Month: May 2019

USD/CHF Price Forecast: Bearish Trend to Continue on Break Below 1.0008

USD/CHF Price Outlook, Charts and Analysis

  • US Dollar looking forward to PCE total and dual FED members speeches today.
  • Looking during USD/CHF cost movement given mid-May

Find out some-more about what is expected to pierce marketplace prices by mid-year, and download for giveaway Q2 categorical currencies and line forecasts

To learn some-more about information releases for this week check outDailyFX Economic Calendar

USD/CHF– Trading Lower

On May 13, USD/CHF began a downtrend after figure out a lower-low during 1.0050.The span continued even reduce after unwell 4 times in a quarrel to mangle above 1.0121, though rebounded on May 24 from the turn discussed in a prior article, 1.0008. However, cost rallied after and unsuccessful to pass 1.0098, effectively capping any certain momentum.

Alongside this growth RSI remained next 50, emphasizing a strength of bearish momentum.

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USD/CHF DAILY PRICE CHART (FEB 4, 2019- May 31, 2019)

USD/CHF Price Daily 31-05-19

A closer demeanour during a USD/CHF daily draft shows a bears perplexing to retake initiative. However, any pierce reduce is fortuitous on violation and shutting next a May 24 low during 1.0008. This growth could lead cost to a reduce multi-day trade operation (0.9920- 1.0008), with an increasing odds of saying a reduce finish of a range. Weekly support zones of 0.9995-0.9988 and 0.9977 – 0.9971 (61.8% Fib) should be monitored. Additionally, pivotal supports levels during 0.9958 and 0.9939 also need to be considered.

A tighten above 1.0130 could meant a commencement of a bullish pierce towards 1.0215. Weekly and daily resistances during 1.0147, 1.0166, 1.0186 and 1.0201 should be watched closely.

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USD/CHF Two-HOUR PRICE CHART (May 21– 31, 2019)

Please supplement a outline for a image.

Looking during a 2-hr chart, currently USD/CHF tested a neckline of a double-top settlement during 1.0049 3 times, however, it rose after. If a cost breaks and stays next 1.0049 it could trade towards a May 24 low during 1.0008. The daily support turn during 1.0024 should be in concentration as well. A mangle next 1.0008 could lead a span to trade towards a section of 0.9995 – 0.9988.

A mangle above 1.0085 could lead USD/CHF towards a May 22 high during 1.0099. If a span breaks a aforementioned high cost competence corner even aloft towards a May 21 rise during 1.0120. Weekly insurgency during 1.0108 should also be watched closely.

Written By: Mahmoud Alkudsi

Please feel giveaway to hit me on Twitter: @Malkudsi

Japanese Yen Soars, Mexican Peso Plummets, Crude Oil Prices Slammed

MARKET DEVELOPMENT – Mexican Peso Plunge, JPY Soars, Euro Benefits from Month-End

DailyFX Q2 2019 FX Trading Forecasts

MXN: The Mexican Peso plunged overnight after President Trump astounded markets by announcing that a US will place 5% tariffs on all Mexican goods, serve dampening risk appetite, while Mexican unprotected bonds (autos in particular) had also dragged equities lower. That said, a 3% dump in a Peso looks to be rather stretched with a pierce exacerbated by complicated prolonged positioning in a banking (net longs top given 2014).

JPY: The Japanese Yen is a important outperformer in a G10 space as safe-haven flows support. Subsequently, USDJPY has done a mangle subsequent a 109 hoop with support during 108.50 eyed.

EUR: Despite a dump in German inflation, that raises a risk of softer Eurozone inflation, a Euro is handling to reason organisation as month-end shopping in EURGBP provides support for a currency, while an tell of a Euro saved lift trades in a Mexican Peso has also underpinned. Reminder, a Euro had been many traders appropriation banking of choice when going prolonged EMs. However, gains in a Euro sojourn extent given a downside risks stemming from a doubt around Italy. Of note, a 5-Star celebration announced that it would support a taxation cut plan, that is expected to see a budget-deficit aim raised. Alongside this, eyes will be on subsequent week’s ECB assembly with Draghi and Co. set to hang to a dovish script.

USD: The US Dollar has unsuccessful to find comfort from a increasing trade fight doubt with a greenback modestly lower, despite holding onto a 98.00 handle. Elsewhere, yesterday’s debate by Fed Vice Chair Clarida has also kept gains in a USD singular after opening a doorway to a intensity rate cut supposing downside risks to a mercantile run-down further.

Crude Oil: Oil prices are once again on a backfoot as souring risk view weighs on a commodity. Consequently, oil prices are now on march for a worse monthly given a Nov sell-off with Brent wanton futures down over 14% for a month.

Japanese Yen Soars, Mexican Peso Plummets, Crude Oil Prices Slammed - US Market OpenJapanese Yen Soars, Mexican Peso Plummets, Crude Oil Prices Slammed - US Market Open

Source: DailyFX, Thomson Reuters

IG Client Sentiment

Japanese Yen Soars, Mexican Peso Plummets, Crude Oil Prices Slammed - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. EURUSD Regains Some Strength, Bond Yields Signal a Recession” by Daniela Sabin Hathorn , Junior Analyst
  2. Gold Price Outlook: Bullish Breakout Gathers Pace, Fed Opening Door to Rate Cut” by Justin McQueen, Market Analyst
  3. FTSE 100 Outlook – Looking to Break a 200-day, Pattern Neckline” by Paul Robinson, Currency Strategist
  4. Using FX To Effectively Trade Global Market Themes during IG” by Tyler Yell, CMT , Forex Trading Instructor

— Written by Justin McQueen, Market Analyst

To hit Justin, email him during Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

Gold Price Bullish Breakout Begins amid Topside Range Breach

Gold Price Talking Points:

  • Gold prices have damaged out of a 1266.18 to 1288.58 range, that has been in place given Apr 15.
  • Now that bullion sensitivity has started to spin higher, bullion prices might be upheld in a near-term.
  • Changes in retail trader positioning advise that bullion prices can still trade higher.

Looking for longer-term forecasts on Gold and Silver prices? Check out a DailyFX Trading Guides.

With tellurian risk resources descending in tandem as a week and month come to a close, bullion prices have captivated poignant certain attention. The total tumble in US equity markets, US Treasury yields, and a US Dollar has increased direct for gold. Rising doubt around tellurian trade continues to disease financier sentiment, and questions over scanty US expansion conditions have once again started to incite conjecture over a Federal Reserve rate cut this year.

For bullion prices, this is maybe a ideal mixture of news upsurge and cross-asset marketplace reactions for a near-term spin to a topside. With US genuine yields dropping (nominal Treasury yields are descending while acceleration hasn’t moved) and a denominated banking (US Dollar) pulling behind from a yearly highs, there are concrete elemental reasons for bullion prices to be trade higher.

GVZ (Gold Volatility) Technical Analysis: Daily Price Chart (May 2018 to May 2019) (Chart 1)

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As was remarkable yesterday, maybe a best growth for bullion prices in a near-term has been how bullion sensitivity and bullion prices have interacted in new days. Even as bullion sensitivity fell to an all-time shutting low progressing this week, bullion prices did not follow suit; we suggested that this was a bullish pointer for bullion. Now, with bullion sensitivity rising again, bullion prices have seen a swell to a topside.

Gold Price Technical Analysis: Daily Chart (April 2018 to May 2019) (Chart 2)

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Now that bullion prices have traded above 1288.58, we are topside mangle of a converging as good as a downtrend from a Feb and Mar 2019 highs. To this end, while a foresee has shifted in a bullish direction, bullion prices now need to transparent 1303.21, a May high, in sequence to concrete their bullish dermatitis move.

Ultimately, if bullion prices have been consolidating in a bullish descending throng given January, afterwards a depot cost aim would be for a lapse to a 2019 high during 1346.61.

IG Client Sentiment Index: Spot Gold Price Forecast (May 31, 2019) (Chart 3)

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Spot gold: Retail merchant information shows 73.4% of traders are net-long with a ratio of traders prolonged to brief during 2.76 to 1. The commission of traders net-long is now a lowest given May 15 when it traded nearby 1296.78. The series of traders net-long is 12.5% reduce than yesterday and 10.7% reduce from final week, while a series of traders net-short is 15.7% aloft than yesterday and 14.6% aloft from final week.

We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests spot gold prices might continue to fall. Yet traders are reduction net-long than yesterday and compared with final week. Recent changes in perspective advise that a stream spot gold cost trend might shortly retreat aloft notwithstanding a fact traders sojourn net-long.

FX TRADING RESOURCES

Whether we are a new or gifted trader, DailyFX has mixed resources accessible to assistance you: an indicator for monitoring trader sentiment; quarterly trading forecasts; methodical and educational webinars hold daily; trade guides to assistance we improve trade performance, and even one for those who are new to FX trading.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail during cvecchio@dailyfx.com

Follow him on Twitter during @CVecchioFX

View our long-term forecasts with a DailyFX Trading Guides

Kiwi Weekly Price Outlook: New Zealand Dollar Grinds during Support

In this array we scale-back and demeanour during a broader technical design to benefit a bit some-more viewpoint on where we are in trend. The New Zealand Dollar has plummeted some-more than 6% from a yearly highs opposite a US Dollar with cost now contrast parallel support around a 65-handle. These are a updated targets and cancellation levels that matter on a NZD/USD weekly cost draft streamer into a start of Jun trade. Review my latest week’s Strategy Webinar for an in-depth relapse of this setup and more.

New to Forex Trading? Get started with this Free Beginners Guide

NZD/USD Weekly Price Chart

NZD/USD Price Chart - Kiwi Weekly - New Zealand Dollar vs US Dollar

Notes: In my final New Zealand Dollar Weekly Price Outlook we remarkable that Kiwi had, “broken next both up-trend support and a multi-month operation we’ve been tracking and leaves a risk weighted to a downside in NZD/USD.” One month after and cost is down some-more than 2% with Kiwi induction uninformed yearly lows final week.

The evident concentration is on a 2018 low-week tighten during 6507– a weekly tighten next this threshold is indispensable to keep a short-bias viable targeting a 2018 low during 6424 and some-more a some-more poignant support connection during 6343/47. Initial insurgency stands during a Jan pitch lows during 6586 with broader bearish cancellation now lowered to a yearly open during 6705.

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Bottom line: Failure to symbol a weekly tighten next 6507 would leave a evident short-bias exposed streamer into a start of Jun trade. From a trade standpoint a good mark to revoke short-exposure / reduce protecting stops. Be on a surveillance for downside depletion near-term. Ultimately a incomparable liberation should infer visual and might offer some-more auspicious entries.I’ll tell an updated NZD/USD Price Outlook once we get serve clarity in near-term cost action.

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NZD/USD Trader Sentiment

NZD/USD Trader Sentiment - Kiwi Positioning - New Zealand Dollar vs US Dollar Price Chart

  • A outline of IG Client Sentiment shows traders are net-long NZD/USD – a ratio stands during +3.35 (77.0% of traders are long) – bearish reading
  • Traders have remained net-long given April 2nd; cost has changed 5.6% reduce given then
  • Long positions are 3.7% aloft than yesterday and 0.4% aloft from final week
  • Short positions are 22.9% reduce than yesterday and 4.6% aloft from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests NZD/USD prices might continue to fall. Traders are serve net-long than yesterday final week, and a multiple of stream positioning and new changes gives us a stronger NZD/USD-bearish contrarian trade bias from a view standpoint.

See how shifts in NZD/USD sell positioning are impacting trend- Learn some-more about sentiment!

Previous Weekly Technical Charts

Learn how to Trade with Confidence in a Free Trading Guide

— Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

Central Bank Weekly: What Can a Fed, ECB and BOJ do to Offset Trade Wars?

Central Bank Weekly Talking Points

  • As a US-China trade fight has escalated, a PBOC has reverted to boosting a USDCNH sell rate to equivalent a impact of a Trump tariffs.
  • Central banks like a BOJ and SNB have to be some-more crafty in perplexing to meddle in markets, distinct a PBOC.
  • Meanwhile, if a Fed or a ECB were to act, it would expected be along a seductiveness rate channel rather than directly in FX markets.

Looking for longer-term forecasts on a US Dollar? Check out a DailyFX Trading Guides.

Trade tensions are rising in each dilemma of a globe. At a core of each emanate seems to be a United States, be they issues with China, a European Union, Canada, or Mexico. As a ghost of trade wars rises, we’ve started to see policymakers take stairs – some concrete, others reduction so – in sequence to seaside adult their economies from downside risks.

Not all executive banks are combined equally, however, and therefore a strategy that they’ve used, they’re now using, and they will use in a destiny will all differ slightly.

People’s Bank of China Reverts to Currency Intervention

The People’s Bank of China is singular relations to G7 or grown economies’ executive banks insofar as it does not honour a ‘non-direct FX intervention’ process followed elsewhere. Accordingly, USDCNH has spin one of a many arguable collection for distilling view about a US-China trade war: we’ve formerly minute how a Chinese Yuan depreciation can effectively equivalent a disastrous mercantile impact of a Trump tariffs.

Read more: Chinese Yuan during 7.00 Barrier: The Most Important Level for Currency Markets

Other Degrees of Central Bank Interference

With other executive banks firm to no proceed involvement in FX markets, policymakers during some of a vital executive banks need to be artistic in how they proceed markets.

Due to a soothing expansion and acceleration sourroundings that persists in countries like Japan and Switzerland, for example, marketplace participants are familiar in a believe that seductiveness rates confirmed by a Bank of Japan and Swiss National Bank will be staying during or subsequent 0 for an extended period.

In turn, warn actions like what a SNB did with a EURCHF building in Sep 2011 and Jan 2015 tend to be a many effective proceed to impact markets.

How Will a Fed Respond to Trade Wars?

But for executive banks like a Federal Reserve or European Central Bank, there is too most tellurian faith on a fortitude of item prices in sequence to dramatically warn marketplace participants. Instead, these executive banks pierce during a some-more freezing pace: once each 3 months, new growth, inflation, and jobs forecasts are constructed that produce superintendence on a brazen trail of seductiveness rates. Policy is some-more predictable.

If a Fed is going to get concerned in trade wars, afterwards it is rarely expected that it will do so along a seductiveness rate track rather than directly inserted in USDCNH like a PBOC or creation a warn process proclamation same to a BOJ or SNB. To this end, traders would be correct to watch how US rates markets have developed in new days as trade fight concerns have skyrocketed.

Fed Funds Pricing Two Potential Rate Cuts in 2019

The luck of a rate cut in 2019 has increasing in a materially poignant over a past week. Ahead of a May Fed meeting, there was a 68% possibility of a 25-bps rate cut by a finish of a year; now those contingency have risen to 91%. In fact, Fed supports futures are pricing in a 71% possibility of a cut by Sep and a 63% possibility of a second cut by December.

Federal Reserve Rate Hike Expectations (May 31, 2019) (Table 1)

fed rate expectations, usd rate expectations, sovereign haven rate cut odds, fed rate cut odds, fed rate travel odds

We can magnitude whether a rate cut is being priced-in by this time subsequent year by examining a disproportion in borrowing costs for blurb banks over a one-year time setting in a future. Over a past dual weeks, rate expectations have been fast pricing in a cut, with rates markets discounting -66-bps by Jun 2020; this is a 16-bps boost from this time final week.

Eurodollar Dec 2019/2020 Spread: Daily Timeframe (October 2018 to May 2019) (Chart 1)

fed rate expectations, usd rate expectations, sovereign haven rate cut odds, fed rate cut odds, fed rate travel odds

Rate pricing has altered dramatically given a finish of April. After oscillating around pricing in one 25-bps rate cut for several weeks, a Eurodollar Jun 2019/2020 agreement widespread collapsed dramatically in May, quite over a final week of a month. Whereas one 25-bps rate cut was priced-in during a start of May, now dual cuts (or 50-bps) are priced-in; rates markets are fast disposition into pricing in 3 25-bps rate cuts transpiring between now and Jun 2020.

DXY INDEX TECHNICAL ANALYSIS: DAILY PRICE CHART (JUNE 2018 TO MAY 2019) (CHART 2)

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The thespian change in Fed rate cut expectations in new days has proven unwieldy for a US Dollar (via a DXY Index). On proceed behind to a May and yearly highs, a DXY Index convene has been cut down forward of insurgency and so cost stays in a five-week prolonged laterally range.

The timing of a new developments comes feeble for a DXY Index, that is now looking a retest of a rising trendline from a Mar 2018 lows – a fortitude of a whole longhorn move. Should a DXY Index cost dump subsequent 97.55 in a entrance sessions, contingency would boost for a operation mangle some time in June.

Read more: Gold Price Bullish Breakout Begins amid Topside Range Breach

FX TRADING RESOURCES

Whether we are a new or gifted trader, DailyFX has mixed resources accessible to assistance you: an indicator for monitoring trader sentiment; quarterly trading forecasts; methodical and educational webinars hold daily; trade guides to assistance we improve trade performance, and even one for those who are new to FX trading.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail during cvecchio@dailyfx.com

Follow him on Twitter during @CVecchioFX

View our long-term forecasts with a DailyFX Trading Guides

Dollar Mixed Ahead Of U.S. Personal Income & Spending Data

The U.S. personal income and spending information for Apr will be out during 8:30 am ET Friday. Ahead of a data, a greenback traded churned opposite a vital counterparts. While a greenback rose opposite a bruise and a franc, it hold solid opposite a euro and a yen.

The greenback was value 1.2577 opposite a pound, 108.74 opposite a yen, 1.0053 opposite a franc and 1.1152 opposite a euro as of 8:25 am ET.




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