This week in forex industry has seen some bad days and dire developments, including a ban in Belgium on forex and binary options. The main bombshell of the week, however, had to be the outlandish fine that could leave a serious impact on Apple as well as U.S. economy as a whole, as it could set a dangerous and game-changing precedent. However, let’s do the usual recap of the week first.
The Week Behind Us:
The EUR/USD pair is the first on our list. Yesterday we saw what seemed to be a remarkable recovery but it could actually spell a short-term low within the next week or so. If the pair manages to rise above 1.1210, we could be looking at some major consolidation, and the current predictions place it between 1.1120 and 1.1280. Do not assume there is going to be the next leg lower until the pair falls below 1.1120 and stays there.
For a while there, it seemed as though the GBP/USD pair was going to stay neutral for at least another week or two, but it seems the Pound is recovering at a somewhat higher rate than originally expected. We are seeing a very strong upward momentum that will likely carry it as high as 1.3370/75, but probably not higher than that. On the other hand, if the pair falls below 1.3130, you can safely assume that this expectation was misplaced and act accordingly.
It was fun while it lasted, but it seems as though the Australian dollar’s range-bound run is coming to an end, at least for the time being. On Wednesday, things got interesting when it reached the 0.7490 low, and this downward momentum will most likely carry into the next week. If you want, you could probably take profit on a move to 0.7485/90, although the possibility of fall below 0.7485 cannot be safely ignored for now.
The New Zealand dollar is also likely to break the range, considering that last Tuesday’s rebound exceeded the expectations. The old stop-loss has not been reached, but things got dangerously close at one point. If we do not see a drop below 0.7200 in the next few days, the dollar is expected to breach the 0.7310 benchmark.
Finally, the Japanese Yen has met the predictions of last week. Yesterday the Yen reached 104.00 albeit only temporarily. That does not mean it will not be breached in the near future, however. The U.S. dollar can easily strengthen but the bullish phase is not over yet. It will be when the pair breaks below 102.00.
Link: efxnews story
Forex Forecast for Major Pairs:
EUR/USD: Possible short-term low for this pair.
GBP/USD: A definite shift from the neutral outlook to a bullish one; Target remains 1.3370/75.
AUD/USD: Definitely bearish. The recommendation is to take partial profit at 0.7485.
NZD/USD: Bearish as well. The prognosis predicts a possible short-term low in the near future.
USD/JPY: The 104.00 target has been met but it seems unlikely the USD has the strength to surge further up for the time being.
Link: efxnews story
The Apple Got Bit: A $13 Billion Chunk
This is not a good week to be an Apple investor; it appears the European Commission is going to rain fire and brimstone on Ireland for allowing the Apple company $13 billion in tax benefits in one of the largest scandals in recent history.
Of course, Ireland being a tax haven for many U.S. corporations is nothing new, but the sheer extent is nothing short of staggering. While this special sort of ‘arrangement’ has been mutually beneficial for Ireland and said companies alike, it seems the other EU member states as well as the U.S. have a different opinion on the subject.
This is a finale of an ordeal that started back in 2014, looking into Ireland’s “illegal state aid” that provided Apple with what seemed to be a perfect legal loophole enabling some serious reduction in their tax bills. Furthermore, this was not made available to other companies, bringing another dimension into the predicament, and breaking another set of rules and regulations.
Like many other companies, Apple has taken full advantage of the possibility to list its intellectual properties in countries whose tax rates favor them to the fullest extent, regardless of where said properties had been made in the first place.
Even though the exact figure of the fine has yet to be determined, some analysts are already predicting the most severe tax penalty that Europe has ever seen, measuring in billions of euros. It is even expected to top the 1.4 billion euros that EDF had to pay last year. However, this figure is expected to be made public next Tuesday. All in all, we could be looking at some new financial statements from Apple as well as a serious change in the tax policies of certain EU member states.
Source: Business Insider
Link: Business Insider story
Belgium Bans Forex, Binary Options and CFDs
It is a sad day indeed for any Belgian resident who enjoys trading in forex, binaries or CFDs, as the Belgian government has decided to ban these types of online trading altogether.
It appears as though the Financial Services and Markets Authority (FSMA) has had it with various unauthorized firms and their aggressive advertizing campaigns aimed at Belgian citizens, so instead of continuing to issue warnings, they have opted for a complete ban. Of course, the only ones truly affected by this ban will be the regular firms, as the unregulated ones will need to be deterred with far more drastic measures.
By comparison, in neighboring France, there is likely going to be a ban on advertizing over-the-counter derivatives, but it seems Belgium is not content with this. This decision fits the earlier Belgian initiatives and bans such as those on cryprtocurrencies such as Bitcoin.
Source: Finance Magnates
Link: Finance Magnates story
Forex Reminder: The Upcoming Week
10:30 GBP Official Reserves (Changes) (AUG)
10:30 GBP Markit/CIPS UK Services PMI (AUG)
10:30 GBP Markit/CIPS UK Composite PMI (AUG)
NZD Dairy Auction Avg. Winning Price MT (SEP 6)
NZD Dairy Auction Whole Milk Powder MT (SEP 6)
06:30 AUD Reserve Bank of Australia Rate Decision (SEP 6)
07:45 CHF Gross Domestic Product (YoY) (2Q)
08:00 EUR German Factory Orders s.a. (MoM) (JUL)
08:00 EUR German Factory Orders n.s.a. (YoY) (JUL)
16:00 USD Labor Market Conditions Index Change (AUG)
16:00 USD ISM Non-Manufacutring Composite (AUG)
16:00 USD IBD/TIPP Economic Optimism (SEP)
CNY Foreign Reserves (AUG)
01:30 AUD AiG Performance of Construction Index (AUG)
03:15 USD Fed’s Williams Speaks on Outlook in Reno, Nevada
03:30 AUD Gross Domestic Product (QoQ) (2Q)
03:30 AUD Gross Domestic Product (YoY) (2Q)
07:00 JPY Leading Index (JUL P)
07:00 JPY Coincident Index (JUL P)
10:30 GBP Industrial Production (MoM) (JUL)
10:30 GBP Industrial Production (YoY) (JUL)
10:30 GBP Manufacturing Production (MoM) (JUL)
10:30 GBP Manufacturing Production (YoY) (JUL)
16:00 CAD Bank of Canada Rate Decision (SEP 7)
16:00 GBP NIESR Gross Domestic Product Estimate (AUG)
01:50 JPY Trade Balance – BOP Basis (Yen) (JUL)
01:50 JPY Gross Domestic Product (QoQ) (2Q F)
01:50 JPY Gross Domestic Product Annualized (2Q F)
01:50 JPY Japan Buying Foreign Bonds (Yen) (SEP 2)
01:50 JPY Japan Buying Foreign Stocks (Yen) (SEP 2)
13:45 EUR European Central Bank Rate Decision (SEP 8)
13:45 EUR ECB Deposit Facility Rate (SEP 8)
13:45 EUR ECB Marginal Lending Facility (SEP 8)
13:45 EUR ECB Asset Purchase Target (SEP)
14:30 USD Initial Jobless Claims (SEP 3)
14:30 CAD Capacity Utilization Rate (2Q)
14:30 CAD New Housing Price Index (YoY) (JUL)
14:30 USD Continuing Claims (AUG 27)
00:45 NZD REINZ House Sales (YoY) (AUG)
00:45 NZD Card Spending Retail (MoM) (AUG)
00:45 NZD NZ Card Spending (MoM) (AUG)
03:30 CNY Consumer Price Index (YoY) (AUG)
03:30 CNY Producer Price Index (YoY) (AUG)
03:30 AUD Home Loans (JUL)
03:30 AUD Investment Lending (JUL)
06:30 JPY Tertiary Industry Index (MoM) (JUL)
07:45 CHF Unemployment Rate (AUG)
07:45 CHF Unemployment Rate s.a. (AUG)
10:30 GBP Visible Trade Balance (Pounds) (JUL)
10:30 GBP Trade Balance Non EU (Pounds) (JUL)
10:30 GBP Total Trade Balance (Pounds) (JUL)
10:30 GBP Construction Output SA (MoM) (JUL)
10:30 GBP Construction Output SA (YoY) (JUL)
10:30 GBP BoE/TNS Inflation Next 12 Mths (AUG)
14:15 CAD Housing Starts (AUG)
14:30 CAD Unemployment Rate (AUG)
14:30 CAD Net Change in Employment (AUG)
14:30 CAD Full Time Employment Change (AUG)
14:30 CAD Part Time Employment Change (AUG)
14:30 CAD Participation Rate (AUG)
CNY New Yuan Loans CNY (AUG)
Source: Daily FX
Link: Daily FX Calendar