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Forex Market Analysis

Daily FX Brief, October 25 – Major Trade Setups – Risk-off Sentiment Plays! 

The U.S. Dollar Index gained 0.2% on the day to 97.68 on Thursday amid mixed U.S. economic data. The euro slid 0.3% to $1.1104. The European Central Bank held its benchmark rates unchanged as expected. ECB President Mario Draghi said risks to the outlook are “on the downside” compared with “tilted to the downside” previously. 

On the other hand, the Markit eurozone manufacturing purchasing managers’ index was flat on the month at 45.7 in October (46.0 expected) while the Services PMI rose to 51.8 (51.9 expected) from 51.6.

The pound dropped 0.6% to $1.2838. U.K. Prime Minister Boris Johnson said he would call for an early general election for December 12. Meanwhile, the European Union is expected to decide the length of Brexit delay later today.

Economic Events to Watch Today

Let’s took at these fundamentals.


GBP/USD– Daily Analysis

The GBP/USD currency pair consolidating in the narrow range below the 200-hour Moving Average at 0.2852, due to the uncertainty intensified regarding the Brexit deal and the United Kingdom eclection. Notably, the pair may remain under pressure mainly due to increased risk.

British Prime Minister Boris Johnson admitted for the first time that he would not fulfill his (do or die) promise to get a departure between the U.K. and E.U. before October 31 and asked for a fresh election on December 12 to break Britain’s Brexit obstacle.

Although the opposition has rejected the election offer and LAbour leader Jermy Corbyn said that he would wait to observe what will the European Union decides regarding the Brexit delay before deciding that how to put the vote on Monday.

Moreover, the European Union is thinking of granting a 3-months delay. However, the decision may not come on Friday. The Brexit is moving in the uncertainty track, and Prime Minister Boris Johnson looks stuck in the middle. Therefore, traders are cautious about buying GBP.

On the technical side, the Technical charts are also indicating a move lower. It should be noted that Thursday’s bearish candlestick has opened the opportunities for a broader reversal, perhaps to the 200-day average at 1.2710.



Daily Support and Resistance

S3 1.2539

S2 1.2701

S1 1.2774

Pivot Point 1.2862

R1 1.2936

R2 1.3024

R3 1.3186

GBP/USD– Trading Tips

After violating the bullish channel, the GBP/USD pair is trading bearish at 1.2835 area. Overall, the Cable is maintaining a sideways range of 1.2950 – 1.2785. The bearish engulfing candle on the 4-hour timeframe is likely to lead the GBP/USD prices towards 1.2785 area today. 

The MACD and RSI indicators are holding in the selling zone, supporting the bearish trend in the GBP/USD. Consider staying bearish below 1.2845 today. 

 


XAU/USD – Daily Analysis

The safe-haven prices rose somewhat due to traders are awaited the next weeks, the United States Federal Reserve policy conference.

The U.S. Federal Reserve’s policymakers will attend next week. Its Oct. 29-30 policy settlement is required to yield in a 3rd-straight quarter-point rate cut.

President Trump tweeted that, “The Federal Reserve is negligent in its duties if it doesn’t deliver the rate cut and even, ideally, stimulate.

Gold prices remain supported in the wake of Japan’s manufacturing activity, which declined at the fastest rate in 3-years. Meanwhile, The U.S. PMI opposed expectations for a drop and rose marginally, but with limited impact on the prices of the safe-haven gold.



Daily Support and Resistance

S3 1466.32

S2 1482.53

S1 1493.22

Pivot Point 1498.74

R1 1509.43

R2 1514.95

R3 1531.16

XAU/USD – Trading Tips

Gold’s bullish trend continues to dominate the market. Closing of 4-hour candles above 1,495 and 1,503 area is indicating chances of further buying in the gold. The precious metal has formed three white soldiers pattern, which typically drives the bullish trend in the market.

On the upper side, the next resistance is likely to be 1,511. Therefore, we should look for buying positions above 1,500 area to target 1508 today. 


USD/JPY – Daily Analysis

The USD/JPY currency pair is sidelined below the 200-day moving average and consolidating in the narrow range of 108.50 and 108.7 overnight, even after the United Sateta data a geopolitical uncertainty. 

As of writing, the USD/JPY currency pair is currently trading at 108.60, having ranged between the level of 108.56and 108.64.

At the Hong Kong front, the condition is dull in Asia right now, but the markets keep their eyes on how the Chinese can react to comments regarding the Honk Kong and China, where he criticized the Chinese over security and human rights.

At the U.S. data front, the United States September Durable Goods Orders were depressed, and the volatile headline dropped -1.1%m/m against an estimate of -0.7%m/m. Though, September New Home Sales found on the positive side, with an increase of 701,000 against 702,000, against the previous revised to 706k from 713k, though average annual prices continued to ease. Markit PMIs also held steady in October, whereby Manufacturing PMI rose to 51.5 and bat the estimates of 50.9 and prior 51.1. Services came in line with expectations with an increase in the composite level to 51.2 from 51.0.

Moreover, the United States’ two-year Treasury yields waited in normal ranges between 1.55% and 1.58%, and the ten-year return moved between 1.74% and 1.77%. Markets are expecting 22-basis points of a rate cut at the October 30 meeting and a terminal rate of 1.21% against 1.88% currently. President Trump tweeted that, “The Federal Reserve is negligent in its duties if it doesn’t deliver the rate cut and even, ideally, stimulate.

At the Brexit front, the British Prime Minister Boris Johnson admitted for the first time that he would not fulfill his (do or die) promise to get departure between the U.K. and E.U. before October 31, and asked for fresh elections on December 12 to break Britain’s Brexit obstacle.

While the European Union was expected to give its answer to the United Kingdom governments request for a delay of European Union membership beyond October. However, due to the conflict between the United Kingdom parliament members, the European Union will decide to prefer to get some transparency first because it is continuously creating uncertainty in U.K. politics and Brexit.



Daily Support and Resistance

S3 108.11

S2 108.37

S1 108.5

Pivot Point 108.63

R1 108.76

R2 108.88

R3 109.14

USD/JPY – Trading Tips

On Friday, the safe have currency pair USD/JPY is facing support at 108.280. This level has become a triple bottom level and pushed the USD/JPY higher for the third time. At the moment, the USD/JPY trend is mixed as it holds right below an immediate resistance level of 108.650. Violation of this level can extend buying until the next resistance level of 108.900. 

Today, let’s keep an eye on 108.650 to stay bearish or bullish above this level to capture quick trade in the USD/JPY. 

All the best!  

 

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Forex Market Analysis

Gold’s Bullish Breakout Setup Activated – Get Ready to Buy! 

On Thursday, the precious metal gold prices trade bullish as investors await clarity on Brexit following the European Union delayed a verdict on allowing Britain an extension. Considering the safe-haven demand in gold, the U.S. dollar has dropped from the 99.5 level to 97.2 continuously for the last two weeks.

It’s been months now, the financial markets are volatile and trading the risk-off sentiment in the wake of geopolitical risks such as the U.S.-China trade war, Brexit, Hong Kong rallies and stresses in the Middle East.

As you know, traders divert their investments from the U.S. dollar, stock markets, and other financial instruments to the safe-haven asset gold during the time of uncertainty. That’s precisely what happening right now. Traders seem to move investments into the gold.

Moreover, the weaker dollar is also keeping the precious metal gold supported due to its negative correlation with gold. Let’s take a look at the technical side of the market.


XAU/USD – Technical Levels

Support Resistance 

1488         1496.18

1484.02    1500.37

1475.85    1508.55

Key Trading Level: 1492.2

On the technical side, gold has violated the ascending triangle pattern, which was keeping gold in check below 1,496. Since this level is violated, we may see gold prices going towards 1,504 and 1,507 area. Therefore, consider keeping buying above 1,497. All the best! 

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Forex Market Analysis

Daily FX Brief, October 24 – Major Trade Setups – Traders Brace for ECB! 

The European Central bank rate decision is scheduled to release at 11:45 GMT, and Mario Draghi will conduct the press conference at 12:30 GMT. Apart from this, the EUR/USD currency pair may get any fresh hints from the United States Durable Goods order, which is scheduled to release at 12:30 GMT and the German preliminary Manufacturing PMIs and Eurozone due in the European trading hours.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 


GBP/USD– Daily Analysis

The GBP/USD currency pair consolidating in the narrow range near the 1.29 and could continue to trading in the tight range due to the Brexit Uncertainty.

As the Prime Minister Boris Johson failed to convince parliament to approve the Brexit deal as a law, therefore Prime Minister Boris Johnson is now on the waiting mood that the Europan Union to decide whether to agree to his 3-months delay request.

Moreover, PM Boris Johnson Spokesman has stated that the election will be compulsory if the European Union approved a request for a 3-month delay.

However, there are very fewer chances that the European Union will decide before Friday. So, traders will be cautious until any fresh news does not come.

The GBP/USD currency pair may beat the recent highs around the 1.30 in the American trading hours if the United States Goods order data release below expects figures, by the way, the data is scheduled to release at 12:30 GMT, rising the dovish Federal Reserve expectations.

It should also be remarked that the United States Central Bank is expected to deliver a rate cut by the 25-basis-points at its coming meeting.


Daily Support and Resistance

    

S3 1.2733

S2 1.2813

S1 1.2864

Pivot Point 1.2894

R1 1.2945

R2 1.2974

R3 1.3054

GBP/USD– Trading Tips

The GBP/USD has broken the bullish channel, which was carrying the pair near 1.2945. The formation fo a bearish engulfing candle is suggesting chances of a bearish reversal in the GBP/USD pair. 

On the lower side, the Sterling may find support at 1.2785 level, which also marks a double bottom on the 4-hour chart. Besides, the resistance stays at 1.2945 level. Consider staying bearish below 1.2920 today. 

 

EUR/USD – Daily Analysis

During the early Asian session, the EUR/USD currency pair trying to cross the 100-hour Moving Average level at 1.1140, mainly due to the European Central Bank (ECB) rate decision, which will be the last decision by the Mario Draghi as president.

The central bank rate cut by ten-basis points to -0.5% during September and announced a new step of the asset purchase program.

Europan Central Bank hasn’t many reasons to change its position at today’s meeting because the recent macro data report has been positive. Moreover, the European Central Bank members were divided due to the need to reviving bond purchases.

However, the bearish trend seems limited because the September month stimulus has been priced in. Besides this, it appears that markets are more interested in knowing hints by the incoming President Christine Lagarde in 2019 and 2020.

The European Central bank rate decision is scheduled to release at 11:45 GMT, and Draghi will hold the press conference at 12:30 GMT. Apart from this, the EUR/USD currency pair may get any fresh hints from the United States Durable Goods order, which is scheduled to release at 12:30 GMT and the German preliminary Manufacturing PMIs and Eurozone due in the European trading hours.

An unexpectedly weaker US data will support the dovish Federal Reserve expectations, and probably this greenback will drop across the board. Notably, the markets remain expecting the Federal Reserve will deliver the rate cut by the 25-basis-points on October 30.

Daily Support and Resistance 

S3 1.1058

S2 1.1092

S1 1.1112

Pivot Point 1.1126

R1 1.1147

R2 1.1161

R3 1.1195

EUR/USD – Trading Tips

The EUR/USD consolidates between 1.1116 and 1.1157 after placing a high around 1.1160 at the start of the week. For now, the EUR/USD is likely to continue consolidating in the narrow range of 1.1110 – 1.1150, at least ahead of the ECB rate decision. 

The EUR/USD is bearing double bottom support at 1.1110 regions, and over this, we can anticipate a bullish trend in the EUR/USD until 1.1150 and 1.1180. On the flip side, selling can be expected beneath 1.1110 till the 1.1065 area. 

USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and declines to 108.60, due to downbeat Brexit news increased the risk-on sentiment. The USD/JPY currency pair recently got support from the upbeat headlines regarding the United States and China trade agreement and Brexit, not to ignore the greenback weakness due to soft data. Although the increases could not long term due to the current threats from the United Kingdom. As of consequence, the recovery in the United States ten-year US treasury yields could not take much longer, whereas Wall street also ended with minor increases.

Brexit headlines and SIno-US trade headline keeps the markets cautious, as fears of hard Brexit and a potential trade deal between the United States and China.

Europan Central Bank hasn’t many reasons to change its position at today’s meeting because the recent macro data report has been positive. Moreover, today’s last meeting of President Draghi’s should be directed on the Governing Council’s views on the economic and geopolitical outlook, especially should talk about Germany’s slowdown as well as on the loud criticism by some Europan Central Bank member of restarting asset purchases. 

The ECB’s policy meeting will be under the eyes overnight, but the market doesn’t anticipate much action after last month’s rate cut package.

On the other hand, the US Durable Orders, Purchasing Managers Index, and New Home Sales will also keep under focus.

Daily Support and Resistance

 S3 107.69

S2 108.12

S1 108.39

Pivot Point 108.55

R1 108.81

R2 108.97

R3 109.4

USD/JPY – Trading Tips

The USD/JPY gained support above 108.280, the triple bottom level, which triggered a bullish reversal in the USD/JPY. At the moment, the bullish trend seems pretty strong, but the USD/JPY may find an immediate resistance at 108.900 area first. 

The MACD and Stochastics have diverted their direction to the bullish side, signaling chances of further buying in the pair. Today, the violation fo 108.270 can help us capture a quick sell position until 107.950. Whereas, buying can be seen until 108.900 level.

All the best!  

 

Categories
Forex Market Analysis

Safe-haven Gold Trades Higher – Brexit Uncertainty Dominates!

The safe-haven metal prices fond on the bullish track due to fresh Brexit headlines. Prime Minister Boris Johnsons Brexit bill gained the parliamentary support, but the government timeline of just three-days discussion on the bill was rejected.

The Chances of Britain departing the European Union before the deadline date of 31 October has dropped sharply, mainly due to parliamentary failure.

On the other hand, the headline came from the Prime Minster Boris Johnson office said that if the European Union agree to a delay until January, then the only way to shift from Britain’s Brexit crisis is a new election.


At the US-China trade front, Chinse Vice Foreign Minister Le Yucheng said during this week that the China and United States reached on some developments in trade talks, as well as he said that as long as both nations respected between ourselves, all problems can resolve.

Trouble in Hong Kong also gained some attention, after the financial Times reported overnight that China is considering replacing Hong Kong’s chief executive, Carrie Lam, by March.

    

Daily Support and Resistance

    

S3 1474.16

S2 1480.41

S1 1484.27

Pivot Point 1486.66

R1 1490.52

R2 1492.91

R3 1499.16

Consider trading bearish below 1,497 area with a stop loss above the 1,500 level. Conversely, selling trades can be taken below 1,496 to target 1,486. All the best! 

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Forex Market Analysis

Daily FX Brief, October 23 – Major Trade Setups – Stronger Dollar Plays

On Wednesday, the dollar rose versus its peer currencies as a risk spread ahead of the British parliament’s vote on the Withdrawal Agreement Bill, which will reflect light on when and how Britain will exit the Eurozone.

The British Pound currency was found on the selling track, although Prime Minister Boris Johnsons Brexit bill gained the parliamentary support, the government timeline of just three-days discussion on the bill was rejected.

The European Union Consumer Confidence is scheduled to release at 14:00 GMT. Hence, the European Central Bank, Andrea Enria, is expected to deliver the speech at an event in Madrid at 08:45GMT.

Economic Events to Watch Today

Let’s took at these fundamentals.


GBP/USD– Daily Analysis

The GBP/USD currency pair came under pressure, and the pair is currently trading below the 1.2850. As well as, the pair failed to hit the critical support range on Tuesday, mainly due to Brexit uncertainty and delay. The 50-hour and 100-hour Moving Averages are found at 1.2940 and 1.2905, respectively.

The British Pound currency was found on the selling track, although Prime Minister Boris Johnsons Brexit bill gained the parliamentary support, the government timeline of just three-days discussion on the bill was rejected.

The chances of Britain departing the European Union before the deadline date of October 31 has dropped sharply, mainly due to parliamentary failure.

On the other hand, the headline came from the Prime Minster Boris Johnson office said that if the European Union agree to a delay until January, then the only way to shift from Britain’s Brexit crisis is a new election.

Forecast view, the ongoing uncertainty regarding Brexit could continue to push the GBP lower. Moreover, the pair is trading well below the 100-hour Moving Average for the 1st time since October 11.

It should be noted that the greenback may gain some haven buying due to the risk-off sentiment in the equity markets and trade uncertainty.



Daily Support and Resistance

S3 1.264

S2 1.278

S1 1.2839

Pivot Point 1.292

R1 1.2979

R2 1.306

R3 1.32

GBP/USD– Trading Tips

The GBP/USD has violated the bullish channel, which was supporting the pair around 1.2945. The formation fo a bearish engulfing candle is suggesting chances of a bearish reversal in the GBP/USD pair. 

On the lower side, the Sterling may find support at 1.2785 level, which also marks a double bottom on the 4-hour chart. Besides, the resistance stays at 1.2945 level. Consider staying bearish below 1.2920 today. 

 

EUR/USD – Daily Analysis

During the early Asian session, the EUR/USD currency pair hit the bearish track, having gained acceptance below the 100-day M.A. yesterday. The EUR currency came under selling pressure, mainly due to the decline in the GBP currency as the Brexit obstacle.

If talking about the past movement of EUR, Brexit certainty has sent the shared currency above the 100-day Moving Average on October 18. 

On the technical side, the EUR/USD currency pair found on the inverted hammer on Monday and ended well below the inverted hammers low of 1.1139 on Tuesday.

So, the EUR currency could drop further, notably if the German ten-year bond yields extend Tuesdays 4-basis-points decline to -0.38%. 

Moreover, the greenback may gain some haven buying, adding to the bearish pressures near the EUR/USD currency due to the risk-off sentiment in the equity markets.

On the other hand, the European Union Consumer Confidence is scheduled to release at 14:00 GMT. Hence, the European Central Bank, Andrea Enria, is expected to deliver the speech at an event in Madrid at 08:45GMT.


Daily Support and Resistance

    

S3 1.1056

S2 1.1096

S1 1.1113

Pivot Point 1.1135

R1 1.1153

R2 1.1175

R3 1.1214

EUR/USD – Trading Tips

The EUR/USD currency was trading 1.1116 and 1.1157 yesterday, hit the lowest range. As for today, the EUR will likely to continue consolidating in the narrow range of 1.1110 – 1.1150.

The EUR/USD is also facing double bottom support at 1.1110 area, and above this, we can expect to buy a trend in the EUR/USD until 1.1150 and 1.1180. On the other hand, selling can be expected below 1.1110 until the 1.1065 area. 

USD/JPY – Daily Analysis

The USD/JPY currency pair is flashing red and representing 0.16% declines on the day. As of writing, the USD/JPY currency pair currently trading at 108.30, as the time of writing, the pair traveled from a high range of 108.51 to a low range of 108.25.

The USD/JPY currency pair may end with a much higher daily loss, as the four-hour chart is showing a head-and-shoulders breakdown. 

Such as Prime Minister Boris Johnsons Brexit bill gained the parliamentary support, but the government timeline of just three-days discussion on the bill was rejected.

Notably, Prime Minister Boris Johnson made a plan to meet with European Union leaders once again to discuss the timeline, and the chances of an early election are increasingly, but Brexit delayed beyond the elections. 

At the data front, the Oct Richmond Fed manufacturing survey rose firmly to +8 (est. -7, prior -9). Increases were comprehensive, with noted raises in employment and new orders with expectations edging higher in addition to stronger current conditions. United Step Sep existing home sales slid -2.2%m/m (est. -0.7%m/m). However, at 5.38mn (est. 5.45mn), the annualized level continues close to post record highs, and NAR’s chief economist continues to cite a shortage of stock and supply.

The United States’ two-year Treasury yields were moving between 1.59% and 1.63, whereas the ten-year yield traveled between 1.76% and 1.80%. Markets are expecting 22-basis points of a rate cut at the October 30 meeting and a terminal rate of 1.24% against % currently.


Daily Support and Resistance

S3 108.09

S2 108.31

S1 108.41

Pivot Point 108.53

R1 108.63

R2 108.75

R3 108.97

USD/JPY – Trading Tips

Recalling our previous update, the USD/JPY was trading in the bullish channel, which was extending support at 108.350. This bullish channel is now violated. As anticipated, the violation of 108.350 is extending bearish rally until the 108 level. 

The MACD and Stochastics are consistently pointing into the selling zone, signaling odds of a bearish bias.

The USD/JPY may attain a critical resistance at 108.57, along with support at 108.300. Today, the violation fo 108.270 can help us capture a quick sell position until 107.950. 

All the best!  

 

Categories
Forex Market Analysis

Daily FX Brief, October 22 – Major Trade Setups – Brexit Parliamentary Votes Ahead! 

The Canadian dollar continued to trade bullish around three-month high on Tuesday as the market seems to celebrate the re-election of the Liberal government, 

“You did it, my friends. Congratulations,” Trudeau told supporters in Montreal early on Tuesday.

Despite this win, few of the traders are worried that the Liberals need to depend upon an opposition party to govern the government. 

Economic Events to Watch Today

Let’s took at these fundamentals.

 


XAU/USD– Daily Analysis

On Tuesday, the yellow metal gold is trading mostly muted, pressed down by floating Asian shares that helped growth in trade discussions between the United States and China, but gained relief from a lack of certainty in the trade talk details.

The lack of clarity over Brexit has kept the gold prices inside a rang for almost two weeks. But on Saturday, some of the uncertainty cleared up from the market after the vote of U.K. parliament against PM Johnson’s Brexit Deal. Gold prices reacted to that news on Monday and showed a slight Bearish trend at the starting day of the week.

The precious metal gold continues to maintain a sideways range of $1,500 to $1,480. At the moment, the gold prices are taking a bullish turn as sellers seem to make profit-taking ahead of the Brexit Parliament vote today. 

Besides, the Peoples Bank of China (PBOC) reduced the mortgage rate from 4.25% to 4.20%. The LPR is estimated based on the range over the medium-term Loan Facility each month. 

Gold may face a bearish trend if the yield drops alliance with a bullish breakout over 1.80%. Nevertheless, the yellow metal is displaying flexibility by neglecting losses. The gold mostly falls due to the Central Bank’s hawkish policy.


Daily Support and Resistance   

S3 1472.23

S2 1480.87

S1 1485.48

Pivot Point 1489.51

R1 1494.12

R2 1498.15

R3 1506.79

XAU/USD– Trading Tips

Gold prices drifted lower on Monday and but the Tuesday sessions are bringing bulls. Gold is poised to test resistance around 1,491, which is extended by the bullish trendline resistance. 

Gold may find support bear near the triple bottom support level of 1,480. The MACD histogram is marking in the red with a smooth trajectory that leads to consolidation. Today, consider staying bearish below 1,492 and bullish above 1,480. 

 


EUR/USD – Daily Analysis

The Euro was little changed at $1.1152, while USD/JPY gained 0.2% to 108.61. The Euro traded mostly unchanged during the day on Monday, as traders didn’ find any reason to determine it’s direction. The market is presently a bit overstretched, so I would not be amazed at all to detect a bit of a pullback occurring.

The Euro has been comparatively low throughout the day on Monday, as we proceed to see much choppiness at the peak of a significant move. 

Studying the 4-hour chart, the 200-day EMA is also rising beyond the 61.8% Fibonacci retracement mark, a range that should bring much attention as well. With that being said, I am not a tremendous fan of attempting to jump in and begin selling instantly. We need to wait for a few checks; especially, the Brexit Parliament Vote is something than can trigger sharp volatility in the market. 


Daily Support and Resistance

R3: 1.1238

R2: 1.1197

R1: 1.1174

Pivot Point 1.1156

S1: 1.1133

S2: 1.1116

S3: 1.1075

EUR/USD – Trading Tips

The bullish engulfing candle over 1.1100 level pushes the currency pair towards the 1.116 level. The RSI and MACD are yet dispensing a buying bais, though the EUR/USD pair may exhibit retracement till 1.1130 ere dispensing a new bullish trend. 

Consider staying bearish below 1.1156 level today to target 1.1135 on the lower side.


USD/JPY – Daily Analysis

The USD/JPY was closed at 108.598 after placing a high of 108.662 and a low of 108.290. The overall trend remained Bullish that day.

At 4:50 GMT, the Trade Balance for September from Japan showed a figure of -0.10T against the expectations of -0.17T and supported the Japanese Yen. The All industrial activities of Japan for September came in as 0.0% against the expectations of 0.1% at 9:30 GMT.

USD/JPY showed an upward trend in the beginning day of the week, the hopes that U.K. Parliament would approve the re-voting for the Brexit deal caused high-risk factors in the market, and traders started buying USD/JPY under that influence. But when the U.K. parliament denied taking another vote on the same issue, the pair’s upward trend suffered.

Additionally, on Monday, the 10-year U.S. Treasury Bond Yield showed a growth of more than 1.5% and added in the upward trend of USD/JPY.

Furthermore, the White House economic advisor on Monday stated that US-China talks were going very well. If the written agreement would get signed in November, then the December tariff hikes could be avoided. This caused an increased demand for U.S. dollars in the market, and hence, USD/JPY surged.



Daily Support and Resistance

R3: 108.99

R2: 108.78

R1: 108.68

Pivot Point 108.57

S1: 108.47

S2: 108.36

S3: 108.15

USD/JPY – Trading Tips

The USD/JPY continues to trade a bullish channel, which is extending support at 108.350. On the lower side, the violation of 108.350 can extend bearish rally until the 108 level. Overall, the MACD and Stochastics are holding in the selling zone, signaling chances of a bearish bias.

The USD/JPY may find an immediate resistance at 108.57, and that’s I think is a perfect level to open sell positions. On the upper side, violation of 108.57 can extend buying until 108.950

All the best!  

 

Categories
Forex Market Analysis

USD/JPY Currency Pair Unchanged – Eyes on Brexit Uncertainty!

The USD/JPY currency pair consolidating between the narrow range of 108.29 and 108.48; by the way, the pair hit the high of108.48 so far. The pair dropped from 108.70 to 108.40 on Friday, 

Financial market’s eyes were on the Brexit ending moments, while the Chinese Gross Domestic produce disappointing figures was also a weigh on risk appetite. As well as the stocks were underperforming into the close with the S&P 500 off by 0.4%, although the DAX was down 0.2%, and the FTSE 100 was down 0.4%.

At the Brexit front, the Chinas economy increased at the target rate by 6% in the 3rd-quarter, which boosted the safe-haven demand, whereas the Brexit uncertainty is currently doing the same work.

United Kingdom Parliament voted 322 to 306 in support of Lewtin Amendment to delay Prime Minister Johnson Brexit’s deal with European Union, but the U.K parliament declared an act withholding support until full legislation is passed. So, Prime Minister Boris Johnson requested the European Union for a 3-months delay, but he didn’t sign the letter yet and stating that his plan was still to get approval for the departure deal and leave European Union by 31 October. Notably, the European Union twenty-seven leaders are remained to respond.

On the other hand, the United States’ two-year treasury yields dropped from 1.59% to 1.57%, whereas the ten-year return consolidated sideways between 1.73% and 1.77%. Markets are anticipating 22 basis points of rate cut the 31 October meeting and a terminal rate of 1.21% against 1.88% currently.

Daily Support and Resistance

S3 107.8

S2 108.15

S1 108.28

Pivot Point 108.5

R1 108.63

R2 108.85

R3 109.2

Consider staying bullish above 108.450 to target 108.600 and 108.750 today. On the lower side, 108.200 and 108 are likely to be potential targets. All the best! 

Categories
Forex Market Analysis

Daily FX Brief, October 21 – Major Trade Setups – Brexit Deal Fails to Pass Parliament Vote! 

The U.S. Dollar Index slid 0.3% on the day to 97.28 on Friday. For the first time since December 2018, the index has been down for a third straight week.

The British pound rose 0.6% to $1.2973, posting a four-day rally. On Saturday, the British members of parliament voted to withhold approval of the Brexit deal. It is reported that the U.K. government has asked the European Union for a three-month delay to the Brexit deadline. This morning, the British pound retreated to $1.2919.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 

  


XAU/USD– Daily Analysis

The safe-haven metal prices consolidating in the narrow range of $1,500 to $1,480 since last Monday, as of now the prices slightly dropped due to traders expected more transparency in the Brexit progress.

At the Brexit front, the United Kingdom Prime Minister Boris Johnson attempted to have a meaningful vote on his Brexit deal on Saturday. Still, the U.K parliament declared an act withholding support until full legislation is passed. Therefore, Prime Minister Boris Johnson requested the European Union for a 3-months delay.

On the other hand, the Peoples Bank of China (PBOC changed the loan rate from 4.25% to 4.20%. The LPR is set based on the range above the medium-term Loan Facility rate every month. 

Gold may come under pressure if the yield ends consolidation with a bullish breakout above 1.80%. However, the yellow metal is showing resilience by ignoring losses. The gold mostly drops due to the Central Bank hawkish decisions.

The United States’ ten-year Treasury is currently unchanged around 1.75%. Interestingly, the benchmark yield is also lacking a clear directional bias since October 15. 

At the US-China trade war front, China’s Vice Premier Liu He stated that the China and United States are on the development track and that they completed the phase one agreement. 



Daily Support and Resistance

    

S3 1472.23

S2 1480.87

S1 1485.48

Pivot Point 1489.51

R1 1494.12

R2 1498.15

R3 1506.79

XAU/USD– Trading Tips

The precious metal gold prices remain to trade in the old range of 1,496 – 1,488. On the 4 hour chart, gold has formed an ascending triangle, which is extending substantial resistance at 1,495. Therefore, consider lingering bearish below 1,492 level to target 1,488 and 1,482. 

 


EUR/USD – Daily Analysis

The EUR/USD currency pair hit the longest weekly rally since July 2018; the pair surged 1.22% last week. Having recovered by 0.54% and 0.33% in the previous two weeks. It should be noted that the reason behind last week’s bullish trends could be Brexit optimism headline and the resulting rally in the GBP.

At the Brexit front, the United Kingdom Prime Minister Boris Johnson attempted to have a meaningful vote on his Brexit deal on Saturday. Still, the U.K parliament declared an act withholding support until full legislation is passed. So, Prime Minister Boris Johnson requested the European Union for a 3-months delay.

It should also be noted that the German Producer Price Index is scheduled to release at 06:00 GMT, and the Bundesbank’s monthly report is scheduled to release at 10:00 GMT. The EUR currency could face bearish pressure if the September PPI figures well below the forecast of -0.1% month-on-month, supporting slowdown fears. 

The shared currency may hit the bearish track if the European Union takes revenge in the return of the United States’ decision to impose tariffs on $7.5 billion worth of European imports.

    


Daily Support and Resistance

    

S3 1.1035

S2 1.1094

S1 1.1133

Pivot Point 1.1153

R1 1.1192

R2 1.1212

R3 1.1271

EUR/USD – Trading Tips

The bullish engulfing candle above 1.1100 level leads the EUR/USD pair towards the 1.116 level. The RSI and MACD are still showing a buying trend, but the pair may dispense some retracement until 1.1140 before showing a further bullish trend. 

Consider staying bullish over 1.1153 level today to target 1.1160 on the higher side.


GBP/USD – Daily Analysis

The GBP/USD currency pair flashing red and representing 0.46% losses on the day, by the way, the GBP/USD currency pair currently trading at 1.2914. Additionally, the GBP currency could come under pressure further according to the forecasted by the options markets.

The GBP/USD currency pair options market is down on GBP currency since April. Moreover, the investors are adding bets for a decline in the Pound currency due to fading Brexit optimism.

One-month risk reversal (GBP1MRR), a gauge of calls to puts on the GBP fell by -1.70 on Friday, but it is currently found at -1.65. Friday’s figures were the weakest level in 6-months. On the positive note, the gauge had surged to a 21-month top of 0.125 on October 11.

The decline from October 11 high of 0.125 to October 17 low of -1.70 hints the investors were anticipating the United Kingdom parliament to put obstacles on Prime Minister Boris Johnson Brexit’s agreement.

As we know, the Super Saturday burned all the expectations due to the U.K parliament declared an act withholding support until full legislation is passed. Meanwhile, Prime Minister Boris Johnson requested the European Union for a 3-months delay.



Daily Support and Resistance

S3 1.2635

S2 1.2784

S1 1.2876

Pivot Point 1.2932

R1 1.3025

R2 1.3081

R3 1.3229

GBP/USD – Trading Tips

The GBP/USD is trading sharply bullish above but within a bullish channel. The bullish channel is giving support around 1.2900 level. The GBP/USD has formed a test bar pattern on the 4-hour chart, which is suggesting a bullish trend in the Cable.

The next support stays at 1.2900, and resistance is likely to remain at 1.3050 today. Consider staying bullish above 1.2932 today. 

All the best!  

 

Categories
Forex Market Analysis Forex Signals

USD/JPY Testing Lower Edge of Bullish Channel – Can We Expect Buying?

The USD/JPY currency pair traded bullish to hit the three-months high at 108.94 before declining to 108.40. As of writing, the USD/JPY currency pair is trading near the 108.40s and touches away from the 200-day Moving Average.

Brexit developments left a positive sentiment on the market, and the investors got encouragement from the progress between Turkey and Syria wherein the ceasefire was formed by the United States announced by the VP Pence in a press conference during the United States session.

However, third-quarter earnings statements were the main focus that raised the benchmarks, and subsequently, the Dow Jones Industrial Average, DJIA, ended with an increase of approximately 26 points, or 0.1%, near 27,028. Consequently, the safe-haven currency Japanese lost its haven appeal despite US September industrial production came worse than expected. The figure fell by -0.4%m/m against estimates of -0.2% while August was revised to +0.8%m/m from +0.6%m/m.

As for yields, the United States 2-year treasury yields increased from 1.58% to 1.64% due to the Brexit headlines then fell back to 1.60%. Markets are still expecting 20-basis-points of a rate cut at the 31 October meeting and a terminal rate of 1.24% against1.88% currently.

Japanese inflation data for September reported with the headline Consumer Price index in at 0.2% Year over Year (YoY) vs. the expected 0.2% & prior 0.3%.

  • Japan CPI (YoY) sep: 0.2% (est 0.2%, prev 0.3%).
  • Ex fresh food (YoY): 0.3% (est 0.3%, prev 0.5%).
  • Ex fresh food, energy (YoY): 0.5% (est 0.5%, prev 0.6%).

USD/JPY – Technical Analysis 

On the 4 hour chart, the USDJPY is trading bullish above 108.400, and above this, we can expect the USD/JPY to go after 108.900. It’s the bullish channel, which is keeping the safe-haven pair supported.

Daily Support and Resistance
S3 107.69
S2 108.18
S1 108.4
Pivot Point 108.67
R1 108.89
R2 109.16
R3 109.65

In the case of a bearish breakout, the USD/JPY pair can drop towards 108.000 level. Therefore, the traders may consider staying bullish over 108.400 and bearish below the same to capture quick 30/50 pips on either side.
All the best!

Categories
Forex Market Analysis

Daily FX Brief, October 18 – Major Trade Setups – Risk Appetite Rises Amid Brexit Deal! 

On Friday, the U.S. dollar trades bearish after the U.S. dollar slid to a nearly eight-week low in the prior session, keeping gold prices underpinned. 

European Union leaders collectively supported a new Brexit agreement with Britain on Thursday. The British Prime Minister Boris Johnson is facing a battle to ensure the U.K. parliament’s support for the deal if he is to get Britain outside of Europe on October 31.

The risk sentiment improved yesterday due to the announcement of the United Kingdom and the European Union that they looked the Brexit deal. Still, the Brexit deal concerns continued to increase because the markets are worrying about the United Kingdom Prime Minister Boris Johnson’s probabilities of getting the approval for the Brexit deal by the U.K. parliament.

Economic Events to Watch Today

Let’s took at these fundamentals.

 


XAU/USD– Daily Analysis

The safe-haven-metal prices dropped despite the weak China GDP data, and the drop came at the prices due to the markets were digesting headlines regarding Brexit and the US-China trade war.

U.S. Gold Futures for December delivery dropped 0.2% to $1,494.95 per ounce by 1:05 AM ET (05:05 GMT).

The risk sentiment improved yesterday due to the announcement of the United Kingdom and the European Union that they looked the Brexit deal. Still, the Brexit deal concerns continued to increase because the markets are worrying about the United Kingdom Prime Minister Boris Johnson’s probabilities of getting the approval for the Brexit deal by the U.K. parliament.

Moreover, China’s 3rd-quarter GDP rose slower than expected. Chinese stocks dropped after the release of the data, but the safe-haven gold didn’t get any benefit from this.

Continuing trade tussle with the U.S. will keep under the eyes. Therefore, China said on Thursday that it believed to be in the last phase of the trade agreement with the United States. At the same time, China gave a warning that the United States has to cancel new tariffs for a full trade deal.

China’s Ministry of Commerce spokesman Gao Feng also said that we expect that both nations can continue to work together to more progress in discussions. As soon as possible, we will reach on a phased deal as well and make new progress with the help of canceling tariffs.


Daily Support and Resistance

S3 1462.89

S2 1476.9

S1 1484.38

Pivot Point 1490.91

R1 1498.39

R2 1504.92

R3 1518.93

XAU/USD– Trading Tips

Gold prices continue to trade in the same range of 1,496 – 1,488 as investors focus mostly stay on the Brexit deal and Sterling pairs. Technically, the precious metal gold has formed an ascending triangle on the 4-hour timeframe, which is extending substantial resistance at 1,495. Thus, consider staying bearish below 1,496 level to target 1,488 and 1,484. 

 


EUR/USD – Daily Analysis

The EUR/USD currency pair found below the 100-day Moving Average of 1.1137, and the pair hit the high of 1.1140 on Thursday due to the headline that the United Kingdom and European Union officials teams (E.U.) have reached a Brexit departure deal.

The upward rally suddenly stopped near the 100-day Moving Average in the overnight session, possibly due to the concerns that the United Kingdom Parliament may reject the deal.

Looking forward, Prime Minister Boris Johnson will face a strongly divided parliament on Saturday, because all the opposition will try to delay the agreement in parliament and another election. Moreover, Boris Johnson Brexit deal already rejected once by the Northern Irish ally, the Democratic Unioost Party.

According to the entire situation, we can say that the chances of the United Kingdom parliament approving the Brexit deal by Boris Johnson are too low. The E.U. currency may remain below the 100-day Moving Average due to uncertainty surrounding the Brexit deal.

On the other hand, the equities could remain under pressure in the wake of sluggish China data; as of data, the final data released in the Asin session which was showed Chinas economy improved 6.0% from a year ago in the 3rd quarter, the weakest data sine 27.5 years.

The E.U. and Pound, both of the currencies, will take a buying trend if the Domcarative Unionist Party gives a softening statement about the Brexit deal on Saturday. In such a case, the EUR/USD currency pair could close above the 100-day Moving Average for the 1st time since July 18.


Daily Support and Resistance  

S3 1.0961

S2 1.1036

S1 1.1082

Pivot Point 1.1111

R1 1.1157

R2 1.1186

R3 1.1261

EUR/USD – Trading Tips

The EUR/USD has come out of the sideways range of 1.1020 – 1.1070. The pair is now holding above 1.1070 level, which is currently working as a support.

The bullish engulfing candle above 1.1100 level is suggesting the chances of further buying in the major currency pair. The RSI and MACD are indicating a buying trend, but the pair may show some correction until 1100 before showing a further bullish trend.

Consider staying bullish above 1.1100 level today to target 1.1160 on the upper side.


GBP/USD – Daily Analysis

The GBP/USD currency pair hit the bearish track, representing a 0.30% declines on the day, mainly due to the fears that Prime Minister Boris Johnson could fail to approve the new Brexit deal in the United Kingdom parliament on coming Saturday.

As of writing, the GBP/USD currency pair currently trading around the 1.2850, having hit a high of 1.2990 on Thursday. By the way, it was the highest level since May 13.

Moreover, the GBP currency took a strong buying trend during the European trading hours due to the report that the United Kingdom and the European Union have reached a Brexit departure deal.

The GBP/USD rose to 5-months highs, but it was short-timed because the optimism decreased on the realization that the United Kingdom parliament could deny the deal.

In an amazing Saturday meeting, the first since 1982, the parliament will vote on approving the new Brexit deal.

Looking forward, Prime Minister Boris Johnson will face a strongly divided parliament on Saturday, because all the opposition will try to delay the agreement in parliament and another election. Moreover, Boris Johnson Brexit deal already rejected once by the Northern Irish ally, the Democratic Unioost Party.


Daily Support and Resistance

    

S3 1.2396

S2 1.2636

S1 1.2764

Pivot Point 1.2877

R1 1.3004

R2 1.3117

R3 1.3357

GBP/USD – Trading Tips

The GBP/USD is trading within a bullish channel, which is extending support around 1.2850 level. The GBP/USD has from inside up bar pattern on the 4-hour chart, which is suggesting a bullish trend in the Cable.

The immediate support prevails at 1.2800, and resistance is likely to stay at 1.2900 today. Consider staying bullish above 1.2800, where the violation of 1.2870 can also lead the GBP/USD towards 1.2910. 

All the best!  

 

Categories
Forex Market Analysis

Daily FX Brief, October 17 – Major Trade Setups – Philly Fed Index In Focus!

The I.C.E. U.S. Dollar Index slipped 0.1% on the day to 98.31. Later today, the Federal Reserve will release its latest economic report, the Beige Book.

The British Pound resumed its rally amid growing Brexit deal optimism, surging 1.2% to $1.2760, the highest level since May 16. It was reported that the U.K. and European Union negotiators would present a draft Brexit deal to national delegations later today. On the other hand, official data showed that U.K.’s jobless rate rose to 3.9% in the three months to August (3.8% expected). September C.P.I. will be reported later today (+1.8% on-year expected).

The Euro edged up 0.1% to $1.1034. The Z.E.W. German Current Situation Index dropped to -25.3 in October (-23.6 expected, -19.9 in September), the lowest level since April 2010. USD/JPY climbed 0.4% to 108.81.

Economic Events to Watch Today

Let’s took at these fundamentals.

 


XAU/USD– Daily Analysis

the safe-haven metal prices dropped despite the U.S.S. weak retail sales data and hinted the higher possibility of a rate cut from the Federal Reserve.

Data showed retail sales in the United States dropped by 0.3% during September, their highest decline since last November.

According to forecasting, investors are now expecting an 88.7% probability of a 25 basis-points rate cut at the Federal Reserve policy meeting at the end of the month.

Brexit progress still under the eyes. The report came from B.B.C. official that the United Kingdom and the European Union will not declare the deal on Brexit today. News from other sources said that the deal could still be announced at the end of this week.

Fresh U.S.-China tensions due to Hong Kong received some attention this week but failed to boost gold prices today.



Daily Support and Resistance    

S3 1457.17

S2 1471.83

S1 1481.27

Pivot Point 1486.49

R1 1495.93

R2 1501.15

R3 1515.81

XAU/USD– Trading Tips

The precious metal gold hasn’t improved much in the past several days since it succeeded in holding under 1,497 handle. Neutral sentiment appears sturdy enough to hold gold within 1,492 – 1,477 range. 

Traders may retain selling trades under 1,494 area today. In the case of a bullish violation of 1,492, the market may witness gold flying towards 1,497 area.

 


EUR/USD – Daily Analysis

The EUR/USD currency pair failed to cross the critical resistance level and still hold below the 1.1085/90 level, despite benefiting from the sluggish U.S. data and change in European Central Bank policy maker’s bias. As of writing, the currency pair is currently trading at 1.1077.

Meanwhile, the U.S. Dollar Index took further disappointment, in terms of September month Retail sales, that sent the pair down to fresh 7-week low on Wednesday.

On the other hand, the policymakers of the European Union continue to struggling to declare a final Brexit deal with the United Kingdom and extended the discussions to Thursday before holding the 2-day European Union summit. The British policymakers didn’t get the support of the Democratic Unionist Party (D.U.P.) so far in the wake of the deal that could be agreed with the European Union.

Risk sentiment in the market is downbeat due to the difficulties between the United States and China trade deal and Brexit uncertainty with the stocks and bonds in Asia.

Whereas the Brexit is the leading cause for the pair movement and the market right now, moreover, the 2nd data from the United States and Federal reserve coming talks will likely entertaining traders.

    


Daily Support and Resistance

S3 1.0934

S2 1.0998

S1 1.1036

Pivot Point 1.1061

R1 1.11

R2 1.1124

R3 1.1188

EUR/USD – Trading Tips

The EUR/USD continues trading in the sideways range of 1.1020 – 1.1070. Lately, the pair violated the horizontal resistance level of 1.1050, which is likely to push the EUR/USD pair towards 1.1100 today. 

Taking a look at the 4-hour chart, the EUR/USD is rising in an upward channel. The bullish channel is extending support at 1.100, but before this, the previously violated figure of 1.1050 can extend bullish rally until 1.1100. Consider staying bullish above 1.1061 today.


GBP/USD – Daily Analysis

The cable pair consolidating in the narrow range below five-months highs The GBP/USD currency pair hit the highest level of 1.2800 since May from the intraday declines of the 1.2655 area on Wednesday, mainly due to positive Brexit headlines. 

The British Pound was additionally depressed by the report in which said that the technical Brexit discussions have stuck in the obstacle, and the Brexit deal seems impossible until the United Kingdom moves. Meanwhile, the Wednesday disappointment from the new consumer numbers left a little impact on the pair intraday two-way price swings.

On the final notes, the statement came from the French President Macron, that Brexit deal was on the last track, provided substantial relief to the GBP buyers. Moreover, the German Chancellor Angela Market also said that the Brexit discussions are now at the end of the story and gave further support to the GBP.


Daily Support and Resistance

 S3 1.2341

S2 1.2563

S1 1.2691

Pivot Point 1.2785

R1 1.2913

R2 1.3006

R3 1.3228

GBP/USD – Trading Tips

The GBP/USD currency pair raised a little from the daily highs and now looks like that the pair entered in the phase of consolidation. That is seemingly caused by the investors avoiding from putting any further bullish bets due to the crucial European Council Summit, starting from today, which will finally decide the United Kingdom will leave the European Union with a deal or not on October 31.

The GBP/USD is testing the firm resistance market of 1.285 and also have formed bearish candles followed by a strong bullish trend. This can drive bearish movement in the market. Therefore, consider the trend bearish below1.2860 mark, and the GBP/USD can stay bearish until 1.2754 and 1.2736 areas.

All the best!  

 

Categories
Forex Market Analysis

AUD/USD Flashing Red As US-China Tensions Dominates! 

 

The AUD/USD currency pair flashing red and representing losses for the 3rd consecutive day. It’s mainly due to the United States and China’s political tensions and weaker daily Chinese Yaun fix by the Peoples Bank of China.

As of writing, the AUD/USD currency pair is trading at 0.6734, representing 0.20% losses on the day. The pair AUD/USD is flirting with the lower edge of the bear flag on the daily chart.

The United States House of officials approved a bill regarding human rights in Hong Kong on Tuesday, moving the Hong Kong Human Rights and Democracy Act of 2019 a step closer to becoming law.

China warned the United States due to interfering in its internal matters and also gave a warning against the United States policy.

Therefore, the risk assets have come under pressure, and the safe havens like the Japanese Yen and gold were found on the bullish track.

AUD/USD Technical Side

On the technical side, the close above below the 0.6737 will confirm a breakdown and create room for a decline to levels below 0.6520. On the way lower, the pair may find support at 0.6671 (Oct. 2 low).


The pair is trading bearish, and it’s very likely to continue its bearish momentum until 0.6700. The MACD and Stochastics are holding in the bearish zone, suggesting odds of further selling in the Aussie.

Daily Support and Resistance

S3 0.6712

S2 0.6752

S1 0.6773

Pivot Point 0.6792

R1 0.6812

R2 0.6831

R3 0.6871

Consider staying bearish below 0.6745 to target 0.6720 today. All the best! 

Categories
Forex Market Analysis

Daily FX Brief, October 16 – Major Trade Setups – Brace for Price Action CPI & Retail Sales!

The ICE U.S. Dollar Index slipped 0.1% on the day to 98.31. Later today, the Federal Reserve will release its latest economic report, the Beige Book.

The British pound resumed its rally amid growing Brexit deal optimism, surging 1.2% to $1.2760, the highest level since May 16. It was reported that the U.K. and European Union negotiators would present a draft Brexit deal to national delegations later today. On the other hand, official data showed that U.K.’s jobless rate rose to 3.9% in the three months to August (3.8% expected). September CPI will be reported later today (+1.8% on-year expected).

The euro edged up 0.1% to $1.1034. The ZEW German Current Situation Index dropped to -25.3 in October (-23.6 expected, -19.9 in September), the lowest level since April 2010. USD/JPY climbed 0.4% to 108.81.

Economic Events to Watch Today

Let’s took at these fundamentals.


XAU/USD– Daily Analysis

The safe-haven metal prices flashing green as traders priced in the latest news regarding Brexit and Sino-US trade worries. The Sino-U.S. trade tensions once again escalated, as China now wants the United States to reduce tariff before singing the purchase of $50 billion of American agriculture products under the round one trade deal touted by the U.S. President Donald Trump.

Brexit negotiations between the United Kingdom and the European Union are reaching a decisive stage. Reports came that a deal between the two sides may be near, but it was still unclear if London could avoid delaying its departure, which is due on October 31.

The United States will not go ahead with the hike in tariffs on nearly $250 billion of Chinese products from 25% to 30%, which is often indicative. Trump and Xi are due to meet in the interests of the APEC conference next November. The mid-December tariff on approximately $160 billion of Chinese products, is what is presently a crucial decision for both nations. 


Daily Support and Resistance

    S3 1443.07

S2 1464.37

S1 1472.78

Pivot Point 1485.67

R1 1494.08

R2 1506.97

R3 1528.27

XAU/USD– Trading Tips

Gold continues to exhibit choppy trading in a small area of 1,487 – 1,477. A bullish breakout of 1,487 can extend buying until 1,494 level whereas, the bearish breakout of 1,477 level is likely to continue selling until 1,464 level. 

 


EUR/USD – Daily Analysis

The EUR/USD currency pair trading above the 50-day moving average for the 3rd consecutive day and failed to hit the critical level resistance level of 1.1075 despite Brexit optimism.

As of writing, the currency pair is currently trading near 1.1030, found on the bearish track on the day in the wake of U.S. monthly retail sales data. By the way, the 50-day Moving Average is now located at 1.1038.

The shared currency rose from 1.0991 on Tuesday, strengthening the bullish breakout. The bullish bias was hinted by Friday’s bullish breakout, a trendline connecting June 25 and August 13 highs. However, the pair took a buying trend, possibly due to the news of the United Kingdom, and the European Union is closing on a Brexit deal.

At the Brexit front, the Brititan Prime Minister Boris Johnson needs the excellent support of Democratic Unionist Parties to pass the Brexit agreement in Parliament.

However, the Democratic Unionist Party is playing rough. The party’s leader has dismissed the statement that it has agreed to support such agreement wherein Northern Ireland will stay in the United Kingdom customs area but adhere to the Europan Union customs rules on tariffs.

The United States retail sales data is scheduled to release at12:30 GMT, is expected to show the retail sales growth slowed to 0.3% in September from August’s reading of 0.4%. Sluggish data will support the dovish Federal Reserve expectations and probably will start the selling trend in the greenback.



Daily Support and Resistance

    S3 1.091

S2 1.0972

S1 1.1005

Pivot Point 1.1034

R1 1.1067

R2 1.1096

R3 1.1158

EUR/USD – Trading Tips

The EUR/USD trade in the restricted range of 1.1020 – 1.1060. The Euro has violated descending trend line resistance, making it weaker against the greenback since late June. That’s suggesting a correction higher is forthcoming.  

On the 4-hour chart above, the EUR/USD is mounting in a bullish channel, which is supporting the pair above 1.1000 level. The daily resistance stays at 1.1050. Consider staying bullish above 1.1030 level to target 1.1050 and 1.1070. On the flip side, the pair can remain bearish below 1.1030 until 1.0976 and 1.0856. 


GBP/USD – Daily Analysis

The GBP/USD currency pair has crossed the level above its 200-day Moving Average resistance for the first time since May 13. Probably, the pair will further increase if Britain’s Prime Minister Boris Johnson gets the support of the Democratic Unionist Party for the approval of the Brexit agreement in the Parliament.

Whereas the Europan Union (E.U.) and the United Kingdom are closing on Brexit agreement, the Democratic Unionist Party is still aggressive. Nevertheless, the Democratic Unionist Party is playing rough. The party’s leader Arlene Foster has dismissed the statement that it has agreed to support such agreement wherein Northern Ireland will stay in the United Kingdom customs area but adhere to the Europan Union customs rules on tariffs.

We all want to make this deal, but it must be a deal in which you have to consider the economic and legal integrity of the British, and that means the whole United Kingdom, included Northern Ireland.

It should also be noted that the Democratic Unionist Party ten lawmakers will play a key role in deciding that the Prime Minster Boris Johnson can pass any agreement in Parliament or not.

The GBP could come under pressure if Boris Johnson does not succeed in getting support from the Democratic Unionist Party. In consequence, the GBP/USD currency pair may drop to the level below the 200-day Moving Average, presently trading at 1.2710.

On the other hand, the cable pair may also take fresh hints from the United Kingdom Consumer Price Index, which is scheduled to release at 08:30 GMT.


Daily Support and Resistance

   

S3 1.199

S2 1.2289

S1 1.2469

Pivot Point 1.2588

R1 1.2768

R2 1.2887

R3 1.3185

GBP/USD – Trading Tips

Technically, the GBP/USD extends to trade upward on the back of a more solid Sterling. The pair have achieved a 38.2% Fibonacci level at 1.2692 and now trading over this level, scanning for a substantial fundamental reason to define the next movement.  

On the upper side, the GBP/USD is expected to meet resistance around 1.2800. Breakout 1.2800 can trigger more buying until 1.12849. Let’s keep an eye on 1.2695 now to take quick trade opportunities.

All the best!  

Categories
Forex Market Analysis Forex Signals

Gold Steady Below 50 EMA – Brace for a Breakout! 

Gold prices trade sideways in a narrow trading range of 1,495 – 1,490 as expectations of improvement in U.S-China trade discussions were moderated and ahead of a summit that will decide how Britain departs the European Union.

Technically, the precious metal gold is facing stiff resistance at 1,495. The 50 periods EMA and double top pattern are keeping the XAU/USD bearish below this level.



The formation of a series of Doji and Spinning Top candles is suggesting a weaker number of bulls in the market. Typically such pattern drives the bearish trends in the market.

The MACD and Stochastics are tossing in red and green territory, suggesting neutral bias among traders. Continuation of a bearish trend can trigger sell-off until 1,485.

Trade Setup 

Entry – Sell below 1,495

Take Profit – 1,484

Stop Loss – 1,498

All the best!

Categories
Forex Market Analysis

Daily FX Brief, October 15 – Major Trade Setups – Investors Back from Holiday! 

The U.S. dollar stabilized on Monday, with the ICE Dollar Index edging up 0.1% on the day to 98.46.

The euro slipped 0.1% to $1.1027, halting a three-day rally. Official data showed that the eurozone industrial production grew 0.4% on month in August (+0.3% expected). Later today, the ZEW German Current Situation Index for October will be reported (-23.6 expected, -19.9 in September).

The British Pound retreated 0.3% to $1.2609, following a surge of more than 3.0% in the prior two sessions. Finnish Prime Minister Antti Rinne told reporters that he does not think it would be possible for the European Union and the U.K. to agree on the terms of a Brexit deal in time for the summit of leaders starting Thursday. Meanwhile, U.K.’s jobless rate for the three-month to August will be released later today (steady at 3.8% expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 


XAU/USD– Daily Analysis

The safe-haven metal prices rose but still below the key level of $1500 due to fresh uncertainty between the United States and China trade talks. The U.S. gold futures for December delivery inched up 0.2% to $1,499.02 during the Asian session before taking a bearish turn ahead of the European session.

The gold prices recovered as China now wants to do more trade discussions before signing the critical phase one trade deal. The Chinese attitude appeared to contradict the U.S. President’s contention on Friday that both nations were very close to making a deal.

Besides, China wants Trump to finish the scheduled tariff hike in December. Treasury Secretary Steven Mnuchin announced CNBC in an interview that he anticipates that both nations couldn’t reach on the deal due to the December hike.


Daily Support and Resistance

S3 1430.45

S2 1459.63

S1 1474.37

Pivot Point 1488.82

R1 1503.56

R2 1518

R3 1547.19

XAU/USD– Trading Tips

Gold has also exhibited choppy trading in a narrow range of 1,497 – 1,489. A bullish breakout of 1,496 can extend buying until 1,502 level whereas, the bearish breakout of 1,489 level is likely to continue selling until 1,481 level and 1,474. Today 1,494 is a crucial level to focus, as gold can stay bearish below this and bullish above this level.

 


EUR/USD – Daily Analysis

The EUR/USD currency pair found on the Doji candlestick pattern which indicates traders’ indecision. The EUR/USD currency pair hit a high and low of 1.1043 and 1.1013, and the trading area remained the same as it was on Friday. The EUR/USD continues to maintain a sideways range of 1.1063 and 1.1001. 

At the German Zew Survey front, Economic Sentiment (Oct), which is scheduled to release at 09:00 GMT, is anticipated to print at -27.3 against-22.5 in September. Whereas, the current is expected to come in at -26, marking a deterioration from September’s -19.9 reading. 

Upbeat expectations may get a strong buying trend in the shared currency. However, a bullish daily close could remain elusive If the markets turn risk-averse due to the negative China producer price index data, which was released in the Asian trading hours.


Daily Support and Resistance

    

S3 1.091

S2 1.0972

S1 1.1005

Pivot Point 1.1034

R1 1.1067

R2 1.1096

R3 1.1158

EUR/USD – Trading Tips

The EUR/USD currency pair trading sideways in tight trading limits of 1.1043 and 1.1001. A close above 1.1043 would suggest a resumption of the rally from fresh lows around 1.0879. Conversely, a close below Monday’s low of 1.1043 would mean an end of the recovery rally.

An upward channel of the EUR/USD is still intact, and the major currency pair continues to trade within this range of 1.1043 and 1.1001. Consider taking buying positions over 1.100 level to target 1.1050 and 1.1070. On the flip side, bearish bias can be seen under 1.1000 until 1.0976 and 1.0856. 

 


GBP/USD – Daily Analysis

The GBP/USD currency pair got to the highest level since January 2018. The investors are expecting Brexit breakthrough and continuing bets to position for a rally in Pound.

As of writing, the GBP/USD currency pair is currently trading at 1.2618, found on the highest track on the day. 

One-month risk reversals (GBP1MRR), a gauge of calls to puts on the GBP, increased above zero on Friday and currently stands at 0.25, the highest level in 21 months.

The possibilities of Britain securing an orderly departure from the Europan Union have lost during this week due to the comments by the Finlands Prime Minister that time has finished.

However, the GBP currency could continue its bullish momentum as there are some renewed sentiments regarding anther Brexit summit, most probably at the end of this month.

Additionally, the British Pound may get buyings if the United Average Earnings (Aug) releases against past expectations. The data is scheduled to release at 08:30 GMT.

On the negative note, if the data release against the expectation and if any negative news comes concerning Brexit, then the GBP/USD currency pair could hit the bearish track sharply. 


Daily Support and Resistance

    

S3 1.199

S2 1.2289

S1 1.2469

Pivot Point 1.2588

R1 1.2768

R2 1.2887

R3 1.3185

GBP/USD – Trading Tips

Technically, the GBP/USD continues to trade bullish in the wake of a stronger Sterling. The pair has completed 38.2% Fibonacci level at 1.2592 and now holding above this level, looking for a solid fundamental reason to determine the next movement.  

On the upper side, the GBP/USD is likely to face strong double top resistance around 1.2700. Breakout 1.2700 can trigger further buying until 1.12759. Let’s keep an eye on 1.2588 now to take quick trade opportunities.

All the best!  

Categories
Forex Market Analysis

Gold’s Safe Haven Demand Fades – Partial Trade War Plays! 

On Monday, the safe-haven metal prices rose but remain below the level of $1500 as the United States and China completed one round of trade meetings, and the United States planned to delay tariff on Chinese goods this week. Gold contract slipped 0.2% to trade at $1,491.35.

The U.S. President Donald Trump sketched the first round of a deal to settle the protracted Sino-U.S. trade war and halted a vulnerable tariff hike, the most significant step by the two nations in 15 months.

In return for the U.S. decision to delay tariff, China agreed to buy $40 billion and $50 billion in U.S. agricultural goods. More steps will be reached in the second phase, the president said.

The safe-haven metal prices swiftly dropped after the report came that the investors adopted the risky assets and dropped the safe-havens.

Technically, the Fibonacci retracement levels are playing a significant role. As you can see on the 2-hour chart above, the XAU/USD is trading right below the 38.2% retracement. This level used to work as resistance last week, but now, the same level is working as a resistance.

The closing of a 2-hour candle below 1,496 is suggesting bearish bias among traders. On the lower side, gold may find support at 1,486 and 1,480 level today.

Daily Support and Resistance    

S3 1430.45

S2 1459.63

S1 1474.37

Pivot Point 1488.82

R1 1503.56

R2 1518

R3 1547.19

Consider staying bearish below 1,494 areas to target 1,487 and 1,482 today. On the flip side, buying can be seen in over 1,496 areas.

All the best!

Categories
Forex Market Analysis

Daily FX Brief, October 14 – Major Trade Setups – U.S. China Partial Trade Settlement Plays! 

On Monday, the market sentiment remains risk-on as traders weight the U.S. – China partial trade settlement. Traders, the exports of China to the United States declined 10.7% in terms of the greenback. While the U.S. imports fell to 26.4% through that era, a Chinese customs spokesperson announced on Monday.

Trade disputes with the United States have begun to influence Chinese trade, although the latest Sino-U.S. trade discussions have produced positive outcomes in some fields. 

The recent development surrounding the trade deal between the United States and China indicate a hard way ahead for the United States and China trade officials as any actual agreement didn’t sign yet that could finish the trade war. However, the market is likely to trade risk-on sentiment to price in positive developments. 

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 


EUR/USD – Daily Analysis

The EUR/USD currency pair is still trading below the fifty-day moving average and having faced rejection at the critical level of 1.1060, even after the positive news came regarding Sino-US trade truce.

The United States President Donald Trump announced a partial trade deal; due to this, the greenback currency slipped lower, and the risky assets gained bullish momentum.

Meantime, the United States decided to delay taxes increases on $250 billion in Chinese goods. In contrast, the dragon nation is ready to buy $40 to $50 billion in United States agriculture products.

Moreover, Goldman Sachs announced there is a 60% possibility that the 15% tariffs will impose, but not sooner, probably in early 2020.

According to forecast, the EUR/USD currency pair could hit again to 50-day Moving Average if the Eurozone Industrial Production for August, which is scheduled to release at 09:00 GMT, beats estimates figures by a big range. The markets may get hints from the speech by the Europan Central Banks, which is scheduled to deliver at 07:15 GMT.



Daily Support and Resistance

S3 1.091

S2 1.0972

S1 1.1005

Pivot Point 1.1034

R1 1.1067

R2 1.1096

R3 1.1158

EUR/USD – Trading Tips

The EUR/USD currency pair consolidating in the narrow range of 1.1030 and below the 50-day Moving Average at 1.1044, because prominent investment banks reported concerns regarding the reliability of the new trade deal.

The EUR/USD is trading in a bullish channel, which can be seen on the 4-hour chart above. The bullish channel is keeping the EUR/USD supported above 1.1000 level with resistance at 1.1050. Consider staying bullish above 1.100 level to target 1.1050 and 1.1070. Selling can be seen below 1.1000 until 1.0976 and 1.0856. 

 


AUD/USD– Daily Analysis

AUD/USD currency pair consolidates in the narrow range around 0.6780, mainly due to China’s mixed trade data. China’s trade figures in the Chinese Yuan (CNY) terms represented that Trade Surplus expanded to CNY 280 billion during September from 239.6 billion flashed in August. Additional details on the same format mention Exports declining -0.7% against +2.6% previous, whereas Imports are falling -6.2% against -2.6% earlier.

On the U.S. Dollar (USD) front, the headline Trade Balance figures increased by $39.65 billion against $33.30 billion estimates whereas Imports and Exports follow the suit of CNY figures. Imports plummet 8.5% YoY against -5.2% expected while Exports lag behind -3.0% market consensus to -3.2% on the year-on-year basis.

Therefore, the Australian dollar traders didn’t get a clear picture of the Chinese trade situation, whereas the overall sentiment remains bullish due to the United States and China trade truce.

The recent development surrounding the trade deal between the United States and China indicate a hard way ahead for the United States and China trade officials as any actual agreement didn’t sign yet that could finish the trade war. However, the market is likely to trade risk-on sentiment to price in positive developments. 

China recently rejected the U.S. ambassador visa, which could hyper the Trump administration toward China during the 2nd phase of talks. Eventually, all investors will keep their eyes on the fresh clue from the trade deal between the United States and China as the first phase is cleared.



Daily Support and Resistance

S3 0.6712

S2 0.6752

S1 0.6773

Pivot Point 0.6792

R1 0.6812

R2 0.6831

R3 0.6871

AUD/USD– Trading Tips

The AUDUSD is trading bearish after testing the double top level of 06800. Below this level, the AUDUSD has formed a tweezers top pattern, which suggests bearish bias among traders. This could trigger a bearish trend in the AUD/USD below 0.6800 level. 

On the lower side, the AUD/USD may gain support at 0.6700, the 38.2% Fibo level, and 50% retracement at 0.6750. Let’s look for selling traders until these levels are met today. 

 


GBP/USD – Daily Analysis

GBP/USD currency pair hit the bearish track and representing 0.37% losses on the day, mainly due to declining certainty for the Brexit deal. By the way, the pair is presently trading around 1.26, having hit a high of 1.2645 in Asian trading hours.

The GBP currency still on the selling track, due to the comment by Britain and the European Union on Sunday that much work will be required to secure a deal on Britain’s departure from the bloc.

Therefore, the risks of the GBP selling sentiment in the Europan session is high. However, if the news flow will turn positive, then the contrary view in the Sterling could be reversed. Kathy Lien from B.K. Asset Management observes that the Pound is rising to levels above 1.28 ahead of the Brexit deadline of October 31.

On the other hand, the eyes remain on the trade talks between the U.S. and China. Such as both sides completed the one stage of the bigger trade deal on Friday. However, Chinese media told that China would not be more confident about future negotiations.

    


Daily Support and Resistance

S3 1.199

S2 1.2289

S1 1.2469

Pivot Point 1.2588

R1 1.2768

R2 1.2887

R3 1.3185

GBP/USD – Trading Tips

Technically, the GBP/USD has disrupted the double top resistance mark of 1.2536, and this point can keep the Cable bullish over this point until 1.2760. 

At the moment, the GBP/USD is trading above 38.2% Fibonacci level at 1.2592. Breakout of this market can trigger further retracement until 1.2525. Let’s keep an eye on 1.2585 today to capture quick trader opportunities.

All the best! 

 

Categories
Forex Market Analysis

Gold Slips to 61.8% Retracement – Safe Have Demand Fades! 

On Friday, gold prices reversed from a one-week high after a rumor hinted that China needs to reach an agreement with the U.S. to avoid further acceleration of an open-ended trade. The safe-haven-metal prices slipped due to positive headlines cames regarding the US-China trade war and Brexit.

The stock market traded bullish due to the positive trade news that the United States and China could reach on the positive outcome this week. As a result, the safe-haven gold prices came under pressure. The United States and China may announce a limited trade agreement during this week, avoiding a new increase in trade tension.

The White House stated that the trade talks going unexpectedly well. However, the future positive headlines regarding trade increased the chances of a currency deal this week.

The market is now trading with Risk-off sentiment, shifting all the investment from gold to stock market. Technically, the precious metal gold has dropped from 1499 area to 1479 points amid faded safely have demand.

Earlier gold faced triple top resistance at 1,513 area, which pushed gold prices lower towards 1,479 that marks 61.8% Fibonacci retracement level.

Daily Support and Resistance

S3 1459.04

S2 1480.2

S1 1492.88

Pivot Point 1501.36

R1 1514.04

R2 1522.52

R3 1543.68

What’s Next?

Gold prices can stay bullish above 1,479 area, and closing of 4-hour candles bove this level could drive buying in gold. 

The RSI and MACD have already entered the oversold zone, suggesting bulls are looming around the corner. 

Gold may find an immediate resistance at 1,487, along with support around 1,479. Violation of 1,479 can lead to gold prices to 1,470 later in the U.S. session. 

All the best! 

Categories
Forex Market Analysis

Daily FX Brief, October 11 – Major Trade Setups – Canadian Job Report On Radar!

The Dollar Index dropped 0.4% on the day to 98.68 on Thursday, as Brexit deal hopes boosted the Euro and the British pound. Meantime, U.S. President Donald Trump said journalists on Thursday: “We just completed an agreement with China, we are doing very fine, we are having another one tomorrow. I am reaching with the vice-premier over at the White House, and I think it is going well.”

Official data revealed that U.S. consumer prices were even on month in September (+0.1% anticipated and in August). The U.S. Labor Department announced that initial jobless claims amounted to 210K. Following today, U.S. import is predicted to be stable for September versus -0.5% in August. The University of Michigan Sentiment is supposed to get in at 92 for the October preliminary reading versus 93.2 in September.

Economic Events to Watch Today

Let’s took at these fundamentals.

 


EUR/USD – Daily Analysis

The EUR/USD currency pair hit the bullish track and struggling to catch break above the crucial level of around 1.1000 due to trade optimism. Moreover, the EUR/USD currency pair could extend its gains if the European Central Bank meeting declares the statement unexpectedly less dovish. 

As of writing, the EUR/USD currency pair took 0.16% gains in the Asian hours as traders sold greenback on trade optimism and announce that the United States is planning to start the currency deal with China. On the other hand, the report came that President Donald Trump may issue a license that will permit a few companies of the United States to supply products to Chinas Huawei.

At the ECB front, the European Central Bank meeting regarding monetary policy is scheduled to happen at 11:30 GMT.

The Central Bank reduced its deposit rate by the 10-basis-points to -0.50% during September and also announced a new bond-buying plan that is scheduled to start from November.

Distinctly, the EUR currency may take a buying trend if the ECB meeting underscores the growing dissent within the Governing Council. Moreover, the EUR may come under pressure and hit the bearish bias if the meeting reports increased odds for more rate cut.


Daily Support and Resistance

S3 1.0904

S2 1.0938

S1 1.0956

Pivot Point 1.0973

R1 1.099

R2 1.1008

R3 1.1042

EUR/USD – Trading Tips

The pair is currently trading at 1.0987, 21-day moving average. The technical line has been closing bullish move since October 3, and this level is considered as a support for the buyers. 

A close above the key Moving Average would open the doors for a stronger corrective bullish move, possibly to 1.1110 (September 13 high).

Today consider staying bullish 1.1025 as the EUR/USD may stay bearish below and bullish above this level. 

 


USD/JPY – Daily Analysis

The USD/JPY currency pair hit the session high of 108.13 and increased more than 20 pips and presently trading at 108.04, due to President Donald Trump’s positive comments related to trade talks.

President Donald Trump’s comment that the trade talks with China are going well and that a deal could be reached on a positive outcome.

On the other hand, the demand or the anti-risk Japanese Yen declined due to the United States President Donald Trump’s positive comment related to trade talks.

The futures on the S&P 500 are presently showing 0.15% increases. The index increased by 0.64% on Thursday, due to trade talks continued, denying reports released in the Asian trading hours, which said Chinese officials could cut short their visit. 

Asian equities are flashing green at press time. Japan’s Nikkei is currently risen by 0.87%, and Hong Kong’s Hang Seng is increased by 1.26%. 

We should also take note that the USD/JPY currency pair could continue its bullish trend if the trade talks finish on the positive outcome. President Trump will meet with Chinese Vice Premier Liu later today. 

    



Daily Support and Resistance    

S3 105.83

S2 106.47

S1 106.77

Pivot Point 107.11

R1 107.41

R2 107.75

R3 108.39

USD/JPY – Trading Tips

The USD/JPY may mark a critical resistance at 108, which is extended by the 78.2% Fibonacci retracement levels. On the lower side, the USD/JPY may get supported at 107.720. The bullish violation of 108 can drive USD/JPY towards 108.54. Consider taking sell positions below 108 and buying positions on the breach of 108 to target 108.450. 


GBP/USD – Daily Analysis

The GBP/USD currency pair now found on the bullish track and was seen while consolidating in the narrow range, just below mid-1.2400s in the Asian session. Moreover, the eyes will keep on the resumption of the European Union and the United Kingdom Brexit talks.

The GBP/USD currency pair took some aggressive buyings and printed its highest % gains since March amid repeated Brexit certainty. Moreover, the GBP is considered as the best performing major currency after the Irish PRimme Minister Leo Varadkar said that a Brexit agreement possibly would be closed by the end of October.

After a 3-hour meeting with United Kingdom Prime Minster Boris Johnson Regarding Brexit, Varadkar said that they have identified a possible way forward on the Irish border issue and how to avoid a hard border. 

Despite the positive trade headlines and an aggressive uptick in the United States Treasury bond yields, the U.S. Dollar failed to gain any rest. The currency is still depressed due to increasing chances of another rate cut by the Federal Reserve at its coming meeting, which is scheduled for 29-30 October.



Daily Support and Resistance

S3 1.2025

S2 1.2133

S1 1.2177

Pivot Point 1.224

R1 1.2285

R2 1.2348

R3 1.2455

GBP/USD – Trading Tips

The GBP/USD pair recovered almost 250 pips, taking along with some trading stops being located near the 1.2300 levels and the 1.2345 and 1.2350 supply zone, and got further support from the prevalent greenback selling bias. The GBP/USD trade at 1.2480 right below the strong double top resistance. The overall trend appears bullish as the GBP/USD can proceed to trade higher. 

Consider keeping an eye on 1.2490 level to take a sell position below this and buy position above the same standard to capturing 30/40 pips. 

All the best! 

 

Categories
Forex Market Analysis

Gold’s Ascending Triangle Set to Break Lower – Eyes On 1,492!

 On Thursday, the precious metal gold prices climbed one-week highs, staying mostly over above $1,500 during the European session. But the scenario seems to change now as the U.S. investors seem to do profit takings in the overbought gold. 

The market sentiment is being driven by two things lately: 

There’s a potential rate cut in the next policy decision by the Federal Reserve. 

The United States and China trade war is damaging the United States economy as well.

The Federal Reserve has already delivered two rates back to back rate cuts so far this year, in the wake of protecting the United States economy record decade-long growth.

Following an FOMC meeting minutes and the Fed Chair speech, the market is focusing on the Jerome Powell announcement that the market participants are possibly expecting another rate cut, and this may not be on the cards this year. So basically, it’s a hawkish statement that drives the bearish trend in the gold prices. 

On the other hand, the traders want more transparency and certainty in the matter of the United States and China trade war. The market is still careful due to conflicting hints from both sides, as trades discussions continued this week.

Gold – Technical Outlook

Recalling our earlier update on gold, the XAU/USD had formed an ascending triangle pattern, which was keeping gold steady below 1,512 resistance level, and it was also extending support at 1,500 level.


Just an hour ago, the XAU/USD violated the ascending triangle pattern on the lower side. Gold may drop further towards a 38.2% Fibonacci retracement level of 1,492. Whereas the violation of 1,492 could lead to gold prices deeper towards 1,485. 

Daily Support and Resistance

S3 1480.69

S2 1493.37

S1 1499.52

Pivot Point 1506.06

R1 1512.2

R2 1518.74

R3 1531.43

Consider taking a sell position below the 1,500 level to target 1,494 and 1,486.

All the best!

Categories
Forex Market Analysis

Daily FX Brief, October 10 – Major Trade Setups – Turkey Triggers Safe Haven Demand!

Earlier today, the financial markets experience extreme volatility after Turkey attacked Syrian rebels. The Syrian Democratic Forces (SDF), which is lead by Kurds, said that civilian areas were targeted by Turkish warplanes and caused a massive panic in the region.

Turkish President Recep Tayyip Erdogan said that the operation named “Peace Spring” has launched with the collaboration of the Syrian National Army against the Kurdish Workers’ Party (PKK) & Daesh Terrorists. He added that the operation was launched to create a “safe zone” to house Syrian refugees after clearing the area from Kurdish militias.

 

Overall, the focus stays on the GDP and CPI figures from the United Kingdom and the United States.  

Economic Events to Watch Today

Let’s took at these fundamentals.

 


EUR/USD – Daily Analysis

The EUR/USD currency pair hit the bullish track and struggling to catch break above the crucial level of around 1.1000 due to trade optimism. Moreover, the EUR/USD currency pair could extend its gains if the European Central Bank meeting declares the statement unexpectedly less dovish. 

As of writing, the EUR/USD currency pair took 0.16% gains in the Asian hours as traders sold greenback on trade optimism and announce that the United States is planning to start the currency deal with China. On the other hand, the report came that President Donald Trump may issue a license that will permit a few companies of the United States to supply products to Chinas Huawei.

The pair is currently trading at 1.0987, 21-day moving average. The technical line has been closing bullish move since October 3, and this level is considered as a support for the buyers. A close above the key Moving Average would open the doors for a stronger corrective bullish move, possibly to 1.1110 (September 13 high).

At the ECB front, as we know, the European Central Bank meeting regarding monetary policy is scheduled to happen at 11:30 GMT.

The Central Bank reduced its deposit rate by the 10-basis-points to -0.50% during September and also announced a fresh bond-buying plan that is scheduled to start from November.

Distinctly, the EUR currency may take a buying trend if the ECB meeting underscores the growing dissent within the Governing Council. Moreover, the EUR may come under pressure and hit the bearish bias if the meeting reports increased odds for more rate cut.

The Federal Reserve September meeting released on Wednesday and showed the rising attention between policymakers that markets continue to expecting more rate cuts than the U.S. Central Bank will deliver this year.

Daily Support and Resistance

S3 1.0904

S2 1.0938

S1 1.0956

Pivot Point 1.0973

R1 1.099

R2 1.1008

R3 1.1042

EUR/USD – Trading Tips

The single currency Euro is taking a sharp bullish turn in the wake of a weaker dollar. The pair is facing support at 1.0975, along with resistance at 1.1025. The MACD and Stochastics are also supporting the bullish bias, especially after the EUR/USD has a bullish crossover of the 50-period EMA today. The bullish breakout of 1.1025 can extend buying until 1.1075 today.

 


USD/JPY – Daily Analysis

During the early Asian session, the USD/JPY currency pair hit the high level following a drop to the 107.00 level. Later, the USD/JPY prices recovered to the 1-weeks high in the last hour.

The USD/JPY currency pair is found on a weekly bullish track after placing a low of 106.560 during the last week. Most of the buying came on sentiments that China is still ready to make a deal with the United States despite the recent development.

The USD/JPY currency pair was marked on the bearish level earlier this Thursday in the nervousness due to the high-level United States and China trade negotiations. The sharp uptick in the pair came as the United States is planning to enter into a currency deal with China as a part of the partial trade deal, although the depressed greenback prices action kept a lid on any strong follow-through.

Despite the positive trade news and the less dovish Federal Reserve meeting minutes, the U.S. Dollar struggled to increase any traction and still on the sideways due to the weaker tone surrounding the United States Treasury bond yields.

Daily Support and Resistance

S3 106.36

S2 106.88

S1 107.17

Pivot Point 107.4

R1 107.69

R2 107.92

R3 108.44

USD/JPY – Trading Tips

Consider the safe-haven appeal triggered by Turkish news, the USD/JPY is holding below the healthy resistance level of 107.700. There has been a sideways movement in the market, as traders are confused about whether to buy JPY on safe-haven or to sell it on U.S. – China trade deal sentiments. 

The USD/JPY may notice a critical resistance at 107.7500, which is extended by the 61.8% Fibonacci retracement levels. On the lower side, the USD/JPY may find support at 106.920. The bullish violation of 107.750 can drive USD/JPY towards 108.04 and 108.50. 


GBP/USD – Daily Analysis

The GBP/USD currency pair found on the recovery track after the bearish session, the pair currently fluctuating between the 1.2225 and 1.2230 area. Cable recovered to the 1.2300 in the wake of a report that the Europan Union is ready to allow a time-limit on the Irish backstop. 

Moreover, the Northen Irish Democratic Unionist party refused the European Union concession on Brexit, and the Europan Union official denied the report and in the consequences, sent the cable pair into the negative area.

On the other hand, the buyers still showing some resilience below the 1.2200 round-figure marks, and some repeated greenback weakness supported limit any further declines. Besides this, the Wednesday FOMC meeting doing little to depress the hopes for yet additional interest rate cut during October. The continued decline in the U.S. Treasury bond yields weakened demand for the U.S. Dollar and turned out to be one of the key factors giving insignificant support to the major.

Moreover, the United Kingdom economic docket could further influence the more extensive market sentiment surrounding the GBP and give some brief trading impetus

Daily Support and Resistance

S3 1.2046

S2 1.2139

S1 1.2175

Pivot Point 1.2233

R1 1.2269

R2 1.2327

R3 1.2421

GBP/USD – Trading Tips

On Thursday, the GBP/USD trade at 1.2233 right above the strong double bottom support level of 1.2220. The overall trend appears sideways as the GBP/USD can proceed to trade within 1.2280 – 1.2108 area. Nevertheless, the bearish breach may prolong the GBP/USD selling until 1.2170 following slight retracements.

All the best! 

 

Categories
Forex Market Analysis

Gold Trades Ascending Triangle – Brace for a Breakout!

On Wednesday, the precious metal gold prices trade sideways in a narrow trading range of 1,512 – 1500 in the wake of mixed economic events. Moreover, the uncertainties encompassing the United States and China trade war and dark Brexit headlines depressed investors’ sentiment. The gold futures for December delivery gained 0.5% to $1,511.83 at the start of the European session.

A report came from South China that China stepped back from the high-level trade talks between the United States and China. The report said the Chinese delegation might enter in Washington a day earlier than scheduled.

China also gave warning that they would hit back after the United States blacklisted a list of Chinese tech companies in the wake of China treatment with Muslim minorities, which ultimately threats increased incoming talks between the United States and China.

On the Brexit front, German Chancellor Angela Merkel told Boris Johnson, U.K.’s Prime Minister, that Northern Ireland has to continue being part of the customs union in any deal, which Johnson said has paved the way for a no-deal Brexit.

Gold – Technical Outlook

Technically, the XAU/USD has formed an ascending triangle pattern, which is keeping gold steady below 1,512 resistance level. The ascending triangle pattern is extending support at 1,500 level.
Typically, these ascending triangle patterns break out on the upper side and may extend bullish rally up to 1,534 in a medium run.

Daily Support and Resistance
S3 1459.04
S2 1480.2
S1 1492.88
Pivot Point 1501.36
R1 1514.04
R2 1522.52
R3 1543.68

Consider taking a buying position on the bullish breakout of 1,513 to target 1,525 and 1,530.

All the best!

Categories
Forex Market Analysis

Daily FX Brief, October 09 – Major Trade Setups – Fed Meeting Minutes on the Radar

The U.S. dollar traded slightly bearish ahead of the FOMC meeting minutes report today. The downward trend was escalated when Inflation data from American session came on board. 

The U.S. inflation data showed a drop in September to -0.3% at 17:30 GMT. This release made the fears of the U.S. recession to re-emerge in the market along with increased chances of further rate cuts by Federal Reserve in the next meeting. 

On Tuesday, Chinese foreign ministry spokesman, Geng Shuang, denied that the government abused human rights in that region and said that the United States should withdraw the relevant decision and stop interference in ‘sChina’s internal affairs. He also stressed that China would take forceful measures against actions that affect the security, national sovereignty, and development interests of the country.

The report about a possible ban on Visa of Chinese ‘communists’ officials linked to the abuses in Xinjiang from the United States gave a boost to the tensions caused by the blacklist report.

Economic Events to Watch Today

Let’sLet’s took at these fundamentals.

 


EUR/USD – Daily Analysis

EUR/USD currency pair hit the bullish level on the day and ahead of Federal Reserve minutes. As of writing, the EUR/USD currency pair is presently trading at 1.0963.

Moreover, the buying tone around the Greenback declined, sent the EUR/USD pair from the 200-hour M.A. support at 1.00947, mainly due to comments by the Federal Reserves Chairman Powell that central Bank balance sheet, which was shrinking until August, but soon will grow again. The Federal Reserve chairman Powell also gave the surety for another rate cut during this month.

Today, the Federal Reserve meeting minutes from its September rate decision is scheduled to happen at 18:00 GMT. Recalling, the U.S. Central Bank cut the rate by 25-basis-points in September. Markets considered this rate cut as a hawkish policy because policymakers were expecting a further rate cut from the FED, and having just 0.25% rate cut was a bit disappointing. 

The Greenback may find a buying track due to a recent drop in the EUR/USD pair, which pushed the pair below recent lows near 1.0879. On the forecast side, the possibility of a rate cut by 25 basis points on October 30 marks above 80%. Moreover, nearly 87 basis points of rate cuts are expected by January 2021 according to forecast.

Daily Support and Resistance    

S3 1.0854

S2 1.0909

S1 1.0932

Pivot Point 1.0964

R1 1.0988

R2 1.102

R3 1.1075

EUR/USD – Trading Tips

The EUR/USD currency pair may hit the resistance of the 21-day moving average at 1.0988 if the Federal Reserve meeting shows the consensus between the policymakers in the wake of the further rate cut. The EUR/USD has violated 1.0970 support, and the pair may head further lower towards 1.09200 and 1.0882 later today. Consider staying bearish below 1.0964 area today.


USD/JPY – Daily Analysis

The USD/JPY currency pair is presently trading around 107.00, hit the bearish track, and faced rejection at 107.30 in overnight trading. By the way, the USD/JPY currency pair consolidate in the narrow range due to intensifying trade tension and risk aversion in the equity markets.

The U.S. stocks fell on Tuesday as tensions between the U.S. and China escalated ahead of the critical trade talk scheduled to happen at the end of the week. The U.S. threatened to blacklist the Chinese companies over human rights violations in Uighur province.

The United States stocks dropped on Tuesday due to tension between the United States, and China intensified in the wake of high-level trade talk scheduled to happen later this week. President Donald Trump’s decision to levy a visa restriction on Chinese officials, including the blacklisting of Chinese firms in the wake of china’s treatment with Muslim minorities. With this, the threats increased into coming talks between the United States and China.

China asked Washington to withdraw its decision and gave warning to retaliation. The United States said that the plan to blacklist the Chinese companies were unrelated to trade talks. As a consequence, the S&P 500 index dropped by 1.56%, pushing the traditional safe-haven assets higher.

At this moment, the futures on the S&P 500 are showing 0.21% gains, which could reduce some bullish pressures around the Japanese Yen and may push the USD/JPY pair higher.

Moreover, the yield on the United States ten-year treasury note is showing signs of life. At press time, the return is trading at 1.54%, indicating a 4-basis point increase on the low of 1.50%. Hence, the Greenback may find some support.



Daily Support and Resistance

S3 105.83

S2 106.47

S1 106.77

Pivot Point 107.11

R1 107.41

R2 107.75

R3 108.39

USD/JPY – Trading Tips

The USD/JPY is trading slightly bullish ahead of the FOMC meeting minutes. The USD/JPY may find an immediate resistance at 107.500, along with support around 106.920. The bullish breakout of 107.450 can lead the USD/JPY prices towards 107.800. On the lower side, the support stays around 106.90. The MACD is hovering in the buying territory. Considering this, we should look for buying trades over 107.11. 


GBP/USD – Daily Analysis

The GBP/USD hit the bearish track, and the pair is found trading in the tight range just above 1-month lows of 1.2203 set in the previous session.

The recent downside pressure surrounding the GBP raised the activity on Tuesday. Most of the trading activity and sharp slum in GBP came after the report that Brexit talks between the UK and the E U were very close to separation.

While the German Chancellor Angela Merker told the British Prime Minister Boris Johnson through the phone call that the U.K. should keep the Northen Ireland in the Europan Union customs union. With this, the odds of the no-Brexit deal raises. 

The cable pair declined to 1.2200 levels; this is the lowest level since September 04. President Donald Trump’s decision to levy a visa restriction on Chinese officials, including blacklisting of Chinese firms in the wake of china treatment with Muslim minorities, threats increased incoming talks between the United States and China.

Eventually, the progress sparked a fresh flow of global risk-aversion trade, which supported the Greenback’s relative safe-haven status against its British counterpart.

Meanwhile, the greenback buyers were not successful in gaining on the positive move overnight amid moderately weaker tone around the United States Treasury bond yields.



Daily Support and Resistance

S3 1.2025

S2 1.2133

S1 1.2177

Pivot Point 1.224

R1 1.2285

R2 1.2348

R3 1.2455

GBP/USD – Trading Tips

The GBP/USD traded sharply bearish, falling from1.2281 to 1,2200 area amid odds of hard Brexit. The GBP/USD has broken the double bottom level at 1.2225 and has settled a range of candles beneath this level, which is validating the bearish breakout.

Today, traders should consider opening a sell position only below 1.224 and bullish positions above the same level to target 1.2276 on the upper side while bearish target stays at 1.2140. 

All the best! 

 

Categories
Forex Signals

Gold Surge Amid Boosted Haven Appeal – Trade War In Focus!

 Today in the early European session, the safe-haven metal prices slipped due to less expectation of the rate cut by the Federal Reserve. Earlier today, the U.S. Gold was down by 0.6% at $1,495.85 as Fed Rate Monitor Tool showed a high chance for a quarter-point rate cut when the Federal Reserve meets Oct. 28-29 at 69.5 percent, versus 72.7 percent on Monday and 78 percent on Friday. The lowered chances of easing by the Federal Reserve continued to hurt gold in post-settlement trade, sending it under the critical $1500 level.

As of writing this, the precious metal gold prices are surging in the wake of boosted safe-haven appeal amid the uncertainty. China-U.S. trade talks are expected to affect gold’s movement late this week when high-level negotiations between the two sides resume this Thursday.

Trade discussions are expected to manage the gold prices movement during this week when both high-level officials will do talks between the two sides’ resumes on Thursday.

At the Hong Kong front, the government of Hong Kong invoked a colonial-era emergency law to stop protesters wearing face masks. Due to this decision, further made the worst environment, which damage China’s banking facilities and retail outlets in the entire city.

Gold – Technical Analysis 

On the technical front, gold has for Doji pattern at 1,497 area, which has to extend support to gold since the morning while the RSI and MACD are shifting in the buy zone.  

   


Daily Support and Resistance

S3 1456.57

S2 1476.39

S1 1484.55

Pivot Point 1496.21

R1 1504.37

R2 1516.03

R3 1535.85

Three bullish candles on the 4-hour chart are signaling chances of a further bullish trend. Today, gold may find an immediate resistance level at 1,513 and support at 1,487 level. Consider staying bearish below the triple top level of 1,513 zones. 

All the best

Categories
Forex Market Analysis

Daily FX Brief, October 08 – Major Trade Setups – U.S. China Trade Talks In Focus! 

On Tuesday, the U.S. dollar trades to trade choppy to slightly bullish on the back of no significant economic figures. The range of light United States numbers during the past week increased uncertainties on the assumption that the United States economy will be further elastic as compared to the other economies and pushed investors to start pricing in another rate cut by the Federal Reserve.

Powell Stressed that an Independent Central Bank could make decisions in the long-term best interests of the economy without regard to the political pressure. He also quoted that “the management of Central Bank must be free from the dangers of control by politics and by private interests, singly or combined.”

In previous days, President Trump has criticized the Federal Reserve for not Lowering its Interest Rates enough. In reply to that criticism, Jerome Powell’s statement about central bank independency has raised the possibility that the Fed might not cut its rate further in the next policy meeting.

Economic Events to Watch Today

Let’s took at these fundamentals.

 


EUR/USD – Daily Analysis

The EUR/USD currency pair consolidating in a narrow range near 1.0975, as we know, the pair were representing 0.06% losses on Monday. It should be noted that the EUR/USD currency pair hit the rejection at the 21-day moving average for the 3rd straight day yesterday. Therefore the figures are presently found at 1.0992. 

On the economic data front, all eyes stay on the German industrial production data, which is scheduled to release at 06:00 GMT, and expectations are high that the German Industrial Production data dropped 0.3% month on month during August, having fallen 0.6% in the previous month. The final number is anticipated to release at -2.7% versus -4.2% in July.

German Factory Orders declined by 0.6% month-on-month in August – the 2nd-straight monthly decline, due to weaker demand from domestic consumers, the official data showed on Monday. 

Additionally, the headline IHS Markit and BME Germany Manufacturing PMI for February, a single-figure picture of the performance of the manufacturing economy, had marked well below 50, indicating contraction.

The statement came that the German recession is generally accepted at this time and price. Therefore, the EUR/USD currency pair will likely remain resilient if the Geman Industrial Production fell according to expectations. The pair may take hints from the United States Producer Price index and comments by the Feral Reserves President Powell.

Daily Support and Resistance

S3 1.0901

S2 1.0939

S1 1.0956

Pivot Point 1.0978

R1 1.0994

R2 1.1017

R3 1.1056


EUR/USD – Trading Tips

On the technical aspect, the EUR/USD may gain support at the critical trading point of 1.0960 level. The MACD and RSI are staying in the bullish territory, implying probabilities of a bullish reversal

A bearish breach of the 1.0967 level can spread selling until 1.0885. While buying can be seen above 1.0960 till 1.1035 levels. 

USD/JPY – Daily Analysis

The USD/JPY currency pair found on the recovery track and traded well in the striking distance of the overnight swing high.

After a bearish break opening at the begin of a new trading week, the USD/JPY currency pair has managed to recover positive traction and returned near 80-pips from an intraday low level of 106.65. Positive figures in the United States treasury bond yields propped the greenback demand and turned out to be one of the critical factors that started the initial support of the uptick.

The momentum gained another boost from some positive comments by the White House economic adviser Larry Kudlow, who said that the U.S. was available for China plans and proposals, but the Chinese companies were not there. Meanwhile, Kudlow noted further that the United States trade officials could make progress between the Sino-US trade war.

The USD/JPY currency pair is trading steady ahead of Fed Chair Speech and PPI figures today as investors seem hesitant to enter the market ahead of the news release. Besides, the highly-expected United States and China trade negotiations in Washington are also keeping the USD/JPY in check ahead of Top-level negotiations scheduled on Thursday.

Meanwhile, Tuesday’s U.S. economic docket, highlighting the release of Producer Price Index (PPI), is under focus, and all eyes will keep on it for fresh impetus. Moreover, the market risk-sentiment and the greenback prices progress could further produce some meaningful trading opportunities together.

Daily Support and Resistance    

S3 105.78

S2 106.47

S1 106.85

Pivot Point 107.16

R1 107.54

R2 107.85

R3 108.54

USD/JPY – Trading Tips

On Monday, the USD/JPY opened with a bearish gap, which is already covered by the end of the day. The USD/JPY pair soared to complete a 50% Fibonacci retracement level at 107.450.  

The USD/JPY is now trading above 50 periods EMA, which is placing a bullish pressure on the USD/JPY at 106.900. The MACD is looming in the buying zone. However, the live histogram is smaller than the previous one, which shows the odds of a bearish reversal. Consider trading bearish below 107.450 to target 106.900. 


GBP/USD – Daily Analysis

The GBP/USD currency pair flashing red and still consolidating in the narrow range just below the 1,2300 handles due to renewed Brexit pessimism. 

The cable found exhibited some intraday bounce during the start of a week. In contrast, a shortage of any substantial progress leads the pair to quickly hit the fresh low level near the 1.2335 level, which is also marked as an important level by 200-period EMA on the 4-hourly chart. 

Considering that the bloc’s leaders observe the United Kingdom Prime Minister Boris Johosn’s new Brexit plan is not enough, uncertainties related to Briaitan exits from the Europan Union, leaving some pressure on the GBP.

The modest pickup in the greenback demand, benefited by the positive rebound in the United States Treasury bond yields and positive trade-related headlines, further helped to the pairs downtick. While, the White House economic adviser Larry Kudlow, who said that the U.S. was available for China plans and proposals, but the Chinese companies were not there, drove some haven appeal in the market.


Daily Support and Resistance    

S3 1.2205

S2 1.2253

S1 1.2271

Pivot Point 1.2302

R1 1.2319

R2 1.2351

R3 1.24

GBP/USD – Trading Tips

On Tuesday, the trading in GBP/USD has changed much as the cable continues to trade bearish. On the upper side, 1.2340 level is extending it a substantial resistance now. The 50 EMA is expected to maintain support at 1.2275, but the new bearish movement in the GBP/USD is likely to challenge the support zone. Consider opening a sell position only below 1.2275 level today. 

All the best! 

 

Categories
Forex Market Analysis Forex Signals

Choppy Sessions in Gold – Brace for a Quick Breakout!

The safe-haven metal gold prices consolidate in the narrow range of $1,508.60 and $1,497 at the start of this week. The lack of volatility in the market was mostly due to the national holidays in China.  

However, the precious metal gold prices slipped later during the European session as the dollar rallied after a report stated China was unwilling to consent to a broad trade deal with Washington. The bullion traded in a tight range as investors adopted a wait-and-see strategy before U.S.-China discussions this week.

As we know, it was all about the United States employment data, which is disappointing, and jobless rate prints a low of 3.5% during September, from 3.7% in August. The United States and Chinese trades are ready to start again this week. However, the Sentiment regarding trade war negotiations is not right.

Looking ahead into the fundamentals, some other key events are under the spotlight, including Federal Reserve chairman Powell’s speech, the FOMC minutes, and the United States Consumer Prices Index.

On the technical side, the gold prices started a day with a Doji candlestick on the charts and having the prices ending above the $1500 psychological level again. 

The technical side of the market seems pretty clear as investor’s are consistently testing 1,497 support area. The violation of this level could extend the bearish trend until 1,492 and 1,487. 

At the same level, we got the 50 periods EMA, which is also extending support at 1,497 zones. 

The leading indicator, such as MACD and RSI, are holding staying in the neutral zone, suggesting indecision among traders today. 


Daily Support and Resistance

S3 1465.24

S2 1485.38

S1 1495.05

Pivot Point 1505.52

R1 1515.19

R2 1525.66

R3 1545.8

I would rather stay out of the market until we have clear direction about the market and clear path means either the bearish breakout of 1,497 or bullish candles closing above the same level.

Categories
Forex Market Analysis

Daily FX Brief, October 07 – Major Trade Setups – Fed Chair Powell Speak! 

On Monday, the U.S. dollar continues to trade sideways in the wake of mixed economic figures. The series of soft United States data last week increased uncertainties on the assumption that the United States economy will be more flexible as compared to the other economies and pushed investors to start pricing in another rate cut by the Federal Reserve.

At the Fed front, the dollar may trade slightly bearish over the strong market expectation that the Federal Reserve will deliver the rate cut again at its upcoming policy meeting on 29-30 October to support the economy.

Economic Events to Watch Today

Let’s took at these fundamentals.



EUR/USD – Daily Analysis

The EUR/USD currency pair is flashing green and representing 10% gains on the day while the currency pair is currently trading around 1.0980, and the twenty-one-day moving average is found at 1.0996. The EUR/USD currency pair can hit the bullish level above the critical M.A. hurdle. Hence, there are some chances that the pair will continue its recovery trend if the German Factory Orders blow past expectations.

On the other hand, if the German Factory Orders decline more than expected, the EUR/USD currency pair could hit the bearish level and will come under the selling pressure below 1.0950.

The German factory orders data is scheduled to release at 06:00 GMT, and expectations are high that the German factory data will show the pace of decline in August.

Factory Orders are anticipated to decline by 1.5% month-on-month in August, after July’s 2.7% decline. The annualized number is expected to print at -4.6%.

The headline IHS Markit and BME Germany Manufacturing PMI, a single-figure snapshot of the performance of the manufacturing economy, increased slightly to 43.5 during August, but remains well below 50, indicating contraction for an 8-month in a row.

It should also be noted that the possibilities of a twenty-basis-points rate cut by the Federal Reserve during October 30 have turned back higher to 83%. Therefore, the EUR/USD bearish trend could be limited.


Daily Support and Resistance

S3 1.0895

S2 1.0937

S1 1.0958

Pivot Point 1.0978

R1 1.1

R2 1.102

R3 1.1062

EUR/USD – Trading Tips

On the technical front, the EUR/USD may find support at the crucial trading level of 1.0960 level. The MACD and RSI are holding in the bullish zone, suggesting odds of a bullish reversal

A bearish breakout of the 1.0967 level can extend selling until 1.0885. While buying can be seen over 1.0960 until 1.1035 levels. 


USD/JPY – Daily Analysis

USD/JPY currency pair still consolidating in the narrow range, although the pair has managed to hold its neck comfortably above around1-month lows.

After Friday’s price fluctuations, the USD/JPY currency pair started with a bearish break on Monday as the Chinese officials are hesitant to agree to a comprehensive trade deal extended by the United States President Donald Trump. The Japanese Yen’s relative safe-haven status is applying some bearish pressure on the major.

At the Fed front, the strong market expectation that the Federal Reserve will deliver the rate cut again at its upcoming policy meeting on 29-30 October in the wake to support the economy.

The series of soft United States data last week increased uncertainties on the assumption that the United States economy will be more flexible as compared to the other economies and pushed investors to start pricing in another rate cut by the Federal Reserve.

The weaker trend in the United States treasury bond yields was found pushing greenback lower, and at the same time, helped driving a slight bearish movement in the USD/JPY pair today. 


Daily Support and Resistance

S3 105.78

S2 106.33

S1 106.62

Pivot Point 106.88

R1 107.17

R2 107.43

R3 107.98

USD/JPY – Trading Tips

The USD/JPY pair covered the bearish gap that we can see on the 4-hour timeframe. The USD/JPY pair is trading below 50 periods EMA, which is placing a bearish pressure on the EUR/USD at 106.850. 

The MACD was massively bearish, but know it’s trying to exhibit a bullish crossover. Histograms above 0 are signalings chances of a bullish reversal in the USD/JPY. The pair has immediate support at 106.400, along with resistance at 107.450. 


GBP/USD – Daily Analysis

GBP/USD currency pair still consolidating in the narrow range and traded well on the bullish track held over the previous 1-week or so.

All factors failed to give any significant reason for the significant and led trading at the beginning of the recent week. The GBP currency is still flat due to Friday’s report that the European parliament president has denied the United Kingdom Prime Minister Boris Johnson’s new Brexit proposal.

However, the bearish range remained warm so far, due to slightly weaker trend surrounding the greenback, pressurized by the strong market expectations that the Federal Reserve will deliver the rate cut again at its upcoming meeting regarding monetary policy, the conference is scheduled to happen on 29-30 October.

On the flip side, the U.K. Prime Minister Boris Johnson still stands to take Britain out of the European Union on October 31, with deal or without, and caught investors from placing any aggressive bullish risk.

Due to serious of soft United States data, last week increased uncertainties on the assumption that the United States economy will be more flexible as compared to the other economies and pushed investors to start pricing in another rate cut by the Federal Reserve.



Daily Support and Resistance

S3 1.2169

S2 1.2245

S1 1.2291

Pivot Point 1.2322

R1 1.2367

R2 1.2398

R3 1.2474

GBP/USD – Trading Tips

The GBP/USD is trading with a bearish bias, as the 1.2340 level is extending it a substantial resistance today. The 50 EMA is likely to continue support at 1.2275, but the recent bearish engulfing candle may keep the GBP/USD under heavy selling pressure. 

The trading bias remains mostly bearish, and you should consider staying bearish below 1.2275 level today. 

All the best! 

 

Categories
Forex Market Analysis

Daily FX Brief, October 04 – Major Trade Setups – Buckle Up for NFP Event!

Daily FX Brief, October 04 – Major Trade Setups – Buckle Up for NFP Event! 

On Friday, the U.S. dollar index continues to weaken ahead of the U.S. NFP data, which is due in the New York session today. Lately, the Institute of Supply Management (ISM) released the Purchasing Manager Index (PMI) for Non-Manufacturing Goods as 51.6 against the expected 55.0 for September. 

The data showed that it fell to a 3-Year low this month. The release of weak indices of the Manufacturing and Non-manufacturing sector this week indicates the slow growth of the economy in the U.S. Consequently, we are seeing less growth in the U.S. dollar today.

Economic Events to Watch Today

Let’s took at these fundamentals.

 


EUR/USD – Daily Analysis

During the early Asian session, the EUR/USD currency pair hit the bullish track for the 4th consecutive day due to all-important United States Nonfarm Payroll data.

As of writing, the EUR/USD currency pair presently trading at 1.0978, hit the high level of 1.0984 and showing 0.13% gains on the day. The pair maintained its gains for the 4th consecutive session.

On the other hand, all traders are presently expecting more than 80% odds of the rate cut by the 25-basis-points at the Federal Reserve next meeting later this month. The expectations were 64% on Wednesday, and 40% were on Monday, and currently reached 80% so far.

The increasing probabilities of an October Federal reserve rate cut also support the bullish track put forward by the hourly chart golden crossover.

At the U.S. Payroll front, the data is scheduled to release at 12:30 GMT an expected to show the economy added 145,000 jobs during the September after the 130,000 additions during the August. Besides this, the Average Hourly Earnings are found while increasing by 3.2% year on year, and the jobless rate is estimated to stay flat at 3.7%.

Whereas, the sluggish data will prop the dovish Federal Reserve expectations and pushing the greenback lower across the board.

As in consequences, probably the EUR/USD pair will come under pressure and possibly hit the low level of 1.09 if the data beats forecasted figures by a considerable margin.   


Daily Support and Resistance

   

S3 1.0823

S2 1.0883

S1 1.0921

Pivot Point 1.0943

R1 1.0981

R2 1.1002

R3 1.1062

EUR/USD – Trading Tips

Before Non-farm payrolls, the EUR/USD is consolidating in a narrow range. Investors await for NFP and trying to stay out of the market until the actual figure is out. The 50-hour moving average (M.A.) had a hit above the 200-hour M.A., confirming a golden crossover – a buyer market sign. Therefore, the pair seems set to maintain the continuous recovery rally from recent lows near 1.0880. 

Consider staying bullish above 1.0970 to target 1.1040. The bearish target can be set at 1.0880. 


USD/JPY – Daily Analysis

The USD/JPY closed at 106.910 after placing a low of 106.480 on Thursday. With no economic release from japan side, the movement of USD/JPY solely depended on U.S. dollars on Thursday. The weak ISM Non-Manufacturing PMI at 19:00 GMT indicated a slowdown in the economic activity of the United States by coming as 52.6 against 55.1 expected. This raised the concerns of the U.S. falling under recession after the continuous disappointing economic releases from the U.S. for three consecutive days. 

On Wednesday U.S. Private sector showed that the hiring made by them in September was not satisfactorily affected by the trade disputes prevailing between U.S. & China.

Concerning trade disputes, on Wednesday, there was another announcement from Trump’s administration related to the Tariffs on European Goods. 

With the increased chances of U.S. economic slowdown and a third rate cut by Federal Reserve in upcoming policy meeting, the U.S. Dollar faced pressure for 3rd consecutive day and has made USD/JPY to move in Bearish Trend.

Other economic releases from the United States on Thursday were, the Unemployment Claims at 17:30 GMT, came as 219K against 215K expected, weighed the U.S. Dollar. At 18:45 GMT, the Final Services PMI came as expected 50.9. The Factory Orders came in favor of U.S. Dollar as -0.1% against -0.5% expected.



Daily Support and Resistance 

S3 105.7

S2 106.53

S1 106.86

Pivot Point 107.37

R1 107.69

R2 108.2

R3 109.04

USD/JPY – Trading Tips

The USD/JPY continues to trade bearish after violating the bullish channel on the 240 mins chart. The USD/JPY is now holding below 50 periods EMA, which is suggesting bearish bias among traders. 

On the lower side, the USD/JPY is likely to gain support at 106.400 area. The MACD and RSI are holding below 0 and 50, suggesting odds or more bearish bias in the USD/JPY. Let’s stay bearish below 107 to target 106.400 today. 


GBP/USD – Daily Analysis

The GBP/USD currency pair hit the high level of 1.2350 and maintains the recovery rally, as worries about the U.S. fundamentals weighing over the Brexit news.

The US ISM Non-Manufacturing Purchasing Managers Index PMI is entering the previous manufacturing level from the same surveyor. Besides, the increased level of uncertainty coming from the survey has extended pullback in the greenback from the 2-year highs.

On the other hand, the GBP/USD pair trades started the day with headlines concerning the European Union. The EU has given 7-days more to the United Kingdom Prime Minister Boris Johnson to announce a better offer. The Tory leader could increase the support of thirty-labour rebels that supports the Breit deal.

Later in the day, investors will keep their eyes on the September month employment data, namely Nonfarm Payrolls (NFP), Unemployment Rate, and Average Hourly Earnings. After the news report, the eyes will remain on the U.S. Federal Reserve Chairman Jerome Powell’s speech at the “Federal Reserve the meeting.

    



Daily Support and Resistance

    

S3 1.2088

S2 1.2186

S1 1.2242

Pivot Point 1.2283

R1 1.234

R2 1.2381

R3 1.2479

GBP/USD – Trading Tips

On the technical view, the 130-pip area between 50-day and 21-day simple moving averages (SMA), 1.2250, and 1.2380, respectively, may keep the pair’s trading moves limited. Today, consider staying bullish above 1.2330 to target 1.2400 and 1.2500. Whereas, the GBP/USD may remain bearish below 1.2330 to target 1.2275 and 1.2230. 

 All the best! 

 

 

Categories
Forex Market Analysis

Daily FX Brief, October 03 – Major Trade Setups – Services PMI’s In Highlights

The U.S. dollar retreated for a second straight session, with the ICE Dollar Index slipping 0.1% to 99.02 on Wednesday. The euro climbed 0.3% to $1.0961. The top five economic think-tanks in Germany lowered their 2020 German GDP forecast to 1.1% from 1.8% previously, citing shrinking manufacturing production. And they said the economy could fall into a technical recession in the third quarter this year.

Economic Events to Watch Today

Let’s took at these fundamentals

 


EUR/USD – Daily Analysis

The EUR/USD currency pair flashing red at the level of1.0955, also the pair got a rejection near the 1.0967 (38.2% Fib Retracement of 1.1110/1.0943).

The EUR/USD currency pair took a buying at lows below 1.09 on Monday after the negative United States Manufacturing data propped the U.S. economic slowdown fears. As we know, the EUR/USD pair reached the recovery range above 1.0950 on Tuesday, ahead of unexpectedly lowest US ADP Employment data.

The United States’ ten-year treasury yield dropped by 3-basis-points and 4-basis-points on Tuesday and Wednesday, individually, and hit a bearish level of 1.578% in the Asian session. By the way, it’s one of the lowest levels since September 09.

However, the currency pair failed to hit the level of 1.0967, due to the decision by the United States President Donald Trump that to impose tariffs on $7.5 billion in European imports starting October 18. 

At the data front, the U.S. non-manufacturing data scheduled to release at 14:00 GMT is anticipated to compensate for worse than expected manufacturing PMI activity during September. The PMI is expected to issue figures at 55.1 against 56.4 during August.

Massive slip in the U.S. economic data will prop the United States slowdown concerns, eventually supporting the EUR/USD pair to hit higher to 1.10. Moreover, the chances of a 25-basis-points rate cut by the Federal Reserve during this month have already increased from 40% to 84% this week. Whereas, if the data beats the expectations, then the EUR/USD pair could decline back below the 1.09 level.

Daily Support and Resistance    

S3 1.0823

S2 1.0883

S1 1.0921

Pivot Point 1.0943

R1 1.0981

R2 1.1002

R3 1.1062

EUR/USD – Trading Tips

A day before Non-farm payrolls, the EUR/USD is trading a bit muted, as traders are staying out of the market due to a National holiday in China and Germany. Despite that, the EUR/USD may trade bearish below 1.0964 to target 1.0915 area. On the other side, the bullish breakout of 1.0960 can lead EUR/USD 1.1020. 


USD/JPY – Daily Analysis

The USD/JPY currency pair consolidates in the narrow range of 107 handle, due to the greenback falls out of favor with investors. Moreover, the USD/JPY currency pair struggles to hit the high-level of107 handles while the Asian equities and Treasury yields trade lowest.

As we know, the greenback continues to drop since the start of the week. The dollar has the weakest start of a 4th-quarter since 2008 after following a slump in the 3rd-quarter range.

The United States stocks continued their decline due to more dismal data. The downward risk sentiment is increasing, and the global economy is slowing down, which was again evident in the U.S. data that pushed the U.S. benchmarks lower. The Dow Jones Industrial Average, DJIA, dropped around 344 points, or 1.3% during the previous session.

Moreover, the S&P 500 index fell by 52.64 points, and the Nasdaq dropped by 123.44 points. The ADP data showed just 135,000 new jobs against forecasted figures of 140,000. With this, the traders are pricing in weaker Nonfarm Payrolls which is due on Friday.

The greenback and Treasury yields need support at this position. The United States’ two-year treasury yields dropped from 1.55% to 1.48%, and the ten-year dropped from 1.66% to 1.59%. 

Daily Support and Resistance

    

S3 105.7

S2 106.53

S1 106.86

Pivot Point 107.37

R1 107.69

R2 108.2

R3 109.04

USD/JPY – Trading Tips

The USD/JPY has formed tweezers bottom on the 4-hour timeframe which is suggesting odds of a bullish reversal. The USD/JPY pair may find support at 106.90, and below this, it can go after 106.400. On the upper side, resistance stays at 107.450. 


WTI Crude Oil – Daily Analysis

The WTI crude oil prices found on the recovery track, due to concerns of the worsening global economic outlook. The economic outlook hit crude oil prices very hard during the previous trading session as traders are pricing in the probability for development in solving the on-going trade war between the United States and China. The U.S. West Texas Intermediate (WTI) crude oil futures were up 23 cents, or 0.4%, to $52.87 a barrel, after sinking by 1.8% on Wednesday.

On the other hand, the global equity benchmarks found on the lowest level in a month on Wednesday. That came due to a sign of a recession in the United States economic growth. Secondly, the weaker economic data in Europe also distributed fears the global economy could fall into the slowdown.

There was a hurting sentiment in the previous trading session from the Energy Information Administration, which reported a surge of 3.1 million barrels in crude oil inventories in the last week. 

It should also be noted that top oil exporter Saudi Arabia is planning to lift the cost for crude oil it sells to Asia during November. The sentiments came following the drone attack on Sauida Kingdoms, and its oil production has also started to spike in the Middle East.  

Daily Support and Resistance

S3 48.53

S2 50.77

S1 51.65

Pivot Point 53

R1 53.89

R2 55.24

R3 57.48

WTI Crude Oil – Trading Tips

The WTI crude oil is finishing the Asian session in a bearish mode, falling from 53 to 52.70. Crude oil is facing significant resistance at 53 levels today. The MACD and RSI are bearish as both of them are holding under their crossover levels of 0 and 50 respectively. 

Consider staying bearish on crude oil below 53 to target 52.65 and 51.80 levels. All the best! 

 

Categories
Forex Market Analysis Forex Signals

Bullish Gold Heads for 61.8% Retracement – Weaker Dollar In Play! 

On Wednesday, the precious metal gold expanded after softer-than-expected U.S. economic figures which hiked concerns about global economic growth. Alongside this, it also raised chances of additional interest rate reductions, pushing traders towards the safe-haven metal.

The precious metal gold is still trading bullish adding 0.3% to trade at $1,483.6. Yesterday, gold slipped dramatically to place two months low at $1,458.50. However, the losses in gold were short-lived as it surged markedly as much as 1% during the late U.S. session.

The U.S. manufacturing activity dropped to a more than a decade low in September as imminent trade tautness pressures on exports. The vulnerable economic report raised global growth anxieties, leading global stock markets to a one-month low and boosting forecasts for further monetary policy easing by the U.S. Federal Reserve.

Gold – Technical Outlook

On the technical front, gold has formed a bullish engulfing candle at 1,480 area, which is suggesting strong bullish bias among traders. On the upper side, gold is likely to meet the 61.8% Fibonacci retracement level of 1,492, but that’s only possible if it manages to crossover the 50% Fibo level of 1,487. 



Gold – Daily Technical Levels

Support    Resistance 

1,463.06    1,491.28

1,446.99    1,503.43

1,418.77    1,531.65

Pivot Point 1,475.21

Gold traders can consider trading bullish above 1,475 level today as the immediate target is likely to be 1,488 and 1,495. Selling can be seen below 1,498 level today. 

All the best!  

 

Categories
Forex Market Analysis

Daily FX Brief, October 02 – Major Trade Setups – Weaker Dollar Sentiment Prevails!

The Greenback retreated 0.2% from a two-year high to 99.15 on Tuesday, as data suggested that U.S. manufacturing activity contracted at the quickest pace in a decade. The euro gained 0.3% to $1.0934, while USD/JPY slid 0.3% to 107.75.

The British pound tested a day-low of $1.2207 before bouncing back to close flat on the day at $1.2292. Media reported that European Union leaders have considered offering the U.K. a concession on Brexit that could set an expiration date on the contentious Irish backstop. The Markit U.K. Manufacturing PMI rose to 48.3 in September (vs. 47.0 expected) from 47.4 in August. Whereas, the U.S. ISM manufacturing PMI figures fell dramatically, triggering a sharp sell-off in the U.S. dollar.

Economic Events to Watch Today

Let’s took at these fundamentals

 


EUR/USD – Daily Analysis

The EUR/USD currency pair consolidates in the narrow range and maintains 0.32% increases. Prominently, the pair may take bids on them today due to the increasing possibilities of the rate cut by the Feral Reserve and the intensified United States slowdown fears.

The United States Insitute of Supply Managements was closely-observed yesterday. The manufacturing index dropped to 47.8 during the month of September. Its the weakest range since the month of June 2009. Besides this, the gauge contracted for the 2nd-consecutive month, confirming the fact that the continuing trade war with the dragon nation is damaging the United States economy lower.

Yesterday’s economic data has propped the U.S. economic slowdown fears, forcing markets to price in the possibility of further rate cuts by Federal Reserve in October. 

Today, the Greenback may trade further lower if the United States ADP employment change which is due to release at 12:15 GMT, release against the estimated number. Consequently, the EUR/USD may hit a high level of 1.10, as suggested by the flag breakout on technical charts. 



Daily Support and Resistance

S3 1.079

S2 1.0854

S1 1.0893

Pivot Point 1.0918

R1 1.0957

R2 1.0982

R3 1.1046

EUR/USD – Trading Tips

On Wednesday, consider staying bearish below 1.0918 level as the EUR/USD has formed a tweezers top pattern on the 4-hour timeframe. 

On the lower side, one should look for a target of 1.0880 and 1.0820. 


USD/JPY – Daily Analysis

USD/JPY was opened on Tuesday at 108.070 and had shown a bearish trend. The U.S. Dollar on Tuesday fell because of drop-in ISM Manufacturing PMI to a 10-year low point.

The highlight release on Tuesday, ISM Manufacturing PMI came in lower than expected increased the fear of the U.S. falling into recession because of Prevailing US-China Trade war’s impact on the domestic economy.

After the weak economic results from the United States on Tuesday, Donald Trump blamed the Federal Reserve for a strong Dollar in his tweet that the Fed has no clue that they are their enemy.

The weak PMI indicated that economic activity in the U.S. manufacturing sector was reserved in September. The data showed that PMI dropped to a 10-Year low of 47.8 from the previous month’s 49.1.

From Japan Side, at 4:30 GMT, the Unemployment Rate came as 2.2% against 2.3% in favor of Japanese Yen. At 4:50 GMT, Tankan 

Manufacturing Index and Tankan Non-Manufacturing Index came as 5 and 21 against expected 1 and 20 respectively. They were also in favor of the Japanese Yen.

However, the Final Manufacturing PMI from Japan at 5:30 GMT came as 48.9 against 49.3 expectations. Like the U.S. and other countries, Japanese PMI also showed a drop in economic activities in September.

The USD/JPY showed a downward movement of 0.2% on Tuesday and placed a low of 107.625; it is currently moving at 107.761.

Daily Support and Resistance

S3 107.13

S2 107.56

S1 107.82

Pivot Point 108

R1 108.26

R2 108.44

R3 108.87

USD/JPY – Trading Tips

The USD/JPY is likely to trade mostly lower as the pair has violated the bullish channel at 108.200. On the lower side, the support stays at 107.300, which is why I will be looking to take sell positions below 108 level to target 107.400.  

 


GBP/USD – Daily Analysis

 The GBP/USD currency pair hit the bearish track and dropped by 0.2% to 1.2280, ahead of U.K. Prime Minister Boris Johnson who is ready to announce his last and final Brexit deal/offer to the European Union during this day. Meanwhile, he clearly said that Britain would not talk anymore if the agreement is not engaged and will leave on October 31.

It should be noted that the greenback overall weakness couldn’t send the GBP/USD sellers far away due to new headlines from the U.K. left bearish pressure on the cable pair. By the way, the currency pair is presently trading around 1.2290.

The United Kingdom PM Boris Johnson has a strong attitude about the Brexit final date October 31. Still, at the same time, the PM is hoping for additional effort to extend the British Parliament. 

Apart from this, the intensified fears and anxiety of the economic recession are likely to keep investor’s focus on the Federal Reserve Bank of New York President John Williams’ speech for further clues about the Fed policy ahead. Whereas the September’s ADP Employment Change is expected 140,000 against 195,000 prior and it’s also one of the highlights today.



Daily Support and Resistance    

S3 1.2008

S2 1.2143

S1 1.2217

Pivot Point 1.2279

R1 1.2352

R2 1.2414

R3 1.2549

GBP/USD – Trading Tips

The GBP/USD pair is finishing the Asian session in a bearish mode, falling over from 1.2330 to 1.2250. The sideways trading range market is keeping the cable in between 1.2335 to 1.2235 zone. 

The MACD and RSI are mixed due to a series of mixed fundamentals. On one side, the GBP/USD is turning bullish over a weaker dollar, and on the other hand, bears are shorting GBP to avoid uncertainties coming from Brexit. 

Consider staying bearish below 1.2330 to target 1.2250. In the case of a bearish breakout, the GBP/USD pair can drop further towards 1.2185.

All the best! 

 

Categories
Forex Market Analysis

Daily FX Brief, October 01 – Major Trade Setups – Canadian GDP In Play! 

On Tuesday, the U.S. dollar surged to trade near its highest in around two weeks against the Japanese yen. The release of economic event that is forecast to dispense the U.S. manufacturing division turned to extension, which would ease concern about the influence of the continuing Sino-U.S. trade war.

The Reserve Bank of Newzealand has lowered the cash rate by 0.25% to a historic low of 0.75%. It’s the third cut this year; Governor Philip Lowe announced the economy was at a turning point, but the possibility of crawling jobs growth and moderate inflation convinced him of the call to act; The Aussie dollar dipped 0.4% to US67.22c; Some economists were predicting further rate cuts this year;

Economic Events to Watch Today

Let’s took at these fundamentals

 

 


EUR/USD – Daily Analysis

EUR/USD currency pair flashing red and dropped by 4% since the 2n d quarter of 2018, as of wiring the currency pair is closed at 1.0885 during the Monday.

The fresh drop in the EUR/USD currency pair came mainly due to tee German slowdown fears and the dovish European Central bank expectations. As we know, the central bank delivered the rate cut by the ten-basis-points to -0.50% last month and planned to restart bond purchase from November 01.

However, the Eurozone Consumer Prices Index data os scheduled to release at 09:00 GMT is anticipated to represent the cost of living in the currency bloc increase 1% yearly during the September.

On the other hand, WTI crude oil prices sharply increased during September as the drone attack on Saudi oil output. As a consequence, the CPI headline could hit forecasted figures in the future. The increase in inflation can be temporary, reflecting the sudden surge in crude oil prices, which is why the WTI crude oil price movement may not stop the European Central Bank from the fresh rate cut. Therefore, CPI data against forecast may not put a buying under the EUR currency. 

It should also be noted that the currency pair may also get hints from the final September Purchasing Managers Indices, which is scheduled to release across the Eurozone.


Daily Support and Resistance

S3 1.0784

S2 1.0847

S1 1.0873

Pivot Point 1.091

R1 1.0936

R2 1.0974

R3 1.1037

EUR/USD – Trading Tips

On Tuesday, the EUR/USD is likely to continue trading lower due to violation of 1.0908 level. Below this, the bearish target is expected to be 1.0835 today. 


USD/JPY – Daily Analysis

The USD/JPY pair is trading in the tight range and currently trading at 108.09, representing gains from 107.78 to 108.15 highs during the night session due to the United States stocks had closed the month in the green.

The market seems a bit calm, assuming that we will not see Chinese markets open due to its China’s National Day holidays that started on the day and will continue to October 07. Moreover, all eyes stay on the trade talk expectations and the United States key data which is scheduled to release yet, as well as Nonfarm Payrolls later in this week.

As of data, the United States’ two-year treasury yields and the 10-year yields were stronger overnight, supportive the DXY to fresh cycle highs while U.S. stocks gained and flashed the green. The United States’ two-year treasury yields increased from 1.62% to 1.65%, whereas the ten-year yield rose 1.68% to 1.71%. 

As for stocks, the Dow Jones Industrial Average, DJIA, ended 96.58 points higher to finish at 26,916.83, while the S&P 500 index rose 14.95 points, or 0.5%, to end at 2,976.74. The Nasdaq Composite Index ended at 7,999.34, for an increase of 0.1%.

The stock market was supported on some back trading concerning trade talks coupled with Federal Reserve rate cut extractions. Markets are pricing eight basis points of a rate cut at the October 31 meeting and a terminal rate of 1.14%.    

Daily Support and Resistance

S3 107.13

S2 107.56

S1 107.82

Pivot Point 108

R1 108.26

R2 108.44

R3 108.87

USD/JPY – Trading Tips

On the hourly chart, the USD/JPY violated the horizontal resistance area of around 108, which is now likely to support the USD/JPY around 108. On the upper side, the resistance continues to stay at 108.460 area. 

The MACD and RSI are still holding in the buying zone, and suggesting chances of a bullish trend. We should consider staying bullish above 108 level today to target 108.460.  


AUD/USD – Daily Analysis

AUD/USD was closed at 0.67492 after placing a low of 0.67409. The overall trend remained bearish that day.

At 6:00 GMT, the MI Inflation Gauge came as 0.1% from Melbourne Institute and at 6:30 GMT. 

The Private Sector Credit from Reserve Bank of Australia came as 0.2% against 0.3% expected to weigh the Australian Dollar. Weak economic data from Australia caused a selling trend for AUD/USD on Monday.

However, Strong U.S. Dollar due to the rise of the U.S. Dollar Index to 99.46 also played its role in the downward movement of AUD/USD on Monday. 

The Reserve Bank of Australia is expected to cut its rates by 25 basis points on Tuesday. The further rate cut would create a selling trend for AUD/USD.


Daily Support and Resistance    

S3 0.6705

S2 0.6728

S1 0.6739

Pivot Point 0.6752

R1 0.6762

R2 0.6775

R3 0.6798

AUD/USD – Trading Tips

The Australian central bank has delivered a 0.25% rate cut on October 01 which has triggered a dramatic sell-off in the AUD/USD currency pair. The AUD/USD is trading at 0.6710 area, exhibiting strong bearish trend.

In fact, the AUD/USD has formed a bearish engulfing candle on the 4-hour timeframe, which is likely to drive further selling in the AUD/USD pair. Today, let’s consider staying bearish below 0.6752 to target 0.6675.

All the best for trading. 

 

Categories
Forex Market Analysis Forex Signals

Gold Loses Safe Haven, Can Triple Bottom Underpins? 

What’s happening on Gold?

On Monday, the yellow metal gold prices were headed distinctly lower, slipping beneath a psychologically vital level at $1,500 on the last trading day of a month as well as a quarter. 

Most of the bearish trend in gold is triggered by a more robust dollar and slight buying in the U.S. stocks and yields, pulling demand away from bullion market.

The U.S. President Donald Trump’s government is weighing delisting Chinese businesses from U.S. stock exchanges. Three specialists advised on the matter stated on Friday, in what would be a drastic intensification of U.S.-China trade tensions. 

This was supposed to drive a sharp buying in gold, but the subsequent news that the United States does not currently intend to prevent Chinese companies from entering on U.S. exchanges drove the risk-on sentiment in the market. 

Gold – Technical Outlook 

On the technical side, gold is trading at the triple bottom level of 1485, which is extending pretty solid support. The new candle has closed as a sort of hammer which may help drive bullish retracement in the gold. 

The leading indicator MACD is still forming bearish histograms, and its value stays at -14, suggesting a substantial bearish bias among traders.


The RSI and moving averages are still signaling bearish bias for gold, but may not see further selling until 1,485 gets violated. On the upperside, gold is likely to face resistance at 1,492 and 1,499. 

Gold – Technical Levels

Support Resistance 

1,486.94    1,507.06

1,476.88    1,517.12

1,456.76    1,537.24

Pivot Point 1,497

Let’s seep an eye on 1497 to stay bearish and 1484 to remain bullish in gold today. All the best! Let’s

 

Categories
Forex Market Analysis

Daily FX Brief, September 30 – Major Trade Setups – Traders Set to Trade Monday! 

Happy Monday, Folks! 

A stellar week for the U.S. dollar index had price halt just shy of YTD highs at 99.37. Up 0.67% and recording its second week in positive territory, the next port of call, aside from 99.37, sits at 99.62, a robust weekly resistance level that draws history as far back as March 2015.

The main highlight of the week was U.S. House Speaker Pelosi opening a formal Trump impeachment inquiry over a controversial phone call between himself and his Ukrainian counterpart. Data was largely ignored. 

Consumer confidence declined in September, following a small slump in August. The Index presently holds at 125.1, falling from 134.2. Headline U.S. durable goods orders rose +0.2% m/m in August, topping the consensus view at -1.1%, according to the U.S. Census Bureau on Friday. U.S. personal consumption expenditures, according to the Bureau of Economic Analysis, fell 0.1% m/m, unable to meet consensus at 0.3%.

Economic Events to Watch Today

Let’s took at these fundamentals

 


EUR/USD – Daily Analysis

Europe’s shared currency ended the week down 0.70% vs. the U.S. dollar. The week booted off undergoing heavy losses, beaten by dark flash PMI numbers and later pulled by resurgent dollar demand. 

Technically, weekly price trades very south of support at 1.0873, while daily run meets with the buying pressure at 1.0851-1.0950. The 4 hourly flow re-entered a descending channel creation (1.1109/1.0993) and is poised to make way for the essential figure 1.10 this week possibly.

Concerning macroeconomic figures, headline U.S. durable goods orders grew +0.2% m/m in August, beating the forecast of -1.1%, according to the U.S. Census Bureau on Friday. U.S. personal consumption expenditures, as per the U.s.s Bureau of Economic Analysis, fell 0.1% m/m, unable to meet consensus at 0.3%.

Technically, the H4 candles left 1.09 unchallenged Friday, sporting several lower candlestick shadows before rotating back within the descending channel formation (1.1109/1.0993). Aided on the back of daily demand highlighted above at 1.0851-1.0950, the pair certainly has scope to shake hands with September’s opening level at 1.0989, closely followed by the key figure 1.10 and channel resistance, this week.

 


Daily Support and Resistance 

S3 1.0814

S2 1.0872

S1 1.0895

Pivot Point 1.0931

R1 1.0954

R2 1.099

R3 1.1049

 

EUR/USD – Trading Tips

Consider staying bearish below 1.0936 and bullish above the same to capture quick take profits of 50 pips on either side. The market may trade sideways over neutral German CPI. However, the sharp variation in number can bring changes in the market. 


USD/JPY – Daily Analysis

Last week, the USD/JPY was closed at 107.929 after placing a high of 108.178. Overall the movement of this pair showed a Bullish trend Last week.

Geopolitical issues were also cooled down a bit due to Saudi ‘Arabia’s decision about a ceasefire in Yemen. Moreover, the impeachment inquiry of Trump was also a headline last week for political anxiety in Washington but had a lesser effect on the U.S. Dollar Index. U.S. Yields rose after a decrease in Global Political & Economic tensions and gave strength to U.S. Dollar against Japanese Yen last week.

On Friday, few reports showed that U.S. President Donald ‘ Trump’s administration was considering the option to delist Chinese companies from US Stock Exchange, and it was also planning to limit the U.S. investors’investors’ portfolio flows in Chinese companies. These reports cause a slowdown in the upward trend of USD/JPY.

On the other hand, the speech of BOJ governor, Kuroda last week, expressed the concerns of Bank of Japan over the escalating risks to the economy. 


Daily Support and Resistance 

R3: 108.98

R2: 108.45

R1: 108.19

Pivot Point 107.92

S1: 107.66

S2: 107.4

S3: 106.87

USD/JPY – Trading Tips

The USD/JPY violated the bullish channel on the hourly chart, which was extending its support around 107.950 area. On the 4 hour timeframe, the 20 and 50 moving averages are reflecting the bearish trend in the USD/JPY. The Japanese yen may find support at 107.750 against the U.S. dollar along with resistance at 107.885. Consider staying bearish below 107.900 today as the pair is likely to stay bearish in the short term. 


AUD/USD – Daily Analysis

The Australian dollar wrapped up the week unmoved against the buck last week, unable to overthrow channel support taken from the low 0.7003. To the upside, resistance resides close by at 0.6828, with a break of the channel mentioned above possibly exposing 0.6677, the YTD low. As is painfully evident on the weekly chart, the long-term downtrend remains in full swing and has done since early 2018. 

Support at 0.6733 endures a significant fixture on the daily timeframe, as does resistance outlined at 0.6833. Likewise, the interest is the 200/50-day SMAs both fronting south. A breach of the said support can help target the market around 0.6687, followed by support at 0.6301 

Daily Support and Resistance

S3 0.6688

S2 0.6723

S1 0.6736

Pivot Point 0.6759

R1 0.6772

R2 0.6794

R3 0.6829

AUD/USD – Trading Tips

The Australian central bank is expected to deliver a 0.25% rate cut on October 01. However, the United States Durable goods Orders, Michigan Consumer Sentiment, and Personal Consumption data might consider short-term investors during the following part of the day.

The AUD/USD is trading at 0.6750 area, maintaining a short trading range of 0.6800 – 0.6750 range on Monday. The 50 periods exponential moving average is neutral but mostly suggesting a bearish bias on the 4-hour timeframe. 

Whereas, the MACD is consolidating in a green and red zone, indicating a neutral bias among traders. Hence, let’s keep an eye on 0.6759 to stay bullish and bearish below this level. 

All the best for trading. 

 

Categories
Forex Educational Library

Expectations about the Economy

Abstract

There are a great many intertwining variables that influence the current state of the economy at any given time; such as unemployment, wages, internal production, investments and many more. But with all of them, it is the expectations of people, and investors that generate certain effects, that explain the behavior of some of these variables and which will affect future conditions. For example, if people expect future interest rates to be higher, they will consume or ask for more loans in the present because in the future it will be more expensive to consume. But without rising interest rates, consumption varies today due to expectations. Another example is the expected interest rates in a country, depending on these expectations the investors decided where to place their capital without waiting for this to happen.

The economy in its short-and long-term models must consider the expectations of consumers, companies and all representative agents within an economy. To consider the subject of expectations first the interest rate variable must be introduced. Interest rates expressed in units of a national currency are referred to as nominal interest rates and these rates appear in newspapers and financial pages. Interest rates expressed in a basket of goods are called the real interest rate and are called that because it is beyond inflation and reflects the cost of acquiring goods that will be consumed by people, what is truly important.

There is an equation that establishes that the real interest rate equals (approximately) the nominal interest rate minus the expected inflation. That is why in some media, although they mention a decrease of the interest rates it is said that the interest rate is still contractionary or it may be that the nominal is lower one year than another, but that does not indicate that loans are cheaper than the previous year, so you should consider real interest rates. The interest rate directly affected by the monetary policy is the nominal interest rate. The interest rate that affects spending and production is the real interest rate. Given this difference, it will be possible to see in the news that they contradict the potential effects of monetary policy on the economy and financial markets. In the following graph, you can see the real interest rate of some countries.

Graph 6 Real Interest Rate. Data taken from the World Bank.

To summarize the issue of interest rates it should be clarified that the nominal interest rate indicates how many euros must be returned in the future to obtain a euro today and the real interest rate tells us how many goods must be returned in the future to obtain a good today. Nominal interest rates will affect investment decisions between bonds, stocks, and money, while the real interest rate will affect project investment decisions. In the short term, an increase in the growth of money leads to a decrease in both nominal interest rates and the real rate, in the medium term, an increase in the growth of money will not affect the real interest rate, but if it raises the nominal interest rate.

The bonds issued by a country are differentiated in two aspects: their risk of default and the time of their pay. There are some bonds that have better coupons than others, which are riskier by defaults and that ends up affecting the price of bonuses. But for economic purposes, this part of the article will focus on the bond term. Bonds with different times of paid have different prices and different interest rates that will be called yields. The yields of short-term bonds, usually a year or less, are termed short-term yields and, if the bonds are more than one year, they are called long-term yields.

The interesting thing about analyzing the bonds is to determine the curve of the yields and the relationship between short-term and long-term rates. The price of a one-year bond varies inversely with the nominal interest rate at one year that is in effect at the present. The price of a two-year bond depends both on the interest rate to a current year at the present, as well as the expected interest rate for the following year. The interesting thing about analyzing bond prices is that bond yields contain the same information about future interest rates as the bond yield curve fully reflects the agents ‘ expectations of the economy of a Country.

To begin the analysis, a term performance must be defined; The term yield of a bond to N years, or in other words the N years interest rate is the constant annual rate that makes the current price of the bond equal to the current value of the future interests generated by this. By examining the yields of the bonds at different times, we can deduce the expectations of the financial markets on future short-term interest rates. For example, if you want to see the expectations of the financial markets in one year you should observe two-year bonds which have included expectations about the interest rate that will be at the end of the year and observe bonds to a year of maturation.

When the yield curve has a positive slope is when long-term interest rates are higher than the short-term, financial markets expect short-term interest rates to increase in the future. When the yield curve has a negative slope long-term interest rates are lower than those of the short-term, but markets expect this situation to change and short-term interest rates fall in the future. To observe market expectations during the crises of 2000, 2007 and others, it is interesting to observe the curves of the bonds of the countries that reflect the expectations of the financial markets and the decisions that were expected to be taken by the banks Central. It is important to note that the interpretation of performance curves only focuses on expectations and in most cases the decisions of banks and market agents are unpredictable. In the following two graphs you can see the bonus yield curve. In the first graph, you can see a bond of Colombia and in the second is the types of curves of yields.

Graph 7.   Curva de Rentabilidad TES Tasa Fija 

Graph 8. Roca E.  Estrategias con bonos

Leaving the issue of bonds aside, the behavior and expectations of consumers and businesses will now be analyzed. These two market agents always respond to their expectations about the future. In economic models, you have a consumer who is extremely far-sighted about the future so consumers will always be thinking about what affects their consumption in the following periods. While not all consumers are like that, in reality, it is a simplification that helps to understand the formation of expectations and how they would respond to an external shock.

To understand consumption decisions, it is essential to take an intertemporal perspective because what a consumer spends and borrows today will impact their future consumption. It is assumed that individuals are rational but in the models, it is assumed that the individuals are identical to simplify the models. According to the theoretical models, consumers are very sensitive to variations in income. An explanation of this is that credit is not available to the whole population so if income disappears or decreases it will have an immediate effect on consumption as there would be liquidity restrictions. Or in another example, before the tax rate reduction is announced soon, consumers can anticipate a future increase in their income because consumption will increase at the present. These effects on consumption depend a lot on the type of agents that there are because in some countries there are more wealthy people and they do not have liquidity restrictions when compared with another country where much of the population have problems to access to credit or income is very low.

Consumption probably varies more than the current income. For example, if you have the expectations that the decrease in your income is permanent your consumption will fall in the same proportion. But if the consumer believes that the effect is transient, they will adjust their consumption less. In a recession, consumption does not adjust to the same magnitude in which the income decreases because when a rational consumer knows that it is a temporary shock and the economy will end up retaking its natural level of production. The same happens during the expansions since the rent can increase but it is not proportional to the increase of consumption because it is a momentary shock.

It should be considered that consumption probably varies, although the current income does not vary. Presidential elections, changes in Congress, or changes in people’s expectations of the performance of the economy or international relations can affect consumption without the income being affected. Even some recessions are exacerbated by people’s expectations of a crisis greater than that which exists

It will now be analyzed how companies make their decisions depending on the expectations they have. As mentioned earlier in this article investment decisions by companies depend on the real interest rate differently from the way people do in considering the nominal interest rate. Corporate decisions also depend on household consumption, sales, and expectations. A company when it is going to invest in machinery and capital to develop its activities more efficiently must make a comparison. The companies must first calculate the expected value of the benefits that the acquisition of that machinery would bring, and then compare this to the costs incurred in buying that machine.

In short, if the company believes in its expectations that the benefits in the future will be greater than the costs of its investment, then it will decide to invest. The higher the actual and expected real interest rate, the lower the expected value of benefits and this will reduce the investment the company makes. The sum of the real interest rate and depreciation is called the cost of capital use and they have adversely affected the investment decision of the companies.

If a company experiences an increase in sales that is believed to be permanent, the expected value of the benefits will also increase what will lead to an increase in investment. But it’s similar to what happens to consumption, the investment does not respond in the same magnitude as sales as the investment is not continuous as can be the consumption. Once a new technology has been implemented, the company has no incentive to continue investing beyond a certain equilibrium point. That is why it can be concluded that investment is much more volatile than consumption, although they respond in the same way to external factors such as recessions and economic booms.

If monetary expansion leads financial investors, businesses, and consumers to revise their expectations of future interest rates and future production, monetary expansion has an influence on economic output, but if the expectations do not change, central banks will not have good tools to affect production as they have small effects on the economy. If a change in monetary policy does not surprise the agents of the economy, expectations will not change and production along with other variables are not affected. The effects can be deeper or not in expectations, but it does not mean that expectations are random and erratic. Economists assume that there are rational expectations in their models and on this basis monetary policies are formulated.

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