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Trump Winds Up the Advisory Council

A guest post written by DAR Wong

Currency Market Observations – 21 August 2017

Fundamental Outlook

The U.S. President Trump closes the advisory council after leaders left one after another, especially after the his biased comments on supremacist rally in Charlottesville. Eurozone’s GDP matches forecast at 0.6 percent. Terrorist attack claimed by Islamic State hits Barcelona in Spain.

The U.S. housing permit grew 1.22 million while housing starts rose 1.16 million in July, both under consensus. Jobless claims for the week ended 12 August was 232,000 and lower than previous week 244,000.

American industrial production including utilities and mines gained 0.2 percent in July and missed forecast. Another report on capacity utility in July was steady at 76.7 percent in-line with forecast.

Following the comments from President Trump on rally in Charlottesville on last weekend, more business leaders are leaving the council. Trump has announced on Wednesday that he would close the Manufacturing Council and the Strategy & Policy Forum.

China’s industrial production grew 6.4 percent in July on year basis and missed the forecast. Fixed asset investment also rose 8.3 percent below expectation and lowest in past 6 months.

Japan’s prelim GDP for Q2 grew 1.0 percent and below target. Revised manufacturing production rose 2.2 percent in June and better than expectation.

German prelim GDP for Q2 rose 0.6 percent but fell short of expectation, after Q1 growth was revised at 0.7 percent. Flash GDP in Eurozone grew 0.6 percent in Q2 ended June and matched forecast.

Final consumer prices among 19 nations in Eurozone grew 1.3 percent on year basis and matched forecast. Trade surplus charted highest in past 3 months at EUR22.3 billion.

Terrorist attack broke out in Barcelona on 17 August when a van rammed into the crowd and bystanders in the city. At least 14 were killed and 130 injured. Islamic State has claimed responsibility for the act.

U.K. consumer prices rose 2.6 percent in July on year basis while producer prices input on monthly basis remain flat in July. Another report on retail price index gained 3.6 percent in July on year and matched the forecast.

British average earnings on 3 month-period ended June gained 2.1 percent and better than previous month. Claimants for jobless benefits reduced by 4,200 in July and better than expectation. Unemployment rate stayed healthy and lowered to 4.4 percent as of June.

Technical Forecast

USD/JPY has exhibited the support at 108.80 – 109.00 region last week. Trend might swing from 109.00 – 111.00 this week in mixed sentiment. However, beware of breaking beneath 108.80 that could drive down to 107.50 area.

EUR/USD is consolidating in tight range from 1.1680 – 1.1850 region. This week. We reckon there would be a good opportunity to pick a short position upon pull-up pattern. Risk control is advised in case of piercing above 1.1900 level. Market might be falling in another week’s time.

GBP/USD is seen supported at 1.2850 region while confluent with EMA200 line. This week, we predict there could be sideways swing from 1.2800 – 1.2950 range until the some updated news lead the market headway. Pound and Dollar are both on weakening trend that creates a taut effect in the 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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