FX market 11/7

 

The FX market appears to be showing signs of life with trade optimism spurring a rise in the dollar against developed market currencies whiles the dollar is falling gently against regional Asian currencies. The development is hardly surprising as a partial trade dispute resolution should add fuel to the US economy and regional Asian ones. EUR/USD fell 0.50% to 1.0780, USD/JPY rose 0.55% to 109.10, USD/CHF rose 0.50% to 0.9910 and NZD/USD fell 0.40% to 0.6375. The AUD was unchanged at 0.6895, balanced between a stronger greenback and trade hopes spurring Australian growth with its high beta to Asia. The USD/CNH has been steadily falling over the last week from 7.1000 and yesterday broke 7.0000. There followed a sharp spike to the early August lows around 6.9850 before an equally violent rally back to 7.0050. The price action had a definite stop-loss selling look about it once 7.0000 cracked. The Forexmentor Live! interactive training in trading Forex includes unlimited access to the live trading classroom, detailed tutorial videos used in trading client accounts, a step-by-step guide to the LPT Method, technical analysis, detailed presentations throughout the day, live Trade Alerts, access to Professional Fund Managers, access to live news feeds in real time and so much more.

Gold 11/5

Gold has stumbled once again just as it looked poised to test its October highs around $1,520, leaving us in consolidation mode. Still, pressures are building from below so just because the breakout is taking its time, it still looks increasingly likely to come to the upside.

A firmer dollar at the start of the week naturally didn’t help matters and took some of the wind out of gold’s sails. The greenback has been softer over the last month though as sentiment and trade headlines have improved.

profit-taking in sterling

The Bank of England could trigger profit-taking in sterling if it hints at cutting interest rates Thursday, FXTM says. The BOE is expected to keep its base rate unchanged at 0.75%, according to a WSJ poll of analysts, so the market's focus is on whether Governor Mark Carney provides any clues on future changes at a press conference after the central bank releases its rate decision, meeting minutes and latest economic forecasts. "Any signs of the BOE indicating an easing of policy will likely lead to profit taking in the pound which has rallied more than 700 pips since October 10 [when GBP/USD began the day just above 1.22]," Hussein Sayed at FXTM says. GBP/USD is last down 0.2% to 1.2916 and EUR/GBP is rises 0.1% to 0.8635.

The GBP/USD

The pound should range between $1.26 and $1.32 until there is clarity on the outcome of the U.K. general election on Dec. 12, UBS analysts say in a note. "The U.K. is facing what feels like the most unpredictable election in living memory," the analysts say. "As things stand, public opinion points to [U.K. Prime Minister] Boris Johnson's election gamble paying off, but as we learned in 2017, much can change as the campaign unfolds." In the meantime, UBS retains its "bullish" medium- to long-term view on the GBP/USD as no-deal Brexit risk is "out of focus for the time being." The GBP/USD falls 0.2% to 1.2912.

The dollar was buffeted by US data

The dollar was buffeted by US data and trade comments on Friday but anded only slightly lower as the week’s dust settled. The dollar index fell 0.15% to 97.20, which belied the intra-day volatility. In other words, it was a typical Non-Farm Payrolls Friday; lots of noise and more than a few tears; but very little change once the dust has settled. The US/CNY daily mid-point has been set at 7.0382, almost unchanged from Friday’s, highlighting the low net change in the dollar basket on Friday. The dollar is virtually unchanged against the majors this morning with FX volumes muted by the Japan holiday today. Despite this, regional currencies should trade positively in today’s session, buoyed by the positive noises coming from the US-China trade talks, which is by far the most significant macro-economic event risk for the region in 2019.