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Kim-Moon Meet in for Historic Moment

A guest post written by DAR Wong

Currency Market Observations – 30 April 2018

Fundamental Outlook

The US home sale continue to grow and signal inflation among property demand. Leaders for North and South Korea meet to talk peace and attracts global media focus. European Central Bank stays unchanged in monetary policy.

The US existing home sale rose 5.60 million and grew in second consecutive month. . New homes sale continued to grow in March at 694,000 and best record in 4 months.

The US Conference Board of consumer confidence rises to 128.7 in April and higher than March. Weekly Crude storage increased 2.2 million barrels ended 21 April and put lid on demand rise.

The US durable goods rose 2.6 percent in March. Excluding transport equipment, core durable goods stayed flat and below forecast. Another separate report on GDP for Q1 seasons grew 2.3 percent and above forecast, after the previous quarter was revised to 2.9 percent gains.

On Friday, the leaders of North and South Korea met for the first time in history. Kim is the first North Korean to cross in South Korea territory since 1953.

German ifo business climate measuring confidence from manufacturers, wholesaler to retailers unexpectedly declines to 102.1 in April and lowest since December 2012. Markit reports that Eurozone’s manufacturing index rises to 56.0 reading in April while services index grew 55.0, both in-line with forecast.

European Central Bank stays unchanged in monetary policy but President Draghi reassures of ultra-easy monetary policy. Analysts are more concerned on the tapering schedule of stimulus as this could be the beginning of interest rise.

UK public sector net borrowing dropped GBP300 million in March and better than forecast. British GDP rose 0.1 percent in Q1 seasons and fell short of expectation.

Technical Forecast

USD/JPY fizzled out at 109.50 area last week and closed lower at 109.00 level. This week, the market may reverse for correction and head down to 108.00 region. Sideways trend is expected in mixed sentiment while Dollar is slightly firm but not robust.

EUR/USD has been supported at 1.2050 region as Dollar rises. This week, we foresee the support will be firm at 1.2000 region in confluence with EMA200 line. Market is likely to bounce into correction while contain from 1.2000 – 1.2250 region.

GBP/USD traded lower last week and supported at 1.3750 level. This week, we forecast the trend may follow Euro into sideways correction with demand rising from 1.3700 area. Topside resistance will emerge at 1.4000 in case of recovery and overall trend may be trapped in mixed sentiment.

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 dar@pwforex.com

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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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