Category: Forex Market Analysis

This section focuses on publications and analytical reports related to financial markets on a daily basis.

Main Features

Multiple asset-classes coverage
Neutral assessment of market conditions
Entry setups with relevant underlying price levels

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Forex Market Analysis

Forex and Indices – Daily Update – 03.07.18

Fundamental Overview

Asian Session with all eyes placed on the RBA decision.
Forex and Indices: In the Overnight session, markets will place their eyes on the Board of Reserve

Fundamental Overview

Asian Session with all eyes placed on the RBA decision.
Forex and Indices: In the Overnight session, markets will place their eyes on the Board of Reserve

Fundamental Overview

Asian Session with all eyes placed on the RBA decision.

Forex and Indices: In the Overnight session, markets will place their eyes on the Board of Reserve Bank of Australia (RBA) interest rate decision in which the analysts’ consensus expects that Governor Philip Lowe and the Board members decide to keep the interest rate at the record low 1.50% which is unchanged since August 2016.

Despite the unemployment rate drop in May to 5.4%, and the inflation rate kept unchanged in May at 1.9%, being near to the RBA inflation target; The cooling on housing market and  the increased volatility in global markets due mainly to the tariffs conflicts, could drive to the RBA  to decide to keep the interest rate unchanged again.

Forex and Indices - Daily Update

Source: Forex.Academy Collection – Forex and Indices

Technical Analysis

EURUSD

The pair still is moving in a bearish wedge pattern which, if it breaks below 1.15649, could drive the price to a new lower low ending the bearish cycle near to the 1.1450 zone coinciding with the lower trendline of the bearish wedge. In the opposite case, if EURUSD breaks above 1.16801, the common currency could drive to test the invalidation level placed at 1.1852.


 

GBPUSD

GBPUSD is still running in a bearish wedge and has a new lower low pending before the cable starts a new bullish cycle. This lower low could be developed as a Bullish 2B pattern (Bear Trap) as a reversal pattern. As long as the price does not make a reversal pattern, the price will continue its bearish bias. Invalidation level of the bearish cycle is at 1.34725.



USDCHF

USDCHF is developing a triangulation structure. The RSI oscillator shows that the price has a bearish bias. However, as the price doesn’t have a definite trend in the short-term, we will expect a false breakout before we define our bias for this pair. In the long-term, the Swiss currency is consolidating a rally which started on February 15th, 2018.



EURAUD

The EURAUD cross maintains a bullish bias, due to the price moving inside an ascending wedge. Additionally, RSI is running in an ascending trend and is above the 60 level. We can expect a false breakout to the 1.59 zone before it completes the bullish cycle. If the price falls below 1.5702, we could evaluate short positions.



 

GBPAUD

The GBPAUD 2-hour chart shows a sideways move, as long as the price moves above 1.78747. The cross will have a last bullish target pending, placed at 1.8085 with an invalidation level below 1.78080, from where we will consider short positions with a profit target in the 1.74 zone.




FTSE 100

The FTSE 100 is moving sideways as a complex corrective structure consolidating the March to May rally. In the middle of global volatility in the stocks markets, we prefer to consider long positions rather than the short positions. The short-term support to control is 7,500 pts.




DAX 30

The DAX 30 2-hour chart shows that the German index has found support at 12,100 pts. From this area, we could start to propose potential zones for entry in the long side.



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Forex Market Analysis

July 2 – Daily Update on S&P500 & Gold – NFP Week Begins

On the first day of the 3rd quarter, the financial markets remained heavily volatile in the wake of trade war sentiments. For instance, gold slid more than 1% to its

On the first day of the 3rd quarter, the financial markets remained heavily volatile in the wake of trade war sentiments. For instance, gold slid more than 1% to its

On the first day of the 3rd quarter, the financial markets remained heavily volatile in the wake of trade war sentiments. For instance, gold slid more than 1% to its lowest ahead of the U.S. holiday, as the dollar recovered. Whereas, the indices inducing SPX, DAX and Nikkei plunged due to ongoing U.S.-European Union trade war. In addition to this, the July 6 trade war tensions have helped the risk sentiment to stay off.  

 

Later this week, we have another series of high impact economic events coming out of the market. Let’s take a quick look.

 

Top Economic Events to Trade

AUD – Building Approvals m/m – 1:30 (GMT)

AUD – RBA Rate Statement – 4:30 (GMT)

AUD – Cash Rate – 4:30 (GMT)

GBP – Construction PMI – 8:30 (GMT)

 

Gold – XAU/USD – Daily Outlook

The precious metal gold is trading at 1242, down 11.60 points and 0.92% on Monday. One of the main reasons behind the bearish trend is the stronger dollar.

 

The greenback continued its ascent as traders boosted their bets that the U.S. administration would prove better in a trade war as compared to some of its trading rivals. The U.S. tariffs on $34 billion worth of Chinese imported goods are due for July 6.


 

Support     Resistance 

1240.83    1247.17

1238.87    1249.13

1235.7    1252.3

Key Trading Level:    1244

         

SPX  – S&P500-  Technical Outlook

SPX is trading bullish at 2727, up 5.75 points and 0.21%. On the 4- hour chart, the bullish trendline is extending a support near 2679. While the resistance predominates at 2732 and 2745 today. The main trend is up as per the daily swing chart. But, momentum is trending lower. A trade through 2679.25 will convert the main trend (bullish) into the bearish bias.

 

Overall, the main trading range of SPX is 2595 to 2796. The index is currently testing the upper or 50% level of this range at 2795.75.



 

Support     Resistance 

2705.72    2719.32

2701.52    2723.52

2694.72    2730.32

Key Trading Level:    2712.52
Categories
Forex Market Analysis

Daily Market Update: EU To Impose Tariffs On US, Great Britain Higher Manufacturing PMI

 

 News Commentary

 

 

The European Union has threatened to impose new tariffs worth $300 billion if the U.S. moves forward with tariffs on European cars.

President Donald Trump

 

 News Commentary

 

 

The European Union has threatened to impose new tariffs worth $300 billion if the U.S. moves forward with tariffs on European cars.

President Donald Trump

 

 News Commentary

 

 

The European Union has threatened to impose new tariffs worth $300 billion if the U.S. moves forward with tariffs on European cars.

President Donald Trump, who has criticised the EU of its trade surplus with the U.S. before, and for its higher import duties on cars, said last week that the government was completing its study and suggested the U.S. would take action soon.

The latest update in the global trade war comes on Friday when the U.S. moved to impose $34 billion of tariffs on Chinese exports. China is expected to respond with tariffs of its own on U.S. goods.

 

The Euro had been boosted on Friday after the European Union’s leaders reached a deal on migration, easing pressure on Merkel. However, the Euro came under pressure after Germany’s interior minister asked to resign over immigration policy, throwing into doubt the future of Angela Merkel’s coalition government.

 

In the UK, British factories kept up a steady growth in June but worries about global trade and Brexit still hit confidence about the outlook to a seven-month low.

But the better than expected Manufacturing PMI (54.4 versus forecast at 54.1) will provide additional optimism for the hawkish members on the committee to raise the rates.

All eyes will be on US manufacturing PMI which is expected to reach 58.2.

 

 

Chart Analysis

 

 

USD INDEX

As we expected on the daily chart, the price had reached the key resistance at 95.5 and bounced back from it, powered by divergence on RSI.

The price also had shaped a reversal double top pattern.

So, the index is supposed to get back down to the support zone again of 93.2-92.6, then start its journey to the C wave.



USD/JPY

On the daily chart, the pair retested the key resistance of 111.1 and the descending trend from the high of 2017.

So, any bounce here will lead the price to the first support of 108.15.



 

 

AUD/USD

On the daily chart, the price has reached the support zone of 0.7325-0.7365.

The pair is supposed to find some breath powered by divergence on RSI to reach the key resistance of 0.7515, where the descending trend from the high of February is located.



 

 

AUD/JPY

As we expected before, the price has reached the support zone 81.2-80.5 as the price is moving sideways.

So, the price is expected to retest the head of the pattern to again reach the levels of 84-84.4.



 

 

CAD/JPY

On the daily chart, as we expected, the price has risen from the support of 81.15, near the green support zone.

The pair bounces with two engulfing bars from the 78.6% Fibonacci level.

A Gartley harmonic pattern has been shaped at these same levels, with an oversold area on RSI.

All these factors enhance the continuation of bullish movement to reach first the resistance at 85.5, then the retest at 86.95.



 

Categories
Forex Market Analysis

Breaking Down the Charts

Technical Analysis

  • US Dollar Index



After a fake breakout in the bearish trend and a bounce back from the resistance, it is back on track to approach the take profit target again. For now, we hold the position.

 

  • EURUSD



The Euro continues its low but consistent downfall against the US Dollar. Recently it has been moving slightly sideways however it remains in the green. After the recent small correction, a continuation of the bearish trend is expected.

 

  • GBPUSD



The British Pound initiated the expected downtrend, nevertheless, a small correction has taken place against the US Dollar. The next days will be key to see whether it continues the downtrend or it reverses and breaks the resistances. For now, we hold expecting a continuation.

 



USDJPY is finally approaching the monthly downtrend resistance we have been waiting weeks for. In the case of a close above it and a breakout, a long position will be opened. If not, we’ll wait to see from which side it decides to break the monthly triangle, it has been moving sideways for months.

 

  • Crude Oil



After breaking abruptly upwards, there is not a clear direction for oil in the next short/medium term. The rational thing, considering Trump’s comments on oil production and concerns about inflation, is that the price should go down. However, technically there is not a clear direction. For now, we do not take any unnecessary risks and wait for a confirmation.

 

  • DAX



After breaking the bullish trend strongly and breaking an important support, DAX is now facing uncertainty and continues moving sideways. First the breakout and then the retest confirm a continuation of this bearish trend which will face many supports. For now, we just wait to reach the first one.

 

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Forex Market Analysis

Markets Going Through Short-term Obstacles

Weekly Update – July (2nd– 6th)

  • Macroeconomic Outlook

The overall context for this week is not all bad, but also not at all good. However, the possible absence of bad news in the upcoming weeks will allow markets to rebound from the recent sell-off. As it as has been seen last Friday, markets do not need too much news to rebound and improve. This means that in the end, the fundamentals of the market are still solid and short-term obstacles are what’s blocking them to move forward.

  • Last Friday, as soon as there was a principle of agreement about immigration within the Eurozone, this has allowed us to see a more constructive future and release pressure over Germany and its immigration policy.
    • Indeed, one of the three short-term obstacles of the markets is the German policy over immigration which in reality, if the policy of the European Union, as with many other countries like Spain, Italy or Austria are also facing similar problems.
    • Second factor is oil prices, which increase the concerns of inflation.
    • Third factor is protectionism.

1.- Hence, there should not be any bad news this week. Indeed, the government coalition in Germany, after the semi-agreement about immigration in the Eurozone and the stronger sense of state by political forces, can take more shape.

  • At the end, the sense of state will be imposed in Germany and this variable will be disappearing, reducing the threat of instability of the markets.

2.- Regarding oil, there is always new news that will lead to an increase in prices. This increase in price is affecting inflation and is providing a strong support to bonds, making them overvalued.

  • At first, this is bad for the markets since the cash flow of money always goes to safe havens, feeling more secure in bonds ahead of these types of events.
  • It gives the impression that concerns over oil prices will not be possible to solve during the upcoming weeks, however, it will not also get worse.

3.- Then, we have protectionism. It is in a similar situation to oil, it does not have a better outlook towards the future. However, we already know it is something mostly bilateral between the United States and China rather than global.

  • Over time, more controversial news will be released because the import will rise to 50bn to 200bn for example but will not happen immediately.

This week, with this improvement in the fundamental background of the markets due to the apparent absence of bad news, it is necessary to bear in mind that:

  • This Wednesday is a holiday in the United States, which lowers the activity in the markets.
  • On Thursday and Friday, there will be a convention meeting of Central Banks in Austria where the most hawkish bankers will probably have the word.
    • This will probably lead to bonds not being that comfortable and retrace slightly, and in the absence of bad news, the markets should perform better.
  • The third reference of the week is the American wages and unemployment rate.
    • The Unemployment Rate should not weight as much as everyone know it is going really well.
      • The rate is forecasted to remain at 3.8% and creation of employment probably would be under 200k.
      • Regarding wages, the indicator can reach 2.8% coming from a previous 2.7%. Any figure close to 3% can increase the concerns on inflation.
      • Nevertheless, at the same time, concerns of inflation can affect bonds, and whatever influences bond gives some breath to the markets.

Therefore, considering the current context with all these factors and references, it appears to be good for the markets in absences of bad news and strong fundamentals.

  • Short-term will remain hard and nothing will be solved quickly, nonetheless, looking to the medium-term, investors should remain calm and follow the triple P rule:
    • Positioning
    • Perseverance
    • Patience

 

 

 

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Forex Market Analysis

Daily Market Update: Euro CPI, Great Britain & Canadian GDP

 

News Commentary

 

The Euro CPI Flash Estimate is set to exceed the last reading at 1.9%, to reach the ECB target of 2.0%.

This could give much volatility

 

News Commentary

 

The Euro CPI Flash Estimate is set to exceed the last reading at 1.9%, to reach the ECB target of 2.0%.

This could give much volatility

 

News Commentary

 

The Euro CPI Flash Estimate is set to exceed the last reading at 1.9%, to reach the ECB target of 2.0%.

This could give much volatility to the Euro after the negative market reaction to the last ECB meeting.

 

In Great Britain, the focus will be on the final release of the Q1 UK GDP. There is a chance it may get revised up closer to the Bank of England forecast of 2.3% vs 2.1% actual.

 

According to a report by Reuters, Canada is set to announce financial aid for their steel industry and workers on Friday.

“Canada will hit back against U.S. tariffs on its steel and aluminium by offering affected companies and workers up to C$800 million ($603 million) in aid”, a source familiar with the matter said on Thursday.

This could shake the market and affect the US dollar badly, as all sides stick to tit for tat tariffs.

 

Chart Analysis

 

 

 

AUD/USD

On the daily chart, the price has reached the support zone of 0.7325-0.7365.

The pair is supposed to find some breath powered by divergence on RSI to reach the key resistance of 0.7515, where the descending trend from the high of February is located.



 

 

USD/JPY

On the daily chart, as we expected, the pair bounced from the descending trend from the high of 2017 and the key resistance of 111.1.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106.9 and also to meet the ascending trend from the low of 2016.

So, a possible bounce has started and on its way.



 

USD/CAD

As we expected before, the price has reached the key resistance level of 1.334.

We can see the price has reversed from a very strong selling area according to many factors, including key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the Gartley harmonic pattern, and overbought in RSI.

So, with this engulfing bar, the price will be led down to the support zone at 1.309-1.299.



 

CAD/JPY

On the daily chart, the price had a bearish rally from the key resistance of 86.95 to reach the support of 81.15, near the green support zone.

The pair bounces with an engulfing bar from the 78.6% Fibonacci level.

A Gartley harmonic pattern has been shaped at these same levels, with an oversold area on RSI.

All these factors enhance the bounce bias for the price to reach firstly the resistance at 85.5, then the retest at 86.95



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Forex Market Analysis

Forex and Indices – Daily Update – 29.06.18

Fundamental Overview

“Green sprout” in New Zealand?

Forex Market Update: The increase in building consents in New Zealand which reached 3,407 permits in May, the highest level reached since June 2004, represents 7.1% after the fall of 3.6% registered in April. Will this be a green outbreak of improvement in New Zealand’s macroeconomic conditions or will it be only an isolated effect?

 

Forex Market UpdateSource: Forex.Academy Collection – Forex Market Update

 

Technical Analysis

EURUSD

The pair is moving in a bearish wedge pattern which could drive to the price to a new lower low ending the bearish cycle near to the 1.145 zone coinciding with the lower trendline of the bearish wedge. Invalidation level of the downward cycle is at 1.18523.



 

GBPUSD

GBPUSD is moving in a bearish wedge in the same way as the EURUSD. We expect a spike to the PRZ before it makes a reversal move, maybe in the next week. A key level to watch out for is 1.30 as a psychological level. Invalidation level of the bearish cycle is at 1.34725.



 

USDCHF

The Swiss currency is moving in a triangulation structure which represents a continuation of the previous bullish move. However, as an inverse correlation with EURUSD, the movement could be a false breakout as a bull trap. In this pair, we will maintain in a neutral position before taking a position in the market.



 

EURCHF

The EURCHF cross is turning bullish after the breakout above the 1.1565 level, a throwback to this level could drive the cross to the 1.1772 short-term targets. RSI is supporting this scenario with the upward trendline.



 

GBPCHF

The GBPCHF 2-hour chart shows the importance of the invalidation level of a proposed scenario and its ex-post analysis. In this cross, we expected a limited retrace to the area between 1.3124 and 1.3089 for an upward move, with the profit target in the area between 1.3323 and 1.3374. However, after the retrace to the blue box, the GBPCHF cross continued falling. Watching the AO oscillator between May 18th and June 1st, we can appreciate that the bearish move corresponds to a bearish wave 3, then the retrace analysed is a wave 4. In consequence, the final movement as a bearish wedge pattern, which should end the bearish cycle.


FTSE 100

The FTSE 100 is moving sideways with a bearish bias which is correcting the previous rally realised from March to May. Despite the bearish bias of global indices, we prefer to avoid the short positions expecting the timing for entry in the bullish side.




DAX 30

In the Thursday 28th trading session, DAX 30 fell to the control level finding support to the corrective move. Now we expect consolidation on the 12,100 pts from where the German Index could start a new bullish cycle.



Categories
Forex Market Analysis

June 29 – Technical Update on S&P500 & Gold – U.S. GDP Disappoints

The financial markets remained heavily volatile due to a series of market-moving economic events like the German CPI and U.S. Final GDP.  Well, the game isn’t over yet. We have

The financial markets remained heavily volatile due to a series of market-moving economic events like the German CPI and U.S. Final GDP.  Well, the game isn’t over yet. We have

The financial markets remained heavily volatile due to a series of market-moving economic events like the German CPI and U.S. Final GDP.  Well, the game isn’t over yet. We have another series of high impact economic events coming out of the market on Friday. Let’s take a quick look.

 

Top Economic Events to Trade

  • EUR – German Retail Sales m/m – 6:00 (GMT)
  • GBP – Current Account – 8:30 (GMT)
  • GBP – Final GDP q/q – 8:30 (GMT)
  • EUR – CPI Flash Estimate y/y – 9:00 (GMT)    
  • CAD – GDP m/m – 12:30 (GMT)
  • USD –  Chicago PMI – 13:45 (GMT)

 

Although there are lot more economic events due to be released, these are the most important ones and may help you capture a nice amount of pips.     

 

Gold – XAU/USD – Daily Outlook

On Thursday, gold plunged to its weakest level in six months to trade at $1,247. Most of the selling came in response to escalating pressure from the trade war and the sentiments of higher U.S. interest rates which continues to weigh on gold. Nevertheless, we can expect a modest reversal in the near term. Price action is expected to retrace the decays back to 1263, the same level which earlier served as support.



 

Support     Resistance 

1252.5    1259.76

1250.26    1262

1246.63    1265.63

Key Trading Level:    1256.13

              

 

SPX – S&P 500 – Technical Outlook

SPX is trading bullish near 2718 after gaining support above 2694. On the 4- hour chart, the upward trendline is also extending support near 2679. While the resistance prevails at 2732 and 2745 today, the main trend is up as per the daily swing chart, but, momentum is trending lower. A trade through 2679.25 will convert the main trend (bullish) into the bearish bias.



 

Overall, the main trading range of SPX is 2595 to 2796. The index is currently testing the upper or 50% level of this range at 2795.75.

 

Support     Resistance 

2697.19    2732.87

2686.16    2743.9

2668.32    2761.74

Key Trading Level:    2715.03

 

Categories
Forex Market Analysis

Daily Market Update: RBNZ Left Interest Rates At 1.75%, BoC Governor Poloz Speech

 

News Commentary

 

Uncertainty remained after White House economic adviser Larry Kudlow told Fox Business Network later on Wednesday that Trump’s announced plan did not indicate a softened stance

 

News Commentary

 

Uncertainty remained after White House economic adviser Larry Kudlow told Fox Business Network later on Wednesday that Trump’s announced plan did not indicate a softened stance

 

News Commentary

 

Uncertainty remained after White House economic adviser Larry Kudlow told Fox Business Network later on Wednesday that Trump’s announced plan did not indicate a softened stance on China.

However, there are still tit-for-tat battles which are affecting the markets.

 

The Reserve Bank of New Zealand (RBNZ) maintained the Official Cash Rate (OCR) at 1.75%and has been forecasting no changes until late next year.

According to Governor Adrian Orr, inflation is likely to increase in the near term due to higher fuel prices. Beyond that, it is expected to gradually rise to the 2% annual target, resulting from capacity pressures.

 

The Bank of Canada Governor, Stephen Poloz, stated that the impact of the US trade fight and tighter mortgage rules will “figure prominently” in the Central Bank’s July’s interest rate decision.

He also approved market reactions to May data, flagging the hanging situation on NAFTA, but also kept an optimistic sentiment.

 

 

Chart Analysis

 

 

AUD/USD

On the daily chart, the price has reached the support zone of 0.7325-0.7365.

The pair is supposed to find some breath powered by divergence on RSI to reach the key resistance of 0.7515, where the descending trend from the high of February is located.

 


 

USD/CAD

As we expected before, the price has reached the key resistance level of 1.334.

As we can see, the price has reversed from a very strong selling area according to many factors, including key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the Gartley harmonic pattern, and overbought in RSI.

So, any bounce there will lead the price down to the support zone at 1.309-1.299.

 


 

AUD/JPY

As we expected before, the price has reached the support zone 81.2-80.5 as the price is moving sideways.

So, the price is expected to retest the head of the pattern to again reach the levels 84-84.4.

 


Categories
Forex Market Analysis

June 28 – Technical Update on S&P500 & Gold – Trade War Tension Eased

It was quite a busy day with series of economic events from global economies. The greenback advanced as trade-related tensions eased after the U.S. administration relaxed its approach to Chinese

It was quite a busy day with series of economic events from global economies. The greenback advanced as trade-related tensions eased after the U.S. administration relaxed its approach to Chinese

It was quite a busy day with series of economic events from global economies. The greenback advanced as trade-related tensions eased after the U.S. administration relaxed its approach to Chinese investment. Most of its buying came on the Euro and the Swiss Franc. Whereas, gold prices hovered on top of 6 months lows as traders continuing to shun the yellow-metal despite signs of a reversal in risk sentiment. The robust greenback continues to keep a lid on the precious metals bullish trend.

 

S&P 500 – Daily Outlook

The New York stock market index  SPX is trading at 2706, down -22.75 points and -0.82%. S&P500 is facing a strong support near 2700, a double bottom level. The violation of 2700 can lead SPX towards 2679. The moving averages are suggesting a bearish bias of investors. The RSI and Stochastics have entered the oversold zone. Let’s see if SPX gets a chance to pull back above 2700.



 

Support     Resistance 

2706        2735.56

2696.86     2744.7

2682.08     2759.48

Key Trading Level:    2720.78

 

Gold – XAU/USD – Daily Outlook

 

Gold traded in a tight range of 1252 – 1261, troubled to manoeuvre off session lows because the greenback remained supported despite a small reversal in intraday risk sentiment, helping safe-haven currencies trim their losses against the dollar.

 

Technical indicators signal gold will continue to drop. For instance, gold has already violated the 1252 support level which is likely to work as a resistance now. Moreover, the moving averages also suggest a bearish bias of traders.



Support     Resistance 

1256.9    1266.84

1253.84    1269.9

1248.87    1274.87

Key Trading Level:    1261.87

 

Investors are advised to monitor the U.S. Final GDP q/q in order to capture further movements in the dollar index, gold, and the U.S. stocks.

Categories
Forex Market Analysis

Daily Market Update: RBNZ to Announce Official Cash Rate, Low ANZ Business Confidence

 

News Commentary

 

Trade tensions still weigh on the markets to cut the traders appetite to risk, to boost the safe havens like the Yen and the Swiss Franc.

 

News Commentary

 

Trade tensions still weigh on the markets to cut the traders appetite to risk, to boost the safe havens like the Yen and the Swiss Franc.

 

News Commentary

 

Trade tensions still weigh on the markets to cut the traders appetite to risk, to boost the safe havens like the Yen and the Swiss Franc.

However, following the trade adviser Peter Navarro, Trump signalled he may take a less confrontational approach, and that any measures would not just target China, to calm down concerns about the administration’s plans to hit Chinese investment in U.S. tech.

 

Jonathan Haskel, the Bank of England policymaker said there may be more slack in the UK economy, which would weaken the case for interest rate hikes.

He added that the central bank has scope to cut rates slightly in case of an economic downturn.

 

Disappointing data came from New Zealand after low ANZ business confidence index came in at -39. The last reading was -27.2.

A big move is awaiting for the NZD as the RBNZ will announce its official cash rate at 09:00 GMT. They are widely expected to not change the rate, to remain stable at 1.75%.

All eyes will be on rate statement with any clue to possible rate hike soon, any dovish sentiment will put more pressure on the currency.

 

Chart Analysis

 

USD INDEX

As we expected on the daily chart, the price had reached the key resistance at 95.5 and bounced back from it, powered by divergence on RSI.

The price also had shaped a reversal double top pattern.

So, the index is supposed to get back down to the support zone again of 93.2-92.6, then start its journey to the C wave.

 


 

AUD/USD

On the daily chart, the price has reached the support zone of 0.7325-0.7365.

The pair is supposed to find some breath powered by divergence on RSI to reach the key resistance of 0.7515, where the descending trend from the high of February is located.

 


 

USD/JPY

On the daily chart, as we expected, the pair bounced from the descending trend from the high of 2017 and the key resistance of 111.1.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106.9 and also to meet the ascending trend from the low of 2016.

So, a possible bounce has started and on its way.



 

USD/CAD

As we expected before, the price has reached the key resistance level of 1.334.

As we can see the price has reversed from very strong selling area according to many factors, including key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the Gartley harmonic pattern, and overbought in RSI.

So, the price is expected to go down to the support zone at 1.309-1.299.

 


 

NZD/USD

On the daily chart, the price has reached the crucial support zone of 0.682-0.6785, with bearish momentum.

Followed by divergence, if we see a price action there, then the price is expected to get back up again to retest the resistance zone at 0.698-0.703.

If the price breaks this zone, we could see a 0.667 level.



 

AUD/JPY

As we expected before, the price has reached the support zone 81.2-80.5 as the price is moving sideways.

So, the price is expected to retest the head of the pattern to again reach the levels of 84-84.4.



Categories
Forex Market Analysis

Good News Expected for RBNZ Decision – Forex and Indices – Daily Update – 27.06.18

Fundamental Overview

Good News Expected for RBNZ Interest Rate Decision.
During the overnight session, Stats NZ released the Trade Balance data from New Zealand, which shows an improvement in

Fundamental Overview

Good News Expected for RBNZ Interest Rate Decision.
During the overnight session, Stats NZ released the Trade Balance data from New Zealand, which shows an improvement in

Fundamental Overview

Good News Expected for RBNZ Interest Rate Decision.

During the overnight session, Stats NZ released the Trade Balance data from New Zealand, which shows an improvement in the commercial situation in June. Exports of meat grew by 17% reaching $817M. While the meat exported increased by 12 per cent reported Stats NZ, the destination of the main export was China, which rose by 27 per cent reaching $1.2B in June. The European Union exports also increased rising by 17 per cent ($664M).

On the other hand, vehicles, parts, and accessories led imports by 25 per cent, climbing to $924M. Whereas, Oil imports were reduced by 30 per cent, falling to $455M in May.

rbnz interest rate decision

Source: Forex.Academy Collection.

 

Technical Analysis

EURUSD

EURUSD is making the retracement of the first impulsive move testing the blue box from where the euro could start the continuation of the previous movement. RSI is testing support above the 40 level, which makes us suspect that the EURUSD pair could be testing support. Our mid-term vision is that the common currency could beat 1.1853, even reaching the target placed at 1.19467. Invalidation level is at 1.1508.



GBPUSD

The GBPUSD pair is still consolidating the previous impulsive move in the descending long-term trendline. The price is moving in the Potential Reversal Zone (Blue Box) from where we expect the bullish reaction as a continuation of the previous movement. We foresee fresh highs with the target at 1.3443. Invalidation level is at 1.31020.



USDCHF

USDCHF is moving slightly bullish consolidating in the long-term ascending trendline. Our main vision for USDCHF is the formation of a flag pattern reaching the 0.99277 level before continuing with the previous bearish move with a target placed on the area between 0.97225 and 0.96495. Invalidation level of this scenario is at 0.99909.



EURNZD

EURNZD continued developing a bullish impulsive move. As we forecasted in a previous Daily Update (June 20th, 2018), the cross is moving near to the target area at 1.7064. Still, we foresee a more upside to the 1.7148 level. Invalidation level is 1.6572.


GBPNZD

GBPNZD still is moving in an ascending channel to the Potential Reversal Zone proposed in our Daily Update for June 20th. The price could reach the target between 1.944 and 1.958 area, from where the cross should complete a bullish cycle. Invalidation level is 1.8909.



FTSE 100

The FTSE 100 index bounced from the sell-off performed on the Monday 25th trading session; despite this bounce, we expect more dips. FTSE should reach at least the 7,468.3 level before it completes the short-term bearish cycle. From this zone, we could build a new bullish connector. If the index breaks down, the Control Level is likely to reach from the 7,182 level to 7,073 area. Watch out for the RSI which is moving sideways between the 40 and 60 level; this coincides with the consolidation pattern that still is running. Invalidation level of the bearish scenario is 7,793.5.



DAX 30

DAX 30 is testing support on the PRZ forecasted at 12,238 pts. The RSI level at 26 makes us foresee that the German index is developing a wave three. In consequence, more downsides are pending; likely DAX 30 plunge below 12,100 pts. Invalidation level of the bearish cycle is at 13,170 pts.



Categories
Forex Market Analysis

Forex and Indices Daily Update 25.06.18

Fundamental Overview

Understanding the Conference Board (CB) Consumer Confidence Index (CCI).
Tomorrow, the U.S. CB Consumer Confidence Index will be released. This reflects the business conditions and likely

Fundamental Overview

Understanding the Conference Board (CB) Consumer Confidence Index (CCI).
Tomorrow, the U.S. CB Consumer Confidence Index will be released. This reflects the business conditions and likely

Fundamental Overview

Understanding the Conference Board (CB) Consumer Confidence Index (CCI).

Tomorrow, the U.S. CB Consumer Confidence Index will be released. This reflects the business conditions and likely developments for the months ahead. The report is issued monthly and is a barometer of the health of the U.S. economy from the perspective of the consumer.

The current CCI level reported in May is 128 pts, and the analysts’ consensus for June is a decrease to 127.6 points. The decreasing could be attributed to the protectionist policy which the Trump Administration is boosting. Despite this decline, consumer confidence keeps having record highs. The highest level reached in the year is 130 pts, the record high since December 2000.

CCI level -forex daily chart trading strategy

Forex Daily Chart Trading Strategy

Technical Analysis

FOREX DAILY CHART TRADING STRATEGY

EURUSD

Since June 22nd, the EURUSD has made an impulsive move reaching the short-term target area between 1.17043 and 1.17617. Our vision is that the common currency could strike the 1.1853 level before it starts a brief retracement to the area between 1.1679 and 1.15892, from there, the price should make a new rally with a target placed at 1.19467. Invalidation level is at 1.1508.



GBPUSD

GBPUSD bounced on June 21st aided by the Bank of England monetary policy decision. Now the price is consolidating the previous impulsive move. We should see a limited fall in three waves to the area between 1.3237 and 1.3165, from where we foresee fresh highs with the target at 1.3443. Invalidation level is at 1.31020.


USDCHF

The USDCHF pair is testing the long-term ascending trendline. Our forecast for USDCHF is that it could make a flag pattern reaching the 0.99277 level before we see the continuation of the previous move with a target placed on the area between 0.97225 and 0.96495. Invalidation level of this scenario is at 0.99909.



EURJPY

The EURJPY cross is moving in a corrective structure as an A-B-C Pattern, which could make a new lower low. RSI Oscillator is running supported by an ascending trendline refecting the corrective structure of the principal trend. We foresee a new bearish move to 124.94 and 126.62; this area converges with the ascending long-term trendline from where EURJPY could start a new rally. Invalidation level of the bearish cycle is 130.347.


GBPJPY

The GBPJPY cross is building a consolidation pattern as a flag pattern, which could make fresh highs to the area between 149.34 and 150.70. Our vision for the cross is that the price could reach the bearish mid-term trendline before it collapses to the lower line of the ascending channel completing a bearish flag pattern of major degree. The next key support is 143.209, invalidation level of the main bearish cycle is at 152.775.


FTSE 100

The FTSE 100 index started the week by falling for the sixth consecutive week. In this session the British index broke down the key support at 7,548, the low reached on June 18th. As we forecasted, FTSE continues their selloff approaching the Potential Reversal Zone in the 7,400 area, from where FTSE could build a new bullish connector. If the index breaks down, the Control Level is likely, that reaches from 7,182 level to 7,073 area. Invalidation level of the bearish scenario is 7,793.5.


DAX 30

DAX  30 is moving bearish in the same way that FTSE 100 is developing a Dead Cat Bounce Pattern. Today, the German index has fallen to the Potential Reversal Zone forecasted, from now we are cautious because the index could start to bounce. The price action, and RSI Oscillator and Awesome Oscillator do not show divergences or reversal signals. To summarise, the short-term bias is bearish. Invalidation level of the bearish cycle is at 13,170 pts.



Categories
Forex Market Analysis

June 25 – Quick Technical Update on S&P500 & Gold

The U.S. stocks sank during a broad sell-off on Monday, with the S&P 500 dropping over 1.5 %. In particular, the technology companies bearing the strength of an escalating

The U.S. stocks sank during a broad sell-off on Monday, with the S&P 500 dropping over 1.5 %. In particular, the technology companies bearing the strength of an escalating

The U.S. stocks sank during a broad sell-off on Monday, with the S&P 500 dropping over 1.5 %. In particular, the technology companies bearing the strength of an escalating trade dispute between the U.S.  and different leading economies.

 

The U.S. Treasury was drafting curbs that may block companies with a minimum of 25% Chinese possession from purchasing  U.S. technology companies. In response, the dollar plunged to a two-week low against the yen as a rise in the global trade worries depressed investor risk appetites and turned down U.S. yields.

 

S&P 500 – Daily Outlook

The U.S. stock market index SPX is trading at 2709.02, down 45.25 points and 1.67%. S&P500 is facing a strong support near 2700 after falling 1.59% today. We can expect a pullback above 2700, whereas the violation of this level will lead SPX -1.66% towards 2685.



S&P500- Intraday Support & Resistance Levels 

Support     Resistance 

2745.54      2769.84

2738.04      2777.34

2725.89      2789.49

Key Trading Level:    2757.69

 

Gold – XAU/USD – Daily Outlook

The precious metal gold is trading bearish at 1267.57, down -0.17% on Monday. Technically, Gold is trading sideways with a lower range of 1264 – 1271. The breakout of this range will define the further trend of gold. The breakout above 1271 can lead gold prices towards 1275 while a breakout below 1265 will open further room for buying until 1261.



Gold- Intraday Support & Resistance Levels 

Support     Resistance 

1271.5     1273.64

1270.84    1274.3

1269.77    1275.37

Key Trading Level:    1272.57

That’s pretty much it for now. Investors are advised to monitor the U.S. CB Consumer Confidence in order to capture further movements in the dollar index, gold, and the U.S. stocks.

 

Categories
Forex Market Analysis

Favourable Conditions for the Bulls

Weekly Update (May 7th – 13th)

Macroeconomic Outlook

Lots of Macro this week

–          Better at the ending of the week than the beginning

  • At the end of the week,  we have some American macro data that is expected to be positive

o   The outcome of the Italian government formation

  • Strange activities
  • Possible second elections

So far, the market has been able to hold everything

–          From an increase in oil prices and its implications for inflation

–          Geostrategy

o   Syria

o   Russia

o   North Korea

–          The petition for help to the IMF from Argentina

It is possible to say that the reference the market currently has is the 10 Year Treasury Note Yield, which is near the psychologic barrier of 3%, and in case it breaks it, there may be some tension.

It gives the impression that even though the T-Notes break the 3% barrier and the Bund passes 0.7% or 0.8%, the markets will hold everything together.

  • The economic cycle is still really powerful
  • Business results are evolving really well

o   An example of that is in the USA where they are evolving to 25% when it was expected to be only 17%

  • There is a huge volume of mergers and acquisitions

o   Which is typic in periods of economic growth

  • Even though oil prices are increasing, inflation remains really low

o   Only in the USA does it rebound a little bit

o   In Europe remains around 1.2 / 1.5

Hence, this week there is a lot of macroeconomic information.

  • American Industrial Production is expected to rise from 0.5 to 0.6
  • A degree of utilisation of productive capacity which is forecasted to rise to 78.4 from the previous 78.0
  • GDP in Europe and Germany are expected to remain strong
  • Japanese GDP is expected to be -0.1%
  • The Italian government coalition would not be that bad as long as it avoids another election

So, at the beginning of the week, results are more or less neutral and by the end, it will provide a better outlook with American indicators.

  • The context is that when circumstances, in general, are not negative it will push the markets to continue the rebound.
  • Consideration is increasing towards the second part of the year where we will see if the current events that are pushing the markets continue, or new ones arise
  • For now, the general situation is accommodating

Technical Outlook

US Dollar Index

 

Categories
Forex Market Analysis

Daily Market Update: Trade War Still on Fire

 

 News Commentary

 

“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers &amp

 

 News Commentary

 

“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers &amp

 

 News Commentary

 

“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one-way street”.

With this tweet, Trump started the markets by denting investor risk appetites and drove down the U.S. yields.

 

The Yen and Swiss Franc were the highest gainers in the Asian session.

 

Chart Analysis

 

USD INDEX

As we expected on the daily chart, the price had reached the key resistance at 95.5 and bounced back from it, powered by divergence on RSI & the B wave (Elliot waves).

So, the index is supposed to get back down again to the support zone of 93.2-92.6, then start its journey to the C wave.


 

USD/JPY

On the daily chart, as we expected, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support of 110.05 to reach the next support 108.15, to then get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce has started and on its way.


 

USD/CAD

As we expected before, the price has reached the key resistance level of 1.334.

As we can see the price is located at very strong selling area according to many factors including key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the Gartley harmonic pattern, and overbought in RSI.

So, any bounce there will lead the price down to the support zone at 1.309-1.299.


 

Categories
Forex Market Analysis

Weekly Market Update: Trade War Tensions, BoE Kept Interest Rates at Same Level, RBNZ to Announce Its Official Cash Rate

It has been a busy week for news, looking forward to seeing much volatility this week according to the consequences of the releases last week and the upcoming week’s data

It has been a busy week for news, looking forward to seeing much volatility this week according to the consequences of the releases last week and the upcoming week’s data

It has been a busy week for news, looking forward to seeing much volatility this week according to the consequences of the releases last week and the upcoming week’s data

News Commentary

 

USD

Tensions between the U.S. and China continue, as the two largest economies in the world faced a tit-for-tat over trade tariffs. Earlier this week, U.S. President Donald Trump threatened to impose tariffs on another $200 billion of Chinese goods. China could strike back at blue-chip firms including Caterpillar and Boeing who rely on China for revenue.

The dollar also eased following the release of soft U.S. manufacturing data which came in at 19.9, lower than the expected 28.9.

But demand for the dollar continued to be boosted after Federal Reserve Chairman Jerome Powell reiterated on Wednesday that the case for gradual rate hikes remains strong.

All eyes will be on Tuesday’s CB consumer confidence which is expected to reach 127.6, and Core Durable Goods Orders on Wednesday which is expected to reach 0.5%, and most importantly, the final GDP on Thursday with a forecast of 2.2%, same as the last one.

 

EUR

The European Union imposed tariffs on about $3.4 billion of U.S. imports on Friday, including motorcycles, orange juice and cranberry sauce. The tariffs have added to tensions as investors fear an outright global trade war between the U.S.and other major countries.

On the other hand, French and German business activity in June came in higher than expected, easing concerns of a slowdown in the Eurozone.
Good news for Greece is that the Eurozone creditors finally agreed a debt relief deal that will help Greece exit its bailout program.
Following late-night talks in Luxembourg, the Eurogroup agreed to hand Greece a final loan tranche of €15 billion.

 

GBP

The Pound strengthened after the Bank of England left interest rates steady, but the vote for a rate hike by the bank’s chief economist came with a surprise that supported the probability for the next hike in the August meeting.

The MPC voted 6-3 to hold rates flat, but the fact that there were three dissenting votes cast in favour of a rate hike today was a bit more hawkish than what was expected

All eyes will be on the current account on Friday with an expectation of -18.2B

 

NZD

New Zealand GDP growth dropped by 0.1% compared to the previous two quarters, coming in at just 0.5%, lower than the previous reading of 0.6%.

It’s a busy week for the New Zealand dollar with ANZ business confidence, which measures economic health with the last reading of -27.2.

The big event will be the official cash rate on Wednesday with the expectation to be left steady at 1.75%.

 

CAD

Disappointing inflation and retail sales from Canada damaged the loonie lower across the board, sending the odds of a July BoC rate hike to 55% from 68% earlier in the week. Meanwhile the odds of an August BoE hike rise to 70%.

All eyes will be on GDP on Friday with the last reading of 0.3%.

 

 

Chart Analysis

 

 

USD INDEX

As we expected on the daily chart, the price had reached the key resistance at 95.5 and bounced back from it, powered by divergence on RSI & B wave (Elliot waves).

So, the index is supposed to get back down again to the support zone 93.2-92.6, then start its journey to the C wave.



 

AUD/USD

On the daily chart, the price has reached the support of 0.7325, with a pin bar candle followed by engulfing one.

The pair is supposed to find some breath powered by divergence on RSI to reach the key resistance of 0.7515, where the descending trend from the high of February is located.



 

USD/JPY

On the daily chart, as we expected, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support of 110.05 to reach the next support 108.15, to then get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce has started and on its way.



 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone of 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it to.

Reaching the support zone and shaping the Gartley harmonic pattern, the price is supposed to continue its bullish movement up to the 1.1045 level after forming hammer & engulfing candles respectively.



 

USD/CAD

As we expected before, the price has reached the key resistance level of 1.334

As we can see the price is located at very strong selling area according to many factors, including key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the Gartley harmonic pattern, and overbought in RSI.

So, any bounce there will lead the price down to the support zone at 1.309-1.299.



 

NZD/USD

On the daily chart, the price has reached a combination of support levels, with a support zone of 0.682-0.6785, an ascending trend line from the low of 2007, and finally with Bat harmonic pattern.

The price is expected to get back up again to retest the resistance zone at 0.698-0.703.



 

AUD/JPY

As we expected before, the price has reached the support zone 81.2-80.5 as the price is moving sideways.

So, with this engulfing candle, we expect the price to retest the head of the pattern to again reach the levels 84-84.4.



Categories
Forex Market Analysis

What to Expect to the Dollar Index during the Second Half of the Year?

What to Expect to the Dollar Index <DXY> during the Second Half of the Year?

The Dollar Index <DXY> has developed an upward impulsive movement during the first

What to Expect to the Dollar Index <DXY> during the Second Half of the Year?

The Dollar Index <DXY> has developed an upward impulsive movement during the first

What to Expect to the Dollar Index <DXY> during the Second Half of the Year?

Dollar Index

The Dollar Index <DXY> has developed an upward impulsive movement during the first half of the year. The bullish cycle began on February 16th when it touched the lowest level of the year at 88.25. From this level, it started the first bullish impulse that took it up to 90.93, where it began a consolidation structure that finished in April; a period in which DXY climbed as a wave 3 from 89.23 to 95.03. Finally, after a retracement as a wave 4, the greenback soared to 95.53, exceeding the highest level attained in November 2017 when the price reached 95.15 and completing a major grade cycle.

The fact that DXY has surpassed last November 2017’s peak makes us think the Dollar Index might make new highs in the long term. During the second half of 2018, we expect the US Dollar to make a corrective movement as an A-B-C pattern that should carry it to seek support at the 93.27 level in the first instance. Then, after a corrective upward sequence to 94, we could see it fall as a C pattern to the area between 91.64 and 91.03, from where a new upward cycle could begin.


Categories
Forex Market Analysis

Daily Market Update: Trade Tensions Continue, OPEC Meeting

 

News Commentary

 

 

 

Tensions between the U.S. and its allies continue, as India joined China and the European Union in retaliation against steel and aluminium tariffs. As

 

News Commentary

 

 

 

Tensions between the U.S. and its allies continue, as India joined China and the European Union in retaliation against steel and aluminium tariffs. As

 

News Commentary

 

 

 

Tensions between the U.S. and its allies continue, as India joined China and the European Union in retaliation against steel and aluminium tariffs. As the biggest buyer of almonds, India raised its tariff on U.S. almonds by 20%

The European Union imposed tariffs on about $3.4 billion of U.S. imports on Friday, including motorcycles, orange juice and cranberry sauce. The tariffs have added to tensions as investors fear an outright global trade war between the U.S.and other major countries.

On the other hand, French and German business activity in June came in higher than expected, easing concerns of a slowdown in the Eurozone.
Good news for Greece is that the Eurozone creditors finally agreed a debt relief deal that will help Greece exit its bailout program.
Following late-night talks in Luxembourg, the Eurogroup agreed to hand Greece a final loan tranche of €15 billion.

The Organisation of the Petroleum Exporting Countries (OPEC) is gathering in Vienna amid calls from the United States, China and India to cool down the price of crude and prevent an oil deficit that would hurt the global economy.

Saudi Arabia and non-OPEC Russia have said a production increase of about 1 million barrels per day (bpd) or around 1 per cent of global supply had become a near-consensus proposal for the group and its allies.

Although a final decision may not arrive until Saturday when OPEC officials are scheduled to meet with their non-member allies who formed part of the 18-month accord to curb production by 1.8 million barrels per day.

 

 

Chart Analysis

 

 

NZD/USD

On the daily chart, the price has reached a combination of support levels, with a support zone of 0.682-0.6785, an ascending trend line from the low of 2007, and finally with a BAT harmonic pattern.

The price is expected to get back up again to retest the resistance zone at 0.698-0.703.



 

AUD/JPY

As we expected before, the price has reached the support zone 81.2-80.5 as it is moving sideways now.

So, with this engulfing candle, we expect the price to retest the head of the pattern to reach the levels of 84-84.4 again.

 


 

USD/JPY

On the daily chart, as we expected the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support of 110.05 to reach the next support 108.15, to then get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce has started and on its way.

 


 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it to.

Reaching the support zone and shaping the Gartley harmonic pattern, the price is supposed to continue its bullish movement up to the 1.1045 level after forming hammer & engulfing candles respectively.

 


 

USD/CAD

As we expected before, the price has reached the key resistance level 1.334.

As we can see the price is located at very strong selling area according to;- key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the “Gartley” harmonic pattern, and overbought in RSI.

So, any bounce there will lead the price down to the support zone at 1.309-1.299.

 


 

Categories
Forex Market Analysis

Analysts Expect Raises on Inflation and Retail Sales Data – Forex and Indices – Daily Update – 21.08.18

Fundamental Overview

Analysts expect raises on inflation and retail sales data.
The Canadian Dollar will be the driver currency of this Friday 22nd trading session, with the release of

Fundamental Overview

Analysts expect raises on inflation and retail sales data.
The Canadian Dollar will be the driver currency of this Friday 22nd trading session, with the release of

Fundamental Overview

Analysts expect raises on inflation and retail sales data.

The Canadian Dollar will be the driver currency of this Friday 22nd trading session, with the release of Inflation and Core Retail Sales data. Analysts expect the Consumer Price Index (CPI) for the month of May to rise to 0.4%, driven mainly by the increase in fuel and food prices; with this increase, the CPI (YoY) estimated should reach 2.5%, being higher than the 2.2% reported in April.

On the other hand, analysts foresee that core retail sales (MoM) would rise to 0.5% during the month of April, which represents an optimistic scenario since the contraction of 0.2% reported in March.

This data could contribute to the scenario of a possible hike in the interest rate by the Bank of Canada (BoC), being in line with what was commented by the BoC Governor Stephen Poloz, who stated that he expects an increase in the interest rate soon.

 

Technical Analysis

EURUSD

EURUSD bounced from the lowest level in three weeks from 1.1507 to 1.1633. Our vision is that the common currency could make a limited recovery to the 1.17 area before we see fresh lows likely in the 1.1425 zone. Invalidation level of the mid-term bearish cycle is 1.1852.



GBPUSD

GBPUSD bounced from the PRZ forecasted at 1.3109 aided by the Bank of England (BoE) monetary policy decision. Now we should see fresh higher highs and lower highs to validate the change in bias. The short-term resistance level is at 1.3298.


 

USDCHF

The USDCHF pair broke down the short-term ascending trendline. Now we expect that the price tests the long-term ascending trendline. Our main vision for USDCHF is that it could make a new bearish leg with first support at the 0.98 level, and 0.9788 as the second support.



 

EURCAD

EURCAD could make a new higher high in the upper line of the ascending channel with a target in the 1.5533 area. After this move, if the price breaks down the short-term ascending trendline, we should see a flag pattern as a continuation of the previous movement.



 

GBPCAD

GBPCAD is developing in an ascending wedge, which could see fresh highs at the 1.7732 level, as a false breakout before it falls to the long-term ascending trendline. The first support level to watch out for is 1.7455.



FTSE 100

FTSE 100 continued falling for the fifth consecutive week. In the current session, it tested support at 7,548, the low reached on June 18th. Our vision for the British index is that it could complete the corrective sequence in the 7,400 area, from where FTSE could build a new bullish connector.



 

DAX 30

As was commented in our previous Daily Update, the DAX 30 is moving bearish, developing a Dead Cat Bounce Pattern. In the current trading session, the German index has fallen below the May 31st low at 12,547.6. The next support level is in the 12,300 area, from where we foresee the DAX should start to bounce.



 

Categories
Forex Market Analysis

June 22 – Quick Update on Gold and SPX – Risk-Off Sentiment Plays

The global stock markets are facing an immense amount of selling pressure as risk-off sentiment continues to dominate the market. The European Union is anticipated to impose tariffs on approx

The global stock markets are facing an immense amount of selling pressure as risk-off sentiment continues to dominate the market. The European Union is anticipated to impose tariffs on approx

The global stock markets are facing an immense amount of selling pressure as risk-off sentiment continues to dominate the market. The European Union is anticipated to impose tariffs on approx $3.4 billion of U.S. imports on a weekday. The expected tariffs have added to tensions as investors worry about an outright world trade war between the U.S., the EU, and China.

Tensions between the U.S. and China have additionally continued because these 2 largest economies within the world, faced a tit-for-tat over trade tariffs. Earlier on, U.S. President Donald Trump decided to impose tariffs on another $200 billion of Chinese merchandise.

 

Gold – XAUUSD – Daily Outlook

Gold prices alleviated from fresh lows for the year because the greenback turned negative on weaker U.S. economic figures. Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell by $3.10 or 0.24%, to $1,271.10 an ounce, spiralling to a new 2018 low of $1,263.20.

A sharp retreat within the greenback – from its highest level since last summer – supported a recovery in gold, however, sentiment remained negative amid expectations of an aggressive Fed rate-hike cycle would still spur demand for the dollar.



 

Gold was down by 0.31%, and it has completed 61.8% retracement near 1270.67 and below this. We can expect a selling opportunity, whereas, the support prevails near 1264 and 1261.

Support    Resistance
1268.04    1272.02
1266.82    1273.24
1264.83    1275.23
Key Trading Level: 1270.03

 

S&P500 – SPX – Dialy Outlook

The S&P500 is trading bearish at 2,748.50, down 22.50 points and -0.78% for the day. That’s mostly because of risk-off sentiment. Investors are feeling uncertain regarding the U.S.- China trade war issues and thereby moving their investments towards safer assets such as Japanese yen, Swiss franc, and Gold.



 

Technically, SPX has already completed a 50% retracement at $2,745 on the 2-hour chart. The U.S. is likely to gain support on this level, whereas, the bearish breakout can lead it towards $2,735.

Support   Resistance
2764.52    2772.88
2761.93    2775.47
2757.75    2779.65
Key Trading Level: 2768.7

Categories
Forex Market Analysis

Daily Market Update: BoE Left Rates On Hold, Philly Fed Manufacturing Index Declined

 

 News Commentary

 

The Pound strengthened after the Bank of England left interest rates steady, but the vote for a rate hike by the bank’s chief economist came with

 

 News Commentary

 

The Pound strengthened after the Bank of England left interest rates steady, but the vote for a rate hike by the bank’s chief economist came with

 

 News Commentary

 

The Pound strengthened after the Bank of England left interest rates steady, but the vote for a rate hike by the bank’s chief economist came with a surprise that supported the probability for the next hike in the August meeting.

The MPC voted 6-3 to hold rates flat, but the fact that there were three dissenting votes cast in favour of a rate hike today was a bit more hawkish than what was expected

 

Tensions between the U.S. and China continue, as the two largest economies in the world faced a tit-for-tat over trade tariffs. Earlier this week, U.S. President Donald Trump threatened to impose tariffs on another $200 billion of Chinese goods. China could strike back at blue-chip firms including Caterpillar and Boeing who rely on China for revenue.

The dollar also eased following the release of soft U.S. manufacturing data to drop at 19.9, lower than expected 28.9

But demand for the dollar continued to be boosted after Federal Reserve Chairman Jerome Powell on Wednesday reiterated that the case for gradual rate hikes remains strong.

 

New Zealand GDP growth dropped by 0.1% compared to the previous two quarters, coming in at just 0.5%, lower than the previous reading of 0.6%

 

 

Chart Analysis

 

 

USD/JPY

On the daily chart, as we expected, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support of 110.05 to reach the next support 108.15, to then get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce has started and on its way.



 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it to.

Reaching the support zone and shaping the Gartley harmonic pattern, the price is supposed to continue its bullish movement up to the 1.1045 level after forming hammer & engulfing candles respectively.



 

USD/CAD

As we expected before, the price has reached the key resistance level 1.334.

As we can see the price is located at very strong selling area according to a key resistance level, 78.6% Fibonacci, the upper level of the reversal wedge, forming the Gartley harmonic pattern, and overbought in RSI.

So, any bounce there will lead the price down to the support zone at 1.309-1.299.



 

Categories
Forex Market Analysis

Economists Expect Lower Growth in New Zealand – Forex and Daily Update 20.06.18

Fundamental Overview

Economists expect lower growth in New Zealand.
Lower growth could reach New Zealand for the first quarter of 2018. Amongst the reasons for the lower GDP is

Fundamental Overview

Economists expect lower growth in New Zealand.
Lower growth could reach New Zealand for the first quarter of 2018. Amongst the reasons for the lower GDP is

Fundamental Overview

Economists expect lower growth in New Zealand.

Lower growth could reach New Zealand for the first quarter of 2018. Amongst the reasons for the lower GDP is the cooling in the housing market, as well as the low prices of dairy products.

Analysts polled expect the quarterly growth to be only 0.5%, being lower than the 0.7% of the previous quarter, this would result in an increase of 2.7% annually, compared to the 2.9% reported in the last quarter of 2017. This deceleration would force the RBNZ to maintain the interest rate at the next monetary policy decision meeting.

 

FOREX DAILY ANALYSIS

EURUSD

EURUSD is still testing the bottom line consolidating below 1.16 as a relevant resistance level. We expect a new lower low between 1.1520 and 1.1425. Invalidation level of the mid-term bearish cycle is 1.1852.



GBPUSD

GBPUSD is moving bearish, and still, we expect that the price complete the bearish cycle in the key support at 1.3109, creating a bullish connector. Short-term resistance level is 1.3298.



USDCHF

USDCHF still is moving bullish seeking the parity making a flag pattern. We still maintain our vision for the Swiss currency that could make a new bearish leg with a mid-term target on 0.98 level testing the bullish long-term trendline.



EURNZD

EURNZD is developing a bullish impulsive move. We foresee that the cross should to make a retrace as a flag pattern from where EURNZD could bring a new opportunity to incorporate us into the bullish trend with a profit target at least at 1.7064. Invalidation level is 1.6572.




GBPNZD

GBPNZD is running upward building an ascending channel. Our vision is that every dip is an opportunity to go long with a target between 1.944 and 1.958, from where the cross should complete a bullish cycle. Invalidation level is 1.8909.




FTSE 100

The FTSE 100 bounced and broke the bearish short-term trendline, but this move could be as a Dead Cat Bounce Pattern. The British index could complete a new bearish leg to the 7,400 area, from where FTSE should build a new bullish connector.



DAX 30

DAX 30 is moving with a bearish bias, the bounce of the current trading session could be a Dead Cat Bounce Pattern, which could drive us to see new lows below the short-term support at 12,547.6, it could even fall to the 12,300 area, from where we foresee that the German index should start a new bullish sequence.



Categories
Forex Market Analysis

Daily Market Update: Great Britain to Vote About Brexit, Market Reaction to Trade Tensions

 

News Commentary

 

Trade tensions between the U.S. and China still remain on investors minds as the two largest economies in the world faced over trade tariffs.

Stocks stumbled

 

News Commentary

 

Trade tensions between the U.S. and China still remain on investors minds as the two largest economies in the world faced over trade tariffs.

Stocks stumbled

 

News Commentary

 

Trade tensions between the U.S. and China still remain on investors minds as the two largest economies in the world faced over trade tariffs.

Stocks stumbled on Tuesday after U.S. President Donald Trump threatened to impose tariffs on another $200 billion of Chinese goods if China refused “to change its practices,” he said.

But currency markets had breathed a sigh of relief after Beijing signalled its tolerance of a stronger currency by fixing a stronger daily midpoint than expected. Safe-haven currencies such as the Swiss franc and the Japanese yen were still well-supported, though.

“Market volatility remains very low and the headline risks from trade concerns should push that higher,” said Hans Redeker, global head of currency strategy at Morgan Stanley.

Economists don’t expect the BoE to raise rates on Thursday, and some not optimistic about their forecasts for a rate rise in August, which would be only the central bank’s second increase since the 2008 financial crisis.

The House of Commons was to vote on the EU withdrawal bill, the government’s flagship piece of Brexit legislation, later in the day.

The government is seeking to defeat an attempt to give MPs a “meaningful vote” before Britain could leave the EU without a deal.

The vote is coming at a time of growing investor nervousness that Brexit negotiations could fail to reach an agreement.

 

Chart Analysis

 

 

US INDEX

As expected, after breaking the wedge reversal pattern, the price met the broken ascending trend from the high of 2017, meeting the broken ascending channel, heading the B level of the ABC Elliot waves. Divergence on RSI followed by breaking the upper line as shown.

According to Elliot, we can see a spike from that level to 97.9.



 

USD/JPY

On the daily chart, as we expected the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support of 110.05 to reach the next support 108.15, to then get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce has started and on its way.



 

USD/CAD

On the daily chart, the price eventually broke the resistance zone of 1.309-1.299, followed by a break of the ascending trend line from the high of 2016, with an engulfing candle.

As we expected that, we need another confirmation bullish candle to assure the long bias, the price is expected to reach 1.34.



 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it to.

Reaching the support zone and shaping the Gartley harmonic pattern, the price is supposed to continue its bullish movement up to the 1.1045 level after forming hammer & engulfing candles respectively.



 

Categories
Forex Market Analysis

U.S. Housing Starts Soars – Forex and Indices – Daily Update 19.06.18

Fundamental Overview

U.S. Housing Starts soars to 2007 highs in May.
Daily Forex Technical Analysis: The U.S. Housing Starts surged 1.35 million in May, the highest level in near

Fundamental Overview

U.S. Housing Starts soars to 2007 highs in May.
Daily Forex Technical Analysis: The U.S. Housing Starts surged 1.35 million in May, the highest level in near

Fundamental Overview

U.S. Housing Starts soars to 2007 highs in May.

Daily Forex Technical Analysis: The U.S. Housing Starts surged 1.35 million in May, the highest level in near to 11-years and over the 1.31 million forecasted. Building permits fell to 1.301 million, under the 1.35 million expected by the analysts.

This buoyant data is attended by the housing market sentiment which fell to 68 points in June from the 70 points reported in June. This decrease in the homebuilder’s sentiment is produced mainly by the rising costs in lumber prices.

On the other hand, the 20-City Home Price Index in the US reported by S&P/Case-Shiller in May soared to the record high 208.62 points, the highest level previous to the 2008 financial crisis.

 

Daily Forex Technical Analysis

EURUSD

Tha pair EURUSD is moving sideways finding to test the May 29th level support at 1.15102, and it looks like the price is making a bottom pattern. For it to place us on the bullish side in EURUSD, we expect the short-term resistance breakout at 1.16445.




GBPUSD

The Pound broke down the low of the May 29 (1.32045 level)  losing the 1.32 psychological level. Now we expect that the price will complete the bearish cycle in the area between 1.3109 and 1.2936, from where the price should start to bounce at least to the 1.3298 level.




USDCHF

USDCHF is running bullish to the parity making a flag pattern. Our vision for the Swiss currency is that it could make a new bearish leg with a mid-term target on 0.98 level.




EURCAD

EURCAD is developing an expanding triangle inside an ascending channel; we expect that the cross makes a new high to the 1.555 area before we see more drops to the 1.49 zone.




EURAUD

EURAUD reached the mid-term target zone in the 1.57 area. We foresee that if the cross breaks down the short-term trendline, EURAUD will complete a flag pattern, which should drive to new lower lows, likely to 1.53 area.




DAX 30

DAX 30 is moving laterally in a major degree structure testing the long-term pivot level at 12,652.2. A breakdown of this level could drive the price to test the short-term support at 12,547.6, it could even fall to 12,300 area, from where we expect the start of a new rally.




FTSE 100

FTSE 100 broke down the May-29th low making a new lower low; this makes us foresee that the British index should see a new lower low, probably to the 7,400 area, from where FTSE should build a new bullish connector.



Categories
Forex Market Analysis

June 19 – Global Stocks Slips on Risk off Sentiment – Trump Strikes

U.S. stocks slouched on Tuesday, with the Dow-Jones Industrial Average erasing its gains for the year, as markets were confused by a sharp escalation of the trade dispute between the

U.S. stocks slouched on Tuesday, with the Dow-Jones Industrial Average erasing its gains for the year, as markets were confused by a sharp escalation of the trade dispute between the

U.S. stocks slouched on Tuesday, with the Dow-Jones Industrial Average erasing its gains for the year, as markets were confused by a sharp escalation of the trade dispute between the United States and China. The US President, Donald Trump warned to impose a 10% tariff on $200 billion of Chinese goods and Beijing threatened it would retaliate.

S&P 500 – Daily Outlook

The U.S. stock market index SPX is trading at 2,664, down -15.25 points and -0.58%. The index is trading in the oversold zone and has already completed 50% retracement at 2,746. At the moment, SPX is likely to pull back to fill the early morning gap.



 

Support Resistance 
2761.79 2775.45
2757.58 2779.66
2750.75 2786.49
Key Trading Level: 2768.62

 

Nikkei – Daily Outlook

Japanese stocks plunged to 2-1/2-week lows on Tuesday and posted the biggest daily percentage decline in three months after Chinese stocks were sold piercingly amid intensifying global trade tussles.

Japan’s Nikkei dipped -401.85 points to trade at 22,278.48 on today. Most of the selling began in response to a risk-off sentiment. Technically, the Japanese index has come out of the asymmetric triangle pattern which supported Nikkei near 22,290. For now, the same level is working as a resistance. Whereas, the support is likely to prevail near 21,952.



Support Resistance 
22617.52 22774.72
22568.96 22823.28
22490.36 22901.88
Key Trading Level: 22696.12

That’s it for now, you are advised to monitor three speeches from the world central bankers. ECB President Draghi, BOJ’s Kuroda and Fed’s Chair Powell are due to participate in a panel discussion at the European Central Bank Forum on Central Banking, in Portugal on Wednesday at 13:30 (GMT). All the best!

Categories
Forex Market Analysis

Daily Market Update: US tariffs on China and its Consequences

 

News Commentary

 

 

Investors are reacting negatively to the escalating trade war between China and the US, and if the tit-for-tat tariffs continue, the euro could continue to

 

News Commentary

 

 

Investors are reacting negatively to the escalating trade war between China and the US, and if the tit-for-tat tariffs continue, the euro could continue to

 

News Commentary

 

 

Investors are reacting negatively to the escalating trade war between China and the US, and if the tit-for-tat tariffs continue, the euro could continue to head south. The US announced a 25 per cent tariff on $50 billion of Chinese goods on Friday. After China responded with an identical move on US imports, President Trump has now threatened to impose 10 per cent tariffs on some $200 billion in Chinese goods. Not surprisingly, China has threatened to retaliate to this latest move. Trump has vowed to take action on the $375 billion trade deficit that the US has with China, claiming that the latter is guilty of unfair trade practices. With the first of the US tariffs scheduled to take effect on July 6 and no signs that any side will blink first, the markets should be preparing for stormy weather ahead.

After the speech from ECB President Mario Draghi, in the eurozone, the current account surplus narrowed for a third straight month, dropping to EUR 28.4 billion. This fell short of the estimate of EUR 30.3 billion.

The US building permits have released with a decrease of 1.3M, lower than expectation 1.35M

 

Chart Analysis

 

 

US INDEX

As expected, After breaking the reversal pattern ‘wedge’, the price met the broken ascending trend from the high of 2017, meeting the broken ascending channel, heading the B level of the ABC Elliot waves. Divergence on RSI followed by breaking the upper line as shown.

According to Elliot, we can see a spike from that level to 97.9.



 

USD/JPY

On the daily chart, as we expected the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support of 110.05 to reach the next support 108.15, to then get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce has started and on its way.



 

USD/CAD

On the daily chart, the price eventually broke the resistance zone of 1.309-1.299, followed by a break of the ascending trend line from the high of 2016, with an engulfing candle.

As we expected that, we need another confirmation bullish candle to assure the long bias, the price is expected to reach 1.34.



 

AUD/JPY

As we expected, the pair had formed a wedge which had been broken to reach the support zone 81.2-80.5, to make the price ranges in sideways between 80.5 & 84.4.

The price is about to have a bearish bias according to:

bouncing from the resistance zone 84.4-93.9, breaking continuous ‘flag’ patterns, bouncing from the moving average 200, and ABC Elliot waves

So, the price is expected to head for 76.25.



 

AUD/USD

As we expected, the price will have a strong bearish rally to the support of 0.7155 and this has been prepared according to five causes;-

the descending trend line from the high of February, breaking of the flag, the resistance zone, and eventually the B level of the ABC Elliott waves, and most importantly the break beneath the key support 0.7415.

So, the C wave is on its way after a possible retracement to the 0.7155 level



 

Categories
Forex Market Analysis

Daily Market Update: US tariffs, Divergence Between Central Banks

 

 News Commentary

 

Tariffs between the United States and China raised fears that an escalating trade war could weigh on global markets.

U.S. President Donald Trump announced tariffs on

 

 News Commentary

 

Tariffs between the United States and China raised fears that an escalating trade war could weigh on global markets.

U.S. President Donald Trump announced tariffs on

 

 News Commentary

 

Tariffs between the United States and China raised fears that an escalating trade war could weigh on global markets.

U.S. President Donald Trump announced tariffs on Friday on $50 billion of Chinese imports, with China retaliating immediately by slapping duties on American exports, which pushed the Yen higher as the safe haven flows away.

Oil prices dropped before OPEC meeting on Friday.

Investors are also estimating the impact of tightening monetary policy by central banks after the U.S. Federal Reserve increased the interest rate last week and the European Central Bank said it planned to end its bond-purchase program at the year-end.

This divergence between the two banks pushed the dollar higher in front of the whole basket of currencies.

 

Chart Analysis

 

 

US INDEX

After breaking the reversal pattern ‘wedge’, the price met the broken ascending trend from the high of 2017, meeting the broken ascending channel, heading the B level of the ABC Elliot waves. Divergence on RSI followed by breaking the upper line as shown.

According to Elliot, we can see a spike from that level to 97.9.



 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support of 110.05 to reach the next support 108.15, to then get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce is expected to be on its way.



 

USD/CAD

On the daily chart, the price eventually broke the resistance zone of 1.309-1.299, followed by break the ascending trend line from the high of 2016, with an engulfing candle.

But we can also see that it touches the top of the “horn” & “wedge” patterns.

So, we only need another confirmation bullish candle to assure the long bias to reach 1.334.



 

AUD/JPY

As we expected, the pair had formed a wedge which had been broken to reach the support zone 81.2-80.5, to make the price ranges in sideways between 80.5 & 84.4.

The price is about to have a bearish bias according to:

bouncing from the resistance zone 84.4-93.9, forming continuous ‘flag’ patterns, bouncing from the moving average 200, and ABC Elliot waves

So, the price is expected to head for 76.25.



 

AUD/USD

As we expected, the price will have a strong bearish rally to the support of 0.7155 and this has been prepared according to five causes;-

the descending trend line from the high of February, breaking of the flag, the resistance zone, and eventually the B level of the ABC Elliott waves

so, the C wave is on its way after a possible retracement



Categories
Forex Market Analysis

Weekly Market Update: ECB Left Interest Rate, US-China Trade War, Great Britain Official Bank Rate

We had a busy last week with announcements from central banks (FED & ECB), also there was the conflict at the G7 summit, the consequences of Singapore summit.

So, we will discuss the upcoming results from all this data, along with the most important releases of the next week.

 

News Commentary

 

 

USD

The FED delivered the widely expected rate hike overnight, with a hawkish statement and economic projections. FOMC raised the Fed funds to 2.00%.

The Trump administration has slapped a 25% tariff on 818 Chinese goods, with a total value of up to $50B.

This action comes on top of the recent decision to impose steel and aluminium tariffs on many US allies, including Canada, Mexico and the European Union. Predictably, those countries countered with $20B in tariffs on US goods.

U.S. President Donald Trump and North Korean leader Kim Jong Un signed a ‘comprehensive’ deal at a historic summit aimed at the denuclearisation of the Korean peninsula.

Trump said the meeting in Singapore had gone “better than anybody could have expected” and he anticipated that the denuclearisation process would start “very, very quickly”, adding he had formed a “special bond” with Kim and the relationship with North Korea would be very different.

 

EUR

The regulator plans to complete the quantitative easing program in December 2018. The Central Bank left interest rates unchanged and said that it is not going to raise them until mid-2019. The speech by Mario Draghi, President of the European Central Bank, also hit the euro. The official said that the slowdown in the economic recovery in the Eurozone was not temporary, but also reached a global level. The ECB lowered the forecast for economic growth in the Eurozone from 2.4% to 2.1% this year.

 

GBP

Positive data came from Great Britain to enhance the sterling, with the retail sales reading 1.3%, higher than the expected 0.5%.

On Thursday the Bank of England is expected to leave all monetary policy levers untouched and the market will then look for clues on future moves from the MPC voting pattern and the subsequent press release. Governor Carney may also give his thoughts on UK Q2 GDP after this week’s data looks likely to weigh on second-quarter growth.

 

AUD

The Australian Dollar was trading as the weakest currency last week as it is pressured by its own data miss as well as weaker than expected China data. Australia employment rose 12k seasonally adjusted in May, below the consensus of 19.2k. The unemployment rate dropped to 5.4%, as participation rate also dropped to 65.5%.

All eyes will on the monetary policy meeting on Tuesday 1:30 GMT

 

 

Chart Analysis

 

 

US INDEX

After breaking the reversal pattern “wedge”, the price met the broken ascending trend from the high of 2017, meeting the broken ascending channel, heading the B level of the ABC Elliot waves, divergence on RSI followed by breaking the upper line as shown.

According to Elliot, we can see a spike from that level to 97.9.



 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support of 106 and also to meet the ascending trend from the low of 2016.

So, a bounce is expected to be on its way.



 

USD/CAD

On the daily chart, the price eventually broke the resistance zone 1.309-1.299 followed by break the ascending tend line from the high of 2016, with an engulfing candle.

But also we can see that it touches the top of the “horn” & “wedge” patterns.

So, we only need another confirmation bullish candle to assure the long bias to reach 1.334.



 

AUD/USD

As we expected, the price will have a strong bearish rally to the support 0.7155. This has been prepared according to five causes;-

The descending trend line from the high of February, breaking of the flag, the resistance zone, and eventually the B level of the ABC Elliott waves

so, the C wave is on its way



 

 AUD/JPY

As we expected, the pair had formed a wedge which had been broken to reach the support zone 81.2-80.5, to make the price ranges sideways between 80.5 & 84.4.

The price is about to have a bearish bias according to:

bouncing from the resistance zone 84.4-93.9, forming continuous ‘flag’ patterns, bouncing from the moving average 200, and ABC Elliot waves

So, the price is expected to head for 76.25.



 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it to.

Reaching the support zone and forming the Gartley harmonic pattern, the price is supposed to continue its bullish movement up to the 1.1045 level after any possible price action from these levels.



 

Categories
Forex Market Analysis

Confident Central Banks Push Markets Up

Weekly Update (June 18th – 24th)

Macroeconomic Outlook

As expected, last week was an intense week full of activity, especially by the Central Banks.

–          Central Banks decisions last week should calm the markets in the following months

o   Fed is raising rates at a normal rhythm

o   ECB has planned to finish its unconventional asset purchase plan by 2019

o   Central banks do this at a time where inflation is rising

  • So, they are not that worried about inflation
  • Apart from the fact that is a transitory inflation influenced by excessive oil prices

o   At the end of the day, Central Banks make clear decisions which are good for bonds

–          Fed wants to raise interest rates two more times this year and a couple more times in 2019, ending around 3.25%

o   Reduce balances

o   Finish a process of normalisation

  • Normalisation is good and stable

–          ECB will retire the unconventional measures in 2019

o   Interest on deposit and credit will rise becoming positive by 2019

o   This is highly positive for the economy

This week we have Central Banks news as references

–          Sintra meeting

o   Annual meeting of central banks

  • With what happened last week not much will be observed here

–          OPEC meeting

o   Will increase production

o   Reduce oil prices

  • Fear over inflation will fall

Hence, the situation should improve within an environment where corporate results are still increasing and inflation starting to fall along with good unemployment rates and less political risk. Therefore, this week and the ones ahead should be positive for the markets.

 

Technical Outlook

US Dollar Index


 

US Dollar Index just broke with power, a critical monthly resistance totally reversing the bearish trend it has been following in the last months. We may see a small retest, but it will only serve to confirm the beginning of a bullish trend. Therefore, it is a good moment to buy, putting the SL just under the minimum of the last session and the TP above the last resistance. With this position, we should catch the new bullish trend.

 

EURUSD


 

After attempting the retest, it has dropped even further continuing the weekly bearish trend it formed previously. Short positions should remain open as for now, it has clear path downwards.

 

GBPUSD


 

After a fake breakout, it has broken down again, against the two supports that were supporting the upward movement. Hence, we open a new short position that has now supported the remaining ahead.

 

USDJPY


 

After moving sideways between two key support and resistance for weeks, the USDJPY is now approaching the resistance above. However, it is necessary to wait for now until it confirms whether it will test it and come down, or it will break it for once and for all. Thus, for now, we wait until we have a confirmation of the breakout.

 

USOIL


 

After breaking and retesting the upward trendline, it confirms the continuation of the bearish trend that began weeks ago and that we are joining again. Without notable supports ahead it should continue going down.

 

DAX


 

DAX has been tumbling the last few months, but after breaking the resistance it has been playing with lately, it has followed a clear path upwards. For now, we hold as fundamentals from last week support the markets even more.

 

 

Categories
Forex Market Analysis

Daily Market Update: FED Decision To Rate Hike, ECB Meeting

 

News Commentary

 

 

The FED delivered the widely expected rate hike overnight, with a hawkish statement and economic projections. FOMC raised the Fed funds to 2.00%.

Greenbacks have

 

News Commentary

 

 

The FED delivered the widely expected rate hike overnight, with a hawkish statement and economic projections. FOMC raised the Fed funds to 2.00%.

Greenbacks have

 

News Commentary

 

 

The FED delivered the widely expected rate hike overnight, with a hawkish statement and economic projections. FOMC raised the Fed funds to 2.00%.

Greenbacks have been erased due to fresh concerns about the U.S.-China trade relations were seen weighing on the dollar, which is often sought in times of political tensions.

U.S. President Donald Trump will meet with his top trade advisors on Thursday to decide whether to activate threatened tariffs on billions of dollars in Chinese goods, a senior Trump administration official said.

The ECB rate decision and press conference is the biggest focus today with Eurozone inflation picked up again in May. The ECB should be much more comfortable to end the asset purchase program later this year.

Stopping the program right after September is certainly Euro positive.

The Australian Dollar is trading as the weakest currency today as it is pressured by its own data miss as well as weaker than expected China data. Australia employment rose 12k seasonally adjusted in May, below the consensus of 19.2k. The unemployment rate dropped to 5.4%, as participation rate also dropped to 65.5%.

From China, retail sales rose 8.5% in May, slowed from 9.4% and missed the expectation of 9.6%. Industrial production slowed to 5.8%, down from 7.0% and missed expectation of 7.0%.

Positive data came from Great Britain to enhance the sterling, with the retail sales reading 1.3%, higher than the expected 0.5%.

 

 

Chart Analysis

 

 

US INDEX

As we can see on the daily chart, the price had bounced from the key resistance level of 95.15. The price is expected to go down to meet the 92.6 level according to many reasons:

Breaking the reversal pattern “wedge”, meeting the broken ascending trend from the high of 2017, meeting the broken ascending channel, heading the B level of the ABC Elliot waves, divergence on RSI followed by breaking the upper line as shown.

According to Elliot, we can see a spike from that level to 97.9.



 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106 and also to meet the ascending trend from the low of 2016.

So, a bounce is expected to be on its way.



 

AUD/JPY

On the daily chart, the pair had formed a wedge which had been broken to reach the support zone 81.2-80.5, to make the price ranges in sideways between 80.5 & 84.4.

The price is about to have a bearish bias according to:

reaching the resistance zone 84.4-93.9, forming continuous pattern “flag”, near the moving average 200, and ABC Elliot waves

So, watch for any price action in these levels to head for 76.25.



 

USD/CAD

The pair is about to take a bearish rally to the 1.274 level according to many reasons:

locating in the resistance zone 1.3-1.38, near the descending trend line from the high of 2016, shaping the reversal pattern “wedge”, and finally the harmonic pattern “Gartley.

So watch for any price action in these levels.



 

AUD/USD

On the daily chart, a reversal pattern wedge has been broken to reach 0.747 to form a flag pattern.

The price is expected to go up to the resistance zone, then it will have a strong bearish rally to the support 0.7155 according to five causes;-

the descending trend line from the high of February, the upper edge of the flag, the retest of the broken wedge, the resistance zone, and eventually the B level of the ABC Elliott waves



 

Categories
Forex Market Analysis

An Interest Rate War is Coming? – 13.06.18 Daily Update

Fundamental Overview

An Interest Rate War is Coming?

Financial Market Latest Updates: In today’s session, the Federal Reserve has decided to increase the interest rate by 0.25%, hiking it from 1.75% to 2%. Beyond commenting the Dollar Index movements or the FED Chairman Jerome Powell’s remarks at the press conference; this interest rate increase the United States is carrying out will mean a change in the course of the monetary policy for the rest of the principal Central Banks.

On the one hand, the ECB has been starting to raise the discourse of the end of the bond purchase program in June and a potential increase in the interest rate that would start from 2019. On the other hand, the Bank of Canada Governor, Stephen Poloz, has commented that there will possibly be a new increase in the interest rate in July (currently at 1.25%). The Reserve Bank of Australia is not far behind in this discourse of rate increases and considers that given the level of inflation in Australia, sooner than later there should be an interest rate hike (the current interest rate is 1.5%.)

 

Technical Analysis

EURUSD

EURUSD continues moving sideways in the pennant pattern expecting the ECB interest rate decision where we foresee that the pair makes new highs above the 1.19 level.

 


 

GBPUSD

GBPUSD continues testing the blue box and bouncing. We expect significant moves in this pair in the next week with the BoE Monetary Policy Meeting scheduled on Thursday 21st. As long as the price does not make a 2B Pattern, a new cycle will not initiate.

 


 

USDCHF

USDCHF as forecasted in our previous Daily Update, made a bullish false breakout and then a bearish move. We still expect fresh lows at least to the blue box between 0.9831 and 0.9809.

 


 

EURGBP

EURGBP is moving sideways. In terms of the traditional Technical Analysis, we could consider the structure as an inverse head and shoulders pattern and a continuation pattern. Our main scenario is that the cross could strike the 0.8921 level mid-term.

 


 

EURJPY

EURJPY is testing the 130.27 resistance, forming an ascending triangle as a continuation pattern of the previous bullish move. We expect that the price reaches the 132.5 level, from where the cross should make a new bearish connector.

 


 

FTSE 100

FTSE 100 still is moving in the lateral channel. Remember that the next BoE interest rate decision meeting will take place on June 21st. Despite none of 63 economists polled by Reuters expect any move from the current 0.5%, a surprise effect of the rate hike could move the British Index considerably.

 


 

DAX30

DAX 30 still is moving in the sideways corrective structure, it’s probably waiting for the ECB interest rate decision and the Mario Draghi discourse before it continues the bearish bias.


 

 

Categories
Forex Market Analysis

Daily Market Update: Market Is Waiting For FOMC and ECB Meeting

 

News Commentary

 

 

Trading is hesitant early on Wednesday as investors awaited further guidance from the Federal Reserve on future U.S. rate rises to shed some light on

 

News Commentary

 

 

Trading is hesitant early on Wednesday as investors awaited further guidance from the Federal Reserve on future U.S. rate rises to shed some light on

 

News Commentary

 

 

Trading is hesitant early on Wednesday as investors awaited further guidance from the Federal Reserve on future U.S. rate rises to shed some light on how many times interest rates may go up this year.

Investors have shifted their focus to the two-day Federal Open Market Committee (FOMC) meeting that starts Wednesday. With a rate hike almost fully priced in, markets are focusing on whether the Fed will signal hiking rates four times this year, rather than the three times as indicated earlier in the year.

 

The Euro rose to three-week highs against the dollar last week after hawkish ECB comments fueled speculation that the bank could signal its intention to start unwinding its bond purchasing program.

Tomorrow’s meeting will hold some extra news about when the ECB cuts its quantitative easing program.

 

The Bank of Japan will also review its monetary policy at a two-day meeting that ends on Friday, but will likely keep its policy intact.

 

 

Chart Analysis

 

 

AUD/JPY

On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.

The price has now entered the red resistance area with a possible bounce.

Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one.

So, any bounce now with price action will push the price to fall.

 


 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it to.

Bouncing from the support zone and the broken descending trend from the high of 2017, the price is supposed to continue its bullish movement up to the 1.1045 level.

But the price may correct to the level 1.0755 to find support by the Gartley harmonic pattern.



 

USD/CAD

On the daily chart, as expected, the price made its way into the resistance zone of 1.289-1.298, almost reaching the key resistance at 1.309, with an approach from the descending trend line starting from the high of 2015, and the upper edge of the horn pattern.

The price is near the key resistance level 1.309, any bounce back from there would take the price firstly to the support level at 1.274.



 

AUD/USD

On the daily chart, the pair had a correction to the 0.758 level supported by the resistance level 0.766 and the descending line from the high of 2018.

The price has bounced from the 0.758 level near the edge of the ascending channel.

So if the price could break the resistance 0.766 and the descending line, it may reach 0.774 which is a level with a combination of the upper edge of the channel and the broken uptrend.



 

Categories
Forex Market Analysis

Forex and Indices – Daily Update – 12.06.18

Fundamental Overview

The exposure of the historic meeting and agreement reached between the U.S. President Donald Trump and the North Korean leader Kim Jong Un for the “denuclearisation” of the Korean peninsula have already been discounted. However, currently, the uncertainty is being headed by the statements of IMF’s Director Christine Lagarde, who has said that the escalation in trade tensions are affecting the global economy, commenting that clouds over global economy are ‘getting darker by the day’ after the G7 summit.

World Trade Organization General Director, Roberto Azevedo, also echoed the comments made by Lagarde adding that the increase in commercial tensions that we are witnessing involves a high economic impact, which can undermine the strength of economic growth since the last financial crisis.”

 

Forex Technical Analysis Signals

EURUSD

EURUSD is consolidating, developing a pennant pattern bounded by the levels 1.173 and 1.184. A breakout of this pattern could lead the price to the 1.196 level. Invalidation level keeps in 1.1616.


GBPUSD

GBPUSD moves in a corrective structure as a flag pattern testing the blue box area as a support level. The breakout of the 1.342 level should lead to the pound to 1.359 resistance. The invalidation level of this scenario is 1.3254.


USDCHF

The structure of the Swiss currency looks like an Irregular Flat Elliott Wave. If this scenario is valid, and for inverse correlation with EURUSD, the USDCHF pair could reach 0.99 level before it drops again. Invalidation level is 0.9983.


EURCAD

EURCAD moves inside a pennant pattern; we expect a breakout of this structure to lead the price to new higher highs at least to 1.5533 level where we foresee the start of a new downward move for to build a new bearish leg.


EURAUD

In the same way as EURCAD and EURUSD, the EURAUD cross is consolidating, but in this case, the price is moving inside a pennant pattern. In the short-term, if EURAUD breaks above 1.5621, we expect fresh highs that should reach the 1.5761 level. Invalidation level for this scenario is 1.5282.


DAX 30

DAX 30 continues driving sideways, in the current session it has touched the blue box reaching the 12,948 pts level, rejecting to the downside. We maintain our scenario on which a price decline below 12,652 pts should activate a bearish second leg, with a target of 12,000 pts. Invalidation level is 13,102 pts.


FTSE 100

A lateral channel of 112 pts bounds the FTSE 100; our vision is that the British index should make a false bullish breakout before continuing its previous downward movement to complete the corrective structure. The potential target is 7,390 with an extension at the 7,073 level. The invalidation level of the bearish scenario is 7,903.5.


Categories
Forex Market Analysis

Daily Market Update: Market’s Reaction to US-North Korea Summit and Central Banks Meetings

 

News Commentary

 

 

 

U.S. President Donald Trump and North Korean leader Kim Jong Un signed a ‘comprehensive’ deal at a historic summit aimed at the denuclearisation of

 

News Commentary

 

 

 

U.S. President Donald Trump and North Korean leader Kim Jong Un signed a ‘comprehensive’ deal at a historic summit aimed at the denuclearisation of

 

News Commentary

 

 

 

U.S. President Donald Trump and North Korean leader Kim Jong Un signed a ‘comprehensive’ deal at a historic summit aimed at the denuclearisation of the Korean peninsula.

Trump said the meeting in Singapore had gone “better than anybody could have expected” and he anticipated that the denuclearisation process would start “very, very quickly”, adding he had formed a “special bond” with Kim and the relationship with North Korea would be very different.

 

On the other hand, Trump upset the Group of Seven’s efforts to show a united front, choosing to back out of a previous joint communique. The action drew criticism from Germany and France, and Trump called Canadian Prime Minister Justin Trudeau “very dishonest and weak.”

However, “markets are generally shrugging off the G7 trainwreck,” said Ray Attrill, head of Forex strategy at the National Australia Bank.

Instead, markets are looking ahead to a busy week.

Policy meetings of the U.S. Federal Reserve and the European Central Bank, as well as a Brexit bill vote in the British parliament, have the whole show.

The U.S. Federal Reserve is widely expected to raise interest rates this week while investors are focused on whether the central bank will hint at raising rates a total of four times in 2018.

All eyes will be also on the U.S. CPI at 12:30 GMT with expectations to remain steady at 0.2%.

 

The European Central Bank also meets to decide whether it could signal intentions to start unwinding its massive bond purchasing program.

Helping calm markets were comments from Italy’s new coalition government that it had no intention of leaving the Eurozone and planned to cut debt.

 

 

Chart Analysis

 

US INDEX

On the daily chart, the price had successfully broken the ascending trend from the high of 2017, along with the resistance level to eventually reach the key resistance of 95.15 to bounce back from there. The price shaped a reversal pattern (wedge) which closed with a break beneath it.

With divergence in RSI, the price is expected to have a correction to the key support at 92.6 which is located at the broken trend too, only if it breaks the support of 93.4.

 


 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106.9.

So, any bounce now with price action will enhance the down run.

 


 

AUD/JPY

On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.

The price now has entered the red resistance area with a possible bounce.

Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one.

So, any bounce now with price action will push the price to fall.

 


 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it to.

Bouncing from the support zone and the broken descending trend from the high of 2017, the price is supposed to continue its bullish movement up to the 1.1045 level.

But the price may correct to the level 1.0755 to find support by the Gartley harmonic pattern.

 


 

USD/CAD

On the daily chart, as expected, the price made its way into the resistance zone of 1.289-1.298, almost reaching the key resistance at 1.309, with an approach from the descending trend line starting from the high of 2015, and the upper edge of the horn pattern.

The price has already bounced beneath the key resistance and the resistance zone and got back above it again, but it couldn’t go much further to form a pinbar, to take the price firstly to the support level at 1.274.

 


AUD/USD

On the daily chart, the pair had a correction to the 0.758 level supported by the resistance level 0.766 and the descending line from the high of 2018.

The price has bounced from the 0.758 level near the edge of the ascending channel.

So if the price could break the resistance 0.766 and the descending line, it may reach 0.774 which is a level with a combination of the upper edge of the channel and the broken uptrend.

 


 

NZD/USD

On the daily chart, as we expected before, the pair had bounced from the ascending trend, along with breaking a descending trend, to reach our target at the resistance zone at 0.697-0.702.

According to the BAT-shaped harmonic pattern we expected, the price has already reached our first target and is expected to reach the B point at the next resistance zone of 0.7155-0.7185.

The price may have a little retracement before hitting this target.

 


Categories
Forex Market Analysis

June 11 – U.S. Indices Soars As Risk-on Sentiment Heads Up

On the first trading day of the fresh week, most of the markets opened with huge gaps on the back of the uncertainty driven by the G7 meeting. However, the

On the first trading day of the fresh week, most of the markets opened with huge gaps on the back of the uncertainty driven by the G7 meeting. However, the

On the first trading day of the fresh week, most of the markets opened with huge gaps on the back of the uncertainty driven by the G7 meeting. However, the markets soon recovered despite unease after U.S. President Donald Trump inflated the threat of higher import tariffs at a rough G7 meeting. Did you miss an opportunity? No worries the game has just begun…

S&P 500 – Daily Outlook

The U.S. stock market index is trading bullish at 2,791.25, up +8.75 points and +0.31%. The S&P500 has come out of the asymmetric triangle pattern at $2,712, indicating the bull bias of investors. At the moment, the SPX is likely to face resistance near the $2,795 level.



Support    Resistance

2767.96    2780.04
2764.24    2783.76
2758.2      2789.8
Key Trading Level: 2774

 

Nikkei – Daily Outlook

Japan’s Nikkei soared more than 375 points to trade at 22,975 on Monday. Most of the bullish trend began in response to the rise in risk appetite. The risk on sentiment kicked in as the investors are very optimistic about the U.S.- North Korea meeting tomorrow.

Technically, the bearish trendline is extending a solid resistance to Nikkei at $22850. At the same time, the RSI has entered the oversold zone which is signifying the chances of a bearish reversal.



 

Support    Resistance
22184.88   22303.38
22148.28   22339.98
22089.03  22399.23
Key Trading Level: 22244.13

That’s pretty much it for now. I hope you are ready for some action tomorrow. We’ve got to deal with the U.S.-North Korea updates and the markets can remain volatile throughout the session.

Categories
Forex Market Analysis

The Pound Sterling in Focus This Week

The Pound Sterling in focus this week
The pound hit the buffers at the 1.3440 today, just prior to the manufacturing data release which was a miss for April (the

The Pound Sterling in focus this week
The pound hit the buffers at the 1.3440 today, just prior to the manufacturing data release which was a miss for April (the

The Pound Sterling in focus this week

The pound hit the buffers at the 1.3440 today, just prior to the manufacturing data release which was a miss for April (the second consecutive monthly miss). With manufacturing being the third largest economic sector it can cause an impact on the overall expectations for GDP growth.

The UK’s goods trade balance widened faster than was expected too, and with the construction sector coming up short on data expectations, it was no wonder the Pound spiked lower to 1.3348 on the release before settling around the 1.3365 level at the time of writing.

But the real jitters are due to a host of further data releases coming later in the week, including key employment data, inflation related data, RPI and PPI and retail sales. Plus the UK Prime Minister Theresa May faces a series of votes in the House of Commons on the 12th June on whether to approve 15 Brexit amendments inserted into the EU Withdrawal Bill. If the Government loses one of the key votes it could pave the way for parliament to have a ‘meaningful’ say in the final Brexit deal, and thus potentially leading to a ‘soft’ Brexit.

Plus of course, we have the Fed interest rate decision to look forward to on Wednesday.

Therefore, I would expect many GBP institutional traders to be sitting on the sidelines this week.

Categories
Forex Market Analysis

Weekly Market Update: G7 & US-North Korea Summit, Central Banks Meetings

 

News Commentary

 

We have a busy week coming up. What will follow the consequences of the G7 summit, and what news will be released regarding the US-North Korea

 

News Commentary

 

We have a busy week coming up. What will follow the consequences of the G7 summit, and what news will be released regarding the US-North Korea

 

News Commentary

 

We have a busy week coming up. What will follow the consequences of the G7 summit, and what news will be released regarding the US-North Korea summit. We also have the Federal Central Bank meeting (FOMC), the European Central Bank meeting, and the Bank of Japan meeting who all have to decide their rates and give hints about the economic polices.

 

US

U.S. President Donald Trump threatened to stop trading with countries that do not reduce barriers to American exports.

Trump said on Saturday that he had instructed his representatives not to endorse the G7 communique and that his administration was considering imposing tariffs on automobiles, further raising the spectre of a trade war that has unnerved Washington’s top allies.

U.S. President Donald Trump and North Korean leader Kim Jong Un are expected to land in Singapore on Sunday within hours of each other in advance of a historic summit over the reclusive country’s arsenal of nuclear weapons.

The unprecedented meeting comes after weeks of sometimes-contentious discussions and was briefly cancelled amid North Korean outrage over messaging from some U.S. advisers.

The Federal Reserve is almost certain to raise interest rates by a quarter point for a second time this year at the conclusion of its two-day policy meeting at 18:00 GMT on Wednesday.

 

EUR

The Euro strengthened on rising bets that the European Central Bank (ECB) may soon announce it will start shooting off its massive bond purchase program.

The central bank’s chief economist Peter Praet, a close ally of President Mario Draghi, said the ECB would discuss next week whether to end bond purchases later this year.

Some reports said that at its next policy meeting this week, the ECB could declare on when its quantitative easing program would end.

“The market will start to focus on the ECB from now on. Politics in Italy and Spain will play second fiddle as we now have new governments in both countries,” said Kazushige Kaida, head of foreign exchange at State Street Bank.

 

AUD

The RBA Board decided to leave the cash rate unchanged at 1.50%.

“The recent data on the Australian economy has been consistent with the Bank’s central forecast for GDP growth to pick up, to average a bit above 3% in 2018 and 2019. Business conditions are positive and non-mining business investment is increasing. Higher levels of public infrastructure investment are also supporting the economy. Stronger growth in exports is expected. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly, and debt levels are high” declared media section of the RBA.

The Australian dollar was supported by GDP growth numbers, which rose 1% in the first quarter of 2018, beating the estimated 0.8%. On an annualised basis, growth was 3.1%, above both the expected 2.8% and the previous quarter’s 2.4% gain.

 

JPY

The Bank of Japan (BoJ) is seen keeping policy on hold at the conclusion of its two-day rate review on Friday, including a pledge to keep short-term interest rates at minus 0.1%.

BoJ Governor Haruhiko Kuroda will hold a press conference afterwards to discuss the decision.

Kuroda has previously said the central bank will telegraph to markets how it plans to exit from ultra-easy policy when conditions for hitting its price goal become robust.

 

 

Chart Analysis

 

US INDEX

On the daily chart, the price had successfully broken the ascending trend from the high of 2017, along with the resistance level to eventually reach the key resistance 95.15 to bounce back from there. The price shaped a reversal pattern (wedge) which closed with a break beneath it.

With divergence in RSI, the price is expected to have a correction to the key support at 92.6 which is located at the broken trend too.



 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106.9.

So, any bounce now with price action will enhance the down run.



 

AUD/JPY

On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.

The price has now entered the red resistance area with a possible bounce.

Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one

So, any bounce now with price action will push the price to fall.

 


 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it too.

Bouncing from the support zone and the uptrend from the low of April, and the broken descending trend from the high of 2017, the price is supposed to continue its bullish movement up to the 1.1045 level.



 

USD/CAD

On the daily chart, as expected, the price made its way into the resistance zone of 1.289-1.298, almost reaching the key resistance at 1.309, with an approach from the descending trend line starting from the high of 2015, and the upper edge of the horn pattern.

The price has already bounced beneath the key resistance and the resistance zone and got back above it again, but it couldn’t go much further to form a pinbar, to take the price firstly to the support level at 1.274.



AUD/USD

On the daily chart, the price had a false break beneath the support zone 0.75-0.7535 with a pin bar. That enhances the AB=CD harmonic pattern, with breaking a descending channel. The pair rose with an engulfing candle above the support zone.

Along with divergence in RSI, the price is ready for the next move up to 0.774 which is a level with a combination of the lower trend line from the high of 2018 and the broken uptrend.

The price may have a little retracement before heading this target.



 

NZD/USD

On the daily chart, as we expected before, the pair had bounced from the ascending trend with an engulfing candle, along with breaking a descending trend, to reach our target at the resistance zone at 0.697-0.702.

According to the BAT-shaped harmonic pattern we expected, the price has already reached our first target and is expected to reach the B point at the next resistance zone of 0.7155-0.7185.

The price may have a little retracement before heading this target.



Categories
Forex Market Analysis

Too Much To Handle?

 

Macroeconomic Outlook

Ahead there is a complex week full of powerful references

–          Apart from the fact that we start from an inconclusive G7

o   More like a G6 + 1

Regarding the references and what needs to be considered

–          Central Banks

o   Fed will raise rates this week to 2% (already discounted)

  • And how many more increases there will be this year
  • Probably one more but open to speculation

o   ECB

  • When will it finish its asset purchase program?

o   Issue of Italian debt

o   Extremely important

  • It will condition what ECB will do

o   Bank of Japan

  • Will repeat with -0.1%

–          Prices

o   Industrial Prices in USA

  • Increase to 2.9 from 2.6

o   European Inflation

  • Remain at 1.9

–          USA – North Korea Meeting

o   Just speculation and news

Bearing in mind all this, it is going to be a hard week, and the best position is to wait on the sidelines to see what the outcome is of all these events and then consider a more clear position.

 

Technical Analysis

US Dollar Index


It is in a danger zone between two monthly bearish trends. Possible rebound from the support one on its way. In the next days, it will clear and show whether it confirms the bounce and breaks the resistance above it or if it is just testing and continuing the monthly bearish trend.

EURUSD


Undecisive, presently, going sideways. For now, we remain bearish as long as it remains below the monthly resistance which it is approaching now. In case it approaches it, we´ll see whether it is just a retest or a breakout creating a bullish trend.

GBPUSD


After breaking out the two resistances, it confirms the creation of a new bullish trend. Hence, we open a new long position looking for a long trend after breaking through the resistances and retesting them afterwards.

USDJPY


As explained in the previous weeks. USDJPY has been and will be going sideways without a clear direction. However, the sideways space is narrowing, and soon, it will be forced to take a side, whether long or short. For now, we wait while the resistances and support get closer to each other.

DAX


It could not close above the resistance we based in our long position. So, this week it will be key to know whether it can close above at some point, eliminating all the fears of a possible bearish trend. In case it does not close above and confirms the retest we will close the position and open a bearish one.

Crude Oil


After breaking the bullish resistance it was holding on to, it is now retesting it. This retest confirms the continuation of the recent bearish trend. For now, we remain bearish.

 

 

Categories
Forex Market Analysis

What Happened Last Week and What Lies Ahead

Last Week Wrap-up

Economic Data Today:

UK

Last week started with a slightly upbeat UK Construction PMI report that slightly beat expectations and the Pound rallied on the news. Next day,  the Market Services PMI figure at 54.0, also beating the expectations continue pushing the Pound higher.

Euro-Zone

Meanwhile, April’s Euro-zone Producer Price Index (YoY) was 2.0%, below the expected 2.4%, while the Composite PMI came at 54.0, as expected.

Then, April’s Euro-zone Retail Sales (MoM) came slightly below expectations at 0.1%  but the year over Year figure kept steady at 1.7%.

What started moving the Euro up was an ECB spokesman’s announcement on June 5th’s “live” meeting discussion regarding QE, at their next June 14th meeting, sparkling the speculation about the end of massive bond purchases.

 

Dax and FTSE

The DAX and the FTSE 100 were having jumpy days, with gaps down that filled during the session. Investors were nervous seeing the FTSE at its near all-time highs, while German DAX suffering was caused by not so good numbers in production and factory orders in the negative territory growth (-2.5% MoM and -0.1% YoY).

 

Australia

June 6th woke up with the positive news about the Australian Economic Growth (YoY) soaring above analysts expectations for the first quarter, reaching 3.1%  above a forecasted 2.8%, and the Aussie jumped up on the news.

 

What lies ahead

 

G7 Meeting

The G7 meeting is the real news queen of this weekend, especially exciting after the verbosity depicted by US President Donald Trump and his tweet-driven messages complaining about his close allies for treating the US unfairly.

Trump, true to his style, refused to endorse a joint G7 declaration calling for a reduction of tariffs.

 

The best description of the meeting came from a fake Angela Merkel tweet:

https://twitter.com/Queen_Europe/status/1005483518271610882

What seems a sure thing is that the underlying trade war is alive and well, with 25% tariff on steel and 10% on aluminium from the EU, Canada and Mexico, after the expiration of the exemptions, and the speedy retaliation by the affected nations. This also raised the question about how alive the NAFTA space remains.

It is likely that this war on tariffs will remain active at least until mid-term elections in November.

 

Trump-Kim Summit

Expect the unexpected here. When two characters like these meet, the unexpected is common.  Trump says he’ll know if Kim is serious in less than 60 seconds and calls the summit a “one time shot” for the North Korean leader.

There is almost nothing at a stake here, as Kim Jon Un has already dismantled the North Korean Nuclear Testing Installations.

 

FED Rate Decision

It is widely expected that FED’s rate decision next Wednesday at 18:00 GMT+2 time will be a 0.25% increase that will put the FED funds rate between 1.75%-2%.

ECB Policy Meeting

The main theme, after the comments of chief economist Peter Praet, is whether the ECB plans to end the bond purchasing program will be announced.

 

Bank of Japan

Friday, June 15th will see the BoJ decision on rates, which the market expects to be kept on hold.  But everybody is expecting the words of BoJ governor Kuroda regarding inflation and quantitative easing.

 

Technical Analysis

 

S&P 500

The S&P 500 is behaving very bullishly. Friday’s close was near the high of the daily range and is heading towards its next resistance area marked in cyan. We have yet to see the effect of the news coming from the G7 meeting and Trump-Kim summit, but the overall picture is bullish.



 

 DAX

The DAX is not that optimist, although it is close to its 2018 peak. The price looked at on a weekly chart is moving at the top of what seems to be a descending channel, and Ehlers Adaptive Cyber Cycle shows that a potential bearish leg has started.



 

Last Friday, the daily chart showed an opening gap that was filled during the day helped by the strength in Wall Street, but the index broke the pennant formation down and the CyberCycle oscillator also signs a possible bearish continuation.



 

FTSE 100

The FTSE 100 has drawn three consecutive weekly bearish candles, but each one of them with less downward impulse than its preceding one. The price is within a triangular formation so it shows a corrective movement. The question now is whether it breaks up or down.  Ehlers Adaptive Cyber Cycle points to a bearish continuation, but it has to be confirmed by price action.



 

The daily chart doesn’t clarify the picture much. Last Friday’s candle is bearish but with a large lower shadow, which points to the bears weren’t in control, but the price moved below the blue trend line that was supporting the minor upward leg. We have to see weakness in the other side of the Atlantic for a confirmation of this bearish continuation.


 

Dollar Index

The Weekly chart of the DXI shows an Evening Star formation and the Cyber Cycle indicator has signs of a cycle change. Therefore my most probable scenario is for a bearish continuation on the Dollar. This means we will see strength in the Euro, the GBP and the JPY, and possibly in the Aussie and Kiwi as well.



 

 

The daily chart shows that the downward move is a bit oversold and it needs some days of retracement or sideways movement before a continuation. Last Friday’s price has drawn a bullish hammer and Thursday’s movement bounced off the 93.24 support.


 

Interesting Educational Charts from last week’s action

AUDUSD  and NZDUSD 60 min Charts

This is a classic Elliott Wave 5 waves upward movement within a large Pennant formation. The break of the pattern and the 5th wave is the start of the corrective downward movement. (click ‘play’ to watch the development)



 

The same pattern is seen in the NZDUSD:



 

AUDJPY

AUDJPY had a five-wave upward movement that went to its previous top, hitting resistance. A short setup was triggered then the price pierced the bullish trendline downwards.



 

BTCUSD

For those crypto junkies may I present a classical bearish pennant on the BTCUSD that showed a kind of exhaustion to the upside. The breaking of this triangular formation was a very good short setup.



 

 

 

Categories
Forex Market Analysis

Forex and Indices – Daily Update – Two Summits One Weekend

Forex Fundamental Analysis Signals

 

In this session, markets are moving expectant at the G7 summit news, mainly due to the tone between President Trump and the rest of the leaders of the seven wealthiest economies of the world. The expectation occurs in the context of the tariffs imposed by the Trump Administration as part of the “America First” agenda to the steel and aluminium imports from Canada, European Union, and Mexico. The United States and European Union have established a dialogue for this Friday, said a French official. President Macron is confident in the advancement of trade issues that have split the United States and its trade allies.

Another summit that markets are following is the meeting of the Shanghai Co operation Organization (SCO). The meeting will begin this Saturday and will include with China, Russia, India, Pakistan and other four nations from Central Asia.  The importance of this meeting lies in the fact that while G7 leaders are discussing the new protectionism, the Chinese President Xi Jinping and the Indian Prime Minister Narendra Modi will talk about an “open and inclusive world economy.”

 

Technical Analysis

DAX 30

The DAX 30 opened the session with a bearish gap. Still, the index is in a corrective structure. This is normal after the rally that started developing on March 26th when DAX found support at 11,726.6 up to May 22nd when it reached the 13,204.3 points. Our vision for DAX is that price could make a new lower low at 12,528.9 pts.


FTSE 100

The FTSE 100 maintained the same consolidation structure from the past week. In the same way as the DAX 30, the FTSE is consolidating after the rally showed since March 26th when it touched the 6,866.9 level and then made an extended wave soaring to 7,903.5  in May 22nd. We foresee a new lower low at 7,468.3 points.


EURUSD

The common currency is developing a retracement from the 1.1840 level; the highest level reached in four weeks. We expect the pair will make a new higher low to the area between the levels 1.1724 to 1.1667, as an A-B-C structure. From this zone, we should see new higher highs to the 1.19 area.


GBPUSD

The pound is making a corrective move shaping an A-B-C pattern, which should dip to the area between 1.33423 and 1.32880. From this area, the pair GBPUSD should continue the bullish cycle started on May 29th, when the price touched the 1.32045 support. The mid-term target is at 1.35940. Invalidation level for this sequence is 1.32544.


USDCHF

The Swiss currency is making a bearish move from the highest level reached on May 7th, when it touched the 1.00563 level. From this area, the pair started to dip in five waves, finding support at 0.97883 on June 7th. From this level, the USDCHF pair bounced above the last corrective structure touching the 0.98877 price. If 0.97883 represents the short-term bottom, we expect a new lower move to the area between 0.98313 and 0.98092, from where the USDCHF could begin to see new higher highs.


GBPJPY

The cross is making a corrective pattern as a flag structure, if the price reaches the zone between 146.234 and 145.719, we foresee a new rally which should carry the price to new highs between 148.908 to 149.645 area.


GBPCHF

GBPCHF is building an expanding ascending triangle. Our main scenario is a new low to the area between 1.31242 and 1.30806, from this area we expect a new higher target in the zone between 1.33236 and 1.33745. Invalidation level is 1.30581.


Categories
Forex Market Analysis

Daily Market Update: G7 Summit

 

News Commentary

 

All eyes will be on the upcoming G-7 meeting in Quebec as the summit comes at a time of escalating trade tensions between the U.S and

 

News Commentary

 

All eyes will be on the upcoming G-7 meeting in Quebec as the summit comes at a time of escalating trade tensions between the U.S and

 

News Commentary

 

All eyes will be on the upcoming G-7 meeting in Quebec as the summit comes at a time of escalating trade tensions between the U.S and some of its major trading partners. Last week, all finance ministers from six members of the G-7 criticised the US Treasury Secretary Steve Mnuchin. The trouble started last week, when the Trump administration imposed tariffs on Canada, Mexico and the European Union. Mexico and Canada are hugely dependent on American demand for their products, which is why over the last few months they’ve shown willingness to grant the US more favourable conditions within the North America Free Trade Area (Nafta). The trade tension is sure to dominate the summit, if these leaders cannot reach an equivalent point, investors could dump their risks to head for safe-haven assets.

 

On the other hand, there’s a release of big date for Canada, at 12:30 GMT. There’s  Employment Change with a forecast of 19.1K, and Unemployment Rate with a forecast of 5.8%. These figures could give the Canadian some fresh air.

 

Chart Analysis

 

 

US INDEX

On the daily chart, the price had successfully broken the ascending trend from the high of 2017, along with the resistance level to eventually reach the key resistance 95.15 to bounce back from there. The price shaped a reversal pattern (wedge) which closed with a break beneath it.

With divergence in RSI, the price is expected to have a correction to the key support at 92.6 which is located at the broken trend too.



 

 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106.9.

So, any bounce now with price action will enhance the down run.



 

 

AUD/JPY

On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.

The price now has entered the red resistance area with a possible bounce.

Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one

So, any bounce now with price action will push the price to fall



 

 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it too.

Bouncing from the support zone and the uptrend from the low of April, and the broken descending trend from the high of 2017, the price is supposed to continue its bullish movement up to the 1.1045 level.

 



 

 

USD/CAD

On the daily chart, as expected, the price made its way into the resistance zone of 1.289-1.298, almost reaching the key resistance at 1.309, with an approach from the descending trend line starting from the high of 2015, and the upper edge of the horn pattern.

The price has already bounced beneath the key resistance and the resistance zone and got back above it again, but it couldn’t go much further to form a pinbar, to take the price firstly to the support level at 1.274.



 

 

AUD/USD

On the daily chart, the price had a false break beneath the support zone 0.75-0.7535 with a pin bar. That enhances the AB=CD harmonic pattern, with breaking a descending channel. The pair rose with an engulfing candle above the support zone.

Along with divergence in RSI, the price is ready for the next move up to 0.774 which is a level with a combination of the lower trend line from the high of 2018 and the broken uptrend.

The price may have a little retracement before hitting this target



 

NZD/USD

On the daily chart, as we expected before, the pair had bounced from the ascending trend with an engulfing candle, along with breaking a descending trend, to reach our target at the resistance zone at 0.697-0.702.

According to the BAT-shaped harmonic pattern we expected, the price has already reached our first target and is expected to reach the B point at the next resistance zone of 0.7155-0.7185.

The price may have a little retracement before hitting this target



 

Categories
Forex Market Analysis

Forex and Indices – Daily Update – June 07th, 2018

Forex and indices trading signals for the end of the trading session of June 07th, 2018 and short-term forecast for the coming sessions. In this issue, we make a follow-up of the price cycles of: EURUSD, GBPUSD, USDCHF, EURAUD, EURJPY, FTSE100 and DAX 30.

Hot Topics:

  • Pairs against the Greenback in key levels
  • Euro crosses close to make a second leg
  • European indices trading signals remain with bearish bias but are not activated.

Pairs Against The Greenback In Key Levels

EURUSD reached the 100% of equal waves in the 1.1831 level; this suggests is that the common currency should make a corrective move, probably to the area between 1.172 to 1.166 levels. The bullish target long-term is the area between 1.1889 to 1.194 levels. Invalidation zone is below 1.1616 level.


 

USDCHF reached the blue box zone from where we anticipate that the Swiss currency should start a bounce. For this pair, our position has changed from bearish to neutral.


 

GBPUSD, as expected in the previous daily update, is making a corrective move as a bearish connector, where we expect more rises to the pound. Short-term bullish target is between 1.3485 and 1.36 levels. Invalidation level is below 1.3254.


Euro Crosses Close To Make a Second Leg

EURJPY has reached our target area for the first cycle. By the Alternation Principle from the Elliott Wave Theory, we foresee a complex correction, probably a sideways structure. In principle, the correction could end near 128.6 level. From this zone, the price should pay its bearish divergence. As our readers could see in the chart, the corrective sequence is not tradeable (dashed line.) Invalidation level is 126.330.


 

For EURAUD we have two scenarios. The first scenario consists of the completion of the internal bullish cycle with the price reaching the 1.5547 level, where it could begin a corrective move. The second scenario is for the price to make a corrective sequence in three waves to the 1.5382 area, where the cross could start a rally to the 1.5547 level. If it soars above the Control Level at 1.5621, it is likely that the price would complete its internal bullish cycle in the zone between 1.57025 to 1.57612 level. Invalidation level is at 1.5282.


European Indices Remain With Bearish Bias But Are Not Activated

The FTSE closed the session in the blue box, the potential bearish move with the target in the area between 7,468 to 7,390.5 is active. If the British index breaks down and closes under the 7680, the bearish targets will be activated. The invalidation level remains above 7,803 pts.


 

In the same way, the DAX remains with a bearish bias short term, selling positions will activate only if the price breaks down and closes below 12,700 pts, with a profit target at 12,500 pts, and the potential extensions to deeper falls to 12,300 and 11,900 pts. Invalidation level remains above 13,102 pts.


Categories
Forex Market Analysis

Daily Market Update: Euro Strength, G7 Summit, Switzerland CPI Rose

 

News Commentary

 

 

The Euro strengthened on rising bets that the European Central Bank (ECB) may soon announce it will start shooting off its massive bond purchase program.

 

News Commentary

 

 

The Euro strengthened on rising bets that the European Central Bank (ECB) may soon announce it will start shooting off its massive bond purchase program.

 

News Commentary

 

 

The Euro strengthened on rising bets that the European Central Bank (ECB) may soon announce it will start shooting off its massive bond purchase program.

The central bank’s chief economist Peter Praet, a close ally of President Mario Draghi, said the ECB would discuss next week whether to end bond purchases later this year.

Data indicated that Switzerland’s consumer price index (CPI) rose by 0.4% on a monthly basis in May, more than the 0.3% expected.

On other hand, Japanese Prime Minister Shinzo Abe was set to meet with U.S. President Donald Trump on Thursday and Friday at the White House to discuss a planned U.S. summit with North Korean leader Kim Jong Un next week.

The Federal Reserve is widely expected to raise interest rates for the second time this year at their next meeting on Wednesday.

But many investors are cautions on making big bets due to uncertainties over trade tensions, given U.S. President Donald Trump looks set to clash with other Group of Seven leaders at their weekend summit in Canada.

On the other hand, Mexico announced on Wednesday that it was imposing $3 billion in tariffs on U.S. imports in response to the latter’s triggering duties on steel and aluminium last Thursday.

 

Chart Analysis

 

 

US INDEX

On the daily chart, the price had successfully broken the ascending trend from the high of 2017, along with the resistance level to eventually reach the key resistance 95.15, to then bounce back from there. The price shaped a reversal pattern (wedge) which closed with a break beneath it.

With divergence in RSI, the price is expected to have a correction to the key support at 92.6 which is located at the broken trend too.



 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106.9.

So, any bounce now with price action will enhance the down run.



 

AUD/JPY

On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.

The price has now entered the red resistance area with a possible bounce.

Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one.

So, any bounce now with price action will push the price to fall.

.

Categories
Forex Market Analysis

Forex and Indices – Daily Update – June 06th, 2018

Hot Topics:

US Trade Balance Falls.
Euro raises supported by ending bonds debate.
European Indices Move Sideways.

US Trade Balance Falls

The US Trade Balance deficit falls in April to

Hot Topics:

US Trade Balance Falls.
Euro raises supported by ending bonds debate.
European Indices Move Sideways.

US Trade Balance Falls

The US Trade Balance deficit falls in April to

Hot Topics:

  • US Trade Balance Falls.
  • Euro raises supported by ending bonds debate.
  • European Indices Move Sideways.

US Trade Balance Falls

The US Trade Balance deficit falls in April to the lowest level for seven months, boosted by the shipments of industrial materials and soybeans.

GBPUSD continues moving higher, aided by the weakness in the Dollar Index. For the coming sessions, we expect that the price makes a bearish connector, probably in the 1.348 zone before it sees new higher highs. Invalidation level is at 1.3254.

Today Forex Market Analysis


The USDCHF pair still moves sideways above the bullish long-term trendline. If the price breaks down the trendline, we expect more dips. In the first instance to the target should be 0.9783; in the second instance, the next support is 0.9725. Invalidation Level is 0.9983.



Euro Raises Supported by Ending Bonds Debate

In the next week, the ECB could start to debate the end of their bonds buying said Peter Praet, the ECB chief economist. This is not the first signal of the QE ending, on May 29th, the ECB member Sabine Lautenschlaeger noted that “June might be the month to decide once and for all to gradually end net asset purchases by the end of this year.”

EURUSD continued rising after the flag breakout and supported by the macroeconomic data. The next resistance levels are 1.1889, 1.19635 and 1.2102. Invalidation level is updated to 1.1616.



EURJPY continues its rally that started on May 29th when it tested the support 124.621. The first corrective structure it developed was brief, this move makes us suspect that the rally continuation could lead to the 132 to 133 area. In the short-term, the cross could see the 130.270 level for bringing steps to a consolidation structure before it continues the bullish cycle. Invalidation level is 126.330.



EURNZD is making a bullish connector inside a bearish major degree structure. Our vision is that the price could visit the area between the 38.2% to 50% of Fibonacci Retracement before it continues its downtrend. In the short-term, the price made a breakout of the 1.6713 level; this move could lead the price to areas between 1.6866 as first resistance and 1.6947 as the second resistance. Invalidation level is below 1.66.



European Indices Move Sideways

The FTSE 100 is moving in a range between 7,680 and 7,720, expecting more volatility. The price could make a limited high completing an A-B-C pattern before it continues the bearish cycle.




The DAX 30 is running sidelong but could complete three waves move in the zone between 12,946 to 13,014 pts before it continues the bearish sequence started on May 23rd, with the bearish target in the 12,528 pts area. If the price plunges below 12,386, the DAX could complete the bearish cycle near to the 12,000 pts. Invalidation level is updated to 13,102.7 pts. In case that price breaks above this level, the next bullish target is 13,250 pts.



Categories
Forex Market Analysis

Today’s Canadian Data Disappoints – But Only Slightly

Canada’s merchandise trade deficit narrowed to CAD 1.9 billion in April of 2018 from a downwardly revised CAD 3.9 billion in March and well below market expectations of a CAD

Canada’s merchandise trade deficit narrowed to CAD 1.9 billion in April of 2018 from a downwardly revised CAD 3.9 billion in March and well below market expectations of a CAD

Canada’s merchandise trade deficit narrowed to CAD 1.9 billion in April of 2018 from a downwardly revised CAD 3.9 billion in March and well below market expectations of a CAD 3.4 billion gap.

Exports increased 1.6 percent, boosted by higher sales of metal and non-metallic mineral products, consumer goods and energy products.

Meantime, imports declined 2.5 percent, after reaching a record high in March, mainly due to lower purchases of motor vehicles and parts and consumer goods.

FX market:-

USDCAD rose 27 pips on the release wiping out some modest loonie gains, whilst popping the pair to just above the 1.29 handle.

 

Categories
Forex Market Analysis

Daily Market Update: Raised GDP in Australia, NAFTA Pressures the Canadian, ECB Next Move

 

News Commentary

 

 

The Australian dollar was supported by GDP growth numbers, which rose 1% in the first quarter of 2018, beating the estimated 0.8%. On an annualised

 

News Commentary

 

 

The Australian dollar was supported by GDP growth numbers, which rose 1% in the first quarter of 2018, beating the estimated 0.8%. On an annualised

 

News Commentary

 

 

The Australian dollar was supported by GDP growth numbers, which rose 1% in the first quarter of 2018, beating the estimated 0.8%. On an annualised basis, growth was 3.1%, above both the expected 2.8% and the previous quarter’s 2.4% gain.

Trade talks between the U.S. and China are ongoing. China offered to increase the buying of U.S. goods by $25 billion this year which grabbed some attention. The reports said China would step up purchases of crude oil, coal and farm products.

The Canadian dollar came under renewed pressure after White House economic adviser, Larry Kudlow, said on Tuesday that President Donald Trump is considering holding separate talks with Canada and Mexico.

That added fuel to the speculation that the United States could dispose of the North American Free Trade Agreement (NAFTA).

All eyes will be on the Canadian trade balance at 12:30 GMT with a forecast of -3.4B.

Some reports said that at its next policy meeting this month, the ECB could declare on when its quantitative easing program would end.

“The market will start to focus on the ECB from now on. Politics in Italy and Spain will play second fiddle as we now have new governments in both countries,” said Kazushige Kaida, head of foreign exchange at State Street Bank.

 

Chart Analysis

 

USD/JPY

On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.

The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.

As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106.9.

So, any bounce now with price action will enhance the down run.



 

AUD/JPY

On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.

The price now has entered the red resistance area with a possible bounce.

Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one

So, any bounce now with price action will push the price to fall.



 

AUD/NZD

On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.

The price has already made its retracement as we expected it too.

Bouncing from the support zone and the uptrend from the low of April, and the broken descending trend from the high of 2017, the price is supposed to continue its bullish movement up to the 1.1045 level.



 

 

Categories
Forex Market Analysis

Forex and Indices – Daily Update – June 05th, 2018

FOREX MARKET NEWS AND ANALYSIS

Hot Topics: 

  • U.K. PMI Services helped the Pound Group to Show Reversal Signals.
  • Main Pairs Against the US Dollar Keeps Consolidating.
  • European Indices Close Lower.

U.K. PMI Services helped the Pound Group to Show Reversal Signals.

PMI Services in May reached 54 pts, the highest level for three months. After the data release, GBPUSD raised to 1.34 level. Now we expect a corrective move before a new bullish cycle. Invalidation level remains at 1.32544.


 

As we expected in our last Daily Update, GBPAUD made a bullish move from the second weekly support to the weekly pivot level direction. Now after the impulsive move, we expect that the price could make a consolidation move as a flag pattern before proceeding with its previous movement.


 

GBPNZD is making a potential bottom structure if the breakout of the 1.91286 level activates the figure, with the profit target at 1.93377. We are surveilling the 1.9005 level as Control Level.


 

Main Pairs Against the US Dollar Keep Consolidating.

The common currency still is developing a consolidation structure after the impulsive move started in the previous week. RSI has found support at the 41.69 level which makes us foresee a new clue for the bullish reversal move that could be starting.


The inversely correlated currency with the Euro and Swiss Franc is also making a sideways consolidating structure. We expect more declines for this pair; our first bearish target is 0.9815, the second target is 09783 level. Invalidation level is 0.9983.


 

European Indices Close Lower.

The FTSE 100 broke down the ascending flag pattern in the blue box. The invalidation level remains at 7,803 pts. In the same way, the RSI has broken down its ascending flag pattern. The British index could visit the 7,500 level, or if it moves below this level, the FTSE could make a second leg down before a new bullish cycle.


 

DAX 30 has made the same breakdown in the ascending wedge pattern. RSI also has broken down its ascending wedge. The first bearish target is 12,528. In case that price falls below 12,386, the next bearish targets are 12,125 and 11,990.


 

Categories
Forex Market Analysis

GBPUSD & EURUSD Reversal Based On Gann’s 49-Day Cycle

 

Most people associate Gann’s work with angles and the Square of 9. What most people are not aware of is his day counts and specific time cycles, which are arguably more important than his market geometry. One of the most important cycles he discussed was the 45-day cycle and the 49-day cycle. The number 7 is very important in Gann analysis, and 49 days is 7 days x 7 = 7 weeks. He called this the ‘Death Zone’ – a cycle which ends trends and blow-off moves. Based solely on this cycle alone, we can predict a strong corrective move.

Categories
Forex Market Analysis

Daily Market Update: RBA Left Rate Unchanged, Great Britain Services PMI Rose

 

News Commentary

 

Sterling

Sterling was boosted by data showing that the British economy is exhibiting signs of recovering from its recent slowdown, reviving expectations that the Bank of England might raise interest rates in August. Services PMI rose to 54.0, higher than the expected 52.9.

RBA

The RBA Board decided to leave the cash rate unchanged at 1.50%.

“The recent data on the Australian economy has been consistent with the Bank’s central forecast for GDP growth to pick up, to average a bit above 3% in 2018 and 2019. Business conditions are positive and non-mining business investment is increasing. Higher levels of public infrastructure investment are also supporting the economy. Stronger growth in exports is expected. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly, and debt levels are high” declared media section of the RBA.

US

All eyes will be on the US ISM Non-Manufacturing PMI at 02:00 GMT with a forecast of 57.9.

 

 Chart Analysis

 

 

US INDEX

On the daily chart, the price had successfully broken the ascending trend from the high of 2017, along with the resistance level to eventually reach the key resistance 95.15 to bounce back from there. The price shaped a reversal pattern (wedge) which closed with a break beneath it.

With divergence in RSI, the price is expected to have a correction to the key support at 92.6 which is located at the broken trend too.

 


 

USD/CAD

On the daily chart, as expected, the price made its way into the resistance zone of 1.289-1.298, almost reaching the key resistance at 1.309, with an approach from the descending trend line starting from the high of 2015, and the upper edge of the horn pattern.

The price has already bounced beneath the key resistance and the resistance zone and got back above it again, but it couldn’t go much further to form a pinbar, to take the price firstly to the support level at 1.274.


 

AUD/USD

On the daily chart, the price had a false break beneath the support zone 0.75-0.7535 with a pin bar. That enhances the AB=CD harmonic pattern, with breaking a descending channel. The pair rose with an engulfing candle above the support zone.

Along with divergence in RSI, the price is ready for the next move up to 0.774 which is a level with a combination of the lower trend line from the high of 2018 and the broken uptrend.