Daily Market Analysis from ForexMart

Fundamental Brent analysis for February 11, 2020

Today, Brent quotes show some growth during the morning trading, although the risks of further decline are still elevated. Oil prices were supported by the comments of the Energy Minister of Kazakhstan that the OPEC+ countries intend to postpone the ministerial meeting from March to the end of February.

Last week, the OPEC+ Technical committee recommended that countries increase oil production by 0.6 million barrels per day in the second quarter of this year amid a decline in demand for raw materials from China. However, OPEC+ member countries have not yet expressed a unified position on this recommendation, which does not allow prices for «black gold» to demonstrate a steady recovery from local lows.

Today, you should pay attention to data from the American Petroleum Institute (API) on US crude oil reserves. Analysts expect an increase in reserves of 3 million barrels. If the forecast is confirmed, pressure on Brent will resume again.

EUR/USD. February 12, 2020 – Euro consolidated at 1.09 lows

The sentiment on global sites remains moderately positive in the face of a slowdown in the spread of coronavirus infection around the world. In recent days, experts have noted a decrease in cases of new diseases, which suggests that China's preventive measures have begun to bear fruit.

As a result, the pair's rate stabilized near the level of 1.0900. At the same time, the US dollar remains strong, having received support from yesterday's statement by J. Powell. The head of the US Federal Reserve noted that the US economy remains very stable, and the current monetary policy of the regulator is optimal in the current conditions.

Also, ECB President Christine Lagarde shared her vision of fiscal stimulus yesterday. The politician urged European officials to carefully study the possibilities of stimulating the economy through fiscal policy, since the ECB's zero rates do not really help to achieve the inflation target.

Thus, against this background, the US dollar looks more attractive for purchases. During the day, the pair will fluctuate slightly near the level of 1.09.

GBP/USD. February 13, 2020 – Sterling confidently broke through the level 1,30

The sterling is growing steadily today, breaking the level of 1.30 The pair is under the multidirectional influence of several factors at once. On the one hand, in the credit market, there is a decrease in the yield spread of 10-year UK/US government bonds, which is negative for the British currency.

On the other hand, macroeconomic data from the UK provided some support to the pound. Despite the fact that statistics for the IV quarter of 2019 showed stagnation of the economy, annualized growth was 1.1%. Analysts had expected a slowdown of 0.8%. Industrial production did not grow as much as analysts had expected, but Britain recorded an unexpected trade surplus in December amid a jump in metal exports (0.85B).

Thus, the pound is growing, the main goal of the «bulls» is the area near the level of 1.3050.

EUR/USD. February 14, 2020 – Euro remains in the lows of 2017

The euro continues to move within the downward channel near the 1.0840 mark. The sentiment in global markets remains moderately negative in the absence of new negative news on the spread of coronavirus in China.

The European currency is at the lows of 2017 under the pressure of weak macroeconomic data from Europe and a strong US dollar. The US currency received support from yesterday's inflation data in the United States, which reflected a slight acceleration in consumer prices in January (2.5% y/y versus 2.3% y/y). If today's data on retail sales and industrial production for January indicate the preservation of stable business activity in the US, the dollar will continue to grow to 1.0800.

EUR/USD. February 17, 2020 – Euro remains in the area of ​​two-year lows

The sentiment on global sites remains moderately optimistic amid the lack of negative news on the topic of coronavirus. The growth rate of new cases of diseases decreased again after the jump caused by the use of a new method for diagnosing the virus. As a result, the EUR/USD pair is trading at 1.0840, remaining in the area of ​​two-year lows.

Today's news background is calm, and in the week you should pay attention to the macroeconomic data block for January. PMI business activity indices in the European Union and the USA will be published on Friday. If statistics show deterioration, risky assets may again be under pressure.

Today, the pair will be trading primarily in a sideways manner near 1.0840.

EUR/USD. February 18, 2020 – Euro is under pressure after the release of data from Germany

Risky assets again came under pressure after Apple announced that it would not be able to fulfill its revenue plan in Q1 due to existing problems with shipments from China in the context of the coronavirus epidemic. An additional influence on investor sentiment was provided by reports that the US plans to limit technology exports to China to restrain Chinese technological development.

The pair EUR/USD remains in weak positions near 1.0830. In the daytime, German ZEW economic expectations and sentiment indices were published. The indicator unexpectedly dropped from 26.7 points to 8.7 points. Analysts had predicted a decline in the index only to around 21.5. Such statistics will put pressure on the euro during the day and may send the pair below 1.08.

USD/CAD. February 19, 2020 – Looney grows in anticipation of inflation data

Today, the USD/CAD pair is showing a decline after strong growth the day before. The instrument continues to move within the trading range of 1.32-1.33, reacting to the publication of macroeconomic data from the US and Canada.

Yesterday, the US dollar managed to grow to 1.3280 after the release of data on business activity in the manufacturing sector of the Federal Reserve Bank of New York: in February the index rose from 4.8 to 12.9 points. Statistics from Canada, on the contrary, reflected a decline in production sales in December by 0.7% m/m after a decline of 1% m/m last month.

However, today Canadian dollar began to grow in anticipation of data on the consumer price index of Canada, which will be published today in the evening. Experts expect annual inflation to rise to 2.3% in January against growth to 2.2% in December. If the forecast is confirmed, the likelihood that the Bank of Canada will decide to mitigate monetary policy will decrease significantly, and the Canadian dollar will receive an incentive for further growth.

EUR/USD. February 20, 2020 – Euro sideways at 1.08

The euro is moving horizontally at the level 1.0800. Market dynamics remain calm in the absence of negative news on the topic of coronavirus. The US dollar is still strong reacting to comments from the Fed on the stability of the US economy.

Thursday is not rich in significant events, the pair will continue to fluctuate slightly near the level of 1.08. Tomorrow you should pay attention to the publication of PMI indices in the EU and the US. If the indices turn out to be worse than expected, this could reduce the risk appetite on global markets at the end of the week.

EUR/USD. February 21, 2020 – Dollar continues to strengthen

Negative sentiment at global sites has been rising again due to a sharp increase in the number of coronavirus infected in South Korea. At the same time, the markets continue to trend towards the strengthening of the US dollar, which is growing in tandem with the main currency competitors.

Yesterday, the Philadelphia Fed index of business activity was published, which rose sharply to 36.7 points. Positive regional data give reason to expect an increase in the ISM business activity index for the United States as a whole, which supports the dollar.

Statistics on business activity in Europe were published today. The index of business activity in the manufacturing sector (PMI) in Germany increased from the level of 45.3 to 47.8 points. Experts predicted a decline to 44.8. The IHS Markit composite purchasing managers' index (PMI) in France also rose – to 51.9 points in February from 51.1 in January. Analysts predicted a value of 51.0 points.

However, these statistics provided the euro only temporary support – the pair managed to rise slightly above the 1.08 level, but the growth was quickly replaced by a decline. During the day, the euro will continue to fall to an area below 1.08.

EUR/USD. February 25, 2020 – Euro under pressure amid the spread of coronavirus in Italy

Sentiments at global sites are again deteriorating amid a sharp increase in the number of coronavirus cases outside of China. Northern Italy became the new epicenter of the outbreak, where more than 200 cases of the disease are currently recorded. This situation puts pressure on the European currency, since the further spread of the disease can lead to a significant decrease in the GDP of European countries in the future.

The pair EUR/USD continues to move in the range of 1.08-1.09. The current euro quote is 1.0830. Yesterday, the currency rose significantly after the German business climate index IFO was released: the indicator unexpectedly rose to 96.1 points, while analysts expected a decline to 95.3.

Today we should pay attention to the speech of Richard Clarida from the Fed – the politician intends to highlight the impact of coronavirus on the US economy and to clarify the further course of movement of the monetary policy of the Fed.

EUR/USD. February 26, 2020 – Euro declines from 1.09

Negative sentiment continues to dominate global markets as investors fear the coronavirus epidemic could escalate into a global pandemic. As you know, the number of cases outside of China continues to grow steadily.

Yesterday, US President Donald Trump announced that the vaccine against the virus would be ready soon, and also announced the upcoming cut in taxes on the middle class in the United States, but this news did not support the dollar. The current quotation of the pair is 1.0870.

The euro has been strengthening for several days. Currency is supported by technical factors: most carry trade operations in emerging markets are funded by the euro, which is strengthened when investors withdraw from risky assets.

However, the coronavirus continues to spread throughout Europe, which puts European currency at risk. During the day, we expect a decrease in the euro from the level of 1.09.

EUR/USD. February 27, 2020 – Euro skyrocketed to 1.0950

The euro today shows a significant increase, up to 1.0950. Currency is supported by technical factors: most carry trade operations in emerging markets are funded by the euro, which is strengthened when investors withdraw from risky assets. And risk appetite at global sites continues to decline amid further growth in the spread of coronavirus outside of China.

However, the growth of the euro is unlikely to be long-term, since the US dollar is still strong, and macroeconomic data from the US continue to signal the stability of the US economy. Sales of new homes in the US in January rose to 764 thousand against 708 thousand a month earlier. The price of a new house also increased – by 14% in January.

Today, you should pay attention to the speeches by the ECB President Christine Lagarde and Evans from the Federal Reserve Bank of Chicago, as well as the release of statistics on US GDP for the fourth quarter of 2019. The indicator is expected at 2.1%.

USD/CAD. February 28, 2020 – Canadian dollar updates lows

The Canadian dollar is showing a strong fall at the end of the week. The current quotation of the USD/CAD pair is 1.3465. The main pressure on the loonie rate is provided by the situation in the oil market, where Brent quotes fell below the level of $50 per barrel. Prices fell to a minimum of two years, as investors fear that the coronavirus epidemic could be the biggest shock to the economy since the 2008 crisis.

Next week, the Bank of Canada will hold a meeting at which the regulator may surprise market participants with a lower rate, despite the main forecast assuming that the rate remains at 1.75%. The Central Bank's Monetary Policy Committee is gradually lowering its confidence regarding the weak influence of coronavirus on the country's economy.

Today, attention should be paid to the publication of quarterly and monthly reports on GDP. Analysts expect a significant slowdown in growth in the IV quarter, so the Canadian dollar may continue to fall to 1.35.

EUR/USD. March 2, 2020 – Euro reaches 1.11

Investors' appetite for risky assets on global markets is moderately recovering after the world's leading central banks announced their readiness to maintain economic activity in the face of the risks associated with the spread of coronavirus.

On Friday, the US Federal Reserve announced that the regulator intends to use monetary policy instruments to maintain the country's economy. Market participants expect that the key rate in the US will be reduced immediately by 50 bp. already at the March meeting. The readiness to take large-scale measures on the eve was also expressed by the Central Bank of Japan.

Thus, the EUR/USD pair continues to grow, almost closely approaching the level of 1.1100. However, the European currency is still under pressure from the further spread of the coronavirus throughout Europe. Therefore, the pair may show a slight decrease from level 67,00.

EUR/USD. March 03, 2020 – Euro firmly fixed above 1.11

The euro did not manage to overcome the level of 1.1185 and it again started to decline to the area of ​​1.11. At global sites, the appetite for risky assets is recovering after the ECB, the US Federal Reserve and other world Central Banks announced their readiness for additional monetary stimulation of the economy to mitigate the detrimental effects of coronavirus. Moreover, today representatives of G7 countries will discuss a package of measures aimed at minimizing the consequences of the epidemic.

Today is not rich in significant macro statistics, and the dynamics of trading will be determined mainly by the news background on the topic of coronavirus. However, you should pay attention to inflation data in the eurozone. Consumer price growth slowed from 1.4% in January to 1.2% in February.

The euro continues to strengthen from the level of 1.11. During the day, «eurobulls» will rise to the level of 1.1150.

EUR/USD. March 04, 2020 – Dollar weakens after unplanned US Fed rate cut

The US dollar came under pressure after an unexpected decision by the US Federal Reserve to lower the interest rate by 50 bp, without waiting for the meeting scheduled for March 18. The last time a rate cut outside a scheduled regulator meeting in the US occurred during the 2008 crisis.

Such actions by the authorities may signal that the risks of a recession in the US economy are still great. Moreover, today in the markets there is a restoration of appetite for risky assets. As a result, the pair EUR/USD rose to the level of 1.1215.

Today, you should pay attention to the US labor market data from ADP, as well as the publication of the ISM index in the non-manufacturing sector of the economy. In the case of weak data, the risk appetite in the evening hours may worsen, which will allow the dollar to somewhat regain its position in pair with the euro. The current quotation of the pair is 1.1150.

EUR/USD. March 05, 2020 – The euro slowed down its growth at the level of 1.12

The level of 1.1200 restrains further growth of the European currency, the current quotation of the EUR/USD pair is 1.1170. The day before the US dollar was under pressure after an unexpected Fed rate cut by 50 bp at once. However, yesterday evening this pressure slightly decreased amid the publication of strong labor market data from ADP and the ISM index in the service sector, which in February rose from 55.5 to 57.3.

Today it became known that the California authorities in the United States announced an emergency mode because of the risks of the coronavirus spread, and Italy decided to close schools until March 15 in the fight against the epidemic. The news signals that the risks of a recession in many economies are still extremely high.

Today you should pay attention to the weekly statistics on initial applications for unemployment benefits in the United States. Experts predict a decrease in the number of calls from 219 thousand to 215 thousand.

EUR/USD. March 06, 2020 – Euro approaches 1.13 high

The euro continues to increase the pace of strengthening, approaching the level of 1.1300. Pressure on the dollar was exerted by an unplanned reduction in the interest rate of the US Federal Reserve, reflecting the fears of the authorities about the presence of significant risks in the country's economic system.

Moreover, the Fed rate can be cut by another 25 basis points (from the current target range of 1.00-1.25% per annum) at the meeting on March 18-19. This could trigger a wave of sales of the American currency and send the pair to the 1.1400 area.

The spread of coronavirus in Europe remains high, which puts pressure on risky assets. Today's statistics on the US labor market may have an additional negative impact on risk and dollar if the current data are below forecast. In case of further deterioration in risk appetite, the euro will continue to receive support in the Forex market.

EUR/USD. March 10, 2020 – Euro fell from highs to 1.1325

The growth of the European currency was stopped by the level of 1.15 – EUR/USD quotes fell on Tuesday to around 1.1325. Yesterday, a drop in the oil market to $32 per barrel triggered a collapse of major indices around the world. In addition, the continued spread of coronavirus outside of China also continues to put pressure on world markets.

It became known that Italy introduced a regime of emergency measures to combat the virus throughout the country, and the head of WHO said that the outbreak of the virus is already very close to becoming a pandemic. The presence and further spread of coronavirus in Europe puts pressure on the euro.

The US dollar, in turn, is under the negative impact of rising yields on 10-year US Treasury bonds and expectations of a Fed rate cut immediately by 70 bp. on the meeting of the American regulator on March 18.
During the day, the EUR/USD pair will continue to grow from the level of 1.1325.

EUR/USD. March 11, 2020 – The pair near 1.13 in anticipation of US inflation data

The US stock market is gradually recovering after the collapse on Monday, and investor sentiment on global markets remains relatively optimistic. The current quotation of the EUR/USD pair is 1.1300. The dollar received some support after U.S. President Donald Trump discussed payroll tax cuts with Republican officials as part of tax breaks.

However, the further spread of coronavirus outside of China still retains the risks of further sales in the financial markets. The number of cases worldwide continues to increase. In the USA, in particular, the number of cases has already exceeded 1000 people.

Today, attention should be paid to inflation data in the United States, which may reflect its deceleration from 2.5% to 2.2%. Amid the expectation of another Fed rate cut at the March meeting, this slowdown could trigger a wave of sales of the US dollar.

EUR/USD. March 12, 2020 – Euro weakens awaiting ECB meeting

Negative sentiment caused by a statement by the World Health Organization (WHO) has returned to global markets. Yesterday, WHO officially assigned pandemic status to the spread of the virus Covid-19, which put strong pressure on the entire block of risky assets. Additional pressure on the markets had a 30-day US ban on entry to the country for all travelers from Europe.

The pair EUR/USD is trading at 1.1250. The euro is moderately declining, under pressure from the words of the ECB head K. Lagarde. The politician said that in the absence of coordinated actions by the authorities, the situation in the EU economy could develop according to the 2008 crisis scenario.

Today, attention should be paid to the ECB meeting. Market participants expect the regulator to introduce a range of monetary incentives, and the scale of measures taken is of particular interest.

At the same time, the US dollar received support after the release of inflation data in the country. Annual inflation in February slowed to 2.3%, better than forecasted.

Fundamental Brent analysis for March 13, 2020

Yesterday, Brent quotes fell again to the level of $32.50 per barrel amid panic sales in global markets. However, today prices are already showing a recovery to $35.40 per barrel.

Support for Brent and other risky assets was provided by the US Federal Reserve reports on a massive infusion of dollar liquidity into the system in the near future.

However, one should not expect a significant strengthening of «black gold», since the situation with the spread of coronavirus in the world remains very dangerous, and OPEC oil-producing countries continue the price war in attempts to increase their market share.

EUR/USD. March 16, 2020 – Dollar weakens after Fed’s decision to cut rate again

The US dollar came under strong pressure after an emergency cut in the US Fed rate on Sunday. The regulator reduced the rate immediately by 100 bp. to 0-0.25% for the first time since 1982, and also announced the launch of a large-scale program for the purchase of financial assets with a total volume of $700 billion. As a result, the EUR/USD pair rose to the level of 1.1230.

The situation with the further development of the coronavirus pandemic puts pressure on all global markets. More and more countries restrict the movement of people, close their borders and introduce other quarantine measures. In the United States, a state of emergency was declared on Friday.

The set of preventive measures of the US government signals the increased risks of a recession in the US economy, which forms a negative background for all risky assets. During the day, the pair will fluctuate near the level of 1.12.

EUR/USD. March 17, 2020 – Euro collapsed after the release of ZEW data from Germany

Today, the US dollar began to rise, reaching 1.1000. The currency received the main support from expectations that the world central banks will follow the example of the US Federal Reserve and also lower interest rates in their countries in the nearest future.

The spread of coronavirus around the world has led investors to flee to safe harbors, in particular – to the US dollar. This trend of strengthening the American currency was interrupted on Sunday, when the US Federal Reserve decided to urgently reduce the rate to 0-0.25%. However, already on Tuesday the general background changed, and the upward trend in the dollar returned to the markets.

Today, you should pay attention to the publication of the March index of economic expectations and sentiment from ZEW in Germany. The indicator crashed from a level of 8.7 points to -49.5. Such a strong decline put significant pressure on the euro, becoming the sharpest decline since December 1991.

EUR/USD. March 18, 2020 – Euro fluctuates below 1.10

The euro continues the downward trend, having broken down the level of 1.10. The US dollar remains strong amid increased demand for dollar liquidity amid rising investor concerns about an impending recession in the global economy.

In addition, the greenback was supported by plans of the US presidential administration to introduce a full package of measures to support the economy, including making payments of $1,000 to all residents (to stimulate domestic demand).

At the same time, pressure on the euro continues to be provided by incredibly weak data on economic conditions and sentiments from ZEW in Germany. The first indicator fell in March to -43.1 points against the forecast of -30 points. The economic sentiment index fell to -49.5 points, although experts expected a decline to -26.4. The economic sentiment index in all countries of the eurozone amounted to -49.5 points against 10.4 a month earlier.

During the day, the EUR/USD pair will continue to fluctuate below the strong support level of 1.10.