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The Analytical Overview of the Main Currency Pairs on 2021.03.22
On Monday, at the opening of the Asian session, a small gap was observed. European currencies declined slightly against the dollar due to a new round of tensions between the EU and the UK. The reason was the supply of the vaccine from AstraZeneca, which, according to the European Union, hadn’t been conducted in accordance with the contracts. In this light, the EU warned that vaccines and ingredients produced in European factories would be reserved for local supplies. Meanwhile, hopes for overseas vacations are fading further, and according to the UK minister, summer holidays overseas are "extremely unlikely" this year.
The Analytical Overview of the Main Currency Pairs on 2021.03.18
On Wednesday, the dollar index fell after Fed Chairman Jerome Powell said that there was no need to change monetary policy direction in conditions of rising government bond yields. The yield on 2-year US bonds fell to 0.13%. At the same time, the forecast for economic growth was raised. Inflation is expected to rise by 2.4%, the GDP by 6.4%. The unemployment rate will drop to 4.5% this year. The dollar index is still holding above the SMA 100 moving average on the daily chart, indicating an upward bias in the long term.
The Analytical Overview of the Main Currency Pairs on 2021.03.17
Quiet trading was observed on Tuesday amid expectations of the Fed meeting results. The dollar index rose slightly, but in the American session returned to the level of the day after the publication of the US retail trade report. According to statistics, total retail sales decreased by 3.0% in February, while the control group’s data decreased even more by 3.5%. However, these negative data were offset by the revision of the January indicators. In January, the retail volume amounted to 7.6%, while a month ago, the preliminary calculation showed 5.3%.
The Analytical Overview of the Main Currency Pairs on 2021.03.15
Quiet trading was observed on Friday. The dollar index rose slightly in light of positive data from the University of Michigan. The report has shown the highest growth in the consumer sentiment index since April last year. Also, manufacturing prices data was released. Manufacturing inflation rose 1% in February to 2.7%, allowing US Treasury yields to gain a foothold above 1.60%.
The Analytical Overview of the Main Currency Pairs on 2021.03.10
On Tuesday, in the absence of important macroeconomic news, the market showed calm trading. The dollar index fell slightly as part of the technical correction. Today in the American session, we can expect some surge in volatility in the light of the release of inflation data in the United States. As the market becomes more and more concerned about the need for strong stimulus from the Fed, the indicators of price pressure may cause a violent reaction in the foreign exchange market. In addition, a monetary policy decision by the Bank of Canada is expected, which may cause significant fluctuations in the Canadian currency.
The Analytical Overview of the Main Currency Pairs on 2021.03.05
The dollar index rose sharply on Thursday after Jerome Powell commented to the Wall Street Journal about the recent skyrocketing of government bond yields. At first glance, nothing important was said. He expressed concern about the dynamics of the development of financial conditions. But at the same time, he has warned that the Fed does not plan to put pressure on profitability, and the monetary regulator will be "patient". The market interpreted this as the end of the easing policy, as a result of which the dollar rose sharply, consolidating above the moving average on the daily chart.
The Analytical Overview of the Main Currency Pairs on 2021.03.03
On Tuesday, the dollar index failed to break the SMA 100 moving average on the daily chart. A pullback has taken place, as the market is in no hurry to fully reverse the direction before the ECB and Fed meetings. ECB members will meet next week to decide on monetary policy. Investors will be keeping a close eye on what Christine Lagarde has to say about the recent rise in bond yields. Their expectations can cause speculation in the market and unexpected bursts of volatility are possible during the week.
The Analytical Overview of the Main Currency Pairs on 2021.03.01
Friday has been the most volatile day since May last year. The dollar index rose by 0.68%. The main outsiders were commodity currencies amid a correction in the oil market. The dollar continues to rise in price in light of positive expectations on the labor market data and the departure of investors from risky assets. The stock market continues to decline as bond yields are rising. At the end of February, the leaders were the British Gilts, which gained almost 50 basis points up to 0.82%.
The Analytical Overview of the Main Currency Pairs on 2021.02.25
On Wednesday, there were short-term yet strong fluctuations amid technical problems at the Fed. Some payment systems stopped working, which caused concerns in the financial markets. The dollar was strengthening before the beginning of the American session. The functionality of the payment modules was restored, which returned the stock market to growth and the US dollar to decline. As a result, the greenback ended the day in the red. Moreover, the American currency has consolidated below the support levels, and the daily candlestick has shown “bearish engulfing”.
The Analytical Overview of the Main Currency Pairs on 2021.02.23
On Monday, the dollar index continued to decline, while the euro renewed its highs this month in light of high estimates of the ease of doing business in Germany. German companies were more optimistic about the growth in economic momentum. The IFO's estimate for the next six months rose from 91.5 in January to 94.2 in February, beating economists' forecasts. The Business Climate Index also rose as companies feel the current situation improves.
The Analytical Overview of the Main Currency Pairs on 2021.02.19
After surprisingly high retail sales data on Wednesday and the rise of the dollar, sentiment turned sharply on Thursday. The dollar came under pressure in light of another pessimistic labor market report. The number of initial jobless claims rose to a four-week high, suggesting no progress in hiring. In addition, the manufacturing index of the state of Philadelphia slowed, showing a significant drop in business activity. The latest news is in stark contrast to the New York Fed data and speaks of uneven economic recovery in the country.
The Analytical Overview of the Main Currency Pairs on 2021.02.17
On Tuesday, in the light of more positive NYES data, the dollar index bounced off the support level and continues to rise in the Asian session. The New York Manufacturing Index surprisingly accelerated growth at twice the expected rate, mainly driven by inflation. The Federal Reserve Bank of New York's general business conditions index rose from 3.5 to 12.1 a month earlier. An increasing number of companies in the state are reporting higher prices for raw materials, which forces them to set higher prices for their products.
The Analytical Overview of the Main Currency Pairs on 2021.02.15
On Friday, the rise in the dollar index was interrupted by the US consumer sentiment indicators. The sentiment index fell to 76.2 from 79 last month, according to data from the University of Michigan released on Friday. The average forecast was a slight improvement to 80.9, but it turned out weaker than even the most pessimistic estimates. Consumers expect the year inflation to be 3.3%, the highest since July 2014. In this light, the dollar index returned to the opening level, leaving a long shadow at the top on the daily chart.
The Analytical Overview of the Main Currency Pairs on 2021.02.11
On Wednesday, the dollar index remained almost unchanged, decreasing just by 2 points to 90.40. Inflation data reflected a lack of progress following stimulus measures. The baseline CPI showed zero growth in January, and in annual terms, the price growth slowed to 1.4%. Despite the unclear January figures, some investors still expect price pressures to leverage in the months ahead amid renewed stimulus from the US government. And an increase in the number of vaccinations allows weakening the quarantine measures, which stimulates consumer spending.
The Analytical Overview of the Main Currency Pairs on 2021.02.09
On Monday, the dollar continued to lose ground amid the disappointment of traders regarding data on the labor market and expectations of a new injection of money into the US economy. The corrective growth seems to be over. The dollar index bounced off the daily moving average SMA100 and is approaching the support level. Commodity markets, where prices have been rising for quite a long time, put additional pressure on the greenback.
The Analytical Overview of the Main Currency Pairs on 2021.03.19
On Thursday, the dollar index rose in light of falling stock indices and oil prices. The market overestimated the global economic recovery after starting new quarantine measures in France, causing oil to lose about 10% from March highs. Also, the high-level talks between the United States and China have led nowhere so far. So the trade war may resume after the change of the US president. Investors began to prepare for Black Friday after the Nasdaq 100 plummeted 3.1% and the S&P 500 lost 1.5%.
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The Analytical Overview of the Main Currency Pairs on 2021.03.16
Low volatility was observed on Monday due to the absence of an important news background. The dollar index continued to trade in Friday's range, holding above the moving averages on the daily chart. In the American session today, a slight increase in volatility can be expected after the publication of data on retail sales in the United States. The average median forecast indicates a decline in buying activity in February. But given the University of Michigan data, retail sales could be a pleasant surprise for traders.
The Analytical Overview of the Main Currency Pairs on 2021.03.11
On Wednesday, the main event of the day was the publication of the US inflation data. A report from the National Bureau of Statistics indicated that the core consumer price index, which excluded food and energy prices, rose by 0.1% from a month earlier. The annual index rose by only 1.3%, 0.1% less than expected. The general consumer price index rose by 0.4% month-on-month and 1.7% year-on-year. All numbers correspond to market expectations, against which the dollar index continued its corrective pullback.
The Analytical Overview of the Main Currency Pairs on 2021.03.09
On Monday, the dollar index continued its upward movement after the extremely positive Friday data on the labor market. The US economy added 379K jobs, well above the median average. Previous NFP numbers were revised upward to 166K. Over the two months, the average exceeded 200K, which is a bullish factor for the dollar. In addition, the unemployment rate fell by 0.1% to 6.2%, while the share of the economically active population remained unchanged.
The Analytical Overview of the Main Currency Pairs on 2021.03.04
On Wednesday, the dollar index rose slightly as the conflict between the EU and the UK resumed. The dispute escalated over trade with Northern Ireland, which effectively remained in the European bloc’s customs area according to the Brexit deal. The European Union said it would take legal action against the UK for violating the terms of the trade deal, as it unilaterally refused to follow customs rules for checking goods until October. In this light, the European currencies came under pressure against the dollar, but in the American session, the greenback itself underwent sales. Negative data from the US services sector from ISM slightly reduced the bullish pressure in the USD, and as a result, the foreign exchange market closed near the opening price.
The Analytical Overview of the Main Currency Pairs on 2021.03.02
On Monday, the market moved in different directions. European currencies continued to decline against the dollar despite positive manufacturing PMI data. Germany showed slightly faster growth from 60.6 to 60.7. In general, the indicator of European manufacturing activity was 57.9 while the preliminary estimate was 57.7. IHS Markit data failed to reverse the trend that had formed last week, as these figures were taken into account in the preliminary calculation. A similar index for the US from the ISM came out significantly higher: 60.8 against 58.7 a month earlier. However, the growth accelerated mainly due to high inflation in the sector.
The Analytical Overview of the Main Currency Pairs on 2021.02.26
The dollar rose sharply on Thursday amid positive data both on labor market and durable goods orders. The number of new jobless claims fell sharply by 111,000 in a week to 730K, according to the Labor Department. The monthly average fell to 807.75K from 828.25K. This gives positive expectations to the market ahead of the release of the NFP report, which will be published on Friday next week. Traders also positively evaluated the data from the Ministry of Commerce. The growth in the volume of orders for durable goods indicates a steady growth in GDP in the first quarter.
The Analytical Overview of the Main Currency Pairs on 2021.02.24
On Tuesday, the dollar index remained almost unchanged. It has been close to the minimum values since January 22. The foreign exchange market was trading in different directions. Almost all currencies were prone to decline against the dollar as part of the pullback. The British pound sterling was again an exception. Bulls in this currency have started betting on monetary tightening. It was provoked by statements by the Bank of England about a sharp rebound in the economy after the worst recession in the past 300 years and rising inflationary expectations, which increased after the Tuesday data claiming the growth of earnings.
The Analytical Overview of the Main Currency Pairs on 2021.02.22
On Friday, the dollar index continued to decline and stopped near the support level at 90.15. Preliminary PMI data for February had a positive impact on European currencies. Despite the expected slowdown, Germany's manufacturing sector has accelerated growth to 60.6, the IHS Markit says. The index for the Eurozone also showed an acceleration to 57.7. The UK services sector surged to 49.7. While the numbers indicate continued contraction, they are close to 50, giving positive expectations for next month. As a result, the euro returned to its February highs against the dollar, while the sterling set a new annual record at 1.4050.
The Analytical Overview of the Main Currency Pairs on 2021.02.18
The US retail sales surprisingly rose in January, well above economists' estimates, pushing the US dollar higher on Wednesday. According to the Commerce Department, total sales increased by 5.3% compared to a 1% decline in December. It has become the first monthly gain since September. In addition, industrial production continued to recover early this year. January production rose more-than-expected, although it remained 1.9% below pre-pandemic levels.
The Analytical Overview of the Main Currency Pairs on 2021.02.16
On Monday, in the absence of important macroeconomic data, the dollar index remained practically unchanged, falling by only 5 points. The commodity market continues to put pressure on the US currency. The rise in oil prices contributes to the growth of inflationary expectations. The yield on US 10-year bonds continues to rise. But the 2-year bonds remain at their previous lows, which negatively affects the USD.
The Analytical Overview of the Main Currency Pairs on 2021.02.12
On Thursday, with no important macroeconomic news, the foreign exchange market traded in a calm atmosphere, and the dollar index remained practically unchanged. The data on the initial jobless claims couldn’t surprise the market. The weekly growth still remains from 750,000 to 800,000. At the same time, the number of open vacancies in the labor market is growing, which gives investors hope for a quick economic recovery.
The Analytical Overview of the Main Currency Pairs on 2021.02.10
On Tuesday, the market followed the previous direction in the absence of a strong news background. The euro continues to rise against the dollar, although the growth of assets on the weekly balance sheet of the ECB has doubled. The data on the German trade balance, which has shown a slight acceleration of growth, partially supports the bulls. The US and Germany inflation data will be released today, but they can hardly change anything in the dynamics of the market since central banks do not see the opportunity to change interest rates in the foreseeable future.
FOREX MARKET DAILY FORECAST 2021.02.08
On Friday, the dollar index fell sharply after the labor market report showed surprisingly low numbers. The NFP indicator showed an increase of only 49,000 against the forecast of 105,000. The negative data was partially offset by a decrease in the unemployment rate to 6.3%. But the decline in unemployment is caused by a decline in the level of the economically active population. December data was revised downwards. The American economy lost 227,000 jobs a month earlier.
