Daily Market Analysis From Forexmart

EUR/USD Fundamental Analysis: November 21, 2018



The euro major par declined abruptly during the US session and reached a fresh new low at 1.1359. The greenback has strengthened across the market in the last hours of trading especially equity in Wall Street paired against yen and euro and consolidated losses due to a bearish decline. Earlier, the price peaked at 1.1472, which has been the highest since November 7 but pulled back and lost momentum, resulting in a correction and lose over 100 pips. The risk-off sentiment yesterday lead the financial markets with the greenback standing strongly against the common currency as well as other main competitors

The decline is not just about the risk-off sentiment with the euro which also had its weakness that was primarily because of the tension between EU Commission and Italy on the 2019 budget. Moreover, the rhetoric by ECB’s Weidmann saying that policy normalization may take a long time.

This adds high bearish pressure on the common currency with concerns on the possible sanction for the Italian government from EU being lenient to France on budget concerns. Italy pointed out that growing out may lead to an economic slowdown that may affect the whole of Europe.

How the EU reacted may add a bearish pressure to the euro if it turns out against Italy, that could add political tension and reach new highs. However, the yields differential may decline abruptly, raising again the euro to yesterday’s high of 1.1472 if the EU becomes more dovish. As for the headlines, there is no data to be released from the Eurozone but existing homes sales data and core durable goods from the US are scheduled today, as well as the weekly crude oil inventory.

 

EUR/USD Fundamental Analysis: November 23, 2018



The euro major is moving steadily upward higher than the 1.14 during the Asian session as the sentiment on the common currency shifted by the Brexit optimism and general weakness of the US dollar as markets prepare for the Markit preliminary of November PMI scheduled later from the EU and the US. The euro gained early bids amid thinned market due to holidays. The Asian market supports the Brexit declaration as talked about by the UK and the European Commission for the night that lays out trade relationship prior to the Brexit summer this Sunday.

The weakened US dollar across the market amid trading concerns of the Fed may tighten and slowed down the pace but keeps the currency afloat. Moreover, the euro supported the ECB minutes that showed the central bank pursuing the QE easing program in December in the background of sluggish Eurozone economic growth. On the headlines, the Eurozone flash manufacturing and services PMI reports will boost and Italian budget concern will still have an influence over the euro in the next few days.

 

EUR/USD Fundamental Analysis: December 3, 2018



The euro major pair is trading close to a fresh midline at 1.1340 during the Monday session after the momentum of risk appetite after the G20 summit over the weekend that allows the broad recovery after the US and China put on hold the tariff increase for another three months as they come to an agreement again. Meanwhile, Italy has been open to negotiating budget plans which can be an obstacle for the euro bulls.

Over the weekend, Italy’s Prime Minister Conte and European Commission’s Jean-Claude Juncker discussed the deal between Italy and the EU while investors are still uncertain about the deficit spending of Italy and growth forecast until solid data has come out. On the headlines, traders should look out for the Eurozone PMI for the month of November while a drop of the German PMI is anticipated right before it.

 

EUR/USD Fundamental Analysis: December 7, 2018



The movement of the global trades has affected the US dollar being the safe haven and added downward pressure on the euro major pair. Recent headlines about the arrest of top executive and add worries about the US-China relation that reduces appetite for riskier assets on Thursday. The dollar didn’t gain a leverage on the early uptrend but was instead brought down by the negative US employment report, failing to meet the expected figure. It seems that the USD bulls wasn’t swayed as much with optimistic US ISM non-manufacturing PMI data with its sudden uprise.

Moreover, the shift in the US Treasury bond yield curve that signals potential recession that adds pressure to the dollar and adds momentum to the pair’s intraday positive momentum. The price rose higher than 1.1400 handle, close to the weekly high on Tuesday. It has been moving steadily and oscillating in a narrow trading band during the Asian session. Now, investors are monitoring the US NFP monthly jobs reports that could drive a significant momentum today. Yet, trades still have to be heedful with nearing OMC monetary policy decision in the latter days of the month. Thus, there are less expectations for the day and resume its trading range-bound in a broader trading range.

 

EUR/USD Fundamental Analysis: December 7, 2018



The movement of the global trades has affected the US dollar being the safe haven and added downward pressure on the euro major pair. Recent headlines about the arrest of top executive and add worries about the US-China relation that reduces appetite for riskier assets on Thursday. The dollar didn’t gain a leverage on the early uptrend but was instead brought down by the negative US employment report, failing to meet the expected figure. It seems that the USD bulls wasn’t swayed as much with optimistic US ISM non-manufacturing PMI data with its sudden uprise.

Moreover, the shift in the US Treasury bond yield curve that signals potential recession that adds pressure to the dollar and adds momentum to the pair’s intraday positive momentum. The price rose higher than 1.1400 handle, close to the weekly high on Tuesday. It has been moving steadily and oscillating in a narrow trading band during the Asian session. Now, investors are monitoring the US NFP monthly jobs reports that could drive a significant momentum today. Yet, trades still have to be heedful with nearing OMC monetary policy decision in the latter days of the month. Thus, there are less expectations for the day and resume its trading range-bound in a broader trading range.

 

EUR/USD Fundamental Analysis: December 10, 2018



The US dollar dropped below Friday session that has further lower by the unexpected monthly jobs report and shows the economy gained only 155,000 new jobs in November. Dovish comments by the Fed governor Lael Brainard and St. Louis Fed President James Bullard support the comments of the postponement of the Fed rate hike cycle in 2019. Selling greenback has boosted the economy over signs of weaker economic growth in the eurozone and pushed for a steady ascent of the euro major pair, ending the week with optimism, just higher than 1.1400 handle. Another report of the third quarter GDP revision shown an annual growth rate of 1.6 percent, slightly lower than the forecast of 1.7 percent. Nevertheless, this had a few impacts on sales.

Reports on China import and export growth figure published over the weekend that instilled fears of global growth slowdown and chances to postpone the Fed rate hike in 2019. Moreover, worsening trade tension between the US and China, as well as the arrest of top Chinese executive in Canada, has added weight to the sentiment of investors and cap the rally despite important economic reports from the euro or the US. The dollar sell-off will probably continue until the European market hours given the dovish turn of Fed expectation that is favorable for US dollar denominated global currencies in depreciating exchange rate.

Both of the US and European markets are subdued but we can anticipate for the release of job openings reports to be hawkish that could boost the US greenback broad-based market sentiment. On a technical aspect, the pair was able to clear a significant descending resistance trend line and a part of the symmetrical triangle on the daily chart was established.

 

EUR/USD Fundamental Analysis: December 11, 2018



The euro major pair induced a bearish outside reversal on Monday and was not successful to breakthrough the symmetrical triangle on another Brexit uncertainty. The UK Prime Minister Theresa May postponed the vote on the exit deal which was already anticipated. The added pressure pushed the British currency since April last year and adds pressure to the risky assets resulted in picking up momentum to the safe haven bidding of the US dollar in the broad market. Furthermore, the possibility of a hard Brexit to continue in the past 24 hours. Hence, risky assets may gain more pressure at least until the uncertainty of Brexit was removed. Euro was also pushed down in the broad market yesterday as French President Macron announced economic emergency regarding the yellow vest protests.

The spread between the US 10-year yield and its German counterpart was 260 basis points, which was the lowest level since October 1. On a technical aspect, the sudden overnight retracement resulted in a short-term bullish breakout that may lead to a fake-out. The weakness lower than the area of 1.1350-45, it strengthens the possibility of a breakout and hastens the movement towards another ascending trend-line support. A continuous weakened movement will push the pair in returning to the yearly lows of 1.1215. On the other hand, a breakout in the solid resistance will likely move the pair towards the 1.1500 level.

 

EUR/USD Fundamental Analysis: December 12, 2018



The euro major pair is trading within a range after the sudden drop to the overnight lows at 1.1400 below the middle of 1.13. The US dollar reversed the majority of its early losses following the release of the core PPI data which is one of the main factors to influence the overnight decline of the pair. The currency was further pushed lower bu the Italian finance minister Giovanni Tria’s rhetorics over the fixed budget of Italy within the European Commission. Yet, the pair has gotten steady caused by the positivity of the Sino-US session trade talk and reaches close to the previous low.

The US President Donald Trump has said Reuters would get involved if these will support the trade deal with China. Moreover, further negotiations are already taking place via the phone but if necessary, he is willing to meet with President Xi Jinping once again. Consequently, the US dollar weakened as a safe haven in Asia the puts a stop to yesterday’s sharp decline.

On the headlines, the European markets anticipate for the release of the Industrial production data while on the US, the Core CPI & Crude Oil Inventories data are scheduled today. The price action will be highly affected by the ongoing political issues in Europe and US macro data, which will highly likely bring in volatility in the market. Considering the technical perspective, calm bidding was seen during the Asian session after the Nov 13 and 28 lows yesterday. Meanwhile, the rising trend line resulted in a deeper sell-off and a bullish reversal is established when the price goes above the 55-day moving average.

 

EUR/USD Fundamental Analysis: December 17, 2018



The euro major pair had a reduction triangle breakdown on Friday after the rise of global growth fears, resulting for traders to shift to equities to minimize risks. The pair is currently trading in the flat as investors are looking forward to FOMC as guidance.

Traders continue to draw bids, sending the euro major pair at as lower rate towards the latest low of 1.1215 if the global equities continue to be the solution amid the rising uncertainty of growth internationally. On Friday, weak economic data from China has awakened fears for a global economic slowdown and lessens investor’s appetite for riskier assets. People looking for safety has strengthened the US dollar as a safe-haven that increases the dollar by 1 and a half year high, inducing a strong selling of the EUR/USD pair. The common currency was further dampened by the weakened German and eurozone PMI in December, indicating a prominent slow down from both manufacturing and services. These data confirmed the dovish sentiment of ECB on Thursday and pushed traders to lessen expectation for next year’s rate hike. It further pushes the common currency to break through lower than 1.13.

Yet, the mixed result from the US macro calendar resulted to a decline of both Industrial/Manufacturing production data and PMI despite the retail sales data, prompting sluggish business growth and reduces prospect for fed rate hike in 2019, limiting the euro decline and triggers a rebound from below and hover above 1.13 as market closed for the week. Meanwhile, the broad-based market for the dollar pushes the euro lower. It was able to trade flat during the Asian session starting the trading session for the week. Currently, the euro major pair is trading flat at 1.1307 with an apparent increase of 0.015 on the day. Meanwhile, the pair is showing a positive trend while the upside continues to be restricted by the FOMC update being the major event for the week, which will influence the future trading of the dollar.

 

EUR/USD Fundamental Analysis: December 19, 2018



The euro major pair stays higher than the mid-level of 1.13 during the Asian session today. Early morning the price grew by 100 pips from Friday last week low of 1.1270 and rebounded from a two-week low and continues to move forward on Tuesday, despite the not-so-good data on German Ifo business climates in December due to broad-based USD sell-off momentum. Meanwhile, Italy has reached an agreement with the European Union regarding the controversial issue on the budget which supported the positive drive for the euro bulls but was not able to induce a bullish breakout.

The dollar sell-off was from the retracement from 1.5 years last Friday that further worsened by the concerns of the slow rate from the Federal Reserve or put on hold with the sharp drop of the dollar index reaching one week low yesterday. The Bearish pressure grew higher after the intervention of the US president on the Fed’s monetary policy that influenced further the weaker sentiment. The pair grew to 1.1400, gaining 40 pips over one week but soon began its decline from highs and settled to 40 pips from a daily swing high. The pair was able to hold range-bound trading in the upper half of 1.13 across the Asian market. On the headlines, traders will give their attention to the anticipated US FOMC interest rates decision while the US Fed is presumed to raise their rates by 25 bps, which was the fourth rate hike this year and look forward to the increase in 2019 on a “dot-plot” which will determine the short to medium term sentiment on greenback and possible give a new direction for the major currency.