Tag: audusd

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Forex Elliott Wave Forex Market Analysis

AUDUSD Consolidates its Gains Expecting the US Employment Data Ahead

The price of AUDUSD reached a fresh yearly high at 0.74496 on the Thursday trading session expecting the last employment data release of the year for the US labor market corresponding to November. 

(Source: tradingeconomics.com)

Technical Overview

This year, as illustrated in the previous chart, Australia’s unemployment rate peaked at a record high of 14.7% in April, mainly boosted by the coronavirus lockdown. In this context, the analysts’ consensus expects the unemployment to drop to 6.8% for November, from 6.9% reported last October.

The mid-term Elliott wave perspective displayed in the 12-hour chart below reveals the upward progression in an incomplete five-wave sequence of Minor degree labeled in green. This bullish impulsive move began on March 18th when the Aussie found fresh buyers at 0.55063.

The previous chart also shows the Aussie’s advance in a third extended wave, suggesting that the price action could be moving in its fourth wave in green, still in development. 

This scenario considers that the Aussie moves in its internal wave (c) of Minuette degree labeled in blue, developing an ending diagonal pattern. Likewise, the wave of the upper degree corresponding to wave ((b)) of Minute degree identified in black should correspond to an expanded flat pattern, and the price should realize a new decline,

The alternative count considers the advance in the fifth wave of Minor degree in green is developing an internal ending diagonal pattern. In this case, the Aussie should start a decline corresponding to wave A in green.

Technical Outlook

The short-term Elliott wave for AUDUSD exposed in its 4-hour chart shows the advance in an ending diagonal pattern, which looks developing its fifth wave of Subminuette degree labeled in green.

Although the ending diagonal pattern suggests completing the fifth wave or wave (c), the Aussie must confirm its completion through the breakdown of its base-line that connects the waves ii and iv, in green. Also, the price should confirm the close below the intraday demand zone between 0.73492 and 0.73571.

Finally, if the price confirms its downward correction, the potential target area for this movement is from 0.7265 and 0.7144. If the area fails to hold, and the bearish pressure extends this downward movement, the Aussie could visit the base of its sideways channel on the psychologically key level of 0.70.

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Forex Elliott Wave Forex Market Analysis

Is AUDUSD Turning Bearish?

In our previous technical analysis of the AUDUSD pair, we mentioned the potential corrective formation that was developing. In particular, we warned about the progress of an incomplete fourth wave of Minute degree identified in black, in which the pair was advancing on the wave (b) of Minutette degree in blue.

In our previous technical analysis of the AUDUSD pair, we mentioned the potential corrective formation that was developing. In particular, we warned about the progress of an incomplete fourth wave of Minute degree identified in black, in which the pair was advancing on the wave (b) of Minutette degree in blue.

In our previous technical analysis of the AUDUSD pair, we mentioned the potential corrective formation that was developing. In particular, we warned about the progress of an incomplete fourth wave of Minute degree identified in black, in which the pair was advancing on the wave (b) of Minutette degree in blue.

Technical Overview

As the previous chart shows, the price action seems moving in a mid-term sideways channel. This formation has been evolving since early September, when the price topped at 0.74134. In terms of the Elliott Wave theory, the figure shows the progression of a likely incomplete flat pattern (3-3-5).

In this context, the bearish rejection below September’s high of 0.74134 should confirm the end of wave (b), in blue, and the beginning of wave (c). Also, according to Elliott’s textbook, the coming wave (c) should follow an internal sequence subdivided into five waves.

The big picture of the AUDUSD pair currently reveals the gray box’s rejection suggested in our previous analysis. From here, the Aussie could start to decline in a five-wave sequence corresponding to the already mentioned wave (c) of Minuette degree, labeled in blue. 

Moreover, after wave (c) completes, the Australian currency should also end its wave ((iv)) of Minute degree in black and giving way to a new impulsive wave corresponding to the fifth wave of the same degree.

Short-term Technical Outlook

The AUDUSD price exposed in the next 2-hour chart reveals the completion of wave c of Subminuette degree identified in green, which topped at 0.74076 on November 30th, as the price action developed an ending diagonal pattern.

Once the price touched the psychological barrier of 0.74, the price began to decline, developing a breakdown below the baseline of the ending diagonal pattern, piercing the demand zone between 0.73492 and 1.73571, where the Aussie started a consolidation in the current trading session.

Considering that the pair started to consolidate, we expect an intraday sideways formation, likely a flag pattern. In this context, if the price breaks and closes below the baseline of this flag pattern, the AUDUSD could confirm the bearish continuation, which could make it drop to the next demand zone between 0.72654 and 0.72801.

Likewise, the price could extend its declines toward the next demand zone between 0.71449 and 0.71651. The movement, developed into a five-wave sequence, should complete the wave (c) of Minuette degree identified in blue, which, at the same time, could confirm the end of wave ((iv)) of Minute degree labeled in black, as we said earlier.

The invalidation level corresponding to this downward scenario is placed at the high of wave c, in green,  0.74076.

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Forex Market Analysis

AUDUSD Prepares for Employment Data Ahead

Market Overview

Market Overview

Market Overview

The AUDUSD pair during the overnight trading session will be driven by October’s employment data, to be released by the Australian Bureau of Statistics in a few hours. The analysts’ consensus expects an increase of 7.1% in the unemployment rate (YoY), representing a deterioration in the labor market conditions and a rise over the 6.9% reported in September.

The unemployment rate jumped from 5.1% in January to 7.5% in August during the current year. In this context, the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, confirmed the change in the focus from inflation rate to labor market conditions, which according to Governor Lowe, would face “an extended period of higher unemployment than we have become used to.”

On the other hand, the next 8-hour chart illustrates the market participants’ sentiment unveiled by the 90-day high and low range, where the price action looks testing the extreme bullish sentiment zone support located at 0.73009.

Likewise, the Aussie advances in a sideways movement. We can see that, after reaching its yearly high at 0.74135, the Aussie was dragged toward the extreme bearish sentiment zone, where the Australian currency bounced back to the extreme bullish sentiment.

Currently, the re-test of the recent intraday high at 0.7335 leads us to expect further upsides in the following sessions, likely to head to its early September highs at 0.7400.

Short-term Technical Outlook

The short-term Elliott Wave view exposed in the next 8-hour chart reveals the sideways advance in an incomplete flat pattern of Minuette degree identified in blue, which, according to the Elliott Wave theory, follows an internal sequence subdivided into 3-3-5. This corrective pattern in progress belongs to the fourth wave of Minute degree labeled in black.

The previous figure shows the current wave (b) in blue, which began on September 25th on 0.70059. The end of wave b of Subminuette degree identified in green pierced the origin of wave a. That leads us to consider the possibility that the current corrective formation could correspond to an expanded flat pattern. 

Finally, the current incomplete movement corresponding to wave c in green could advance to the potential target area between 0.7352 and 0.7465. If the price action doesn’t surpass the level 0.7352, then the price could test the sideways channel’s previous lows. 

The alternative scenario is if the price breaks above the 0.74134 level, climbing until 0.7465. Thar means the bullish pressure is strong. In that case, the next decline corresponding to wave c in blue will likely be weaker, ending in a region under 0.71, but no further than 0.70.

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Forex Signals

AUD/USD Bullish Channel Support Assie – Quick Update

The AUD/USD currency pair failed to extend its previous day bullish moves and took fresh offers near below the 0.7250 level mainly due to prevalent risk-off market sentiment, triggered by the worsening coronavirus (COVID-19) conditions in the U.S. and the U.K., which exerted some selling pressure on the perceived riskier Aussie and dragged the currency pair below 0.7000 marks. 

The AUD/USD currency pair failed to extend its previous day bullish moves and took fresh offers near below the 0.7250 level mainly due to prevalent risk-off market sentiment, triggered by the worsening coronavirus (COVID-19) conditions in the U.S. and the U.K., which exerted some selling pressure on the perceived riskier Aussie and dragged the currency pair below 0.7000 marks. 

AUD/USD Bullish Channel Support Assie – Quick Update

The AUD/USD currency pair failed to extend its previous day bullish moves and took fresh offers near below the 0.7250 level mainly due to prevalent risk-off market sentiment, triggered by the worsening coronavirus (COVID-19) conditions in the U.S. and the U.K., which exerted some selling pressure on the perceived riskier Aussie and dragged the currency pair below 0.7000 marks. 

However, the global risk sentiment was further pressured by the uncertainty surrounding the U.S. election, triggered by the rumors concerning the delay in U.S. election results until January. On the other hand, the broad-based U.S. dollar fresh strength, backed by the risk-off market sentiment, has also played its major role in undermining the currency pair. 

On the contrary, the currency pair’s losses were capped by the RBA’s monetary policy statement, in which the RBA explicitly calling out no further reduction in interest rates, which tend to underpin the Australian dollar and helps the currency pair to limit its deeper losses. At the moment, the AUD/USD currency pair is currently trading at 0.7255 and consolidating in the range between 0.7250 – 0.7285.

The market trading sentiment remains depressed during the early Asian trading session due to the second wave of coronavirus infections in the U.S. and the U.K. getting worse day by day. As per the latest report, there are 109,000 new COVID-19 cases from the U.S. so far. Thus, these figures marked the second day in a row with over 100,000 new cases after beating Wednesday’s daily record.

Additionally, the long-lasting inability to pass the U.S. fiscal package, as well as the jitters of the American presidential election also weighed on the risk sentiment, which eventually undermined the perceived riskier Australian dollar and contributed to the currency pair gains.

Despite Democratic candidate Joe Biden’s heavy role in the electoral votes, currently around 260 counts against 270 required, the U.S. election results still not showing any decision. However, the reason could be attributed to President Donald Trump’s lawsuits against multiple states. As per the latest report from Pennsylvania, Trump’s lead getting narrowed over the democratic rival Biden.

Despite this, the broad-based U.S. dollar succeeded in stopping its last session losses and took some fresh bids during Friday’s Asian session as investors started to prefer the safe-haven assets in the wake of the risk-off market sentiment. However, the U.S. dollar gains seem rather unaffected by the downbeat comments from the Fed Chair Jerome Powell. On the other hand, the U.S. dollar gains were also capped by the prevalent worries over the U.S. economic recovery amid the reappearance of coronavirus cases, which could be bad for both the U.S. and the global economy. However, the U.S. dollar gains become the key factor that kept the currency pair under pressure. Simultaneously, the U.S. Dollar Index that tracks the greenback against a basket of other currencies recovered to 92.698.

The Fed has performed as broadly expected, maintaining its benchmark interest rate at the 0%-0.25% range and its bond-buying program unchanged. In the meantime, he showed readiness to fulfill its pledge to support the U.S. economy, “promoting its maximum employment and price stability goals in times of the COVID-19 pandemic.

At home, the currency pair’s losses were capped by the RBA’s monetary policy statement, in which the RBA indicated for no further reduction in interest rates, which tend to underpin the Australian dollar and helps the currency pair to limit its deeper losses.

Moving ahead, the market traders will keep their eyes on the American employment numbers for October., USD price dynamics, and coronavirus headlines, which could give a fresh direction for the currency pair. In the meantime, the updates surrounding the U.S. elections could not lose their importance on the day.


Daily Support and Resistance

S1 0.6867

S2 0.7007

S3 0.7094

Pivot Point 0.7146

R1 0.7233

R2 0.7286

R3 0.7426

The AUD/USD traded distinctly bullish at the 0.7262 area, with a critical resistance of 0.7282 and 0.7335. In the daily chart, the AUD/USD has established a substantial buying candle, conferring substantial bullish sentiment among investors. While on the lower side, the support can be seen around the 0.7230 mark. Bullish sentiment rules the market. Good luck! 

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Forex Signals

AUD/USD Extends Its Early-Day Gains Over 0.7100 – Quick Trade Plan! 

The AUD/USD currency pair stopped its early-day gains and took some new offers near the 0.7100 level mainly due to the risk-off market sentiment, triggered by the intensification of tensions between the U.S. and China. Apart from this, the lack of clarity over the much-awaited coronavirus (COVID-19) stimulus bill also exerted downside pressure on the market trading tone, which tends to undermine the perceived riskier Australian dollar and contributed to the currency pair gains. 

The AUD/USD currency pair stopped its early-day gains and took some new offers near the 0.7100 level mainly due to the risk-off market sentiment, triggered by the intensification of tensions between the U.S. and China. Apart from this, the lack of clarity over the much-awaited coronavirus (COVID-19) stimulus bill also exerted downside pressure on the market trading tone, which tends to undermine the perceived riskier Australian dollar and contributed to the currency pair gains. 

The AUD/USD currency pair stopped its early-day gains and took some new offers near the 0.7100 level mainly due to the risk-off market sentiment, triggered by the intensification of tensions between the U.S. and China. Apart from this, the lack of clarity over the much-awaited coronavirus (COVID-19) stimulus bill also exerted downside pressure on the market trading tone, which tends to undermine the perceived riskier Australian dollar and contributed to the currency pair gains. 

Besides, the ever-increasing number of coronavirus cases across the globe also kept the market sentiment under pressure, which provided further discouragement to the currency pair. On the other hand, the broad-based U.S. dollar fresh strength, backed by the market risk-off tone, also weighed on the AUD/USD currency pair. The gains in the U.S. dollar were further bolstered by the U.S. Congress’ progress towards passing the latest $2.2 trillion fiscal stimulus bill. On the contrary, the better-than-expected China PMI data could be considered as one of the key factors that help the currency pair to limits its deeper losses. At the moment, the AUD/USD currency pair is currently trading at 0.7111 and consolidating in the range between 0.7100 – 0.7149.

As we all well aware that the market trading sentiment remains depressed during the Asian trading session as the concern about the second wave of coronavirus infections, leads the lockdown measures to control the outbreak in several countries, which kept the global risk sentiment under pressure. As per the latest report, the global death losses from the COVID-19 pandemic crossed 1 million earlier in the week, and case numbers continue to rise. Thus, the ever-increasing cases of coronavirus across the globe, destroying hopes of any V-shaped economic recovery. This, in turn, urged investors to invest their money into safe-haven assets instead of riskier assets like Aussie.

At the US-China front, the renewed concerns over worsening tensions between the world’s two largest economies over Beijing’s lesser than promised buying of the U.S. goods, which keeps threatening the Sino-American trade deal. This, in turn, exerted downside pressure on the market trading sentiment and contributed to the currency pair losses. Other than the US-China tussle, the tussle between the European and British policymakers over the Brexit trade deal kicked off yesterday.

Additionally, the lack of clarity over the much-awaited coronavirus (COVID-19) stimulus bill also keeps the investors cautious. But the hopes were earlier fueled by the U.S. Congress’ progress towards passing the latest $2.2 trillion fiscal stimulus bill proposed by Democrats on Monday after U.S. House of Representatives Speaker Nancy Pelosi stated that a deal with the Trump White House could be possible by this week.

At the USD front, the broad-based U.S. dollar succeeded to stop its previous session losses and took some fresh bid during the Asian session on the day as investors turned to the safe-haven in the wake of risk-off market sentiment. However, the progress in the U.S. dollar could be limited as the Investors are turning their focus to comments from President Trump and Democrat candidate Joe Biden However, the gains in the U.S. dollar kept the currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose by 0.05% to 93.977 by 12:53 AM ET (4:53 AM GMT). 

Across the pond, the market trading sentiment was unaffected by the better-than-expected China data, which showed that the recovery in manufacturing had maintained its momentum in the wake of the Covid-19 epidemic, with both the supply and demand surging. At the data front, China’s NBS or government Manufacturing PMI, which focuses on state-owned enterprises with easy access to credit, increased to 51.5 in September from 51 in August, surpassing the estimate of 51.2. 

In the meantime, the NBS Non-Manufacturing PMI, rose to 55.9 in September from 55.2 in August, exceeding the forecast of 52.1 by a significant margin. A reading above 50 indicates development in the economy. However, this positive data becomes the key factor that helps the currency pair to limit its deeper losses. Looking forward, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play an important role in managing the intraday momentum. Meanwhile, the FOMC Member Kashkari Speaks and FOMC Member Bowman Speaks will be key to watch on the day.


Daily Support and Resistance

S1 0.6878

S2 0.6959

S3 0.6994

Pivot Point 0.704

R1 0.7075

R2 0.7121

R3 0.7202

The AUD/USD has violated the double top resistance level of 0.7082 and the bullish crossover of this level makes 0.7082 a support for the AUD/USD pair. On the higher side, the AUD/USD pair may go after the next resistance area of 0.7115 level. Conversely, the bearish breakout of 0.7065 may drive further selling until 0.7014. Bullish bias seems stronger today. Check out a trading plan below…

Entry Price – Buy 0.71358

Stop Loss – 0.70958

Take Profit – 0.71758

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

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Forex Market Analysis

Daily F.X. Analysis, September 24 – Top Trade Setups In Forex – U.S. Jobless Claims in Focus! 

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

Economic Events to Watch Today  

 

 

AUD/USD – Daily Analysis

The AUD/USD failed to stop its previous losing streak and dropped to a 2-months low around below the mid-0.7000 level mainly due to the risk-off market sentiment, triggered by the renewed concern about the second wave of coronavirus infections, which continued weighing on investors sentiment and undermined the perceived riskier Australian dollar. The broad-based U.S. dollar strength, supported by the combination of factors, also dragged the currency down across the ocean. At the moment, the AUD/USD is currently trading at 0.7033 and consolidating in the range between 0.7029 – 0.7083. 

The traders seem cautious to place any strong position ahead of the testimony by the Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin, which will influence the USD price dynamics and provide some fresh direction to the currency pair.

Worries that the coronavirus pandemic’s resurgence could ruin the global economic recovery keeps the market trading sentiment under pressure and weakened the perceived riskier Australian dollar. As per the latest report, the coronavirus COVID-19 cases continue to climb in Europe, U.K., and the U.S. Whereas, some E.U. countries are now facing the starting of the second wave coinciding with the onset of the flu season. That was witnessed after the World Health Organization’s regional director for Europe said that “We have a dire situation unfolding before us,” H further added that Europe’s number of weekly infections was higher now than at the first peak in March. 

At the US-China front, the long-lasting tussle between the United States and China remains on the play as State Mike Pompeo took help from France, Germany, and the U.K. to reject China’s claims of the South China Sea at the United Nations (U.N.). This also exerted downside pressure on the market trading sentiment and contributed to the currency pair losses. 

As a result, the broad-based U.S. dollar succeeded in extending its previous session gains and remained well bid on the day as investors turned to the safe-haven in the wake risk-off market sentiment. However, the U.S. dollar gains could be short-lived or temporary due to the worries that the U.S.’s economic recovery could be stopped because of the reappearance of coronavirus cases. Besides this, the gains in the U.S. dollar was further boosted after the hawkish comments by Chicago Fed President Charles Evans, that further quantitative easing may not provide additional support to the U.S. economy. However, the gains in the U.S. dollar kept the currency pair under pressure. Whereas, the dollar index, which pits the dollar against a bucket of 6-major currencies, stood at 94.336 on the day, close to a nine-week high.

Moving Ahead, the traders will keep their eyes on the U.S. economic docket, which will show the release of Initial Weekly Jobless Claims and New Home Sales data. Apart from this, the U.S. Federal Reserve (Fed) Chair Jerome Powell’s testimony will also be closely observed. Across the ocean, the market risk sentiment and developments surrounding the coronavirus will not lose their importance. 

Daily Technical Levels

 Support      Resistance  

0.7035       0.7147  

 0.6996      0.7218  

 0.6924      0.7258  

  Pivot Point: 0.7107  

  

AUD/USD– Trading Tip

The stronger U.S. dollar has also driven sharp selling in the AUD/USD pair as it trades at 0.7042 level today. The AUD/USD pair has formed three black crows patterns on a daily timeframe, suggesting odds of selling bias in the AUD/USD. However, the AUD/USD has closed a Doji candle at 0.7042 level, and we may see some bullish correction over the 0.7001 support level until the next resistance level of 0.7098 and 0.7152 level. 

USD/CAD– Daily Analysis

The USD/CAD currency pair extended its previous session bullish bias and kept gaining positive traction around above 1.3400 level, mainly due to the broad-based U.S. dollar strength. The bullish tone around the U.S. dollar was sponsored by the concerns over rising COVID-19 cases and fears of renewed lockdown measures, which kept the market trading sentiment under pressure and supported the greenback’s status as the global reserve currency. 

On the flip side, the currency pair bullish bias could also be attributed to the weaker crude oil prices, which undermined the demand for the loonie, a commodity-linked currency, and contributed to the pair gains. Currently, the USD/CAD pair is trading at 1.3396 and consolidating in the range between 1.3370 – 1.3412.

As we already mentioned that the equity market had been flashing red since the Asian session started. The reason could be associated with the major negative catalysts. Be it the concerns about the second wave of coronavirus diseases or the fears of renewed lockdown measures, not to forget the long-lasting US-China tussle, all these factors weigh on the market trading sentiment and helping the U.S. dollar to put the safe-have bids. Apart from this, the slowdown in Europe, alongside concerns expressed by U.S. Federal Reserve officials over the U.S. economy, pushed the equity market down. 

The broad-based U.S. dollar keeps its gaining streak and still reporting gains on the day amid market risk-off sentiment. However, the U.S. dollar gains could be short-lived or temporary as worries that the U.S.’s economic recovery could be stopped amid the resurgence of the second wave of coronavirus cases. Besides this, the U.S. dollar gains were further boosted by the hawkish comments by Chicago Fed President Charles Evans, suggesting that further quantitative easing may not provide additional support to the U.S. economy. However, the gains in the U.S. dollar kept the currency pair higher. Whereas, the dollar index, which pits the dollar against a bucket of 6-major currencies, stood at 94.336 on the day, close to a nine-week high.

Across the pond, the crude oil prices failed to stop its previous session, losing streak and remained pressed around below the mid-$39.00 marks. Besides, the possibilities of Libya resuming oil exports added further bearish pressures around the crude oil prices. Thus, the declines in crude oil prices undermined demand for the commodity-linked currency the loonie and contributed to the currency pair gains. 

Looking forward, the traders will keep their eyes on the U.S. Federal Reserve (Fed) Chair Jerome Powell’s testimony. Furthermore, the U.S. Jobless Claims and Housing data will also be key to watch. Whereas, the updates concerning the US-China relations and the U.S. stimulus package will not lose their importance.

 Daily Technical Levels

Support      Resistance

  1.3323      1.3418  

  1.3260      1.3450  

  1.3228      1.3513  

  Pivot Point: 1.3355  

  

USD/CAD– Trading Tip

The USD/CAD is trading with a bullish bias at 1.3402 level, having violated the ascending triangle pattern at 1.349 level, and now it’s heading further higher until the next resistance level of 1.3460. The MACD and three white soldiers pattern is suggesting chances of bullish bias in the pair. In contrast, the pair has also crossed over 50 periods EMA at 1.3254 level. Today we should consider taking a buying trade over 1.3349 level to target the 1.3462 level. 

 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.362 after placing a high of 105.494 and a low of 104.847. The pair USD/JPY extended its gains on Wednesday for the third consecutive day and peaked six previous days. The rising USD/JPY prices were due to the strong rebound of the U.S. dollar’s safe-haven status and upbeat market data.

On Wednesday, the U.S. dollar was strong due to Fed officials’ more hawkish comments that raised the U.S. dollar and helped it regain its safe-haven status. The strong bullish momentum in the USD/JPY pair was also supported by Japan’s weak PMI data on Wednesday.

At 05:30 GMT, the Flash manufacturing PMI from Japan for the month of September declined to 47.3 against the projected 48.0 and weighed on the Japanese Yen. The figures showed that Japan’s manufacturing sector viewed contraction in September that was negative for local currency but positive for the USD/JPY pair. At 09:30 GMT, All Industrial Activity in September remained flat at 1.3% from Japan.

On the U.S. front, the Housing Price Index for July advanced to 1.0% against the expectations of 0.4% and supported the U.S. dollar that helped the gains of USD?JPY pair on Wednesday. At 18:45 GMT, the highly awaited Flash Manufacturing PMI also rose to 53.5 against the anticipated 52.5 and supported the greenback that added further gains in the USD/JPY pair. However, the Flash Services PMMI remained flat with a projection of 54.5.

Meanwhile, the President of the Federal Reserve Bank of Cleveland, Loretta Mester, said on Wednesday that the U.S. economy had rebounded significantly from the losses caused by the pandemic induced lockdowns. However, she also said that the recovery was still narrow and was not sustainable. The Fed Vice Chair Randal K. Quarles said that the coronavirus event was an enormous economic shock in the first half of 2020. He also said that the recovery was underway, but a full recovery was far off as the risks remain on the downside.

Apart from this, the Fed Chair Jerome Powell, in his testimony, faced many questions regarding the next round of stimulus package. He replied that the difference between Democrats & Republicans over the package’s size remains and caused a delay. Powell also urged more spending to help the economy recover from the pandemic crisis. All these developments raised the U.S. dollar prices due to its safe-haven status and boosted the USD/JPY pair.

Moreover, the tensions between the U.S. and China also escalated after U.S. President Donald Trump blamed China and called for holding it accountable for the global spread of coronavirus. In response to this, Chinese President XI Jinping accused Trump of lying and insulting the platform of the U.N. He also said that he had no intension of having a cold war with any country. These harsh comments from both sides also raised uncertainty and helped the U.S. dollar to gain traction due to safe-haven nature and post gains in the USD/JPY pair on Wednesday.

Daily Technical Levels

Support      Resistance

  105.0000      105.6100  

  104.6400      105.8600  

  104.3900      106.2100  

  Pivot Point: 105.2500  

  

USD/JPY – Trading Tips

The USD/JPY is trading with a bullish bias to trade at 105.460 level, and the series for EMA are now extending at 105.550 level. On the lower side, the support stays at 104.840 level. The MACD is also in support of bullish bias amid a stronger U.S. dollar and reduced safe-haven appeal. Bullish crossover of 105.550 level may drive more buying until 106.258. The idea is to stay bearish below the 105.470 level today. Let’s wait for Jobless Claims from the U.S. to determine further trends. Good luck! 

 

Categories
Forex Signals

AUDUSD Breaks Down an Ascending Wedge

Description

Description

Description

The AUDUSD pair, in its hourly chart, exposes a downward sequence after surpassed the psychological barrier of 0.74 on the Tuesday trading session. In the same way, the re-test and bounce of the U.S. Dollar index at 91.75, the lowest level since mid-May 2018, lead us to expect further movement in favor of the Greenback for the following trading sessions.

From the next chart, we observe a downward movement after the breakdown of an ascending wedge pattern. The consolidation below the last relevant swing at 0.7365(blue box) and the RSI oscillator moving below level 40 confirms the intraday bearish bias that should lead the coming sessions.

The movement below the level 0.7365 carries us to weight bearish positions expecting intraday profits at 0.7310, which corresponds to the last consolidation level of August 28th.

Our invalidation level is located at 0.7392, which corresponds to the first congestion zone after the first drop of the ascending wedge pattern.

Chart

Trading Plan Summary

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Categories
Forex Market Analysis

Aussie Moves Looking at 0.74 Barrier

Overview

Overview

Overview

The AUDUSD pair continues advancing toward the psychological barrier at 0.7400, which corresponds to its highest level since mid-August 2018. Currently, the Aussie exposes an extreme bullish sentiment, which rises near 5% (YTD) during this year. Nevertheless, the Australian currency could complete its third extended wave soon.

Market Sentiment Overview

During this year, the Australian currency has gained near 5%(YTD) recovering from the losses reported in the first quarter, dragged by the massive sell-off on the stock market between mid- February until mid-March 2020.

On the following chart, we observe the AUDUSD pair advancing in the 52-week high and low range’s extreme bullish sentiment. At the same time, we distinguish the price action toward the highest level reached by the Aussie on December 03rd, 2018, when the price topped at 0.74935.

The advance of the AUDUSD pair above the 60-day moving average confirms the up-up-up sentiment prevailing on the market participants.

Until now, we observe continuation signals of the current uptrend, which began on March 19th, when the price find a bottom at 0.55063. Since this level, the Aussie advanced over 33% to date.

Elliott Wave Outlook

On its 8-hour chart and log scale, the Australian currency exposes a bullish impulsive advance developed since the March 19th low at 0.55063, which remains intact after the biggest decline that carried it to lose over 21% in the first quarter of the year.

The AUDUSD pair rallies in an incomplete third wave of Minute degree, identified in black, which began once the Aussie bounced developing a leading diagonal pattern. According to the Elliott Wave Theory, the leading diagonal pattern tends to appear in waves 1 or A. At the same time, from the previous figure, we distinguish the price action progressing in an extended wave.

The incomplete third wave of Minute degree seems to advance in its fifth wave of Minuette degree labeled in blue, which at the same time, moves in its fifth wave of Sunminuette degree identified in green. This upward move could reach the 0.7495 level, where the Aussie could find selling pressure.

Once the third wave of Minute degree completes, the AUDUSD pair should start to develop a corrective sequence identified as Wave ((iv)). According to the Alternation principle and considering that the third wave is the extended movement, the fourth wave should be a triangle pattern or a complex corrective formation.

As for a potential target, the next decline could retrace to the level of 0.7065, which corresponds with the top of the third wave of Minuette degree in blue.

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Forex Signals

AUDUSD Breaks its Intraday Support

Description

Description

Description

The AUDUSD pair broke below the 0.72 intraday support on Friday session supported by the U.S. employment data release that boosted the U.S. Dollar Index from yearly lows levels.
The breakdown below the short-term ascending trendline added to the piercing under the intraday support at the level 0.72, leads us to expect more declines for the Aussie in the following sessions.

The pullback toward the previous intraday support zone located at 0.7195 could represent an opportunity to incorporate us into the intraday bearish trend with a potential profit target placed at 0.7150.

The invalidation level of our bearish scenario locates above the last swing at 0.7225.

Chart

Trading Plan Summary

  • Entry Level: 0.7195
  • Protective Stop: 0.7225
  • Profit Target: 0.7150
  • Risk/Reward Ratio: 1.5
  • Position Size: 0.01 lot per $1,000 in trading account.

Check out the latest trading signals on the Forex Academy App for your mobile phone from the Android and iOS App Store.

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Forex Signals

AUD/USD Double Top Breakout – Quick Update on Buy Signal!

Entry Price – Buy 0.70425

Entry Price – Buy 0.70425

Today in the early European trading session, the AUD/USD currency pair extended its previous session winning streak and rose above mid-0.7000 level while representing 0.45% gains on the day mainly due to the upbeat risk sentiment underpinned the Aussie currency and contributed to the currency pair gains. On the other hand, the currency pair also benefited from the broad-based U.S. dollar weakness triggered by the risk-on market sentiment. In the meantime, the upbeat RBA minutes also exerted some positive impact on the Aussie currency and contributed to the pair gains. On the negative side, Victoria’s recent figures marked a seventh consecutive day of 300+ new cases, which capped the currency pair further upside momentum.

However, the market’s upbeat performance could be attributed to the expectations for a fiscal rescue package in Europe and the U.S. It should be noted that the European Union (E.U.) leaders showed a consensus for a possible €1.8 trillion ($2.06 trillion) coronavirus spending package meant to reverse the coronavirus-induced slump in the European economies.

Apart from this, the encouraging data from Oxford University’s coronavirus vaccine and CanSino Biologics’ drug developed in coordination with China’s military research unit also favored the risk-on market sentiment. The British drugmaker AstraZeneca (LON: AZN) and Oxford University said on Monday that its COVID-19 vaccine induced an immune response in all study participants that received two doses. Whereas, the two other separate vaccines were also developed by Cansino Biologics (HK:6185) alongside China’s military research unit, and German biotech BioNTech (NASDAQ: BNTX) and U.S. drugmaker Pfizer (NYSE:NYSE: PFE).

As in result, the broad-based U.S. dollar flashed red and edged lower on the day. However, the losses in the U.S. dollar could be attributed to the uptick in the U.S. stock futures and kept the currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.16% to 95.623 by 10:09 AM ET (3:09 AM GMT).

In the absence of the major data/events on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. The MI Leading Index m/m and Retail Sales m/m will be key to watch.


The AUD/USD pair has already hit our take profit levels by the time I’m finishing this update. For now, we may have an opportunity to capture a quick sell position in Aussie below 0.7102 level with a target of 0.7065 level.

Entry Price – Buy 0.70425

Stop Loss – 0.70025

Take Profit – 0.70825

Risk to Reward – 1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

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Forex Signals

AUDUSD Breaks a Terminal EW Formation

Description

Description

Description

The AUDUSD pair in its hourly chart reveals a breakdown of an ascending diagonal pattern triggered by the RBA rate decision realized on the overnight trading session. 

The breakdown experienced by the Aussie exposes in the RSI oscillator the penetration below the level-40, which makes us conclude that the market bias changed from the bullish to bearish. 

Currently, in the hourly chart, we observe a recovery that could bring us the opportunity to incorporate us into the next bearish movement with a potential profit target in the area of the mid-term ascending trendline at 0.6857.

The invalidation level of our bearish outlook locates at 0.6992.

Chart

Trading Plan Summary

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Forex Market Analysis

AUD/USD Exhabits Bullish MACD & RSI Crossover – Quick Update on Signal! 

During Tuesday’s European trading session, the AUD/USD currency pair took a U-turn from early-day losses and drew some fresh bids around well above 0.6900 level mainly due to the risk-on market sentiment triggered after the uncertainty between the US-China over trade deal decreased which eventually underpinned the perceived risker Australian dollar and contributed to the currency pair gains. On the other hand, the gains in the currency pair were further bolstered by the broad-based US dollar selling bias in the wake of risk-on market sentiment. At the press time, the AUD/USD currency pair is currently trading at 0.6928 and consolidating in the range between 0.6858 and 0.6938.

During Tuesday’s European trading session, the AUD/USD currency pair took a U-turn from early-day losses and drew some fresh bids around well above 0.6900 level mainly due to the risk-on market sentiment triggered after the uncertainty between the US-China over trade deal decreased which eventually underpinned the perceived risker Australian dollar and contributed to the currency pair gains. On the other hand, the gains in the currency pair were further bolstered by the broad-based US dollar selling bias in the wake of risk-on market sentiment. At the press time, the AUD/USD currency pair is currently trading at 0.6928 and consolidating in the range between 0.6858 and 0.6938.

During Tuesday’s European trading session, the AUD/USD currency pair took a U-turn from early-day losses and drew some fresh bids around well above 0.6900 level mainly due to the risk-on market sentiment triggered after the uncertainty between the US-China over trade deal decreased which eventually underpinned the perceived risker Australian dollar and contributed to the currency pair gains. On the other hand, the gains in the currency pair were further bolstered by the broad-based US dollar selling bias in the wake of risk-on market sentiment. At the press time, the AUD/USD currency pair is currently trading at 0.6928 and consolidating in the range between 0.6858 and 0.6938.

It is worth recalling that the currency pair was dropped by over 60 pips in the earlier session and hit session’s low near 0.6860 mainly after White House advisor announced the end of US-China trade deal which initially triggered the risk-off market sentiment and pushed the currency pair lower.

Later, the Navarro explained properly that his comments were taken wrongly by the market and the phase-one agreement was on track. At the same time, the US President Donald Trump also tweeted that the agreement was “fully intact” which eventually turned out to be one of the key factors that kept a lid on any additional downbeat sentiment in the market and exerted some positive impact on the AUD/USD currency pair.

At the USD front, the broad-based US dollar failed to maintain its early day bullish moves and edged lower at least for now, mainly due to the fresh risk-on wave in the market sentiment triggered by the multiple reasons which gave a boost to the risk market and contributed to the greenback’s decline. However, the declines in the US dollar kept the currency higher. From a technical perspective, the currency AUD/USD pair now broke the hurdle above the 0.6900 round-figure marks and seems poised to build on the overnight strong recovery move from the 0.6800 neighborhood. 


Looking forward, the market traders will keep their eyes on the flash version of the US Manufacturing and Services PMI for June. Let me remind, this data will be followed by the release of New Home Sales data and the Richmond Manufacturing Index, which will leave an impact on the USD price dynamics and produce some short-term trading opportunities around the AUD/USD pair.

The AUD/USD is on a bullish run, heading toward 0.6978 level. The MACD and RSI both are exhibiting bullish crossover, and these are expected to lead the Aussie to a higher level until the level of 0.6975. Bullish trend continuation can lead to AUD/USD further higher until 0.7030 level. For now, here’s a quick trade idea.

 

Entry Price – Buy 0.6934

Stop Loss – 0.6894    

Take Profit – 0.6974

Risk to Reward – 1

Profit & Loss Per Standard Lot = -$400 / +$400

Profit & Loss Per Micro Lot = -$400/ +$40

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Forex Signals

AUDUSD Develops a Descending Channel

Description

Description

Description

The AUDUSD pair in its 2-hour chart exposes a corrective descending structure, which began once the Aussie topped at 0.7064 on June 18th. 

The Aussie Dollar started a rally on May 15th when the price found fresh buyers at 0.6402. The accelerated movement experienced by the pair looks like an extended wave. Once the price action topped at 0.7064, the AUDUSD pair started to move mostly downward, breaking below the accelerated trendline and fell until the mid-term trendline. After this decline, the recovery realized a lower high, which carries us to project a descending trendline. 

On the other hand, the RSI oscillator reflects a drop until level 22.18, corresponding to the breakdown that the Aussie developed once topped at 0.7064. The RSI reading leads us to observe that the price should be entering on a bearish cycle.

For the following trading sessions, we expect further declines, which could visit the area of 0.6682, corresponding to the next swing high developed by the AUDUSD pair. The invalidation level of our bearish scenario locates at 0.6927.

Chart

Trading Plan Summary

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Forex Signals

AUD/USD Breakout of Ascending Triangle Pattern – Is It Going After 0.6680?

The AUD/USD prices have exhibited sharp bullish bias during the European and the U.S. session in the wake of stronger Aussie. The AUD/USD pair is currently holding around 0.6609. Meanwhile, the minutes of the Reserve Bank of Australia revealed that the Central Bank admitted that the Australian economy was set to experience a contraction due to coronavirus pandemic. Bank also believed that fiscal and monetary measures would reduce the impact of the virus crisis on the economy. 

The AUD/USD prices have exhibited sharp bullish bias during the European and the U.S. session in the wake of stronger Aussie. The AUD/USD pair is currently holding around 0.6609. Meanwhile, the minutes of the Reserve Bank of Australia revealed that the Central Bank admitted that the Australian economy was set to experience a contraction due to coronavirus pandemic. Bank also believed that fiscal and monetary measures would reduce the impact of the virus crisis on the economy. 

The AUD/USD prices have exhibited sharp bullish bias during the European and the U.S. session in the wake of stronger Aussie. The AUD/USD pair is currently holding around 0.6609. Meanwhile, the minutes of the Reserve Bank of Australia revealed that the Central Bank admitted that the Australian economy was set to experience a contraction due to coronavirus pandemic. Bank also believed that fiscal and monetary measures would reduce the impact of the virus crisis on the economy. 

The Bank held its rates on a 0.25% level in its latest meeting and confirmed its intention to retain a 3-year bond yield of close to 0.25% by increasing government bond purchases.

RBA’s board members projected a 10% contraction in the Australian economy during H1 2020 and an overall decrease of 6% for the whole year. RBA said that the nature of shrinkage would be public health measures, and it would be easy & quick to recover from, in comparison of the contraction caused by financial factors. In the absence of any economic data from Australia, USD movement and updates about US-China & US-Australia relations drove this pair.


The technical outlook of the AUD/USD prices has violated 0.6563 resistance level, and bullish trend continuation can extend buying until 0.6688 level. The EMA and MACD are supporting an upward trend in the market, and these may lead Aussie further higher today. 

Entry Price – Buy 0.65804    

Stop Loss – 0.65207‬

Take Profit – 0.66404    

Risk to Reward – 1.00    

Profit & Loss Per Standard Lot = -$600/ +$600

Profit & Loss Per Micro Lot = -$60/ +$60

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Forex Signals

AUD/USD Violates Ascending Triangle – Let’s Enter on Retracement 

The AUD/USD pair is trading with a bullish bias on Wednesday, soaring from 0.6190 to 0.6220. Bullish bias in Aussie triggered over a better coronavirus scenario in China, especially after China lifted Wuhan city’s lockdown. Australia’s parliament passed an emergency A$130 billion stimulus package to combat the economy from the coronavirus pandemic, which is helping limit deeper declines and keep the pair above 0.6190 support.

The AUD/USD pair is trading with a bullish bias on Wednesday, soaring from 0.6190 to 0.6220. Bullish bias in Aussie triggered over a better coronavirus scenario in China, especially after China lifted Wuhan city’s lockdown. Australia’s parliament passed an emergency A$130 billion stimulus package to combat the economy from the coronavirus pandemic, which is helping limit deeper declines and keep the pair above 0.6190 support.

The AUD/USD pair is trading with a bullish bias on Wednesday, soaring from 0.6190 to 0.6220. Bullish bias in Aussie triggered over a better coronavirus scenario in China, especially after China lifted Wuhan city’s lockdown. Australia’s parliament passed an emergency A$130 billion stimulus package to combat the economy from the coronavirus pandemic, which is helping limit deeper declines and keep the pair above 0.6190 support.

All traders seem cautious due to the latest coronavirus situation and took bids in traditional safe-haven currency. This eventually helped the US dollar and turned out to be one of the key factors weighing on the perceived riskier currency the Aussie. Yesterday, the AUD/USD showed bearish bias, and the reason behind this decline in the Australian dollar was the fact that rating agency S&P reduced the outlook on the country’s AAA sovereign debt rating from stable to negative and expected the Australian economy to fall into a slowdown for the 1st-time since 30 years.

Looking forward, Wednesday’s release of the FOMC meeting minutes will be key to watch. The traders will keep their eyes on the COVID-19 clues for near-term direction. 

Technically, the AUD/USD has violated the resistance level of 0.6190, and the closing of candles above this level may drive bullish bias in the AUD/USD currency pair. Since the pair has entered the overbought zone, we may see it’s pricing showing a bearish retracement from 0.6225 level to 0.6190, and there we can open a bullish trade. 

On the 2 hour timeframe, the Aussie dollar has formed a bullish channel, while the AUD/USD 50 EMA also supports the bullish bias in the pair. Let’s place a buy limit at 0.61913 with a stop loss of around 0.61313 and take profit at 0.63023.

Buying Price: 0.61913

Take Profit  0.63023

Stop Loss 0.61313

Risk/Reward 1.85

Profit & Loss Per Standard Lot = -$600/ +$1110

Profit & Loss Per Micro Lot = -$60/ +$110

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Forex Market Analysis

Daily FX. Analysis, December 16 – Top Trade Setups In Forex – Eurozone’s PMI Figure Drives! 

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

Regarding U.S. economic data, retail sales rose 0.2% on month in November (below the +0.5% expected, +0.4% in October). Import prices increased 0.2% on month (as expected, -0.5% in October).

Later today, the Empire Manufacturing Index for December (5.0 expected) and the Markit US Manufacturing Purchasing Managers’ Index (52.6 expected) will be reported.

Economic Events to Watch Today

Let’s took at these fundamentals.

AUD/USD – Daily Analysis

The AUD/USD currency pair seen unchanged and consolidates in the narrow trading range between the 0.6875 – 0.6878. The currency pair remains depressed despite the fresh optimism over the Sino-US trade deal. As of writing, the Aussie currency pair is currently trading at 0.6875.

The AUD/USD currency pair picked up a buying near 0.6775 following the consumer spending data, which represented a rise in retail sales by 8% year-on-year during November, crossing the forecasted growth of 7.6% by a big range.

Industrial production rose 6.2% compared to an expected rise of 5%, marking an improvement from October’s 4.7%. Moreover, the People’s Bank of China has injected 300 billion Yuan into the system via a one-year medium-term lending facility. 

The AUD/USD currency pair did not succeed to gain on its early positive move and saw a dramatic intraday turnaround on Friday. Moreover, the uncertainty regarding the US President Donald Trump’s decision to cancel the December 15 tariff-hike on Chinese imports weighed heavily on the China-proxy Australian dollar, causing a drop in AUD/USD pair around 75 pips from an intraday high level of 0.6938 the highest since July 26.

The bullish sentiment remains weak, possibly due to the reports that Beijing is planning to lower its 2020 gross domestic product target to 6% from the current year’s 6.5%. 

Looking forward, the worries of a deeper recession in China in 2020 will likely continue to overshadow the phase one US-China trade deal and send the AUD lower.

Daily Support and Resistance  

  • S3 0.6759
  • S2 0.6824
  • S1 0.685

Pivot Point 0.6889

  • R1 0.6915
  • R2 0.6954
  • R3 0.7019

AUD/USD– Trading Tips

The AUD/USD pair is hanging around 0.6900, trading mostly bullish despite staying in the overbought zone. The traded higher further above the 0.6865 mark, the 61.8% Fibo retracement level of its November slide. In the 4-hour chart, the 20 SMA has hastened north over the bigger ones, all of them under the current mark. In contrast, the technical indicators lead to the north in overbought territory, without indications of bullish exhaustion. The rally is set to remain on a break over 0.6930, the next resistance.

GBP/USD– Daily Analysis

The GBP/USD currency pair still found on the bullish track and remain supportive mainly due to the United Kingdom Prime Minister Boris Johnson win who promised to leave the European Union (EU) swiftly before January 31, 2020. 

The GBP/USD currency pair traded bullish at 1.3388 and representing sizeable gains of +0.50%, having hit the high of 1.3398. By the way, the pair consolidates in the range between 1.3337 – 1.3398.

Prime Minister Johnson will welcome 109 new Conservative lawmakers to parliament and will repeat his promise to increase funding to the state health service on the day.

Moreover, the GBP/USD currency pair is also supported by the increased expectations of an improvement in the UK’s manufacturing sector activity, as the Markit Preliminary Manufacturing PMI for December is seen arriving at 49.4 against. 48.9 previous. The country’s Services PMI is expected to reach at 49.6 against. 49.3 last.

At the greenback front, markets still unexcited despite the details of the US-China Phase One trade deal. The US dollar index now tests the 97 handles, retreating from Friday’s highs of 97.24.

The GBP currency buyers will keep up the buying because the UK looks to clear the Brexit departure Agreement in the parliament before Christmas. In contrast, the Bank of England (BOE) may signal a willingness to change course on the monetary policy, with the United Kingdom election out of the way.             

Daily Support and Resistance

  • S3 1.3025
  • S2 1.32
  • S1 1.3267

Pivot Point 1.3374

  • R1 1.3441
  • R2 1.3548
  • R3 1.3722

GBP/USD– Trading Tip

The GBP/USD is presently consolidating around at1.3457, placing around 19-month high to 1.3515 during the US session yesterday. The UK election exit polls foretelling a big win for the incumbent Prime Minister Boris Johnson. 

The GBP/USD pair’s 14-day relative strength index (RSI) is now floating around 80.47. I must say it’s the highest mark since January 2018. An above 70-reading shows overbought situations. Consider capturing retracement below 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the bullish track and representing some moderate gains mainly due to fresh trade optimism between the United States and China. As of writing, the currency pair is currently trading at 109.38 and consolidates in the range of 109.31 – 109.44.

Notably, the currency pair had some good 2-way price moves on Friday and was impressed by the full market risk-on sentiment, which turned out to be one of the major reasons that affected the Japanese yen’s as a perceived safe-haven status. 

However, the USD/JPY pair quickly reversed an early decline to sub-109.00 levels and recovered to multi-month highs in the wake of optimism of UK Parliamentary elections.

However, the bullish momentum failed near the 109.70 regions after the disappointing release of the United States’ monthly retail sales data, which kept the greenback buyers on the defensive.]The uncertainty regarding the United States President Donald Trump’s decision to cancel the December 15 tariff-hike on Chinese imports further helped to the pair’s intraday pullback of around 35-40 pips.

It should be noted that the USD/JPY currency pair finally closed unchanged for the day but succeeded in recovering some positive traction. That might have been due to the United States Trade Representative Robert Lighthizer’s comments on Sunday, saying that the phase-one Sino-US trade deal is done. Under the agreement, China said it would increase agricultural purchases due to the US’ decision not to attempt a new round of tariffs.

Daily Support and Resistance

  • S3 108.42
  • S2 108.92
  • S1 109.13

Pivot Point 109.42

  • R1 109.63
  • R2 109.92
  • R3 110.42

USD/JPY – Trading Tips

The USD/JPY rose 0.8% to 109.40 as investors’ risk appetite grew. The pair is heading towards the double top resistance level of around 109.700. Below this, the USD/JPY is likely to show a bearish correction of up to 38.2% level, which stays at 109.200. 

On the higher side, the bullish breakout of USD/JPY can lead the Japanese pair towards 110.300. The MACD and RSI are in support of the bullish trend. 

All the best!

Categories
Forex Market Analysis

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

 

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

 

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

 

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

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

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

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

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

AUD/USD Technical Side

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


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

Daily Support and Resistance

S3 0.6712

S2 0.6752

S1 0.6773

Pivot Point 0.6792

R1 0.6812

R2 0.6831

R3 0.6871

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

Categories
Forex Market Analysis

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

On Monday, the market sentiment remains risk-on as traders weight the U.S. – China partial trade settlement. Traders, the exports of China to the United States declined 10.7% in terms

On Monday, the market sentiment remains risk-on as traders weight the U.S. – China partial trade settlement. Traders, the exports of China to the United States declined 10.7% in terms

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

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

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

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 

EUR/USD – Daily Analysis

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

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

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

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

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



Daily Support and Resistance

S3 1.091

S2 1.0972

S1 1.1005

Pivot Point 1.1034

R1 1.1067

R2 1.1096

R3 1.1158

EUR/USD – Trading Tips

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

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

 

AUD/USD– Daily Analysis

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

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

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

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

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



Daily Support and Resistance

S3 0.6712

S2 0.6752

S1 0.6773

Pivot Point 0.6792

R1 0.6812

R2 0.6831

R3 0.6871

AUD/USD– Trading Tips

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

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

 

GBP/USD – Daily Analysis

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

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

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

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

    


Daily Support and Resistance

S3 1.199

S2 1.2289

S1 1.2469

Pivot Point 1.2588

R1 1.2768

R2 1.2887

R3 1.3185

GBP/USD – Trading Tips

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

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

All the best! 

 

Categories
Forex Market Analysis

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

The Greenback retreated 0.2% from a two-year high to 99.15 on Tuesday, as data suggested that U.S. manufacturing activity contracted at the quickest pace in a decade. The euro gained

The Greenback retreated 0.2% from a two-year high to 99.15 on Tuesday, as data suggested that U.S. manufacturing activity contracted at the quickest pace in a decade. The euro gained

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

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

Economic Events to Watch Today

Let’s took at these fundamentals

 

EUR/USD – Daily Analysis

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

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

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

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



Daily Support and Resistance

S3 1.079

S2 1.0854

S1 1.0893

Pivot Point 1.0918

R1 1.0957

R2 1.0982

R3 1.1046

EUR/USD – Trading Tips

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

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

Daily Support and Resistance

S3 107.13

S2 107.56

S1 107.82

Pivot Point 108

R1 108.26

R2 108.44

R3 108.87

USD/JPY – Trading Tips

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

 

GBP/USD – Daily Analysis

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

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

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

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



Daily Support and Resistance    

S3 1.2008

S2 1.2143

S1 1.2217

Pivot Point 1.2279

R1 1.2352

R2 1.2414

R3 1.2549

GBP/USD – Trading Tips

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

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

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

All the best! 

 

Categories
Forex Market Analysis

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

On Tuesday, the U.S. dollar surged to trade near its highest in around two weeks against the Japanese yen. The release of economic event that is forecast to dispense the

On Tuesday, the U.S. dollar surged to trade near its highest in around two weeks against the Japanese yen. The release of economic event that is forecast to dispense the

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

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

Economic Events to Watch Today

Let’s took at these fundamentals

 

 

EUR/USD – Daily Analysis

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

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

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

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

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


Daily Support and Resistance

S3 1.0784

S2 1.0847

S1 1.0873

Pivot Point 1.091

R1 1.0936

R2 1.0974

R3 1.1037

EUR/USD – Trading Tips

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

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Support and Resistance

S3 107.13

S2 107.56

S1 107.82

Pivot Point 108

R1 108.26

R2 108.44

R3 108.87

USD/JPY – Trading Tips

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

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

AUD/USD – Daily Analysis

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

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

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

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

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


Daily Support and Resistance    

S3 0.6705

S2 0.6728

S1 0.6739

Pivot Point 0.6752

R1 0.6762

R2 0.6775

R3 0.6798

AUD/USD – Trading Tips

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

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

All the best for trading. 

 

Categories
Forex Market Analysis

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

Happy Monday, Folks! 

A stellar week for the U.S. dollar index had price halt just shy of YTD highs at 99.37. Up 0.67% and recording its second week in positive

Happy Monday, Folks! 

A stellar week for the U.S. dollar index had price halt just shy of YTD highs at 99.37. Up 0.67% and recording its second week in positive

Happy Monday, Folks! 

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

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

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

Economic Events to Watch Today

Let’s took at these fundamentals

 

EUR/USD – Daily Analysis

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

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

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

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

 


Daily Support and Resistance 

S3 1.0814

S2 1.0872

S1 1.0895

Pivot Point 1.0931

R1 1.0954

R2 1.099

R3 1.1049

 

EUR/USD – Trading Tips

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

USD/JPY – Daily Analysis

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

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

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

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


Daily Support and Resistance 

R3: 108.98

R2: 108.45

R1: 108.19

Pivot Point 107.92

S1: 107.66

S2: 107.4

S3: 106.87

USD/JPY – Trading Tips

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

AUD/USD – Daily Analysis

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

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

Daily Support and Resistance

S3 0.6688

S2 0.6723

S1 0.6736

Pivot Point 0.6759

R1 0.6772

R2 0.6794

R3 0.6829

AUD/USD – Trading Tips

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

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

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

All the best for trading. 

 

Categories
Forex Market Analysis

Daily: New Episode of Trade War, Brexit Negotiations, U.S & South Korean Summit

 

NEWS COMMENTARY

 

 

U.S. President Donald Trump and South Korean leader Moon Jae-in will meet in New York on Monday to discuss how to move forward on a formal declaration of the end of the Korean War. Moon met with North Korean leader Kim Jong Un last week. “Chairman Kim expressed his wish to finish complete denuclearization at an early date and focus on economic development,” Moon said of his meeting with the North Korean leader in Pyongyang.

The Organization of the Petroleum Exporting Countries and Russia pushed back against a call last week by U.S. President Donald Trump to lower prices. “I do not influence prices,” Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers. The group of oil producers is in discussion about rising output to counter falling Iranian supplies due to U.S. sanctions but made no formal recommendation for any additional supply boost at its Sunday meeting.

British Prime Minister Theresa May is under attack from several fronts over her Brexit plan. Members of her own party launched an alternative plan for leaving the European Union which would involve ditching her Chequers deal for a cleaner break with the bloc. The main opposition Labour Party are holding their annual conference where members will decide on whether to back a second referendum on the issue. There were also reports over the weekend of a possible snap election in November. Relations with the EU side, meanwhile, continue to be strained.

 

CHART ANALYSIS

 

OIL

Last week price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. As we expected, price is now “pin bar” reaching the main resistance zone with touching 72.45, we expect bullish momentum to build up towards the 74.45 level. and then wait for a bounce or a break to determine the next move



 

S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



 

AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

the price manages to stay above 0.7225,then it has the potential of reaching 0.733 and 0.745



 

USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

As we expected before that the price fell further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)

Now the price located at the key support of 1.289 besides the ascending trend line from the low of 2017. so, any bounce here would expose the price back to 1.312. and any break beneath these levels would continue the bearish bias to 1.272



 

USD/JPY

On the daily chart, as expected, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



 

Categories
Forex Market Analysis

Weekly: Trade Tensions Continue; Italy “Crisis”; No Brexit Deal; FED to Raise Rates

 

NEWS COMMENTARY

US

Bets on Fed fund futures suggest that traders have already priced in the near-certainty of the next rate hike to occur this coming week. Yet the dollar reversed course, after last week posting the second trough in a descending peak-trough succession.

Also in the U.S., traders will get the opportunity to react to the latest data on consumer confidence, durable goods and gross domestic product.

OIL

A steady rise in U.S. oil output will gather pace in the next five years, OPEC said on Sunday, predicting that demand for the producer group’s crude will decline despite a growing appetite for energy fed by global economic expansion.

“Declining demand for OPEC crude is a result of strong non-OPEC supply in the 2017–2023 period, most notably from U.S. tight oil,” the Organization of the Petroleum Exporting Countries said in its long-term world oil outlook.

“The U.S. remains by far the most important source of medium-term supply growth, contributing … two-thirds of new supply, driven by surging tight oil output,” it said

 

EUR & GBP

The near term drag for the  single currency continues to be around the Italian debt. Recently, on August 31 to be more precise, the 2-year yield gilt on Italian bonds was as high as 1.465%, before plummeting to 0.63% after the presentation of the Italian budget prospect. It’s of no coincidence that the Euro rally in September coincided with a reduction of perceived short-term sovereign credit risk around Italy. If concerns around Italy are going to impact the Euro, it will be via another rise in short-term yields. We believe that there is no such a thing as a “crisis” surrounding Italian Credit’s situation; however, “news” do have the potential to print short-lived volatility to the markets.

The return of ‘hard Brexit’ fears resulting from the “surprisingly” fractious Salzburg summit obviously hit the British Pound hard at the end of the week. After Teresa May suggested that there would be a no deal Brexit, which of course causes a lot of fear. She stated that there are still a couple of points in the negotiation that divide the UK and the EU, but the spillover impact to the Euro was apparent as well. If odds of a disruptive exit from the EU increase, the uncertainty surrounding the impact to trade could be enough of a reason for the European Central Bank to eventually delay its monetary policy timeline for late next year.

 

AUD & NZD

While an easing of trade tensions between the United States and China may have been the catalysts behind last week’s rally in the Aussie and Kiwi, the possibility of renewed concerns could take the currencies lower early this week. This is because late Friday, China announced it was cancelling its meeting with the U.S., and wouldn’t resume negotiations until after the November U.S. mid-term elections.

The Australian Dollar, a proxy of China-related trades as well as gauge of risk sentiment, climbed to a three-week high last week. It also produced its biggest weekly advance in 14 months. Additionally, S&P Global Ratings revised its outlook on triple-A rated Australia to stable from negative on Friday, providing the Aussie with a further lift.

In its monetary policy minutes, the Reserve Bank of Australia (RBA) warned on risks to its outlook from U.S.-China trade tensions and weak wages, while reaffirming its next interest rate move would likely be a hike.

The RBA also said “Significant tensions” around trade policy are a “material risk” to the global outlook. Unemployment is expected to decline gradually toward 5 percent and wage growth is expected to increase gradually as spare capacity in the labor market is absorbed.

Although the Fed is widely expected to raise its benchmark interest rate on its next meeting, Australian and New Zealand Dollar traders will be primarily focused on the direction the Fed will chart ahead. Traders essentially want to know how aggressive the Fed will be in increasing rates in the future.

The 25-basis point increase to the federal funds rate is already priced into the market. The hike will push the funds target to 2 percent to 2.25 percent, where it last was more than 10 years ago.

Since the rate hike has already been factored into the dollar and the currencies, traders will be paying more attention to any information that shows how much more monetary tightening will be necessary to keep the economy (and inflation) healthy.

In New Zealand, the focus will be on business confidence and the interest rate and monetary policy decisions by the Reserve Bank of New Zealand (RBNZ). The Reserve Bank is widely expected to leave its benchmark interest rate at 1.75%.

 

 

CHART ANALYSIS

 

 

OIL

Last week price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



 

S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



 

AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

the price manages to stay above 0.7225,then it has the potential of reaching 0.733 and 0.745



 

USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

As we expected before that the price fell further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)

Now the price located at the key support of 1.289 besides the ascending trend line from the low of 2017. so, any bounce here would expose the price back to 1.312. and any break beneath these levels would continue the bearish bias to 1.272



 

USD/JPY

On the daily chart, as expected, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



Categories
Forex Market Analysis

Daily: Trade War Fears Fading; Strong Kiwi on NZ GDP Increase; U.K Retail Sales Printing Upward Momentum on the Pound

 

NEWS COMMENTARY

 

 

Markets extended their rally on Thursday as U.S.-China trade war fears were set aside and investors focused on bullish macroeconomic and corporate news.

Global markets appear to be shrugging off concerns over an escalating trade war between the U.S. and China

The British Pound got a strong boost following the surprisingly positive UK monthly retail sales figures, coming in to show 0.3% m/m growth in August as against a contraction of 0.2% anticipated. This coupled with some optimistic Brexit comments by the European Commission President Juncker and Irish Foreign Minister Simon Coveney remained supportive of the strong bid surrounding the cross.

In Europe, attention will be focused on an informal summit of European Union leaders in Austria on Thursday. Brexit and immigration are set to be the main points of discussion. U.K. Prime Minister Theresa May, under pressure at home and abroad to achieve a workable Brexit deal, has called for “goodwill” and flexibility from her EU counterparts. The future of the Irish/Northern Irish border remains a stumbling block in talks.

The New Zealand dollar jumped to three-week highs after strong domestic GDP data showed the country’s economy grew at the fastest pace in two years in the second quarter.

The Swiss National Bank (SNB) is maintaining its expansionary monetary policy, thereby stabilising price developments and supporting economic activity. Interest on sight deposits at the SNB remains at –0.75% and the target range for the three-month Libor is unchanged at between –1.25% and –0.25%. The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. Since the monetary policy assessment of June 2018, the Swiss franc has appreciated noticeably, against the major currencies as well as against emerging market currencies. The Swiss franc is highly valued, and the situation on the foreign exchange market is still fragile. The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market as necessary remain essential in order to keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency.

 

CHART ANALYSIS

 

OIL

Last week price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

the price manages to stay above 0.7225,then it has the potential of reaching 0.733 and 0.745



USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

We expect price to fall further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)



USD/CHF

On the 4H chart, price is moving in a broadening wedge while breaking through the continuous Rectangle pattern at 0.9652. A correction has been already made to this level at the descending trend of the wedge. so, any reverse will take the price back to 0.956



USD/JPY

On the daily chart, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



 

Categories
Forex Market Analysis

Daily -UK CPI Gives Sterling (short-lived?) Upward Momentum; NAFTA Talks Continues; European Summit Ahead

 

NEWS COMMENTARY

Trade war

Investors continue expectant on new developments over the U.S.-China trade war after the Trump administration said on Monday it will implement new tariffs of 10% on $200 billion of Chinese products on Sept. 24, with the tariffs to go up to 25% in January. China retaliated by threatening to implement duties on about $60 billion worth U.S. goods, as previously announced; which is lower than expected. Unless new information hits the wires, markets seem to have fully priced in the current status on the Trade War theme.

Housing Data Ahead

The focus on Wednesday’s economic calendar will be on home construction coming 12:30 GMT.

Housing starts are expected to  risen by 5.8% to an annual rate of 1.235 million in August.

OIL

Oil traded slightly lower on Wednesday as stockpile data from the American Petroleum Institute showed a 1.25 million barrels increase in weekly crude inventories.

Traders are waiting for the weekly government data from the Energy Information Administration with expectations for a draw of 2.741 million barrels.

UK CPI

Meanwhile sterling increased after the consumer price index came in 2.7% higher than expected 2.4%, with core CPI 2.1% v. 1.8% forecasted,  which is regarded by market participants as yet another reason for the BoE and its MPC peers to to expand their monetary policy normalization plan further with a new rate increase anytime soon.

Later on, according to Times, UK Prime Minister Theresa May is set to reject the improved offer by Chief EU Negotiator Michel Barnier for a solution on the Irish border.  Maintaining an open border between the Republic of Ireland and Northern Ireland (part of the UK) has been one of the thorniest issues in the Brexit negotiations. This could make the recent Sterling rally fade.

The report from the times comes a short time before European leaders including May convene for an unofficial summit in Salzburg, Austria, with Brexit being high on the agenda.

NAFTA

U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland will meet later today in Washington as the two countries remain at odds over some key details on a deal. President Donald Trump has warned he would impose tariffs on Canada in the event of no deal being reached, while Congress remains unwilling to approve a Mexico-only pact.

 

 

CHART ANALYSIS

OIL

Last week price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

the price manages to stay above 0.7225,then it has the potential of reaching 0.733 and 0.745



USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

We expect price to fall further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)


USD/CHF

On the 4H chart, price is moving in a broadening wedge while breaking through the continuous Rectangle pattern at 0.9652. A correction has been already made to this level at the descending trend of the wedge. so, any reverse will take the price back to 0.956



USD/JPY

On the daily chart, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



 

Categories
Forex Market Analysis

Daily: Trade was Escalates; RBA Gives the Australian Dollar Upwards Momentum

NEWS COMMENTARY

 

 

U.S. President Donald Trump announced on Monday that the U.S. will put 10% tariffs on $200 billion in Chinese goods, which will go up to 25% at the end of the year.

Trump added that “if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.” “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly,” he said in the statement. “But, so far, China has been unwilling to change its practices.”

 

China said on Tuesday that it had no choice but to retaliate against new U.S. trade tariffs, raising the risk that U.S. President Donald Trump could soon impose duties on virtually all of the Chinese goods that America buys. The Chinese commerce ministry’s statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the U.S. action.

The brief statement gave no details on China’s plans, but Foreign Ministry spokesman Geng Shuang told a news briefing later that the U.S. steps have brought “new uncertainty” to talks between the two countries. “China has always emphasized that the only correct way to resolve the China-U.S. trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does not give the impression of sincerity or goodwill,” he added. Geng said he would not comment on “hypotheticals” such as what measures Beijing might consider apart from tariffs on U.S. products, saying only that details would be released at the appropriate time.

The Aussie rise in today’s session was caused by the upbeat approach used by the RBA in the Minutes published earlier today, i.e., while there was no strong case for near-term adjustment in policy, the next move in the lending rate is more likely to be an increase. Furthermore, despite of persistent risks related to abroad uncertainty and the slow recovery in labor wages, the bank explicitly vowed for a stronger AUD as supportive of domestic growth. However, upward momentum is likely to be temporary due to another key economic indicator, the CPI, which print was also released at -0.6% v.-0.7% and 2.0% prior; which lessens pressure on the RBA to push for a faster monetary policy normalization.

CHART ANALYSIS

 

OIL

Last week, price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



 

S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



 

AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

Consequently, if the price manages to stay above 0.7225, it has the potential of reaching 0.733 and 0.745.



 

USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

We expect price to fall further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)



 

USD/CHF

On the 4H chart, price is moving in a broadening wedge while breaking through the continuous Rectangle pattern at 0.9652. A correction may occur at this level again before digging down to the next support 0.956



 

USD/JPY

On the daily chart, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



 

Categories
Forex Educational Library

AUDUSD – Cycle Analysis and Forecast

AUDUSD – Cycle Analysis and Forecast

The AUDUSD pair in daily chart is moving bearish as an A-B-C pattern, from the highest level reached on January 25 (0.81358 level). The segment BC developed a bullish divergence, which alerts us to the exhaustion of the bearish movement, this divergence is not a reversal signal. On the last sequence of the wave C, the price tested two times the 0.73179 level (FE 141.4 level).



In the 4-hour chart, the wave between B and C has fallen in five waves from 0.79163 to 0.73105 on July 02. From this level, the Aussie started an internal bullish move which reached the 0.74838 level, surpassing the previous high 0.74438 in time and shape. Currently, the price is moving in a range which could be the start of a new bullish cycle.



For the coming sessions, we foresee new upsides which could be activated as long as the price bounce from the area between 0.73562 and 0.73265, with a potential profit target area between 0.75382 and 0.75956. The invalidation level of this scenario is 0.73105.



Categories
Forex Harmonic

Harmonic price levels based on Music Theory

One of the most mind-boggling books regarding technical analysis and W.D. Gann was Tony Plummer’s book, The Law of Vibration – The Revelation of William D. Gann. It is easily

One of the most mind-boggling books regarding technical analysis and W.D. Gann was Tony Plummer’s book, The Law of Vibration – The Revelation of William D. Gann. It is easily

One of the most mind-boggling books regarding technical analysis and W.D. Gann was Tony Plummer’s book, The Law of Vibration – The Revelation of William D. Gann. It is easily one of the most enthralling and contemporary works for any Gannyst out there. Without going into extreme detail of the book, I want to focus on one part of this book that I found particularly interesting: Harmonics in Music. Back in the day, yours truly was a double-major in both music education and music performance (I was a Euphonium player – also the Trombone and Tuba). Anyway – on to the awesomeness of this article.

I want to stress that in the book, the author does not tell you how to apply the information into your trading or how to apply it on a chart. I think that is an homage of sorts to Gann himself (Gann also was very ‘cryptic’ about how to use his methods).

But I’m pretty sure I figured it out.

The Law of Three and Middle C

The opening of Chapter 6 in Plummer’s book begins with a quote from P. D. Ouspensky: “A study of the seven-tone musical scale gives a very good foundation for understanding the cosmic of octaves.” Plummer writes that Western music is based on a series of notes centered around the Middle C (The middle note of C on a keyboard, labeled C4). The Middle-C vibrates at a rate of 256 cycles per second. And one octave above that is the next C, C5. The rate of vibration of C5 is double that of Middle-C: 512.

In music, a scale is made up of 8 notes. In Music Theory and Aural Theory, or if you’ve watched The Sound of Music, you’re probably familiar with the song Do Re Mi. Do Re Mi is called solfege, or tonic solfa. The words: Do, Re, Mi, Fa, So, La, Ti, and Do represent the eight notes in a scale. And each one of those notes has its own rate of vibration. Here’s the table:

musicalharmonics

I’ve spent considerable time studying not only Gann’s own work, but also the work of Michael Jenkins, Constance Brown, George Bayer, James Hyerczyk, and others. One of the things I’ve learned from these Gann experts’ work was Gann’s use of Harmonics, which seems to be a broad term for calculating important price levels. There are various methods used that generally come to the same value area. Some of those methods are Gann’s Square of 9, Square of 24, natural squared numbers and others. Probably one of the most popular methods from the 1990s was a system called Murray Math. Murray simplified the application of harmonic ranges in both time and price. It’s useful, but not as accurate.

I’ve used a number of methods to apply Gann’s harmonics, and Plummer’s ratios have probably been the most effective. There is a piece of software called Optuma by Market Analyst. They actually have a tool that creates exactly what I figured out on my own. So it was pretty damn cool to use that software and see that I had come across a solution and application all on my own and have it confirmed by software created by people way smarter than me.

How I applied it

Using the vibrational number of 256, it’s easy to double that value and then double again. So 256, 512, 1024, 2048, etc, etc etc. These numbers, for whatever reason, appear everywhere in science and nature. Now, you can use these numbers for any type of stock, futures contract, forex pair or cryptocurrency. Here are some examples. Notice how much these zones act as support and resistance and how often prices trade within these zones.

Chart Examples

AUDUSD

AUDUSD

This AUDUSD chart is from using Optuma by Market Analyst. The harmonic values are starting at the octave of 65536 to 131072. I converted the 131072 to 1.31072. 65536 was converted to 0.65536.

XAUUSD (Gold)

XAUUSD

EURUSD

EURUSD

BTCUSD

BTCUSD

ETHUSD

ETHUSD

LTCUSD

LTCUSD

The rest of the images above are from Tradingview. I created a simple indicator that will plot out the lines depending on division or multiple of 256 that you want to use. You simply add the number you wish to, and it will plot out a full Octave from Do to Do.

Categories
Forex Market Analysis

FOMC statement, Canadian growth, New Zealand data

 

news commentary

 

 

The meeting of the Federal Reserve’s will be the least surprising. They just raised interest rates in June; we know that the Fed probably won’t make any changes this month. However, the Fed will announce further tightening which is required because the labour market is healthy and economic activity is expanding at a solid rate. Inflation is on the rise, manufacturing and service-sector activity is accelerating so there’s no reason to postpone their plan to tighten again.

The weaker-than-expected Japan economic data are giving the bond prices a push higher. That movement has been triggered by the Bank of Japan decision to hold interest rate policy unchanged. While adding forward guidance that would maintain low-interest rates for an extended period. They also cut its inflation forecast.

 

Sources said that the White House was about to set higher tariffs on $200 billion in Chinese imports, maybe igniting a new round of trade conflicts.

Reports claim that President Donald Trump is thinking of putting tariffs of 25%, instead of 10%, in a statement that may come early on Wednesday.

 

Stronger-than-expected Canadian GDP growth led the Canadian dollar higher for the third day in a row. Besides Canada’s economy grew 0.5% in May

 

The New Zealand dollar failed to have a little breath because business confidence weakened, which followed by a decline in Q2 employment report.

 

 

chart analysis

 

 

US INDEX

On the daily chart, the price has bounced from the red resistance zone for the third time to shape the reversal triple top.

Price has recently formed another reversal pattern to assure the bearish bias with the wedge.

Followed by a break beneath an ascending trend on RSI, the index is settled down at the ascending trend line, if it’s broken, the price will have its way back to the support zone 93.2-92.6


 

 

AUD/USD

On the daily chart, the pair reached back the green support zone again to shape a double top pattern

Followed by divergence on RSI, our bullish view is still the same: if the price manages to still above the support area and the key level 0.7455, it will be heading towards the combination of levels of descending trend, ascending channel and resistance zone at 0.7655-0.774.


 

 

NZD/USD

On the daily chart, the price retested the green support zone 0.675-0.6695, followed by divergence in RSI.

An AB=CD harmonic pattern has been shaped to reinforce the bounce.

If the price could break above the key level at 0.6845, the price will be supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703 only if it manages to hold above the green zone


 

 

USD/CAD

On the daily chart,  the price has broken main support areas, as it closed beneath the key support 1.309, and beneath the ascending trend line

A wedge has been shaped and successfully confirmed after breaking it, besides a GARTLEY harmonic pattern to assure the bearish momentum

Followed by divergence on RSI, the price is expected to reach the next support 1.289


 

 

USD/JPY

On the daily chart, the price is located at a good long-buy position according to the support of 111.3, the retest of the broken descending trend, 23.6% Fibonacci level and the ascending channel.

Followed by engulfing candle, the price is expected to go further  back to the level 113.15


Categories
Forex Market Analysis

Central Banks meetings, China conditions to negotiate

 

news commentary

 

At the beginning of the week, investors have something of the calm before the storm as they brace for monetary events risk.

The Bank of Japan is expected to hold rates unchanged on Tuesday, the BoJ may carry the most influence when it announces its latest monetary policy decision. This is because several reports have indicated that the central bank is considering a decrease in its stimulus program.  a shift in this policy will not only lead to a spike in Japanese bond yields but it will also have a global effect that will lead to further tightening in credit conditions. However, the latest inflation report indicates that the BoJ might not make any significant changes on this front and will instead try to calm markets.

The Federal Reserve is also likely to leave rates unmoved when it announces its decision on Wednesday, with economists saying that recent comments from President Donald Trump will have no impact on policy and the Fed will continue sending the message that more rate hikes are on the way.

On Thursday, the Bank of England is expected to raise rates for the first time since November, But according to the recent fall in inflation and continued Brexit uncertainty, they might deliver a hike and hint that it’s the only one expected for 2018.

 

On another hand, Chinese Foreign Minister Wang Yi said his country would be willing to resume trade negotiations with the U.S. if the Trump administration “took a less combative” approach to talks.

President Trump said on Twitter yesterday that he would be willing to ‘shut down’ the government if Democrats do not support funding plans for his wall along the border with Mexico. The tweet came after a meeting last week in the White House between Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell to discuss how to avoid an Oct. 1 shutdown, a month before elections that will determine control of Congress.

 

 

chart analysis

 

 

US INDEX

On the daily chart, the price has bounced from the red resistance zone for the third time to shape the reversal triple top.

Price has recently formed another reversal pattern to assure the bearish bias with the wedge.

Followed by a break beneath an ascending trend on RSI, the index is settled down at the ascending trend line, if it’s broken, the price will have its way back to the support zone 93.2-92.6



 

 

AUD/USD

On the daily chart, the pair reached back the green support zone again to shape a double top pattern

Followed by divergence on RSI, our bullish view is still the same: if the price manages to still above the support area and the key level 0.7455, it will be heading towards the combination of levels of descending trend, ascending channel and resistance zone at 0.7655-0.774.



 

 

NZD/USD

On the daily chart, the price retested the green support zone 0.675-0.6695, followed by divergence in RSI.

An AB=CD harmonic pattern has been shaped to reinforce the bounce.

If the price could break above the key level at 0.6845, the price will be supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703 only if it manages to hold above the green zone



 

 

USD/CAD

On the daily chart,  the price has broken main support areas, as it closed beneath the key support 1.309, and beneath the ascending trend line

A wedge has been shaped and successfully confirmed after breaking it, besides a GARTLEY harmonic pattern to assure the bearish momentum

Followed by divergence on RSI, the price is expected to reach the next support 1.289



 

USD/JPY

On the daily chart, the price is located at a good long-buy position according to the support of 111.3, the retest of the broken descending trend, 23.6% Fibonacci level and the ascending channel.

All these factors may boost the price further to go back to the level 113.15 and more if the price witnesses a suitable price action from these levels.



 

Categories
Forex Market Analysis

Daily Market Update: EU Data Remains Stable, PBoC Efforts to Support Yuan

 

 News Commentary

 

European data was still steady even after sentiment remained cautious with flash services PMI data easing slightly with 54.4, less than expected of 55.0. Meanwhile flash manufacturing PMI came positive with 55.1, more than expected of 54.7.

 

The Japanese yen cut most of its gains frustrating expectations about the Bank of Japan starting a fresh round of stimulus at its scheduled policy meeting next week.

Japan’s central bank is discussing changes to its interest-rate targets and stock-buying techniques, sending bond yields and the yen rocketing higher on Monday.

 

Risk appetite was mostly stable across markets after Beijing vowed to pursue a more ‘vigorous’ financial policy, stepping up efforts to support growth among growing economic struggle conditions.

 

 

 Chart Analysis

 

 

US INDEX

On the daily chart, the price has bounced from the red resistance zone for the third time to shape the reversal triple top.

Price has recently formed another reversal pattern to assure the bearish bias with the wedge.

Followed by a break beneath an ascending trend on RSI, the index is settled down at the ascending trend line, if it’s broken, the price will move its way back to the support zone 93.2-92.6.

 


 

USD/JPY

The pair had broken before the key level at 111.3 along with a descending trend line from the high of 2015, to reach the resistance of 113.15 to then bounce from there as a retracement.

Now, the price is located at a good long-buy position according to;- the support of 111.3, the retest of the broken descending trend, 23.6% Fibonacci level and the ascending channel.

All these factors may boost the price further to go back to the level 113.15 and more if the price witnesses a suitable price action from these levels.

 


 

AUD/USD

On the daily chart, the pair reached back the green support zone again to shape a double top pattern.

Followed by divergence on RSI, our bullish view is still the same: if the price manages to stay above the support area and the key level 0.7455, it will be heading towards the combination of levels of descending trend, ascending channel and resistance zone at 0.7655-0.774.

 


 

NZD/USD

On the daily chart, the price retested the green support zone 0.675-0.6695, followed by divergence in RSI.

An AB=CD harmonic pattern has been shaped to reinforce the bounce.

If the price could break above the key level at 0.6845, the price will be supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703 only if it manages to hold above the green zone.

 


 

AUD/JPY

On the daily chart, as we expected, the price has bounced from the red resistance zone at 83.9-85.95 with an engulfing bar.

The price is expected to continue its reversal to keep going in its sideways movement to the support zone 81.2-80.5.

 


 

CHF/JPY

On the daily chart, as we expected, the price has bounced according to the key levels that the price has recently reached the resistance zone at 112.85-113.05, reversal wedge, moving average 200 and 50% Fibonacci.

Followed by AB=CD harmonic pattern, if the price could break beneath the key level 111.9, the price is expected to go down to 111.9 then 110.3.


 

Categories
Forex Market Analysis

Daily Market Update: Trump Comments on Rate Hikes, Japan & Canada CPI

 

News Commentary

 

The dollar reversed against the currency basket on Thursday after U.S. President Trump said he was “not happy” about the Federal Reserve rate hikes but the downside was limited amid optimism over the U.S. economy.

“I’m not happy about it,” President Donald Trump said about interest-rate increases during an interview with CNBC Thursday, claiming that “higher rates put the United States at a disadvantage.” Trump insisted, but, he also sees that “Fed do what they feel is best.”

However, Powell earlier this week said gradual interest rate hikes would be “the best way forward” for the economy, citing stronger labour markets, and inflation that had met the Fed’s 2% objective.

 

The US and China are continuing a full-blown trade war. The People’s Bank of China (PBOC) is increasingly favouring a weaker Yuan after setting the Yuan reference rate at 6.7671 versus previous day’s fix of 6.7066.

 

The Japanese Yen started Friday’s trading session slightly affected by the release of local inflation data. June’s national CPI was 0.7%, lower than forecasts of 0.8% and in line with May’s result. However, the Yen may rise as trade war tensions may increase risk aversion.

 

All eyes will be on Canadian CPI at 12:30 GMT with a forecast of 0.1% such as with June’s reading. Traders will follow the result to get any conclusion about soon rates hike.

 

 Chart Analysis

 

 

US INDEX

On the daily chart, the price has bounced from the red resistance zone for the third time to shape the reversal triple top.

The price has recently formed another reversal pattern to assure the bearish bias with the wedge.

Followed by a break beneath an ascending trend on RSI, the index is supposed to move its way back to the support zone of 93.2-92.6.



 

AUD/USD

On the daily chart, the pair went back to the green support zone again to shape a double top pattern.

Followed by divergence in RSI, our bullish view is still the same: if the price manages to still be above the support area, it will be heading towards the combination of levels of the descending trend, ascending channel and resistance zone at 0.7655-0.774.



 

NZD/USD

On the daily chart, the price retested the green support zone 0.675-0.6695, followed by divergence in RSI.

An AB=CD harmonic pattern has been shaped to reinforce the bounce.

The price is supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703, but only if it manages to hold above the green zone.



 

AUD/JPY

On the daily chart, as we expected, the price has bounced from the red resistance zone at 83.9-85.95 with engulfing bar.

The price is expected to continue its reverse to keep going in its sideways movement to the support zone 81.2-80.5.



 

CHF/JPY

On the daily chart, it’s obvious to recognise by the key levels that the price has recently reached the resistance zone at 112.85-113.05, reversal wedge, moving average 200 and 50% Fibonacci.

Followed by AB=CD harmonic pattern, the price is expected to go down to 111.9 then 110.3



 

Categories
Forex Market Analysis

Daily Market Update: Upbeat Data From Australia, UK CPI, Powell Set To Be Hawkish Again

 

 News Commentary

 

Fed Chairman Jerome Powell supported the Dollar by bullish comments, which affirmed expectations about the central bank’s possible interest rate moves this year.

In Congressional testimony on Tuesday and Wednesday, Powell said he believed the United States was in steady growth for years, and carefully played down the risks to the U.S. economy of an escalating trade conflict.

U.S. President Donald Trump’s top economic advisor, Larry Kudlow, said that he believed Chinese President Xi Jinping has blocked any progress on a deal to end the duelling in U.S. and Chinese tariffs.

“China could end U.S. tariffs by providing a more satisfactory approach” and “taking steps that other countries are also calling for”, Kudlow said.

 

The U.K. was pulled down yesterday on weak inflation data, with the CPI reading 2.4%, less than the expectation of 2.6%, causing market expectations for a BoE August rate hike to ease slightly from 77% to 68%

 

Earlier, the Australian economy added 50.9K jobs in June, better than the estimated forecast of 16.7K
More importantly, the full-time jobs rose by 41.2 K following a 20.6K drop registered in May. Meanwhile, the jobless rate came in at a seasonally adjusted rate of 5.4% as expected.

 

 

 Chart Analysis

 

 

US INDEX

On the daily chart, the price has returned to the red resistance zone with shaping before the reversal double top.

The price has formed another reversal pattern to assure the bearish bias with the wedge.

Followed by a break beneath an ascending trend on RSI, the index is supposed to make its way back to the support zone 93.2-92.6



 

AUD/USD

On the daily chart, the pair bounced back from the resistance 0.7455 to retest the green support zone again.

Followed by divergence on RSI, our bullish view is still the same: Heading towards the combination of levels of descending trend, ascending channel and resistance zone at 0.7655-0.774.



 

NZD/USD

On the daily chart, the price retested the green support zone 0.682-0.6775, followed by divergence in RSI.

An AB=CD harmonic pattern has been shaped to reinforce the bounce.

The price is supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703.



 

USD/CAD

On the daily chart, the price reached the support of 1.3085 with the ascending trend line from the low of April.

On the other hand, the price has shaped a GARTLEY harmonic pattern with a reversal wedge, bouncing from the 78.6% Fibonacci level, followed by a divergence in RSI.

So, If the price breaks above the resistance 1.3225, it would head back to 1.34.

If it breaks beneath the wedge and the support of 1.3085, it would head back to 1.289.



AUD/JPY

On the daily chart, as we expected before, the price has reached the red resistance zone at 83.9-85.95.

It’s a crucial area that if the price bounces back from, it will continue its sideways movement to the support zone 81.2-80.5.

If the price breaks above it, it will head new levels to the next resistance zone 85.5-85.95.



 

Categories
Forex Market Analysis

Daily Market Update: Fed Chair Powel To Testify, New Zealand CPI

 

 News Commentary

 

 

The dollar eased on Tuesday due to congressional testimony by Federal Reserve Chairman Jerome Powell which traders will examine for clues on the pace of U.S. interest rate rises and risks emanating from trade conflicts.

Powell will testify on the economy and monetary policy before the U.S. Senate Banking Committee at 14:00 GMT

He is expected to deliver an optimistic message on the outlook for growth and reassure the FED’s gradual monetary tightening policy but could face tough questions on how the FED would deal with an escalation in the global trade war.

Powell is supposed to begin two days of testimony on the economy and monetary policy later Tuesday when he appears before the U.S. Senate Banking Committee in Washington.

 

The NZ Q2 CPI data arrived at 0.4%, slightly lower than the 0.5% expected. The year on year data arrived as 1.5 % vs the expected 1.6%

Also, the UK average earning index came in as expected at 2.5%, the unemployment rate was stable with previous reading at 4.2%

 

 

 Chart Analysis

 

 

US INDEX

On the daily chart, the price has returned to the red resistance zone with shaping before the reversal double top.

The price has formed another reversal pattern to assure the bearish bias with the wedge.

Followed by a break beneath an ascending trend on RSI, the index is supposed to have its way back to the support zone 93.2-92.6.



 

AUD/USD

On the daily chart, the pair bounced back from the resistance 0.7455, to retest the green support zone again.

Followed by divergence on RSI, our bullish view is still the same: Heading towards the combination of levels of descending trend, ascending channel and resistance zone at 0.7655-0.774.



 

NZD/USD

On the daily chart, the price retested the green support zone 0.682-0.6775, followed by divergence in RSI.

An AB=CD harmonic pattern has been shaped to reinforce the bounce.

The price is supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703.



 

AUD/JPY

On the daily chart, as we expected before, the price has reached the red resistance zone at 83.9-85.95.

It’s a crucial area that if the price bounces back from, it will continue its sideways movement to the support zone 81.2-80.5.

If the price breaks above it, it will head new levels to the next resistance zone 85.5-85.95.



 

Categories
Forex Market Analysis

U.S CPI, NATO Meeting

 

News Commentary

 

Markets rose as investors pushed back trade concerns and looked ahead to earnings results.

Unemployment claims fell to a nine-week low of 214,000, while While U.S. consumer prices advanced less than expected in June among falling utility prices and a record drop in hotel costs, the gauge excluding food and energy costs rose 0.2%.

But the annual consumer inflation rate rose to 2.9% in June. To support the argument for a faster pace of monetary tightening by the Federal Reserve.

President Donald Trump claimed a personal victory at the NATO summit on Thursday after telling European allies to increase spending or lose Washington’s support, which forced leaders huddle in a crisis session with the U.S. president.

Trump declared his commitment to a Western alliance built on U.S. military might that has stood up to Moscow since World War Two.

 

 

Chart Analysis

 

US INDEX

On the daily chart, the price has returned to the red resistance zone with shaping before the reversal double top.

Price has formed another reversal pattern to assure the bearish bias with the wedge.

Followed by a break beneath an ascending trend on RSI, the index is supposed to have its way back to the support zone 93.2-92.6.


 

AUD/USD

On the daily chart, the pair bounced back from the resistance 0.7455, to retest the green support zone again.

Followed by divergence on RSI, our bullish view is still the same: Heading towards the combination of levels of descending trend, ascending channel and resistance zone at 0.7655-0.774.

 


 

CAD/JPY

On 4-hour chart, as we expected before, the price broke the resistance and the neckline of the head & shoulders pattern at 84.35, to assure the bullish momentum also powered by wedge & Gartley harmonic patterns.

The price is expected to target the resistance 87.

 


 

NZD/USD

On the daily chart, the price retested the green support zone 0.682-0.6775, followed by divergence in RSI.

An AB=CD harmonic pattern has been shaped to reinforce the bounce.

The price is supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703.

 


 

Categories
Forex Market Analysis

Daily Market Update: NFP Report, Brexit View

 

News Commentary

 

 

The dollar was heading up three-week lows against a currency basket after the latest U.S. jobs report on Friday showed wages grew less than expectation

 

News Commentary

 

 

The dollar was heading up three-week lows against a currency basket after the latest U.S. jobs report on Friday showed wages grew less than expectation

 

News Commentary

 

 

The dollar was heading up three-week lows against a currency basket after the latest U.S. jobs report on Friday showed wages grew less than expectation in June with 0.2% (forecast was 0.3%), even as the economy created more jobs than expected with 213K (forecast was 195K).

The average hourly earnings pointed to sustain inflation pressures that hold expectations back for a fourth rate hike by the Federal Reserve this year.

 

Brexit secretary David Davis resigned unexpectedly last night, to send a blow to Prime Minister Theresa May, as she struggles to end conflicts among her ministers who felt her plan to press for the closest possible trading ties with the European Union had betrayed their desire for a clean break with the bloc.

The pound had fallen responding to the following the reports, before having another turnaround amid indications that May would not face major trouble against her Brexit policy and hopes that a softer Brexit may be on the cards moving forward.

 

The Euro was boosted after data showing that German exports rose by more than imports in May, indicating that the euro area’s largest economy remains solid despite global trade tensions.

 

 

Chart Analysis

 

 

USD INDEX

As we expected on the daily chart, the price had bounced from the key resistance at 95.5, powered by divergence on RSI and a break beneath an ascending trend line.

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.



 

USD/JPY

On the daily chart, the pair retested the key resistance of 111.1 again and the descending trend from the high of 2017 to shape a double top reversal pattern.
So, the price is expected to assure the next bearish move that leads the price to the support zone of 108.65-108.15.



 

AUD/USD

On the daily chart, as we expected, the price has reversed from the support zone of 0.7325-0.7365.

The pair is supposed to go on in its bullish momentum powered by divergence on RSI to reach the key resistance of 0.758, where the descending trend from the high of February is located.



 

AUD/JPY

As we expected before, the price has reached and bounced from 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 4 hour chart, we can see a break above the descending wedge along with shaping a head & shoulders pattern.

A GARTLEY harmonic pattern has enhanced the bullish bias before 84.35.

Watch the neckline of the H&S which is located at the mentioned resistance (84.35) with moving average 200 too.

A break above these levels would take the price up to the key resistance 87.



Categories
Forex Market Analysis

Daily Market Update: Trade Tariffs Begin, FOMC Meeting, NFP Data

 

News Commentary

 

The trade conflict between the US and China has just been put into action today when U.S. tariffs on $34 billion worth of Chinese goods went

 

News Commentary

 

The trade conflict between the US and China has just been put into action today when U.S. tariffs on $34 billion worth of Chinese goods went

 

News Commentary

 

The trade conflict between the US and China has just been put into action today when U.S. tariffs on $34 billion worth of Chinese goods went into effect at 04:00 GMT. An additional tariffs on another $16 billion is expected to take place in the upcoming two weeks. Meanwhile U.S. President Donald Trump has given instructions to identify a further $300 billion on possible Chinese goods.

China has also vowed to reply with tariffs on $34 billion of American goods. Beijing had previously said it would impose tariffs on U.S. agricultural products, crude imports, and vehicle products.

 

Yesterday, Federal Reserve policymakers enhanced the view of further increases in interest rates as the U.S. economic growth continued “above trend”.

“Participants generally expected that further gradual increases in the target range for the federal funds rate would be consistent with the solid expansion of economic activity, strong labour market conditions, and inflation near the Committee’s symmetric 2 per cent objective over the medium term,” the Fed said in the minutes.

The Fed’s statement to continue tightening monetary policy was boosted by a continued rally in inflation and a solid labour market, despite concerns about the impact of rising trade tensions on spending and business sentiment.

 

Today’s big data will be at 12:30 GMT with NFP. The expectation goes for 195K, less than the previous reading 223K

Also keep an eye on average hourly earnings, which is expected to remain the same as the last reading with 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.

The price also had shaped a reversal double top pattern.

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



 

USD/JPY

On the daily chart, the pair retested the key resistance of 111.1 again and the descending trend from the high of 2017 to shape a double top reversal pattern.
So, the price is expected to assure the next bearish move that leads the price to the support zone of 108.65-108.15.



 

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 reach the levels of 84-84.4 again.



 

CAD/JPY

On the 4 hour chart, we can see a break above the descending wedge along with shaping head & shoulders pattern.

A GARTLEY harmonic pattern has enhanced the bullish bias before 84.35.

Watch the neckline of the H&S which is located at the mentioned resistance (84.35) with moving average 200 too.

A break above these levels would take the price up to the key resistance 87.



 

Categories
Forex Market Analysis

Daily Market Update: FOMC Meeting, Friday Deadline Of Tariffs, German Industrial Bounces

 

News Commentary

 

 

US President Trump has restated his call for OPEC to bring down the price of gasoline. He recently asked Saudi Arabia to increase production after

 

News Commentary

 

 

US President Trump has restated his call for OPEC to bring down the price of gasoline. He recently asked Saudi Arabia to increase production after

 

News Commentary

 

 

US President Trump has restated his call for OPEC to bring down the price of gasoline. He recently asked Saudi Arabia to increase production after he imposed Iran with sanctions reducing Iran’s production by up to 1.1M barrels per day. An Iranian Republican Guard Commander has said that Iran would block the Strait of Hormuz if the US stops Iranian oil sales.

Investors are still cautious ahead of Friday’s deadline for the U.S. to impose a 25% tariff on $34 billion worth of Chinese imports, which Beijing has pledged to match with a levy on U.S. products.

 

The Fed will release minutes of its June meeting today, with investors looking for clues on whether it is still on track to raise interest rates twice more this year

Most economists expect that the FED will persist in raising the rates at its own pace.

“Every FED official but one projects the central bank will get rates above 3% by 2020”, said Michael Hanson, head of global macro strategy at TD Securities.

Seth Carpenter, chief U.S. economist at UBS, agreed. He said it would take “a major surprise” to keep the FED from pushing interest rates up at a steady pace.

 

On other hand, some ECB members seemed to be troubled about the slow pace of rates hikes, saying that a Sept/Oct 2019 hike is too late. In response, the probability of a September rate hike has risen from 69% to 80%.

German industrial orders bounced back in May with higher than expected results after four consecutive monthly drops, as demand from domestic customers and the rest of the Eurozone picked up.

 

 

 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 of 93.2-92.6 again, then start its journey to the C wave.



 

USD/JPY

On the daily chart, the pair retested the key resistance of 111.1 again and the descending trend from the high of 2017 to shape a double top reversal pattern.
So, the price is expected to assure the next bearish move that leads it to the support zone of 108.65-108.15.



 

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.



Categories
Forex Market Analysis

Daily Market Update: PBOC To Hold Rates, Positive Data For AUD & GBP

 

News Commentary

 

The Dollar fell against the rest of the currency basket on Wednesday as trade slowed ahead of the U.S. Independence Day holiday, as concerns over trade

 

News Commentary

 

The Dollar fell against the rest of the currency basket on Wednesday as trade slowed ahead of the U.S. Independence Day holiday, as concerns over trade

 

News Commentary

 

The Dollar fell against the rest of the currency basket on Wednesday as trade slowed ahead of the U.S. Independence Day holiday, as concerns over trade tensions remain the top issue.

Investors remained worried ahead of Friday’s deadline for the U.S. to impose a 25% tariff on Chinese imports, which Beijing has declared to match with a another response on U.S. products.

U.S. President Donald Trump is insisting on plans to harm major trading partners, including the European Union, Mexico and Canada as part of his ‘America First’ policy that many investors fear will hit global growth.

 

On the other hand, China’s central bank has warranted to keep the exchange rate “basically stable,” in an attempt to calm markets which have been on fire by fears over the escalating trade hassle between Washington and Beijing.

 

The Australian dollar was boosted overnight after data showing that retail sales rose by a higher than expected 0.4% in May, beating forecasts for the second straight month.

 

Great Britain services PMI grew to 55.1 to exceed expectations and the last reading which was at 54.0.

Services PMI is considered a substantial factor to Sterling as it represents 80% of the total Gross Domestic Product (GDP), which has risen to 0.2% with a hike in manufacturing & construction, 54.4 & 53.1 respectively.

This data enhances the hawkish outlook for the BoE to raise the rate in August.

 

 

 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 had also shaped a reversal double top pattern.

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



 

USD/JPY

On the daily chart, the pair retested the key resistance of 111.1 again and the descending trend from the high of 2017 to shape a double top reversal pattern.
So, the price is expected to assure the next bearish move that leads the price to the support zone of 108.65-108.15.



 

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 reach the levels of 84-84.4 again.

 



Categories
Forex Market Analysis

Daily Market Update: RBA Remains Rates On Hold, German Politics Eased

 

News Commentary

 

 

Trade tensions remain on fire as the U.S. government has blocked China Mobile from offering services to the U.S. telecommunications market, recommending its application be

 

News Commentary

 

 

Trade tensions remain on fire as the U.S. government has blocked China Mobile from offering services to the U.S. telecommunications market, recommending its application be

 

News Commentary

 

 

Trade tensions remain on fire as the U.S. government has blocked China Mobile from offering services to the U.S. telecommunications market, recommending its application be declined.

“We urge the relevant side in the United States to abandon Cold War thinking and zero-sum games.” Said the Chinese foreign ministry spokesman Lu Kang

That move by U.S. President Donald Trump’s administration comes amid growing trade tensions between the two countries. The U.S. is probably set to impose tariffs on $34 billion worth of goods from China on Friday, which Beijing is expected to respond to with tariffs of its own, to remain in a tit for tat circle.

 

The euro has been supported as political risk in Germany calmed, after Chancellor Angela Merkel reached a deal on immigration policy with coalition partners, resolving a row that had put into doubt the future of the government.

 

The Reserve Bank of Australia left interest rates steady at 1.5%. The statement had come to a rather neutral to dovish tone as it declared inflation is likely to remain slow for some time, wage growth also remained slow and household consumption remains a source of uncertainty.

The statement came similar to the June statement with main data remaining the same as well as the tone.

 

Trading is expected to be thin ahead of the U.S. independence day holiday, with markets closing early at 17:00 GMT.

 

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 of 93.2-92.6 again, then start its journey to the C wave.



 

 

USD/JPY

On the daily chart, the pair retested the key resistance 111.1 again 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 firstly the resistance at 85.5, then the retest at 86.95



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

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



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

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

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

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

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

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.