Connect with us

Forex

Forex Weekly Outlook May 30 – June 3

Published

on

Jared Martinez

The U.S. dollar continues its run after data showed first quarter GDP growth was higher than previously estimated, and revised upward from 0.5 percent to 0.8 percent. Also, unemployment claims post moderate decline to 268,000 from 278,000, beating economists forecast of 275,000. While this is not bad, Federal Reserve Chair Janet Yellen on Friday said an interest rate hike is “Probably appropriate in the coming months“. This is a big statement considering the fact that the market has already priced in the possibility of a June rate hike, and as more investors come to terms with the possibility of unchanged rate in June I expect US dollar to lose some gains. And even more as the odds changes. So I am going to pay attention to the US dollar differently this week, especially with Unemployment rate, ECB press conference, Non-Farm Payrolls and average hourly earnings due this week. Also, I be looking into GBPJPY, NZDUSD and USDCAD.

GBPJPY

The pound has been battered by brexit and its politics, but as the votes draw closer more politicians are coming out to support the Union of Europe and Great Britain, which is gradually increasing investors’ confidence in the region once again. On the other hand, the Bank of Japan is still looking for ways to curtail the yen gains in order to ease the pressure on its manufacturing sector due to weak oversea orders, and with continuous comments from both Japan’s Finance Minister Taro Aso and BOJ governor Haruhiko Kuroda on why current gain is bad for Japan and the needs for them to intervene, they have strategically rendered the yen unattractive. Hence, paving way for GBPJPY buyers.

GBPJPYDaily

Click to enlarge

So looking at the chart, this pair has gained 597 pips since three weeks ago that I first posted the chart and breach 161.71 resistance level twice but failed to sustain it. Further confirming this upsurge is the three higher-lows double bottom established on the daily chart from the retest to last week Monday/Tuesday and Friday candlestick  that closed as a pin bar. As long as price remains above 161.71 price level, I am bullish on GBPJPY with 165.66 as the first target and 169.21 as the second.

NZDUSD

New Zealand dollar continues to lose ground even after recording $292 million trade surplus from the previous $189 million, and beating analysts forecast of $40 million. The economy is still struggling with low exports and drop in price of global dairy products as China, its largest trading partner is far from recovery.

NZDUSDDaily

Click to enlarge

This pair has lost about 151 pips in the last three weeks and hit our 0.6771 target, as long as new resistance 0.6771 holds, I am bearish on NZDUSD pair with 0.6609 as the target. Global Dairy Trade report is due on Wednesday.

USDCAD

This week, Canadian monthly GDP and Trade balance reports are due. But since 1.3142 target was hit three weeks ago after May 4th break-out from the downward trend that started on January 20 this year. I can’t help but to treat current trend as a continuation of the break-out, and with the Friday’s bullish pin bar I am bullish on USDCAD this week, and expect a sustained break of 1.3142 resistance level to attract enough buyers to open up 1.3387 target. It is important to keep an eye on Tuesday GDP and make adjustments accordingly.

USDCADDaily

Click to enlarge

Last Week Recap

Last week EURUSD dropped 132 pips in our favour to 1.1109, but short of 1.0925 target. This week, I am neutral on eurusd because of numerous economic data coming out later in the week and uncertainties surrounding June rate hike and brexit.

GBPUSD

Cable rose as high as 1.4738 after the report of “EU Remain” polls were made public. The pair has since lost 132 pips, this week, I am bearish on cable as long as 1.4732 holds, with 1.4509 as the target.

GBPUSDDaily

Click to enlarge

AUDUSD

Last week,  Australia’s private capital expenditure for the first quarter of the year plunged 5.2 percent from 1.8 percent recorded in the final quarter of 2015.  Showing investors are gradually losing confidence in the economy. The pair dropped 114 pips last week to 0.7144, this week I am still bearish on the Aussie dollar with 0.7088 as the first target, and if the building permit and first quarter GDP report schedule to be released later in the week support this analysis, 0.6699 will be the second target.

AUDUSDDaily

Click to enlarge

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.

Continue Reading
Comments

Pound

British Pound Extends Decline as 44 British Lawmakers Resigns

British Pound sustained its decline against the United States Dollar and other global counterparts on Wednesday after five additional British lawmakers resigned their positions in protest against a series of scandals rocking the House of Commons in recent weeks.

Published

on

British pound

British Pound sustained its decline against the United States Dollar and other global counterparts on Wednesday after five additional British lawmakers resigned their positions in protest against a series of scandals rocking the House of Commons in recent weeks.

A total of 44 British lawmakers have resigned under Prime Minister Boris Johnson’s leadership, accusing the Prime Minister of engaging in or condoning actions that put parliament moral in question.

Against the American Dollar, Great Britain Pounds (GBP) dropped from 1.2164 it peaked on Monday to 1.1934 in the early hours of Thursday.

While against the Japanese Yen, one of the world’s safe-haven currencies, GBP exchanged at 162.02, down from 165.26 it traded on Tuesday.

The decline was broad-based as the embattled GBP also lost some ground against the Swiss Franc to exchange at 1.1568, down from about 1.1687 on Tuesday.

On Wednesday,  five lawmakers signed in one go. In their letter, they said “It has become increasingly clear that the Government cannot function given the issues that have come to light and the way in which they have been handled,” they wrote.

Selaine Saxby, Claire Coutinho and David Johnston were the latest lawmakers to tender their resignation on Wednesday.

Continue Reading

Naira

Naira Plunges to N621 at Black Market

The Nigerian Naira remained under pressure at the unregulated parallel market popularly known as the black market on Tuesday.

Published

on

Naira - Investors King

The Nigerian Naira remained under pressure at the unregulated parallel market popularly known as the black market on Tuesday. The Naira exchanged at N621 to a United States Dollar amid persistent foreign exchange scarcity.

At the Investors and Exporters’ forex window, the local currency dropped to N425.75 against the United States Dollar after opening the day at N422.25/US$1 on Monday. Forex traders in that segment of the forex market transacted $47.56 million in value and volume, Investors King reports.

However, Naira improved slightly against the U.S Dollar at the Central Bank of Nigeria (CBN) forex section. Naira exchange rate to dollar improved marginally from N415.86/US$ to N415.8.

Against the Pounds Sterling, the Nigerian Naira declined in value to N505.6544 from N500.6539. Similarly, against the European common currency, the local currency dipped slightly in value from N434.0331 to N434.7605.

Crude Oil

Oil prices dropped by $6 on Tuesday as concerns over the global recession containing demand outweighed supply concerns.

Brent crude oil, the international benchmark for Nigerian oil, declined by $6.65 to $106.85 a barrel while the U.S. West Texas Crude Oil lost $5.65 to $102.78 a barrel.

“Oil is still struggling to break out from its current recessionary malaise as the market pivots away from inflation to economic despair,” Stephen Innes of SPI Asset Management wrote.

Crude oil remains an important commodity for the Nigerian economy given its nature as a mono-product economy. Africa’s largest economy relies on crude oil revenue to service its economy and sustain its currency value against its global counterparts.

However, the inability to prop up crude oil production despite the increase in oil prices continued to hurt Nigeria’s foreign reserves and the availability of dollars in the economy. Hence, the Nigerian Naira is presently trading at a record low of N621 to a United States Dollar.

Cryptocurrency Exchange Rates

Global economic uncertainty ahead of the projected recession continues to dictate the performance of the cryptocurrency space in recent weeks.

Bitcoin extended its decline by 2.37% in the last 24 hours to $19,387.33 per coin. ETH, a token of the Ethereum protocol, lost 3.09% of its value to $1,079 a coin.

Meanwhile, Meta, formerly known as Facebook, has suspended its cryptocurrency project called Libra.  Celsius, a cryptocurrency lender, has paused withdrawals and announced plans to cut 150 jobs.

Cryptocurrency space market value dropped from over $2.5 trillion at its peak to about $900 million presently. The huge decline forced several players to cut losses and halt capital inflow into the cryptocurrency space.

Continue Reading

Naira

Dollar to Naira Today Wednesday, 29 June 2022

The dollar to naira exchange opened the day at N420.70 to a U.S. Dollar on Tuesday and closed at N421, representing a decline in value of N0.30.

Published

on

Naira Exchange Rates - Investors King

The dollar to naira exchange rate today Wednesday, 29 June 2022 remained largely unchanged at the Investors and Exporters forex window and the Central Bank of Nigeria (CBN)’s section of foreign exchange.

The dollar to naira exchange opened the day at N420.70 to a U.S. Dollar on Tuesday and closed at N421, representing a decline in value of N0.30. Forex traders transacted 206.65 million dollars at the official Investors and Exporters window on Tuesday.

In the CBN forex section, U.S. Dollar was sold at N415.6 by the apex bank to authorised dealers, slightly better than N415.64 it exchanged on Monday.

Against the Pounds Sterling, the Naira appreciated from N509.824 to N508.53. However, against the Euro common currency, the value of the Naira dropped from N433.05 on Monday to N439.5 on Tuesday.

Dollar to Naira Black Market Exchange Rate

Forex scarcity continued to drag on the Naira value in the unregulated foreign exchange market popularly known as the black market.

On Wednesday, the Naira was exchanged at N614 for a United States Dollar on the black market. Representing another decline of N7 from N607 it was sold two weeks ago.

According to traders in that section of forex, rising demand amid a chronic scarcity is responsible for the wide foreign exchange rate of the local currency and could worsen if developed economies plunge into recession as widely projected.

Inflow into emerging economies like Nigeria will drop, hence impeding the apex bank’s ability to service the economy.

Crude Oil

Crude oil extended its gains for four consecutive days on Wednesday after it became obvious that OPEC and its allies will not be able to meet their targets as projected.

Brent crude oil, the international benchmark for Nigerian oil, appreciated to $120 a barrel on Wednesday while the U.S West Texas Intermediate (WTI) rose from $99.33 per barrel a week ago to $112.37 per barrel.

According to Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDA, said “A surprise drop by US API Crude Inventories by 3.8 million barrels helped the bullish momentum, with markets ignoring the rise in refined product stocks. Disruptions to Libyan and Ecuadorian production were supportive, but the Macron’s remarks yesterday around Saudi Arabia and the UAE’s limited production capacity seems to have been the main driver.”

Continue Reading




Advertisement
Advertisement
Advertisement

Trending