Forex Analysis - Financial News & FX Daily Forecast

Looking at the British pound today, concerns regarding Brexit and the stock market rout are outweighing the Bank of England’s positive economic outlook. As a currency that benefits from rising risk appetite, pound sterling has been selling off sharply in February thanks to fears regarding elevated asset prices. While Bank of England Governor Mark Carney helped the pound last Thursday after saying…

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Looking at this week’s Commitments of Traders report, bullish extremes continue in the euro, British pound and crude oil. Looking at net speculator positions as a proportion of open interest, long crude oil positions are the most at risk. While euro and British pound net positions are elevated relative to historical averages, open interest has also grown over time. Thus neither currency look exte…

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Tags: Euro

For a currency that strengthens when global growth accelerates, recent moves in the Australian dollar have been fairly disappointing. While the currency rocketed higher between mid-December and late January, the Australian dollar has sold off sharply in recent weeks. The currency first began weakening against the Japanese yen, which led us to downgrade our short-term AUD/JPY outlook to neutral on…

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The US dollar currency index, a measure of USD against six major peers, declined by 9.9% in 2017. Last month, the currency index continued declining and fell by another 3.3%. Given the speed of the recent decline, the US dollar started looking oversold according to technical indicators around mid-January. While we warned that the currency was looking oversold in several recent editions of our US …

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Tags: US dollar

When will the Canadian dollar rebound? We take a closer look at the Canadian dollar future forecast and what the latest Commitments of Traders report says about the currency. Bank of Canada remains cautious - impacting trader optimism, but better data has us rethinking an earlier prediction.

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In early 2017, doubts regarding the integrity of the Eurozone led many to take refuge in the Japanese yen. Unlike the euro, the Japanese yen exhibits classic safe haven characteristics and tends to strengthen during downturns. Following the Brexit referendum vote and US presidential elections, few were willing to bet on opinion polls that predicted Macron’s victory. Similar to political events in…

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In our last take on the British pound in early January, we wrote that the currency was set to keep strengthening thanks to strong regional growth, moderate sentiment and the historically low value of the pound. More specifically, the currency looks cheap based on broad nominal effective exchange rates (a measure of the pound relative to other foreign currencies). Looking at GBP/USD since our last…

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Japan has suffered from weak growth and inflation since the global financial crisis, and the Bank of Japan has frequently experimented with unorthodox monetary policies. In September 2016, the BoJ decided to directly target long-term interest rates. The so-called “yield curve control” (YCC) program fixed 10-year Japanese government bond (JGB) yields at 0%. If yields deviated from the BoJ’s target…

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Tags: Japanese yen

Looking at this week’s Commitments of Traders Report, bullish extremes continue in long crude oil, the euro and the British pound. Net long positions have also grown this week for the two currencies and the commodity. The purpose of this report is to track how the consensus is positioned across various currencies and commodities. When net long positions become crowded in either direction, we fla…

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Tags: US dollar

Looking at this week’s COT report, the British pound is now at a bullish extreme, while the Australian dollar is no longer at a bearish extreme. Bullish extremes continue in long euro and long crude oil speculator net positions. The purpose of this report is to track how the consensus is positioned across various currencies and commodities. When net long positions become crowded in either direct…

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At MarketsNow, we specialize in clear, data-driven analysis of the foreign exchange market so you have the information you need to make smart investment decisions. Human beings are prone to psychological biases, so decisions made by intuition alone can result in costly errors - which is why using accurate data in your investment process is critical. By basing our forex market analysis process on numbers, we ensure that the information we provide is accurate and based on fact, not pre-conceived notions. Here's an overview of the factors we consider when creating a forex analysis.

Policy

A government's fiscal policies and monetary policies understandably have an impact on currency trading, so it's an important factor to consider as part of any investment analysis. We look at fiscal policy, and the impact of tax rates, government spending and international relations to predict which plans will boost near-term growth - and which policies could have an adverse impact on the strength of a currency.

Monetary policy is also vital to consider in the overall picture of fx market analysis, as central banks can influence the cost of borrowing money by raising or lowering interest rates. This will impact the value and appreciation of a currency against the currency of other countries.

Sentiment

To best analyze sentiment, one of our key sources is the Commitments of Traders (COT) report. The report provides a weekly breakdown of how futures traders are positioned in various markets (including currencies). The report is especially powerful as it categorizes traders into many different categories (e.g. speculators, asset managers, dealers, commercials, etc.). We focus on how speculators are positioned in each currency, narrowing in on any extreme, 'at risk' positions that could indicate a potential direction change in the near future.

Our sentiment analysis is combined with technical data - drawing from the Relative Strength Index and historical tops and bottoms to further bolster our recommendations.

Economic Data

While most media outlets focus on mid-term gains and losses by breaking down economic data into quarters, that information can be a hindrence when it comes to making long-term recommendations. We look at year-over-year movements to shed light on underlying trends that will impact the forex market to gain an accurate, comprehensive view of economic changes that could impact our forex trading analysis.

By analyzing the market through three distinct perspectives, we're able to provide expert forex analysis daily to currency traders and speculators around the globe.