EUR/USD Fundamental Analysis: December 29, 2016
The EUR/USD pair became somewhat active during the previous trading session after a lackluster performance during the past few days, and this is especially good news for traders who are waiting for any sign of market activity since the holiday season has caused the market liquidity to diminish. The currency pair was able to go beyond its daily price range of 30-40 pips, and the USD’s recent price surge has caused the EUR/USD pair to plummet below 1.0400 points and even reached 1.0360 points. However, the negative pending home sales data from the US has caused the currency pair to go back above 1.0400 points.
As the new year starts and the holiday season comes to an end, the market’s volatility and liquidity is expected to return, and liquidity levels could possibly go higher. However, the strength of the US dollar is not expected to be stalled anytime soon, and government leaders from both the UK and the European Union are now preparing for the onslaught of the Brexit process next year, which is expected to be very tedious for both regions. On the other hand, Germany will also be holding its elections next year, and the market will be closely monitoring Merkel’s performance before and during the elections. However, until such time that these things happen, market players should first monitor just how long will the USD be able to maintain its recent strong stance. For the EUR/USD pair, the currency pair is expected to consolidate with a bullish undertone as the market adjusts to the very disappointing pending home sales data from the US.
GBP/USD Fundamental Analysis: December 29, 2016
The USD was able to regain some of its lost strength during the earlier parts of yesterday’s trading session, which was felt all throughout the market, and has also affected the sentiment of the sterling pound. The GBP then plummeted and the GBP/USD pair went way below 1.2200 points after almost two months as a result of a very disappointing home sales data. However, as the North American session commenced, the GBP/USD pair was able to surface over 1.2200 points and has hovered over this level for the rest of the trading session. But it still remains to be seen whether the currency pair would be able to deflect the effects of the USD’s ever-growing strength.
The effects of the long and winding Brexit process is expected to be seen during the next several months since various government leaders from the UK and the EU is set to debate on how to go through with the process in general. These are expected to create a constant pressure for the sterling pound, and all reversions on the part of the GBP/USD could immediately be sold by bears, therefore making it hard for this currency pair to make any significant advancements in the coming months.
For today’s trading session, since there are no major economic data which is set to be released from the UK region, the GBP/USD pair is more likely to encounter more consolidation with a bullish undertone, especially since the market is currently experiencing low volatility and liquidity due to the holiday season.
USD/CAD Fundamental Analysis: December 29, 2016
The USD/CAD pair continued to trade in an upward direction due to substantial support coming from the USD, which was basically the market’s theme during yesterday’s trading session. The currency pair was able to maintain its buoyancy in spite of the recent surge in oil prices. Market speculators are now stating that oil prices could be well on its way towards reaching its optimum price and once oil prices stop going in an upward direction, then this could put more pressure on the Canadian dollar, thereby inducing a strong uptrend on the USD/CAD pair.
The USD experienced a short correction during yesterday’s session after the US home sales data came in at a disappointing reading of -2.5% which fell short of initial market expectations of 0.5%. Luckily, the market is now shifting its focus on the Fed’s rate hikes this 2017, particularly the pricing of these rate hikes. The strength of the USD is very evident as of late, since the lack of trading and relatively low market liquidity was unable to mask the dollar’s strong stance, as well as the CAD’s pointed weakness.
For today’s trading session, there are no major economic data scheduled to be released from Canada, while the US is expected to release its weekly oil inventory data. Since the market is relatively thin due to the holiday season, expect an added consolidation for the USD/CAD with a bullish undertone.
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GBP/USD Fundamental Analysis: January 3, 2017
The pair GBP/USD has been moving softly and remains resilient despite the appreciation of U.S. dollar since yesterday. This was brought by closing of London market same with the New York market that causing the low liquidity and weak volatility of the pair. Since today is the opening again, it is expected for the pair to gain volatility and waiting for hints on what will happen to the short term trend.
The U.S. dollar surged in the early weeks of December since the announcement of the Fed rate hike but a few correction were seen as the days advanced near the holidays. This pushed the pair to go lower towards the 1.2400 level predominant in thin market but it is expected that this will only occur for a short period of time. Since it is after holidays, then there will be high liquidity that guarantees the next moves compared to how it was 2 weeks ago.
The Manufacturing PMI data from U.K. will be announced today that starts this week rich in data while the market awaits if the trend will continued to be supported by U.K. keep posting positive results in the midst of Brexit preparation. However, the surge of dollar may continue for some time while pound weakens. Hence, any form of rebound for the pair signals an opportunity for short-term position.
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USD/CAD Fundamental Analysis: January 4, 2017
The USD/CAD was one of the few currency pairs which benefited from the dollar index surge, as well as the recent drop in crude oil prices during yesterday’s trading session, which was the result of the carrying out of the recent agreements between oil production firms. The USD/CAD pair continued to exhibit a somewhat circumspect trading in spite of the dollar strength and has also limited itself to a tight trading range yesterday. The USD/CAD pair made a short-term drop at just below 1.3400 points but eventually reverted back to due an onslaught in demand and is now currently hovering at just below the 1.3450 trading range. The currency pair is expected to increase its strength as the day progresses, especially since majority of traders are now finishing off the holiday season and are now coming back to their trading desks. Even if the increase in the dollar index is not expected to drop anytime soon, its effect on the currency pair is expected to be somewhat subdued since the effect of the dollar surge could be offset by the recent increase in oil prices.
For today’s trading session, there are no major economic news releases from both Canada and US, and if the USD’s strength continues to go across the board, then the USD/CAD could possibly re-test the 1.3500 levels soon.