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Forex Market Analysis

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

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

 

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

 

Top Economic Events to Trade

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

AUD – RBA Rate Statement – 4:30 (GMT)

AUD – Cash Rate – 4:30 (GMT)

GBP – Construction PMI – 8:30 (GMT)

 

Gold – XAU/USD – Daily Outlook

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

 

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


 

Support     Resistance 

1240.83    1247.17

1238.87    1249.13

1235.7    1252.3

Key Trading Level:    1244

         

SPX  – S&P500-  Technical Outlook

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

 

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



 

Support     Resistance 

2705.72    2719.32

2701.52    2723.52

2694.72    2730.32

Key Trading Level:    2712.52
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Forex Market Analysis

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

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

 

Top Economic Events to Trade

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

 

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

 

Gold – XAU/USD – Daily Outlook

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



 

Support     Resistance 

1252.5    1259.76

1250.26    1262

1246.63    1265.63

Key Trading Level:    1256.13

              

 

SPX – S&P 500 – Technical Outlook

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



 

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

 

Support     Resistance 

2697.19    2732.87

2686.16    2743.9

2668.32    2761.74

Key Trading Level:    2715.03

 

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Forex Market Analysis

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

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

 

S&P 500 – Daily Outlook

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



 

Support     Resistance 

2706        2735.56

2696.86     2744.7

2682.08     2759.48

Key Trading Level:    2720.78

 

Gold – XAU/USD – Daily Outlook

 

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

 

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



Support     Resistance 

1256.9    1266.84

1253.84    1269.9

1248.87    1274.87

Key Trading Level:    1261.87

 

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

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Forex Market Analysis

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

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

 

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

 

S&P 500 – Daily Outlook

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



S&P500- Intraday Support & Resistance Levels 

Support     Resistance 

2745.54      2769.84

2738.04      2777.34

2725.89      2789.49

Key Trading Level:    2757.69

 

Gold – XAU/USD – Daily Outlook

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



Gold- Intraday Support & Resistance Levels 

Support     Resistance 

1271.5     1273.64

1270.84    1274.3

1269.77    1275.37

Key Trading Level:    1272.57

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

 

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Forex Market Analysis

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

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

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

 

Gold – XAUUSD – Daily Outlook

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

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



 

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

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

 

S&P500 – SPX – Dialy Outlook

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



 

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

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

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Forex Market Analysis

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

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

S&P 500 – Daily Outlook

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



 

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

 

Nikkei – Daily Outlook

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

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



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

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

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Forex Market Analysis

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

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

S&P 500 – Daily Outlook

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



Support    Resistance

2767.96    2780.04
2764.24    2783.76
2758.2      2789.8
Key Trading Level: 2774

 

Nikkei – Daily Outlook

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

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



 

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

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

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Forex Market Analysis

April 25 – Global Stocks Slips as Bond Yields Rises above 3%


S&P 500 – Daily Outlook

The U.S. stock market index SPX is trading at 2,631.25, down -4.25 points and -0.17%. Recalling our previous update, the index was trading in an overbought zone below 2,680 before falling down. It has already completed 61.8% retracement, and it’s likely to face support above 2,616.


Support     Resistance
2619.84     2670.44
2604.21     2686.07
2578.91     2711.37
Key Trading Level: 2645.14


Nikkei – Daily Outlook

Japan’s Nikkei dipped -62.80 points to trade at 22,215.32 on Wednesday. Most of the selling trend began in response to a weakness in the Wall Street soured risk sentiment. While the investors focused remained on rising bond yields.

Technically, the index has formed a double top pattern up at 22,350 which is likely to hold Nikkei below 22,350. The 50 periods moving average is suggesting a bullish bias with a significant support at 21,850.


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

That’s pretty much it for now. I hope you are ready for some action tomorrow in the wake of ECB policy decision. European Central Bank is due to release the monetary policy with wide expectations of no change in minimum bid rate. However, the press conference will be a key market mover. Don’t forget to watch it.

©Forex.Academy

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Forex Market Analysis

April 23 – S&P500 & Nikkei Dips on Rising U.S Treasury Yields

 

 

S&P 500 – Technical Outlook

At the moment, the US stock market index SPX is trading right above a strong support level of 2,660, and a break below this level can drive more bearish in the market until 2,640. Whereas, on the upper side, the index is likely to face a resistance near 2,717.

Speaking of leading indicators, the RSI and Stochastics are holding below 20, signifying a potential for a retracement. However, the SPX seems to continue trading bearish below 2674 today.

Nikkei – Technical Outlook

During the Asian session, the Japanese stock market index Nikkei fell after the heavyweight stocks such as SoftBank and Terumo lost ground, compensating gains in financials, which roused after U.S. yields rose. Moreover, the financial stocks, that trades in the foreign bonds, soared dramatically following a rise in the U.S. yields.

Technically speaking, the NKY is trading in an upward channel which is supporting it near 21,975. The 50- periods EMA is suggesting a bullish trend whereas, the RSI is massively oversold. Nikkei is likely to stay bullish above 22,166 for a target of 22,240 and 22,351.

Good luck & have an awesome day!

©Forex.Academy

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Forex Market Analysis

Tit-for-tat weighs heavy on the markets

A difficult week

It has been another difficult week in the markets, and this has been primarily down to the difficulty in assessing what the trade standoff between the US and China mean for the markets. The week started off with the market taking fright as additional tariff threats were voiced by the US, leading to a sharp sell-off in equity markets. However, much of that rhetoric was rowed back on leading to a significant bounce back actually making pre-fright highs before the SP500 started to sell off again.  This simply means that there is no overriding directional bias in either direction making this market very choppy and difficult to trade.

 

Gold

As a result, the Gold market responded by initially strengthening due to the fear related to the equity story but then reversed those initial gains and now trades right in the middle of significant support and resistance levels which can be clearly seen from the chart below, these significant levels are $1,357 and $1,310, so all eyes will be on these levels over the coming days and weeks to see what is next for the yellow metal.

Oil

The Crude-Oil market responded to these major global developments by initially selling off but then after seeing a bit of erratic price action we continued to see a continuation to the down side, closing the week below the $62 level.  However, from a technical perspective, the situation regarding the crude oil market is an interesting one.  We can see from the chart below that we have been in a consistent up trend since mid-June 2017, reaching a high of $66 towards the end of Jan 2018.  Since this time, this market has clearly struggled to break the $66, creating a double top end of March.  So over the last two weeks, this market has bounced back to its lower trend line.  The next few days will be interesting to see whether the support level holds and we see another attack at the $66 level or will this support level break, and we see prices pushing down to a potential structural failure below the $60 level which would put major pressure on this market to the downside.  At this crucial point, it’s hard to see whether buyers or sellers will win out.

 

So just to recap, over the course of the last 5 trading days, US officials made very strong statements about the need for trade tariffs to be introduced only for US officials to then row back on some of its rhetoric, as a result, market nerves were calmed, and Monday’s fear related move was subsequently reversed. The S&P rallied and then retraced, and the gold and crude oil markets came off.

US Dollar

The USD, however, has been impacted by recent events but to a lesser degree. As you can see, from the chart below, the dollar index has been in a period of consolidation since mid-Jan.  These, unfortunately, for the time being, are the market conditions in which we are trading the USD. The two major prices to keep an eye out for over the coming days and weeks is the 99.880 to the up side and 88.416 to the down side.  A move in either direction would be significant for this market.

 

EURUSD

EURUSD continues to trade within a range. Today’s weaker NFP numbers perhaps suggest that the pair might move higher next week given the fact too that from a technical perspective, the pair is trading closer to the lower end of its range as can be seen from the chart below.

 

USDJPY

USDJPY has been firmer this week, however, watch the key pivotal resistance area next week around 108.20. This was the breach that confirmed a bearish range breakout back in February.

 

 

The US Dollar paired earlier gains during Friday’s London session after data showed the US economy adding new jobs at less than half the pace economists had expected for the March month. The important Non-Farm Payrolls figure grew by just 103,000 during the recent month, which is down from 313,000 in February and far below the economist consensus for a reading of 188,000.

Separately, the unemployment rate held steady at 4.1% for the month when markets had been looking for a 10-basis point fall to 4.0%. Household incomes grew by 0.3% during the recent month, which is up from the 0.1% seen in February and in line with the consensus forecast of economists.

 

Price action largely noted limited volume in the week leading up the non-farm payroll figure but saw initial volatile swings before the USD began to weaken over the course of Friday afternoon and evening.

Trade of the week – Long GBP/USD

With the US caught up with trade issues with China causing confusion among other countries and added uncertainty across the US Dollar Forex Pairs, perhaps the best technical trade may look GBP support with better than forecast UK economic data.

With the GBP showing strength over the USD in April for the last 13 consecutive years running, speculators are now looking at this trend for the best potential buying opportunity. With good news for the pound with UK PMI slightly higher than expectations, Friday trading is seeing the pound trade up with a touch and bounce from the greater bullish trendline of 2017. The discussion now seems to favour the pound is seemingly defying the expectations of Brexit doom.