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Forex Weekly Outlook May 23 – 27

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Images Of Chinese Yuan Banknotes

The various economic data released last week from the U.S. shows an improved economy, especially the consumer price index that rose 0.4 percent in April and 1.6 percent year-on-year. While this is a good news, it is yet uncertain if it’s enough for Fed to increase borrowing cost when job creation is still struggling and gasoline cost rising with oil prices. But with the U.S. dollar renew demands, I have narrowed down pairs I will be looking at this week to EURUSD, GBPUSD and AUDUSD.

EURUSD

Currently, the euro-area is struggling with the possibility of Britain exit from the European Union. This couple with weak manufacturing sector amid global slowdown has created too many uncertainties around the single currency, and as the June referendum draws closer demand is expected to drop as most investors will like to know the out-come of the June vote before making a long-term commitment.

EURUSDWeekly

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Now to the chart, three weeks ago, eurusd weekly candlestick closed as rejection after reaching 1.1615, and failed again two weeks ago to sustain 1.1338 support level established since January 18th, hence, reaching 1.1178 price level. Its lowest price level in seven weeks. As long as new resistance level 1.1338 holds, I am bearish on EurUSd with 1.0925 as target.

GBPUSD

The pound jumped the most this year last week after polls showed brexit risks receding, but quickly lost half of its 331 pips gain immediately the officials of the Bank of England said even with positive outcome in June referendum. U.K. will still require additional stimulus to aid its economy.

GBPUSDDaily

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Another reason why I think this is a good set up is the chart. The last candlestick of last week, Friday’s candlestick closed bearish, giving us evening star pattern after Thursday’s spinning top rejection. Though its a volatile pair that requires certain monitoring, but trading it against a strong US dollar should give us around 150 pips from 1.4500 with 1.4350 as the target, provided price remains below 1.4500 price level.

AUDUSD

The Aussie dollar is worth looking into this week for several reasons, one its economic data failed to support its gains so far this year after inflation fell below the Reserve Bank of Australia target in the first quarter of the year, prompting Governor Glenn Stevens and its monetary committee to cut interest rates by 25 basis points. While the market thinks another 25 basis points cut will be needed to achieve the central bank target. The central bank has stepped forward to maintain its current outlook by leaving interest rates unchanged. A decision that creates more doubt about the state of the economy, and with Goldman Sachs Group Inc. kick-starting a process to sell $9 billion of its Australian asset arm. We can only expect more downfall of the currency in the days to come.

AUDUSDWeekly

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The weekly time-frame confirmed rejection of higher prices with last week close, as long as price remain below 0.7379 I am bearish on Audusd but to minimize risk and maximize profit, it is advisable to wait for Reserve Bank of Australia Governor Glenn Stevens Speech due on Tuesday for a better entry while targeting 0.7092.

Last Week Recap

NUDUSD dropped 138 pips last week from the 0.6847 entry level, but has gained back 73 pips since last week Thursday even with negative Global Dairy Trade and Producer Price report, this week New Zealand trade balance report and annual Budget release are due. Hence, I will be looking to sell at a much better price level for 0.6771 that seems to be our new support, and then 0.6609 as explained last week. Provided 0.6847 resistance level still holds.

NZDUSDDaily

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USDCAD

Last week target was hit at 1.3142, but this week a sustainable close above 1.3142 resistance level is needed to confirm the continuation of trend for another 240 pips with 1.3382 as the target.

USDCADDaily

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GBPJPY

Fell short of 161.71 target by 9 pips after gaining 597 pips. This is week, I will stay aside while monitoring price actions and fundamental behind the pair as BOJ comments and England numerous issues from brexit to economic data could trigger volatility.

GBPJPYDaily

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A wonderful week to us all, and please drop comments.

 

 

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Naira

CBN Will Redesign Naira Notes Every Five to Eight Years; Say Emefiele

The central bank will henceforth redesign the nation’s legal tender every five to eight years

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New Naira Notes

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has said the bank will henceforth redesign the nation’s legal tender every five to eight years.

The apex bank governor revealed at the unveiling of the new naira notes on Tuesday. 

Godwin Emefiele explained that the naira redesign is in line with global best practice noting that the naira needed to be redesigned and re-issued every five to eight years.

According to the CBN governor, previous administrations lacked the political will to approve the redesign of the naira notes. Stating that it is regrettable that the naira has not been redesigned for the past 19 years. 

“In the past, I have to confess that attempts by the CBN to redesign and re-issue the naira notes have been resisted. It is only President Muhammadu Buhari that has exhibited the courage to do so,” the CBN governor stated. 

Emefiele added that going forward, naira notes will be redesigned at intervals to address some peculiar issues. 

 “After today, the CBN will begin to redesign and reissue the naira every five to eight years,” he said. 

Investors King had earlier reported that President Muhammadu Buhari unveiled the redesigned naira notes at the Federal Executive Council (FEC) meeting today. 

Among those who joined the president with the unveiling include the CBN governor and the EFCC chairman.

Recall, in October, the CBN announced it will redesign the N200, N500 and N1,000 notes in line with its mandate.

Meanwhile, the CBN governor has disclosed that the new naira notes can not be counterfeited because of the features embedded in them. 

Similarly, he added that security agencies would be monitoring people making withdrawals at the counter to sniff out money laundering and unravel illegal usage. 

“The CBN has moved to a cashless economy. We will restrain the volume of cash someone will withdraw over the counter. We will follow up with the person’s data to know the reason for such withdrawal,” he concluded.

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Naira

President Buhari Unveils New Redesigned Naira Notes, See Pictures

Buhari launched the new naira notes as the CBN forges ahead with redesign plans.

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New Naira Notes

President Muhammadu Buhari on Wednesday unveiled the new redesigned Naira notes at the State House in Abuja following a series of sensitisation to ensure that Nigerians are aware of the deadline for the old notes.

New Naira Notes

Godwin Emefiele, the governor of the Central Bank of Nigeria, who was also present at the launching explained that the redesigned notes would help curb counterfeit, reduce hoarding and support the apex bank’s cashless policy.

Earlier in October, the central bank announced it was redesigning the N200, N500 and N1,000 notes in line with its mandate. The apex bank further stated that the newly redesigned notes would be available on December 15, 2022.

However, Emefiele later announced the central bank won’t wait until December 15th before unveiling the new notes on November 2023.

He said, “100 days is enough for any person from any part of Nigeria to deposit his money in the bank and get his money when the new notes are released.

“For information, indeed, we are no longer waiting till December 15th to unveil and begin to release the new notes.

“By the special grace of God, tomorrow, which is the 23rd of November 2022, the President has graciously accepted to unveil the new currencies and the new currencies will be unveiled tomorrow at the Federal Executive Chamber by 10am.”

New Naira notes

Meanwhile, the central bank-led monetary policy committee raised interest rates by another 100 basis points from 15.5% to 16.5%. Bringing the total increase in 2022 to 500 basis points despite the challenges Nigerians are facing amid weak job creation and poor earnings.

The committee claimed the decision was based on the rising inflation rate that rose to 21.09% in October. However, given Nigeria’s economic structure and current situation, the persistent increase was mainly to lure foreign investors to invest in the economy against the developed economies that are equally raising rates to curb escalating inflation.

 

New Naira notes

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Naira

President Buhari to Launch New Naira Notes Today

CBN says Buhari is expected to introduce redesigned naira notes to the public today at the Federal Executive Council (FEC) meeting in Abuja.

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President Buhari - Investors King

Nigerian President, Muhammadu Buhari is expected to launch the redesigned naira notes today at the Federal Executive Council (FEC) meeting in Abuja.

The launch will precede the circulation of the affected currency which is billed for December 15, 2022. The FEC meeting is a weekly (Wednesday) meeting of the executive arm of government often presided over by the President or the Vice President.

The Central Bank Governor, Godwin Emefiele disclosed on the sidelines of the Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, that the new naira notes will be displayed for public view on Wednesday. 

Therefore, the governor added that the CBN will not shift its deadline for all old notes to be returned to commercial banks in exchange for newly designed ones.

Investors King recalls that in October 2022, the central bank announced it will issue redesigned N200, N500, and N1,000 notes, effective December 15, 2022, while the new and existing currencies will remain legal tender and circulate together until January 31, 2023.

However, in a sudden change of schedule, the CBN governor noted that the unveiling will be done by the president today stating that the bank will no longer wait till December 15th to unveil and begin to release the new notes.

” By the special grace of God, tomorrow, (today) which is the 23rd of November 2022, the President has graciously accepted to unveil the new currencies and the new currencies will be unveiled tomorrow at the Federal Executive Chamber by 10am.” Emefiele started.

Meanwhile, the Monetary Policy Committee (MPC) which is the highest decision-making body for any issues related to Nigerian monetary policy has hiked the interest rates from 15.5 percent to 16.5 percent. 

According to CBN, the hike in interest rate is to curtain inflation and maintain economic stability. 

Speaking at the end of a two-day Monetary Policy Committee meeting yesterday, the CBN governor noted that the MPC voted to retain the cash reserve ratio at 32.5 percent and the liquidity ratio at 30 percent.

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