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Fundamental Analysis: February 9


 


The USA labor market attracts the attention of all traders through its statistics.  The dollar still manage to stabilize its spot in spite of the fact that the Non-Farm Payroll (NFP) report has not stretched out even to a moderate status of what was reported 190,000 but only reflected 151,000 and the preceding value was re-assessed downward. But somehow, the trades were different directed on Monday.


 


A solid leap of 0.5% from 0.0% was made by the US Average Hourly Earnings. In the meantime, having a sudden fall by 5.0%, the unemployment rate attained a recurrent low level of 4.9%. A very vital thing for the Fed is the increase of the wage rate, pertaining to the inflation acceleration prospects that results to the dollar disregarding the poor NFP and drew attention on the Hourly Earnings outcome. The EURO did not show any pivotal data. The EUR/USD showed a slight increase by the end of the trades.


 


It is always a traditional bearish factor for British currency the bond yield spreads growth of the US and UK government as a result of the Friday's labor market release. However, the oil market bulls were extended which has a positive effect on the pound value. The pound/dollar returned upwards after a decrease.


 


The publishing of the Monetary Policy Meeting minutes will be held on February 18. In the meantime, the unpredictability in the world markets have a negative effect on business sentiment as stated by the Bank of Japan chairman. The currency pair USD/JPY aggressively decreased.


 


 

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Technical Analysis for GBP/USD: February 10


 


 


The outpouring of the capital from the British assets cause the government bonds yield remarkably lessen in opposition to the US Treasuries and the German bonds. In turn, this component gave a negative effect on the Cable. The Sterling were rather toned up.


 


 


The first support occurs at 1.4400 and at 1.4320 subsequently. The first resistance stands at 1.4480 and at 1.4560 subsequently.


 


 


A poor and confirmed buy signal was found. The price is on top of the Ichimoku Cloud and it is over the Chikou Span. The Tenkan-sen creates a descending motion and the Kijun-sen forms a horizontal motion, displaying a "Dead Cross". The ascending motion will remain as much as the price is over the Cloud.


 


 


The MACD indicator is in an impartial location. The price is increasing. We may hope for the stabilization at the present levels. The descending bounce probable target is at 1.4400. If the price increases it will break over 1.4480.


 


 


 

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Fundamental Analysis: February 11


 


Generally, the trader's adherence regarding the world's economic development loosen up and the energy sector's fate is a factor for a new wave of stock indices selling. Immense slate of companies' insolvency abreast with the Deutsche Bank difficult situations whose shares have dropped to the record lows, dispirited investors from trading high-risk assets.


 


We must not rely on the remarkable growth of euro in the medium term due to the industrial production and trade balance poor statistics of Germany for December. In 2015, the industrial production signified an increase of 0.8% but decreased by 2.2%. It is not exceedingly profitable to have a sturdy euro as we find a stable negative trend. The EUR/USD reduced by the end of the trades.


 


The UK issued the industrial production deliverance for the month of December. The index occurs at -1.1% m/m. The GBP/USD pair, in spite of poor manufacturing industry data, rapidly left the lows. The pair slightly grew.


 


This week key event is part of the speech of Janet Yellen, an American economist, to Congress. Her perspective concerning the economy state and the monetary policy future shall determine additional prospects of the dollar which has weakened lately. The USD/JPY pair decreased by the end of the trades.


 


Janet Yellen stated that their goal to expand the interest rates in short-term may loosen up due to the risks in the US economy. The China's economic innovation set a negative effect on the US economy and the trader's inflation anticipations keep on decreasing. The Fed chairman did not discuss about the probable interest rates increase yet the mentioned risks cause her to speak softly pointing out concerns regarding this year's Fed rate hikes.


 


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Technical Analysis for GBP/USD: February 12


 


The GBP/USD pair paid no attention to the poor UK data. In January, the industrial production decreased by 1.1% m/m and 0.4% y/y against -0.1% and +1.0% and the former outcome at the level of -0.8% and +0.7%. The GDP of the National Institute of Economic and Social Research (NIESR) for January was approximately +0.4% against the preceding result of +0.6%.


 


The first support occurs at 1.4480 and at 1.4400 subsequently. The first resistance stands at 1.4560 and at 1.4630 subsequently.


 


The price is in the Ichimoku Cloud and it is over the Chikou Span. The Tenkan-sen and the Kijun-sen form a horizontal movement.


 


The MACD indicator is in a positive location. The price strengthened.


 


The way to resistance level of 1.4560 will paved if the price breaks 1.4480 and up. If the price sets under the support 1.4400, the descending trend in the short term may proceed. The possible target is 1.4320.


 


 

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Fundamental Analysis: February 15

 

A down fall of stock markets is an aftermath of concerns about the global economic outlook which also caused the US dollar to be under pressure last Friday. The demand for the yen and the euro heightened. And because of the celebration of Chinese New Year, the Chinese market was closed.

 

The Japanese Finance Minister enlightened the investors that the fleet growth of Japanese yen could be a factor of the regulator's mediation. If there's a need to restrict the yen's growth, the bank will take all the necessary measures to make this happen. The exchange rate has been lately demonstrating quite sharp inconsistency that vary from the BoJ's financial policy, the Finance Minister stated.

 

The Gross Domestic Product of the Eurozone (q/) stayed at the same level of 0.3%, as claimed by the Eurostat.

 

 

On Friday, the US retail sales forecast for January was issued. The report was at 0.1%, the index occurred at 0.2%. In the initial estimate, the Michigan University Consumer Confidence Index for February was anticipated to increase by 92.6 from 92.0 in January. The index occurred at 90.7, much lesser than it was expected.

 

 

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Technical Analysis for EUR/USD: February 16


 


On yesterday's trades, the EUR/USD pair decreased. Before this, the pair's progress was caused by the break out from the risky assets together with the opposite Eurozone data. Exceeding the report, the Eurozone economy increased by 0.3% q/q in the fourth quarter. Traders' attention were dragged by the ECB President Mario Draghi's performance yesterday. As stated by him, the economic restoration is proceeding at medium pace.


 


The first support occurs at 1.1150 and at 1.1050 subsequently. The first resistance stays at 1.1260 and at 1.1350 subsequently.


 


The price is in the Ichimoku Cloud and it is over the Chikou Span. The Tenkan-sen creates a descending movement and the Kijun-sen forms a horizontal movement which creates a "Dead Cross". The MACD indicator is in a negative location. The price is falling.


 


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Fundamental Analysis: February 17


 


A new week of trading has begun with a positive entry of the dollar. The purchases of the US currency give sustenance to the positive sentiment for the world stock exchange. And even the recurrence of China to the market after the holidays did not ruin the sentiments. In January, the imports and exports quantity from China reduced by 18.8% and 11.2%.


 


The market in Europe has been out-powered by the banking sector shares. For the Euro, which is a funding currency, the "risk appetite" of the investors is a negative factor as it is increasing. The Germany issued the ZEW Survey - Economic Sentiment for February. The index recent value was 10.2 and the report was 3.2 but it showed 1.0. The EUR/USD decreased.


 


An inflation report for January was issued by the UK. A sturdy labor market indicated that the yearly CPI growth could be a bit better than the agreement report of 0.4%. In November, wages grew by 1.02% while the unemployment rate reduced by 5.1%. Nevertheless, the CPI occurred at the reported median 0,3%. The GBP/USD pair aggressively decreased.


 


The negative macroeconomics data of Japan continue to regain. In the fourth quarter the Gross Domestic Product reduced by 0.4%. In 2015, the number of industrial manufacture has been falling for two consecutive years and the negative trend increased from 1.91% to 2.49%. In the beginning of the year, the aggressive build up of the yen brings further risks to the Japanese economy. The USD/JPY is stabilizing after a downtrend.


 


 

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Fundamental Analysis: February 22


 


The dollar unsuccessfully increase in spite the fact of positive stock markets sentiment and healthy labor market data of the USA. Since the reported inflation level was reached by China, investors were grateful about the scarcity of its negative forecasts. In addition, the dollar was also affected by the Fed's meeting minutes that was released on Wednesday. The traders have an implication about the tender tone of the regulator that there is an additional regress from December's plans.


 


The inflation would stay at low levels according to the ECB minutes. Mario Draghi stated that by the next meeting on March 10, the ECB was all set to carry out further monetary policy easing. We once again come by the dissimilar expectations of a policies change of the two central banks. The EUR/USD pair grew a little bit by the end of the trades.


 


For January, the UK issued retail sales release at the level of 2,3% m/m and 5,2% y/y in opposition to the reported 0,8 m/m and 3,6 y/y. In contrary to the previous month, the positive trend in the labor market permit us to hope for retail sales increase. In the past year, a growth of wages was recorded in the UK throughout the period of November to December. By the end of the trades, the GBP/USD pair displayed an increase.


 


The Gross Domestic Product of Japan in 2016 was 1.0% to 0.8% to which the Organisation for Economic Co-operation and Development (OECD) demote its inflation report. In the beginning of this year, the Japanese yen was stabilized by 5.1% in opposition to the dollar. An aftermath of this is the decrease in the national products competitiveness in foreign markets. In January, the trade deficit in Japan reached 645.9 billion which is 5 times more than in the last quarter of 2015. By the end of the trades, the USD/JPY pair reduced.


 

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Fundamental Analysis: February 24


 


The week was started with the dollar's aggrandizement over its competitor. In spite the fact that the oil price is aggressively rising, the US currency together with the stock assets managed to increased. The Markit Manufacturing PMI for February caused the dollar to slightly decelerate which was dropped to its bottom-most level of 51.0 since October 2012. The preceding value was 52.4 and the reported was 52.3.


 


In the 4th quarter, the Gross Domestic Product of Germany heightened unlike the recent quarter which correlates to the inflation rate in the 3rd quarter. This figure proved the preliminary evaluation. Hence, the Gross Domestic Product inflation rate reached 1.1% yearly. The EUR/USD pair became a bit stronger by the end of the trades.


 


The possible Brexit caused the GBP/USD pair to decreased. It is clear that the vigorous pound selling is due to the declaration of Mayor Boris Johnson, London, where he stated that he is all out support for the British exit from the European Union. The holding of the referendum on June 23 this year was confirmed by Prime Minister David Cameron. Despite of these advancement, the Citibank put up its estimation of the Brexit probability from 20-30% to 30-40%. The GBP/USD pair aggressively decreased.


 


On Tuesday, Governor Haruhiko Kuroda, Bank of Japan, stated that he did not see direct connection amid the monetary base growth and the inflation expectations. But still, Kuroda overvalue the effect of monetary policy major changes on public opinion. The USD/JPY pair is stabilizing.


 


 


 

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Fundamental Analysis: February 26

 

The euro find its vigor to thrust the dollar down through the poor US data. The Markit Services PMI for February came out at the level of 49.8 contrary to the reported value of 53.5 and the recent 53.2. In the meantime, the expected slow decline of the primary housing market sales is -4.4% but slumped by 9.2%. The United States published the following reports: Initial Jobless Claims which is 272,000 contrary to the reported 270,000; Housing Prices which is 0,4% m/m contrary to the reported 0,5% m/m; Orders for Durable Goods wherein 1,8% m/m in opposition to the reported 0,2 m/m.

 

In spite of the decrease in oil prices, worries for the irregularity of the banking system of China, as well as the Brexit issue, the demand for euro reduced. Concurrently, the probable exit of British from the European Union caused the pound to multi-year lows, which also push the euro as well. There were assumptions of the probable depolarization of the European Union caused by the parting of UK which also make the traders to not use the euro as a safe haven. The EUR/USD pair became a bit stronger by the end of the trades.

 

Amidst the fact of the possible UK exit from the EU caused the GBP/USD pair to be pressured. The market was unpredictable in the expectation of the UK Gross Domestic Product data for Q4. Traders hoped for an increase by 0.5%. As a matter of fact, the second GDP estimate occurs at 0.5% q/q and +1.9  y/y. The GBP/USD pair is recovering.

 

The yen strengthened again in a new wave of risky assets sales this week. However the dollar showed a growth against the yen on Tuesday’s trades.

 

 

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Fundamental Analysis: March 1


 


The most expected occurrence for this week would be the Non-Farm Payroll (NFP), which is the final report that hopefully would change the mind of the Federal Reserve regarding the March rate hike. The Automatic Data Processing Report (ADP) will be published on Wednesday while the NFP will be on Friday.


 


The low inflation jog the trader's memory that the ECB was probably tighten its policy in March which cause the euro to still be under pressure. The other Eurozone countries displayed a deflation while the Germany reflected an increase for February and advanced to 0.4% after decreasing to 0.8% in January which concerns the consumer prices. The Eurozone published consumer price index for February. The index displayed -02% y/y, the reported was 0.1% y/y. The EUR/USD pair declined by the end of the trades.


 


The Brexit matter did not reduce its impact on the global financial markets. A statement from George Osborne, Finance Minister of Great Britain added a new impulse to panic. According to him, the British currency might fall and the country might encounter intense economic issues if it quitted from EU. The GBP/USD pair increase by the end of the trades.


 


The Japan's industrial production report for January was published which cause the yen to become popular. Contrary to the previous month, the index increased. The industrial production growth was 3.7% whilst the economists reported a growth by only 3.3%. The USD/JPY pair decreased by the end of the trades.


 

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Fundamental Analysis: March 3


 


 


The Automatic Data Processing (ADP) report has been issued by the United States at the level of 214,000 wherein, the recent value was from 205,000 to 193,000 while the report was 190,000.


 


The medium positive data of the manufacturing PMI from Markit cause an increase of quotations and also a decrease of unemployment rate to 10.3% in the eurozone. Since September 2011, the unemployment rate in Eurozone reached its bottom-most level yet way too far to the pre-crisis levels in 2008. Meanwhile, in the debt market, the 10-year government bond yield of Germany reduced in connection to their counterparts which is the US and the UK, wherein it diminished the attraction for European assets. In someway, it wasn't a long-term increase and the EUR/USD pair declined by the end of the trades.


 


 


We should take into account the construction PMI of the UK which occurs at the level of 54,2 that seems to be worse than the reported 55,5. The Gross Domestic Product in this sector reflected a decrease in the second half of the year 2015 after a long fast increase. It is also a negative factor for the construction sector the probable exit of the Great Britain to the EU. The London real estate market will be motionless if the UK leaves the union. However, the GBP/USD aggressively heightened by the end of the trades.


 


 


Some factors causes the USD/JPY to show some increase. The bears were put in a cumbersome position as the Japan's household spending were release in a negative data. As a funding currency, one of the negative factor for the yen is the "risk appetite in addition to private consumption as the basis of the GDP of Japan. The USD/JPY pair reduced by the end of the trades.

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Fundamental Analysis: March 7


 


The poor US statistic cause the market sentiment to intensified. In opposition to the European currency, the dollar loosen its track. The labor expenditure aggressively dropped to 3.3% contrary to the expected increase of 4.7% while the Initial Jobless Claims in the USA increased from 272,000 to 278,000. The US publicized the employment outside agricultural sector release. The statistics occur more than the expected of 190,000. The number of employees reached to 242,000.


 


The Fed's meeting will be held on March 16 and some economists think that the powerful employment data in the private sector will cause the Fed to heighten the rate. The USA issued another crucial release which is the unemployment rate for February wherein the recent value was 4.9% and the report was also at 4.9%. The data occurred at the reported median. The EUR/USD pair stabilized by the end of the trades.


 


The negative fundamental background of the pound clearly signified that we should expect a new downtrend in the near future even if it tries to grow. The investors were upset by the poor data of all three UK Markit's report this week. Moreover, the service PMI for February fell to its bottom-most level since March 2013 to 52.7 contrary to 55.1. The GBP/USD grew by the end of the trades.


 


The USA issued the foreign trade balance for January wherein the recent value was 43.36 billion while the report was -43.5 billion. The USD/JPY pair is trading in a side passage.


 

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Fundamental Analysis: March 9


 


As the poor data of Chinese enliven anxiety towards the slack in the Chinese economy, the yen still managed to showed an increase in opposition to the dollar and euro. A demand stimulation for shelter currencies arises due to this data.


 


In February, the amount of Chinese exports dropped on a yearly basis by 25.4% to 126.1 million contrary to the reported decrease of 12.5% shown in the official data. In January, slowing from 18.8%, the number of imports decreased by 13.8% yearly. In the last quarter of 2015, the Gross Domestic Product had dropped by 1.1% that has been seen in the Japanese data on Tuesday, being modified from 1.4%.


 


Governor Mark Carney, head of the Bank of England discussed the financial costs and benefits of Great Britain membership in the EU. The 2nd estimate of Eurozone GDP for the 4th quarter was published by the UK. Periodically corrected, this indicator was 0.3% in comparison with 0.3% in the previous quarter.


 


A growth rate of 0.3% for the last quarter has been anticipated by the experts. We hoped for a slight development in the French trade balance. In the midst of lofty expectations that the ECB will launch supplementary monetary policy easing, the euro stayed under pressure.


 

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Fundamental Analysis: March 11


 


On Thursday, the sole European currency was limelighted. Aiming to support the economy in a low inflation environment, the European Central Bank (ECB) had to improve its measures. The primary news for the day were the Bank's resolution regarding monetary policy and Mario Draghi's press conference.


 


The ECB was certain that monetary policy should be simplified yet the new rate cuts would not be going to happen as the regulator made it clear. It has been expected that the ECB cut its deposit rate by 10 points.


 


In comparison to the previous month data of 20,3 billion, the Germany issued Trade Balance that occurs at 18,9 billion. These data was changed upwards to 18,8 billion. For the last month, an increase rate of 19,6 billion is what the experts anticipated.


 


The Bank of England is not willing to grow the interest rates in conformity with the British macroeconomic data.In a few months, the UK shall manage a referendum on the UK exit from the EU. This also cause the British pound to be under pressure. The growth can be regarded as a consolidation from being low for seven years.  


 


In spite of the increasing risks when the Consumer Price Index of China turned out better than what was expected, the Japanese currency became under pressure. Meanwhile, the US has issued the Initial Jobless Claims. The index showed 259,000 wherein the economists had expected a decrease from 277,000 to 275,000.


 

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Fundamental Analysis: March 15


 


The Fed's probable declaration will be the primary driver to start up the week. The Central Banks will be the center of attraction this week and the BOJ, the Fed and the Bank of England will going to declare their decisions. The banks' statements can still be a reason of volatility although we're not looking forward for surprises.


 


Risk aversion has been elicited and the dollar came under pressure cause by the ECB President Mario Draghi's statement regarding the lack of demand for new procedures last week. In someway, traders cope up to focus on new ECB's large-scale incentives which heightened the need for the dollar at the end of the trading week. Erkki Liikanen's statement, ECB representative, about the rates being cohered at the present or lower levels unless the target inflation level is reached, adds up some buoyancy.  It gave the market tranquility as well as bringing hope to investors that the European regulator had more plans. On Monday, the euro/dollar pair declined by the end of the trades.


 


The favorable data of the UK trade shortage did not support the price to improve as the data showed £ -3.459 billion, and this also did not made any impression on the GBP/USD.  Yet if the dollar came under a wave of selling, the pound consolidated. In someway, the pound/dollar pair fell by the end of the trades on Monday.


 


However, the USD/JPY pair were even as it goes on the trades.


 

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Fundamental Analysis: March 17


 


The concerns regarding about the American regulator's hawkish actions, the Bank of Japan's idleness on it's last meeting, the decrease of oil prices and the issue of British exit from the EU being resumed were the main cause of risk aversion.


 


The press conference of Janet Yellen was the investor's center of attraction and the market did not hope for any revision of rates from the Federal Reserve. As we have all known, Yellen's statement did not have any difference from the previous statements. The regulator stated that the Fed will heighten the rates only if the regulator finds growth and the labor market positive tendency as the monetary authorities will closely monitor incoming macroeconomic data. Yellen did not confirmed the date of the next rate hike yet and said that Fed's attainment should involve a lower pace of rate growth. The EUR/USD pair grew.


 


Two important releases was published by the UK. First is the unemployment rate for January which occurs at the reported level wherein the recent value was -5.1% and the report was 5.1%. Next is the Average Earnings including bonus for January which came in at the level 2,1% wherein the recent value was 1.9% and the report was 2.0%. The GBP/USD pair increased by the end of the trades.


 


The USD/JPY was expected to leave the flat soon but this can be very volatile. Japan's economy continuously shows a slowdown and it does not need a sturdy yen. Simultaneously, the strong dollar is not a pleasing factor for the US Federal Reserve due to the negative impact to US exporters brought by the strong dollar. The USD/JPY pair decreased by the end of the trades.


 

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Fundamental Analysis: March 21


 


The Fed meeting has gone by and the regulator made changes in his plans and declared only two rate hikes instead of four. The market also remained unstable after the meeting.


 


The demand for euro as a funding currency keep on growing in spite of the fact that the "risk appetite" is also increasing. This factor was completely disregarded by the market which manifested the presence of strong buyers. The dynamics of the debt market signified varied trends as the 10-year government bonds yield in Germany increased in connection in the UK, but decreased to US Treasuries. The EUR/USD pair decreased by the end of the trades.


 


We did not received any significant macroeconomic data from the UK. We think that investors will be more attentive on the dynamics of oil market. Improving the highest of the last trading week, black gold fell by 3%. The demand for oil affected the pound/dollar pair in a usual positive way. The GBP/USD grew by the end of the trades.


 


The dollar/yen pair marked a new low for the last 14 months. This kind of aggrandizement of the yen could be a menace to exporters and may also disgruntle the monetary authorities of Japan. The US issued consumer confidence from the University of Michigan wherein it showed 91,7 contrary to the reported 92,1. The USD/JPY pair grew by the end of the trades.


 

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Fundamental Analysis: March 23


 


Being halted from increasing in opposition to the major currencies on Tuesday, the dollar still gained support caused by the investors who stick on being heedful as a round of terrorist attacks in Brussels killed 26 people and left more than 100 injured. This devastating events in Brussels affected the euro and the British pound negatively.


 


The market slightly strengthened in the absence of important macroeconomic reports. Likewise, US releases did not help to enliven the market. The existing Home Sales for February embark at a low level wherein it was lessened by 7.1% whereas analysts had hoped for a more moderate fall of 2.8%. The Chicago Fed National Activity Index for February embarked at -0.29 contrary to the reported +.025 and the previous value of +0.41.


 


Our focus will be on the IFO Institute release. The dynamics of Gross Domestic Product of Germany is closely corresponded with this indicator and investors always keep an eye on it. This indicator has been consistently giving a negative trend for the last three months. In the midst of euro's growth, the market did not anticipated the data to be better than the consensus report. However, the data embarked at the level of 106,7 contrary to the reported 106,0. The euro/dollar pair decreased.


 


An Inflation Report was released by the UK. As expected, the sturdy labor market data pointed to the forecast that was a little better than the consensus report. The average monthly income was 0.2% in the last three months which would heighten inflationary pressures whilst the unemployment in UK is at the bottom-most level now since 2005. The Consumer Price Index embarked at the level of 0,3% y/y and 0,2% m/m contrary to the reported 0,4% y/y and 0,4% m/m. The pound/dollar pair aggressively declined by the end of the trades.


 


As of now, we are not expecting a sturdy increase of quotations. The investors were not pleased with the United States' poor macroeconomic data wherein the Existing Home Sales for February lessened by 7.1%. The home sales reduced by 6.7% from January to March which only certified again the assumptions that the Americans started to save more than spending. The dollar/yen pair became stronger.


 

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Fundamental Analysis: March 29, 2016


 


The dollar managed to recover most of its losses which is an aftermath of the Federal Reserve meeting, and is being in demand continuously. In the midst of the Catholic Easter celebration, the traders' activity was inferior. We are hoping that today the volatility shall resume as the traders' return from their holidays' activities.


 


The Gross Domestic Product forecast of the US is somewhat strong and is quite surprising which of course sustained the dollar as well. The GDP was altered upwards. In the fourth quarter, the US economy increased by 1.4% contrary to the previous estimate of +1.0% and an increase of 2% in the third quarter. In favor of an early rate hike, these figures became another cause of disagreement which was consistently uttered by the Fed's representative in the past week wherein it also turned out to be supporting the demand for the dollar. The US has issued the Pending Home Sales for February wherein the data occurs at the level of 3,5% and the report was 1.0%. The EUR/USD pair slightly increase by the end of the trades on Monday.


 


The GBP/USD was still weak and continuously move down in the midst of concerns regarding the effect of Brexit. High risks in Brexit effect enkindled growth in volatility for the pound and the pair. The GBP/USD grew by the end of the trades.


 


In favor of the United States, the inflation forecast for February between Japan and US modified their differential of CPI indicators. In January, the spread was 0.1% and grew by 0.43% in the last month of winter. The USD/JPY pair reduced by the end of the trades.


 

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Fundamental Analysis: March 31, 2016

 

The dollar experienced remarkable losses. The tremendous tender eloquence of the Fed oppressed the US currency. The external and internal risks has given emphasis by the regulator and stated that there would be a probable policy easing if needed. The statement of the regulator implies an essential enfeeblement of the dollar in coordination with its viable return to the economy stimulation. The ADP for March was issued on Wednesday wherein the report was 194,000 while the previous value was 214,000. The data occurred at the level of 200,000.

 

Disregarding the growth of risk appetite is not possible which is an aftermath of the growing long positions and high-yield cross-rates of the traders which gave pressure to the euro as a funding currency. The EUR/USD pair stabilized by the end of the trades.

 

The debt market dynamics correspond to the British currency rectification. In relative with their counterparts, United States and Germany, the 10 years UK government bonds yields decreased which also caused to diminished the appeal of the British assets. On Thursday, the performance of the Bank of England will be the center of attraction. The GBP/USD pair reduced by the end of the trades.

 

The United States and Japan's yields differential on government bonds reduced from November to February. In Japan, the Retail Trade revenue diminished by 5.4%. The 0% retail sales differential indicator of the Japan and US at the end of January managed to extend as far as level of 2.2% in favor of the latter in February. The USD/JPY pair slightly grew by the end of the trades.

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Fundamental Analysis for AUD/USD: March 31, 2016

 

The Australian dollar is riding the bulls while the greenback is too weak to follow owing to the sell-off after Fed chairwoman Janet Yellen’s speech on Tuesday. In fact, the Aussie dollar is gaining too much for the Reserve Bank of Australia’s (RBA) liking.

 

AUD has now reached the level of 0.77, its highest in two weeks. Investors are selling their dollars and opting for Aussie ones as the latter has a better yield. However, questions are aloft on the RBA’s next move over the currency’s overvaluation.

 

RBA officials had previously said that the Aussie dollar is “getting ahead of itself” without significant signs of slowing down. Banks are also aiming for a lower domestic currency to successfully transition to a services-oriented economy from a mining-oriented one.

 

Yellen disappointed many central banks including the RBA after saying on Tuesday that tightening monetary policy should be approached with caution, slashing the hopes of many that they will see a rate hike in its policy meeting in late April.

 

Earlier this month, the RBA was forced to revise Aussie dollar expectations by the end of the year from US70¢ to US75¢. Furthermore, the current inflation is at 1.7 percent, missing the bank’s target of 2 to 3 percent.

 

If the RBA is to take a hawkish stance during its policy meeting on Tuesday, only two course of actions are in the horizon: to jawbone the Australian dollar or to cut bank rates, which now stand at a record low of 2 percent.

 

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Fundamental Analysis for EUR/USD: April 1, 2016

 

The EUR/USD posted its highest rates in five months, a strong end to cap the first quarter of the year. Gaining more than 4.75 percent during the first three months, this is also Euro’s best quarter against the dollar in almost five years.

 

The pair is now trading at 1.1381 in a range between 1.1310 and 1.1412. The Euro is trying to break into the 1.14 level as traders wait for the upcoming economic data from the US side.

 

The US will release data on nonfarm payrolls later today. About 210,000 are expected to be added to the already strong labor market, but should it reveal more than the expected amount, the dollar may recover its losses since Tuesday.

 

It is also possible for the nonfarm payrolls to not pull the dollars up as

 

(The unemployment rate should hold steady at 4.9% following a series of increases in labor force participation.)

 

Fears on Britain’s exit in the EU and a high inflation rate buoyed the Euro against bearish greenbacks.

 

The Eurostat revealed yesterday that March’s inflation rate dropped by 0.1 percent from a -0.2 percent in February, far from the European Central Bank’s 2 percent target inflation.

 

Meanwhile, core inflation (which strips off the most volatile industry such as food, and energy) increased to 1.0 percent from last month’s 0.8 percent, the highest in six months. However, the core inflation’s rise is only attributed to businesses’ seasonal price hike for the Easter holiday and not necessarily to the whole month.

 

Earlier in March, the ECB cut interest rates to the red, and if needed, they will do more in the future, ECB governing council member Francois Villeroy de Galhau said on Thursday.

 

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Fundamental Analysis: April 8, 2016

 

A poor Industrial Production forecast was presented to the market wherein the index missed 0.5% while the report was 1.8%. Yellen's statement about the external risks and the decelerating rate hike were implied in the issued Fed minutes. The market was hoping for the Fed to lower their rate hike in September wherein they expected for 46.5%. There is also presumptions and the market gives 50% that the rate hike will take place in November and 52.5% that it will happen in December.

 

The main occurrence of Thursday were the declaration of the ECB minutes and Mario Draghi's statement. The Initial Jobless Claims was 267,000 while the report was 270,000. However, the Consumer Credit Change was $17,22B while the report was 14.74B.

 

The House Prices forecast for March was issued by the UK wherein the housing prices grew by 10.1%. However, the economists expected that the inflation rate would slow down a bit to 9.5%. In monthly terms, the housing prices increased by 2.6%. Nevertheless, analysts expected the prices to increase only by 0.7%.

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Fundamental Analysis for AUD/USD: April 11, 2016

 

We see a weakening Australian dollar against the USD as recently released data proved that the first quarter has been sluggish despite the overvalued currency.

 

The Reserve Bank of Australia (RBA) will welcome the soft currency as board members have been saying that they prefer a lower exchange, although they did not cut interest rates in the latest policy meeting.

 

Australia’s home loans released on Monday showed a 1.5 percent rise against a 4.4 percent drop in February, failing to reach the 2.0 percent projection.

 

China, Australia’s largest partner in trade, also helped AUD’s price decline with an unchanged year-on-year inflation rate of 2.3 percent in March, missing a forecasted 2.5 percent. Wholesale prices contracted for the 49th consecutive month by 0.4 percent.

 

Investors will have a lot to look forward to as Australia’s consumer sentiment index will be published on Tuesday and data on the country’s labor market will be released on Wednesday. RBA’s first financial stability review will come on Thursday.

 

The AUD is trading 0.7535 against the USD.  The first support occurred at 0.7527 and 0.7489 subsequently. The first resistance occurred at 0.7608 and 0.7649 subsequently.

 

The MACD indicator is in a negative position and the price is falling.

 

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Fundamental Analysis for AUD/USD: April 13, 2016

 

The Westpac Consumer Sentiment slid in April for the second consecutive month to 95.1 percent from March’s 99.1 percent. A level below 100 shows that pessimists outnumber the optimists for the short-term and long-term outlooks.

 

The consumers’ bias toward economic conditions over the next 12 months and the next five years were reduced by 5.5 percent and 5.9 percent, respectively. Family finances compared to one year ago dropped by 3.8 percent, while family finances over the next 12 months waned by 6.6 percent.

 

Meanwhile, the unemployment expectations index softened by 1.8 percent, which means that consumer confidence on low unemployment rate is high.

 

The disappointing and a bit surprising figures squashed hopes that the public’s confidence will follow a considerably optimistic trend because of the previous four consecutive releases above 100.  

 

Westpac chief economist Bill Evans said that consumers are probably seeing the strong Australian dollar as detrimental for future growth. The media and RBA officials have openly said that the AUD may be overvalued.

 

The low consumer sentiment is offset by China’s hefty trade data which sent the AUD to bullish territory. After a 25.4 percent fall in March 2015, Chinese exports grew by an immense 11.5 percent, surpassing the forecasted 2.5 percent by leaps and bounds. However, it is important to note that the measured period included the Lunar New Year, a considerably lavish celebration by the Chinese.

 

Chinese imports contracted by 7.6 percent, positively missing the projected 10.2 percent decrease. This leaves the country’s trade balance at $29.86 billion, slimmer than the estimated $34.95 billion.

 

Mixed statements from Fed officials on Tuesday injected volatility into the US currency as Richmond Fed President Jeffrey Lacker said that he is backing rate hikes this year due to inflation’s fast pace. Meanwhile, Fed Dallas President Robert Kaplan said that an interest rate in April does not bode well for the weak economic growth.

 

Furthermore, the International Monetary Fund (IMF) revised its 2016 economic growth forecast by 0.2 percent, the third consecutive cuts it made since July last year. IMF estimated the US economy to grow by only 2.4 percent this year, lower than January’s 2.6 percent projection.

 

The AUD has broken into 77 cents in earlier session, but is now back to 0.7670.

 

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Fundamental Analysis: April 18, 2016

 

The risk assets may be affected by the outcome of the summit in Doha, and beforehand, the volatility of the market already reduced. Moreover, the US currency had gone under pressure which is the aftermath of the Fed statements and the poor inflation data from the US. Dennis Lockhart, Chief Executive Officer of the Fed of Atlanta, stated that he would not go for a rate hike in April as he supports a careful approach to the monetary policy tightening because of low consumer spending. The market volatility heightened by the end of the trades.

 

The US issued the Industrial Production volume for March. The index occur at the level of -0,6% m/m wherein the recent value was -0.50% m/m while the report was -0.60% m/m and the Consumer Sentiment index from the University of Michigan for April. The index have shown 89.7 wherein the previous value was 91.0 while the report was 92.3.

 

There was no important impact on EUR/USD the inflation data of the Euro area wherein the index came in the zero value after decreasing by 0.1% y/y. The Euro zone issued the Trade Balance for February wherein the index displayed 19.0 billion euro and the recent value was 20.0 billions. The pair euro/dollar increased.

 

The Bank of England let the rate remained at the level of 0,5% and the Bank pointed to the risks relative to the Brexit. The pound stayed appeased to the regulator's speech. The GBP/USD pair aggressively grew by the end of the trades.

 

The investors were upset by the poor US retail sales, PPI and CPI reports. The US and Japanese government bond yields reduced which caused the US assets to lessen its charm. The USD/JPY pair diminished by the end of the trades.

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Fundamental Analysis: April 19, 2016


 


In the middle of risk aversion in the stock markets, the dollar came low. While the attention in the safe assets heightened amidst the cheap oil prices. The fall of the oil prices was due to the negative outcome of the oil exporter's meeting in Doha. The dollar have gone under pressure caused by the poor US data which is low than expected. The UDS Industrial Production decreased by 0.6% contrary to the expected 0.1% whilst the Capacity Utilization lessened to 74.8% from 75.4% and lastly, the preliminary Consumer Confidence index for April reduced to 89.7 contrary to the reported 92.


 


Serving as a funding currency, the euro were sustained by the decline of the risk appetite. Also, the attention in the risky assets slacken caused by the slowdown of the Gross Domestic Product increase of China and the poor economic statistics from the US. The primary reasons that cause the dollar to fall were the decrease of economic inflation of China to its bottom-most level and the average negative statistics on the US inflation. The euro/usd pair stabilized by the end of the trades.


 


A technical rectification to the psychological level of $40 per barrel was caused by the traders that acquired profit and closed their orders in oil contracts. Traditionally, inferior energy prices had a negative effect on the British currency. The oil price heightened and the pound/dollar pair increased by the end of the trades.


 


The President of the Federal Reserve Bank of New York, William Dudley stated on  Monday that the US labor market has recuperated firmly and the Central Bank would slowly pursue to make the interest rates remained normal. An Inflation, Retail Sales and Industrial Production were negatively reported in the past week. These also played into the bear's hands in the dollar/yen pair. The dollar/yen pair increased by the end of the trades.


 

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Fundamental Analysis for AUD/USD: April 19, 2016

 

The minutes of the RBA’s policy meeting on April 9 was released today, revealing the board’s optimistic outlook on the economy. Although there is a slight hint of downplaying the Aussie dollar, we are yet to see a  tough jawboning from Governor Glenn Stevens to balance the AUD’s surging value and the target inflation rate.

 

“Members noted that an appreciating exchange rate could complicate progress in activity rebalancing towards the non-mining sectors of the economy,” the RBA said.

 

A continuous increase in commodity prices can cushion the blow of an ‘overvalued’ AUD. After sliding several pips leading to the minutes’ release, the pair reached a 10-month high of 0.7779. The recovery of oil prices also helped the currency regain losses.

 

On the flipside, a snap election in July was confirmed by Prime Minister Malcolm Turnbull earlier today, casting a shadow on the AUD’s uptrend against the USD.

 

Meanwhile, Boston Fed president Eric Rosengren dismissed pessimistic investors, saying that the Fed is likely to raise the rates due to a modest increase in wages. In his speech, Rosengren’s deviates from his usually dovish stance, adding that “rate increases are absolutely appropriate.”

 

The pair is drifting just below 78 cents. The exchange rate is currently at 0.7778.

 

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Fundamental Analysis: April 22, 2016


 


On Thursday, the central events were the ECB meeting and Mario Draghi's speech. The rate remained unchanged by the regulator at 0%. Draghi stated that he does not also deny a transition to the negative rates. The soft policy will remain until the inflation hits 2%.


 


The dissatisfying retail sales publication cause the pound to decrease in opposition to the US dollar which weaken the optimism regarding the strength of the British economy. The total number of retail sales for March was anticipated to lessen by 0.1%, but it was diminished even lower to 1.3%.


 


For April, the Philadelphia Fed Manufacturing index reduced and displayed -1.6. Initial Jobless Claims occured at 247,000 contrary to the reported 263,000.


 


In spite of lower than expected Trade Balance publication, the yen increased slightly wherein the Balance reached 755 billion contrary to the expected 834,6 billion. While the exports increased from -4.0% y/y to -6.8% y/y, imports heightened from -14.2% y/y to 14.9% y/y. Kuroda's speech about further policy easing if necessary supported the yen as well.


 

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Fundamental Analysis: April 27, 2016


 


The America filled the economic calendar with its important releases yesterday. For March, the Durable Goods Orders record was issued first wherein it came out at 0.8% in opposition to the report of 1.8%. Meanwhile, the Consumer Confidence for April hitted 94.2 wherein the recent value was 94.2 and the report was 96.0. Traders were hoping to have a glimpse of sign about the state of the economy before the Fed release their decision on Wednesday. And this could also have an effect on any further activity of the dollar. Now, investors abstain from opening new positions before the meeting.


 


The Eurozone did not have any significant news yesterday. After a solid increase, the EUR/USD pair reduced a bit by the end of the trades.


 


Meanwhile, the UK has issued Mortgage Approvals index for March wherein the data came in at 45.1K in opposition to the report of 46.0K. The GBP/USD pair displayed an increase but diminished a bit by the end of the trades.


 


The attraction set for the safe assets provoked the buying of yen. The gossips regarding the BoJ who won't implement fresh soft measures also sustained the yen. We are thinking that the regulator will cautiously assess the impact of the running measures furthermore and will implement the new ones only in June. The USD/JPY pair consolidated.


 

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Fundamental Analysis: April 29, 2016


 


On Wednesday, the dollar were constantly steadfast to other major currencies as a preparation for the last Federal Reserve System political speech. Investors put their attention to the result of the political meeting expecting for any signs about the interest rates modification in June. The Fed left the rates remained at 0.5%.


 


In Germany, the Consumer Confidence outstandingly improved as it came at 9.7 in opposition to the recent value of 9.4. The consumers think that the economy of Germany will get better for the next months and look forward to its modest improvement. The EUR/USD stabilized a little.


 


Since the market realized that the UK economy gained by 0.4%, the pound ceased in growing together with the expectations of economists, but it slowed down to 0.6% in the recent quarter. In the first quarter, the UK economy grew by 2.1% on annual basis, which is the same with the recent quarter and rather high than the anticipated 2.0%. The GBP/USD pair reduced by the end of the trades.


 


Meanwhile, the USD/JPY pair heightened by the end of the trades.

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Technical Analysis for NZD/USD: April 29, 2016

 

The kiwi is hovering 20 pips below 0.70 handle after recording losses from an intraday high of 0.6990. With rate decisions coming from a number of currencies this week, NZD is showing the second strongest performance after the Yen.

 

The ANZ Business Confidence released today showed that companies are expecting positive economic activity as it jumped from 3.2 in March to 6.2 in April. Thirty-five percent of the surveyed firms predict an interest rate cut in the next policy meeting.

 

On the US side, personal spending will be released today while a deluge of data including manufacturing PMI and nonfarm payroll will come next week.

 

The first support is at 0.6918 and 0.6883 subsequently. The first resistance is at 0.7037 and 0.7072 subsequently. The MACD indicator is in neutral location. The price is rising.

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Fundamental Analysis: May 4, 2016


 


Insignificant forecasts has been issued by the USA which is the ISM New York and IBD/TIPP Economic Optimism indices wherein the data came in at 48,7 in opposition to the reported 46,6. The stabilization of the price can be viewed already, yet it is too soon to determine whether this is enough for a rate hike. At the next meeting that will take place in June, the decision for the rate hike will come up.


 


Meanwhile, the Producer Price Index in Eurozone for March displayed -4.2% wherein the report was -4.3% and the recent value was -4.2%. And for the first time this year, the index heightened. It could be a sign that the growth is impossible to decline for the next months.


 


The pound reduced on Tuesday from being on peak for four months when the manufacturing activity of the UK dropped in April for the first time over the past three years wherein the data came in at 49.2 from 51.0 in March contrary to the reported 51.2. The index that has been issued heightened the concerns regarding the probable growth in the second quarter.


 


Meanwhile, in the midst of the Constitution Day, the Bank of Japan did not have any activity on Tuesday.


 

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Fundamental Analysis: May 11, 2016


 


Tuesday, the dynamics of the market was enliven with the help of the calendar of economic events. Job Openings was issued by the US wherein the data came in at 5.757 million contrary to the report of 5.431 million.


 


The euro currency heightened a little in opposition with the dollar. The euro zone has made a report about Industrial Production in Germany for March which the data dropped low more than what was expected wherein it came at -1,3% contrary with the expectations of -0,2%. Meanwhile, exports displayed a fast growth showing 1,9% against expectations -0,1%.


 


The Trade Balance which has sustained the pound was showed by the United Kingdom. The Bank of England Governor Mark Carney apprised the commercial banks and other financial institutions regarding a probable rate cut if ever the UK departs from the European Union.


 


The fall of the yen currency is an aftermath of the statement of the Minister of Finance on Monday. If it happens that the yen continues to grow, the regulator is ready to intercede, as stated by the ASO. The Japan Minister of Economy Nobuteru Ishihara stated that after the rally of the yen in the past week, he is nearly observing the financial markets.


 

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Fundamental Analysis: May 12, 2016


 


Yesterday, in opposition with the US dollar, the major pairs has been rectified. We haven't heard EU stating significant data and the market's volatility was weak. The market was not affected by the British data through the main cross-pair EUR/GBP and most of the trades were unperturbed and smooth.


 


 


The scarcity of drivers helped the UK market to stay still. But the forthcoming referendum can probably become one of the drivers in the future. As stated by Michael Sanders, Bank of England Monetary Committee representative, if Britain favors the exit from EU, the Central Bank will be obliged to heighten the rates to 3.5% by the end of 2017, because the exit out of the EU union will facilitate the slump of the pound and will probably strengthen the inflation.


 


 


Due to the profits taken by the investors, the dollar slumped in opposition with the yen on Wednesday. It was an aftermath of the recent rally gaining a two-week highs and the Japanese speech regarding its preparation for an intercession. Yet, Japan were expected by many investors to refrain from doing any activity to enfeeble the yen before the G7 meeting.

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Fundamental Analysis: May 13, 2016


 


The sturdiness of the world economy was left vague even though the dollar was sustained by the restored risk appetite. The Initial Jobless Claims volume was issued by the US wherein the data came in at 294,000 contrary with the expected 270,000. The political event of the day were the statements which came from Rosengren E. and Mester L, the Fed representatives. Mester stated that the risks which relative with the Fed reports should not affect the monetary policy management. While Rosengren proposed that the risks of leaving the rates unmodified seem too inferior for a long term of time.


 


The Germany issued the Wholesale Price Index wherein the data came in at 0,3% m/m in opposition with the expected 0,2% m/m while the Eurozone issued Industrial Production wherein the data came in at -0.8% m/m contrary with the expected 0.1% m/m.


 


The significant event of the day was the Bank of England meeting. The rate was remained unmodified by the regulator at 0.5%. At the same time, the inflation report of the Central Bank became the center of attraction. We hope that the growth in assessment of the inflation in the present year could help the pound to rise and counterbalance concerns about the cost of lending decrease. The Central Banks anticipates the inflation to restore at 0.2%.


 


In the midst of short positions closing, the dollar still managed to increased in opposition to yen. However, the US currency was still under pressure caused by the vagueness of probable increase in the global market.


 

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Fundamental Analysis: May 18, 2016


 


We heard a lot of economic news on Tuesday, US data being the main driver of the day. The States has given the report of Core Consumer Price Index to the public wherein the data came in at 0,2% which occur simultaneously with the report and also the Industrial Production which reached 0,7% against the reported 0,3%. The Federal Reserve representatives, Williams and Lockhart gave their statements. The idea of raising the rates twice or thrice this year was supported by Williams. Meanwhile, Lockhart stated that the negative rates scenario was not intended.  


 


As for the Eurozone, it only published their positive Trade Balance for March wherein the data came in at 28.6 billion against the report of 22.5 billion.


 


Since September last year, the inflation in the UK decelerated in April for the first time which also caused the pound to lessen its gains contrary with the dollar. After increasing by 0,5% in March, the Retail Price Index grew by 0,3% y/y. The inflation was expected to stay at 0,5% by the traders, but the British inflation has been low from the target level of 2% for more than 2 years.


 


In March, the Japanese Industrial Production aggressively increased wherein the data came in at 3,8% against the previous 3,6%. While the Capacity Utilization grew from -5,4% to 3,2% in March. But still these statistics could not support the yen.


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Fundamental Analysis: May 27, 2016


 


In the midst of positive economic forecasts, the dollar reinforced its positions. As stated by the Fed, the US regulator may heightened the rates at its conference this coming June. Meanwhile, in the economic news, the United States presented the Initial Jobless Claims wherein the volume appeared at 268,000 against the report of 275,000.


 


The euro was bolstered by the agreement happened between the Eurozone and the Greece. The latter attained an agreement with its creditors and shall take a new tranche of loans in the amount of 10 billion euro.


 


It has been inveterated that the recoupment of the British economy became sluggish by the second Gross Domestic Product estimate for the first quarter in the UK. The economy showed a growth by 0,4% in the first quarter from 0,6% in Q4 2015. The economy of Britain encountered a difficulty with a devitalized growth in emerging markets particularly in China. The approaching referendum also decelerated the growth.  


 


The dollar stick around in a range waiting for the statement of Janet Yellen. The market is anticipating hints from the regulator about the probable rate hike in June. The yen raised and bereaved the dollar from its recent gains. The investors involuntarily close positions before there are any probable risk that may occur.


 

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Fundamental Analysis for GBP/USD: June 15, 2016

 

A latest survey showing that Vote Leave is points ahead dragged the British pound to 1.41 cents against a stronger US dollar. As the EU referendum approaches, the sterling is swaying nonstop due to voters’ sentiment and the release of poll results after another.

 

TNS revealed yesterday that 47 percent of respondents wanted the UK to leave the EU, while only 40 percent wanted to remain a member of the bloc. GBP/USD fell to two-month lows.

 

UK inflation in May was also on the red, printing only a 0.3 percent rise, similar to the same period last year. Analysts were expecting a 0.4 percent growth. In m/m terms, CPI also disappointed as it climbed by 0.2 percent, missing the forecasted 0.3 percent. Transport costs rose by 0.9 percent in Mayi from the previous month but was offset by declines in food and clothing.

 

As we predicted, CPI didn’t have significant effect on the sterling especially because a Brexit poll was released in the same day. The Bank of England’s decision on its interest rate is next on the GBP’s economic headline.

 

The USD performed slightly stronger than its counterparts with the release of positive retail sales which hit 0.5 percent m/m against a 0.3 percent forecast. Core retail sales was in line with expectations at 0.4 percent. Both exports and imports at 1.1 percent and 1.4 percent respectively eclipsed their forecasted rates.

 

Atlanta Fed upgraded its GDP forecast for Q2 to 2.8 percent from an initial estimate of 2.5 percent. Strong retail sales was also viewed as a signal that consumer expenditure will most likely print robust numbers.

 

We are looking at an immediate support of 1.4089 and 1.4040 subsequently, while resistance is at 1.4265 and 1.4350. The MACD indicator is in negative location. The spot exchange is at 1.4142 and rising.

 

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Fundamental Analysis for EUR/USD: June 22, 2016

 

EUR/USD was hit with profit-taking and a warning from ECB president Mario Draghi that another stimulus is on the way. The euro retreated to 1.12 cents after reaching 1.13 in the past days due to a firming ‘Bremain’ public sentiment. The pair is trading at 1.1272.

 

Draghi said that more stimulus is on the way as the ECB sees inflation rate missing the 2 percent target until 2018. Inflation is predicted to reach 1.3 percent in 2017 and 1.6 percent in 2018.

 

On the data front, Germany’s ZEW Economic Sentiment for June was at 19.2, largely exceeding the predicted 4.7 increase. The country’s current conditions grew to 54.5 from 53.1 in May, while the Eurozone’s economic sentiment was up to 20.2, surpassing the 15.3 expected rate.

 

The USD is also taking a beating from Yellen’s statement that shows Fed’s worry over the labor market. The Fed chairwoman effectively reduced the possibility of a rate hike in its next monetary meeting in July.

 

EUR/USD is still on the bullish side but a drop below the immediate support of 1.1240 will move it to a neutral position, with the next support at 1.1213. The first resistance is at 1.1291 and 1.1350 subsequently.  The MACD indicator is in a positive location.

 

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Fundamental Analysis for GBP/USD: June 23, 2016

 

GBP broke through 1.48 in early European session, peaking at 1.4830 due to two polls that showed the Remain camp leading by several points. This is the sterling’s highest rate against the USD in 2016.

 

According to YouGov, the Remain camp gathered 51 percent of voters while the Brexit camp recorded 49 percent. ComRes, another major polling firm, revealed similar results with the Bremain leading by 6 percent at 48 percent while the Brexit side was at 42 percent. GBP/USD is now in a consolidating phase as traders remain cautious in the hours leading to the referendum.

 

In the US, traders are going short on the USD as they wait for the huge impact the referendum’s result could bring. It is understood that the result along with the outcome of Fed’s assessment on a soft labor market will largely affect the interest rate in July.

 

Dutch bank ING predicted that a Bremain will propel the GBP/USD to the 1.52 level while a Brexit will push it to as low as 1.30.

 

The first support occurs at 1.4700 and 1.4659 subsequently. The first resistance occurs at 1.4830 and 1.4897. The MACD indicator is in positive location.

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Fundamental Analysis: July 14 2016


 


The Bank of Canada opted to maintain interest rates during their most recent closed-door meeting with the currency board and bank directors and eventually the rate of the Canadian Dollar moved higher yesterday. The USD/CAD keeps on pushing higher prices most of the trading session but the invested capital gains immediately fluctuate down to 1.2934 close to 1.2976, falling to 0.0064 or -0.49%. Since midsummer the BoC continued to retain its appropriate benchmark with a rate of 0.50%.


 


According to the central bank, the financial valuation of the BoC would likely have an economic growth, considering that it has increased by 2.4% during the first quarter of the year and is expected to decline by 1% by the second quarter. The assessment is inferred through the volatility of the capital flows, household consumption and the massive wildfire that ravage the Canada's region.


 


The central bank also anticipates the expansion of the Canada's economy by 1.3% up to 3.5% during the months of July to September. The BoC mentioned also their expectation of the price stability of oil prices for the rest of this year.


 


One of the problems emerged in Canada is the overall financial vulnerabilities as it resulted to a lower rates and experienced an adverse shock. Other news releases said that a 4% price fall in crude oil will restrain the weakening of the USD/CAD pair.

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Fundamental Analysis EUR/USD: July 14, 2016


The EUR/USD pair was subject to pressure following the release of China’s latest trade balance data. The Euro went up by 0.0012 or roughly +0.11%, hitting 1.1084 from its low of 1.1042.


EUR traders can now breathe a sigh of relief after the trade balance data from China came out in their favor after the news release signalled a possible volatility. Exports came out at -4.8% after an estimate of -4.1%. On the other hand, imports came out at -8.4%, a long shot from its forecast of -5.0%. Meanwhile the dollar’s headline figure for June came out at $48.1 billion, about $2 billion lower than May’s headline figure, with economists gunning for a reading of $46.64 billion.


After US stock indices had an upward surge, Investors and traders are now back to monitoring global equity assets with the promise of higher risk assets, putting more confidence in the EUR/USD and aiding in its overall recovery.

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USD/CAD Fundamental Analysis: July 18, 2016


 


The USD/CAD pair traded at 1.2971 and closed at 0.56% after the USD was restored and pressure was put on the market as international events shook traders during last Friday’s session. On Thursday, US numbers looked promising, as inflation rates went up after the PPI went over its estimated percentage of 0.3%, climbing up to 0.5%, the highest monthly gain since May 2015.


 


The Core PPI also exceeded expectations, gaining 0.4% after an initial estimate of 0.1%. However, Unemployment Claims remained stagnant at 254 thousand, way below the expected rate of 263 thousand. The consumer price index report of the US Department of Labor showed an increase in the CPI by 0.2% for June, while currency speculators renewed their net long position on the USD following a significant upsurge since June, after positive US economic data caused the currency to experience an increase.


 


The USD’s net long position increased after the week’s end on July 12, hitting $8.01 billion after last week’s $4.18 billion. US retail sales also picked up and went higher than expected, which shows how the economy went up during the second quarter of the year.

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EUR/USD Technical Analysis: July 18, 2016


 


Last Friday, the EUR/USD pair unexpectedly increased with an exchange rate of 1.0874 but experienced to have a reverse path today and formed a negative candle pattern with a price rate of 1.1067 . The pair continued to strike around within the consolidation period and it snap back in the bottom of 1.10 level and 1.12 level at the top. Short-term market rallies will continue to sell and offer various opportunities that support short-term charts.

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Fundamental Analysis: July 19 2016


 


Currency Pair GBP/USD (British Pound/U.S. Dollar) has earned 55 points just as the U.S paper dollars go through a few price differences. Short-term buyers are expecting to have a significant data set this impending week since the recent British Prime Minister is now working for a new trade agreement with Europe. The moving average of the sterling pound is 1.3237 and gained up to 0.5% that yielded $1.3256. The pound increased right after the time of announcing the deal for adjustable-rate mortgage (ARM) and when the policymaker of the Bank of England, Martin Weale released a statement about the need of a firmer financial evidences in order to change bank policy and bring an impact to U.K after they leave EU behind.


 


The BOE provided an additional market liquidity and cutback the mandatory capital requirements for the credit unions. Most of the Monetary Policy Committee members is anticipating for a stable movement on the 4th of August immediately prior to the publication of economic conditions and forecast.


 


Eventually, Weale will hand his resignation in the rear of the meeting next month. He confirmed that there is no instances of panic selling or panic buying among traders and investors after the strong vote for Brexit last month. Weale also said that central banks are far beyond the horizon of the falling market.

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Fundamental Analysis for EUR/USD: July 20, 2016


 


The EUR/USD pair went down to 1.1071 while traders sit in anticipation of the ECB meeting scheduled on Thursday, where Mario Draghi is expected to comment about the ECB bond buying program after it drained the market supply. On the other hand, the economic sentiment for the German ZEW went lower due to uncertainties brought about by Brexit, as well as Italian bank concerns and worldwide terrorism attacks.


 


The economic sentiment reading for the German ZEW went down drastically at -6.8 points. Meanwhile, the Eurozone ZEW sentiment numbers were released at -14.7 points, with both sentiment readings coming short of its expected numbers.


 


The Brexit vote will be affecting not only the German ZEW but also other european countries. Although the German economy has proven to be resilient enough, its economy is still prone to the negative effects of economic events in the nation, and the ZEW numbers is expected to reflect these repercussions.


 


The German ZEW economic sentiment surprised the market after a steep decline in July, its first since October 2014. It was initially forecasted to come in at +8.2 points.


 

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EUR/JPY Fundamental Analysis: July 20 2016


 


The EUR/JPY recorded a downturn with an estimate of 35 points to 117.23 after euro traded a flat-lining, though the Japanese yen strongly gained a higher level just before the meeting of the Bank of Japan (BoJ) to be held next week, July 28-29. The BoJ expects that banks all over the world will cease the feverish trading cues. While the European Central Bank (ECB) already stated that they will set up a meeting this week.


 


The movement of Governor Kuroda's Mario Draghi recovered and will continue to affect him as he stands to lose through the monetary course. However, he can reconsider the route he used to take or measure the BoJ's quantitative easing then accept that he is suffering from defeat. On the other hand, Kuroda could apply the recommendation from the Chairman of the Federal Reserve, Ben Bernanke about the deflation of Japan for a long period of time.


 


Whereas, the conjecture of the BoJ on their upcoming meeting is that Japan will pursue the “helicopter money” in order to widen the perpetual bond payments. The analysts from Morgan Stanley pointed out about the reports issued last few months ago by which it appeared that BoJ had an increase on their purchases beyond their official year pace worth $750 billion.


 

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Fundamental Analysis for USD/CAD: July 21, 2016


The USD gained an increase versus the CAD after investors paid more attention to a possible hike in US interest rates rather than a recovery in oil prices. The USD/CAD pair went up by 0.0036 or +0.28% at 1.3060.


 


On Tuesday, the USD/CAD sustained its support from traders after the release of a positive US housing starts data, causing a drastic change in the possibility of a Fed rate hike by at least 50%, after previous indicators showed only a 20% hike.


 


The USD was previously backed up by healthy June data of US Non-Farm Payrolls and an unexpected upsurge in retail sales data. On the other hand, the CAD was previously supported by the Bank of Canada’s decision to maintain its interest rates while rallying for a stronger and more stable economic status.


 

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EUR/USD Fundamental Analysis: July 21 2016


 


The EUR/USD gradually declined at 1.1009, dropping at 0.0011 or -0.10% because there is a build up of selling pressure that moves technically into a weaker global market since July 2014 which has 1.1164 as their highest points.


 


Investors are now fully prepared since the European Central Bank (ECB) have announced their monetary policy today thus resulted to a physically lower level of volume and volatility. According to the ECB, they planned not to enact new policy to their current protocol but it is still possible for the bank to issue a statement about the negative effects of inflation with response to the Brexit decision. After the dovish tone statement made by the ECB they intended to have a break for eight weeks.


 


The Brexit decision also affected the main driver of the price growth which is the relative value of U.S. Dollar. The report about the U.S Non-Farm Payrolls for the month of June made the dollar to settle against the Euro and the dollar continuously to heighten just as the U.S. Retail Sales excelled more over their anticipated outcome.


 


Yesterday, the report about the bullish housing were released and it supported the Fed rate to have a chance in increasing its rate hike up to 50% in response to the upcoming meeting on the month of December. Due to the absence of any major economic releases the market presented a two-way market on Wednesday.


 


In addition to the ECB announcement, traders can decide whether to cutback their positions over the long run since the EUR/USD may continue to finished a lower interest rate because of the rate differential against the U.S dollar. To wrap it up, the ECB could plan for an additional quantitative easing program while the U.S Fed is settling an increase for the recovery of the U.S dollar rate hike.


 

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Fundamental Analysis for EUR/GBP: July 22, 2016


 


The EUR/GBP pair finished off last session with a gain of 27 points after the British Pound fell and the Euro sustained its value after the ECB held fast to its policy and rates. Traders are now monitoring Draghi’s address regarding the Brexit vote and the bond buying program. The ECB has left stagnant interest rates in the European Union.


 


However, the governing council has not taken any steps in spite of the uncertainties brought about by the Brexit referendum. The headline rates are still at zero and banks are still charged at 0.4% as penalty for leaving money inside the vaults of ECB. Retail sales on the other hand fell rapidly since December, with bad weather in the UK put to blame. Meanwhile the present currency volatility caused by the Brexit referendum and the recent attacks in Nice, France and Turkey continue to affect consumer confidence rates.

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AUD/USD Fundamental Analysis: July 22 2016


 


The AUD/USD pair shifted from greater rates down to a lesser flat rates earlier today. The Australian dollar is experiencing an adverse situation since its net position turned down against the USD. The AUD trading rate is 0.7476. In spite of the relentless decline of the Aussie dollar, the Reserve Bank of Australia will uphold the reduction of the percentage rates within two weeks, although the rate of the US dollar is surging.


 


After an hour session last Wednesday, AUD/USD can be purchased at 0.7477 while the pair flattened again in the Asian trade. The New Zealand dollar also regressed with the AUD. The Reserve Bank of New Zealand released a statement about their reduction on the interest rates, with regards to the restoration of the economic performance that were issued after the session.


 


The investors are expectant about the diversion of the United States' monetary policy after the US Federal Reserve increased in percentage rate and the RBA made an interest rate recession. While the Aussie dollar could possibly heightened their rate since it happened last May 2015.

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USD/JPY Fundamental Analysis: July 28 2016

 

 

Prime Minister Shinzo Abe is preparing to issue an economic stimulus package about the competitive sale of Japan's Fuji TV last Tuesday that reached around 27 trillion yen but Japanese Yen still declined against the U.S Dollar. The exchange rate of USD/JPY is 105.568, up 0.953 or +0.91%.

 

The report from Kyodo News about the upcoming announcement of Abe made the US Dollar to gain more over Yen instead, and it approximately achieve $354 billion or 28 trillion yen.

The stimulus plan of Abe is already prepared before the policy meeting of the Bank of Japan finishes on Friday. The BoJ will lend their support for the monetary policy stimulus.

 

USD/JPY is expected to receive a support from the U.S Federal Reserve policy statement if they would release it at 1800 GMT because the Fed would not modify their interest rate in any moment. However, many investors are anticipating for a rate hike in Fed since there is a fifty percent possibility that the BoJ will have an increased on interest rate just before the December meeting take place.

 

A Fed rate hike will probably occur this month when the U.S economic reports will suppose to have a stronger result than expected. The U.S Federal Reserve considers some improvement in the labor market, wage growth and inflation before establishing a rate hike before the year ends.

 

An inflation hawk will allow the pair USD/JPY to make a progress but may recede if the Fed finishes a dove stances. In the rear of such issues and feedback, the main subject will be the resolution of BoJ on Friday.

 

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Fundamental Analysis for EUR/GBP: July 29, 2016


 


The EUR/GBP pair increased by 62 points after the euro went up and the sterling pound declined during Thursday’s session. The currency pair is presently trading at 0.8425 points. The British pound still continued its decline even after a reported second-quarter increase in UK’s economic growth, whose increase was initially seen to be a positive sign for the currency pair.


 


The UK economy went up by 0.6% during the second-quarter which was sealed by the controversial Brexit vote, a significant increase compared to the 0.4% during the first quarter of 2016. The British pound plummeted its lowest in two weeks after Bank of England policymaker Martin Weale said that PMI surveys would be of importance during BoE’s next policy meeting. He also added that in order for an interest rate cut to happen, there must be a concrete evidence of the UK economy losing its strength.


 


In July, the Bank of England shocked the financial market when it refused to snip the benchmark for the borrowing cost from its all-time low of 0.5%. However, decision details from last week’s BoE meeting showed that most policymakers will be expected to endorse a yet unknown set of measures in order to help strengthen Britain’s economy.


 

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Fundamental Analysis for EUR/GBP: August 3, 2016


 


The EUR/GBP pair traded at 0.8462 points prior to the Bank of England meeting this coming Thursday. Certain factors may weigh in on the value of the said currency pair, such as the Bank of England’s prospective move to cut its base rates below the US rates, which can add to its passive quantitative easing. However, some major banks are speculating that the dollar might be prone to a squeeze following the release of data on Friday.


 


The EUR has surprisingly done well in spite of the controversy brought about by the Brexit vote three weeks ago. It traded slightly lower than the dollar but is still higher compared to its value last February and has traded higher against the pound, its highest since three years ago. But the IMF has already stressed that Brexit is somewhat more damaging to the EU economy than it is for Great Britain, and the  latest ZEW survey has shown reports of confidence going down, with economic sentiment indicators decreasing to its lowest levels since Germany’s financial crisis last 2012.


 


Some economists believe that this data means that investors are more concerned with Brexit’s effects on the German economy than the financial market’s response to Brexit.


 

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Fundamental Analysis for GBP/USD: August 5, 2016


 


The cable pair GBP/USD went down by 150 points after the good news brought about by the Bank of England. The BoE added stimulus by cutting its rates, which increased the sterling pound’s trading value at 1.3165. The Bank of England increased its asset purchases by 425 billion pounds and cut 0.25% from its lending rates. It has also announced its plans to follow in ECB’s footsteps by buying corporate bonds. Money markets were also completely priced in a quarter-point decrease to the main rates of the central bank, and investors and economists believe that there will soon be new measures which can cause the economy to surge after the UK’s decision to cut itself off from the European Union.


 


On the other hand, the USD remained firm in spite of Thursday’s most recent low in six weeks, while the GBP remained in a tight range on top of renewed anticipation that the BoE will be cutting its interest rates for the first time since 2009 in an attempt to stave off a possible recession.


 


The dollar index fell flat at 95.56 on top of a six-week low of 95.003 early this week. The most recent focus for the USD is the expected release of US jobs data on Friday. It is expected that this will cause the Federal Reserve to increase its interest rates on the latter part of the year. US futures interest rates are suggesting a 40% chance of the Fed increasing its interest rates this coming December.


 

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Fundamental Analysis for USD/CAD: August 8, 2016


 


The USD/CAD pair experienced an upsurge at 1.3175 after employment data in Canada disheartened investors, while US jobs data went up at an impressive rate. The week’s forecast for the greenback showed a continued surge for the currency pair. According to Statistic Canada’s labour force survey, the market lost a total of 31,200 in jobs last July, the biggest one-month drop in the last five years. Another report also showed Canada’s international trade deficit, which reached up to $3.6 billion last June.


 


The said data caused the CAD to go even lower against the greenback, which caused a reversal of a short-term moderate strength. The Canadian economy was deprived of one of the most crucial support in the past years because of the stagnant consumer demand during the last two months. This is while the other sources of growth, like energy patch, business investment, and manufacturing continue its struggle.


 


Analysts are suggesting that a dip in the Q2 GDP is likely to happen, mainly because of the losses incurred after the Alberta wildfires. Short-term interest differentials in the USD/CAD pair will remain in the USD’s favor due to a divergence in the general growth trends. The CAD also weakens during the latter part of the year, and seasonal considerations are being foreseen for the said pair.


 

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Fundamental Analysis for AUD/USD: August 9, 2016

 

The AUD/USD pair traded lower after disappointments brought about by Chinese trade numbers. The AUD is currently trading at 0.7609, which is higher than its anticipated trading range. The currency did not seem to be affected by plummeting Chinese exports which created hopes for stimuli from the PBOC. The USD eased by a small amount this week after the release of jobs data. Traders are anticipating the rate decision of the Reserve Bank of New Zealand this week and a statement from the RBA head following this week’s rate decision release. 

 

The USD closed Friday’s session with nearly 0.5% in terms of gains while the US 10-year treasury yields went up by 10 basis points to hit 1.59%. The USD traded at 96.11 by Monday morning, putting pressure on the Australian dollar after coming close enough to a multi-month high just before the release of payroll reports. 

 

China’s total export value dipped by 6.25%, decreasing from $192.01 billion to $180.3 billion in a span of just one month. Exports during the first half of the year also went down by 2.1% every year. This significant decrease in Chinese export numbers show that a weak yuan won’t necessarily become an advantage on the part of exporters, particularly in the textile industry, whose export reports showed a decline at 3.7% during the first half of every year. 

 

The PBOC surprised financial markets after devaluing the yuan by decreasing its daily reference rate at 1.87% against the USD. It also bolstered its slow economy by front-lining its stimulus program, with banks allowing lending of up to billions of dollars to various business in order to maintain cash flow in the economy. 

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Fundamental Analysis for USD/JPY: August 10, 2016


 


The USD/JPY pair plummeted by 11 points, trading at 102.34 after the release of China’s inflation data proved to be better than its forecast. This helped the yen to rally since the Chinese economic situation might see some improvement. Investors are now awaiting more data from Japan, Bank of Japan comments and government statement about stimulus programs. The JPY was initially sent higher by investors, however its fiscal stimulus failed to meet the high expectations set by the market. The USD, on the other hand, went up by a significant amount following a positive US labor market report, erasing most of JPY’s early-week gains.


 


The Japanese economic stimulus remains as the main focus since BoJ will be releasing its Summary of Opinions from the monetary policy announcement last July 29. This particular BoJ statement has previously caused the JPY to surge since the new policy fell short of its previous expectations. The Bank of Japan is currently in a tight position as it has little room for more stimulus after its easing regulatory policies. However, BoJ predicts that it will be able to reach its headline inflation rate by 2017. However, only its officials believe in BoJ’s ability to reach its targets, since both businesses and consumers are in disagreement with BoJ’s prediction.


 

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Fundamental Analysis for EUR/JPY: August 11, 2016

 

 

The EUR/JPY pair went down further after Wednesday’s session, trading at 113.006, going down by 0.264 or -0.23%. The tight trading range remained as a result of the absence of major economic and political news from Japan and the eurozone. However, Japan’s Tertiary Industry Activity Index was released before the opening of Wednesday’s session and showed an increase by 0.8%, exceeding the initial report expectations which only predicted a 0.3% increase.

 

Volatility and volume levels were particularly light during Wednesday, since the Japanese public holiday on Thursday will mean closed markets, with volumes expected to be below average. Some major market players will also be having an extended weekend, as most of them will be absent on Friday as well. The EUR/JPY is expected to weaken further due to disappointments caused by stimulus programs from BoJ and the Japanese government, and the ECB is not expected to release another statement until September 8.

 

The overall trend prediction for EUR/JPY is a decrease in its rates, and is expected to continue, with a possible post-Brexit low of 109.519. An increase in selling pressure is also expected to manifest during the latter part of this year, especially once UK files Article 50 and formerly relieves its membership in the European Union.

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Fundamental Analysis for AUD/USD: August 15, 2016

 

 

The AUD/USD pair ended last week’s session below its recent high of 0.77, trading at 0.7646. However, the pair remains strong as it enters into a new trading week after traders adjust to Friday’s sudden decrease, although China will be weighing in on the markets following a possible stimulus from PBOC. On the other hand, the RBA reduced its rates by 25 bps and the RBNZ followed suit, applying a 25 bps reduction rate as well.

 

 

Prior to this particular move of New Zealand and Australian  central banks, RBA’s Glenn Stevens previously denied that cutbacks on interest rates can help in improving the Australian economy. Stevens also added that Australia’s economic slowdown is only natural, given its constant growth during the past few years. He also noted that Australian households will take a while before they can start spending again since a significant amount of domestic debt has put households in tighter positions.

 

 

The RBA representative also added that Australia’s lack of a demographic dividend has contributed to the slowing down of the GDP growth. The demographic dividend is the slow growth of the overall working population as compared to the general population growth, a problem which is also being dealt with by Japan. However, Steven’s speech did not have any impact on the AUD, which is up by 0.4% against the US dollar after the USD decreased its value following the release of the US productivity data since traders have already speculated that the Federal Reserve would not have an increase in its rates.

 

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Fundamental Analysis for NZD/USD: August 16, 2016

 

The NZD/USD pair weakened its stance and traded down at 0.7177, although this is still a relatively strong value compared to its counterparts. Investors are taking into consideration China’s mixed signals and the lack of stimulus from the People’s Bank of China. The RBA and RBNZ statements on its rate decisions are making investors and traders uneasy. The retail sales volume rose by 2.3% last June, which is the biggest increase in the last nine years. This is in comparison with a 1% increase last year.

 

According to Statistics New Zealand, the increase was mainly caused by surges in vehicle sales, personal and pharmaceutical products, and more people spending on eating and drinking out. The retail sales’ total value rose from 2.2% last quarter to almost $20 billion. According to Westpac economist Satish Ranchhod, consumers are benefiting from low inflation and interest rates, which are putting money back in domestic pockets. A strengthened tourist season and strong migration rates are also helping in the surge in spending figures.

 

Zespri has also stated that it has already improved its pre-export checking procedures, which has already been approved by the MPI, who is currently advising China with regards to kiwifruit exports. Kiwifruit sales has also exceeded last year’s total volume sales, with another 7 million kiwifruit trays in line for export this coming season.

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Fundamental Analysis for EUR/JPY: August 18, 2016

 

 

The EUR/JPY pair continued its tight range-trading during Wednesday’s session after trading at 113.195, since traders are now focusing on the minutes from the US Federal Reserve Bank’s July meeting.

 

The lack of significant economic news from both Japan and the eurozone has led to decreased volatility and volume levels, with the currency pair now range-bound after reaching its lowest level in a month last August 5 at 112.308. However, this unnatural chart pattern might lead to excessive volatility levels, and investors should brace themselves for possibly unexpected economic news.

 

The ECB is not expected to release a statement until September 8 and the BoJ has apparently run out of economic stimuli, so traders must expect a dull period for the EUR/JPY pair until economic stimuli drives the pair back in activity.

 

On Thursday, investors are expected to react to several Japanese reports, including the Adjust Trade Balance, where it is expected to be released at 0.14 trillion yen. Japanese exports are expected to decrease by up to 14.0%. Meanwhile, July’s trade balance is expected to fall from 693 billion yen to 284 billion yen.

 

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Fundamental Analysis for USD/CAD: August 19, 2016

 

 

The USD/CAD pair went down by 26 points as the USD further decreased its value, with both gold and oil experiencing an upsurge. The said pair is currently trading at 1.2819, with the CAD continuing its present positive value. The CAD temporarily went over the 78-cent level of the USD as the greenback fell in relation to a lot of currencies as oil prices continued to rise.

 

One of the reasons for the CAD’s recent gains is the sudden upsurge in oil futures, with per barrel amounting to more than $47. Another reason for the currency’s gain is the weakening of the US dollar after calls for the Federal Reserve to take extra caution when it comes to increasing its interest rates. The CAD has been steadily increasing its value during the last 7 trading sessions before the meeting of the Federal Open Market Committee yesterday, which led to a decrease after the release of the meeting’s statement.

 

Investors are now expecting the release of the Canadian Consumer Price Index monthly report for its yearly and monthly data. Yearly data is expected to fall at 1.3% from last month’s 1.5%, while the monthly data is also expected to go down by -0.1% from last month’s 0.2%. Should the actual data fail to match the expected data release, then traders can expect volatility in prices as the market will try to adapt to the released financial information.

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Fundamental Analysis for NZD/USD: August 22, 2016

 

 

The NZD/USD pair is currently trading at 0.7264 points after gaining a 1% increase during the week due to an upsurge in dairy prices and a generally positive data flow. The positive data for dairy prices was due to an increase in the global dairy auction, with the average pricing going up from 12.7% to $2731 per tonne, with a 6.6% increase during the auction.

 

Speculators in the market had predicted a 25-point basis cut as central banks are pushing for inflation rates to go back at the 1-3% rate in order to counter high currencies. The governor of the Reserve Bank has also stated that they are willing to further cut down on interest rates since there is a renewed pressure on the NZD as international conditions are continuing to weaken and interest rates remain low. He also stated that the Reserve Bank is currently having difficulties to meet its target inflation rate since the exchange rate must decline first in order to make way for added inflation.

 

The financial market could also become undermined if the surges in the housing market continue, while the domestic economy remains on the positive side due to an added strength in its tourism and migration data, as well as low interest rates. Commodity prices also increased by at least 2%, its highest index since October 2015.

 

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Fundamental Analysis for EUR/USD: August 24, 2016

 

 

The EUR/USD pair had little response to the positive composite PMI data, with the EUR trading up to 25 points before the data release and remained at 1.1345 near its highest range point as the USD continued to weaken. Manufacturing PMI data went below its expected range but went above the 50-divider line.

 

The economic status of the eurozone maintained its status in August, with its growth showing that it is unlikely to be cut back as a result of a possible fallout following the Brexit referendum. The composite PMI for the eurozone rose in July, from 53.2 to 53.3 points, going above the 50 level which separates expansion from contraction and is the best reading for the region in seven months. IHS Markit has stated that the eurozone’s economy remains on the steady side, with an estimated 0.3% GDP for this quarter, similar to the first half average of 2015.

 

Speculators are now awaiting the Federal Reserve’s chairwoman Janet Yellen’s statement at the Jackson Hole Symposium this coming Friday. Investors will be monitoring this symposium as this has been the platform used by the Fed to warn of either a tightening or a loosening of monetary policy.

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Fundamental Analysis for USD/CAD: August 25, 2016

 

The USD/CAD pair went higher during Wednesday’s session, trading at 1.2942 after increasing by 0.0031 or +0.24%. This increase in the pair was due to speculations that Fed Chairwoman Janet Yellen will be delivering a possibly hawkish statement on Friday’s Jackson Hole Wyoming central bankers’ symposium. The CAD also weakened after a sudden build caused crude oil prices to go lower than 1.50%. This sharp sell-off occurred after an unexpected stockpile increase as stated by the US Energy Information Administration, causing renewed concerns about the surplus in international supply.

 

The government of Alberta, Canada raised its 2016-17 budget deficit forecast to C$10.9 billion last Tuesday, after the disastrous wildfire that ripped through the region caused damages in Fort McMurray’s oil sands hub.

 

If the USD continues to strengthen against the CAD and crude oil prices further decrease, then the daily pattern chart shows an upside shift in momentum. However, crude oil prices can also experience a sudden surge especially if Janet Yellen’s statement on Friday turns out to be dovish, or both OPEC and non-OPEC countries opt for a production freeze. Large payoffs are expected, however, if crude levels go lower than this month’s levels and if the Fed’s statement signals at least one rate hike before the year comes to a close.

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Fundamental Analysis for USD/JPY: August 26, 2016


 


The USD/JPY pair remained within its range while the markets are awaiting Janet Yellen’s speech within today. Aside from the Fed’s statement release, investors are also anticipating the release of Japan’s inflation data, which is expected to cause volatility in the yen’s current value. The BoJ might not be able to extend additional support to either the Japanese economy or to assist inflation rates while employers refuse to have a wage increase, causing stagnation in the country’s economic cycle. The IMF has also recently noticed that Abenomics was not able to use its three-arrow plan in order to boost the economic status in Asia.


 


The index of Nikkei 225 increased by 10% since June and the JPY has also increased in relation to the USD. This might become a problem for stocks since a strengthening yen would not attract exporters as it can decrease their foreign profits especially when converted to their local currencies. Investors are also worried that the Bank of Japan might dominate financial markets after the BoJ doubled its purchases of Tokyo-based shares, which can cause distortions in prices. This will also make it harder for investors to separate functional companies from non-functional ones, and can also cause misallocation of capital and can reduce incentives which are needed by companies to attain shareholder needs.


 


The Bank of Japan has previously attempted to revitalize the Japanese economy and put a stop to years of deflation by way of purchasing large amounts of assets, thereby flooding the economy with cash. This has mostly included corporate bonds, JGBs, and ETFs.

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AUD/USD Fundamental Analysis: August 26 2016


 


The Aussie and the US dollar hover to the range bound periods raised with 11 points at 0.7624. The quantitative measures indicated a low level but will experience a slight effect because of the grand news of Yellen on her Jackson Hole speech. The Australia and New Zealand Banking Group reported that AUD strengthened which influence the economic growth while exports from the region like coal and iron ore are consistent to have the largest volume of supply among countries all over the world.


 


Subsequent to the unsatisfactory rate of the AUD yesterday due to a lower-than-expected results of the infrastructures, Australian dollar still gained positively.


 


Australian reports have noted the statement from one of the largest government owned company of the continent, QIC Global Liquid Strategies with the head of the pension managers, Ms. Katrina King said that at US 77 cents, AUD is seen to be overvalued by 10% evaluated by the RBA's newly-developed in-house economic modeling.


 


While Mr. Roy Teo, an analyst from said that the ABN Amro Bank NV ended their recommendations during the closing of the third quarter since they perceived that the AUD will be bearish with a target price of 72 cents. Reports from Bloomberg issued a forecast from the RBA about the ease of movement on November and expecting the AUD to finished with 74 cents on year end.

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Fundamental Analysis for GBP/USD: August 30, 2016


 


The GBP/USD pair decreased by 38 points as the dollar continued to surge after the statement release by the Federal Reserve last Friday. The GBP rallied by 0.5%, hitting its highest in three weeks at 1.3264 following Fed Chairwoman Janet Yellen’s speech at Wyoming. The GBP decreased but is still above $1.31. Prior to the Fed statement, the GBP has been experiencing an increase after data from the Office for National Statistics showed that the UK had a 0.6% economic growth for the second quarter.


 


Investors are expecting low volatility for the UK market, as the market is closed on Monday due to the Summer Bank holiday. The August survey for UK’s construction and manufacturing data are expected to recover slightly after a massive downgrade in July, which can reduce the possibility of the country going into a recession next year. Investors and speculators are also confident that the UK economy will be revitalized after the Brexit referendum.


 


The UK will also be releasing its plans this week regarding its objective to retain its single market access on a per sector basis.


 

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USD/JPY Technical Analysis: August 30 2016


 


The USD accrued by making a 2-week high in spite of the reports concerning the increment in price introduced by the Fed to be imposed for the next month. Furthermore, the yen resumed to subsidize the dollar.


 


When the pair heightened its rate on Monday, it secured a concrete resistance level at 102.50 but did not permitted any price gains. The current resistance of the doolar and yen is 102.50, the level of support identified at 101.40.


 


MACD presented a positive movement, the histogram denoted the buyer's’ strength and the RSI is seen in overbought area.


 


USD/JPY moves through the 4-hour chart and broke 200-EMA and ascended the moving averages of 50, 100 and 200. The trading pair seems bullish after the growth of its resistance level of 102.50.

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Fundamental Analysis for AUD/USD: August 31, 2016


 


The AUD/USD pair went up by a few trading points but had limited gains as the US Dollar continued to increase its value. The release of the housing data yesterday caused building permits to go above as expected. In July 2016, the volume of approved houses went up by 0.2%,  necclinching an eight-month steady increase, according to the Australian Bureau of Statistics.


 


In the area of New South Wales and Victoria, the total number of approved houses surged in July by up to 2.4% but has seen a drop in the area of Queensland, Tasmania, and Australian Capital Territory. The AUD is presently trading at 0.7571, a drop from its previous weekly high. Meanwhile the USD is steadily increasing after the Fed statement in Wyoming.


 


After the non-farm payrolls data were released last Friday, the USD index rallied as the market adjusts into a steady holding pattern.


 

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Fundamental Analysis for USD/JPY: September 1, 2016

The USD went up slightly higher than the JPY during Wednesday’s session as investors are waiting for the latest updates on the economic status of the United States. The USD/JPY pair is currently trading at 103.259 points, going up by +0.30% or 0.304. Volatility and volume levels were on a below average level since majority of the currency players in the market are staying on the sidelines prior to the release of the US Non-Farm Payrolls report on Friday, which will be determining the frequency and timing of the oncoming Fed rate increases.

 

Tuesday’s trading session saw an increase in the USD/JPY pair, after the consumer confidence report in August showed an increase at 101.1, its highest in a year. However, newfound concerns regarding the overall state of the Japanese economy arose as the release of industrial production figures for Japan surprised economists who were expecting two consecutive monthly gains, insinuating the possibility that the Japanese economy might be failing to sustain its progress for the third quarter.

 

Traders and investors are now waiting for the US ADP Non-Farm Employment Change Report, which is expected to show an increase in jobs offered by the private sector. A below average data could further weaken the USD/JPY, but the onset of the release of the Non-Farm Payrolls Report on Friday might help in alleviating possible losses.

 

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Fundamental Analysis for EUR/USD: September 2, 2016

 

 

The EUR/USD pair went down by 6 points today as the unemployment rates in the European Union went up and the USD continued to strengthen. The PMI data for the eurozone also came out lower than expected at 51.7 points. The EUR is currently trading at 1.1151, indicating that the pair is currently at the bottom rung of its trading range.

 

 

The US jobs data showed an additional 177,000 jobs in the private sector last month, with a significant number of firms and industries adding up their payrolls. On the other hand, last week’s Fed statement are hinting at a possible interest rate hike in September, and if the payroll data comes out stronger than expected, investors should expect an increased volatility in the market.

 

 

During the past five years, the August data for US Non-Farm Payrolls has always been erratic, and it is expected to miss again for this period. Traders are then warned of sudden price moves among all asset classes due to the said positions, regardless of whether the data comes out as positive or negative.

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Fundamental Analysis for EUR/GBP: September 6, 2016

 

 

The EUR/GBP traded higher by 3 points, going up at 0.8403. However, the pair still remains at the bottom rung of its trading average since the GBP has been bouncing back during the past sessions, especially since UK economic data reports has shown that the Brexit vote did not have that much of an adverse effect to the economy in contradiction to the initial speculations. Financial institutions such as the IMF has also stated that they are now reevaluating the situation since the Bank of England’s foresight has prevented further damage to the UK economy.

 

 

Meanwhile, the EUR went slightly higher at 84 pence. However, this is not far from Friday’s all-week low of 83.76 points. The construction and manufacturing surveys for the eurozone showed a major comeback, while the manufacturing PMI data recovered from July’s three-year low and traded at 53.3 points in August, its highest trading point reached in 10 months. On the other hand, the construction PMI data went up to 49.2 points from July’s 45.9 points, going over the speculations indicated in economic polls.

 

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Fundamental Analysis for NZD/USD: September 7, 2016

 

 

The NZD/USD pair weakened in relation to the USD, trading at 0.7231 points after the Reserve Bank of Australia held fast to its interest rates and monetary policies. The NZD might increase after the release of data from the GlobalDairyTrade auction tonight, where there is an expected surge in the prices of milk powder. Traders and speculators are now monitoring the data for wholesale trade for the second quarter, as well as an update on the RBA’s interest rates.

 

 

On the other hand, borrowers are expecting even lower interest rates following low inflation rates. Statistics New Zealand released a report last Monday showing that the Consumer Price Index went up by 0.4% as of June 30. The RBA is predicting that inflation rates would go up by 0.6%, and economists are now expecting the bank to cut down its cash rates by up to 2%.

 

 

Westpac has also stated that based on the market prices of financial products, there is now an 80% chance of the RBA cutting down the OCR by up to 70% prior to the release of rates.

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Fundamental Analysis for USD/JPY: September 8, 2016

 

 

The USD continued to plummet against the JPY during Wednesday’s trading session, dropping by -0.55% or 0.564 points to trade at 101.445 points. This drop in rates was mostly caused by a negative-leaning US economic data, which reduced the probability of a Fed rate hike within the month, and protective sell stops are also being triggered by every new low encountered.

 

 

The Institute for Supply Management’s data release for the non-manufacturing purchasing managers’ index also fell at 51.4 points last August, the largest drop seen for the data since November 2008, especially since traders and speculators were expecting 55.4 points. Traders are speculating that the fragile economic data can be used by Fed to refrain from increasing its interest rates.

 

 

The labor market conditions data from the Fed also plummeted in August at -0.7 points following a positive data surge in July. On the other hand, the JPY continues to rise following reports that BoJ policymakers had varying opinions prior to the bank’s meeting on September 20-21. The said meeting is expected to tackle the bank’s stimulus program and conduct a thorough assessment of the said program. Analysts are speculating that the BoJ’s move to review its stimulus program may be a sign that its policymakers are beginning to doubt the effectiveness of the nation’s economic stimulus program.

 

 

The US is also expected to release its most recent job openings report, with investors expecting data to come out at 5.58M, which is a bit lower from the previous data release of 5.62M. Meanwhile, the Fed is also expected to release its most recent Beige Book data. In addition, Esther George from FOMC will also be releasing a statement on Wednesday, which might have an impact on the market especially if there is a discontinuation of the expected interest rate hike in September.

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Fundamental Analysis for GBP/USD: September 9, 2016

 

 

The GBP/USD pair increased by 30 points to trade at 1.3370, hitting its highest trading point since the Brexit vote. The GBP was able to gain strength due to the weakening of the USD and strong economic data. The Bank of England previously underwent criticism from Brexit supporters after the central bank stated that the UK economy would soon face a massive slowdown and a recession after the Brexit vote. Post-Brexit data has shown that the UK economy did not wholly suffer the drastic post-Brexit changes that was initially forecasted by analysts and spectators. However, economists are still speculating that it will not be long before Britain goes into an economic slowdown.

 

 

The Bank of England Governor Mark Carney defended the bank’s moves against critics who were saying that the BoE has moved too rashly with regards to its handling of the Brexit shock, particularly in August where the bank cut down on its interest rates, eased lending policies, and expanded its bond-buying mechanisms. Carney has since then stated that the BoE has always expected that the main economic sectors would be able to recover from the referendum’s sudden impact in July, and this was shown in the recently published PMI data during the past few days.

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Fundamental Analysis for USD/CAD: September 13, 2016

 

The USD/CAD increased by 28 points after a decrease in oil prices caused by a positive US production data and an easing in gold prices. The Canadian dollar is currently trading at 1.3077 points after an increase in international commodity prices, with the USD rallying on Friday after speculations that the Fed might consider an increase in its interest rates within the month.

 

The USD is increasing in relation to the CAD after a relatively positive US jobless claims data and negative Canadian building permits report data. According to the US Department of Labor, the jobless claims data up until September 3 decreased by 4,000, going down from 263,000 to 259,000. However, market analysts are still expecting the jobless claims data to go up by 2,000 within the week.

 

Canadian building permits data meanwhile went up by 0.8% in July, exceeding initial expectations for an increase of only 0.3%. The housing price index data also saw an improvement, rising to 0.4% from last month’s 0.1%, while the annual score also increased 2.5% to 2.8%. Investors are refraining from buying into the CAD due to the appeal of other riskier currencies.

 

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Fundamental Analysis for NZD/USD: September 14, 2016

 

 

The NZD/USD pair went lower during the last trading session, going down 12 points to trade at 0.7341 in the light of an impending interest rate increase by the Fed and confusions brought about by a decision from the Bank of Japan. On the other hand, China’s industrial production data went well above the expected range but did not seem to bring much support to the commodity currency. The Chinese industrial data increased by 6.3% in August as compared to last year, while retail sales data also exceeded expectations from market speculators.

 

 

Traders are now monitoring data from New Zealand, with the account balance due on Wednesday, economic data results scheduled to come out on Thursday, and the results of the consumer confidence survey set to be released on Friday. The NZD was also supported by an increase in food prices, which can cause inflation rates to ease a little bit. Bond prices from New Zealand also decreased, with yield points at 1.5 basis points, going higher towards the end of the yield curve.

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