Foreign exchange weekly comment: The dollar is extremely sad and has nothing to do with the war in the Middle East.
In the week of May 7-11, the US dollar index and the US dollar fell against the yen, and the euro rebounded against the US dollar. The moderate US CPI triggered the dollar's long-term profit; the Bank of England's pigeons shook, causing the pound's gains to die. Long and short saws in the 200-day moving average, the market outlook or back to the M neckline; the United States exited the Iranian nuclear agreement, the Middle East war rekindled, but the market is indifferent, the US and Japan return material as a technical amendment, short-term prospects neutral.
★Lee very sad, gentle CPI triggers the dollar long-term profit
The US dollar index hit a downward trend this week, trading in the 92.35-93.42 range, and weekly gains of 0.01% to 92.84; the euro against the US dollar was first suppressed and traded in the 1.1890-1.1968 range; there was no significant bearish fundamentals this week. News, but due to the accumulation of a large number of long positions in the previous period, the US dollar is in an overbought condition, and the mild CPI data triggered a long position to close the position, and the US dollar index was at a high level during the year.
According to data released by the US Department of Labor on Thursday (May 10), the US core CPI rate in April was lower than expected, which lowered the possibility that the inflation rate will be significantly higher than the Fed's target in the next few months.
Analysts commented that the US April CPI data said that the US CPI monthly rate rose less than expected in April, dragged down by the decline in car and air ticket prices, which reduced the possibility that the inflation rate will be significantly higher than the Fed's target in the next few months.
The price of used cars is the biggest monthly decline since 2009, and the price of air tickets has fallen the most in four years. Although the labor market is tight and the tariffs of enterprises are increasing despite the high freight rates, inflation will not make the Fed feel difficult.
However, it is not so much that poor inflation data has weighed on the US dollar. It is better to say that a large number of long-term dollar profitable stocks accumulated in the near future will take advantage of CPI data to close the position. According to the CFTC data, as of May 8, the net short position of the US dollar fell to a minimum of 549 lots during the year, indicating that there has been a large number of long-term buys in the near future, but the speculative bulls objectively have the need to close the position.
Nomura Securities pointed out that the US dollar index has climbed all the way in recent weeks and has appreciated by nearly 5% since mid-April; this rebound rate and size have made the US dollar overbought against many currencies (including major currencies and emerging market currencies).
At present, the US dollar against the emerging market currency and developed market currency, about 70% of the RSI indicator is above 70, is overbought; in the past few years only three times this situation, for November 2016, May 2016 and 2015 March; each time will trigger a dollar correction, falling by about 4-6% in the next 2-3 months; when the RSI is above 70, suggesting that the dollar is overbought or overvalued, it faces a reversal risk.
Based on historical data, Nomura Securities said that the dollar bulls are now approaching the limit; whether the dollar's gains are stagnant, or a moderate retracement, or a major adjustment of more than 5%, may depend on external factors; Sino-US trade negotiations, Fed interest rate expectations And the direction of the euro against the dollar may determine the next direction of the dollar.
★British silver pigeons slam the pound counterattack, but stick to the 200-day moving average or back to the M neckline
GBP/USD oscillated sideways between 1.3458 and 1.3617 this week;
The UK stabilized interest rates as expected on Monday, but the resolution statement and the Carney press conference were unexpectedly offensive, which killed the pound against the dollar's long-term counter-offensive; the pound once hit a new low since the beginning of the year, but the exchange rate subsequently narrowed, still entrenched 200 Near the daily average, it indicates that the support is extremely stable, and the exchange rate needs to completely fall below the moving average before it is expected to further decline. Otherwise, it is expected to enter the adjustment market.
The Bank of England kept its benchmark interest rate unchanged at 0.5% in a 7-2 ratio, and McCafferty and Sanders supported a rate hike. In the monetary policy statement, the Bank of England cut its GDP and inflation expectations, and all members agreed that further interest rate hikes in the future may be gradual and limited.
The Bank of England cut its GDP growth forecast for 2018 to 1.4% (previous value was 1.8%); lowered its GDP growth forecast for 2019 to 1.7% (previous value was 1.8%); lowered its 2020 GDP growth forecast to 1.7 % (previous value is 1.8%).
In addition, the Bank of England lowered its inflation forecast for the fourth quarter of 2018 to 2.2% (previous value was 2.4%); lowered its inflation forecast for the fourth quarter of 2019 to 2.1% (previous value was 2.2%); Quarterly inflation expectations are lowered to 2.0% (previously 2.1%).
The Bank of England said that the decline in inflation in the first quarter of 2018 showed that the pound-driven inflation factor quickly disappeared, and the inflation rate is expected to cool down more quickly, returning to the 2% target within two years.
The statement also said that most members hope to wait until the next few months of data to raise interest rates. All members agreed that further interest rate hikes in the future may be gradual and limited, and only limited tightening is needed in the next few years. The current market interest rate path implies that interest rates may be raised three times in the next three years, each time raising interest rates by 25 basis points. This is consistent with the February path.
Bank of England Governor Carney said that the UK economy and inflation were weaker, the UK economy did not meet the conditions for raising interest rates, and the pound fell to more than 100 points, but then he said that the momentum of economic growth will restart and trade And the job market has given positive recognition.
Scotiabank believes that the short-term outlook for the pound against the dollar is still neutral, as it is still under pressure at 1.3715, after falling below the neckline support at that point, confirming the formation of the double top pattern; Market interest rates show that the Bank of England's chances of raising interest rates by 25 points in August rose slightly, thus supporting the pound's rebound; however, the "British Brexit" policy still poses risks to the exchange rate, and the outlook for the pound may still face challenges in the medium and long term.
On the daily chart, the pound has formed a M-shaped pattern against the US dollar. The Bollinger Band has already opened downwards, but the RSI is oversold and long and short is competing near the 200-day moving average;
Because the exchange rate is oversold, if the short position can not completely break the 200-day moving average, the exchange rate may enter the adjustment period, and may test back the resistance of the neckline near 1.3711;
If the exchange rate enters the adjustment period, it tends to have a stop loss near the 1.3711 neckline;
The lower support is located at the 1.35 mark;
The upper resistance is at the 1.36 mark and the 1.3711 neck line;
★The United States withdraws from the Iranian nuclear agreement in the Middle East. The market is calm and difficult to press on the US and Japan.
USD/JPY fell back this week, trading in the 108.75-110.01 range, but still closed up 0.28% on the weekend, at 109.37; as Trump announced the withdrawal of the nuclear deal and the resurgence of the Middle East, the geopolitical crisis once again attracted the world Eyes; However, what is strange is that the market does not seem to worry much about this, the risk aversion does not rise and fall; the fall of the dollar against the yen is mainly due to the long-term retreat, the short-term trend is neutral.
Trump announced his decision on the Iranian nuclear agreement at 2:00 Beijing time on Wednesday (May 9). Trump has been threatening to withdraw from the nuclear deal signed in 2015, and he hopes the UK, France and Germany will strengthen the terms of the agreement.
What worries the market is that the deputy commander of the Iranian Revolutionary Guard has said that Iran is prepared to deal with the worst situation without fear of US sanctions or military attacks. This may indicate that if Iran’s nuclear deal collapses, Iran will be subject to sanctions and it will take retaliatory measures.
On the third day after US President Trump announced his withdrawal from the Iranian nuclear program agreement, Israel violently attacked Iranian targets in Syria and retaliated against Iranian rocket attacks. Russia, Germany and France expressed concern over the escalation of tensions and called for restraint between Iran and Israel. .
However, although the situation in the Middle East is suddenly tense, the market seems to be eccentric. The VIX panic index did not rise and fall this week, falling to a low of 13.22 since February. The fall of the dollar against the yen was mainly due to the dollar's profitability. The result of closing the position is only due to the profit.
UOB believes that although the USD/JPY is retreating from a high level, in the next 1-3 weeks, the USD may still test the resistance at 110.45 / 50 (before a more sustained retracement may occur), the currency pair only breaks through 109 shows that the current moderate upward pressure has eased.
Huitong Netcom believes that on the daily chart, MACD is dead, and RSI is oversold after buying, indicating that the exchange rate is facing correction pressure, and the 200-day moving average has obviously suppressed the exchange rate, but the exchange rate needs to fall below the May 4 low of 108.64. Forming a bearish M-head pattern, and the 100-day moving average also supports the exchange rate, and the short-term trend is neutral.
The lower support is located at the 109 mark, 109.64, and 100-day moving average; the upper resistance is at the 110 mark and the 200-day moving average at 110.13.
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In the week of May 7-11, the US dollar index and the US dollar fell against the yen, and the euro rebounded against the US dollar. The moderate US CPI triggered the dollar's long-term profit; the Bank of England's pigeons shook, causing the pound's gains to die. Long and short saws in the 200-day moving average, the market outlook or back to the M neckline; the United States exited the Iranian nuclear agreement, the Middle East war rekindled, but the market is indifferent, the US and Japan return material as a technical amendment, short-term prospects neutral.
★Lee very sad, gentle CPI triggers the dollar long-term profit
The US dollar index hit a downward trend this week, trading in the 92.35-93.42 range, and weekly gains of 0.01% to 92.84; the euro against the US dollar was first suppressed and traded in the 1.1890-1.1968 range; there was no significant bearish fundamentals this week. News, but due to the accumulation of a large number of long positions in the previous period, the US dollar is in an overbought condition, and the mild CPI data triggered a long position to close the position, and the US dollar index was at a high level during the year.
According to data released by the US Department of Labor on Thursday (May 10), the US core CPI rate in April was lower than expected, which lowered the possibility that the inflation rate will be significantly higher than the Fed's target in the next few months.
Analysts commented that the US April CPI data said that the US CPI monthly rate rose less than expected in April, dragged down by the decline in car and air ticket prices, which reduced the possibility that the inflation rate will be significantly higher than the Fed's target in the next few months.
The price of used cars is the biggest monthly decline since 2009, and the price of air tickets has fallen the most in four years. Although the labor market is tight and the tariffs of enterprises are increasing despite the high freight rates, inflation will not make the Fed feel difficult.
However, it is not so much that poor inflation data has weighed on the US dollar. It is better to say that a large number of long-term dollar profitable stocks accumulated in the near future will take advantage of CPI data to close the position. According to the CFTC data, as of May 8, the net short position of the US dollar fell to a minimum of 549 lots during the year, indicating that there has been a large number of long-term buys in the near future, but the speculative bulls objectively have the need to close the position.
Nomura Securities pointed out that the US dollar index has climbed all the way in recent weeks and has appreciated by nearly 5% since mid-April; this rebound rate and size have made the US dollar overbought against many currencies (including major currencies and emerging market currencies).
At present, the US dollar against the emerging market currency and developed market currency, about 70% of the RSI indicator is above 70, is overbought; in the past few years only three times this situation, for November 2016, May 2016 and 2015 March; each time will trigger a dollar correction, falling by about 4-6% in the next 2-3 months; when the RSI is above 70, suggesting that the dollar is overbought or overvalued, it faces a reversal risk.
Based on historical data, Nomura Securities said that the dollar bulls are now approaching the limit; whether the dollar's gains are stagnant, or a moderate retracement, or a major adjustment of more than 5%, may depend on external factors; Sino-US trade negotiations, Fed interest rate expectations And the direction of the euro against the dollar may determine the next direction of the dollar.★British silver pigeons slam the pound counterattack, but stick to the 200-day moving average or back to the M neckline
GBP/USD oscillated sideways between 1.3458 and 1.3617 this week;
The UK stabilized interest rates as expected on Monday, but the resolution statement and the Carney press conference were unexpectedly offensive, which killed the pound against the dollar's long-term counter-offensive; the pound once hit a new low since the beginning of the year, but the exchange rate subsequently narrowed, still entrenched 200 Near the daily average, it indicates that the support is extremely stable, and the exchange rate needs to completely fall below the moving average before it is expected to further decline. Otherwise, it is expected to enter the adjustment market.
The Bank of England kept its benchmark interest rate unchanged at 0.5% in a 7-2 ratio, and McCafferty and Sanders supported a rate hike. In the monetary policy statement, the Bank of England cut its GDP and inflation expectations, and all members agreed that further interest rate hikes in the future may be gradual and limited.
The Bank of England cut its GDP growth forecast for 2018 to 1.4% (previous value was 1.8%); lowered its GDP growth forecast for 2019 to 1.7% (previous value was 1.8%); lowered its 2020 GDP growth forecast to 1.7 % (previous value is 1.8%).
In addition, the Bank of England lowered its inflation forecast for the fourth quarter of 2018 to 2.2% (previous value was 2.4%); lowered its inflation forecast for the fourth quarter of 2019 to 2.1% (previous value was 2.2%); Quarterly inflation expectations are lowered to 2.0% (previously 2.1%).
The Bank of England said that the decline in inflation in the first quarter of 2018 showed that the pound-driven inflation factor quickly disappeared, and the inflation rate is expected to cool down more quickly, returning to the 2% target within two years.
The statement also said that most members hope to wait until the next few months of data to raise interest rates. All members agreed that further interest rate hikes in the future may be gradual and limited, and only limited tightening is needed in the next few years. The current market interest rate path implies that interest rates may be raised three times in the next three years, each time raising interest rates by 25 basis points. This is consistent with the February path.
Bank of England Governor Carney said that the UK economy and inflation were weaker, the UK economy did not meet the conditions for raising interest rates, and the pound fell to more than 100 points, but then he said that the momentum of economic growth will restart and trade And the job market has given positive recognition.
Scotiabank believes that the short-term outlook for the pound against the dollar is still neutral, as it is still under pressure at 1.3715, after falling below the neckline support at that point, confirming the formation of the double top pattern; Market interest rates show that the Bank of England's chances of raising interest rates by 25 points in August rose slightly, thus supporting the pound's rebound; however, the "British Brexit" policy still poses risks to the exchange rate, and the outlook for the pound may still face challenges in the medium and long term.
On the daily chart, the pound has formed a M-shaped pattern against the US dollar. The Bollinger Band has already opened downwards, but the RSI is oversold and long and short is competing near the 200-day moving average;
Because the exchange rate is oversold, if the short position can not completely break the 200-day moving average, the exchange rate may enter the adjustment period, and may test back the resistance of the neckline near 1.3711;
If the exchange rate enters the adjustment period, it tends to have a stop loss near the 1.3711 neckline;
The lower support is located at the 1.35 mark;
The upper resistance is at the 1.36 mark and the 1.3711 neck line;
★The United States withdraws from the Iranian nuclear agreement in the Middle East. The market is calm and difficult to press on the US and Japan.
USD/JPY fell back this week, trading in the 108.75-110.01 range, but still closed up 0.28% on the weekend, at 109.37; as Trump announced the withdrawal of the nuclear deal and the resurgence of the Middle East, the geopolitical crisis once again attracted the world Eyes; However, what is strange is that the market does not seem to worry much about this, the risk aversion does not rise and fall; the fall of the dollar against the yen is mainly due to the long-term retreat, the short-term trend is neutral.
Trump announced his decision on the Iranian nuclear agreement at 2:00 Beijing time on Wednesday (May 9). Trump has been threatening to withdraw from the nuclear deal signed in 2015, and he hopes the UK, France and Germany will strengthen the terms of the agreement.
What worries the market is that the deputy commander of the Iranian Revolutionary Guard has said that Iran is prepared to deal with the worst situation without fear of US sanctions or military attacks. This may indicate that if Iran’s nuclear deal collapses, Iran will be subject to sanctions and it will take retaliatory measures.
On the third day after US President Trump announced his withdrawal from the Iranian nuclear program agreement, Israel violently attacked Iranian targets in Syria and retaliated against Iranian rocket attacks. Russia, Germany and France expressed concern over the escalation of tensions and called for restraint between Iran and Israel. .
However, although the situation in the Middle East is suddenly tense, the market seems to be eccentric. The VIX panic index did not rise and fall this week, falling to a low of 13.22 since February. The fall of the dollar against the yen was mainly due to the dollar's profitability. The result of closing the position is only due to the profit.UOB believes that although the USD/JPY is retreating from a high level, in the next 1-3 weeks, the USD may still test the resistance at 110.45 / 50 (before a more sustained retracement may occur), the currency pair only breaks through 109 shows that the current moderate upward pressure has eased.
Huitong Netcom believes that on the daily chart, MACD is dead, and RSI is oversold after buying, indicating that the exchange rate is facing correction pressure, and the 200-day moving average has obviously suppressed the exchange rate, but the exchange rate needs to fall below the May 4 low of 108.64. Forming a bearish M-head pattern, and the 100-day moving average also supports the exchange rate, and the short-term trend is neutral.The lower support is located at the 109 mark, 109.64, and 100-day moving average; the upper resistance is at the 110 mark and the 200-day moving average at 110.13.
(Editor: Wang Zhiqiang HF013)
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