InvestMacro

By Dan Steinbock

Trump’s grueling 12-day Asia tour was a quest for mega deals.  US policies in Asia are shifting. The stress on competitive strategic visions is being redefined by historic bilateral economic opportunities with China, Vietnam, South Korea, the Philippines and other ASEAN and APEC nations.

Diplomatic history has its ironies. In the Obama era, US President initiated a pivot to Asia that he had little time to visit. In the Trump era, US President has been so busy fortressing America against the world that he has had to spend more time in Asia to tame rumors about US disengagement.

This time President Trump’s strategic objective was in lucrative deal-making, which proved historical. In the future “America First” issues are likely to return with gusto, especially as the White House’s future is overshadowed by the Mueller investigation at home. 

Golf, trade and arms in Japan

Besides golf with Prime Minister Shinzo Abe, Trump had a good reason to start his Asian tour in Japan. Outside of North America, Japan is America’s third-largest export market and second-largest source of imports. Japanese firms are the second-largest source of foreign direct investment (FDI) in the US, and Japanese investors are the largest foreign holders of US treasuries.

The aging Japan has a critical role in a containment scenario, which Washington would seize against Beijing, should the US-China bilateral relations fall apart.

Ever since Trump withdrew from the Trans-Pacific Partnership (TPP), the White House’s focus has been on a redefined bilateral trade deal with Japan that would also include significant arms deals. Strategically, the alliance rests on the forward deployment of 50,000 US troops and other US military assets in Japan, including the controversial Okinawa base.

After decades of secular stagnation, Japanese politics has been more stable after the victories of Abe’s Liberal Democratic Party in the 2012, 2016 and 2017 elections. But instead of seizing the historic opportunity to use political consolidation to reignite the Japanese economy, Abe has pursued controversial strategic initiatives, including re-militarization, the US-style 2015 security legislation, and renuclearization.

Ménage à trois in the Korean Peninsula

Since the early 1950s, the Mutual Defense Treaty has allowed the US to dominate South Korea’s military defense. Today, some 29,000 U.S. troops are based in the country, which is included under the U.S. “nuclear umbrella.”

However, after the Park impeachment, South Korea opted for a strategic U-turn in economy and strategic relations. Elected in May 2017, President Moon Jae-in is no friend of the US anti-missile system (THAAD); he supports sanctions against North Korea, but only as long as it is aimed at bringing Pyongyang to the negotiating table.Moon does not accept the past Park-Obama “sanctions-only” approach toward North Korea, which the Trump administration has escalated with its “maximum pressure” principle.

South Korea remains the US’s seventh-largest trading partner and the US is South Korea’s second-largest trading partner. The two economies are joined by the Korea-US Free Trade Agreement (KORUS FTA). While the Trump administration has stated its intent to review and renegotiate the deal, it has not specified what it would like to amend.

Realistically, the harder Trump will push Seoul economically, the more he will stand to lose strategically – and vice versa.

Historic deals to avoid a clash with China

In 2016, US-China trade amounted to $579 billion, while Trump’s singular focus is on the $368 billion trade deficit. Yet, merchandise trade is only one aspect of the broad bilateral economic relationship. Today, China is US’s second-largest merchandise trading partner, third-largest export market, and biggest source of imports.

During his tour, Trump was accompanied by CEOs of 30 companies. Hungry for huge deals, the last thing they wanted was Trump to undermine access to the $400 billion Chinese market, based on US exports to China, sales by US foreign affiliates in China, and re-exports of US products through Hong Kong to China.

The same goes for services, foreign direct investment (FDI) and US Treasury securities. China is America’s fourth largest services trading partner (at $70 billion), third-largest services export market, and US has a major services trade surplus with China. The combined annual US-China investment passed $60 billion in 2016, but there is room for far more as China has become the world’s third-largest source of global FDI. Finally, China remains the second-largest foreign holder of US Treasury securities ($1.2 billion as of August 2017), which help keep US interest rates low.

In Beijing, the Trump Administration more moderate approach toward China paid off – as evidenced by the historic $254 billion deals.

Nurturing Vietnam as ASEAN’s ‘mini-China’

Trump’s tour featured two major Association of Southeast Asian Nations (ASEAN) nations, Vietnam and the Philippines. Since Obama’s military pivot to Asia, Washington has morphed its relationship with Vietnam into a “strategic partnership.”

Vietnam’s rapid growth in bilateral trade can be attributed to the post-1986 domestic economic reforms and US extension of normal trade relations (NTR) status in 2001.

Based on US data, bilateral trade soared from $220 million in 1994 to $45 billion in 2015, which has turned Vietnam into the 13^th-largest source for US imports (but only 37^th-largest destination for US exports). To Washington, Vietnam is a ‘mini-China’: the second-largest source of US clothing imports, a major source for electrical machinery, footwear, and furniture. While Washington seeks to protect US agricultural interests against Vietnam, the latter sees the regulation of its catfish-like basa imports in the US as protectionism.

Vietnam is hedging its trade bets. While it was a willing participant in the TPP, it is a party to negotiations to the Regional Comprehensive Economic Partnership (RCEP), a pan-Asian regional trade association that currently does not include the US but promotes the interests of emerging nations in Asia Pacific.

Duterte recalibration between US and China

Washington’s ties with its former colony the Philippines grew deep during the controversial Marcos years (1965-86), which led to the end of the US bases in the country (1947-91) and the departure of US forces from the Philippines, and during the Aquino III years (2010-16), which resulted in the Enhanced Defense Cooperation Agreement (EDCA), the return of US forces to the Philippines, rearmament with Pentagon’s support and the escalation of maritime conflicts with China.

However, the twin periods of close US ties coincided with deep strategic dependency on US, increasing economic polarization within the country and the spread of drugs, corruption and questionable “narco ties” with the pre-2016 regime.

Since the 2016 election triumph of Rodrigo Duterte, the US-Philippines relationship has been subject to a recalibration and, in the end of the Obama era, alleged US efforts at destabilization. Duterte’s sovereign foreign policy is less reliant on US security guarantees and benefits from economic relations with China – even as he has been developing more constructive personal ties with the Trump White House.

Duterte has also been able to link the Philippines into the China-supported One Road One Belt (OBOR) initiative, which is vital to his government’s huge “Build, Build, Build” infrastructure program that is paving way to the tripling of the Philippine per capita incomes in the next 25 years.

ASEAN tribute to the not-so-benign hegemon

Trump seeks to review and renegotiate many of the existing trade deals, while challenging the US postwar hub-and-spoke system of security alliances in the region. Unsurprisingly, then, several Association of Southeast Asian Nations (ASEAN), countries – such as Malaysia, Thailand and Singapore – that were not included in the current tour sought to preempt pressures.

During a recent visit, Premier Najib Raza announced that Malaysia’s large national pension fund and provident fund would invest several billion dollars in equity and infrastructure projects in the US as Malaysia Airlines pledged to explore options for acquiring more Boeing jetliners and General Electric engines at $10 billion.

Prime Minister Prayut Chanocha promised Thailand would buy Blackhawk and Lakota helicopters, a Cobra gunship, Harpoon missiles and F-16 fighter jet upgrades, plus 20 new Boeing jetliners for Thai Airways. Siam Cement Group agreed to purchase 155,000 tons of coal while Thai petroleum company PTT will invest in shale gas factories in Ohio. Prayut and Trump signed an MOU to facilitate $6 billion worth of investments that could create over 8,000 jobs in the US.

Tiny but wealthy Singapore followed in the footprints. Prime Minister Lee Hsien Loong showcased Singapore Airlines’ deal with Boeing for buying 39 B787 and B777-9 aircraft, which – as it was said – could create 70,000 jobs in the US.

That is the regional way to offer dollar-tribute to the US hegemon.

US military pivot to Asia

Trump’s Asian tour was also about the hard sell of military assets across the region. According to SIPRI, increases in global military spending are now driven by demand in Asia, along with the Middle East. During the Obama military pivot to Asia, Asia/Oceania received most of global imports (43%). Of the 10 largest importers in 2012-16, half were in India, China, Australia, Pakistan and Vietnam.

US dominates imports to its key security allies in East Asia and Oceania; Australia, Japan, and South Korea. In the past, these were thriving economies; today, they are aging and slowing. Growth markets are in emerging Asia, which is less prosperous and thus not willing to pay the US price premium, especially with more cost-efficient arms rivals, such as Russia.

When President Obama gave eloquent speeches about peace, his pivot to Asia contributed to maritime conflicts in the region fueling demand for weapons.  But Pentagon did not cash the profits. Russia accounted for most arms deliveries to Asia and Oceania (37%), followed by the US (27%) and China (10%).

And despite US-India strategic cooperation, Russia dominated arms imports in India (68% of total imports) and Vietnam (88%). Meanwhile, China has become a major arms supplier in Pakistan (68%), Bangladesh (73%), and Myanmar (70%).

From TPP lite to real free trade in Asia Pacific

After Japan, South Korea, China and Vietnam, Trump attended the Asia Pacific Economic Cooperation (APEC) Summit in Danang, Vietnam, followed by the 50^th Anniversary of ASEAN and 40^th Anniversary of the US-ASEAN Relations in Manila.

While trade ministers from 11 countries announced they would push ahead with a TPP lite, Abe may have seen the newly-named Comprehensive and Progressive Agreement for Trans-Pacific Partnership as a rival to the China-supported RCEP. In reality, it is a shaky TPP lite that will serve as a face-saving measure to him but as a hedge option to other 10 nations.

With the failed original TPP, the “America First” doctrine, Washington’s polarization and the impending impasse of the Mueller investigation, APEC hopes for greater US initiative in the region rest on quick-sand. The best APEC may hope for is long-term US-Chinese cooperation for the Free Trade Area of Asia-Pacific (FTAAP), which focuses on trade and investment and has room for both the US and China.

In this view, the US has a role in the ASEAN Economic Community (AEC), APEC and the US-ASEAN Connect Framework – as long as its engagement rests on economic cooperation, not geopolitical destabilization. In turn, the ASEAN nations’ integration plan AEC 2025 can benefit from China’s globalization initiatives, particularly the OBOR and the Asian Infrastructure Investment initiative (AIIP). In contrast, an enforced “America First” doctrine would undermine ASEAN 2025 goals.

A historical US-Chinese opportunity

In a defiant address, Trump told the APEC meeting that the US would no longer tolerate “chronic trade abuses,” while Xi announced that globalization was irreversible. What got lost in the translation was the intriguing fact – and historical opportunity – that the Trump and Xi visions need not be seen as exclusive.

In fact, both the US and Chinese visions support globalization, but with caveats. Both criticize the old multilateral international banks, though for different reasons. Both believe in rebalancing that is not accompanied by excessive trade deficits and foreign investment that should benefit both investors and destinations.

It is not the competitive US-China visions that offer a new path to the future in Asia Pacific. Rather, it is the inherent commonalities in these approaches that could sustain trade and investment in the region – and globally.

About the Author:

Dr Dan Steinbock is the founder of Difference Group and has served as research director at the India, China and America Institute (USA) and visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see https://www.differencegroup.net/ 

The original commentary was published by China-US Focus on November 15, 2017

By GrowthAces.com

Macroeconomic overview:

• Underlying U.S. consumer prices increased in October on the back of a pickup in rents and healthcare costs, bolstering the view that a recent disinflationary trend worrying the Federal Reserve probably had ended.
• The rise in the consumer price index, excluding the volatile food and energy categories, reported by the Labor Department on Wednesday likely clears the way for the U.S. central bank to raise interest rates next month.
• October’s gain in the so-called core CPI, which measures underlying inflation pressures, could comfort Fed officials concerned that stubbornly low inflation may reflect not only temporary factors but also more persistent developments.
• The core CPI rose 0.2% mom and 1.8% yoy in October. It edged up 0.1% mom and 1.7% yoy in September.
• The data suggest the Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, probably rose 0.2% in October, which would snap five straight monthly 0.1% gains. That would raise the year-on-year increase in the core PCE price index to 1.4 % from 1.3% in September.
• The core PCE price index has consistently undershot the Fed’s 2% target for more than five years. The central bank has lifted borrowing costs twice this year and has projected three rate increases in 2018. The government will publish core PCE price index data later this month.
• Overall consumer prices, however, rose marginally in October as the boost to gasoline prices from hurricane-related disruptions to Gulf Coast oil refineries was unwound. The CPI nudged up 0.1% last month after jumping 0.5% in September. That lowered the year-on-year increase in the CPI to 2.0% from 2.2% in September.
• Low inflation is, however, helping to underpin consumer spending. In a separate report on Wednesday, the Commerce Department said retail sales increased 0.2% last month as heavy price discounting by automobile manufacturers buoyed purchases of motor vehicles. Data for September was revised to show sales jumping 1.9%, which was the largest gain since March 2015, rather than the previously reported 1.6% advance. Retail sales increased 4.6% on an annual basis.
• The slowdown in retail sales from September’s robust pace largely reflected an unwinding of the boost to building materials and gasoline prices after recent hurricanes.
• Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3% last month after climbing 0.5% in September. These so-called core retail sales correspond most closely with the consumer spending component of GDP. Last month’s increase in core retail sales indicated a healthy pace of consumer spending at the start of the fourth quarter.
• Boston Fed President Eric Rosengren said falling unemployment and sustained growth mean the U.S. economy has accelerated beyond a sustainable level so the Federal Reserve should continue to raise interest rates, including next month.
• The data stopped a severe USD correction from the uptrend that began in early September on hopes of a tax cut deal.

Technical analysis and trading signals:

• We see a shooting star pattern on candles after Wednesday’s sharp fall from 1.1862. Failure inside the cloud and the close back below suggest further pullback action is due.
• Underlying trend is bullish so use dips as fresh buying opportunities. We stay long at 1.1714 for 1.1960.

USD/CAD: Loonie drops on oil and stocks slide

Macroeconomic overview:

• The CAD weakened to a one-week low against the USD on Wednesday as oil and stocks fell and investors weighed trade uncertainties ahead of fresh NAFTA talks.
• On Tuesday, Canada launched a NAFTA challenge of a U.S. decision earlier this month to impose duties on softwood lumber exports from its northern neighbor.The U.S. Commerce Department accuses Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in the construction of homes. Canada denies it is dumping the lumber.
• NAFTA working groups are due to begin meeting from Wednesday in Mexico. Talks will begin on Friday and continue through November 21.
• Prices of oil, one of Canada’s major exports, slipped for a fourth day on a gloomy outlook for oil demand growth from the International Energy Agency. On Tuesday, the IEA cut its oil demand growth forecast by 100k barrels per day for both 2017 and 2018. That could mean world oil consumption may not breach 100 million bpd next year as many had expected. Also, supplies are likely to exceed that level, particularly as U.S. production continues to rise.
• World stocks registered their longest losing streak in eight months, while the USD recovered early losses against a basket of major currencies as U.S. data boosted expectations for further Federal Reserve interest rate hikes.
• Bank of Canada Senior Deputy Governor Carolyn Wilkins said a cautious approach to monetary policy may be prudent during times of uncertainty like today, but caution has its limits because the trade-off can be financial instability. Explaining how uncertainty affects decision-making at the bank, Wilkins said policy may respond to negative shocks more aggressively when interest rates are low, but a cautious approach is prudent when it is not clear how rate moves will affect spending.
• The Bank of Canada raised rates in back-to-back moves in July and September but policymakers have since said that while less stimulus will be required over time, they will be cautious as they consider future rate moves. Wilkins said the bank is particularly focused on data that indicate how wages and potential output are progressing, as well as the effects of the rate hikes and the renegotiation of the North American Free Trade Agreement.
• Canada’s manufacturing sales data for September is due on Thursday and an October inflation report will be released on Friday.

Technical analysis and trading signals:

• Short-term moving averages have flattened and the USD/CAD is fluctuating around them. The pair broke below the 23.6% fibo of September-October rise but did not manage to stay below.
• Daily chart does not show any clear signal, while weekly chart still points to the downward move. We stick to our short position opened at 1.2815 with the target at 1.2550.

TRADING STRATEGIES SUMMARY:

FOREX – MAJOR PAIRS:

FOREX – MAJOR CROSSES:

PRECIOUS METALS:

How to read these tables?

1. Support/Resistance – three closest important support/resistance levels
2. Position/Trading Idea:
BUY/SELL – It means we are looking to open LONG/SHORT position at the Entry Price. If the order is filled we will set the suggested Target and Stop-loss level.
LONG/SHORT – It means we have already taken this position at the Entry Price and expect the rate to go up/down to the Target level.
3. Stop-Loss/Profit Locked In – Sometimes we move the stop-loss level above (in case of LONG) or below (in case of SHORT) the Entry price. This means that we have locked in profit on this position.
4. Risk Factor – green “*” means high level of confidence (low level of uncertainty), grey “**” means medium level of confidence, red “***” means low level of confidence (high level of uncertainty)
5. Position Size (forex)– position size suggested for a USD 10,000 trading account in mini lots. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size). You should always round the result down. For example, if the result was 2.671, your position size should be 2 mini lots. This would be a great tool for your risk management!
Position size (precious metals) – position size suggested for a USD 10,000 trading account in units. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size).
6. Profit/Loss on recently closed position (forex) – is the amount of pips we have earned/lost on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
Profit/Loss on recently closed position (precious metals) – is profit/loss we have earned/lost per unit on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.

VIP Traders Club members should expect to receive forex and precious metals trading signals updates at least twice a day. We will send you:

1. Buy and sell forex, precious metals signals (entry level, target, stop-loss)
2. Suggested position size that you can easily adjust to your trading account size – this would help you in risk management and you will survive longer drawdown periods
3. Early heads-up about the potential trading opportunities or rationale to taken positions ( fundamental analysis, technical analysis )
4. Forecasts of most important macroeconomic indicators prepared by our economists and econometricians.

JOIN VIP TRADERS CLUB – TRIAL MONTH FOR $1 NOW

About the Author:

By GrowthAces.com – Daily Forex Trading Strategies

Article By RoboForex.com

EUR USD, “Euro vs US Dollar”

The EUR/USD pair has completed the ascending correction and right now is forming another impulse to the downside, which may be considered as the start of a new descending wave. The first target is at 1.1727. Later, in our opinion, the market may start another correction towards 1.1790 and then resume falling inside the downtrend.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair has finished the ascending structure. Possibly, the price may break 1.3130 and continue falling inside the downtrend. The next target is at 1.3000.

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair has completed the correctional wave. We think, today the price may grow to reach 0.9991 and then fall towards 0.9925. Later, in our opinion, the market may resume growing inside the uptrend with the target at 1.0100.

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair has reached the correctional target. Possibly, today the price may start forming another ascending wave. The first target is at 114.00. After that, the instrument may start another correction towards 113.50 and then resume moving upwards to reach 115.00.

AUD USD, “Australian Dollar vs US Dollar”

The AUD/USD pair is consolidating near the lows. Possibly, the price may break this range upwards. The first target is at 0.7694. Later, in our opinion, the market may fall towards 0.7632 and then resume growing to reach 0.7840.

USD RUB, “US Dollar vs Russian Ruble”

The USD/RUB pair has reached the local target of its ascending structure. We think, today the price may form another descending wave with the first target at 59.90. The main target of the fourth wave is at 58.50.

XAU USD, “Gold vs US Dollar”

Gold is moving downwards. Possibly, the price may reach 1269. After breaking this level to the downside, the instrument will continue falling towards 1250.

BRENT

Brent is consolidating near the lows. After breaking this range upwards, the market is expected to resume growing inside the uptrend and reach the first target at 63.50. Later, in our opinion, the market may form another descending structure towards 62.30 and then continue moving to the upside with the target at 65.85.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By Gabriel Ojimadu, Alpari

Source: EURUSD: daily pin bar model suggests a decline ahead

Article By RoboForex.com

AUD USD, “Australian Dollar vs US Dollar”

At the H4 chart, the AUD/USD pair is moving downwards. After finishing the correction and breaking the low, the price entered the post-correctional extension area between the retracements of 138.2% and 161.8%. The next significant downside target is the retracement of 76.0% at 0.7520.

At the H1 chart, the situation is quite similar. We can see the divergence being formed, which indicates a possible pullback after the pair reaches its targets. The targets of this possible correction may be the retracements of 50.0% and 61.8% at 0.7606 and 0.7626 respectively.

USD CAD, “US Dollar vs Canadian Dollar”

As we can see at the H4 chart, the price has completed the correction and right now is starting a new ascending impulse. The targets of this uptrend is the current high at 1.2916. If the price breaks it, the instrument may resume growing towards the post-correctional extension area between the retracements of 138.2% and 161.8% at 1.3010 and 1.3070 respectively.

At the H1 chart, the situation is quite similar. The closest upside targets are the retracements of 61.8% and 76.0% at 1.2819 and 1.2854 respectively.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By GrowthAces.com

Macroeconomic overview:

• The EUR/USD continues its rise today, getting a boost from Tuesday’s upbeat German economic data. Germany’s seasonally adjusted GDP rose by 0.8% on the quarter, beating market forecast of 0.6%.
• Yesterday’s data showed U.S. producer prices rose more than expected in October, driven by a surge in the cost of services, leading to the biggest annual increase in wholesale inflation in more than 5-and-a-half years.
• Tuesday’s report from the Labor Department also showed steady gains in underlying producer prices, which supported expectations of a gradual increase in inflation and keep the Federal Reserve on track to raise interest rates in December.
• The producer price index for final demand increased 0.4% last month after a similar gain in September. That lifted the year-on-year increase in the PPI to 2.8%, the largest rise since February 2012, from 2.6% in September. Firming inflation at the factory gate is likely to be welcomed by Fed officials who have long argued that price pressures were being held back by transitory factors.
• The FX market will be closely watching the release of the US CPI where failure to show any acceleration would be perceived as market neutral, leaving rate-hike expectations in December currently unchanged. That said, we expect the USD to remain on offer today, as speculative shorts have been cleaned-out and US retail sales (released alongside the US CPI) are likely to have decelerated sharply in October after the strong increase in September. On balance, US data releases are thus expected to allow EUR-USD more room to extend gains above 1.18, with the pair already having recovered back above levels preceding the sell-off on 26 October when the ECB announced its “QE downsize”.

Technical analysis and trading signals:

• The EUR/USD breaks into the daily cloud which should fuel the bulls further. 1.1877 is the top of the daily cloud and a near term target. The rally has left slow stochs heavily overbought and we think that any corrective actions should be used as fresh opportunities to join the bull trend. We stay long for 1.1960.

USD/JPY: Japanese economy grows above expectations as exports outperform

Macroeconomic overview:

• Japan’s economy grew faster than expected in the third quarter due to strong exports, posting the longest period of uninterrupted growth in more than a decade.
• The economy expanded at a 1.4% annualised rate in July-September, slightly above the median estimate for annualised growth of 1.3%, Cabinet Office data showed on Wednesday. That followed revised annualised growth of 2.6% in April-June. GDP grew 0.3% compared to the previous quarter, which matched the median estimate and followed a 0.6% quarter-on-quarter expansion in April-June.
• Consumer spending fell for the first time in seven quarters but this is expected to be temporary because the economy is near full employment, which should bolster domestic consumption in the future.
• External demand – or exports minus imports – was the biggest reason for expansion, adding 0.5 percentage points to growth. In comparison, negative external demand subtracted a revised 0.2 percentage point from GDP growth in April-June.
• Private consumption, which accounts for about two-thirds of GDP, fell 0.5% from the previous quarter, more than the median estimate of a 0.3% contraction to mark the first decline since October-December 2015.
• “There’s no change to our view the economy is recovering moderately as a trend,” Japanese Economy Minister Toshimitsu Motegi said. “We need to make the recovery a durable one, so we’ll proceed with reforms to boost Japan’s productivity.” Japan’s government is due to announce a package of economic measures by year-end aimed at increasing investment in skills training and raising productivity.
• Capital expenditure rose 0.2% in July-September from the previous quarter, less than the median estimate for a 0.3% increase but still up for the fourth straight quarter.
• In our opinion available data suggested that economic activity continued to expand in the current quarter, noting household incomes maintained solid growth and external demand was holding up. However, the economy is running into capacity constraints which suggests that growth will start to slow next year.
• This long run of growth should encourage the Bank of Japan to stick with the current monetary easing framework, given its argument that inflationary pressure will percolate through the economy as long as growth is on track.

Technical analysis and trading signals:

• USD/JPY bears are seeking a daily close below 112.98, 23.6% fibo of the 107.33-114.73 rise, which would open the way to the next fibo level at 111.90. The 7-day exponential moving average crossed below 14-day ema, which is an important bearish signal.
• We have placed a sell order at 113.10 with the target at 111.00.

AUD/USD weakens on Australian wages data

Macroeconomic overview:

• Wednesday’s figures from the Australian Bureau of Statistics showed its wage price index rose 0.5% in the third quarter, from the second quarter, missing market forecasts of a 0.7% increase. Annual wage growth quickened to 2.0%, from a record low of 1.9%, but again was short of the 2.2% forecasted and only just above inflation at 1.8%.
• And that tiny pick-up owed much to a relatively generous 3.3% hike in the minimum wage which was forced on reluctant employers by the government regulator.
• The low pace of wage rises is a major reason the Reserve Bank of Australia recently forecast core inflation would not reach the floor of its 2 to 3% target band until early 2019, a year later than previously hoped.
• As a result household incomes have been lagging debt, sapping spending power and slugging the retail sector where sales suffered a rare contraction in the third quarter.
• Consumers remained cautious with a Westpac survey out on Wednesday showing pessimists again outnumbered optimists in November as its sentiment index dropped 1.7%.
• Businesses seem to be doing well enough out of it. A well regarded survey of firms from NAB out on Tuesday showed profits spiking to their highest in two decades even as labour costs grew well below their long-run average.
• The conservative government of Prime Minister Malcolm Turnbull has proposed addressing the wages problem by slashing corporate taxes, apparently in the hope firms would pass on some of the cash to workers.
• The Australian dollar skidded to a four-month trough today as a surprisingly weak reading on wages threatened to keep interest rates lower for even longer than currently priced in.

Technical analysis and trading signals:

• A new low is set to keep the broader bear trend intact. The pair broke below 0.7632, 61.8% fibo of May-September rise. The nearest support level is July 5 low at 0.7573.
• A break below the 0.7632 opens the way to stronger drop, even to full retracement of the above-mentioned move to 0.7328. But we stay sideways on this pair, as we expect the broad USD recovery to be over.

VIP Traders Club members should expect to receive forex and precious metals trading signals updates at least twice a day. We will send you:

1. Buy and sell forex, precious metals signals (entry level, target, stop-loss)
2. Suggested position size that you can easily adjust to your trading account size – this would help you in risk management and you will survive longer drawdown periods
3. Early heads-up about the potential trading opportunities or rationale to taken positions ( fundamental analysis, technical analysis )
4. Forecasts of most important macroeconomic indicators prepared by our economists and econometricians.

JOIN VIP TRADERS CLUB – TRIAL MONTH FOR $1 NOW

About the Author:

By GrowthAces.com – Daily Forex Trading Strategies

Article By RoboForex.com

AUD USD, “Australian Dollar vs US Dollar”

At the H4 chart, after forming Hammer and Inverted Hammer patterns, which indicated a possible trend reverse, the AUD/USD pair broke them and continued falling. By now, the price has formed one more Hammer pattern and, judging from previous movements, may continue trading to the downside.

USD CAD, “US Dollar vs Canadian Dollar”

As we can see at the H4 chart, while forming the descending channel, the USD/CAD pair has finished another correction and reached the resistance level. Shooting Star and Harami patterns indicate that the current correction may have been complete. Later, the price may continue falling towards the downside border of the channel.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article By RoboForex.com

EUR USD, “Euro vs US Dollar”

The EUR/USD pair has broken its consolidation range upwards and may choose an alternative scenario and start another correction to reach 1.1700. Later, in our opinion, the market may form another ascending structure towards 1.1828 to finish the correction and then continue falling inside the downtrend with the target at 1.1530.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair is consolidating and forming a new ascending structure towards 1.3197. After that, the instrument may continue falling inside the downtrend with the local target at 1.2929.

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair has returned to the center of the third ascending structure and finished the correction. According to the main scenario, the instrument is expected to resume growing inside the uptrend to reach 0.9991.

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair has reached the correctional target. We think, today the price may consolidate near the lows. After breaking the correctional channel, the market may start forming the fifth ascending wave to reach 115.00.

AUD USD, “Australian Dollar vs US Dollar”

The AUD/USD pair has reached the predicted target of the descending wave. Possibly, today the price may consolidate near the current lows. After breaking the descending channel, the market may start forming the fourth wave to reach 0.7840.

USD RUB, “US Dollar vs Russian Ruble”

The USD/RUB pair is still moving upwards with the target at 60.20. Later, in our opinion, the market may fall towards 58.60 and then start forming the fifth ascending structure to reach 60.47.

XAU USD, “Gold vs US Dollar”

Gold is consolidating around 1277. If later the instrument breaks this range to the upside, the market may extend this correction towards 1311; if to the downside – continue falling to reach 1250.

BRENT

Brent has broken its consolidation range downwards and reached the first downside target. Possibly, today the price may grow to test 63.00 from below and then form another descending structure towards 61.00 to complete the correction. After that, the instrument may start another wave to the upside with the target at 65.75.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By Gabriel Ojimadu, Alpari

By Elliott Wave International