Daily Technical & Fundamental Analysis

Oil weaker on unclear signals
05 December, 2018 12:45

Oil weaker on unclear signals

After a healthy start of the week oil prices failed to maintain recovery on Tuesday. The market is strongly affected by growing uncertainties on the upcoming meeting of the OPEC members along with generally unstable financial markets in the world. As a result, Brent prices hit $63.55/bbl, but then collapsed. As of Wednesday, the bearish trend persists and the 61 handle seems to be the target during the morning trading.

Sterling shows solid upturn
04 December, 2018 13:55

Sterling shows solid upturn

The sterling is on the rise on Tuesday. The bulk of the support is definitely coming from weaker US dollar encouraging sterling to hit new highs. As for the greenback, the American currency is depressed now by lower state-bond yield, which can be a sign of upcoming recession in the USA. Today, the sterling-to-US dollar exchange rate soared above the 1.28 handle for the first time since late November. Additional upturn driver was the message of the advocate general of the European court saying that London can refuse from Brexit on a unilateral basis until the court makes a final determination. However, this scenario is unlikely to happen, but this move bolstered the sterling.

US dollar probably under short-lived pressure
03 December, 2018 18:32

US dollar probably under short-lived pressure

The US dollar has taken a protective position vs the majors at the start of the week. Sales improved mainly driven by the progress in the US-China trade talks that were observed during the G20 summit held in Buenos Aires last week. During the event, the parties managed to agree on a 3-month break, which in its turn gave grounds to expect a possible settlement of this dramatic trade conflict. The additional pressure on the greenback as a protective asset is coming from the agreement achieved by Saudi Arabia and Russia regarding oil production restriction, which in its turn supported demand for high-margin assets including oil.

US-China agreement can fail to happen at G20
30 November, 2018 15:18

US-China agreement can fail to happen at G20

The Argentine capital, Buenos Aires, hosts the G20 summit that begins today. The summit's agenda is unemployment and fair trading issues. Moreover, it is quite possible that the members manage to make the first progress in the WTO reforming. The global economy will focuse on the progress of the conflict between Washington and Beijing. In particular, this will be the first meeting of Donald Trump and Xí Jìnpíng from when Washington picked a trading fight with China.

US dollar keeps leaving behind other currencies
30 November, 2018 14:10

US dollar keeps leaving behind other currencies

US dollar has briefly felt down due to the changed mood of the US Federal Reserve, which was confirmed by the minutes of the recent meeting released yesterday. Lately, Jerome Powell, US Fed Chairman, hinted possible slowdown in the interest rate revision, and other Fed members also stated that the authority could revise the pace of the monetary tightening. However, the US dollar has resumed strengthening today after the short-term selloffs, which supports the integrity of the bullish trend.

Euro sliding further
28 November, 2018 15:02

Euro sliding further

The euro is losing grounds with the current rate against the US dollar reaching $1.1286. Consumer confidence index released by Conference Board on Tuesday weakened to 135.7, though it was well above the voiced forecasts. For reference, the October rate was recorded at 137.9. Under the normal environment, the greenback would slide but not this time. For now, the market will study the second Q3 GDP assessment. The first assessment suggested the increase of 3.5%, while new figures can be 3.6%.

State of euro-area economy can be a concern
23 November, 2018 14:24

State of euro-area economy can be a concern

On Friday, the euro has kept attempting to maintain the yesterday's upturn driven by the careful stance of the US dollar bulls. As for the Italian issue, the euro generally stays aside it and reacts just sketchy. However, this factor naturally adds some occasional instability. With the recent euro-area PMI, the euro to US dollar exchange rate collapsed from the peaks above the 1.14 handle. Given the current state of the European economy, it will be hard to find a reason to prepare the market for the interest rate revision by the European Central Bank run by Mario Draghi and his team.

US dollar uptrend can apparently be broken only by strong factors
21 November, 2018 17:00

US dollar uptrend can apparently be broken only by strong factors

The US dollar strengthening has slowed down following the Tuesday buying boom. However, the greenback still shows good positions, as the European investors reportedly maintain optimistic mood even despite tough situation everywhere. However, the Brexit and Italian budget are still in the spotlight in the market being the key factors that prevent European currencies from soaring.

Italy closer to EU budget penalty
21 November, 2018 16:21

Italy closer to EU budget penalty

Italy has got one step closer to the fines from the European Commission citing sharp noncompliance of the Italian draft budget to the EU requirements. Brussels confirmed that Italy strongly violated the Stability and Growth Pact. As a result, Italy can face a fine of 0.2% of GDP for that. Along with budget noncompliance, the European Commission prepared a separate report about Italian state debt, which was rescheduled on fears of debt burden in the country. As a result, it was discovered that Rome failed to comply with EU lending rules as well. It is expected that Italy will face slower GDP at 1.1% in 2018 (1.6% in 2017), while in 2019 the rate will be 1.2%. At the same time, the EC believes that the budget deficit will hike to 2.9% and 3.1% in 2019 and 2020 respectively.

Italian budget issue still can shake euro
20 November, 2018 17:10

Italian budget issue still can shake euro

The European Central Bank stated that the regional bond market faces minimal impact from the Italian issue. Meanwhile, the gap between the yield of 10Y bonds of Italy and Germany expanded to 335 basis points. The European currency is sensitive about this fact. The euro-to-US dollar rate plunged from the top of 1.1470 to the bottom line of 1.1403 after numerous attempts to break the $1.15 handle. As a result, the 1.14 handle is under a threat now.EU can raise pressure on Italy, one of the leading economies in the euro-area, which definitely will play against the European currency.

Prices for oil may slide to $60
20 November, 2018 15:57

Prices for oil may slide to $60

Brent oil managed to somewhat recover to $67/bbl, though the rebound was short lived. A mid-term outlook remains pessimistic despite local demand for the oil. As a result, prices have inevitably decreased to the support level of $60/bbl. Risk instruments are said to face a risk of even bigger losses until the situation gets clear. The last hope is the upcoming meeting of OPEC members slated for early December, the market expert noted. In the case of fruitful meeting and the countries agree on production cutbacks, oil can receive some support. Still, this scenario is barely possible. 

Situation runs high in UK Cabinet
19 November, 2018 14:10

Situation runs high in UK Cabinet

The sterling posted gains on Monday, which indicate the second positive day for the currency in a row. Today, the sterling to US dollar exchange rate was recorded above the 1.28 handle. The British currency keeps moderately rising targeting 1.29. However, the observed dynamics is mainly driven by the US dollar which shows unstable positions rather than the sterling. The greenback is affected by the US Fed alarm signals, as the regulator is concerned about the global economy, which can amend further monetary tightening policy followed by the US Federal Reserve.