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Forex Videos

Forex For Beginners – How To Trade EURGBP! Buying The Euro With A No Brexit Trade Deal!

For beginners – How to trade the EURGBP with no trade deal Brexit 

Thank you for joining this forex academy educational video.

Great Britain voted in a national referendum to leave the European Union June 2016.  The  United Kingdom officially left the EU you in January 2020 with a one-year transition period which ends on the 31st of December 2020.

This was to allow the EU and the United Kingdom four years to come up with a future trading solution with regard to laws and arrangements which would allow the United Kingdom to take back its sovereignty, which is what the people of Great Britain wanted.

However, unravelling the years of business ties between the two areas, including laws,  fishing rights,  humanitarian issues,  worker’s rights,  competitive fairness,  financial regulatory alignment, including a whole myriad of rules and regulations has been one of the most complicated issues in modern times.  The affair is turning into an acrimonious divorcAfter the transition period, theThe two sides agreed thod they would work towards having a free trade agreem,ent which would lead to an almost seamless continuation of business.

But the United Kingdom claims that many of the terms and conditions as set out by the European Union in order to grant a free trade agreement to the United Kingdom are seen as not acceptable to the British government.  Some of these conditions are centred around fishing, where the EU wants to continue fishing in British sovereign waters, a so-called level playing field,  where the United Kingdom cannot go out and sign up other trade agreements around the world by undercutting EU member states.  And where the EU has said that any breach by the UK of such a future agreement, or where the EU changes regulations, and the UK does not fall into line, would be penalised by tariffs and which the UK has said this is totally unacceptable.  Ten deadlines have come and passed between the two sides regarding reaching an agreement,  and where currently, at the time of writing,  there are just a few days left to instigate and agreement,  and where both sides are saying this is now very unlikely to happen.

This is a daily chart of the euro to Great British pound pair ,or EURGBP,  and where we can clearly by the blue candlesticks that since the latter part of November 2020, the Euro is gaining in value on the exchange rate.  

Investors believe that the sentiment has changed in the latter stages of November and certainly since the 7th of December, and  where they believe that in the current state there will likely be no deal and therefore because the European Union is economy is much greater than that of the United Kingdom that the Euro will fare better than the pound in the event of a no tariff-free arrangement being reached.

In in the same chart we have highlighted a section A,  where the pound was gaining against the euro since August,  because the market considered that an agreement would be reached.

 

 So how can investors get in on the action and ride the pair hire based on current sentiment?

Firstly, we need to bring the chart down to a smaller time frame, such as the one hour.  Here we can see a defined bull channel, with areas of support at two points and areas of resistance at two points as show by the exchange rate touching the two purple lines, and where we might consider going long at a pull-back to the support line, perhaps somewhere around the X mark.  

By reverting back to our daily chart we can see some potential targets, or areas of resistance, the closest is 0.9294  which was reached in September 2020 and way back in  the middle of March this year, where we have a target/resistance level of 0.9500.

Of course the exchange rate might be a little different by the time you get to view this video, however, should there be a no tariff deal agreement and where the United Kingdom crashes out of the EU on world trade organisation rules, where tariffs will be imposed by either side,  but most likely to be more detrimental to the UK than the EU, you should then be looking for setups such as we have shown today to buy the pair.

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Forex Elliott Wave Forex Technical Analysis

EURGBP Soars!, More Gains Ahead?

The EURGBP cross soared on Friday session, surpassing the psychological 0.92 barrier, advancing until the target area forecasted in our previous short-term analysis (here.)

Technical Overview

Our previous analysis discussed the completion of the complex corrective formation identified as a double-three pattern of Minute degree labeled in black, which began on last September 11th at 0.92916 and finished on November 11th at 0.88610. Likewise, after the double-three completion, the cross completed the wave B of Minor degree identified in green.

Once the EURGBP found the bottom at 0.88610, the cross began a rally corresponding to wave C. We have seen in our previous analysis the price completed wave ((ii)) at 0.88667 on November 23rd. After this completion, both the breakout of the descending trendline of the second wave in black and the strong bullish long-body candlestick formation developed in the November 27th session confirmed the start of the third wave in black.

Technical Outlook

During the last trading session of the week, the short-term Elliott wave view for the EURGBP cross exposed in the following 8-hour chart reveals the acceleration in its advance, which surpassed the supply zone between 0.92008 and 0.92181, finding resistance at 0.92298.

The impulsive upward movement observed during Friday’s session allows us to distinguish the completion of the wave ((iii)) at 0.92298 and the beginning of the fourth wave of the same degree.

In this context, the current corrective formation identified as wave ((iv)) in black could decline until the previous supply zone between 0.90686 and 0.90446, where the cross could find fresh buyers. Once the fourth wave completes, the cross should advance in a new rally corresponding to wave ((v)), which would be subdivided into a five-wave sequence. The potential target for the end of wave C is within the next supply zone between 0.92568 and 0.92916.

In summary, the EURGBP cross appears moving in an incomplete wave C of Minor degree, which, in its lesser degree count, shows the beginning of the fourth wave in black. This corrective formation could decline until the previous supply zone is located between 0.90446 and 0.90686. The cross, then, could find fresh buyers expecting the continuation of the trend that would push up the price toward the supply zone between 0.92568 and 0.92916.

Lastly, the invalidation level for this bullish scenario can be found at 0.90031.

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Forex Elliott Wave Forex Market Analysis Forex Price Action Forex Technical Analysis

Is EURGBP Ready for a Fresh Rally?

In our latest EURGBP technical analysis, we commented on the cross moving in an incomplete sideways corrective formation of Minor degree, identified in green. Its internal structure suggested the completion of a double-three pattern of Minute degree.

Also, we saw the pierce and bounce of the September 03rd low at 0.8658, when EURGBP dropped to 0.88610, found fresh buyers there, and created an intraday impulsive move identified as the first wave of Minute degree, labeled in black.

As the next 4-hour chart shows, once the EURGBP cross completed its first wave, in black that belongs to wave C, in green, it reacted mostly bearish, developing a correction, extending the move below our forecasted area, and testing the lows of the previous bullish impulsive move.

The breakout of the short-term descending trendline confirmed the end of wave ((ii)) of Minute degree and the beginning of the third wave of the same degree, which remains in progress.

Likewise, in the last chart, we distinguish the advance of the third wave of Minuette degree identified in blue in its internal structure.

Short-term Technical Outlook

The short-term Elliott Wave view of the EURGBP cross, unveiled in the below 4-hour chart, reveals the breakout of the descending trendline that follows the wave ((ii)) identified in black, which suggests the beginning of a new rally.

Once the price found fresh buyers at 0.88998, the cross began to advance mostly bullish in an impulsive sequence of Minuette degree, identified in blue, that remains in progress. This upward move corresponds to the internal structural series of wave ((iii)) of Minute degree that belongs to wave C of Minor degree, in green.

Furthermore, considering the reduced period it took for the first stage of wave (iii) to complete, It is plausible that the third wave in progress will be the extended wave, as the Elliott Wave theory states that only one extended wave would occur in an impulsive structure. 

In this context, the current upward move could advance to the next supply zone between 0.90446 until 0.90686. But, if the cross maintains its bullish momentum, it could strike the next potential target zone between 0.91260 and 0.91464.

Finally, the current bullish scenario’s invalidation level is 0.88610, which corresponds to the origin of the wave C in green.

 

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Forex Elliott Wave Forex Market Analysis

Is EURGBP Ready for an Elliott Wave Rally?

Technical Overview

The EURGBP cross develops an incomplete Elliott wave correction of Minor degree labeled in green, which began on September 03rd when the price found fresh buyers at 0.88658 and rallied until 0.92916, in where the cross completed its wave A in green. 

The following 4-hour chart illustrates wave B completion.  We see that its internal structure looks like a double-three pattern. This second leg started on 0.92916 on September 11th and ended on November 11th when the price found fresh buyers that boosted the cross in a move that looks like an impulsive intraday rally.

According to the Elliott Wave theory, the double-three pattern is a complex correction that follows an internal structure subdivided into 3-3-3. Likewise, in a corrective formation subdivided into three-wave movements, the segment corresponding to wave C should hold five segments inside it.

On the other hand, considering the Elliott wave theory’s alternation principle, the price likely could advance in an aggressive rally after an extended complex movement.

The cross is advancing in its wave ((ii)) of Minute degree labeled in black that belongs to wave C of Minor degree. In this context, the descending channel’s upper line’s breakout would confirm the potential bullish continuation of wave (iii).

Short-term Technical Outlook

The next 4-hour chart shows the second wave of Minute degree’s internal corrective structure, which could be advancing in its wave (c) of Minuette degree labeled in blue. 

From the previous chart, if the cross finds support in the demand zone located between 0.8917 and 0.8901, opens the likelihood of a new rally corresponding to wave ((iii)), which could advance toward the first supply zone between 0.9126 and 0.91464. The next potential target zone resides between 0.9200 and 0.9218.

On the other hand, both the breakout of the intraday descending trendline that connects the end of waves ((i)) in black and (b) in blue and the surpassing of the end of wave ((i)) will confirm the advance in wave ((iii)) of Minute degree.

Finally, the bullish turning scenario’s invalidation level locates at 0.88610, which corresponds to the origin of wave ((i)).

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Forex Signals

EUR/GBP Continues its Bearish Move

 

EUR/GBP had a bearish day yesterday. The H1 chart shows that the pair made a bearish move to start its trading day and found its support at 0.89420. It produced a bullish inside bar and headed towards the North in search of its resistance. The level of 0.89560 worked as a level of resistance and produced a bearish candle with a tiny lower shadow. However, the candle closed with a long bearish body producing at the 61.8% Fibo level. Thus, the price may continue its bearish move towards support. If it makes a breakout at today’s low, then the sellers may go short and drive the price towards the downside. We have triggered a Sell Stop order at 0.89375.

Trade Summary:

Entry: 0.89375

Stop Loss: 0.89555

Take Profit: 0.89195

The risk for the trade per standard lot is $ 197.94, Mini lot $ 19.79 and Micro lot $1.97. The risk-reward is 1:1. Thus, the reward for per standard lot is $ 197.94, Mini lot $ 19.79 and Micro lot $1.97.

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Forex Signals

EURGBP Breakout Retest SELL

This is a position add to the existing EURGBP SELL trade here.

Flow Assessment

  • Structural down flow with LLs and LHs

Location Assessment

  • Price has come back to a critical level where previous volatile reactions happened around, making it a good area to look for sells

Momentum Assessment

  • Buyers suddenly shot up right into the key level with high volatility. But this is suspicious because the original buyers did not show this much strength or volatility.
  • This makes us suspect that it is a trap, specifically a liquidity and stop hunt to accumulate more sell orders, making it a fantastic entry trigger
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Forex Signals

EURGBP Swing Failure SELL

Flow Assessment

  • Price has reacted off a monthly sellers area and has been grinding down slowly.
  • The sellers have been maintaining market structure as there has been no higher high by the buyers.
  • The sellers have been making progress by making lower lows

Location Assessment

  • Price has reacted of a H1 sellers area
  • We are trading based on the buyers’ continued inability to make a higher high

Momentum Assessment

  • We waited for a 2nd attempt of buyers to see if they can push and make a higher high
  • When this 2nd attempt too failed; instead sellers made a lower high, this confirmed to us that the sellers are firmly in control, hence we can join them to trade down to the daily lows
  • In some cases, profit targets may be extended to the weekly lows
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Forex Signals

EURGBP Could Start a New Rally

Description

The EURGBP cross, in its 4-hour chart, exposes an incomplete corrective structure that completed its wave B. The completion of the wave B of Minor degree suggests a new rally corresponding to the advance of wave C of Minor degree labeled in green.

From the EURGBP chart, we distinguish that the upper degree’s corrective formation subdivided into a three-wave sequence and labeled in a Minor degree and marked in green is incomplete. It could develop its third segment corresponding to wave C, which follows a five-wave internal structure.

On the other hand, the wave B internal structure unveils the double-three corrective pattern. According to the Elliott wave theory, the double-three formation follows a 3-3-3 internal sequence and looks labeled as ((w))-((x)-((y)) of Minute degree identified in black.

In summary, the completion of the double-three pattern of Minute degree that belongs to wave B of Minor degree labeled should give way to the upward advance of wave C identified in green. This wave structure could strike at least to level 0.92. However, the price action could lead the price toward the end of wave A at 0.92916.

The short-term bullish scenario suggests the positioning on the long-side looking for a potential target from the current zone, or better, with a potential profit target at 0.9191. The invalidation level locates below level 0.9041.

Chart

Trading Plan Summary

  • Entry Level:0.91012
  • Protective Stop:0.90412
  • Profit Target: 0.91912
  • Risk/Reward Ratio: 1.50
  • 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

EURGBP Unveils an Engulfing Candle Pattern

Description

The EURGBP cross, in its 4-hour chart, illustrates a downward corrective sequence that seems to be ending. The engulfing candle pattern in the first trading session of the week unveils the possibility of a new rally.

The big picture reveals an impulsive movement developed since early September at 0.88685; this move ended on September 11th, when the price topped at 0.92212. Once the price found resistance, the cross started to develop a retrace as a descending wedge pattern. This chartist formation calls for the continuation of the previous upward impulsive move.

The engulfing candle formation suggests the possibility of a bullish side positioning at 0.90634 (or better) with a potential profit target at 0.9148, which corresponds to the nearest resistance zone from where the price could start to consolidate.

A second option is to maintain the trade looking for the AB=CD pattern completion, with a potential profit target located at 0.94329.

The invalidation level locates below the intraday low at 0.90224.

Chart

Trading Plan Summary

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

EUR/GBP Breaks Symmetric Triangle – Brace for Sell Trade!

Our forex signal on EUR/GBP is doing pretty well as the pair has dropped to 0.9098 level. The single currency Euro seems to be in a nervous mood, perhaps due to the dovish remarks made by the European Central Bank policymaker Francois Villeroy de Galhau on Sunday, which could further undermine the shared currency and push the currency pair lower. However, the politician said that the monetary policy needed to remain loose until the central bank’s inflation target of 2% was clearly in sight.

It is worth mentioning that the International Monetary Fund (IMF) Chief Economist Gita Gopinath said during the interview with Der Spiegel on Monday that the substantial part of the stimulus package must consist of grants rather than loans. She also said, “In case of more attribution to loans, then it will not promote economic recovery”, this statement exerted some downside pressure on the shared currency.

On the positive side, the European Union is expected to welcome travelers from more than a dozen countries not overwhelmed by the coronavirus, unlike the United States, Russia, and dozens of other countries. As of now, the traders seemed failed to cheer this fresh optimism as the European Union was thinking to stop most travelers from the United States, Russia, and dozens of other countries which are considered as too risky because they have not controlled the coronavirus outbreak yet.

Apart from this, the reason for the risk-off market sentiment could be associated with the recent report of the coronavirus (COVID-19) outbreak, which suggested the pandemic has already crossed approximately half a million lives. Whereas Texas-registered consecutive seven days of above 5,000 cases by the weekend, whereas California’s State Health Department said cases rose by 4,810 to 211,243 total as of June 27. The figures from Los Angeles County rose by near-record of 2,542 to a total of 97,894 by Sunday.

Technically, the EUR/GBP currency pair has violated the symmetric triangle pattern which is likely to lead the currency pair lower towards 0.9088 and 0.9068 level. The recent three black crows pattern is also supporting the selling bias in the EUR/GBP pair. Here’s a quick trade plan.

Entry Price – Sell 0.91248 

Stop Loss – 0.91648 Take Profit – 0.90848

Risk to Reward – 1

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

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

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Forex Assets

What Should You Know About EUR/GBP Forex Pair Before Trading

Introduction

EURGBP is the abbreviation for the currency pair Euro area’s euro against the Great Britain pound. This pair, unlike the EURUSD, USDCAD, GBPUSD, USDCHF, etc. is not a major currency pair. This pair is classified under the minor currency pairs and the cross-currency pairs. In EURGBP, EUR is the base currency, and GBP is the quote currency.

Understanding EUR/GBP

The current market price of EURGBP depicts the required number of pounds to purchase one euro. For example, if the value of EURGBP is 0.8527, then one needs to pay 0.8527 pounds to buy one euro.

EUR/GBP Specification

Spread

Spread in trading is the difference between the bid price and the ask price. The spread is not the same on all brokers but depends on the type of account. It also varies depending on the volatility of the market. An average spread on an ECN account and an STP account is shown below.

Spread on ECN: 0.8 | Spread on STP: 1.5

Fees

On trade a trader takes, there is some fee associated with it. Fees, again, depends on the type of account. There is no fee on STP accounts, but few pips on ECN accounts.

Slippage

When a trader executes a using the market order, they don’t really get the price they had intended. There is a small pip difference between the two prices. And this difference between the prices is referred to as slippage. The slippage is usually within 0.5 to 5 pips.

Trading Range in EUR/GBP

Understanding the volatility of the market is essential before opening or closing a position. It shows how much profit or loss a trader will be on a particular timeframe. For example, if the volatility is on the 4H is 10 pips, the trader can expect to gain or lose $1269 (10 pips x 12.69 value per pip) in a matter of about 4 hours.

The table below illustrates the minimum, average, and maximum pip movement on the 1H, 2H, 4H, 1D, 1W, and 1M timeframe.

EUR/GBP PIP RANGES

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

EUR/GBP Cost as a Percent of the Trading Range

An application of the volatility would be the determining of cost on each trade. As in, the ratio between the volatility and the total cost on each trade is calculated and is expressed in terms of percentage. The percentage depicts the cost for a particular timeframe and volatility. The comprehension of it shall be discussed in the subsequent section.

ECN Model Account

Spread = 0.8 | Slippage = 2 | Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.8 + 1 = 3.8

STP Model Account

Spread = 1.5 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.5 + 0 = 3.5

The ideal way to trade the EUR/GBP

With the above two tables, let us figure out the ideal way to trade this currency pair. Note that the higher the percentage, the higher is the cost on a trade and vice versa. It is evident from the chart that the percentages are highest for the minimum column and lowest for the max column. In other words, the cost is high when the volatility of the market is low, and the cost is low when the volatility is high. So does this mean it is ideal to trade when the volatility is high? Well, that’s not the right approach to it, as trading in high volatility is risky. So, it is ideal to take trades during those times when the volatility is around the average range. Doing that will ensure marginal cost as well as decent cost. For example, a 4H trader must take trades during those occasions when the volatility is around 20 pips.

Note: One can apply the ATR indicator to determine the current volatility of the market.

Another feasible way to reduce costs is by canceling out the slippage cost. Cancel slippage costs can simply be done by placing limit orders. With limit orders, the slippage automatically becomes 0.

The difference in the cost percentage when the slippage goes to zero is illustrated as follows.

We hope you find this Asset Analytics informative. Let us know if you have any questions in the comments below. Cheers!

Categories
Forex Market Analysis

Daily: Markets are Calmed Ahead of a New Fresh Wave of U.S Tariffs

 


NEWS COMMENTARY


 

 

The U.S.-China trade spat will likely remain a key driver of sentiment this week ahead after reports said U.S. President Donald Trump wants to move forward with tariffs on $200 billion in Chinese goods.

U.S.-China trade-war fears have been simmering for months. Neither side is showing any signs of backing off, fueling worries that the world’s two largest economies are spiraling towards a trade war that could shake the global economy.

Besides trade rhetoric, the U.S. will see a relatively quiet week in terms of economic releases, with a report on the housing sector expected to draw the most attention.

The tariff level will probably be about 10%, as the Wall Street Journal reported, quoting people familiar with the matter. This is below the 25% the administration said it was considering for this possible round of tariffs. The decision comes despite a Treasury invitation last week to senior Chinese officials, including Vice Premier Liu He, for further negotiations to reach a calm resolution of this matter. Trump has demanded that China cut its $375 billion trade surplus with the United States, end policies aimed at acquiring U.S. technologies and intellectual property and roll back high-tech industrial subsidies.

On other hand, in spite of disappointing inflation and retail sales data released on Thursday, the USD Index managed to recover some of the lost ground afterwards, closing the previous week with indecisiveness about future moves. However, such a recovery is expected to be short-lived as the underlying economic indicators lack of the strenght to represent any serious impact on monetary policy. In fact, last week we experienced a typical case of market participants using fundamentals as means to print more liquidity and to reposition themselves by given economics a contrarian reading

 

 


CHART ANALYSIS


EUR/GBP

On the daily chart, the price was moving strongly in ascending channel towards the key resistance 0.91 then it dropped to 0.8895 due to

1- breaking beneath the channel after completing the wave 5 (Eliot waves)

2- the AB=CD harmonic pattern

3- the overbought on RSI

The price is about to reach 0.8845 where the descending trend and moving average 200 collide

Then, it may retrace to the resistance 0.9025 before heading the C wave target at 0.873



 

 

GBP/CAD

On the daily chart, the pair has reached decisive resistance levels, as the zone 1.7165-1.7065 pushed the price lower along with the upper side of the descending channel from the high of 2018

An AB=CD harmonic pattern has been completed as the price stopped at the B level which is located at the same zone spot

An ascending channel had been formed as a reversal flag besides a divergence on RSI to reinforce the bearish bias to the support 1.657



 

Categories
Forex Market Analysis

Forex and Indices – Daily Update 02.08.18


Fundamental Overview


In today’s session, market sentiment is led by the preference of risk protection assets facing the expectation for the US employment data, which will be announced on the Friday 03rd session. The US Dollar and Japanese Yen, which advanced 0.30% and 0.30% respectively. Within the commodity currencies group, the oceanic currencies are the hardest hit; the New Zealand Dollar is the worst performer which falls 0.49%, followed by the Australian dollar that drops 0.45% in the trading session.

Source: Forex Academy Collection

 

 


Technical Analysis


EURUSD

EURUSD in the 1-hour chart is moving bearish, below the weekly pivot level. For short positions, the price should break under the 1.1657 level with a profit target in the confluence zone between the first weekly support and the Lower HHL at 1.16061 level. For long positions (reversal case), the price should break above the breakdown candle at 1.1691, with a profit target between the confluence zone between the first weekly resistance and the Upper HHL at 1.1729.



GBPUSD

The pair GBPUSD is moving slightly bearish below the weekly pivot consolidating between 1.3090 and 1.3140. A breakdown below 1.309 could drive to the pound to the first weekly support at 1.3050. The bullish case, if the price breaks above 1.3140, the potential target is the first weekly resistance located at 1.3189.




USDCHF

USDCHF in the hourly chart is consolidating as a triangle pattern; this chart pattern suggests more upsides. For long positions, is essential that the price breaks above the weekly pivot level at 0.9937, with a profit target at the third daily resistance at 0.9974. Short positions should be valued if the price breaks under 0.9917, the potential target is the HHL at 0.9880.



EURGBP

The EURGBP cross is running bearish and is consolidating as a flag pattern. For bearish continuation, the price could drop to the confluence zone between the second daily support and the first weekly support at 0.8860. For long positions, the price should break above the weekly pivot level at 0.8897 with a potential move to the HHL at 0.8928.


GBPNZD

The GBPNZD cross is running sideways with a bullish bias in the last sequence which started from the first weekly support at 1.76318. For long positions, the price should break above the first daily resistance with a mid-term target placed on the confluence between the second weekly resistance and the third daily resistance at 1.7864. Short positions should be valued if the price closes below the daily pivot level at 1.77059, and the potential target is at the first weekly support at 1.76318.


DAX 30

DAX 30 is moving slightly neutral in the weekly pivot level at 12,746 pts. For short positions, the price should break below 12,707 with a potential target in the first weekly support at 12,604 pts. Long positions should be regarded if the German index closes above 12,800 pts, with a potential profit target at 12,920 pts.



FTSE 100

The FTSE 100 index shows bearish signals closing below the weekly pivot level at 7,687.9 pts. Continuation of the previous bearish move should be valued if the price breaks under the first weekly pivot at 7,635.2 pts., with a profit target in the confluence zone between the HHL and the third weekly support at 7,521 pts. Long positions could be valued if the price breaks above the weekly pivot level, with a potential target in the first weekly resistance at 7,754 pts. Additionally, note that if the price plunges to the third weekly support, it could be an interesting reversal level.


Categories
Forex Market Analysis

An Interest Rate War is Coming? – 13.06.18 Daily Update


Fundamental Overview


An Interest Rate War is Coming?

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

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

 


Technical Analysis


EURUSD

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

 


 

GBPUSD

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

 


 

USDCHF

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

 


 

EURGBP

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

 


 

EURJPY

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

 


 

FTSE 100

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

 


 

DAX30

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


 

 

Categories
Forex Market Analysis

Forex and Indices – Daily Update – May 31st, 2018


Update On Forex Market Hot Topics:


  • The U.S. Commerce Department announces tariffs to EU.
  • Euro currency shows bullish signals against crosses.
  • European Indices Continue the Selloff.

The U.S. Commerce Department announces tariffs to EU.

The U.S. Commerce Secretary Wilbur Ross announced that it would impose tariffs on European Union steel and aluminium imports as shortly as Thursday. The European Commision President Jean-Claude Junker considered this measure to be “totally unacceptable” and will introduce a settlement dispute with the WTO, and will announce counterbalancing measures in the coming hours, he said.

In this session, EURUSD is correcting the bullish move showed in the last trading session where it climbed above the Invalidation level placed at 1.16317. We foresee that the price could make a corrective structure as a flag pattern, as a continuation of the previous move. The invalidation level is at 1.15205, the next targets levels are 1.1811 and 1.1975.

Update On Forex Market


GBPUSD is consolidating the bearish trend, short-term. In the last trading session, the cable has corrected the strike to the invalidation level of the bearish cycle located at the 1.33231 level. Our vision is that the Pound still has space for more declines, likely to be the area between 1.31095 and 1.29365.


 

USDCHF is moving close to the bullish long-term trend-line, where the first target area is placed between 0.9815 and 0.9783. If the price continues its movement down, the next support levels are 0.9725 and 0.9641. Invalidation level remains at 0.99831.


 


Euro currency shows bullish signals against crosses.

EURJPY has made a bear trap (or 2B Pattern) testing the 124.621 level, from where the price made a bullish impulsive move advancing above the 127 level. Now we anticipate that the price could make a consolidation pattern as a flag and then from its breakout, the price could see new highs in the 131 zone. Invalidation level is below 124.998.

Update On Forex Market


 

EURGBP is moving inside a consolidation structure where the last internal cycle shows an impulsive bullish bias. Oscillators confirm the bullish bias of the cross. The breakout of the upper line of the channel could boost the price to the 0.89 area. Invalidation level is 0.8997.


 


European Indices Continue the Selloff.

The FTSE 100 closed the session slightly bearish. The British index could make a new high as an A-B-C pattern to 7,800 pts, from where the price could create a new lower low with 7,573 pts as a target. Invalidation level of the bearish cycle is 7,803.5.

Update On Forex Market


DAX dipped more than 1%, dragged like other Euro-zone indices; EURO STOXX 50 felt 1.00%, IBEX 35 drop 1.05% in a session driven by the U.S. tariffs to the EU. The DAX could find support at 12,528 pts, but if it breaks down the 12,386 level, the plunge could be more deep finding support at the 12,000 pts. Invalidation level of the bearish cycle is 13,040 pts.