Tag: USDJPY

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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 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: Trade Tensions Continue, OPEC Meeting

 

News Commentary

 

 

 

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

 

News Commentary

 

 

 

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

 

News Commentary

 

 

 

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

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

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

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

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

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

 

 

Chart Analysis

 

 

NZD/USD

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

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



 

AUD/JPY

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

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

 


 

USD/JPY

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

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

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

So, a bounce has started and on its way.

 


 

AUD/NZD

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

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

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

 


 

USD/CAD

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

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

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

 


 

Categories
Forex Market Analysis

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

 

News Commentary

 

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

Stocks stumbled

 

News Commentary

 

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

Stocks stumbled

 

News Commentary

 

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

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

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

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

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

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

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

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

 

Chart Analysis

 

 

US INDEX

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

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



 

USD/JPY

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

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

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

So, a bounce has started and on its way.



 

USD/CAD

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

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



 

AUD/NZD

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

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

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



 

Categories
Forex Market Analysis

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’s Reaction to US-North Korea Summit and Central Banks Meetings

 

News Commentary

 

 

 

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

 

News Commentary

 

 

 

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

 

News Commentary

 

 

 

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

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

 

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

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

Instead, markets are looking ahead to a busy week.

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

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

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

 

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

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

 

 

Chart Analysis

 

US INDEX

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

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

 


 

USD/JPY

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

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

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

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

 


 

AUD/JPY

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

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

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

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

 


 

AUD/NZD

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

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

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

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

 


 

USD/CAD

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

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

 


AUD/USD

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

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

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

 


 

NZD/USD

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

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

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

 


Categories
Forex Market Analysis

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

 

News Commentary

 

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

 

News Commentary

 

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

 

News Commentary

 

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

 

US

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

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

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

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

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

 

EUR

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

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

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

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

 

AUD

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

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

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

 

JPY

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

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

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

 

 

Chart Analysis

 

US INDEX

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

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



 

USD/JPY

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

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

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

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



 

AUD/JPY

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

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

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

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

 


 

AUD/NZD

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

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

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



 

USD/CAD

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

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



AUD/USD

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

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

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



 

NZD/USD

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

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

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



Categories
Forex Market Analysis

Daily Market Update: G7 Summit

 

News Commentary

 

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

 

News Commentary

 

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

 

News Commentary

 

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

 

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

 

Chart Analysis

 

 

US INDEX

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

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



 

 

USD/JPY

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

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

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

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



 

 

AUD/JPY

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

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

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

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



 

 

AUD/NZD

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

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

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

 



 

 

USD/CAD

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

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



 

 

AUD/USD

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

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

The price may have a little retracement before hitting this target



 

NZD/USD

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

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

The price may have a little retracement before hitting this target



 

Categories
Forex Market Analysis

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

 

News Commentary

 

 

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

 

News Commentary

 

 

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

 

News Commentary

 

 

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

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

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

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

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

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

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

 

Chart Analysis

 

 

US INDEX

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

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



 

USD/JPY

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

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

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

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



 

AUD/JPY

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

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

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

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

.

Categories
Forex Market Analysis

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

 

News Commentary

 

 

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

 

News Commentary

 

 

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

 

News Commentary

 

 

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

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

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

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

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

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

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

 

Chart Analysis

 

USD/JPY

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

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

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

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



 

AUD/JPY

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

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

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

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



 

AUD/NZD

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

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

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



 

 

Categories
Forex Market Analysis

Weekly Market Update: FOMC & ECB Meetings

 

 

News Commentary

 

We are looking forward to another busy calendar week for most assets, followed by many important readings and announcements from central banks, to see how

 

 

News Commentary

 

We are looking forward to another busy calendar week for most assets, followed by many important readings and announcements from central banks, to see how

 

 

News Commentary

 

We are looking forward to another busy calendar week for most assets, followed by many important readings and announcements from central banks, to see how this will affect each currency.

 

EUR

The German Final CPI results were not unexpected. The indicator dropped to 0.0% marking a 3-month low. The Eurozone Final CPI went to 1.2%, down from 1.3% last month. The Eurozone Final Core CPI dropped from 1.0% to 0.7. The German indicator posted a sharp drop of -8.2 for a second straight month, the first declines since July 2016. The low reading certainly doesn’t show much optimism. The ECB will have to stay with its stimulus policy program in their meeting on Thursday.

 

The EUR has another battle with Italy’s new leader’s elections who may propose new deficit spending that appears to tighten the EU Growth.

Further details on the formation of the new Italian government between the League and Five Star movement will be a key market focus for EUR fixed income markets.

 

US

The dollar found momentum as the bond yields on 10-year U.S. Treasury raised to 3.025%, the highest level in three weeks. A rise above the high of 3.035% reached on April 25 would take it to its highest since early 2014.

U.S. bond yields were enhanced by signs of trade tensions between the U.S. and China calming down after U.S. President Donald Trump promised to help Chinese technology company ZTE.

This also affected the Dow and S&P 500 who both passed the previous peak, which came almost a month earlier in what could be an indication of an ending of the correction.

All eyes will be on the FOMC meeting on Wednesday to show any hint about how many rate hikes may come this year.

 

GBP

The UK Average Earnings Index came in below expectations with 2.6%. This may put more pressure on sterling which will make traders concerned about any rate hike soon.

Besides, inflation fell faster than the BoE forecasted in February.

Policymakers think the effects of Brexit on sterling are likely to ease slightly faster than expected, so they now plan that inflation will return to the 2 percent target in two years, despite the delay of the next rate rise.

In the UK, the inflation report on Tuesday is expected to ease the fading impact of the GBP lowering.

With also CPI on Wednesday, there are expectations of the same as the last reading of 2.5%.

Following on Thursday will be retail sales with a forecast of 0.8%, and second estimate on GDP on Friday with an expectation of 0.1%.

All eyes will be on BOE governor Carney’s speech on Thursday and Friday, noting about an upcoming rate hike.

 

CAD

Inflation in Canada has been higher in recent months and rose to 2.3% in March.

Economic CPI stabilised at the forecast of 0.3%, with core retail sales falling to 0.2%.

Negotiations about the North American Free Trade Agreement (NAFTA) have reached a dilemma with no meetings scheduled among the top leaders, ahead of the month-end.

Trump’s economic adviser Kudlow linked between NAFTA and China, indicating that an agreement on NAFTA would show that the US can avoid a trade conflict with China. The NAFTA agreement would also show Trump’s tactics, and if there is trade conflict with China, then it is China’s fault.

 

 AUD

The Australian Employment Change for April was better than expected with 22.6K, which crossed over the 19.8K estimate.

On the other hand, the Unemployment Rate rose for the fifth time since July 2017, reaching 5.6%.

The lower wage price index put more pressure on the Australian dollar with a reading less than expected of 0.5%.

All eyes will be on RBA governor Lowe’s speech to declare any notes about inflation,  growth and the outlook for the economy.

 

JPY

The announcement that North Korea suspended negotiations with South Korea on the denuclearisation has affected the Japanese yen as a “safe haven” of the financial market.

Japan GDP ended the expansion streak for eight straight quarters of growth. Japan GDP contracted -0.2% QoQ in Q1, less than the expectation of 0.0% QoQ. On an annualised basis, GDP contracted -0.6% versus the expectation of -0.1%.

 

 

 

CHART ANALYSIS

 

US INDEX

On the daily chart, the price has bounced from the lower trend line from the high of 2017.

The price is near the key resistance of 94.15 which bounced with a pin bar.

A bat harmonic pattern boosts the continuation of the bearish momentum.

Divergent on RSI assured this possible downfall.

If the price could break beneath the key support level 92.6, it may reach 91.1 again.



 

 AUD/USD

On the daily chart, the price had a false break beneath the support zone 0.75-0.7535. That enhances the harmonic pattern AB=CD. The pair had made a price action (pin bar) in this false break to boost the bullish bias. The pair is moving onto the support zone now. Along with divergence in RSI and breaking the lower trend line as shown, the price is ready for the next move up to 0.7635 then 0.7715.



 

 USD/CAD

On the daily chart, the price had made its way into the resistance zone of 1.2925-1.3, with an approach from the descending trend line starting from the high of 2015. The price reversed from these levels, breaking beneath the key 1.28 support level and then, returning to it. If the daily candle closes under this level again, it will prompt the price to be bearish to the support zone 1.252-1.243.



 

 AUD/JPY

On the daily chart, we can see that the price bounced from the support area of 80.35-81.2.

A well-noticed head & shoulders reversal pattern is shaped. The price is on the second shoulder with a breaking of the lower trend line as shown.

Followed by oversold on RSI and the breaking of the lower trend line, the price is expected to get back up again to the resistance area 84-84.35.



 

USD/JPY

The price is located at a very strong short-selling area, rebounding from the descending trend line from the high of 2018. Besides the broken uptrend line from the low of 2011, also reaching the top edge of the upward channel along with forming an AB=CD harmonic pattern with divergence on RSI. The price is also about to shape a double top pattern. We will wait for a bounce from these levels and break beneath the upward channel to go short to our targets of 108.1 then 104.8.



 

Categories
Forex Market Analysis

EZ Economic Sentiment Plunges To Its Lowest Level Since 2016

Hot Topics:

  • EZ Economic Sentiment plunges to the lowest level since 2016.
  • Pound falls after unemployment rate release.
  • Dow continues advancing with all eyes on the 25,000 pts level.
  • Expecting the Crude Oil Inventories data release.
  • Limited down movement before BoC MP decision.

 

EZ Economic Sentiment plunges to the lowest level since 2016.

The Eurozone ZEW Economic Sentiment in March dropped to 1.9, the lowest level since July 2016. The ZEW President Achim Wambach said, “The reason for this downturn in expectations can mainly be found in the international trade conflict with the United States and the current situation in the Syrian war.” 

Once the sentiment data was released, the common currency reacted dropping 0.25%. As we have envisioned, the Euro dropped from the blue box.

In the European stocks market, the German index DAX 30 continued its rally closing the session with a gain of 0.99%. The index is moving in an ascending channel; the price could still reach new highs until the 12,702 – 12825 area before starting a potential corrective move.

At the same time, the Dollar Index climbed from 88.94, the 3 weeks lowest level, advancing to its short-term pivot of 89.36. The price still is bouncing from the Potential Reversal Zone (PRZ). Invalidation level is in 88.52 level.

 

Pound falls after unemployment rate release.

The unemployment rate in March fell 4.2%, the lowest level in more than four decades. The GBPUSD pair plunged 0.31% from the highest level of the year. On the technical side, the pound has made a false breakout reaching 1.4376 and falling sharply below 1.43. We are now expecting a setup as a 1-2-3 pattern before we look to sell the pair.

 

Dow continues advancing with all eyes on the 25,000 pts level.

In the middle of the big companies earnings release, Dow Jones continued advancing, breaking up our key resistance level of 24,625 closing the session with gains of 0.59%. Our central vision is bullish with the target placed at the 25,407 level.

As result of the market risk on sentiment, the USDJPY has moved above our invalidation level (106.61), bouncing in the Potential Continuation Section (PCS); closing the session at 107.0, maintaining the bullish bias with the target placed at 108.41 level.

 

Expecting the Crude Oil Inventories data release.

Today, the weekly Crude Oil Inventory data released by the EIA is expected. On the technical side, the price is making a bullish channel in five movements. We estimate that Crude Oil could reach the 67.86 – 68.75 area where sellers could enter in action with their targets placed at 64 $/barrel.

 

Limited falls before BoC MP decision.

The most expected release for this session is the interest rate decision from the Bank of Canada. The analysts’ consensus expects that the BoC will keep its rate unchanged at 1.25%. Our vision is that the loonie could make a new low to the 1.2499 level, where it could find new buyers with their target at 1.274.

Categories
Forex Market Analysis

Dollar Index Drops, Sterling jump to its max, Wall Street is moved up by Earnings

Hot Topics.

  • Dollar Index drops despite the increase in Retail Sales (MoM) in March.
  • Sterling strikes the highest level of the year for a second time.
  • Japanese Cabinet says the economy is “recovering moderately.”
  • Watching the Copper bullish cycle.
  • US Indexes climbs are boosted, aided by the companies earnings reports.

Dollar Index drops despite the increase in Retail Sales (MoM) in March.

The US economy continues showing strength signals about its economic growth. This time it was the retail sales report shift that advanced up 0.6% from February 2018 and 4.5% (YoY). Sales from the vehicle and parts dealers boosted 2% in March. Despite this good news, the US Dollar Index fell 0.40% touching its PRZ. While the price continues above the 88.52 level, we will consider the chance of a new bullish cycle.

The Euro, which represented more than 50% of the Dollar Index, closed the session with 0.41% gain. The pair still has almost 40 pips of space to reach its PRZ, previous to the ZEW economic sentiment data release. Meanwhile, the Index still could maintain its trading range. The invalidation level of the reversal scenario is above 1.2476.

 

Sterling strikes the highest level of the year for a second time.

The Pound is the best performing currency of the year with an advance of 6.24% (YTD). Not even the uncertainty driven by the Brexit negotiations or the negatives consequences of the severe weather conditions that have impacted some sectorial economic indicators have been enough to slow the Pound rally. In our last Daily Update, we saw a potential top and reversal pattern; our vision is that we could witness a 2B Pattern. In this case, we will be attentive to a breakout candle before to pulling the trigger.

 

Japanese Cabinet says the economy is “recovering moderately”.

The Cabinet Office of Japan described Japan’s economic growth as a “recovery at a moderate pace”. The private consumption and business investment in exports are “picking up”. Concerning the tariffs tensions between the US and China, the Cabinet economists see it as a risk factor they will observe closely. The USDJPY pair fell 0.31% to our PCS (Potential Continuation Section) as a bearish wedge pattern. If the price remains above 106.61, our vision continues to be bullish.The Pound/Yen cross is testing the second monthly resistance pivot level; however, it still could make new highs before a deeper correction. Our vision is that the cross could climb to the area between 155.8 – 157. Selling positions are considered only if the price breaks below the 152.95 level.

Watching the Copper bullish cycle.

Copper is developing a bullish cycle since January 2016. It is currently in an ascending expansive triangle pattern. In the long term, the red metal has “market debt” in the 3.44 level. In the short-term, as long as the price keeps above 2.98, the trend is bullish. If the price moves down to 3.01 – 3.03, copper could find new buyers at those levels, with their targets at around 3.20 – 3.21 and its extension in the 3.25 – 3.28 area.

US Indexes climbs are boosted, aided by the companies earnings reports.

This week,  the big companies started their quarterly earnings release. The optimistic analysts’ expectations came under the assumption that results are coming mainly from activities made before the tariffs conflict between the US and China. Dow Jones 30 closed the first trading session of the week with an advance of 0.44%. The Dow is testing the key level 24,620 and we are watching from our short-term picks. The invalidation level is below 24,090.

In the same way, Nasdaq 100 closed the session advancing 0.43%. The Technological Index is moving in an ascending triangle pattern. Mid-term, we expect that the price will hit the 7,090 level. The invalidation level for the bull market scenario is below 6,398 pts.

© Forex.Academy

 

Categories
Forex Market Analysis

What kind of trigger could boost the Dollar?

Hot Topics:

What kind of trigger could boost the Dollar?
Will the Eurozone continue to bring weaker economic data?
Could the UK CPI have reached their peak?
Fear of a

Hot Topics:

What kind of trigger could boost the Dollar?
Will the Eurozone continue to bring weaker economic data?
Could the UK CPI have reached their peak?
Fear of a

Hot Topics:

  • What kind of trigger could boost the Dollar?
  • Will the Eurozone continue to bring weaker economic data?
  • Could the UK CPI have reached their peak?
  • Fear of a new war or do we expect a new bearish leg?
  • A new higher high in oils is expected before it starts a corrective move.
  • Downward continuation limited before the BoC decision.

What kind of trigger could boost the Dollar?

The recent tensions originated by the strike made between the US, UK, and France on Syria and the reactions of Russia condemning the act could continue to increase the volatility in the markets. Another triggering factor could be the one originated by the US Retail Sales, which fell in February -0.1%. In March the analysts’ consensus is expecting an increase near to 0.4%. In technical terms, the greenback is still in a range and could be making a bottom formation. The control levels are 88.66 to 89.16. Invalidation level is below 88.1.

 

Will the Eurozone continue to bring weaker economic data?

This week the Germany and Eurozone ZEW economic sentiment reports were released. Particularly, the level of confidence fell to 13.4 in February from 29.3 reported in January. Probably it could be produced by a stational factor, like the weather conditions (winter time). In the panoramic chart, we are watching the current structure, as a corrective formation that could reach new lows in the 1.196 – 1.20 area. The invalidation level is above 1.2476.

 

 

Could the UK CPI have reached their peak?

In the last months, the British CPI apparently reached their peak, with a CPI of 3.1% (YoY) reported in the past year in November. Then in December and January, it achieved a 3.0%, but in February in line with other activity indicators, it has shown a decrease in the economic activity. It is probable that at these levels we are witnessing a stabilisation of the economic activity. In the same way, on the chart, we are watching a potential top pattern as a mother wave that could initiate a new bearish cycle with a target at the base of the sideways channel. The invalidation level is above 1.4345.

 

 

 

Fear of a new war or do we expect a new bearish leg?

The Japanese currency is moving in an ascending diagonal pattern in search for its long-term 108 level resistance. Despite the US attacks against Syria, the price continues moving according to our vision. We expect to find sellers once the price strikes the 108.2 – 108.4 area,  starting a new bearish leg.

The correlation between the Nikkei 225 and the USDJPY pair, bring us a clue about the moves that it could make. The first scenario is a breakout above 21,957 pts for a bullish continuation move, drawing the 22,764 – 23,050 area as a target. In the second scenario, if the price moves making a new bearish leg, we expect that move to reach the 20,660 zone, making a “mother wave”  and starting a new bullish cycle.

 

A new higher high in oils is expected before it starts a corrective move.

Last week the oils, Brent and WTI, reached their highest levels since 2014. For inverse correlation and as it was envisioned by us on January 12th, the Crude Oil VIX ETF reached the Potential Reversal Zone, where it might start a bullish cycle. In practical terms, once the WTI reaches the 67.8 – 68.7 area, it is likely that it begins a corrective move.

 

And concerning Brent Oil, we could see it at a new high, to 72.9 level,  before it starts a falling move.

Falls continuation is limited before the BoC decision.

Next Wednesday 18th the Bank of Canada (BoC) Monetary Policy Meeting will take place. The analysts’ consensus expects that the decision will maintain the interest rate at 1.25%. The price is making a downward cycle since March 19th, and our vision is that the Loonie might fall to the area between 1.245 – 1.254, where it could start an upward move, at least up to 1.274. The invalidation level for the ascending movement is 1.225.

 

 

Categories
Forex Market Analysis

Euro Plunges on Weak European Industrial Production data

Hot Topics:

Euro plunges by weak European Production Industrial Data.
The Pound is near to our control zone.
Bank of Japan’s Sakura Report: household spending and robust exports are aiding

Hot Topics:

Euro plunges by weak European Production Industrial Data.
The Pound is near to our control zone.
Bank of Japan’s Sakura Report: household spending and robust exports are aiding

Hot Topics:

  • Euro plunges by weak European Production Industrial Data.
  • The Pound is near to our control zone.
  • Bank of Japan’s Sakura Report: household spending and robust exports are aiding recovery.
  • Crude Oil is consolidating above $66.
The Euro plunges by weak European Industrial Production data.

Weak industrial production data in the Eurozone has triggered a 0.41% drop in the Euro, during today’s session, as we were expecting in the last Daily Update. Industrial production (YoY) fell from 3.7% in January to 2.9% in February, well below the mobile quarterly average of  3.97%.

The weak data published was mainly due to the reduction in the production of intermediate goods, capital goods, and durable and non-durable consumer goods. The common currency could go back to test the medium-term uptrend line. The support level to be controlled is 1.225 (For full resolution, click on the chart).

The German Index DAX 30 advances 1.08% within a tight upward channel, despite the weak European industrial production data.  In the case of overcoming the resistance at 12,476.8 pts, the price could take us to the 12,702.42 – 12,825.92 area.

In the case of the Dollar Index, which advanced 0.36%, we will wait to see how it behaves around 89.36 and 89.03 levels, from which we could validate a reversal of the uptrend. The invalidation level remains below 88.52.

The pound is near to our control zone.

The sterling closed the session yesterday with an advance of 0.37%, approaching the levels that we see as a potential reversal zone (PRZ) that could extend even below to 1.427. From the raised area, the pound could begin to develop that bearish move as a new bearish leg.

Bank of Japan’s Sakura Report: household spending and robust exports are aiding recovery.

In their quarterly report, the Bank of Japan (BoJ) concludes that six regions reported their economy had been expanding or expanding moderately, and three regions had continued to recover moderately.

In general terms, household income is increasing moderately as the labour market conditions had continued to tighten continuously. In this macroeconomic context, Kuroda reports that the BoJ will continue with the bonds purchase program to stimulate economic growth.

On the technical side, the USDJPY pair is gaining bullish momentum that could lead us to the 108.2 – 108.5 area. The relevant resistance level is 107.48; invalidation level is at 106.61.

 

Crude Oil is consolidating above $66.

After reaching its highest level since 2014, crude oil is consolidating close to the $66 level. Following the rally that took place on April 06th, we expect the consolidation to be relatively extensive, so we should wait for a more discernible scenario to take positions in favour of the prevailing trend.

The USDCAD/oil correlated pair is consolidating between 1.2544 – 1.2623, in the same fashion that Crude Oil is doing. By inverse correlation, we expect that the Loonie makes a reversal pattern between 1.2540 and 1.246. The invalidation level for the reversal move is below 1.2250.

Another energy commodity correlated with the USDCAD pair is Natural Gas, which is making a complex corrective structure that could make a new low between 2.522 – 2.260 before it finds buyers.

Categories
Forex Market Analysis

Outlook for 10.24.2017

EUR/USD
The US Dollar is hesitant as President D. Trump told reporters he is very close to a decision about who should chair the Federal Reserve, which includes current Fed

EUR/USD
The US Dollar is hesitant as President D. Trump told reporters he is very close to a decision about who should chair the Federal Reserve, which includes current Fed

EUR/USD

The US Dollar is hesitant as President D. Trump told reporters he is very close to a decision about who should chair the Federal Reserve, which includes current Fed Chair, Janet Yellen. It also weighs on the US currency the rumors about Trump’s plan to reform taxes.

On the Euro front, European Central Bank is expected to announce on Thursday a possible timetable for a reduction of its asset purchases, as economic data suggest the Eurozone might witness a higher than expected economic expansion in 2017. Reducing asset purchases might, likely, be accompanied with a continuation of low interest rated, as Eurozone inflation data seems to be stable

Sideways channel movement on the EUR/USD pair

The Euro 1-hour price has been trending down since Oct, 19 when it draws an almost perfect triple top (1). Yesterday it touched Oct, 18th lows and bounced from there, and piercing up the downward trendline

Overall, the EUR/USD pair seems to trade in a sideways channel, but its current price may allow for a profitable trade, with a target touching the upper trend line (fig.1).

GBP/USD

JP Morgan analysts are convinced that shorting the GBP is still the way to go

The GBP is, still, affected by the Brexit process, but no major news about it is expected today. Slower consumer expending and softening of economic sentiment press policymakers to keep interest rates unchanged, which weighs on the British currency.

Daniel Hui, a foreign exchange strategist at J.P. Morgan said that their conviction to short the GBP is still high because they felt UK rate hikes were “overpriced”, given the “weak starting point for UK growth” and the reality of a Brexit shock that keeps dominating the medium-term outlook.

There is evidence that today’s lows might be the start of a new up-leg that may carry GBP/USD prices up to, at least, the highs of this lateral channel

GBP/USD daily price is experiencing a sideways movement, after retracing more 70% of its upward movement from its lows in August 2017

Possible scenarios:

  1. Today’s lows (1.31653) might be the start of a new up-leg that may carry GBP/USD prices up to, at least, the highs of this lateral channel (1.32272), provided that prices cross over the downward trend line.
  2. If the price does not continue up and reverse near the BB mean, then the downward leg is continuing to its next floor, at 1.31, and a good reward to risk trade is possible at about 1.3177.

USD/JPY

Japan was in focus yesterday, as prime minister, Shinzo Abe is back in power

Japan was in focus yesterday, as prime minister, Shinzo Abe is back in power, after his victory this weekend, that drove the yen downward yesterday. Today, we see a bounce that set prices to test the highs of yesterday’s session. Tuesday, the Japanese currency, instead of focusing on Japan’s manufacturing PMI, slightly lower in October, it seems to pay more attention to interest rate differentials.

Mid-term, the USD/JPY is trading on a lateral price channel whose low is at about 107.7 and it’s high is at 114.34. Currently, the price, trading at 113.71, is moving closer to the top of that channel.

A short-term bottom at (1) in sync with the MACD signal crossover, marks the start of a new uptrend. The red 10-period BB is sloping strongly up, so prices are heading for a test of the recent highs at (3), and, potentially break them up.

The best possible action here is to scalp on a short timeframe, such as 15 min charts or shorter, being aware that we are at the highs of a mid-term channel. Long and short-swing trades must wait for a clear signal or news event

USD/CHF

The Swiss National Bank (SNB) is keeping an expansive monetary policy that drives Swiss CHF down

The Swiss National Bank (SNB) considers the CHF to be over-valued, so it is keeping an expansive monetary policy that is driving the Swiss currency down. The SNB policy of negative interest rates contributes to the downward currency trend.

To sum up, the Swiss economy is slowing down, its growth rate (+0.3%) is losing track compared to the one registered in the Eurozone (+2.3%) in the second 2017 quarter.

USD/CHF is at overbought but still strongly moving up

The USD/CHF weekly is on a sideways channel with a lower limit at 0.942, and an upper limit at 1.0365. Its current price – 0.9896- is at about the middle of this channel. On a daily and weekly basis, the price is in overbought territory.

Today the USD/CHF is trading strongly up, and its hourly chart is currently at overbought territory as well, with its price touching the 3rth Bollinger band (+3STD) (1). On such a strong trend, the best thing to do is wait for a price pullback to create a short-term support near the mean of the Bollinger bands (2) and set a long trade there.

AUD/USD

Tomorrow, Australia’s quarterly inflation data will be released.

The Aussie is under pressure as the soft Chinese housing data was weaker than expected. China is a major partner for Australia, and China’s economic health shakes Australian currency for the good and the bad. The Housing Price Index grew in China by 6.3%, after an 8.3% increase in August. Next Wednesday, Australia will release its quarterly inflation figures.

AUD/USD is currently in a downtrend

The AUD/CAD pair, on a weekly chart, is moving on a downward leg, in a sideways channel that started in Jan 2015. The channel has a slight upward bias.

On the daily chart, the AUD/USD pair is down-trending after drawing a double top (July and September 2017). Actually, the price is below the -1 Bollinger Band showing that the downtrend is still in place

The most probable scenario for the AUD/USD pair is to go down to at least 0.766, or, even deeper, to touch the lower weekly trend line (0.7518). The MACD crossover to the downside confirms the bearish bias of this currency pair

USD/CAD

USD continues to show strength against the Canadian currency. Tomorrow’s interest rate decision by the Bank of Canada will bring a confirmation (or denial) to the strong uptrend od this currency pair. The odds of a new rate hike are getting lower, after weak economic data ahead of the BoC meeting.

Canada Wholesale sales rose by just 0.5% in line with forecasts, although, it seems the market expected a bit more increment.

USD/CAD moving up with strength
The USD/CAD pair, on a weekly chart, is in the middle of a retracing trend, starting at the beginning of September, which has retraced 35% of the length of the downward move. Its daily chart shows the currency pair approaching the ceiling of a potential wide and sideways price channel. The other notable fact being, a price breakout through 1.25953, starting a new impulsive leg up.

NZD/USD

NZ Government to reform RBNZ process to set rates.

The Kiwi dollar is under pressure since the government announced its plans to reform the Reserve Bank of New Zealand. NZ Labor-led coalition said it will modernize the bank’s process for rate-setting and adapt it into a format that was more “growth-friendly”. Giving hints about expansionist monetary policy. Analysts say the RBNZ reform is already well priced by the market, and have downplayed its impact on interest rate expectations.

NZD/USD is currently at the bottom of a down-trending channel

On a daily chart, the NZD/USD pair is trending down on a channel that started on July, 27. Actually, the price is oversold, well below the -2 Bollinger Band. The price is near a mid-term support, so it’s in the process of bottoming out, as is clearly seen in its hourly chart.

A possible scenario for the next few hours is a retracement from here to test resistance points at about 0.695. If it stalls without breaking 0.6908, and MACD turns bearish the retracement is failing, and the downtrend might resume testing the lows made in May 2017.