Fundamental Analysis of EUR/JPY for December 12, 2018

Trading 12 déc 2018 Commentaire »

EUR/JPY has been volatile and corrective in the price range of 127.50 to 130.00 from where it is expected to push lower in the coming days. Despite a series of worse economic reports published recently in Japan, JPY has made impulsive bearish price swings that indicates EUR's weakness.

EUR has been hurt by Italy's budget deficit issue for a few weeks in a row. Italy has not suggested a better solution on the draft budget. As a result, EUR bulls lost faith in further EUR growth. Moreover, BREXIT deal is also derailing EUR's advance. Recently, ECB President Draghi has been quite positive in his speeches about the eurozone's economic outlook. Besides, some upbeat economic reports contributed to overall gains of EUR. Today Italian Quarterly Unemployment Rate report was published with a positive result of a decrease to 10.2% from the previous value of 10.7% which was expected to be at 10.3% and the eurozone's Industrial Production increased to 0.2% as expected from the previous value of 0.6%.

On the other hand, due to recent Financial Sector issues and worse economic results, JPY has been undermined by the recently published economic reports. If more downbeat reports from Japan follow, JPY will lose ground. Today Japan's Core Machinery Orders report was published with an increase to 7.6% from the previous negative value of -18.3% which unfortunately failed to meet the expected score of 10.2%, PPI decreased to 2.3% from the previous value of 3.0% which was expected to be at 2.4%, and Tertiary Industry Activity increased to 1.9% from the previous value of -1.2% which was expected to be at 0.9%. Ahead of Tenkan and Revised Industrial Production report this week, JPY is currently quite short of positive economic results to dominate EUR.

Meantime, EUR is currently quite optimistic with the economic reports despite the recent political developments. On the other hand, JPY has been hurt by the economic data. If Japan fails to publish solid reports, EUR is expected to continue a further rally. Nevertheless, any positive news from Japan may lead to continuation of the bearish pressure in the pair again with ease.

Now let us look at the technical view. The price has been quite volatile but impulsive with the recent bullish momentum which lead it to reside above the Kumo Cloud resistance with an impulsive break. The price is currently residing above 128.50 area from where it is expected to push higher towards 130.00 resistance area in the coming days. As the price remains above 128.00 area with a daily close, the bullish pressure is expected to continue. Otherwise, a break below 128.00 may lead the price lower towards 125.50 support area in the distant future as the overall bias of this pair is still bearish.

SUPPORT: 125.50, 127.00-50, 128.50

RESISTANCE: 129.50, 130.00

BIAS: BEARISH

MOMENTUM: VOLATILE

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Dollar Little Changed Following U.S. CPI

Trading 12 déc 2018 Commentaire »

The Labor Department has released U.S. consumer price index for November at 8:30 am ET Wednesday.

After the data, the greenback changed little against its major counterparts.

The greenback was trading at 1.1342 against the euro, 1.2579 against the pound, 0.9944 against the franc and 113.38 against the yen around 8:32 am ET.


The material has been provided by InstaForex Company - www.instaforex.com

Dollar Little Changed Following U.S. CPI

Trading 12 déc 2018 Commentaire »

The Labor Department has released U.S. consumer price index for November at 8:30 am ET Wednesday.

After the data, the greenback changed little against its major counterparts.

The greenback was trading at 1.1342 against the euro, 1.2579 against the pound, 0.9944 against the franc and 113.38 against the yen around 8:32 am ET.


The material has been provided by InstaForex Company - www.instaforex.com

*Canadian Industrial Capacity Utilization Drops To 82.6% In Q3

Trading 12 déc 2018 Commentaire »

Canadian Industrial Capacity Utilization Drops To 82.6% In Q3


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*Canadian Industrial Capacity Utilization Drops To 82.6% In Q3

Trading 12 déc 2018 Commentaire »

Canadian Industrial Capacity Utilization Drops To 82.6% In Q3


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*U.S. Consumer Prices Unchanged In November, Core Prices Rise 0.2%

Trading 12 déc 2018 Commentaire »

U.S. Consumer Prices Unchanged In November, Core Prices Rise 0.2%


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Dollar Weakens Ahead Of U.S. CPI

Trading 12 déc 2018 Commentaire »

The Labor Department will release U.S. consumer price index for November at 8:30 am ET Wednesday. Economists expect a flat reading on month after a 0.3 percent rise in October.

Ahead of the data, the greenback dropped against its major counterparts.

The greenback was worth 1.1350 against the euro, 1.2584 against the pound, 0.9940 against the franc and 113.36 against the yen as of 8:25 am ET.


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Gold plays by the rules of the Central Bank

Trading 12 déc 2018 Commentaire »

Having reached a five-month high, gold failed to gain a foothold above the psychologically important mark of $ 1,250 per ounce due to strong statistics on American producer prices. In November, the base indicator accelerated to 2.7% y / y, which immediately brought back the idea of continuing the Fed's monetary policy normalization cycle in 2019 on the table. The day before, the derivatives market reduced the chances of a single increase in the federal funds rate to 49%, but strong PPI pushed them to the level of 57%. The dollar came to itself, which made the bulls in XAU / USD retreat.

Since mid-November, the main driver of the growth of the precious metal is the change in the worldview of the Fed. Jerome Powell said that the level of neutral interest rates is close, which led investors to doubt the realism of the September FOMC forecasts. Currently, the market is counting on one or two acts of monetary restriction in 2019 instead of three. Simply put, investors do not like the dollar because of the possibility of deterioration in the forecasts of the Central Bank in December. At the same time, Jerome Powell said that further decisions by the regulator will depend on the incoming data so that strong statistics on producer prices quite naturally led to the strengthening of the USD index.

Despite the retreat, banks represented by JP Morgan, BofA Merrill Lynch, and Commerzbank are optimistic about the medium and long-term prospects for gold. The precious metal may grow by 5% -15% in 2019 due to the slowdown in the process of monetary restriction of the Fed, difficulties in financing the US double deficit, falling stock indices and the yield of treasury bonds.

Dynamics of gold and yield of US Treasury bonds

G55XOhmXkinWjbRQMJI5gpdI78yBgXmQ9etvpqZtLet's not forget about the favorable external background for gold. Despite the truce in the trade wars of Washington and Beijing, in 90 days it is fully capable of resuming. In addition, the uncertainty associated with the negotiations will keep the demand for safe-haven assets at a high level. The Italian budget crisis is far from resolved, and Britain risks plunging into the promiscuous Brexit. It is not surprising that in such conditions, stocks of specialized exchange-traded funds are growing. For the largest of them, SPDR Gold Shares, the figure increased to 763.56 tons, the maximum level since the end of August.

Further XAU / USD dynamics will depend on releases of data on US inflation, European business activity and on the outcome of the ECB meeting. The slowdown in CPI, Mario Draghi's confidence in restoring the eurozone economy despite current weak statistics and the gradual growth of purchasing managers' indexes will inspire EUR / USD bulls to attack, which will affect the USD index and gold. On the contrary, the acceleration of inflation, the weakness of PMI and the readiness of the European Central Bank to extend QE will strike at the main opponent of the dollar. The euro, which will force the precious metal to retreat.

Technically, the bulls leave no hope to realize a target of 200% using the AB = CD pattern. The situation is under their control, so it makes sense to use kickbacks to support at $ 1239 and $ 1230 per ounce for purchasing.

Gold, the daily chart

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South Africa Inflation Highest In 18 Months

Trading 12 déc 2018 Commentaire »

South Africa's consumer price inflation accelerated for a second straight month in November to its highest level in one-and-a-half years, data from Statistics South Africa showed on Wednesday.

Inflation accelerated to 5.2 percent in November from 5.1 percent in October. The latest figure was the highest since May 2017, when inflation was 5.4 percent.

Economists had forecast inflation of 5.2 percent.

Core inflation, which excludes prices of items such as food, non-alcoholic beverages, fuel and energy, rose to 4.4 percent from 4.2 percent in the previous two months.

Food prices rose 2.8 percent in November and clothing and footwear prices increased 1.8 percent.

Transport had the biggest price growth of 10.7 percent in November due to higher fuel costs, followed by health that registered 5.1 percent inflation. Communication costs increased 1.4 percent.

In November, the consumer price index increased by 0.2 percent from the previous month, which was slightly less than the 0.3 percent economists had forecast.


The material has been provided by InstaForex Company - www.instaforex.com

South Africa Inflation Highest In 18 Months

Trading 12 déc 2018 Commentaire »

South Africa's consumer price inflation accelerated for a second straight month in November to its highest level in one-and-a-half years, data from Statistics South Africa showed on Wednesday.

Inflation accelerated to 5.2 percent in November from 5.1 percent in October. The latest figure was the highest since May 2017, when inflation was 5.4 percent.

Economists had forecast inflation of 5.2 percent.

Core inflation, which excludes prices of items such as food, non-alcoholic beverages, fuel and energy, rose to 4.4 percent from 4.2 percent in the previous two months.

Food prices rose 2.8 percent in November and clothing and footwear prices increased 1.8 percent.

Transport had the biggest price growth of 10.7 percent in November due to higher fuel costs, followed by health that registered 5.1 percent inflation. Communication costs increased 1.4 percent.

In November, the consumer price index increased by 0.2 percent from the previous month, which was slightly less than the 0.3 percent economists had forecast.


The material has been provided by InstaForex Company - www.instaforex.com