SuperForex Analytics and Economic News

[Superfx_official]

EUR/USD Technical Analysis & Daily Chart

We need to sell the pair today, as the trend has turned bearish.

Today we would take a look at the EUR/USD currency pair. Despite a drop in the dollar two weeks ago, recently the American currency strengthened again and pushed the pair towards bearishness.

The outlook for the European single currency remains somewhat mixed. Inflation targets still haven’t been reached and the dovishness of the European Central Bank is scheduled to continue at least until the middle of 2019. Though there has been a fair bit of uncertainty regarding crises that can possibly affect the EU, such as the collapse of the Turkish lira or the Italian budgetary issue, overall the European economy is doing well. Analysts expect that in the last quarter of 2018 we might see a stabilization in the single currency.

On the other hand, the American dollar continues to reign supreme on the financial markets. The USD is supported by a positive economic outlook in the United States, as well as last week’s interest rate increase by the Federal Reserve. With strong fundamentals and another hike expected before the year’s end, the outlook for the USD remains bullish. Today the dollar might increase again if the employment and manufacturing reports exceed the forecasts.

In terms of the daily chart, today we have a pivot point for the pair located at 1.1609. The daily support levels lie at 1.1599 and 1.1594, with the pair currently trading near the latter one. The daily resistances are located at 1.1614 and 1.1624. We expect the price to continue dropping. The indicators of technical analysis and the moving averages agree on a strong sell recommendation.

 

[Superfx_official]

EUR/SGD: Fundamental Review & Forecast


The EUR is weakening against most currencies due to the continued economic recession anf high budget deficit in Italy. The deals to Sell seem the most effective in the medium term.

The uptrend gradually transformed into a weak downtrend, which was formed under the influence of the economic slowdown in the EU and the ECB's soft monetary policy. At the same time, the economic situation in Singapore is similar and is also on the decline. Despite the fact that the Singaporean dollar is not a commodity currency, it does depend on the development of the trade conflict between the US and China because a significant part of the products are exported to China.

This week the Euro fell against most currencies due to the conflict between the EU and Italy. The problem arose because of the high budget deficit in Italy which does not meet EU standards. Another negative argument was the PMI manufacturing index, which fell to 53.2 points in September, the ninth consecutive decline after reaching the maximum value in December 2017. Investors regarded this as a signal of a continued recession in the economy, which had a negative impact on the value of the euro. Another negative signal for investors was a decrease in retail sales in August by 0.2%, while a growth by 0.2% was expected. At the same time, the unemployment rate in the EU was 8.1%, as expected on the market, the lowest value in the last 10 years. This fact allowed the euro to stop its decline and strengthen, which has been happening until now.

Next week data about Singapore's GDP for the 3rd quarter of 2018 is expected, as well as data on retail sales. Investors have forecasted a GDP growth by 1.2%, that is twice more than in the previous period. If the forecasts coincide with the actual data, the SGD has all chances to continue strengthening against the Euro. Up to this point, the incentives to strengthen most likely will not be enough and volatility will be weak in the absence of a news background. The MACD and Stochastic oscillators are showing mixed signals. Nevertheless, the most optimal move in the current situation are the short-term deals according to the trend, which can be effective in the medium term.

 

[Superfx_official]

USD / JPY Technical analysis


The uptrend continues

At the moment, the monetary policy of the Fed and the Bank of Japan for the near future is clear and we see a formed uptrend on the chart.

The dollar rally continues, US stocks are rising and indices are at historic highs. Japanese stocks have been falling for the past three days, but the state regulator is doing its function and the level of foreign investments is growing. Also, the course of the monetary policy of the Bank of Japan is aimed at a weak currency for export growth.

Therefore, we believe that the upward movement will continue and the quote will remain within the current channel in the upper Bollinger band. Therefore, we advise to enter the market at the borders of the upper band and take into account that the movement is ascending.

 

[Superfx_official]

International Trade: Where We Stand

A quick look at the US's trade relations with countries other than China.

It has been no secret that the trade relations between China and the United States have been getting progressively worse with each passing month this year. Nevertheless, it is important to also note that Donald Trump still has his aim up at other trading partners of the US, such as Europe and Japan. This week we wanted to take another look at those situations and see if there are any impending shocks coming to the financial markets.

To begin with, the European Union is having a special meeting to discuss trade today. It is very likely that the EU leaders would discuss the specifics of the deal previously reached in July between Trump and Jean-Claude Juncker when a massive tariff on the European car industry was successfully avoided. At the time the terms of the deal were not publicly announced but President Trump seemed confident that his requirements were met by the chief EU Commissioner’s promises. Whatever the two of them discussed, a key tariff of 25% on car imports from the union was put on hold. Nevertheless, there hasn’t been much progress in that respect when it comes to actual policies implemented. Other European leaders, as well as representatives of the United States, are getting nervous that the deal will be cancelled if more specific action is not implemented soon.

Juncker himself expressed the view that the European Union is often slow to act (and react) because of basic unanimity rules, i.e. decisions have to be made only when all member states agree. He stated that instead there should be a standard majority rule, which would allow the EU to act even if only a couple of countries disagree on a certain action, as long as more than half of the members support it.

Japan, on the other hand, is holding continued negotiations with the United States regarding trade. Earlier today the Japanese government confirmed that they will be expecting US Vice President Mike Pence for official talks next month. The visit is supposed to deal primarily with trade and other forms of economic cooperation between the two countries. Another topic very likely to come up is North Korea. The recent warming of the relationship between the US and North Korea has been largely with South Korea’s help as a negotiator, but Japan is another country with a huge stake in the matter (especially considering that other than South Korea, Japan has often been at risk during missile testing from North Korea). Japan hasn’t been included in the peace talks with North Korea yet, but is also very eager to see the denuclearization of the Korean peninsula.

Japan became one of Trump’s chief trade interests because the country has a trade surplus with the United States that amounts to roughly $69 billion. Perhaps most notably, Japan is known for its huge car manufacturing industry and exporting quite a lot of automobiles to the United States. President Trump is hoping that the negotiations would lead to a more even relationship between the two and he is likely looking to force Japan to import more American goods. However, there isn’t much that Japan can add to its list of US imports. Agriculture is one sector that US negotiators might have their eyes on, but the truth is that many American products do not meet Japan’s standards due to the United States’ extensive use of genetic modification techniques, as well as Japan’s own ability to produce prime quality food. This might put Japan in a very tough spot.

 

[Superfx_official]

EUR/USD Technical Analysis & Daily Chart


The strong bearish trend offers us a chance to sell the pair.

Today we would take a look at the EUR/USD currency pair. The dollar continues to steadily push against the euro, taking the single currency further down each day.

With no expected changes in the dovish policy of the European Central Bank and not that many events to look forward to within the eurozone, it is expected that the euro will continue to be susceptible to the movements of other currencies. Investors are hoping for an economic stabilization and better fundamentals during the last quarter of 2018, but the budgetary struggles of Italy, as well as the ongoing Brexit negotiations still hold the potential to shake the euro.

On the other hand, the American dollar is riding on strong fundamentals and continues to appreciate against most currencies. It received a significant boost recently when the Federal Reserve implemented their third interest rate increase for this year, and another one is expected in December, which will further propel the dollar upwards. Moreover, the USD keeps winning positions every time there is talk of trade wars on account of it being a good safety asset. That’s why our outlook for the USD is bullish.

In terms of the daily chart, today we have a pivot point for the pair located at 1.1524. The daily support levels lie at 1.1520 and 1.1516, with the pair currently trading below both of them. The daily resistances are located at 1.1528 and 1.1532. We expect the price to continue dropping. The indicators of technical analysis and the moving averages agree on a strong sell recommendation.

 

[Superfx_official]

AUD/CAD: Fundamental Review & Forecast


The AUD continues to decrease against the CAD. The deals on the trend are still effective in the short term.

The rates continue within the downtrend, which has lasted for more than a year. As a result, the quotes are steadily approaching the psychological level of 0.911 CAD, below which the Australian dollar has not fallen in this decade. Nevertheless, this level was tested less than a week ago, but then the rates shifted up, towards the resistance line, within the frames of the price correction. At the same time, there are no signs of a new trend, and the incentives to strengthen the AUD may not be enough in the near future. Therefore, the continuation of the downtrend in the near future with the achievement of new minimums is not excluded.

The Australian dollar has recently been perceived by investors as an indicator of China's economy and its import potential is under the influence of the trade conflict between the US and China. The situation is deepening by the soft monetary policy of the RBA and the changeable economic situation. However, the latest data on the Australian economy strengthened the value of AUD. Australia's trade balance remains positive for the eighth consecutive month. Moreover, in August the balance surplus rose to 1.6 billion AUD, while investors expected a decrease to 1.4 billion AUD. Export volumes increased by 1% to AUD 36.56 billion, again approaching the record figure for exports, which has been reached in June this year. Such indicators are significant for investors, showing a much weaker impact of the trade conflict than could be forecasted.

Despite the improvement in the Australian economy, the Canadian economy at this time successfully resists the strengthening of the AUD, showing an even more impressive performance. The trade balance was positive for the first time in 20 months. The surplus in August amounted to only 0,526 billion CAD, while the market was expecting the completely opposite minus 0.5 billion CAD. At the same time, the volume of exports and imports decreased by 2.5% and 1.1%, respectively, but the rate of decline in exports was 2 times lower than the rate of decline in imports, which in the long term increases the probability of trade surplus growth. Another impressive achievement is the data on the labor market. In September the number of jobs increased by 63.3 thousand, while the market expected 2.5 times more moderate job growth after the reduction in the number of jobs the previous month. The unemployment rate, respectively, fell from 6% to 5.9%, according to forecasts. The only negative indicator was the decreasing of the PMI business activity index from 61.9 points to 50.4 points in September, which is likely due to uncertainty in trade relations between the US and Canada. However, the issue was already resolved in early October, and a new trade agreement has been successfully signed between the US, Canada, and Mexico, which certainly had a positive impact on the cost of the CAD. At the same time, oil prices continue to support the Canadian dollar. Oil continues rising in price amid the falling exports from Iran. A temporary factor is also the coming hurricane Michael to the Gulf of Mexico, in anticipation of which 19% of the oil production capacity was paused, which raises fears about the possible shortage of fuel on the market.

At the moment the MACD and Stochastic oscillators are multidirectional. It is safe to assume that the downtrend will continue, but the further decreasing will be limited. Trend-following deals seem the most effective in the near future, but the efficiency of the deals to BUY will be increasing if the rates come closer to the level of 0.911 CAD.

 

[Superfx_official]

GBP / USD Technical analysis


The pair went into correction

The dollar index opens with a gap in the negative zone for the 3rd day in a row and demonstrates a downward movement.



Despite positive assessments by Fed Chairman Jerome Powell, investors decided it was time to move on to risky assets.

After the release of the macroeconomic data in the US, the US dollar fell against a basket of major currencies and the pair showed a large upward candle.



At the moment, we believe that the upward movement will continue to the marks of 1.3250 and 1.3290 after the completion of the current correction, which can lead to the marks of 1.3150 and 1.31.

 

[Superfx_official]

Saudi Arabia Facing Backlash


The disappearance of a prominent Saudi journalist is worrying the world.

A new scandal is brewing around Saudi Arabia this week. The country has mostly been quiet, except for when OPEC meetings were concerned, but it made the headlines for a much darker reason recently: a Saudi journalist, Jamal Khashoggi, disappeared in Turkey and is presumed dead. Now many media and companies are pulling away from a conference hosted by the Saudi crown prince at the end of October. Let us look at the reasons for this animosity towards Saudi Arabia and what it entails.

First of all, Khashoggi is the most important person in this conversation. He is well-known in the international journalistic community as a contributor to the Washington Post. His views against the political regime in Saudi Arabia have long been public, so it is safe to say he is in opposition to the crown prince. In the past he had been invited several times to join different Saudi projects, but he rejected the invitations and remained living abroad, fearing for his safety if he returns to Saudi Arabia. As his criticism of the Saudi government became more and more serious and consistent, he stopped receiving invitations.

Prince Mohammed bin Salman, on the other hand, is a polarizing man: while he is lauded for his reforms and his desire to bring the Saudi economy out of its dependence on crude oil, he is also known for his harsh measures against the opposition, including famously arresting tens of aristocracy members and confining them in a prestigious hotel some time ago. He is a man who takes swift action against his political enemies.

Khashoggi disappeared when he visited the Saudi embassy in Turkey, supposedly to get a marriage certificate. The Turkish authorities claim that it is most likely that he was murdered inside of the consulate building. The United States have said that they have evidence of the Saudis planning on arresting Khashoggi. Turkey has reportedly shared audio and video evidence that something horrific went down in the Saudi consulate after Khashoggi entered it. Moreover, a group of about 15 Saudi men, some of whom with well-established connections to the Saudi government, came to Istanbul on the same day as the disappearance happened (October 2).

Prince Mohammed is organizing a conference to discuss his platform for reforming Saudi Arabia. The so-called “Davos in the desert” event previously had booked many media and other international partners. Since the incident with Khashoggi, the New York Times has pulled out from the conference, as has Viacom, as well as the Huffington Post founder. Similar reactions came from CNN, Bloomberg, The Economist, the Financial Times, CNBC, Fox, and more.

The CEO of Uber also stated he would no longer take part in the conference, even though Saudi Arabia is a major investor in Uber, i.e. he made the statements at a great risk to his company’s capital. British business mogul Richard Branson, while not tied to the conference directly, also stated he’s putting a stop on a couple of his projects in Saudi Arabia. Branson’s companies have a long history of doing business with Saudi Arabia, but he stated that until the situation is clarified and the government’s name is cleared with sufficient evidence, Western companies cannot safely do business with Saudi Arabia.

The world is still awaiting more details from the on-going investigations into the journalist’s disappearance. However, a worsening of global relations with Saudi Arabia would certainly have a huge impact on the financial markets, not in the least because the Saudis are the most powerful country in OPEC and are set to take over some of the supply gaps left over by Iran due to US sanctions.

 

[Superfx_official]

EUR/USD Technical Analysis


The pair found a resistance level.

Despite the opening of yesterday's trading session in favor of the dollar, the euro is trying to win back its positions and at the moment our pair is showing a positive trend. After the decline to the level of 1.1550, the pair went up and turned around from the mark of 1.1610 which happened to be the resistance level.

Today, we expect a number of macroeconomic reports from the eurozone and some data on the US Labor Market to be released. However, we believe that the dollar may strengthen and the pair may again begin a downward movement, despite the fact that the dollar index is still below the 95.00 level.

The data recently released in Germany showed a worse performance than predicted. Thus, the pair could not overcome the mark of 1.1605 and turned from it.

Therefore, we advise you to wait for a new test of this mark and take short positions in case of a new rebound from this level. Consider the marks of 1.1550 and 1.15 as your goals.

 

[Superfx_official]

XAU/USD: Fundamental Review & Forecast

Gold has been restored in price recently to the 3-month maximum. However, the deals to SELL still seem optimal in the short term.

Gold for the last six months has finally lost the status of a ”safe haven" for investors. With the strengthening of the dollar, investing in the yellow metal has become unprofitable. However, no one expected such a rapid decline in the value of gold. The rates fell below $1,200 and traded around this level for a long time. In addition to the strong dollar, an important factor is the trade conflict between the US and China, which has had a negative impact on the consumption of gold in the long term perspective in China.

Starting from October, the situation began to change. A positive impact was the increase in 51% of the volume of gold imports to India in September, compared to the same period last year. Nevertheless, overall, the demand for the yellow metal is lower by 8% for the last 9 months. The US dollar remains strong based on strong macroeconomic statistics, but last week retreated from highs amid a falling on the stock markets due to rising yields on US government bonds and investors' fears about the further development of the trade conflict. Furthermore, the value of the dollar fell due to Donald Trump's criticism of the Federal Reserve's aggressive monetary policy. As a result, Gold managed to recover in value to the maximum level in the last three months.

Further forecasts about the price of gold are multidirectional: some analysts see the latest recovery as a sign of the beginning of a new uptrend, indicating the achievement of a price low of 1,169 dollars, after which the rates consolidated and then moved to recovery. Other analysts suppose that the recent recovery is no more than just a price correction, after which the rates will begin decreasing again, taking into account the potential of the dollar to strengthen and the ongoing aggressive monetary policy, which no one plans to change. The Stochastic oscillator indicates the quotes are in the overbought zone. We suppose that in the current situation in the short-term perspective the most optimal seem to be the deals on the trend. However, in the long-term perspective it's also possible to open deals to Buy, although the best time for this was in early October.