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The U.S dollar advanced against most of its major rivals, including the euro. Despite Goldman Sachs Group Inc.’s comment that strengthens U.S. dollar poses troublesome for American corporations, investors are still betting on a high chance that the Federal Reserve will hike rates by the year’s end.

Today (16/11), EURUSD moves in a range between 1.07124 and 1.07588. Now poising near the open price. Yesterday, the Euro also weakened against the US Dollar in the New York session, closing 0.24% lower at $1.0737.


Fig. EURUSD D1 Technical Chart

Factors that cover on EURUSD

Covering on US dollar

US Economic data

Tuesday (15/11), a report from U.S. Commerce Department said that retail sales rose 0.8% in October, compared to expectations for a 0.6% increase. September retail sales increased 1.0%, revised from an initial 0.6% rise. Rising retail sales over time have the positive signals that are bolstering optimism about consumer spending being able to push economic growth at the start of the fourth quarter.

In addition, core retail sales, which exclude automobile sales, increased 0.8% in the previous month, higher than the expectation of an advance of 0.5%. Core sales in September were revised to a 0.7% advance from the prior 0.5% gain.

Furthermore, according to the report published by Federal Reserve Bank of New York on Tuesday, Empire State manufacturing index in November reached 1.5 from -6.80 the previous month.

In fact, the strengthen U.S. dollar poses a lot of troublesome for American corporations, especially manufacturers, automakers. Indeed, according to a comment of Goldman Sachs Group Inc. President Gary Cohn on Wednesday (16/11), the growing U.S. dollar will push a growing threat to U.S. manufacturers by making imported products more competitive, especially making foreign cars cheaper for U.S. consumers. More disadvantage effects on this most powerful nation will occur as profits calculated by dollars of firms are lower than before, leading to a big sell-off in the stock market that turns attraction down of US financial market.

However, all of these figures are better than forecast, showing the optimistic of US economy. This would lead to the possibility of Federal Reserve to boost interest rates in the next month. Fed Governor Daniel Tarullo said Tuesday an interest-rate rise next month is more likely than before and Fed funds futures imply a 94% probability of an increase.

Oil market

For energy market, today, crude oil declined 0.6% to $47.29 a barrel in New York, after jumping 5.8% on Tuesday.


Fig. Change in oil prices

Having some poor signals of crude oil prices released by American Petroleum Institute (API) yesterday showed that crude oil inventories rose 3.65 million barrels last week to 488.8 million barrels the previous week and rose more than expected. Official figures on stockpiles from the U.S. Energy Information Administration are due later today. Cushing recorded a build of 1.13 million barrels after a slight increase the previous week. This news has generated distances in solving the glut in the crude market and decreasing the oil price in the future, which is an important factor for prevention US inflation towards the central bank’s 2% target.


Fig. US Crude oil inventories by API

Overnight, oil prices were higher during North America trading, extending overnight gains as market participants continued to weigh prospects of a coordinated production cut among major global oil producers.

Covering on Euro

On the other hand, yesterday, we received the chains of figures stemming from German’s reports – is the largest economy in Eurozone. So, any the tiny changes also make influence on the development of this regional economy.

German economic sentiment improved more than expected in November, bolstering optimism over the motor of the eurozone economy. The data from ZEW Centre for Economic Research showed that its index of German economic sentiment rose to 13.8 this month from October’s reading of 6.2. Analysts had expected the index to increase to 8.1 in October. That was itshighest level since June of this year. Meanwhile, the index of euro zone economic sentiment increased to 15.8 in November from 12.3 a month earlier.


Fig. German ZEW Economic Sentiment



Fig. EURUSD D1 Technical Chart

On the D1 Chart, RSI (14) is hovering around the oversold threshold afer falling back from the bullish market. This indicates that the sellers are still taking control in the market and a reversal into uptrend likely to be awaited after some period od time.


Fig. EURUSD H4 Technical Chart

Since last Tuesday, thanks to American positive data, US dollar advanced against the euro. ADX (14) points downwards but still far from the reading of 20, while DI+ and DI- are strugling against each other. The bull just on way to strive up to seize the lead but the mometum is not strong enough. Its rival still overwhelms and will drag the currency pair down further.

Analyses of Group Fiinvesting

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