SuperForex Analytics and Economic News

[Superfx_official]

Technical Analysis

EUR/USD. Judging by the previous candle, we think that the pair will test the 1.1405 mark and continue to move down to the marks of 1.1355 and 1.1305.

GBP/USD. We believe that the pair will go to the 1.2930 and 1.2875 marks.

AUD/USD. We see a reversal and a strong downward momentum. The pair is heading towards the 0.71 and 0.7045 marks.

USD/CAD. In case of overcoming it, there can be a movement to the level of 1.3335.

 

[Superfx_official]

USD/SEK: Fundamental Review & Forecast



The rates continue within the upward trend formed in early 2018. A month earlier we saw signs of a trend change, but this did not happen. Quotes again rushed up in favor of the USD. The increase in the interest rate by the Central Bank of Sweden and the fairly hawkish attitude, amid the central banks of other countries, including the United States, soften monetary policy and did not change the situation. This time the reason for the continuation of the uptrend and the weakening of the SEK is outside Sweden, in the Eurozone, which is experiencing a serious economic downturn. This certainly affects Sweden, which is also part of the EU and is highly dependent on exports to the EU.

Recent data on the EU economy do not encourage investors, but raise new concerns among them. Despite some improvement in economic sentiment, according to the ZEW economic sentiment index, it remains negative for the ninth consecutive month. The trade surplus, at the same time, is declining amid falling exports and unemployment is growing both in the Eurozone as a whole and in Sweden. Another negative news was the threat of the introduction of duties by Donald Trump on cars from the EU, which can have an extremely negative impact on exports and the economy of the leading EU countries - Germany and France. If, however, this happens, we are waiting for another trade conflict that has a negative impact on the entire world economy.

The economic situation in the US is much better than in the EU. Of course, the USD may be under pressure due to the political confrontation between Donald Trump and Congress, but the USD is strengthening despite that due to high risks of investing in the Euro and other currencies of the region.

Next week will be much more saturated with economic reports. Expected are data on the real estate market in the US, the balance of foreign trade, and the US GDP for the 4th quarter. In this situation, the most optimal can be considered the deals in favor of the USD. Oscillators such as the MACD, Stochastic, and RSI at the same time indicate the efficiency of the deals to SELL, which, taking into account fundamental factors, are not yet relevant.

 

[Superfx_official]

GBP/USD Technical analysis



Against the background of investors' optimism, our pair was able to turn around five days ago and head up from the level of 1.2785. Yesterday Prime Minister Theresa May arrived in Brussels to continue negotiations and the pair halted growth in fear of a failure.

The dollar index is in the corridor and after the rally last week does not show active growth.

Technical indicators are set on purchase. Soon our fast MA will cross the slow MA from the bottom up and also point to a purchase.

Now the support level is 1.3040 and the pair was able to consolidate above this mark.

We believe that the pair will continue the upward movement and will go to the levels of 1.3010, 1.3130, and 1.3160.

 

[Superfx_official]

Trade Wars Update





The trade wars started by Donald Trump in 2018 have had a massive negative impact on the markets. With a widespread tariff on steel and aluminum applied to multiple countries Trump made the lives of manufacturers more difficult, and with his extra harsh fees on Chinese goods, the whole world economy found itself staggering. This is why every time we have received news regarding an improvement in the trade relations between countries, the markets have reacted quite positively. This week we wanted to take another look at the trade war situation.

To begin with, the United States and China appear to be patching this up. Last year in November the two countries signed an agreement to not impose any more tariffs on one another for 90 days (which expire on March 1). During this time negotiators from China and the United States have met multiple times in order to work out their differences. Note that the conflict between the United States and China started with Trump stating that China’s trade surplus is unfair to the US. The Americans have made demands of China to reform the way they treat international companies so as not to have access to so much of their intellectual property. For example, since Chinese manufacturers make iPhones, they have an intimate knowledge of Apple’s technology, which has allowed Chinese brands to produce similar devices at lower price points. Furthermore, it is interesting that Trump’s tariff plan has not helped the negative trade balance the US has with China and after a whole year of back and forth fees, the difference in favor of China remains.

Last week Trump gave the markets an unexpected boost when he announced that even after the March 1 deadline arrives, he might be willing to hold off the increased tariff rate as a sign of goodwill towards China in order to continue the negotiations that appear to have been going well these past two months. This week we also heard from insiders that the negotiators on both sides have begun drafting a trade agreement, which might resolve the major disputes between the countries and bring the trade war to a close.

However, as this issue is hopefully about to pass, a new concern is arising regarding Europe. Donald Trump and Jean-Claude Juncker previously agreed to buy some time and settle their own issues regarding automobiles imported to the US from the European Union. Back then the EU managed to delay tariffs on its massive car manufacturing industry, but now this agreement is also nearing its end. According to the currently available data, the tariffs on several German car-makers will approximate $7 billion. This could hit the German economy pretty hard and reduce GDP growth for years to come.

A car tariff would also have a negative impact on Japan, Canada, and Mexico, where many vehicles are made and then exported to the United States. In fact, those countries’ GDPs are set to be hit even harder than Germany if Trump decides on a car tariff.

So while the markets are welcoming the news that the US and China are hard to work to resolve their differences, a new threat is entering in stage in a possible trade war between the EU and the United States. The trade between these two is actually worth more than the trade with China, and it could hit global trade even more.

 

[Superfx_official]

May to Reject Hard Brexit





Over the past couple of weeks British Prime Minister Theresa May has spent all of her time and energy trying to convince the UK Parliament to support her Brexit deal, no matter how flawed, by threatening them that rejecting it would lead to a no-deal Brexit, the worst possible scenario for the economy of the United Kingdom. May also tried to renegotiate some of the most contested points in the deal with the European Union in order to sweeten the bitter pill for British MPs, but the EU has been steady in their view that the agreement signed with May in 2018 is binding and not subject to significant changes. This in turn has led to another stalemate in Brexit, with just a month until the March 29 deadline.

Today Theresa May is expected to officially announce (and take legally binding action) that she will put a hard Brexit off the table. This is due to calls from MPs and ministers for her to do so and to officially make a commitment to not leave the European Union without a deal. After 15 different ministers threatened to resign, May has no choice but to do exactly this.

Formally eliminating a no-deal Brexit scenario could go several ways. Firstly, May will likely postpone Brexit past the March 29 deadline in order to buy more negotiation time. She could then try to persuade the EU to do what they have been refusing to do for months, and if that fails (which is likely) she might have to call another Brexit vote in the United Kingdom.

 

[Superfx_official]

EUR/USD Technical Analysis

After subsidence, the dollar index since the beginning of the month continues to grow and currently is trading at 96.65 showing a reserve currency and the growth of our quote is directed downward. The single currency is declining relative to the major currencies, reinforcing the downward trend.

The interest in the dollar can be explained by the successful negotiations between the US and China, as well as the release of strong data on the US economy.

Regarding technical indicators, the ADX and MACD show us a downward movement, while based on the Stochastic we expect a reversal; the pair is below our moving averages.

We believe that now is the right time to enter short positions and take profits near the levels 1.13, 1.1270 and 1.1255.

 

[Superfx_official]

OIl (Cl/WTI): Fundamental Review & Forecast

The rates continue within the upward trend, but the intensity of the trend is falling rapidly. In February oil was strengthened by increasing the probability of a solution to the trade conflict between China and the United States and a truce between these countries, but as time goes by investors are not receiving any concrete evidence of progress in the trade negotiations. In addition, oil prices are limited in growth due to forecasts of a slowdown in the global economy. This week these forecasts are confirmed with the release of China's GDP growth forecasts. According to the Chinese Central Bank, the GDP will grow by 6% in 2019, although in 2018 China's GDP grew by 6.6%.

Meanwhile, macroeconomic statistics from the USA have strengthened the USD. Reports received on the US GDP, real estate market, as well as the growth of the PMI index of business activity support the dollar at a high level, but negatively affects the cost of oil. At the same time, oil reserves in the US, according to recent reports, exceed forecasts by 7 times. Analysts predicted an increase of the reserves by 1.2 million barrels, while in fact they increased by 7.3 million barrels. The largest oil companies in the United States announce an increase of oil extraction in their fields.

Another blow to oil prices was the news of the resumption of oil extraction in Libya, with the perspective of a gradual increase in extraction within the OPEC agreement. Thus, oil was influenced by many negative factors that will negatively affect its value in the long term. Therefore, in the near future we can expect a shifting of the support line down. The current uptrend can still be maintained, although in the medium term there is a possibility of a trend change. In this situation, the most effective would be the deals to SELL. Oscillators at the same time are contradictory.

 

[Superfx_official]

EUR/USD Technical Analysis

Today we will be able to observe either the continuation of the dollar rally for the seventh day in a row, or a reversal and correction. During yesterday's trading session the dollar index remained almost unchanged, while US stock markets declined due to fears of a slowdown in global growth rates. Therefore, many investors prefer the dollar as one of the defensive assets. Therefore, we believe that the dollar will be able to continue to strengthen.

During yesterday's trading session the euro began to strengthen against the British pound and was able to stop falling against the dollar, and therefore our pair is now in a correction.

We believe that the downward movement in the pair will resume again and it will be able to overcome the mark of 1.13.

Therefore, we advise you to take short positions on the pair and set a take profit near the 1.1270, 1.1250 and 1.1215 marks.

 

[Superfx_official]

Triple Brexit Vote Incoming

This week was definitely not lacking in economic news. Donald Trump’s administration continues to be hard at work negotiating a trade agreement with China which is expected to end the trade war, an event likely to impact positively the entire world. Moreover, the European Central Bank had an important policy meeting this week, where new cheap loans for European banks were announced and the economic forecast was revised down. The ECB also stated that we would almost certainly not see an interest rate increase in 2019, based on how difficult it is for inflation to rise. However, besides these events, we thought it would be a good idea to do another update on one of the key issues at hand – Brexit. With less than 21 days left until the official deadline, what is the United Kingdom up to?

Since the last time we updated you on the developments surrounding the United Kingdom’s exit from the European Union, there have only been a few changes, but they are important. Most notably, there is more internal clarity about what the UK aims to achieve in the talks. Theresa May was initially reluctant to rule out a no-deal Brexit, most likely in an attempt to force MPs to support her deal: she hoped that no matter how much they hate the deal her government negotiated, it would still look better to some than the unknown risk of a hard Brexit. However, since the European Union did not budge on the Irish backstop issue and May saw her deal is not likely to gather enough support, she made a couple of public commitments. First of all, there will be another vote on her proposed deal (as it is right now) on Tuesday, March 12. If the vote fails, on March 13 Parliament could vote on whether to leave the EU with no deal at all. If no-deal Brexit also fails to gather enough votes, then on March 14 MPs will vote once more, this time on whether to postpone Brexit. In other words, if MPs say they prefer neither May’s deal, nor a hard Brexit, on March 14 they will almost certainly vote to postpone Brexit and take more time to discuss their options.

Meanwhile, the opposition party in the UK Parliament, Labour, have also consolidated their ideas. Under Jeremy Corbyn’s leadership Labour MPs initially stated they want a customs union with the EU. Their proposed plan was essentially leaving things as they are, as if the United Kingdom remains an EU member, but without the voting rights in the European Parliament that a full membership grants. After much criticism from voters and a lack of support for this plan, now the Labour party has officially stated that they will campaign for a second Brexit referendum if the UK postpones Brexit.

As of now, May has done all she could have for her proposal. Members of Parliament have a few days of consideration leading up to the possibly triple votes next week, but there are no new statements and opinions on the table. Nevertheless, one last element that investors following the United Kingdom should keep an eye on is that if May’s deal and the no-deal Brexit vote both fail, Theresa May will most likely resign her position as Prime Minister and more chaos will ensue as the UK searches for new leadership to take them the rest of the way to their goals.

 

[Superfx_official]

GBP/USD Technical Analysis


Hope for a calm Brexit supported the British pound and the pair demonstrated a strong upward momentum during yesterday's trading session.

The dollar index, on the contrary, during yesterday's trading session fell below the 97.00 level.

After such a sharp growth, the pair stopped and we expect a correction followed by the drop in the price.

Approaching the level of 1.3290, the quotation began to decline and the technical indicators turned to the 4-hour chart.

We believe that the price will continue to decline for some time and may reach the levels of 1.3115 and 1.3080.

Therefore, we advise from the above levels to take long positions on the pair assuming that the price will return to the levels of 1.32 and 1.3260.