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American Housing Inflation Stays on Track

A guest post written by DAR Wong

Currency Market Observations – 20 November 2017

Fundamental Outlook

The U.S. housing inflation increases and opens higher chance of rate hike in December. China maintains in growth track. Britain persists in showing good inflation in consumer and producer prices.

The U.S. producer prices grew 0.4 percent in October on monthly basis and made highest record in past 6 months. Consumer prices rose 0.1 percent while core prices grew 0.2 percent in October, both matching the forecast.

Another report on U.S. retail sales gained unexpectedly on automobile purchases at 0.2 percent while core retail sales rose 0.1 percent below consensus. Weekly jobless claims rose to 249,000 for the week ended 11 November and highest in past 5 weeks.

American industrial production rose for second consecutive month in October by 0.9 percent after 0.4 percent gains in September. Building permit increased in October by 1.30 million and above forecast. Likewise, housing starts jump to 1-year high in at 1.29 million.

China’s industrial production maintains good growth in October at 6.2 percent on year basis. Another report on fixed asset investment rose 7.3 percent in last month over 12 months.

Japan’s producer prices rose 3.4 percent in October from a year ago and shows best record in more than 3 years. Japan’s GDP for Q3 seasons rose 0.3 percent and misses forecast. Revised industrial production slid 1.0 percent in September.

German prelim GDP grew 0.8 percent in the Q3 seasons and best in 3-1/2 year record. Another report on ZEW sentiment shows 18.7 gains in this month and maintains steady growth.

In Eurozone, GDP for Q3 seasons matched forecast at 0.6 percent. Consumer prices rose 1.4 percent in October on annual basis and matched forecast.

U.K. consumer prices expanded 3.0 percent in October on year basis, misses the consensus but levels with previous month. Producer prices grew 1.0 percent and better than September. Retail price index also scaled to 5-year high at 4.0 percent gains.

British averaging earnings on quarterly basis ended September rose 2.2 percent and maintained good growth. Claimants for jobless benefits rose 1,100 in October and below forecast. Unemployment steadies at 4.3 percent. Retail sales grew 0.3 percent in October after slid at revised 0.7 percent in previous month.

USD/JPY traded lower last week as Dollar weakened. This week, we reckon the market will be supported at 111.30 region as bargain-hunting may arise. The trend should be constricted from 111.30 – 113.50 region for consolidation. Breaking beneath 111.30 support will probably test 110.50 as next support.

EUR/USD has been rattling around 1.1800 for many days and likely to fall in near future. Technically, we forecast the market is prone to fall at 1.1550 this week. Range is limited about 250 pips but risk control needs to be reinforced at 1.1850 in case of upward reversal.

GBP/USD has been trading in tight range with resistance pressing at 1.3250 area. This week, we foresee the trend is prone to fall at 1.3050 level as Dollar may recede. Breaking beneath this support area will possibly go lower at 1.2850 as our next target. Technical pattern is revealing bearish sign but seller needs to control risk against adversity.

Technical Forecast

USD/JPY has traded slightly in correction in small range. This week, the trend will stay strong if it could stand above 113.00. Range is expect to move from 113.00 – 114.50 region but piercing beneath 113.00 support will need to abandon the bullish view.

EUR/USD traded in sideways last week amid uncertain trend. This week, we reckon the trend will be resisted at 1.1700 – 1.1750 region in case of initial pull up. The prices are likely to fall after mid-week to 1.1450 bottoms. However, risk control is advised if it pierces above 1.1750 resistance.

GBP/USD is showing unclear directional trend as the Pound is still influenced by the BREXIT procedures that have yet to be ascertain. This week, we foresee the range will be supported at 1.3030 region while small recovery might be possible at 1.3300 target.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is a registered fund manager in Singapore with 26 years of global trading experiences. You may reach him at

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.


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