InvestMacro

By George Prior

The pound will be rebounding in the short term as the UK Parliament seizes control to try and block a no-deal Brexit – but with major political chaos and a looming election, the currency remains vulnerable.

This is the warning from Nigel Green, the CEO and founder of financial advisory giant deVere Group, which has more than $12bn under advisement.

It comes as Uk lawmakers s on Tuesday night in the House of Commons voted in favour of debating a motion to take the no-deal Brexit off the table and ask the EU for an extension. Prime Minister Boris Johnson has declared he will call a general election if the motion passes.

Mr Green observes: “After falling to its lowest level in 34 years on Tuesday, the pound began to rebound after the Prime Minister lost his Commons majority as Conservative member of parliament Phillip Lee crossed the floor to join the Liberal Democrats – putting Boris Johnson’s ‘do or die’ Brexit agenda under enormous pressure.

“There was then another enormous blow to the PM on Tuesday evening when he lost his first Parliamentary Brexit battle.

“Lawmakers have, in effect, seized control of Parliament’s agenda on Wednesday and will try and force through legislation to stop a no-deal Brexit.

“The squeeze on Boris Johnson’s plans will have a positive effect on the pound in the short term – we can expect it to trade considerably higher in the coming sessions as the potential for the PM losing his threat of no-deal increases.”

He continues: “However, this might also be put in context.  The rebound will be tempered by the possibility of an imminent election.

“An election always creates uncertainty and therefore turbulence for sterling, but even before it is called there will be major question marks as Jeremy Corbyn, the opposition Labour leader, is now demanding no-deal is off the table before he agrees to go to the polls.

“And should a Corbyn-led Labour party win that election, there will be even more bad news for the pound.

“His anti-business rhetoric and high tax and low-profit policies would lead to a significant sterling sell-off.”

The deVere CEO concludes: “Whilst recent developments in the parliament move towards reducing the risk of a no-deal Brexit, it is still a critical issue for the performance of the pound.

“There remains major political upheaval in the UK and a looming election.  This uncertainty means the currency remains vulnerable and volatile.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

By IFCMarkets

Growing industrial producer prices bullish for EURUSD

Industrial producer prices in euro-zone rose by 0.2% over month in July 2019, recording similar increase over year. The growth followed 0.6% decline over month in June. Will the EURUSD climb?

On 1-hour timeframe EURUSD: H1 is in uptrend. The price has crossed above the 50-period moving average MA(50) which has levelled off.

Technical Analysis Summary

Market Analysis provided by IFCMarkets

By Orbex

The US dollar rose to post a fresh two-year high at 99.32 before pulling back. The declines came after the ISM manufacturing PMI contracted for the first time in three years.

The manufacturing activity index fell to 49.1 in August from 51.2. This raised concerns once again about a potential recession, fueled by trade war uncertainty.

Euro Rebounds After ISM PMI

The euro rebounded on Tuesday after prices initially slipped to a fresh two-year low at 1.0925. Economic data from the eurozone was thin. However, the producer prices index report showed a 0.2% increase on the month. This was below the estimates of a 0.3% increase but better than the 0.6% decline in July.

EURUSD Could Rebound in the Short Term

Price action after the EURUSD fell to a two-year low, which indicates a possible rebound on the horizon. However, the gains will be limited to the recently breached support of 1.1030. A retest of this level to establish resistance will, however, confirm the downside. But the currency pair could remain range bound within 1.1030 and the lows of 1.0925.

Sterling Jumps as MPs Move to Stop No-Deal Brexit

Brexit and political uncertainty continue in the UK. In the latest move, lawmakers are planning to vote to stop Britain from leaving the EU without a deal in hand. However, PM Johnson reiterated that the UK will be leaving the EU regardless of a deal. The UK is also possibly headed for another general election if lawmakers vote to block a no-deal Brexit.

GBPUSD Pares Losses From Earlier This Week

The currency pair recovered off the day’s lows. GBPUSD initially slipped to new lows of 1.1957, before turning bullish. The bullish momentum, if maintained, could see the currency pair attempting to test 1.2170 level. However, this will be subject to the current short-term resistance at 1.2082 being cleared.

Gold Back at 6-Year Highs

The precious metal logged gains on Tuesday after the ISM report on manufacturing. With the trade war being blamed for the decline in global manufacturing, investors piled into safe-haven assets. Gold prices retested the level of 1543 as US equities fell, reflecting the market sentiment.

Can XAUUSD Breakout to New Highs?

The current gains look to be coming in with weak momentum. Unless there is a strong close above the 1543 handle, XAUUSD is likely to remain flat in the near term. A convincing close above 1543 is required to establish further highs. We expect XAUUSD to remain trading flat or close to the current highs. The lower support at 1518 could likely stall the declines.

By Orbex

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD has reached the target of the first ascending impulse; right now, it is forming a new consolidation range around 1.0970. Possibly, the pair may expand the range towards 1.0983 and then fall to reach 1.0960. If later the price breaks this range to the downside, the instrument may form a new descending structure towards 1.0944; if to the upside – start another growth with the target at 1.1002.

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD has completed the first ascending impulse; right now, it is consolidating at the top close to 1.2089. If later the price breaks this range to the downside at 1.2070, the instrument may continue trading downwards to reach 1.2025; if to the upside – form one more ascending structure with the target at 1.2220.

USDCHF, “US Dollar vs Swiss Franc”

USDCHF has completed the descending impulse at 0.9860. Today, the pair may start another growth to reach 0.9894 and then form a new consolidation range between these two levels. If later the price breaks this range to the downside at 0.9860, the instrument may form a new descending structure towards 0.9820; if to the upside at 0.9898 – resume trading upwards with the target at 0.9930.

USDJPY, “US Dollar vs Japanese Yen”

USDJPY has broken Triangle pattern and may continue the correction. Possibly, today the pair may reach 106.12 and then start a new decline towards 105.70. Later, the market may form one more ascending structure with the target at 106.16.

AUDUSD, “Australian Dollar vs US Dollar”

After completing an upside continuation pattern at 0.6725, AUDUSD has finished one more ascending structure. Today, the pair may form a new consolidation range at the top of this impulse. Possibly, the price may expand the range towards 0.6787, fall to reach 0.6757, and then grow to return to 0.6770. If later the price breaks this range to the downside, the instrument may form a new descending structure towards 0.6717 if to the upside – start another growth with the target at 0.6890.

USDRUB, “US Dollar vs Russian Ruble”

USDRUB has reached 67.07; it looks like the price is forming Double Top pattern. Possibly, the pair may rebound from it and then start a new decline with the first target at 66.25.

USDCAD, “US Dollar vs Canadian Dollar”

USDCAD is still moving upwards to reach 1.3400. Possibly, today the pair may be corrected to test 1.3300 from above and then form one more ascending structure towards 1.3400. Later, the market may start a new correction to reach 1.3355 at least and then grow with the target at 1.3434 to finish this wave. After that, the instrument may continue trading downwards with the target at 1.2950.

XAUUSD, “Gold vs US Dollar”

After breaking Triangle pattern, Gold has completed one more structure. Today, the pair may reach 1550.60 and then form a new descending structure with the target at 1533.90.

BRENT

Brent has finished another ascending impulse towards 58.85; right now, it is consolidating to break the channel’s upside border. If later the price breaks this range to the upside at 58.88, the instrument may resume trading inside the uptrend with the first target at 59.60; if to the downside at 58.50 – complete the correction at 58.20 and then start a new growth towards the above-mentioned target.

BTCUSD, “Bitcoin vs US Dollar”

BTCUSD has completed the first descending impulse at 10461.00 along with the correction at 10592.00. Possibly, today the pair may fall to break 10460.88 and then continue trading downwards with the target at 10092.00. However, the price may choose an alternative scenario to form one more ascending structure towards 10790.00 and then start a new decline with the target at 9900.00.

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 Orbex

The Bank of Canada will kick off the new month with its monetary policy meeting today, and investors remain somewhat divided on the outcome.

The BoC will be holding rates steady at today’s meeting. But the central bank is still not out of the woods as the global economic uncertainty remains bleak.

Given the world economic outlook, there is a growing consensus that the central bank should cut rates at least once this year. This falls in line with the BoC’s playbook. The central bank is often seen to make “insurance cuts” ahead of time.

The central bank follows a similar view on hiking interest rates as well.

The BoC has been one of the few central banks among major economies to remain neutral for the most part. This comes amid other big central banks such as the Fed and the ECB moving into an easing cycle.

The Bank of Canada started its rate hike cycle in July 2017, when it raised rates by a quarter basis point to 0.75%. Since then, the rate hike cycle saw the BoC hiking rates steadily to bring it to the current 1.75%.

Interest rates in Canada have remained steady since October last year. After bringing rates to the current 1.75%, the central bank has remained on the sidelines for nearly nine months so far.

Will the Central Bank Cut Rates this September?

For the September meeting, the general consensus among economists is that the BoC will hold rates steady. But looking ahead, the next policy move is almost certain to be a rate cut instead of a rate hike.

Canada’s domestic economy doesn’t warrant a rate cut at this point in time. But considering the global conditions, there is a good chance a rate cut could follow.

As of July, the economic indicators have been broadly in line with the BoC’s forecasts.

The central bank in the July meeting forecast that growth would average 1.3% this year while expecting Q2 growth to rise 2.3% on an annualized basis.

So far, data has consistently beaten the BoC’s forecasts. This gives the central bank a bit of room to wait and watch for further indicators to unfold. As a result, the BoC remains on firm footing compared to its peers.

GDP Rise Lowers Odds of Rate Cut This Month

On Friday, Canada’s latest GDP figures were released. In the second quarter, GDP rose 3.7%. The gains were mostly due to an increase in the export sector. This was the strongest quarterly gain since 2017. In the previous quarter, Canada’s GDP grew by 2.1%.

GDP is now outpacing that of the United States. Exports grew 3.7% during the quarter ending June 2019, while services exports rose 1.1%. However, business investment fell by 1.6% alongside consumer spending which was down 0.1% for the reported period.

The Bank of Canada was forecasting a growth rate of 2.3%. And the data beat estimates by a strong margin!

The gains in the GDP report now lowers the odds of a Bank of Canada rate cut. However, the timeline for a rate cut is still open for October. This largely comes due to the global headwinds. The Bank of Canada will also issue its forecasts for the economy.

In the previous forecasts, the BoC expected growth to slow into the next year. The odds for an October rate cut stand at 60%, compared to just 16% for a September rate cut.

Investors will be looking to today’s report specifically for the forward guidance. While the markets are currently anticipating a rate cut in October, there is a good chance that the central bank will like to extend this time frame a bit further beyond that.

By Orbex

Article By RoboForex.com

GBPUSD, “Great Britain Pound vs US Dollar”

As we can see in the H4 chart, after finishing the correction at 50.0% fibo and breaking the low, GBPUSD is still trading downwards. The next downside targets are inside the post-correctional extension area between 138.2% and 161.8% fibo at 1.2019 and 1.1788 respectively. The resistance is at 1.2286. At the same time, there is a convergence on MACD, which indicates slowdown of the descending tendency.

In the H1 chart, the pair is correcting to the upside and has already reached 38.2% fibo. The next target may be 50.0% fibo at 1.2133. The support is close to the low at 1.1958.

EURJPY, “Euro vs. Japanese Yen”

As we can see in the daily chart, after breaking the significant low, EURUSD is still moving downwards. The targets are inside the post-correctional extension area between 138.2% and 161.8% fibo at 114.33 and 112.06 respectively. The resistance is at 117.96..

In the H4 chart, there is a convergence, which may indicate a possible pullback soon. The targets of this correction may be 23.6%, 38.2%, and 50.0% fibo at 117.18, 117.96, and 118.62 respectively. The support is near the low at 115.86.

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 CentralBankNews.info
Georgia’s central bank lived up to its warning from July and raised its benchmark rate to curb inflationary pressures from a depreciation of its lari currency and said it was “ready to continue tightening policy until the pressure on the exchange rate weakens.”
The National Bank of Georgia (NBG) raised its refinancing rate by 50 basis points to 7.0 percent, saying the impact of the exchange rate depreciation on inflation had increased recently and this was now exacerbating inflationary expectations.
The rate hike by NBG comes as inflation has begun to accelerate following a steady fall in the lari since February and after the central bank cut its rate twice this year in January and March by a total of 50 basis points.
Georgia’s inflation rate rose to 4.9 percent in July from 4.6 percent in June and only 2.2 percent in January, boosted by higher taxes on cigarettes. Core inflation, which excludes food, energy and tobacco, is still low at 2.4 percent, indicating weakening demand-side pressures, NBG said.
The lari has been falling since mid-February and was trading at 2.96 to the U.S. dollar today, down 9.5 percent since the start of this year.
The central bank said it would “use all available means to ensure price stability” and if necessary its monetary policy committee would consider meeting at an extraordinary session. Its next meeting is scheduled for Oct. 23.

The National Bank of Georgia issued the following statement:

     www.CentralBankNews.info

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.09659
• Open: 1.09720
• % chg. over the last day: +0.05
• Day’s range: 1.09685 – 1.09794
• 52 wk range: 1.0931 – 1.1817

The dollar index retreated from local highs after a long rally. Investors began to partially fix positions on the greenback. Additional pressure on the US currency is provided by weak data on business activity in the US manufacturing sector from ISM. At the moment, EUR / USD quotes are consolidating in the range of 1.09500-1.09800. The single currency has the potential for further recovery. Positions must be opened from key levels.

The Economic News Feed for 04.09.2019:

• – composite business activity index (PMI) from Markit in the eurozone – 11:00 (GMT+3:00);
• – US trade balance – 15:30 (GMT+3:00);
• – “The Beige Book” of the US Federal Reserve – 21:00 (GMT+3:00).

Indicators of accurate signals do not give: the price has fixed between 50 MA and 100 MA.

The MACD histogram has moved into the positive zone, which indicates a correction of the EUR / USD currency pair.

The Stochastic Oscillator is in the neutral zone, the% K line began to cross the% D line. There are no signals at the moment.

Trading recommendations

• Support levels: 1.09500, 1.09250, 1.09000
• Resistance levels: 1.09800, 1.10000, 1.10350

If the price consolidates above 1.09800, expect further correction of EUR/USD quotes. The potential movement is to 1.10200-1.10400.

Alternatively, the quotes could decrease toward 1.09300-1.09000.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.20608
• Open: 1.20724
• % chg. over the last day: +0.19
• Day’s range: 1.20722 – 1.21243
• 52 wk range: 1.1995 – 1.3385

The GBP/USD currency pair began to recover. The trading instrument has updated local highs. Investors’ concerns about the “hard” Brexit have somewhat eased. The House of Commons of Great Britain supported the introduction of amendments to the agenda of the parliament, which will allow voting to ban the country’s exit from the EU without a deal. We recommend that you keep track of current information on this issue. At the moment, the local support and resistance levels are 1.20700 and 1.21200, respectively. GBP/USD quotes can grow further. Positions must be opened from key levels.

The Economic News Feed for 04.09.2019:

• – composite index of business activity (PMI) – 11:30 (GMT+3:00);
• – the business activity index in the service industry – 11:30 (GMT+3:00).

Indicators do not give accurate signals: the price crossed 50 MA and 100 MA.

The MACD histogram is in the positive zone and above the signal line, which indicates a further recovery of the GBP / USD currency pair.

The Stochastic Oscillator is near the overbought zone, the %K line began to cross the %D line. There are no signals at the moment.

Trading recommendations

• Support levels: 1.20700, 1.20150
• Resistance levels: 1.21200, 1.21700, 1.22250

If the price consolidates above the local resistance of 1.21200, expect further growth toward 1.21600-1.21800.

Alternatively, the quotes could drop toward 1.20400-1.20200.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.33242
• Open: 1.33345
• % chg. over the last day: +0.10
• Day’s range: 1.33168 – 1.33444
• 52 wk range: 1.2727 – 1.3664

The technical picture on the USD / CAD currency pair is still ambiguous. Looney is in lateral movement. The trading tool tests the key support and resistance levels: 1.33150 and 1.33450, respectively. Participants in financial markets took a wait and see attitude before the meeting of the Bank of Canada. It is expected that the regulator will maintain the basic parameters of monetary policy at the same level. We also recommend paying attention to the dynamics of oil quotes. Positions must be opened from key levels.

At 17:00 (GMT+3:00) the Central Bank of Canada will announce its decision about the key interest rate.

Indicators do not give accurate signals: the price crossed 50 MA and 100 MA.

The MACD histogram has moved into the negative zone, indicating a bearish sentiment.

The Stochastic Oscillator is in the oversold zone, the %K line crossed the %D line. There are no signals at the moment.

Trading recommendations

• Support levels: 1.33150, 1.32800, 1.32550
• Resistance levels: 1.33450, 1.33800, 1.34000

If the price consolidates below 1.33150, USD/CAD quotes are expected to fall. The potential movement is to 1.32800-1.32600.

Alternatively, the quotes could grow to 1.33700-1.34000.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 106.211
• Open: 105.962
• % chg. over the last day: -0.34
• Day’s range: 105.830 – 106.245
• 52 wk range: 104.97 – 114.56

The USD / JPY currency pair continues to trade flat. There is no defined trend. Investors expect additional drivers. At the moment, the following key support and resistance levels can be identified: 105.800 and 106.300. Financial market participants expect up-to-date information regarding the US/China trade conflict. We also recommend paying attention to the dynamics of yield on US government bonds. Positions must be opened from key levels.

The Economic News Feed for 04.09.2019 is calm.

Indicators do not provide accurate signals: 50 MA crossed 100 MA.

The MACD histogram is near 0. There are no signals at the moment.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates bullish sentiment.

Trading recommendations

• Support levels: 105.800, 105.600, 105.300
• Resistance levels: 106.300, 106.700, 107.000

If the price consolidates above 106.300, expect the quotes to grow toward 106.700-107.000.

Alternatively, the quotes could drop toward 105.600-105.400.

by JustForex

by JustForex

Investors began to fix positions in the US dollar after a protracted rally. The dollar index (#DX) has moved away from local highs. Weak economic releases put additional pressure on the greenback. Thus, the ISM manufacturing PMI in August amounted to 49.1 instead of the forecasted value of 51.1. Investors are still awaiting further information regarding the escalation of the trade war between the US and China.

Investors’ concerns about the “hard” Brexit have become weaker, triggering higher demand for the British pound. The British Prime Minister and Conservative Party Leader, Boris Johnson, lost a majority in the House of Commons yesterday after MP Philip Lee decided to move from conservative to liberal democrats. From now on, the UK government will be a minority cabinet. The official opposed the “hard” Brexit without a deal. The House of Commons of Great Britain supported the introduction of amendments to the agenda of the parliament, which will allow voting to ban the country’s exit from the EU without a deal. Boris Johnson himself believes that the bill that does not allow Britain to leave the EU without a deal greatly injures the country. This bill allows Brussels to impose its conditions.

Today, the attention of financial market participants will be directed to a meeting of the Bank of Canada. It is expected that the regulator will maintain the basic parameters of monetary policy at the same level. We recommend paying attention to the comments of the Central Bank representatives.

The “black gold” prices rise after falling the day before. At the moment, WTI crude oil futures are testing the $54.25 per barrel mark. At 23:30 (GMT+3:00) weekly crude oil inventories will be published according to the American Petroleum Institute.

Market indicators

Yesterday, the bearish sentiment was observed in the US stock markets: #SPY (-0.57%), #DIA (-0.80%), #QQQ (-0.97%).

The yield on 10-year US government bonds is consolidating near multi-year lows. At the moment, the indicator is at the level of 1.48-1.49%.

– Composite PMI from Markit in the eurozone at 11:00 (GMT+3:00);
– Composite PMI in the UK at 11:30 (GMT+3:00);
– US trade balance at 15:30 (GMT+3:00);
– A decision of the Bank of Canada at the key interest rate at 17:00 (GMT+3:00);
– The Fed’s Beige Book at 21:00 (GMT+3:00).

by JustForex

By Alpari.com

By Alpari.com