FOREX Newsletter - City Credit Capital

FOREX Newsletter
September 15, 2016
Pulse of the Market
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Recent Interest Rates & US
Treasury Yields
USD
0.50%
EUR
0.00%
GBP
0.25%
JPY
0.00%
CAD
0.50%
AUD
1.50%
NZD
2.00%
Change
Yield
2-yr Yield
-0.03
0.75%
5-yr Yield
-0.04
1.19%
10-yr Yield
-0.03
1.68%
Time(GMT)
U.S retail sales, producer prices, Empire State and Philadelphia Fed reports scheduled for release
Weaker than expected Eurozone industrial production numbers failed to stop Euro from rising
U.K retail sales and a Bank of England monetary policy announcement scheduled for release today
The Swiss National Bank has a monetary policy announcement scheduled in today’s session
The U.S Dollar traded lower against all of the major currencies yesterday with the
exception of the Canadian dollar, which was hit by the continued slide in crude
prices. Treasury yields declined but considering that rates abroad also fell, the move
in bonds cannot explain the move in the dollar. Instead economists believe investors
are positioning ahead of today’s U.S economic reports. It’s been a quiet week for U.S
data but that will be changed today with retail sales, producer prices, Empire State,
Philadelphia Fed and industrial production reports scheduled for release. The decline
in gas prices, weaker wage growth and disappointing labor market report points to
weaker consumer spending. Even Johnson Redbook reported lower sales in August
compared to July. Retail sales are always important but particularly so this month
because investors are days away from FOMC and some investors are holding out
hope that the Fed will tighten in September. Weaker than expected Eurozone
industrial production numbers failed to stop EUR/USD from rising. The currency pair
has been consolidating all week and after falling to the 50-day SMA on Tuesday, it
rebounded yesterday. We have the Eurozone’s trade balance and consumer price
report scheduled for release today. CPI is predicted to rise and it needs to increase
after the sharp decline in July. If it fails to do so it is bad news for the euro. The Swiss
National Bank also has a monetary policy announcement today. Inflation is still very
low (-0.1%) but year over year rates have improved significantly since their last
meeting in June. Exports also grew 5.5% in July, up from -0.4% in May, which is a
testament to the central bank’s effectiveness in keeping the Franc weak. With U.K
retail sales and a Bank of England monetary policy announcement scheduled for
release, today will be a busy day for the Pound. While GBP spent the early part of the
North American trading session under water, it staged a strong recovery to end the
day in positive territory. At first investors were not convinced that the BoE could be
optimistic in light of mixed labor data but as the rate decision neared everyone took
stock of the broad based improvements since the last monetary policy meeting.
IMP
Actual
Forecast
Prior
01:30
Australia Employment Change (AUG)
Economic Release
High
-3.9k
15.0k
25.3k
07:30
SNB Sight Deposit Interest Rate (SEP 15)
High
-0.75%
-0.75%
09:00
Euro-Zone Consumer Price Index (YoY) (AUG)
Medium
0.2%
0.2%
11:00
Bank of England Rate Decision (SEP 15)
High
0.25%
0.25%
11:00
BOE Asset Purchase Target (SEP)
High
435b
435b
12:30
U.S Advance Retail Sales (AUG)
High
-0.1%%
0.0%
12:30
U.S Initial Jobless Claims (SEP 10)
Medium
265k
259k
12:30
U.S Philadelphia Fed. (SEP)
Medium
1
2
12:30
U.S PPI Final Demand (YoY) (AUG)
Low
0.1%
-0.2%
13:00
U.S Existing Home Sales (MoM) (AUG)
Medium
13:15
U.S Industrial Production (AUG)
Medium
-0.2%
0.7%
13:15
U.S Manufacturing (SIC) Production (AUG)
Medium
-0.3%
0.5%
-1.3%
Euro
The single currency traded higher following a muted
reaction to a sharp decline in Euro Zone industrial
production. Trader reaction to the report suggests the
main focus is on the Fed and its upcoming interest rate
decision on September 21. Eurostat reported that
industrial production was down 1.1% in June. Overall,
the EUR/USD traded with a low of 1.1210 and a high of
1.1272 before closing the day around 1.1248 in the New
York session.
Yen
The Japanese Yen ended yesterday’s session almost
unchanged after falling sharply against the U.S Dollar
earlier in the session. The catalyst behind the move was
a report that the Bank of Japan is considering expanding
its monetary policy program, even if it means taking
interest rates further into negative territory. Overall, the
USD/JPY traded with a low of 102.23 and a high of
103.33 before closing the day around 102.41 in the U.S
session.
British Pound
The British Pound rebounded after early weakness.
Yesterday’s key employment data report was mixed, but
the market started to recover after reaching a strong
technical support level. U.K employment data shows a
resilient British jobs market that remains unfazed a little
more than two months after the country voted to leave
the European Union. Overall, the GBP/USD traded with a
low of 1.3136 and a high of 1.3238 before closing the
day at 1.3232 in the New York session.
Canadian Dollar
The Canadian Dollar posted a two-sided trade yesterday.
The Canadian Dollar fell to a nearly six-week low against
the U.S. currency after a steep drop in oil prices and on
lower demand for risky assets. Traders were also
reacting to the recent rise in bond yields. Lower crude
prices also pressured the Canadian Dollar. Overall,
USD/CAD traded with a low of 1.3125 and a high of
1.3206 before closing the day at 1.3192 in the New York
session.
Australian Dollar
The Australian Dollar traded higher earlier in the session
on increased demand for higher-yielding assets since the
Westpac Consumer Sentiment report came out below
expectations. But ended the day almost unchanged. The
leading indicator of Australian consumer confidence rose
for a second consecutive month in September, posting
an increase of 0.3%, following a 2% increase the prior
month. Overall, AUD/USD traded with a low of 0.7449
and a high of 0.7494 before closing the day at 0.7467 in
the New York session.
Euro-Yen
EUR/JPY is trading above 14, 50 and below 100 days
moving average. Fast stochastic is giving a bearish tone
and MACD is issuing a bullish stance. The Relative
Strength Index is above 53 and lies above the neutral
zone. In general, the pair has gained 0.15%.
Sterling-Yen
Currently GBP/JPY is trading below 14, 100 and above
50 days moving average. Fast stochastic is issuing a
bearish tone and MACD is indicating a bullish stance.
The Relative Strength Index is above 51 reading and lies
above the neutral zone. On the whole, the pair has
gained 0.20%.
Aussie-Yen
Currently, the cross is trading below 14, 50 and 100 days
moving average. Fast stochastic is giving a bearish tone
and MACD is also indicating a bearish stance. The
Relative Strength Index is above 38 reading and lies
below the neutral region. In general, the pair has lost
0.07%.
Euro-Sterling
This cross is currently trading above 14, 50 and 100 days
moving average. Fast stochastic is indicating a bullish
tone and MACD is issuing a bearish signal. The Relative
Strength Index is above 51 and lies above the neutral
region. On the whole, the pair has lost 0.04%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving
average. Fast stochastic is issuing a bearish stance and
MACD is indicating a bullish tone. The Relative Strength
Index is above 50 and lies above the neutral region. In
general, the pair has gained 0.01%.
Appendix
Currency
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
EUR/JPY
GBP/JPY
CHF/JPY
AUD/JPY
EUR/GBP
EUR/CHF
GBP/CHF
FOREX Closing Prices for September 14, 2016
Open
High
Low
Close
1.12171
102.563
1.31906
0.97645
1.31691
115.044
135.302
105.01
76.536
0.85017
1.09551
1.28809
1.12726
103.337
1.32388
0.9788
1.32063
116.061
136.601
105.79
77.389
0.85429
1.09823
1.29391
1.12103
102.233
1.31366
0.97044
1.31259
114.892
134.891
104.819
76.357
0.84814
1.09358
1.28061
1.12487
102.413
1.32329
0.97317
1.31926
115.214
135.541
105.199
76.466
0.84984
1.09489
1.28807
Net Chg
0.0031
-0.1240
0.0042
-0.0030
0.0018
0.1730
0.2660
0.1960
-0.0500
-0.0003
-0.0005
0.0001
Daily Pivot Points
Trading Range
Contract
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
EUR/JPY
GBP/JPY
CHF/JPY
AUD/JPY
EUR/GBP
EUR/CHF
GBP/CHF
S3
1.1153
100.88
1.3065
0.9611
1.3063
113.55
133.04
103.78
75.05
0.8411
1.0883
1.2679
S2
1.1182
101.56
1.3101
0.9658
1.3095
114.22
133.97
104.30
75.71
0.8446
1.0909
1.2742
S1
1.1215
101.99
1.3167
0.9695
1.3144
114.72
134.75
104.75
76.09
0.8472
1.0929
1.2812
Pivot
1.1244
102.66
1.3203
0.9741
1.3175
115.39
135.68
105.27
76.74
0.8508
1.0956
1.2875
R1
1.1277
103.09
1.3269
0.9778
1.3224
115.89
136.46
105.72
77.12
0.8534
1.0976
1.2945
R2
1.1306
103.77
1.3305
0.9825
1.3255
116.56
137.39
106.24
77.77
0.8569
1.1002
1.3008
R3
1.1340
104.19
1.3371
0.9862
1.3304
117.06
138.17
106.69
78.15
0.8595
1.1022
1.3078
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not
constitute investment advice as defined by the rules of the FCA.
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