Forex Analysis - Financial News & FX Daily Forecast

In our last commentary on the Japanese yen, we wrote that the currency was looking excessively weak against the euro. In particular, we stated that bullish catalysts driving EUR/JPY were at risk as speculator positioning in both long euro and short yen trades were looking extreme. In addition, we flagged changes to the Bank of Japan’s “yield curve control” program as a potential risk for yen stre…

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Tags: Japanese yen

In our previous analysis on the pound, we claimed that the number of catalysts driving the currency’s bullish trend were running out. At the time, we warned that the rally was running out of momentum, but did not see any evidence that would suggest adopting a bearish stance. Following recent weakness in the British pound, we downgraded our longer-term outlook on the currency to bearish on April 2…

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In our previous commentary on the US dollar, we warned that a weak dollar was hiding significant risks in growth-sensitive assets such as equities and European currencies. As the world’s reserve currency, the buck is inversely correlated to most financial assets because most cross-border lending is conducted in dollars. Thanks to a slowdown in economic growth outside the United States coupled wit…

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Tags: US dollar

In our previous take on the Australian dollar in late February, we wrote that falling commodity prices, an ongoing slowdown in China, and weak domestic conditions (looking at both economic data and monetary policy expectations) were significant headwinds for the currency. Beyond economic indicators, quantitative signals also suggested that the bullish trend was running out of steam. We downgraded…

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Earlier today, we downgraded our euro outlook to neutral in the medium-term, and bearish in the short-term. As the euro runs out of momentum, the trend is now neutral based on quantitative factors such as price, trading volumes and volatility. While forward-looking economic indicators continue to suggest an ongoing expansion, growth appears to be slowing in rate-of-change terms. This is why our p…

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Tags: Euro

The outlook for the pound, while still bullish, is looking less optimistic today. More specifically, factors including the ongoing slowdown in regional growth, lower expectations for a May rate hike, and significant speculator interest in the currency are hampering the rally. Following Brexit, the trade-weighted value of pound sterling (a measure of GBP relative to other currencies) hit an all-t…

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While the outlook for the Canadian dollar looked dire just a few months ago, the currency appears to have recently turned a corner. After looking oversold in late March, the currency managed to strengthen thanks to a rebound in crude oil prices. Two weeks later, the Canadian dollar received more good news as the Trump administration pushed to conclude NAFTA talks at a faster pace. In more recent …

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In our previous take on the US dollar in early February, we wrote that the currency was set to remain weak. At the time, ex-US growth was accelerating, while speculator sentiment was only mildly bearish. While dollar bulls have argued that rate hikes should help the currency, we wrote that expectations for monetary tightening were rising around the world, limiting the impact from the Fed’s action…

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Tags: US dollar

In our previous take on the euro in late February, we wrote that the bullish case for the currency was looking increasingly challenging. At the time, euro speculators were spooked by slowing forward-looking economic indicators, while upcoming political events in Italy and Germany risked the future unity of the region. While our outlook remains mildly bullish, this comes with the significant cavea…

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Tags: Euro

We take a closer look at the Australian dollar forecast, and how domestic and international economic changes are set to impact the currency. From China's slow down to key domestic indicators that reveal slowing growth, we break down why we're changing our outlook on this commodity currency.

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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.