SuperForex Analytics and Economic News

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CAD/CHF Fundamental Review & Forecast

The rates continue within the downward trend formed more than a year ago. At the same time, we see a gradual decrease in volatility and a narrowing of the range. Despite the rise in oil prices, as well as the economic downturn in the EU, the Swiss franc in the long term was more stable and less exposed to negative factors, confirming its status of a safe asset.

After a busy last week, we are seeing a certain calm on the market, which will continue next week. Last week the CHF strengthened slightly against the CAD amid the soft rhetoric in the Bank of Canada, which decided not to change the rate. The Central Bank noted the increased risk of a slowdown in the global economy, as well as the slowdown in the economy of Canada. Recent reports show a worsening on the real estate market. Also, job growth was worse than expected. A previously published report showed a quarterly GDP growth by only 0.4%, which shows that the economy is not growing all that much. At the same time, negative economic reports have not yet significantly affected the cost of the CAD, which is now supported by rising oil prices. To date, CL/WTI oil has reached the level of 57 dollars per barrel and has all chances to rise in price and reach the level of 60 dollars, with the toughening of sanctions against Venezuela, as well as with plans to completely stop the export of oil from Iran to 0.

The CHF changed in price only under the influence of external factors with the lack of any new data on the Swiss economy. As for the situation in the EU, the latest report showed a higher increase in industrial production output than expected in January. This is certainly a positive signal, but not enough to definitely talk about the recovery of the EU economy after a period of recession. Therefore, investors are looking forward to new reports, in particular the PMI business activity index in the Eurozone, which will be published on March 22.

In this situation, the most effective would be the deals on the trend, in the medium and long-term perspective. This is confirmed by the Stochastic oscillator, indicating the rates in the overbought zone. The MACD at the same time is at 0 level, but is aimed at entering the negative zone.

 

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Technical analysis of the GBP/USD pair for March 14


During yesterday's trading session the British pound once again showed a positive trend. After the Brexit vote, we again saw a strong upward momentum in the pair, and it is quite possible that the pair may soon head for the 1.35 mark.

At the current moment, the pair has stopped near the 1.3260 mark.

The dollar index is now positive, but still remains below the level of 97.00.

The key role in the formation of quotes currently is another vote in the UK. The direction of the price depends on its results. We believe that the pair will continue to grow, as investors are positive regarding the British currency.

It is worth waiting for the completion of the correction for the pair. We expect it to drop to 1.3210 and 1.3190, from which it will be possible to occupy long positions. Consider targets near the levels of 1.3280, 1.33, and 1.3360.

 

[Superfx_official]

EUR/USD Technical Analysis


Today we would take a look at the EUR/USD currency pair. As of last week the pair continues steadily growing.

Not much has changed for the European single currency since our last analysis. Fundamental reports, while not altogether awful, remain off-target for the most part and inflation continues to be low. The European Central Bank recently unveiled a new stimulus plan which is naturally contributing to a further weakness in the euro. Nevertheless, in the absence of political shocks and a hope for a smoother-than-expected Brexit, right now there are no shock factors in the EU, so the price is holding steady.

Meanwhile, the tables have turned for the American dollar. Recent fundamentals showed that the economy of the United States is worsening. Unemployment is rising and the economic activity is not as strong as it was last year. This is very likely the consequence of Donald Trump’s prolonged trade conflicts with other countries (not only China), as well as his protectionist policies which are harming industrial activities. This week there will be a Federal Reserve policy meeting, where it is expected that interest rates will not be hiked due to the poor economic climate at present. Overall this situation has weakened the USD and we see a pronounced bearishness in it for the first time in a long while.

In terms of the daily chart, today we have a pivot point for the pair located at 1.1324, with the price currently trading above it. The daily support levels lie at 1.1313 and 1.1307. The daily resistances are located at 1.1341 and 1.1348, and are currently both overcome. The indicators of technical analysis and the moving averages agree on a strong buy recommendation.

 

[Superfx_official]

Technical Analysis of the EUR/USD Pair for March 19

All investors' attention this week is focused on the Fed's interest rate decision tomorrow. It is predicted that the decision will be in favor of maintaining the current rate of 2.5%. The dollar index continues to decline and is at a monthly minimum, below the 96.00 mark.

The euro has been strengthening against the dollar since the middle of last week, moving away from three-year lows.

Technical indicators point to a pair purchase and we expect that the price will be able to overcome the levels of 1.1360 and 1.14, having fixed above the given levels.

Therefore, we advise you to take long positions on this pair and consider targets for marking near tthe levels of 1.1380 and 1.1440.

 

[Superfx_official]

EUR/AUD: Fundamental Review & Forecast


The EUR/AUD is one of the lowest volatile pairs to date. The rates have been in a strictly defined, flat range since January this year. However, as of February, we have seen a gradual upward shift and the formation of an uptrend.

Macroeconomic statistics and a number of negative factors preventing the strengthening of the AUD also support the formation of an uptrend. First of all, we are talking about the lack of progress in the negotiations between China and the United States. Furthermore, according to the published minutes of the RBA meeting, the regulator will keep the rate at the current level, taking into account the increased external risks associated with the slowdown in the global economy, and most importantly - China, where industrial production output fell to the lowest level in 17 years. Against this negative background investors are hesitant to invest in the AUD.

The EUR, on the other hand, is strengthening mainly due to the weakening of other currencies. Secondary macroeconomic statistics provide some hope for an improvement in the economic situation in Europe, but nothing more.The end of March for the Euro was relatively calm, with only the situation with Brexit as a potential source of uncertainty. At the same time, the current situation plays in favor of the Euro and good economic statistics in Britain provide a weak support for the value of the Euro this week.

The end of March is expected to be even calmer for the EUR/AUD. On 29 March, Friday, GDP data will be published in Britain, Spain, as well as data on unemployment in Germany, which may affect the value of the euro. In this situation, the most optimal would be the deals to Buy, as confirmed by the MACD oscillator. Entry points can also be specified at the output levels of the flat trend at 1.6096 and 1.5727 AUD. Achieving the first one looks more likely today.

 

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Technical analysis of the EUR / USD pair for March 21


After yesterday's Federal Reserve decision on the interest rate, we observed a large rising candle to the level of 1.1445. After that, the pair went into a correction when the bulls decided to take profits. The pair overcame several resistance levels at once and has now returned to the level of 1.1410.

Today there will be a summit of EU leaders, which will be able to increase volatility in the pair and help it pass some levels faster.

We believe that the correction for the pair can send the price to the levels of 1.1350 and 1.1320. Therefore we advise you to take short positions and set a take-profit near the above levels.

 

[Superfx_official]

Brexit Officially Postponed


When in 2016 the United Kingdom’s citizens were invited to cast their votes in a referendum as to whether they want to stay or leave the European Union, the Brexiteers prevailed by a narrow margin. Since then the conservative government led by Theresa May has championed that her cabinet deliver on that promise, one way or another. She formally triggered Article 50, which set the deadline for Brexit to March 29, 2019. However, with one week until Brexit it is now official: the exit of the UK has been delayed.

After many months of stumbling and back-and-forth negotiations with the European Union, May’s cabinet finally delivered an exit agreement last November. However, for reasons that we have explained in the past, this agreement is quite unpopular with the British Parliament. May’s deal was formally rejected twice (with one tentative backing in-between, which simply served to confirm nobody else wants to take May’s job at the moment). Now the Prime Minister is holding Parliament hostage: they can either accept her deal, or face a possibly chaotic divorce from the EU.

Last week the UK Parliament voted in favor of asking for a delay. Respecting their wishes, Prime Minister May formally asked European leaders to grant the United Kingdom a few extra months to get the exit deal through Parliament. The PM requested an extension until June 30, which was denied on account of the upcoming European parliamentary elections. The elections are scheduled for May 23, so naturally keeping the United Kingdom officially in the bloc past that date would legally obligate them to also participate in the elections, a prolonged and costly process that the United Kingdom wants to avoid.

On Thursday night we learned that the details surrounding the Brexit postponement had been agreed. As of the publication of this article, the UK and the EU have agreed on two different deadlines. If Theresa May manages to get enough support for the deal she agreed on with the EU in November in a third vote next week, then the United Kingdom will have until May 22 to prepare for Brexit. However, if May’s deal is rejected a third time, the United Kingdom will get an even shorter deadline – until April 12, which is tied to a more uncertain future. The government might try to push for more votes on an already despised deal, or they could be even more unpredictable and resign, for example. Moreover, Donald Tusk stated that the UK can still change their mind by April 12 and decide to remain, or ask for a longer delay and take part in the elections.

It is unclear whether the Prime Minister will be able to find enough support for her deal in Parliament. Many of the proposals’ clauses are disliked by MPs, hence the repeated rejections. Before the most recent vote Theresa May managed to procure last-minute assurances against some of the problematic aspects of the proposal in hopes of calming the doubts of skeptical MPs. Nevertheless, that was not enough and the deal still failed. What more could the Prime Minister bring? Just two days ago Theresa May gave a very controversial speech in Parliament, which put the blame on MPs for dragging out Brexit (by implication by not supporting her deal). Analysts find it very unlikely that Members of Parliament will suddenly warm up to the deal now, after so many weeks of solid rejection.

Meanwhile, the UK public has expressed their current feelings on the matter in an online petition to cancel Brexit altogether. The petition is on the government’s website and requires citizen verification, but it is not considered binding, so it is not very likely to change the Prime Minister’s mind.

 

[Superfx_official]

EUR/USD Technical Analysis

Today we would take a look at the EUR/USD currency pair. The pair spent most of last week growing, but declined over the weekend.

The situation with the European single currency is more or less the same. The European Central Bank continues with their dovishness and inflation is still far off the target levels which would allow the euro to strengthen. Last week’s bullishness was more due to the weaknesses of other currencies, not the euro’s own momentum. However, some of the euro’s losses were due to expectations that the German IFO data released today would fail to meet the overcasts, but it actually turned out to be better than expected. In a way, the EUR is already doing better than investors thought it would this week. Still, there will be a lot of volatility in the pair, as we wait to hear from the ECB this week, as well as more about Brexit’s new deadline, which will be determined by another vote in Parliament.

Last week the American dollar disappointed investors and gave up some ground amid higher unemployment rates and slowing economic growth. This data prompted the Federal Reserve to announce that we are not likely to see any more interest rate hikes in 2019 at all, a much more dovish turn than previously expected. The dollar quickly turned the losses into a correction, but this week we expect to hear about GDP growth in the United States, and if it is lower than expected, investors would rely on even further dovishness by the Fed.

In terms of the daily chart, today we have a pivot point for the pair located at 1.1299, with the price currently trading above it. The daily support levels lie at 1.1283 and 1.1269. The daily resistances are located at 1.1313 and 1.1329, and currently the first one has been overcome. The indicators of technical analysis are showing us mixed signals, but lean towards a sell recommendation.

 

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Technical analysis on the USD/CAD pair for March, 26

Now we are seeing on the chart that the pair has developed from the previously reached peaks and is directed downwards. The rise in oil prices helps the Canadian dollar, so the pair confidently approached our Moving Averages and soon may be fixed below the MA (21), indicating a sale.

The dollar index shows a decline and we observe that after the losses of last week, it still cannot confidently hold above the 96.00 mark.

The MACD has gone out of the histogram and is now putting pressure on the price, pointing to the strengthening of the downward movement.

We believe that the price will continue to decline due to a number of fundamental factors, and we advise you to take short positions on the pair. We recommend setting your take-profit near the 1.3355, 1.3335, and 1.3285 marks.

 

[Superfx_official]

NZD/JPY: Fundamental Review & Forecast


The rates continue within a downward trend. Since January we have observed an increase in the demand for risky assets. Also, the probability of a successful end to the trade conflict between the US and China grew, and this has the potential to stop the slowdown in the global economy. But until this happens, the trade conflict remains and the perspectives for its completion are not defined. All factors affecting this currency pair are outside of New Zealand and Japan, although the economies of both countries are also important.

The NZD has been strengthening for the last few months, as demand for risky assets has grown, and in spite of all the long-term risks to all commodity currencies. In favor of the NZD this week are the good reports on the trade balance, which in February reached a positive value by 12 million NZD, while investors expected a trade deficit by 200 million NZD. At the same time, in recent years positive news from New Zealand have become a rarity. Compared to February 2018, the surplus was 188 million NZD, which is 10 times more than this February. Thus, we can confidently talk about the continuation of the economic downturn in New Zealand, taking into account also the latest GDP report for the fourth quarter of 2018, which showed a decline in growth rates for the third quarter in a row - up to 2.3%. The situation is aggravated by problems in China, where a significant part of the products are exported, as well as in Australia, which also depends on the Chinese economy. Against this background, the RBNZ's decision to leave the rate unchanged was obvious, but the central bank's plans to further soften monetary policy and reduce the rate caused new wave of sales on the market.

Japan is also experiencing economic problems, but the JPY is supported as a safe asset. Global factors proved to be key in this situation. Uncertainty in the negotiations between China and the United States, as well as the perspectives of a recession in the global economy, forcing investors to return to safe assets. The strengthening of the yen is restrained by negative reports on the Japanese economy: low business activity and extremely low inflation. However, against the NZD the yen may feel confident. In the long term, there is every chance to continue decreasing to the levels reached last year. The efficiency of short deals is confirmed by most technical analysis tools, including the MACD and Stochastic oscillators.