Categories
Forex Market Analysis

Daily Abstract – 2nd February 2018

Hot Topics:

  • DOLLAR – BUILDING A SIDEWAYS STRUCTURE BEFORE U.S. EMPLOYMENT DATA RELEASE.
  • FAANG – APPLE, AMAZON AND ALPHABET CLOSE MIXED BEFORE QUARTER EARNINGS RELEASE.
  • CRYPTOS – BTC CONTINUES THEIR SELL-OFF.

 

Main currencies daily performance.

DOLLAR – BUILDING A SIDEWAYS STRUCTURE BEFORE US EMPLOYMENT DATA RELEASE.

We are starting the second month of the year, and as usual, in the first week of every month, the market is expecting the employment data release. Today, the Bureau of Labour Statistics in the US will publish the unemployment rate. It is expected to remain unchanged at 4.1%, while Nonfarm Payrolls’ expected increase is to 184K.

The Index has returned to the past week’s lower values, building a sideways structure. We expect that the volatility generated by the data release could define the market direction.

 

FAANG – APPLE, AMAZON AND ALPHABET CLOSE MIXED BEFORE QUARTER EARNINGS RELEASE.

Alphabet <GOOG> has closed with an advance of 0.8% before the last quarter earnings release, where GOOG has reported an EPS of 9.7 ($/sh.) vs 9.98 ($/sh.) estimated, and a Revenue of 32.32B vs 31.87B expected. Amazon <AMZN> has closed the session with 2.65% of losses after the closing bell. AMZN reported an EPS of 3.75 ($/sh.) vs 1.85 ($/sh.) estimated, and a Revenue of 60.45B vs 59.83B expected. Finally, Apple <AAPL> also closed with losses (0.22%), the earnings reported was an EPS of 3.89 ($/sh.) vs 3.85 ($/sh.) estimated, and a Revenue of 88.3B vs 77.25B expected.

 

CRYPTOS – BTC CONTINUES THEIR SELL-OFF.

As we are forecasting from the Potential Dead Cat Bounce Pattern article, and as has been published yesterday in our Daily Abstract, the crypto-currency Bitcoin is making new lower lows; our vision is that BTC will reach the 8,000 level. BTCUSD falls to November 2017 levels. So far this year, Bitcoin has lost approximately 58.9%.

 

Categories
Forex Market Analysis

Daily Abstract – 1st February 2018

Daily Abstract’s Hot Topics:

  • DOLLAR – FOMC, Federal Reserve maintains an unchanged interest rate at the end of the Yellen age.
  • NZD – Kiwi the best currency performer of the session aided by the investors’ confidence in market conditions.
  • FAANG – AMAZON despite the bullish gap, closes lower  
  • FAANG – GOOGL and AAPL close mixed before the earnings release.
  • CRYPTOS – BTC tests the psychological 10,000 support.

 

Main currencies daily performance.

DOLLAR – FOMC, FEDERAL RESERVE MAINTAIN AN UNCHANGED INTEREST RATE AT THE END OF THE YELLEN AGE.

The Federal Open Market Committee (FOMC) members in their last meeting of the Yellen age have decided to maintain the interest rate unchanged at 1.50%. The labour market has continued to strengthen and economic growth has risen. This meeting has been the end of the Janet Yellen era as chair, next month the chair will be the Republican Jerome Powell, who has been confirmed by the Senate on January 24.

Our vision still considers a probability of turning bullish; if the index consolidates above the weekly pivot, our forecast will have more confidence in selling the Euro <EURUSD>. Additionally, we are positioned to sell the Euro from 1.250 level (see long-term pick EURUSD Watching the Weekly F38.2 )

US Dollar Index 1-hour chart ( click on the image to enlarge)

 

EUR-USD 30-min chart ( click on the image to enlarge)

 

NZD – INVESTORS’ CONFIDENCE IN MARKET CONDITIONS THE BOOST KIWI.

Favourable market conditions are boosting New Zealand’s agro-industry; the central factor has been the increase of the dairy products exports. Dairy products and their derivatives are the most relevant contributors to exports, about 95% of New Zealand dairy products are exported.

On the technical side, the Kiwi is making a consolidation structure; we expect if it breaks down, the target level is the confluence between Daily S2 and Weekly S1, the zone from the Kiwi could find buyers again.

NZD-USD 1-hour chart ( click on the image to enlarge)

 

FAANG – AMAZON DESPITE THE BULLISH GAP, CLOSES LOWER  

In the last session, Amazon <AMZN> opens higher by 1.53%, boosted by the project between Amazon and Berkshire Hathaway (the Warren Buffett’s company) to create a healthcare company with “reasonable costs”.

The chart shows us a clear bull trend. Bullish positions must be considered above the confluence between Daily R2 and Weekly R2, which could be working as strong resistance.

Amazon <AMZN> 1-hour chart ( click on the image to enlarge)

 

FAANG – GOOGL AND AAPL CLOSE MIXED BEFORE THE EARNINGS RELEASE.

Google <GOOG> has been the best performer of the session with a 0.88% advance, aided by the expectation before the earnings release, which will be after the closing market; the analyst consensus expects $31.87B of revenues and $9.98 earnings per share (EPS).

We expect that GOOG reaches the weekly R1 level ($1,191.32) during the session, a zone that could find sellers.

Google <GOOG> 1-hour chart ( click on the image to enlarge)

 

Another company that will release earnings, after the market closes, will be Apple <AAPL> which has closed with a -0.17% performance. The analyst expects $77.25B of revenues and $3.85 EPS.

In the AAPL case, it is probable that it will reach the 164.22 level, the zone from where it could find buyers to the weekly pivot point (173.60).

Apple <AAPL> 4-hour chart ( click on the image to enlarge)

 

CRYPTOS – BTC TESTS THE PSYCHOLOGICAL 10,000 SUPPORT.

In the last session and the past week, Bitcoin <BTCUSD> has been testing the psychological level $10,000; we expect that BTC plunges to $8,074 level as a continuation of the bearish cycle started on the 17th December 2017.

BitCoiun <BTC> 4-hour chart ( click on the image to enlarge)

 

Categories
Forex Market Analysis

Weekly Forecast 22nd to 26th January 2018

Weekly Forecast’s Hot Topics:

  • JPY – BOJ KEEPS THE MONETARY POLICY UNCHANGED, AND INFLATION CLOSE TO TARGET.
  • DOLLAR – DESPITE THE DEAL TO STOP THE SHUTDOWN THE GREENBACK HAS CONTINUED FALLING.
  • EUR – EURO EXCEEDS 1.25 HELPED BY THE DECLARATIONS OF DRAGHI.
  • AUD – EXPECTED VOLATILITY DUE TO INFLATION DATA RELEASE.

Asset Performance

This week, the best performer was Crude Oil <USOil> with a rise of 4.48%. WTI has reached the 66 US$/Barrel level, the highest since December 2014. Despite the deal between Republican and Democrats US Senators to stop the Government shutdown, the Dollar <DOLLAR> couldn’t take a breath and continued moving down 1.56% this week.

 

 

JPY – BOJ KEEPS THE MONETARY POLICY UNCHANGED, AND INFLATION CLOSE TO TARGET.

The Bank of Japan (BoJ) decided to keep the monetary policy and the economic stimulus unchanged. Kuroda has signalled that the BoJ might be nearing the start of policy normalisation: not so fast. The BoJ’s members voted 8-1 to keep its interest rates and asset purchases at current levels. Also, Kuroda said inflation expectations had stopped falling. The BoJ’s perspective is that the economy will grow 1.4% in the fiscal year starting in April, with an inflation of 1.4% over the same period.

The inflation data (YoY) excluding the food component, released this week has reached the 0.9%. The BoJ Governor Kuroda speaking at the World Economic Forum in Davos has said that “there are some indicators that wages and some prices have started to rise”. Also added that “there are many factors that made the 2 percent target difficult and time-consuming, but we are finally close”.

 

Technically, the USD-JPY is completing a sideways consolidation macro-structure. Our vision is to expect if the price falls to 108.16 to 107.18, where the yen could find buyers again.

USD-JPY daily chart ( click on the image to enlarge)

 

DOLLAR – DESPITE THE DEAL TO STOP THE SHUTDOWN THE GREENBACK HAS CONTINUED FALLING.

This week the Republicans Senators has stricken a deal with Democrats for stop temporally the US Government shutdown for three days, the first shutdown since 2013. In this agreement, Democrats have accepted to vote for the bill while they will continue negotiating immigration legislation for “dreamers” (children that migrate illegally to the US). This agreement has as a deadline February 8.

The week has ended with the US GDP (QoQ) data release. The US economic growth a 2.6%, lower than the expected 3% in the fourth quarter. Although the fourth quarter GDP has been slowed, in 2017 the economic growth has gained momentum, from the 0.9% reported in March 2017.

Technically, the US Dollar Index has broken down the past week range to the 88.9 level. Our vision for the next week is a limited downward into the 87.85 to 87.1 area to make a potential reversal pattern to reach 91.03 level.

US Dollar Index daily chart ( click on the image to enlarge)

 

EUR – EURO EXCEEDS 1.25 HELPED BY DECLARATIONS OF DRAGHI.

This Thursday the common currency has raised over 1.25, the highest level since December 2014. In the last Monetary Policy Decision ECB Conference, President Mario Draghi has maintained the accommodative policy, and the interest rates will remain well beyond the end of the QE.

Regarding forex risk, Draghi signalled that “Now, we have downside risks relating primarily to geopolitical and especially foreign exchange markets. But by and large, the risks to growth are balanced.”

On the technical side, once the euro reached the weekly Fibonacci level F(38.2), has started to make a corrective move leaving to the pair to the 1.24235 level. Our central vision is that the euro could start a new bearish cycle, where our first target is 1.16845.

EUR-USD daily chart ( click on the image to enlarge)

 

AUD – EXPECTED VOLATILITY DUE TO INFLATION DATA RELEASE.

 

In the last week of the month, in Oceanic Session, the volatility expected will come from the Inflation (QoQ) data release. The analysts expect that the CPI (QoQ) will be 0.8% and (YoY) 2.0%. Under this context, the RBA could hike the Interest Rate in the next Monetary Policy Meeting scheduled on February 6.

 

As has been forecasted previously, our primary vision remains bullish for Aussie, where the long-term target is 0.8433, level from where the price could find sellers to begin to develop a major degree connector.

AUD-USD daily chart ( click on the image to enlarge)

©Forex.Academy