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UN Security Council Imposes New Sanction on North Korea

A guest post written by DAR Wong

Currency Market Observations – 26 December 2017

Fundamental Outlook

The U.S. home sales market soar and signals inflation amid rate hike last week. Korea Peninsula tension may rise very soon in New Year seasons as UN Security Council passes new sanction on North Korea. Eurozone’s inflation grows in steady pace.

The U.S. housing permits rose 1.3 million in November while the previous month has been revised higher to 1.32 million. Housing starts also went high at 1.30 million in the same month. Another report on current deficits improved by narrowing to USD101 billion in November that is lowest over 3 years.

The U.S. existing homes sales continues to soar higher in more than 8-year high after November grew 5.81 million cases. Orders for durable goods rose 1.3 percent in November while core orders, excluding transport equipment, dipped 0.1 percent for the first time in 7 months.

Consumer spending grew 0.6 percent in higher than 0.3 percent in October. Another report on new home sales rose to 10-year high at 733,000 in November.

UN Security Council passes new sanction on North Korea by capping the oil support at 500,000 barrels per year and repatriation of overseas workers within 24 months.

German Ifo business climate rises to 117.2 in December and stays firm on growth. Eurozone consumer prices rise 1.5 percent in December on year basis. Excluding food and energy, core prices grew 0.9 percent from last year.

U.K. current deficits shrank GBP22.8 billion in November and narrowed down from previous month. Another report on GDP in Q3 seasons grew 0.4 percent.

Yemen continues to struggle in civil war between the political fight among Saudi and Iran by supporting their favorable government. Analysts reckon the feud has entered into new unpredictable region.

Technical Forecast

USD/JPY traded in mild recovery last week amid range bound region. This week, we predict the trend will move from 111.50 – 113.50 without much changes. Market activity will slowdown in coming week due to year-end seasons.

EUR/USD recovered in small rise last week but capped under 1.1900 level. This week, we foresee the trend will trade sideways and prone to decline slightly. Range might move from 1.1750 – 1.1900 in tight activity. Breaking above 1.1900 needs risk control.

GBP/USD has narrowed in price formation while the trend settled at 1.3360 region. Technically, we have identified the impending market parameters from 1.3300 – 1.3400 and moving beyond any of these extremes will go into a new directional trend. Technically, we reckon the trend may drive lower at 1.3100 in January.

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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