Growth Aces Research Team
Growth Aces
EUR/USD: Trump rally is over for now
Macroeconomic overview
Jeffrey Lacker, the hawkish president of the Federal Reserve Bank of Richmond, said he is worried inflation could surge unless the U.S. central bank raises interest rates faster than his fellow policymakers anticipate. Most of the Fed's policymakers see the central bank raising rates three times this year.
The market ignored hawkish comments from Lacker. The dollar wallowed near seven-week lows in Asian trade on Tuesday, pressured by concerns about the impact of U.S President Donald Trump's protectionist trade stance.
The benchmark 10-year yield posted its biggest one-day drop in more than two weeks as concerns about the fallout of Trump's tough stance on trade spurred safe-haven demand for bonds.
Trump's nominee for Treasury Secretary Steven Mnuchin said that an excessively strong dollar was negative in the short term, which put additional pressure on the dollar.
Technical analysis
The situation has not changed a lot from yesterday. We see a small retreat in the morning of the European trade, but this does not change an overall bullish structure.
Yield spread between German and U.S. 10-year bonds
Trading strategy
EUR/GBP: May must get parliament approval to trigger Brexit
Macroeconomic overview
Britain's pound surged to its highest in five weeks against the USD on Monday as investors priced in a defeat for the government in its appeal against a ruling that forces it to consult parliament before formally triggering EU exit talks in March.
Today the UK Supreme Court ruled on Tuesday that Prime Minister Theresa May must get parliament's approval before she begins Britain's formal exit from the European Union. We see a ‘buy the rumor, sell the fact’ reaction today as GBP weakens after the court decision.
Recent macroeconomic data from the UK has been broadly mixed, with upbeat wage growth figures offset by weaker hiring and investment numbers. Official national retail sales released on Friday saw the biggest fall since April 2012, dropping 1.9% mom in December.
Technical analysis
The EUR/GBP is close to the rising December-January trendline and a close below this trendline may signal a deeper downward move. EUR/GBP bulls need a break above 0.8663/80 resistance area to feel more comfortable with their positions.
Yield spread between German and British 10-year bonds
Trading strategy
AUD/USD: Technical analysis suggests a corrective move in the coming days
Macroeconomic overview
The Australian dollar touched two-and-a-half month highs on Tuesday as the greenback wallowed on concerns about the impact of U.S. President Donald Trump's protectionist trade stance. Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies even as China's influence in the region rises.
CPI numbers tonight in Australia are set to confirm the general theme seen in the fourth quarter 2016 in most countries, i.e. an acceleration of inflation, mostly driven by higher oil prices and therefore boosting primarily the headline indices.
The Aussie dollar has run very fast so far this month, which may trigger some profit taking from time to time, especially if macroeconomic data disappoint.
Technical analysis
The AUD/USD struggles to hold gains on rallies toward 0.7600. A doji candlestick on Friday and long upper wick on today’s candle suggest a corrective move may be coming.
Yield spread between Australian and U.S. 10-year bonds
Trading strategy
Our research is based on information obtained from or are based upon public information sources. We consider them to be reliable but we assume no liability of their completeness and accuracy. All analyses and opinions found in our reports are the independent judgment of their authors at the time of writing. The opinions are for information purposes only and are neither an offer nor a recommendation to purchase or sell securities. By reading our research you fully agree we are not liable for any decisions you make regarding any information provided in our reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise you to contact a certified investment advisor and we encourage you to do your own research before making any investment decision.
Recommended Content
Editors’ Picks
AUD/USD: A tough barrier remains around 0.6800
AUD/USD failed to maintain the earlier surpass of the 0.6800 barrier, eventually succumbing to the late rebound in the Greenback following the Fed’s decision to lower its interest rates by50 bps.
EUR/USD still targets the 2024 peaks around 1.1200
EUR/USD added to Tuesday’s losses after the post-FOMC rebound in the US Dollar prompted the pair to give away earlier gains to three-week highs in the 1.1185-1.1190 band.
Gold surrenders gains and drops to weekly lows near $2,550
Gold prices reverses the initial uptick to record highs around the $$2,600 per ounce troy, coming under renewed downside pressure and revisiting the $2,550 zone amidst the late recovery in the US Dollar.
Australian Unemployment Rate expected to hold steady at 4.2% in August
The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.
Ethereum could rally to $2,817 following Fed's 50 bps rate cut
Ethereum (ETH) is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's (Fed) decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds (ETF) recorded $15.1 million in outflows.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.