Currencies Trader
USD Fundamental Analysis
The upcoming week has updated data on Balance of Trade, Unemployment Rate and Employment Rate. The results are expected to be far below any previous expectations. It is a clear time to sell the dollar.
Author: jeepsontrading
Long Term Analysis Report of the United States
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.
EUR/USD Report
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.
Two Weeks to Next Event
Trading activity will be minimal during the Christmas break.
The next activity is the ADP Non Farm Payrolls at on Jan 3 2019. This is an LLA so will be overshadowed by the HLA, Unemployment Rate the day after, on Jan 4.
Trading plans going into these events will made a day or two before.
Merry Christmas and a Happy New Year.
Jeepson Trading
United States Economic Analysis
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
High Level Analysis 
Low Level Analysis
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.
US GDP Growth Rate
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.
Fundamental and Geopolitical Analysis
Central Bank focus points
measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments
- 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
Buy US Dollars
High Level Economic Analysis
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
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
Live charts can be viewed here
