Forecast for Q4'16 - levels for US Dollar Index - page 2

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Sergey Golubev, 2016.11.28 15:30

Intra-Day Fundamentals - EUR/USD, USD/CNH and US Dollar Index: ECB President Draghi Speech

2016-11-28 14:00 GMT | [EUR - ECB President Draghi Speaks]

[EUR - ECB President Draghi Speaks] = Speech about the European Central Bank's perspective on economic and monetary developments and the consequences of the Brexit before the European Parliament's Economic Committee, in Brussels.

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From official release:

  • "It is, in fact, essential to further strengthen and develop the Single Market. In the area of financial services we have made significant progress. The Single Market for financial services is now supported by the Single Rulebook for banks and by common supervisory institutions. Within the euro area we went further with the banking union. As I have said, we are not at the end of this process. For instance, financial integration through a fully fledged Capital Markets Union could diversify financing sources for European companies. By fostering private risk-sharing, it can also contribute to a more resilient European economy."
  • "It is encouraging to see that recent opinion surveys show support for European integration increasing since the UK referendum, contrary to the expectations of many. At the same time, there are lessons to be learnt. The key lesson is that the European Union has to deliver on key objectives from the citizens’ perspective if it is to rekindle trust in the European project. And to address the widespread feelings of insecurity, including economic insecurity, the European project needs strong economic foundations. For the euro area economy, this means strengthening the recovery, preserving financial stability and addressing the remaining vulnerabilities of Economic and Monetary Union." 

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EUR/USD M5: 14 pips range price movement by ECB President Draghi Speech news events


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USD/CNH M5: 29 pips range price movement by ECB President Draghi Speech news events


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US Dollar Index M5: range price movement by ECB President Draghi Speech news events


 

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Sergey Golubev, 2016.12.02 08:35

Dollar Index Intra-Day Technicals: correction within the bullish (based on the article)

H4 price is located above 100 SMA/200 SMA in the bullish area of the chart for the secondary correction to be continuing.

"Monday’s (11/14) close settled above channel resistance, indicating potential for upside acceleration (could be a ‘blow-off’). The importance of the break through resistance is accentuated by the fact that channel resistance (former now) was support earlier this week (on 11/17 dip). DXY hasn’t disappointed, having traded through the 2015 highs. 99.83 (former support), along with former channel resistance, should be watched for support."

 

The price is breaking 100.76 support level to below for the correction to be continuing with 100.65 nearest target.


 

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Sergey Golubev, 2016.12.17 13:41

Weekly Outlook: 2016, December 18 - December 25 (based on the article)


The dollar soared, in particular against the euro and the yen, as the Fed introduced its hawkish hike. A rate decision from Japan, GDP data from New Zealand, Canada and the US, as well as durable goods orders, stand out in the week leading to Christmas.

  1. German Ifo Business Climate: Monday, 9:00. Economists expect both the Brexit vote and Trump’s election will take their toll on the economy at a later stage. German business German business sentiment is expected to climb to 110.7 this month.
  2. Japan rate decision: Tuesday. The bank expects to reach its inflation target only at 2018.
  3. US Crude Oil Inventories: Wednesday, 15:30.
  4. New Zealand GDP: Wednesday, 21:45. New Zealand’s growth rate for the third quarter is estimated at 0.8%.
  5. US Durable Goods Orders: Thursday, 13:30. Economists expect core orders to climb 0.2% this time.
  6. US GDP data: Thursday, 13:30. US third quarter GDP is estimated to reach 3.3%.
  7. US Unemployment claims: Thursday, 13:30. New jobless claims are expected to reach 255,000 this week.
  8. Canadian GDP data: Friday, 13:30. Canadian GDP is expected to gain 0.1% in September.

 

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Sergey Golubev, 2016.12.18 11:58

Weekly Fundamental Forecast for Dollar Index (based on the article)


Dollar Index - "Having had the benefit of the weekend to cool off, investors’ thinking may well evolve in this direction. The emergence of this narrative on the eve of the year-end liquidity drain and with many benchmark assets pushed to meaningful extremes may trigger a round of market-wide profit-taking that sinks the greenback."


 

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Sergey Golubev, 2016.12.24 05:30

What can we expect in 2017? Interview with FXStreet (based on the article)

What emerging trends or issues should traders prepare for in 2017?

"The easy answer is growing impact from politics: Trump’s first year in office, as well as elections in France and later Germany, will keep us busy. This makes central bankers somewhat less important than they used to be. They will no longer be “the only game in town” but will not disappear in the shadows either. In Europe, some fiscal stimulus could replace austerity on an election year and in line with other countries. Britain could also join in. This could be the year when we talk about “inflation lifting its ugly head” more often than worries about deflation which have dominated beforehand. Inflation could come from China rather than from the US."

 

Which will be the best and worst performing currencies in 2017 and why? 

"The US dollar could reverse its gains as the dust settles in after Trump’s inauguration. Like with many politicians, promises are meant to be broken and a Republican Congress is where the buck could stop. The pound could extend its falls as Brexit reality bites in, something that has not happened so far. The winners could be the euro, that may fall early in the year but recover on fiscal stimulus and more mainstream election results. Another winner could be the Australian dollar, which could enjoy Chinese efforts to maintain its growth."

 

Which under-the-radar currency pair do you expect to make a big move in 2017? 

"USD/CAD could make a big move to the upside due to two reasons. The first is oil prices unable to rise and this could weigh on the loonie. Another reason is a lack of US demand due to less stimulus. Both factors could trigger a rate cut. The BOC has already told us that the lower end for rates is -0.50%, a full percentage point under the current level. The Canadian dollar has scope for falls, something that may eventually help the Canadian economy, but not in 2017."

 

What will you be focused on next year? 

"I will be focused on politics and their impact on markets. Central bankers are still important but have somewhat less influence, and they are less exciting than the impact of politics on currencies. This is not limited to the elections but also to policy, which could certainly be on the move."


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