukung argumen bahwa pertumbuhan global mulai kehilangan momentum. Ini juga akan menjadi justifikasi penurunan kinerja saham Eropa. DAX, CAC, dan IBEX merosot 6.35%, 2.73% dan 4.4% YTD (sejak awal tahun).

Inflasi Zona Euro

Trader Eropa akan sangat memperhatikan IHK awal Zona Euro untuk bulan Maret yang akan dirilis hari Rabu. Di bulan Februari, inflasi terharmonisasi tercatat di level 1.1%, turun 0.2% dari data Januari dan semakin jauh dari target ECB yaitu tak jauh dari 2%. Apabila data kembali mengecewakan, maka para pejabat ECB mungkin akan bersuara untuk menghindari pengetatan kebijakan moneter dan EURUSD dapat semakin tertekan setelah turun lebih dari 1.3% dari level tertinggi pekan lalu.

NFP AS agenda utama pekan ini

Rilis laporan ketenagakerjaan non-pertanian atau NFP AS di hari Jumat adalah agenda terpenting pekan ini. Lapangan kerja AS diprediksi bertambah 198,000 di bulan Maret vs 313,000 di bulan Februari. Sementara itu, tingkat pengangguran diprediksi turun 0.1% menjadi 4%, level yang terakhir kali tercapai 18 tahun lalu. Walau demikian, pertumbuhan upah tetap menjadi data terpenting, setelah merosot di luar dugaan dari 2.8% menjadi 2.6% bulan lalu. Pembahasan terpenting di pasar saat ini adalah apakah Fed akan meningkatkan suku bunga sebanyak 2 atau 3 kali lagi di tahun 2018, sehingga data ini memegang peran penting dalam memperhitungkan ekspektasi suku bunga yang akan terefleksikan pada harga dan memengaruhi arah pergerakan Dolar.



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Daily Fundamental ForexTime ( FXTM )

US markets continue to shine






Large swings in the equity markets have been the recipe of the day recently, as they swung lower on the back of political tensions in the US markets. However, the market saw some positive light as ADP payroll lifted to 241K (210K exp), which was well above what was expected by the market. As a result equity markets have been slightly more upbeat as of late, however the bearish trend has still looked to be the dominate player in the market at present. One other thing that that has been dragging on additionally has been the NAFTA agreement which many had hoped to finish this week, but now looks like it may drag on a little longer, but has provided a positive momentum as of late.



As a result of the equity markets have so far pulled back above the 200 day moving average on the back of this bullish movement. However, I am overly cautious in this sort of market as resistance looks to be tight at 2664 as of late, and has the potential to fall lower to if the technical's come into play. Any break out above this is likely to also meet stiff resistance at the 100 day moving average above this level which is acting as dynamic resistance at present. Any bearish movements lower will hit 2628 and 2579 as support levels, with the 200 day moving average still the major player in this scenario between the bulls and the bears.

As mentioned yesterday the USDCAD continues to be a major player in the current market climate, as it looks to drift lower on the back of USD weakness, and Canadian economic data which so far has been robust and honest. Previous movements in favour of the CAD have been helped by strengthening oil markets, but that is less so the case in recent times as oil markets have been relatively bullish compared to the CAD. Which begs the question, how powerful is the correlation these days between the two pairs. Well for now it seems further mute, but it warrants further investigation based of the wildish movements we have seen in the USD.



All in all the USDCAD has been a technical powerhouse, and there is further movement to go to reach some sort of consensus at this stage. So far the USDCAD head and shoulders pattern looks to be in full swing and is drifting lower at a steady pace. The market is likely to continue this pattern in the short term until the USD can take full control and the potential target of 1.2681 as support looks like a key target for traders.




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Daily Fundamental ForexTime ( FXTM )

Will the earnings season steal the spotlight from trade?





Friday’s steep declines in Wall Street driven by weak employment report and a war of words between U.S. & China seem to have been shrugged off in Asia trade. President Trump’s tweets are becoming a little confusing to investors. After threatening to impose tariffs on additional $100 billion of Chinese exports, Trump tweeted that he will always be friends with President Xi and China will take down its barriers because it is the right thing to do. The trade drama will continue to create noise in the coming weeks, but it will be interesting to hear from the Chinese President at the Boao Forum on Tuesday, where he will likely show his country’s readiness to retaliate, while indicating a willingness to negotiate.

Oil traders will continue eyeing situation in Syria, after the Pentagon denied conducting air strikes on an airport in Homs. The missile strikes came a couple of hours after Trump warned of "a big price to pay", in response to the attack on rebel-held Douma.

While trade tensions and geopolitical risks are likely to keep appetite for risk in check, investors will have new information to digest this week, particularly earnings from big banks and U.S. inflation data.

Inflation data & FOMC Minutes

U.S. Consumer Price Index is expected to increase by 0.1% YoY, to 2.3%. Meanwhile, the core reading is anticipated to hit back the Fed’s target of 2%, after falling short for the past 11 months. The inflation reading along with the FOMC minutes release on Wednesday will probably lead to a repricing of interest rates expectations given any surprise. An upside surprise will likely push U.S. 10-year Treasury yields bonds towards 2.9%, having fallen 17 basis points from its February’s peak of 2.96%.

It’s the Earnings Season

As usual, the U.S. earnings season kicks off with big banks – JPMorgan, Citi Group, and Wells Fargo will report their Q1 results on Friday. According to Factset, the estimated earnings growth for the S&P 500 in Q1 is 17.1%, marking the highest earnings growth since Q1 2011. More interestingly, 26 companies in the Tech sector issued positive Earning Per Share guidance, well above the 5-year average of 11. With the S&P 500 down 2.6% for the year, I think there will be many buying opportunities, especially if trade tensions abate. The forward 12-month P/E ratio at 16.5 looks much more reasonable compared to a year ago.



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Daily Fundamental ForexTime ( FXTM )

Bears swipe on AUDUSD





The Australian dollar continues to struggle on the global stage as markets have punished it for a weaker than expected employment report. With only 4.9k jobs created in the previous month, compared to the forecasted 20k. This is a drop when you compare it to February which saw 17.5K jobs created and the economy was looking a little stronger. To throw things further into the mix the participation rate has dropped as well to 65.5% (65.7%), meaning less people are looking for work, or have given up completely when it comes to finding a job. All in all it's tough times for the Australian economy, and the Reserve Bank of Australia is certainly looking like it may struggle to talk up anything positive about the economy apart from the fact that commodity prices are lifting due to Russian sanctions. The biggest benefactor though of all this chaos has been the AUDUSD which continues to struggle to find any bullish momentum at present.

Looking at the chart it's clear that a bearish wedge was in action, but the market didn't break out as expected. Instead we've seen sideways movement and now a strong bearish movement, which may indicate a return to the bearish trend. The 100 day moving average continues to be a clear level of resistance which no candles were able to close past. Now with the bears in control and support at 0.7760 cracked it looks likely that it may extend all the way down to the 0.7680 area which is likely to be a strong band of support. Beyond this we could see a further push to 0.7546, but that's likely to take some time or worse economic data coming out of Australia.

Recent reports today triggered some interesting moves for Oil markets, as it was report that there was no overhang in oil inventories anymore. In short this means that there is no longer a case of oversupply, and many OPEC nations will be breathing a sigh of relief - even though shale producers are working harder than ever to pump more oil out the ground. What was interesting was that the push today failed just short of the 70 dollar mark, which lends credit to recent thinking that oil markets are likely to range between the 60 and 70 dollar mark. If that is the case then technical levels are likely to come back into play heavily. More than anything though the fall today could most likely be attributed to the strengthening in the USD and traders should be aware of that.

On the charts the oil pull back will get the bears excited and 69.49 is looking like it may be a strong resistance level yet. Bears will be targeting the next two key levels at 67.21 and 66.05 as they push down the charts. In the event that the bulls look to take charge on a Friday then, 69.49 is the likely level to beat, but it would take a large effort to bust through.



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Daily Fundamental ForexTime ( FXTM )

Rupiah merosot di awal pekan trading






Rupiah tertekan di hari Senin karena Dolar menguat dan kenaikan imbal hasil obligasi AS.

Risiko peristiwa utama untuk Indonesia dan Rupiah di hari Selasa adalah rilis laporan Investasi Langsung Asing (FDI) Q1. Peningkatan investasi langsung asing memperkuat potensi PDB dan dapat meningkatkan optimisme terhadap ekonomi Indonesia.

Mengingat sebagian besar mata uang negara berkembang di Asia saat ini tertekan, depresiasi tajam Rupiah sepertinya memang terjadi karena apresiasi Dolar. Jika Dolar terus menguat, USDIDR dapat menguji 14000 dalam waktu dekat.

Angka 3 lagi!

Angka 3 sering menjadi pusat perhatian di tahun 2018. Trump memperkirakan bahwa kebijakannya akan meningkatkan pertumbuhan tahunan menjadi lebih dari 3% per tahun. Federal Reserve diprediksi meningkatkan suku bunga sebanyak 3 kali di tahun 2018. Walau begitu, hal yang paling mengkhawatirkan bagi trader dan investor adalah jika imbal hasil Treasury 10-tahun AS mencapai 3%. Pada saat laporan ini dituliskan, imbal hasil 10-tahun AS hanya kurang 3 bps lagi untuk melampaui 3%, level yang belum pernah tercapai sejak 2014. Apa yang akan terjadi apabila level ini terlampaui?

Saat suku bunga mulai meningkat di bulan Februari seiring dengan ketegangan sektor perdagangan, saham AS merosot tajam. Semua indeks utama AS mengalami koreksi. Kenaikan suku bunga berarti kenaikan biaya kredit untuk perusahaan. Kenaikan suku bunga yang terus melonjak tajam akan menggerus profitabilitas secara signifikan karena biaya bunga yang meningkat. Investor juga akan menyesuaikan biaya modal yang dibutuhkan seiring dengan kenaikan suku bunga bebas risiko, sehingga saham menjadi kurang menarik. Pendapatan konsumen yang dapat dibelanjakan juga akan turun, karena mereka harus membayar cicilan kredit yang lebih tinggi. Jadi, kecuali jika pertumbuhan ekonomi, upah, dan profitabilitas perusahaan lebih besar dari kenaikan suku bunga, maka masa depan mungkin terlihat suram, terutama untuk saham.

Dollar bulls adalah yang paling gembira dengan imbal hasil yang terus meningkat, karena ini adalah peluang emas untuk mengambil posisi long. DXY berada di level tertinggi dua pekan pada awal perdagangan hari Senin, di atas 90.40. Bulls mungkin sedang menunggu konfirmasi dari pasar obligasi sebelum mengambil langkah berikutnya. Break di atas 3% dapat menjadi alasan bagi lebih banyak investor untuk memasuki trade long.

Harga minyak adalah hal lain yang perlu kita pantau. Pekan lalu, Presiden Trump menuduh OPEC sengaja membuat harga emas tinggi secara artifisial. Intervensinya muncul pasca laporan di hari Rabu yang menunjukkan bahwa Arab Saudi akan gembira jika harga minyak mentah meningkat ke $80 atau bahkan $100 per barrel. Ini sebuah pertanda bahwa OPEC dkk. tidak akan mengubah kesepakatan pemangkasan pasokan dalam waktu dekat. Walaupun cuitan Trump mungkin mendorong aksi ambil untung, namun dampaknya tidak akan panjang. OPEC sekarang perlu memperhatikan bagaimana harga minyak yang lebih tinggi akan memengaruhi inflasi dan suku bunga. Walaupun banyak negara saat ini kekurangan inflasi, kenaikan harga yang tajam akan semakin menekan ekonomi global yang sudah tampak lemah. Ini dapat membatasi harga minyak.



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Daily Fundamental ForexTime ( FXTM )

Indeks Harga Saham Gabungan terpukul oleh spekulasi kenaikan suku bunga BI





Saham Indonesia kembali tertekan di spekulasi bahwa Bank Indonesia akan meningkatkan suku bunga demi memperkuat kurs Rupiah.

Kenaikan imbal hasil Treasury AS meningkatkan nilai tukar Dolar sehingga Rupiah dan mata uang pasar berkembang lainnya pun melemah. Intervensi BI akan memengaruhi cadangan devisa. Dengan kata lain, intervensi berkelanjutan untuk melindungi Rupiah akan semakin sulit apabila Dolar terus menguat. Walaupun ekspektasi pasar bahwa BI akan meningkatkan suku bunga dapat memperkuat Rupiah, tapi Indeks Harga Saham Gabungan sangat dirugikan dengan merosot 2.51% dan ditutup di level 6073.02.

Sterling melemah ke bawah 1.4000

Sterling kesulitan untuk bangkit ke atas level penting 1.4000 pagi ini karena investor mempertanyakan peluang kenaikan suku bunga BoE di bulan Mei.

Dolar yang melonjak tajam semakin menekan GBPUSD yang bergerak di kisaran 1.3957 pada saat laporan ini dituliskan. Inflasi Inggris melambat dan Mark Carney memberi isyarat berhati-hati, karena itu ekspektasi investor atas kenaikan suku bunga di bulan Mei pun berkurang. Pound sangat sensitif terhadap spekulasi kebijakan moneter dan dapat semakin melemah.

Dari sudut pandang teknikal, GBPUSD bearish di grafik harian. Penurunan tegas ke bawah support penting 1.4000 dapat menyebabkan depresiasi lebih lanjut menuju 1.3920 kemudian 1.3800. Agar bulls dapat kembali unjuk gigi, harga harus mencapai penutupan harian di atas 1.4000.



Sorotan mata uang - USDJPY

Yen tergelincir ke level terendah dua bulan baru yaitu 109.25 pada sesi perdagangan hari Rabu karena kenaikan imbal hasil obligasi AS memperkuat Dolar.

Dolar diperkuat oleh kenaikan imbal hasil obligasi pemerintah AS serta ekspektasi kenaikan suku bunga AS. Karena itu, USDJPY berpotensi terus menguat. Dari sudut pandang teknikal, USDJPY bullish pada rentang waktu harian karena secara konsisten ditemukan Higher Highs dan Higher Lows. Penutupan harian di atas 109.00 dapat membuka jalan untuk peningkatan menuju 109.70. Sebaliknya, jika bulls gagal mempertahankan kendali di atas 109.00, level target berikutnya adalah 108.40 dan 107.80.



Sorotan komoditas - Emas

Emas merosot menuju $1324 walaupun pasar saham global pun merosot tajam.

Dolar yang menguat signifikan, ekspektasi kenaikan suku bunga AS, dan berkurangnya ketegangan geopolitik adalah kemungkinan penyebab utama melemahnya harga logam mulia ini. Dolar diprediksi terus terangkat karena kenaikan imbal hasil obligasi dan spekulasi suku bunga Fed, sehingga emas dapat terus tertekan. Apabila PDB AS memberi kejutan positif di hari Jumat, bears mungkin mendapat alasan untuk mengantarkan harga menuju $1300. Walau begitu, perlu kita perhatikan bahwa emas masih berada di rentang $60 yang luas, dengan support di $1300 dan resistance di $1360. Harga emas sepertinya akan tetap berada dalam rentang ini, kecuali ada faktor pemicu baru yang menyeruak.






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Daily Fundamental ForexTime ( FXTM )

FOMC disappoints hawkish USD bulls





The FOMC has spoken, and to no ones surprise it has not raised interest rates at all for this month; opting to continue to hold them at the current 1.75%. The market has certainly been expecting this, and the odds are still very high that the FED will act in the month of June to boost rates as employment continues to expand and the FED expects the US economy to further expand on the back of recent tax changes. The only thing that could potentially change things at present is of course inflation, with the FED still looking to hit that 2% mark as part of its policy. If we saw a jump in inflation then of course this could quicken the pace for interest rate rises, but in recent times it has been sluggish, and a little hard to predict, so it will be hard to really guess where it's going from here.



As a result of the comments the reactions so far have caused some dollar weakness in the market, as traders were looking for something a little more hawkish. For the most part though major pairs have not seen any major moves and are still positive for trend opportunities. Case and point the USDJPY which has been in a bullish trend for some time now as it glides up the chart with a potential target of 111.083. Support at 109.347 is also looking quite strong with the potential for any bearish pressure to find it tough going around there. The trend is strong, and US fundamental data continues to be strong, putting the USDJPY is a strong position to continue its gains. Also note there is a potential short term bullish trend line, however it's quite steep and short so it would only be able to hand light pressure from the current market volatility.

The GBPUSD continues to be a trade not to be taken lightly with all the recent debate around Brexit and of course a resurgent USD. There are still some thorny unpopular issues surrounding the UK government with no clear impasse based on the EU's comments. However, there was briefly progress and the markets were enjoying it for some time as could be seen by the bullish movements. The USD though has turned that bullish sentiment on its head and is now dominating the GBPUSD as a result.



Looking at the GBPUSD and the technical's we can see that it has clearly cracked through that bullish trend line with a vengeance and is drifting lower under bearish pressure. Right now it's testing support around 1.3575 with the potential to go lower to the next level at 1.3314. In the event that the GBP does manage to get some bulls finding interest I would look to the long term trend line as dynamic resistance before contemplating 1.3801 as the next level of resistance in this instance. Long term trend lines are well known for rejecting wave movements, rather than trending. All in all, the GBPUSD has turned and is looking like a very interesting trade at present with the potential to go lower.



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Daily Fundamental ForexTime ( FXTM )

Rupiah stabil menjelang rilis data keyakinan konsumen




Rupiah stabil sedangkan Indeks Harga Saham Gabungan melemah menjelang rilis laporan Keyakinan Konsumen Indonesia bulan April. Rupiah berpotensi menguat apabila keyakinan konsumen Indonesia semakin membaik. Walau begitu, peningkatan kurs Rupiah mungkin terbatas oleh faktor eksternal. Karena Dolar dapat terangkat oleh prospek kenaikan suku bunga AS dan naiknya ekspektasi inflasi, mata uang pasar berkembang termasuk Rupiah mungkin tetap tertekan. Dolar yang menguat secara agresif dapat memaksa Bank Indonesia untuk meningkatkan suku bunga acuan demi menyelamatkan Rupiah.

Terkait prospek forex, Rupiah stabil terhadap Dolar dan harga bergerak mendekati 13935 pada saat laporan ini dituliskan. Dengan peningkatan antisipasi menjelang rilis NFP AS di hari Jumat, USDIDR dapat mengalami volatilitas lebih tinggi.

PMI Mengecewakan, Pound Melemah, Minyak Tidak Stabil

Investor yang mencari peluang cepat untuk menyerang Pound menemukannya pada hari Kamis setelah rilis data menunjukkan bahwa sektor jasa Inggris pulih lebih lambat dari yang diharapkan bulan lalu.

PMI sektor jasa Inggris meningkat menjadi 52.8 di bulan April, lebih tinggi dari bulan Maret yaitu 51.7, namun di bawah prediksi pasar yaitu 53.5. Data sektor jasa yang lambat ini dapat memicu pesimisme dan kekhawatiran bahwa pertumbuhan ekonomi tetap terhambat. Ekspektasi bahwa Bank of England akan meningkatkan suku bunga pekan depan semakin menurun setelah laporan PMI yang mengecewakan hari ini. GBPUSD merosot menuju 1.3573 pada saat laporan ini dituliskan. Pound dapat semakin merosot apabila ketidakpastian Brexit dan penurunan ekspektasi kenaikan suku bunga Inggris memberi risiko turun. Divergensi kebijakan moneter yang semakin besar antara BoE dan Fed dapat memberi alasan bagi bears untuk mengantarkan GBPUSD ke level yang tak pernah tersentuh sejak Desember 2017 yaitu di kisaran 1.3400.

Dari sudut pandang teknikal, GBPUSD tetap sangat bearish di grafik harian. Ditemukan level tertinggi yang konsisten lebih rendah (LH) serta level terendah yang lebih rendah (LL) sedangkan MACD melintas ke bawah. Breakdown di bawah 1.3640 dapat menyebabkan depresiasi lebih lanjut menuju 1.3580 kemudian 1.3500.



Sorotan Komoditas - Minyak Mentah WTI

Harga minyak menguat di hari Kamis karena investor mengabaikan kenaikan persediaan minyak mentah AS dan berfokus pada pemangkasan pasokan OPEC dan perkembangan situasi nuklir Iran.

Aksi harga mengatakan bahwa WTI bulls tetap sangat mengandalkan ketegangan geopolitik dan kekhawatiran kekurangan pasokan untuk mempertahankan peningkatan harga saat ini. Harga minyak dapat semakin meningkat apabila AS mundur dari kesepakatan nuklir Iran 2015, tapi kenaikan ini sepertinya tetap dibatasi oleh produksi minyak serpih AS yang tinggi. Harga minyak tetap tidak stabil dan apresiasi Dolar dapat mempercepat penurunan. Dari sudut pandang teknikal, WTI bulls menampilkan pertanda awal kelelahan di grafik harian dan resistance terlihat di $69.00. Jika bulls gagal bertahan di atas level $67.50, maka harga dapat melemah ke arah $67.00 dan kemudian $66.00.



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Daily Fundamental ForexTime ( FXTM )

Emerging markets face punishment from stronger Dollar






The unprecedented turnaround of fortunes for the US Dollar is continuing to leave a lasting impression on the FX markets, following the Dollar Index’s rise to above 92.80 on Monday, a new milestone for 2018. The emerging market currencies are now playing catch up with some of the excessive losses seen in developed currencies like the Euro, British Pound and Japanese Yen over the past couple of weeks, with the Dollar broadly stronger against the emerging markets at the start of the week. Asian currencies have also fallen victim to the latest round of USD buying momentum. The Japanese Yen, Singapore Dollar, New Taiwan Dollar, Korean Won, Philippine Peso, Indonesian Rupiah, Chinese Yuan, Malaysian Ringgit and Thai Baht are all suffering as a result of the USD’s strength at time of writing.

While there will be concerns that the extended run of Dollar-buying momentum risks spelling pain for the emerging markets in ways not seen since the Federal Reserve began raising US interest rates back in 2015, emerging market investors should not panic. It must not be forgotten that we are encountering an unexpected global theme where the Dollar has become unexpectedly stronger than the overwhelming majority of its counterparts. The British Pound has nosedived 5.5% since April 17th, while the Euro has lost 3.7% during the same period.

Rather than investors becoming concerned about the future prospects of the emerging markets, the real question to ask is - what exactly has encouraged such a turnaround in investor demand for the Dollar? Many will be inclined to look towards the 10-year US treasury yields, that are above 3% for the first time since 2014, as being the main catalyst behind the Dollar drive. Although I am personally leaning towards the view that increased interest rate differentials between the United States and its developed peers are what is causing the move in the US Dollar. Both the Bank of England (BoE) & European Central Bank (ECB) have seemingly backtracked from their own interest rate ambitions over the past couple of weeks. This has reminded investors that the Federal Reserve remains significantly beyond its developed peers when it comes to normalizing monetary policy.

Euro hits new 2018 low

The EURUSD has resumed its recent downward spiral by falling below 1.19 for the first time since late 2017. A new round of weak economic data has exposed further fears that the Euro area is at risk of entering another downturn. I personally feel that this view is a little unfair, considering that the Eurozone outperformed all expectations throughout the previous year. The latest EU data will however provide the ECB with more reason to remain hesitant on raising interest rates, meaning that increasing interest rate differentials between the United States and Europe risk exposing the EURUSD further to the downside.

China and Nafta talks still in spotlight

The first round of negotiations between the United States and China concluded at the end of last week with no breakthrough, as expected. While ongoing talks behind the scenes have eased tensions around a potential trade war between two of the largest economies in the world, investors will remain on high alert for trade threats, as long as the discussions fail to bring any tangible results.

Oil benefits from Iran risk

Persistent fears that President Trump will pull out of the Iran nuclear deal later this week have played a pivotal role behind the price of US Oil rising above $70 for the first time since November 2014. With Trump having referred to the Iran agreement in the past as “the worst deal ever”, it is not difficult to understand why investors are pricing in heavy risk premiums into the price of oil before Trump’s announcement on the Iran nuclear deal this evening. It does need to be remembered that there will be wider implications than the price of oil, if Trump does abandon the 2015 nuclear deal.

Iranian President Hassan Rouhani has already warned that the US would “regret” its decision to exit the nuclear deal, and concerns over how Iran might react to the United States pulling out do not appear to have been factored into other asset classes. One of the most difficult questions to answer is what impact the United States pulling out of the deal might mean for politics in the Middle East.

There is a likelihood of market uncertainty in the lead up to Trump’s “decision” on the Iran nuclear deal today, and I think the Japanese Yen and Gold will be sought from investors if there is a period of risk aversion in the markets.

Ringgit weakens ahead of General Election

Ahead of an extremely busy week for the Malaysian economic calendar, the Ringgit is showing signs of weakness against the USD.

The intense buying momentum in the USD has probably been the main contributor to the Ringgit fluctuations, but the general election later this week will still be seen as a potential event risk. If there is unexpected uncertainty with the election in Malaysia, it can’t be ruled out that the Ringgit could find itself at risk of further selling pressure.

Rupiah weakens as Indonesia GDP disappoints

The Indonesian Rupiah tumbled to its lowest levels since December 2015 at 14,000, after GDP growth in Indonesia showed signs of weakness in the first quarter of 2018. The headline GDP miss has been attributed to weak consumption, and the news failed to help the Rupiah pull away from its recent rut that has seen the currency take the position of the second-worst Asian performer over the past three months.

The slower pace of economic growth is going to make it difficult for Bank Indonesia to raise interest rates, despite calls for the central bank to take action in an effort to prevent the local currency from further weakness.



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Daily Fundamental ForexTime ( FXTM )

GBP and AUD continue to struggle






The pound has come under increased pressure over the last few weeks, as the so called Brexit continue to fail to come to any sort of conclusions at all for markets. Certainly there is a case for leaving the EU, however no politicians can come to any sort of agreement on it. Further to the downside has been UK retail sales m/m coming in at -4.2% (-0.75% exp), which is much worse than anyone expected, and a figure not seen since 1995 when records began. It's clear that off the back of this traders will be looking to offset losses and clear balance sheets.



Looking at the GBPUSD it's clear to see that that the daily char reflects a number of key points, the first being that Brexit continues to be a major topic and that the initial positivity of a quick solution has quickly failed. Further to this economic data continues to be a mixed bag as can be seen from the retail sales figures above, which will put further pressures on UK businesses. For me the defining technical movement is of course resistance at 1.3575 holding up very strongly to any pressure at present and preventing anything but bearish movements from happening. The market as a result is looking increasingly like it may look to move lower to support at 1.3314 if the bearish pressure continues in the short term. However, a push down here may provoke a very strong bearish pressure.

The Australian dollar can get no breaks as of late, as it continued its bearish run against the USD even further today. This comes as no surprise as the trend has been quite bearish, but also retail sales m/m came in at 0% (0.2% exp), showing that the consumer sector is weaker than expected. While not largely off the market it continue to show that the Reserve Bank of Australia will struggle to lift rates in the near future if the status quo continues.



Looking at the AUDUSD on the charts it's clear to see the bearish trend that has been in effect for the last month and looks set to continue in these circumstances. The AUDUSD has cracked through support at 0.7472 and is now looking lower on the charts in the face of bearish pressure, to the potential support level at 0.7371 as the bears look to target lower lows. In the event we do see any bullish pressure in the market expect 0.7472 to be the key area that will either allow the bulls to take control or reaffirm the bearish trend in this market, as the AUDUSD continues to be a bearish story in the interim.



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Daily Fundamental ForexTime ( FXTM )

AUD struggles in market enviroment





The Australian dollar got some positive news for a change as it faced off against the USD and won a round for the bulls after a month of bearish pressure. This has been positive on the fact that the Australian economy in the employment sector has performed better than most expected with Australian employment coming in at 22.6K ( 20K exp) and the unemployment rate lifting to 5.6% (5.5% prev) on the charts as a result. For now the Australian dollar continues to find itself under pressure, with the labour market being the only strong point. Despite all of this the Reserve Bank of Australia continues to look for positives for the future, with inflation being a key compontent for any future rate rises.



The AUDUSD continues to climb high, but only on the back of weaker currencies as of late. The AUDUSD failed to make it through resistance at 0.7506 as traders are quite bearish above that level of pace that the AUDUSD continues to go through. Traders will be looking ot see if the market can indeed pressure here and breakthrough, but in reality it could be another bearish test followed by further pressure on 0.7472. I would expect in the long run that we could potentially see an extension to 0.7371 on the charts if the USD strength continues to be a mainstay for the market. All in all the AUDUSD finds itself in a unique position and I would expect to see further bearish pressure unless anything radical comes about in the markets.

The other key mover has been EURUSD which has struggled to find its feet under immense pressure from the USD but also weakness in Europe surronding Iran and Italy. The market has been looking for strong words from the EU and how much the Italian goverement changes will influence the EU, but so far it has shown little promise of anything radical in the way of changes. Despite all of this the EURUSD is always a favourite for traders and has slid down the charts reflecting USD strength. If we do see futher politiacl pressure we could see the EUR drop further against all major pairs.



One of the key areas has been support has been 1.1760 which has so far defending againt any and all bearish movements lower on the charts. It's unlikely this key level will hold in the long run and we could see further slippage down into the low 1.10 levels if the USD strengthening continues. I would expect that any movements higher are likely to find strong resisstance at 1.1825 on the charts as this level has come under pressure in the past.



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Daily Fundamental ForexTime ( FXTM )

Key market events to watch this week





Trade war on hold - for now

Asian stocks gained on Monday morning as investors learned that the U.S. and China agreed to drop the tariff threats against each other while they continue to work out an agreement. This was the second round of trade negotiations without clearly defined targets, suggesting that there’s still a long way to go. Today, a trade war may have been averted, but according to the joint statement from both countries, nothing is being guaranteed apart from China promising to increase American imports. It seems that tensions will remain for the foreseeable future and investors will have to live with it; unless the U.S. officially announces that it is imposing tariffs on China, the noise in the background will have little impact on sentiment.



Nicolás Maduro wins Venezuelan elections

As was widely anticipated, Nicolás Maduro won another six years in office in Sunday’s elections. The Venezuelan economy, which has been struggling for several years, may enter a deeper crisis if the U.S. and other western countries step up sanctions against the nation. Brent crude, up 0.7% at the time of writing, might benefit further from the increasingly grave outlook for Venezuela, if proposed sanctions result in a steeper decline in output.



FOMC minutes

The dollar climbed to a new 2018 high on Monday, with overall gains of more than 6.3% from its lowest point in February. The U.S. currency has been benefiting mainly from improved economic prospects and higher interest rates. Whether the upward trajectory will resume in the short run, is likely to depend on the FOMC minutes scheduled for release on Wednesday. The Fed has changed its language with respect to inflation and become slightly more bullish, but its latest statement didn’t indicate a faster tightening in monetary policy. Whether the Fed is prepared to fight inflation, or whether it will be more cautious about raising rates too quickly, will be reflected in the minutes. However, with a number of speeches scheduled from Fed officials this week, it will be interesting to hear their thoughts on how oil above $80 may impact policy.



Italy’s new government

Italy's new government is likely to be formed within the next few days and provide a new headache for Brussels, since populists will be leading it. Italian borrowing costs rallied sharply over the past several days, as investors sold Italian debt after a leaked draft showed the new coalition’s intentions to request the cancellation of €250bn of Italian government debt. How things go from here depends on whether the new government follows through on its promises, that include a massive spending spree that conflicts with the EU’s budgetary rules, or whether it starts to gradually scale back .



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Daily Fundamental ForexTime ( FXTM )

Yen and Lira fight back against USD





FOMC minutes were released not too long ago and they reveal that the June rate hike is very likely to happen after FED members were positive about the state of the economy and the recent rise in inflation. It also showed that if inflation did increase beyond forecasts they FED would likely let it run instead of risking bumping rates to soon and causing a pinch effect in the economy if it tapered off; as a result the USD is a little weaker as many had expected the FED to be more hawkish, rather than let inflation run in this instance. The FED also noted the recent risks, with China and NAFTA being threats to the US economy and progress overall for the expansion of the economy. However, there is little the FED can do but try and negotiate the turbulent waters that come with politics and trade agreements.

One of the big movers on the back of the USD weakness has been of course the USDJPY, which moved quite heavily as a result of bad economic data (US home sales) and of course the dovish response from the FED in regards to inflation.



The USDJPY had been moving in a tight channel up the charts as the USD appreciation and positive risk sentiment saw traders looking to exit the USDJPY. However, after today's movements that channel has now been broken and even a bullish fight back was unable to contain the bears as they looked to swipe a little lower. Traders may be looking now to target key support at 109.347 and with further potential falls to 107.718 on the cards as well, but it's also worth noting that the USDJPY does not break levels easily and can just as easily move sideways until it finds direction. In the event this is just a pause I would look for markets to have another crack at resistance at 111.083. The long term for the USDJPY does look to be bullish, but the positive risk climate must continue to enable it to do so, and there will inevitably be days where these sort of movements happen.

The other back mover made reference to by my colleagues has been of course the Turkish Lira which has come under immense pressure over the last few days, as a strengthening USD and economic/political factors have undermined the currency heavily - much like the Russia crisis a few years ago.



The Turkish Central Bank has taken the extraordinary step to intervene without any formal meeting, lifting interest rates by 3% in the wake of all the aggression. This has had a positive effect when it comes to stopping the bleeding for the currency, as it touched on resistance at 4.9200 but has since fallen back sharply since the rate rise. Markets will now be looking for potential support levels, but it's hard to tell where they start and stop with possible areas being at 4.4916 and 4.2840, if the bears continue to fight back.



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