Thread: Fundamental Analysis by ForexMart

EUR/USD. July 31, 2020 – Euro has updated its maximum at around 1.1900

The euro continues to rally, reaching 1.1900. The US dollar again came under pressure from several factors at once: from the fresh macroeconomic data and statements by US President Donald Trump.

So, yesterday's data on US GDP showed a decline in the US economy in the II quarter by 32.9%. This was the largest decline since the Great Depression. Experts note that without the $3 trillion stimulus package, the GDP failure would have been even greater, but the current figures are impressive.

Additional pressure on the currency was exerted by the words of D. Trump, who does not exclude the postponement of the upcoming presidential elections in November due to low GDP and economic problems. Moreover, the lack of progress in talks between Republicans and Democrats in the US Congress on a new $1 trillion package of measures also does not give the US dollar optimism.

Today we should pay attention to the data on inflation for July in the eurozone and changes in the volume of GDP for the II quarter. Inflation in the region rose 0.4% on an annualized basis, while GDP fell by a record 12.1%. Such news somewhat dampened the appetite for the euro, which allowed the EUR/USD pair to fall to 1.1850.

GBP/USD. August 3, 2020 – Sterling started to decline from highs

Monday starts with a moderate weakening of the pound sterling after rising to the level of 1.3100. The current quote for the GBP/USD pair is 1.3000. Rally of the British currency lasted 11 days in a row; experts note that such a growth of the pound has not been observed for a whole decade.

Today, the sterling was under pressure from the statistics on business activity in the UK manufacturing sector for July. The indicator rose from 50.1 points to 53.3 points. However, the latest data turned out to be worse than the forecast for growth to the level of 53.6 points, which had a negative impact on the exchange rate.

Additional negativity comes from the uncertainty surrounding Brexit. Negotiations between the UK and the EU are failing, and the likelihood that the country will leave the EU without a full-fledged trade agreement is growing every day.

A meeting of the Board of the Bank of England will take place on Thursday. Market participants expect that all parameters of the regulator's monetary policy will remain unchanged.

Brent. August 04, 2020 – Oil awaiting data from API

Yesterday ended with the growth of Brent quotes to $44.40 per barrel. Market participants are optimistic about the further recovery of demand after the release of fairly good reports on business activity in the manufacturing sector of the eurozone and the United States.

Further support for oil prices is provided by a decrease in the number of new cases of coronavirus infection in the United States, which also indicates a further recovery in demand.

However, on Tuesday Brent quotes began to decline to $ 43.40 per barrel. The asset is still under pressure from the increase in oil production by the OPEC+ countries and Russia. More and more countries are gradually phasing out the previously set production quotas as part of the OPEC deal.

Today and tomorrow you should pay attention to the data from the American Petroleum Institute (API) and the US Department of Energy on crude oil reserves in the country. In case of another decline in reserves, Brent quotes may test the resistance of $45 per barrel.

EUR/USD. March 25, 2021 | Euro fell to the level of 1.1800

The EUR/USD pair continues to be in the clutches of «bears»: the current quotation of the euro is 1.1800.

The strengthening of the dollar is again helped by the rise in the yield of US bonds. In addition, the worsening epidemiological situation in the euro area continues to negatively impact the single currency.

Today we should pay attention to the final data on US GDP for the fourth quarter. These statistics should confirm preliminary estimates that showed a slowdown in the rate of economic decline from -2.8% to -2.4%. Therefore, these statistics are unlikely to have any impact on the market. But the report on the number of applications for unemployment benefits, the total number of which should once again be reduced, can provide significant support to the dollar. In this case, we expect a further decline in the European currency below the level of 1.18.

EUR/USD. March 24, 2021 | «Bears» are approaching the 1.1800 level

During the trading session on Wednesday, the euro continues to decline. The current quote for the EUR/USD pair is 1.1825.

The pressure on the European currency is exerted by the prospect of a worsening economic situation in the eurozone countries amid the development of the third wave of the coronavirus pandemic. Many countries in the region are resuming restrictive measures. Including Germany, the largest economy in Europe, where a new quarantine was introduced until April 18. France and Italy are also under severe restrictions that delay the recovery of the entire European region.

The situation is aggravated by the problems with the use of the AstraZeneca vaccine, which is being phased out by an increasing number of EU countries.

Additional pressure on the euro is exerted by the widespread strengthening of the dollar in the market. Greenback is growing after the speeches of D. Powell and D. Yellen in Congress, who said they expect a strong recovery in the US economy this year thanks to successful vaccinations.

The head of the FRS also noted that he does not expect an unwanted acceleration of inflation after the adoption of the stimulus package, adding that the regulator has all the necessary tools to curb the excessive rise in price pressure. Against this background, the dollar index approached the maximum level in the last 4 months.

EUR/USD. March 29, 2021| Euro remains below 1.1800

The EUR/USD pair continues to move within a narrow range of 1.1750-1.1800. The main support for the US dollar last week was provided by economic statistics, which allowed the dollar index to reach a four-month high.

Individual spending fell 1%, while the expected decline was only 0.7%. At the same time, revenues fell 7.1% (vs. 7.3% forecast), and the University of Michigan Consumer Sentiment Index was revised upward (from 83.6 to 84.9). Moreover, the number of initial applications for unemployment benefits reached the lowest level for the entire period of the pandemic (684 thousand applications).

The IFO report on the index of the business climate in Germany helped to stop the fall in the euro: the indicator exceeded analysts' expectations, rising to 96.6 points. However, the euro is still under strong pressure from the difference in the epidemiological situation between the US and the eurozone. The United States plans to return to normal life in a few months, while the fight against coronavirus in Europe is far from successful. In Germany, they fear that the third wave of the pandemic will be the most destructive and they propose to return the curfew.

Today the macroeconomic calendar is empty, the pair will continue to fluctuate weakly below the 1.1800 level.

GBP/USD. March 31, 2021 | Pound sterling is corrected after the release of GDP data

The British pound is showing some strengthening today against the dollar after the publication of a block of economic statistics. The current quote for the GBP/USD pair is 1.3766.

UK GDP in the IV quarter of 2020, according to the final data, grew by 1.3% q/q, while the forecast of an increase of 1.0% q/q. By the end of 2020, the British economy fell by 7.4% y/y against the forecast of a failure of 7.8% y/y. Such indicators can be considered positive, since by the end of a rather difficult year, the British economy was still able to show good results.

At the same time, the property price index in Great Britain in March fell by 0.2% m/m after an increase in February by 0.7% m/m. This is worse than forecasted, but it can be explained by the cold weather this spring and the continued lockdown. In-store prices continued to fall in March and fell 2.4% y/y due to massive discounts, special offers and discounts.

In the evening, you should also pay attention to the data from the United States. The dollar may receive strong support from the ADP statistics, which should show an increase in employment by 380 thousand. And this is a very good result, indicating a confident recovery of the labor market in the United States. If the forecasts are confirmed, the dollar will continue to rise to the area of ​​local highs near 1.3660.

EUR/USD. 31.03 | Euro recovers after falling to 1.1700

Yesterday, the euro slipped even more, falling to the level of 1.1700. The fall was again driven by a jump in Treasury yields amid successful US vaccinations and a faster economic recovery. Back in early January, rates on 10-year bonds were 0.91%, and in March the figure reached 1.77%. The widening yield spread between US and German securities is also an additional negative factor for the European currency.

However, on Wednesday, the EUR/USD pair is showing some correction: the asset quotes rose to the 1.1735 area. The entire spectrum of risky assets was supported by the publication of China PMI indices. The index of business activity in the service sector in March rose to 56, points against the forecast of growth to 51.9. In the industrial sector, the indicator was 51.9 against expectations of 51.3 points.

Additional support for the pair was provided by the data on employment in Germany. The indicator came out better than the forecast, showing a decrease in the number of unemployed by 8 thousand.

Tonight, attention should be paid to the speech of US President Joe Biden, during which the head of the White House will present a new program of economic assistance in the amount of $1.5-3 trillion.

GBP/USD. April 01, 2021 | British sterling is moderately recovering

The GBP/USD pair continues to trade in the range of 1.37-1.38. The current quote for the pair is 1.3775.

Sterling received support yesterday after the publication of UK GDP data, according to which the economy grew by 1.3% in the 4th quarter of last year. The actual numbers beat analysts' forecasts for a 1.0% q/q rise in GDP. By the end of 2020, the British economy fell by 7.4% y/y against the forecast of a failure of 7.8% y/y.

The pound received additional support today from the data on business activity in the manufacturing sector in Britain in March: the indicator rose to 58.9 against the forecast of growth to 57.9 points. In February, the index was fixed at 55.1 points.

On the side of buyers is also the corrective weakening of the US dollar against the background of fixing positions on the eve of Good Friday and on the eve of Friday's Non-farm Payrolls. Labor market statistics from ADP were released yesterday. According to the report, the number of new jobs in March increased by 517 thousand, which fell short of the forecast of 525 thousand.

The position of the British currency is also supported by the high rates of vaccination of the UK population and the related reduction in restrictive measures in the country.

Brent. April 02, 2021| Oil starts to grow after the OPEC+ meeting

The price of Brent oil started to rise after the announcement of the results of the meeting of the heads of the OPEC+ countries. At the moment, the quotes rose to the level of $65.03 per barrel, the current price of the asset is $64.70.

The alliance, contrary to expectations, decided to gradually increase oil production within three months, starting in May. In particular, the collective increase in the current production level in May will amount to 350 thousand barrels per day, in June – 350 thousand barrels per day, and in July production will grow by 450 thousand barrels per day. Thus, the OPEC+ countries will increase production by more than 1 million barrels in three months.

Saudi Arabia may also cut some of its previously voluntarily assumed additional production limit of 1 million barrels per day. It is noted that the majority of OPEC+ members initially supported the extension of the existing cuts, but the general sentiment changed after Saudi Arabia (the actual leader of OPEC) offered to increase production.

April 05 | EUR / USD technical analysis: H4 chart, Pivot levels

The euro / dollar pair opened today directly above the weekly pivot level, then after a small upward wave broke it from top to bottom, testing the DS1 resistance, turned sharply and moved to growth.

Now buyers of EUR / USD are testing the DR1 level, if successful, one can expect further growth to the 1.1800 level, to the DR2 and WR1 lines, to the area of ​​weekly highs.

When planning new deals, do not forget that trades today are held in small volumes and unexpected bursts of volatility and false breakouts of levels are possible.

Daily Pivot - 1.1765;
Daily Resistance 1 - 1.1782, DR2 - 1.1802, DR3 - 1.1819;
Daily Support 1 - 1.1744, DS2 - 1.1727, DS3 - 1.1707.

Weekly Pivot - 1.1752;
Weekly Resistance 1 - 1.1802, WR2 - 1.1842, WR3 - 1.1891;
Weekly Support 1 - 1.1712, WS2 - 1.1663, WS3 - 1.1622.

April 06 | USD / JPY technical analysis: H4 chart, Pivot levels

The pair US dollar against the Japanese yen started today trading under the daily and weekly pivot levels, then crossed them from the bottom up, but then turned around and moved to a decline.

The price of USD / JPY rewritten the low since March 29 at 109.666, having tested the DS1 and WS1 levels.

The pair is decreasing due to the general weakening of the American currency amid rising yields on government securities and US stock markets.

Daily Pivot - 110.289;
Daily Resistance 1 - 110.621, DR2 - 111.078, DR3 - 111.410;
Daily Support 1 - 109.832, DS2 - 109.500, DS3 - 109.043.

Weekly Pivot - 110.324;
Weekly Resistance 1 - 111.278, WR2 - 111.915, WR3 - 112.869;
Weekly Support 1 - 109.687, WS2 - 108.733, WS3 - 108.096.