Long Term Direction

The data reflects an indifferent time for the US Dollar that has been marginally boosted by good October data for consumer prices. Further improvements are necessary before any changes are expected to be made to Monetary Policy. The outlook is optimistic on improvements due to the recent lowering of interest rates.Global tensions are keeping any bullish activity on the sidelines so the overall summary is that the long term direction is flat.

Monetary Policy and Interest Rate

The current situation is that the European Central Bank is monitoring the current policy with changes to the interest rate unlikely to be made for the foreseeable future.

As decided at the last Governing Council meeting in September, net purchases will be restarted under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion as from 1 November. The Governing Council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.

Economy

GDP Growth Rate

The data for Q3 was as expected and continues the worsening twelve-month trend.

Consumer Prices

Inflation Rate

The data for October was as expected and continues the worsening twelve-month trend.

Labour Market

Unemployment Rate

The data for October was slightly worse than expected but continues the improving twelve-month trend.

Short Term Analysis

4 Hour Timeframe

Commentary

  • Up-trending since October 1st after a bounce from 4 Hour Support Test
  • Created a Fibonacci trend with a 0.618  break zone

Expectations

  • Bullish action to continue towards 4 + 1 Hour + 15 Minute Resistance zone

1 Hour Timeframe

Commentary

  • Up-trending since October 1st with a short reprieve at 1.100 zone which also confluences with the 4 hour 0.618 Fibonacci break zone.

Expectations

  • Bullish action to continue towards 4 + 1 Hour + 15 Minute Resistance zone

15 Minute Timeframe

Commentary

  • Up-trending since October 1st with a short reprieve at 1.100 zone which also confluences with the 4 hour 0.618 Fibonacci break zone.

Expectations

  • Bullish action to continue towards 4 + 1 Hour + 15 Minute Resistance zone

Short Term Analysis Conclusion

Bullish action to continue towards 4 + 1 Hour + 15 Minute Resistance where it can be sold upon a bearish expectation on Fundamental Analysis.

The sell can then be held until the price reaches the 1 Hour + 15 Minute Support or Fundamental Analysis expectation looks bullish.

Long Term Analysis

Month Timeframe

Commentary

  • Down-trending since Feb 18 after stalling around Monthly Resistance
  • Created a Fibonacci trend with a 0.382  break zone

Expectations

  • Down-trend to continue towards Month + Week Support

Week Timeframe

Commentary

  • Down-trending since February 18 after stalling around Monthly Resistance
  • Small retracement at the 1.1400 zone

Expectations

  • Down-trend to continue towards Month + Week Support

Day Timeframe

Commentary

  • Price has broken through the down-trending Fibonacci
  • Bullish climb since touching Day Support on October 1st

Expectations

  • Bullish climb to continue towards Week + Day Resistance

Long Term Analysis Conclusion

Price to rise towards Week and Day Resistance where it can be sold upon a bearish expectation on Fundamental Analysis.

The sell can then be held until the price reaches the Day Support or Fundamental Analysis expectation looks bullish.

Jeepson Trading have a unique method to determine the performance of an economy. This method is two form, firstly high level analysis which looks at the key indicators. And then, low level analysis which is an analysis of the indicators of the central bank’s focus area.

High Level Analysis

High Level Analysis (HLA) is the process of analysing the key indicators of an economy and determining the subsequent performance. The key indicators are as follows;

  • GDP Growth Rate
  • Unemployment Rate
  • Inflation Rate
  • Interest Rate
  • Balance of Trade
  • Government Debt to GDP

The individual performance of each indicator is analysed over a twelve month period to determine the the high level economic performance.

Central Bank

The Federal Reserve is the central bank of the united states who has a dual mandate to maintain price stability and achieve maximum sustainable employment.

At their previous meeting on November 8 they stated that the focus areas are the labour market and inflation. These can be monitored by reviewing the performance of the Significant Indicators (SIND).

Low Level Analysis

Jeepson Trading have identified the following SIND that are to be monitored for the low level analysis.

Labour

  • Non Farm Payrolls
  • ADP Non Farm Payrolls
  • Average Hourly Earnings

Inflation

  • Producer Prices Change
  • Core Inflation Rate
  • Inflation Rate Month on Month

Conclusion

High Level Analysis: strong economy with an improving outlook

Low Level Analysis: strong indicators with an improving outlook

BUY from the Support levels of Technical Analysis.

Even though there has been a mix of data, the trend has been improving over the previous twelve months.

The release due on November 28th is expected at 3.50 percent which will maintain the uptrend.

US GDP Growth Rate courtesy tradingeconomics.com

Fundamental and Geopolitical Analysis


measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments

Central Bank focus points
  • No other significant news events at this time

Sentiment Analysis

  • Dollar is in a bullish period over the previous week

Order

Orders to buy are good at appropriate levels determined by Technical Analysis here


Image credits: Aron Van de Pol

High Level Economic Analysis

Summary Indicators (SUIN)

The Federal Reserve are planning to raise interest rates again and a decision to do so is based on the performance of Labour and Inflation.

On review, the SUIN are in great shape and support buying the US Dollar.

Low Level Economic Analysis

Significant Indicators (SIND)

The SIND have been identified based on the focus of the Federal Reserve.

All indicators are performaing well and I expect the Inflation Rate Month on Month is being closely monitored. Should this show a strong result then a December hike is highly likely.

On review, the SUIN are in great shape and support buying the US Dollar.

Technical Analysis


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