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FOREX PRO WEEKLY #2, December 25-29, 2017

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Dec 24, 2017.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    So, as holidays stands - we will take a look at another currency that we usually leave without attention - JPY.

    Fundamentals

    (Reuters) - Japan’s consumer prices were expected to rise fractionally for an 11-th straight month in November, a Reuters poll found on Friday, highlighting the reticence of consumer inflation despite the solid economy.

    The nationwide core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, likely rose 0.8 percent in November from a year ago, unchanged from October’s reading, the poll of 19 economists found.

    The rate of increase in utility costs slowed down, but the cost of oil products such as gasoline supported core consumer prices, analysts said.

    Core consumer prices in Tokyo, available a month before the nationwide data, were projected to be up 0.7 percent in December from a year earlier versus a 0.6 percent annual increase in November.

    “The contribution from energy prices to core CPI will likely stay steady in this fiscal year but it will peak in fiscal 2018,” Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said in the survey.

    The Bank of Japan kept monetary policy steady on Thursday and Governor Haruhiko Kuroda stressed the need to “patiently” maintain ultra-loose policy, with inflation still distant from the BOJ’s 2 percent target despite a strengthening economy.

    The poll also found industrial output was likely to have grown 0.5 percent in November from the previous month, up for a second straight month.

    Factory output is forecast to remain solid given buoyant business sentiment and robust external demand, analysts said.

    “We expect factory output will continue to recover thanks to gains in exports on the global economic recovery, upbeat corporate profits and the improving jobs market,” said Akihiro Morishige, senior economist at Mitsubishi Research Institute in the survey.

    The poll saw the jobless rate steady at a 23-year low of 2.8 percent in November and the jobs-to-applicants ratio at 1.56, which would be the highest level since January 1974.

    Household spending is forecast to have risen an annual 0.5 percent in November and retail sales were seen likely to grow 1.2 percent on the year.

    The internal affairs ministry will release the jobs market and household spending data on Dec. 26, while the trade ministry will publish the retail sales figures on Dec. 28.


    COT Report

    Speculators pared back net short U.S. dollar bets, pushing them to their lowest level since mid-November, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

    The value of the net short dollar positions, derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was $2.18 billion in the week ended Dec. 19. That was lower than the previous week’s net short position of $7.81 billion

    In general, since autumn JPY stands extremely oversold, and keeps net short positions around 115-120K contracts. It makes difficult for currency to drop more and limits upside USD/JPY potential. In last three weeks we see some short-covering. It stands gradual and it is difficult to say what the reason for that - either recent BoJ statement and data or just end of the year.
    upload_2017-12-24_14-10-39.

    Technicals
    Monthly

    So, today we will take a look at yen, because it shows interesting technical picture. Personally I do not remember whether I've seen something of that sort anywhere.

    On monthly chart picture stands moderately bullish. Major upside swing from 75 to 125 level has become a bullish reversal swing as well. For few pips but it is greater than previous swing down. After that logical deep retracement to 100 level has followed.

    Upward rally after first touch of 50% Fib support area was furious, then also retracement has followed. All these stuff is forming wide pennant or triangle pattern, which potentially has chances to become upside continuation pattern.

    But now we're mostly interested in action that stands inside the triangle. Here market has formed bullish grabber, which suggests action above 119. And in general we could recognize a shape of big reverse H&S pattern. The bottom of right shoulder has been passed already and price was able to hold there. It means that in long-term perspective we could get an action somewhere to 150 area.

    Finally, triangle also could shift to big upside butterfly pattern. But all these moments have a relation to far-going future. Now we mostly care just about inner grabber and 119 target here.
    jpy_m_25_12_17.

    Weekly

    Here, on weekly, we're going further as a lot of other bullish signs stand here. First is - take a look at difference of price action. Market has shown fast rally up from 100 to 118, but gradual and choppy back to 108. It means that downside action was a retracement and it takes the shape of wedge pattern that has been broken up already.

    This agrees with monthly picture and supports idea of big H&S pattern there.

    Inside the wedge we also have some patterns - multiple AB-CD's, "222" Sell etc. We even have traded some of them. Combination of rally and wedge consolidation takes the shape of large "222" Buy...

    Price also behaves well around pivots - action down was held by MPS1 and now market is coiling around MPP, stands slightly above it.

    Finally right now, we have multiple bullish grabbers that suggest action above 115 area - right to MPR1:

    jpy_w_25_12_17.

    Daily

    We've talked about daily chart just on Friday. So, here is also picture mostly stands bullish. And again, guys - we have bullish grabber with even closer target - 113.80. Major AB-CD pattern has COP target slightly above the top which agrees with grabber's idea...

    As weekly chart shows this AB-CD pattern could get continuation to OP target which stands slightly higher than 114.50 tops, and particular this action is suggested by weekly grabbers.
    jpy_d_25_12_17.

    Intraday

    Here is trading plan that we've discussed in video is working. As market has completed some inner targets - AB-CD XOP and formed "222" Sell pattern, some retracement should happen and now it is started.

    Still, as major targets still stand ahead and not completed yet - retracement should not be too deep. By current pace it seems that 113.10 area will be the point where market could re-establish upside action again.
    jpy_4h_25_12_17.


    Conclusion:

    So, we've extended view on JPY and here is indeed stands unique combination of bullish grabbers, starting from monthly and down to daily chart, which provides a combination of upside targets.

    Here is still some contradiction exists with other dollar-related currencies, as there we also expect upside action. But, may be not the USD will become a reason for action on JPY, or action could happen in different time or different pace.


    The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
     

    Attached Files:

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  2. shahsavari

    shahsavari Private, 1st Class

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    Dear Sive
    Merry Christmas and thanks for all of your helps in 2017 .
     
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,

    (Reuters) - Gold prices edged up on Tuesday inlow-volume trade to more than three-week highs, helped by aweaker dollar. Spot gold was up 0.3 percent at $1,278.06 per ounceat 0252 GMT, after hitting its highest since Dec. 1 at $1,279.05. U.S. gold futures rose 0.3 percent to $1,282.50 anounce. The futures market was closed for Christmas on Monday and volumes remained extremely thin on Tuesday.

    Anemic U.S. consumption data on Friday helped gold, while the dollar remained under pressure in thin trading in Asia, said Jeffrey Halley, senior market analyst at OANDA. "With North Korea's Constitution Day Holiday on Wednesday, there may also be an element of risk hedging in play forregional markets at the moment", Halley said.

    Tension has been rising over North Korea's nuclear and missile programmes, which it pursues in defiance of years of U.N. Security Council resolutions, with bellicose rhetoric coming from both Pyongyang and the White House.

    U.S. growth prospects dimmed on Friday as data showed spending outpaced income in November and the Federal Reserve's preferred inflation measure - the personal consumption expenditures price index that excludes food and energy - rose by just 0.1 percent in November.

    The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 percent to 93.256. Gold rose for a second straight week last week and closed above its 200-day moving average, a key and a positive technical indicator.

    Adding a touch of bullishness to gold was the data from U.S.Commodity Futures Trading Commission (CFTC) on Friday, which showed that hedge funds and money managers had increased their net long stance in gold in the week to Dec. 19.

    Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.18 percent to 837.50 tonnes on Friday from 836.02 tonnes on Thursday.

    On gold market situation has changed. Although we could put it on lack of liquidity, but this is not quite so, because CFTC data and SPDR stats also tell that investors keep longs. Despite drop since late summer - investors still keep major part of long positions.

    The same story on daily chart. In fact, we haven't got our bearish setup here as no clear bearish pattern has been formed. Gold even has broken through resistance and price now stands again inside the triangle. This is clear bullish sign. Now it seems that we should search chances to go long.

    At the same time - price is coming to daily K-resistance area and MPP. So, some retracement should be triggered here. As 1265 area has some special meaning - this is first level that should be touched on retracement:
    gold_d_26_12_17.

    On 4-hour chart we also have AB-CD pattern with XOP around 1282 that creates Agreement with daily K-area. That's being said, we could get two setups here. First for scalp traders and it is bearish - downside action could start somewhere around 1282, so watch for bearish reversal patterns. Second setup is for upside continuation. Here we will watch for bullish patterns while retracement will stand:
    gold_4h_26_12_17.
     
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,

    (Reuters) - Gold prices edged down on Wednesday,hovering just below a three-week high hit in the previous session, as the dollar held steady and equities firmed. Spot gold fell 0.1 percent to $1,281.71 an ounce as of 0337 GMT, after hitting its highest since Dec. 1 at $1,283.72 in the previous session. U.S. gold futures were little changed at $1,286.70 an ounce.

    "Technically, the 38.2 percent of the move down from the 2017 high of $1,357 comes in at $1,282. The 100-day moving average is at $1,286. So, these levels will be watched for further moves", said Amit Kumar Gupta, portfolio management services head at Adroit Financial Services. "We will have to see how gold behaves at these levels in holiday mood amid low liquidity."

    The dollar held steady versus a basket of major currencies on Wednesday, drawing support after oil prices climbed to 2-1/2year highs.

    "More people are looking at gold as a portfolio rotation ...Both gold and silver are seeing some bids despite a firm currency",a Singapore-based trader said.

    Equities firmed on Wednesday, boosted by commodity- and energy-linked shares around Asia. Commodities gained broadly on Tuesday as a stocks rally paused on thin-volume trade and as many markets were shut after Christmas Day holiday.

    Meanwhile, the United States announced sanctions on two North Korean officials behind their country's ballistic missile programme on Tuesday, while Russia reiterated an offer to mediate to ease tensions between Washington and Pyongyang. Geopolitical risks can boost demand for safe-haven assets such as gold and the Japanese yen.


    On gold market price has reached our 1282 K-resistance area. In general, this will be very important level. Also I plot here 100-days MA, as many traders look at it. Daily chart is a part of the story. There are 3 days till the end of December and now we have unconfirmed bullish grabber on monthly chart. If it will be confirmed - it could put foundation for drastic changes here.
    gold_d_27_12_17.
    Our task on daily chart is to watch - what shape of retracement will be out from 1282-1286 area. Gradual and slow retracement will increase chances on upside continuation, while collapse through all Fib levels - could turn gold to bearish action again.
    Personally, I think that bulls now have more advantages - long-term positions by CFTC and SPDR, grabber on monthly, rally on daily... But... we will see. Just watch for the shape of retracement.

    On 4-hour chart market has passed through our 1282 XOP target, that's why now we have the last one - from absolute low and it stands around 1286. So, market should hit it first. Then retracement should start. Most probable destination is K-support around 1265. Scalp traders could think about short position as soon as any bearish reversal pattern will be formed around 1286...
    gold_4h_27_12_17.
     
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,

    (Reuters) - Gold prices were steady early onThursday, holding onto gains from the previous session when theyhit a 3-1/2 week high, as the dollar stayed on the back foot.

    * Spot gold was little changed at $1,287.80 an ounceat 0051 GMT, having hit its highest since Dec. 1 at $1,289 inthe previous session. U.S. gold futures were steady at $1,291.20 anounce.

    * The dollar index, which tracks the greenback against a basket of six major rivals, was nearly flat at 92.990.The dollar fell 0.1 percent against the yen at 113.20 .

    * The U.S. dollar fell to a 3-1/2 week low against a basket of currencies on Wednesday as traders bet more major centralbanks will begin reducing monetary stimulus in 2018 because of faster global economic growth.

    * Asian shares rose to a one-month high on Thursday and were on track for their best annual performance since 2009, while commodity-driven currencies were buoyed by a rally in copper,which hit a four-year peak.

    * The United States and Russia have agreed to continue diplomatic efforts to resolve the crisis over North Korea'sdevelopment of nuclear missiles capable of hitting the United States and emphasized that neither accept Pyongyang as a nuclear power, the U.S. State Department said on Wednesday.

    * Contracts to buy previously owned homes edged higher in November, boosted by job growth across a strengthening economy.

    * Earnings at China's industrial firms grew at their slowestpace in seven months in November, as demand and producer pricegains eased in further confirmation of ebbing growth in theworld's second-largest economy.


    Gold market, on a back of commodities rally, is becoming rather attractive. Now we see multiple patterns on horizon. Thus, on daily chart sooner rather than later some solid retracement should happen. So, we should not regret about missing upward action.

    Take a careful look at daily gold chart - here we could get reverse H&S pattern. Recent plunge and fast recover reminds bullish engulfing pattern. And, as a rule, as engulfing has been formed - some retracement back inside it happens.

    Second - rally itself is a good background for DiNapoli pattern. Here we also could watch for B&B's, DRPO's etc.

    As price is coming to some resistance around 1295-1300 area - MPR1, 50% major Fib level (not shown), downside reaction could start. Besides, tomorrow is last trading session of 2017.
    gold_d_28_12_17.

    On 4-hour chart we do not have any upside targets as gold has passed through all of them. But here we could suggest retracement targets. Levels are based not at current top but at 1294 level. We think that gold should reach at least 1275 K-support area on retracement by 2 reasons. First - daily K-resistance was disrespected and in most cases markets re-test them. Second - we have unfilled gap in the same area. Both these issues increase chances on drop at least to 1275.
    Potentially, gold could reach 1265 to keep harmony of daily shape:
    gold_4h_28_12_17.

    That's being said, overall perspectives look very good here. Now we need just to catch moment for jumping in.
     
  6. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,

    (Reuters) - Gold extended a nine-day rally on Thursday and hit a one-month high on a strong technical
    outlook and a U.S. dollar at a four-week low, as palladium prices reversed earlier losses to touch fresh 17-year highs.

    Gold benefited from technically-driven momentum after closing above its 100-day moving average on Wednesday for the first time since late November, analysts said.

    Spot gold was up 0.61 percent at $1,294.84 per ounce by 3:37 p.m. EST (1034 GMT) after hitting its highest since Nov. 29 at $1,295.21 an ounce. Spot prices have risen for nine straight sessions, not including the Christmas holiday. That is the longest string of daily gains since July 2011. U.S. gold futures for February delivery settled up 0.45 percent at $1,297.20 per ounce.

    Higher lows have bullion's chart looking strong, said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago. "The technicals favor the upside. The gravitational force is trying to break through the (key) psychological level of $1,300", he said.

    "Continued softness in the dollar bolstered bullion, with additional strength lent by commodities markets including copper and crude oil", traders said.

    Brent crude oil futures stayed near 2-1/2-year highs and copper touched a four-year peak.

    The dollar retreated against a basket of currencies, with the index slipping to its lowest since late November on a less certain U.S. economic outlook after the passage of major tax cuts.

    "The weakness in the dollar is playing its part", Naeem Aslam, chief market analyst at ThinkMarkets, said. "We do think that this trend will continue into 2018. We expect the gold price to finish the year above $1,300 mark, and that would send a strong buy signal for traders."

    The dollar index is down more than 9 percent so far this year, set for its biggest annual loss since 2003. That's helped lift gold nearly 5 percent from a near five-month low of $1,235.92 struck in mid-December.

    "With the Relative Strength Index (RSI) still at neutral levels, the technical picture suggests there is still potential topside in this rally", currency broker OANDA said in a note.

    Net gold imports to major consumer China via main conduit Hong Kong fell 23.6 percent in November from the previous month, data showed.


    Gold market doesn't have any big changes since yesterday, guys. On daily price finally has come to our 1296 resistance. Still, I do not exclude chances of appearing bullish reversal swing here, some W&R of 1300 top easily could happen... but, this is minor technical detail.
    In fact, daily chart brings multiple setups. First one is major reverse H&S pattern, which should be formed if retracement will start. Second - upside thrust, which could give B&B/DRPO trades...
    gold_d_29_12_17.

    On 4-hour chart smaller thrust (up from ~1265 area) now looks clearer, so, it could be used for seperate trading setups. May be DRPO "Sell", based on this thrust could trigger downside retracement, we'll see...
    gold_4h_29_12_17.

    On hourly chart we do not see something really special. Clearly we have steep channel here, and when it will be broken, this tells about retracement. But I hope that we will know this in advance, based on some reversal pattern on 4-hour chart...
    gold_1h_29_12_17.

    So, guys, here we could get a lot of trading setups and patterns, but we need to wait a bit more...
     

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