Market news and trade recommendations by FBS

[riki143]

Forex Analytics

CAD/JPY: buy target - 92.00
2 October 2015
By: Dmitriy Chernovolov

• CAD/JPY reached sell target 90.00
• Next buy target - 92.00

CAD/JPY has been rising sharply in the last few days – following the earlier upward reversal from the strong support zone lying between the support levels 90.00 (sell target set in our previous forecast for this currency pair) and 89.00. The upward reversal from this support zone completed the previous minor B-wave of the intermediate ABC correction (2) from the end of August.

CAD/JPY is likely to rise further in the active wave C toward the next buy target at the resistance level 92.00 (which reversed previous waves A and (b) and which coincides with the 50% Fibonacci Correction of the previous sharp minor impulse wave 5 from August).

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http://fxbazooka.com/en/analitycs/show/6612

 

[riki143]

Forex Analytics
USD/JPY: forecast for October 5-11

By Elizabeth Belugina

The main event for Japanese yen next week will be the Bank of Japan’s meeting on Wednesday.

The central bank’s Tankan survey showed that sentiment among big Japanese manufacturers slipped in Q3. At the same time, other indicators, such as prospects for profits and plans for construction spending, were positive, providing some hope for the economy. The survey does not point at an unambiguous necessity for the Bank of Japan’s monetary stimulus. The recent comments from the BOJ show that Governor Kuroda still believes that the nation’s economy is on track for inflation, so the regulator does not have to increase quantitative easing (QE), which currently expands the monetary base at an annual pace of 80 trillion yen ($666 billion). However, there are wide fears that Japan may slip in technical recession this year because of falling exports to China and other emerging markets.

Despite Kuroda’s comments, many market players believe that the Bank of Japan will act in October. Investors remember Kuroda’s tactics of big surprise he used last year, when he expressed confidence in Japanese economy and then suddenly dropped the bomb of large QE.

If the central bank does not deliver easing, USD/JPY will make a short-term voyage down, to the 117.00 area and probably to 116.50/00. Surprise easing contrary to Kuroda’s promises, on the other hand, will send dollar/yen to 122.50/123.00 area. Next big resistance in this case will be at 124.80 (trend line from June highs).

Note also that there will be another meeting of Japanese regulator on October 30. This meeting will be accompanied by the release of the BOJ’s economic outlook. If the Bank of Japan chooses to ease policy in October it will more likely choose the end of the month. This is why our main scenario is that the BOJ will keep policy unchanged next week. All in all, the likely lack of easing from the Bank of Japan together with the weak US NFP data makes us bearish on USD/JPY.

Daily USD/JPY

If the Bank of Japan chooses to leave the bond-buying program unchanged, it may decide to inject money into the economy via stock market increasing the amount of exchange-traded funds it purchases. This, in turn, will be a great opportunity to invest in Japanese stocks, for example through CFD on Nikkei 225 index futures.

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http://fxbazooka.com/en/analitycs/show/6617

 

[riki143]

Forex Analytics
GBP/USD: forecast for October 5-11

By Kira Iukhtenko

GBP/USD broke above the 1.5160 resistance on the downbeat US labor market data on Friday. The pair confirmed a reversal “rising wedge” pattern on the daily chart. It seems that the bearish trend has finally ended. The pair is trading in a medium term bullish flag with the next targets at 1.5330 and 1.5500. Next support lies at 1.5050.

As for the economic calendar, you should watch Services PMI on Monday and Manufacturing production on Wednesday. The Bank of England meeting will take place on Thursday. Monetary policy is expected to stay on hold, but it is the change in rhetoric that matters for the market.

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http://fxbazooka.com/en/analitycs/show/6620http://fxbazooka.com/en/analitycs/show/6620

 

[riki143]

Forex Analytics

EUR/USD: forecast for October 5-11

By Elizabeth Belugina

During the past week lower-than-expected euro zone’s September inflation figures were welcome by the euro bears, as they strengthened expectations of more monetary stimulus from the European Central Bank. According to the data, the region’s annual inflation was -0.1%. The annual rate of core inflation, however, remained stable at 0.9%.

The ECB president Mario Draghi sounded optimistic about economy saying that it has returned to ‘sustained growth’. Still, earlier Draghi had promised to do more quantitative easing than planned if inflation if inflation keeps declining. As a result, more QE from the ECB is very likely, though it is clear that the central bank is in no hurry to act.

We will hear more from Mario Draghi next week as he delivers another speech on Tuesday. Other important events in the euro area in the coming days include the meetings of the European finance ministers on Monday and Tuesday. The meetings will be devoted to the discussion of Greek bailout. Greek finance minister Euclid Tsakalotos will meet his euro zone counterparts next Monday for the first time since his country’s September 20 election. The work on the first review of the new bailout program, which must be completed by November 15, is beginning. There may be some headlines at the beginning of the next week. For now, the situation in the euro area looks rather stable that allows us to expect that even remaining under pressure the single currency will not give up easily.

US labor market data came out much weaker than expected. Weak NFP was a serious blow for the US dollar bringing the euro up to 1.1300. There is resistance line from August highs in the 1.1330 area, and a close higher is needed to confirm the way up to 1.1460 and 1.1500. In the absence of a break and if we see reversal model, we will go short on the euro targeting 1.1215 and 1.1150. Support of the 55- and 100-day MAs, which are currently a bit above 1.1100 was able to hold for a long time and will likely survive more attacks of the bears. Further support lies at 1.1015/00 (trend line support since March 2015) ahead of 1.0850/00.

Daily EUR/USD

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http://fxbazooka.com/en/analitycs/show/6619

 

[riki143]

Forex Analytics
US Dollar: forecast for October 5-11

By Kira Iukhtenko

US Dollar was hit by the weak labor market data released on Friday. US economy added only 142K new jobs in September, while the October reading was revised down to 136K. Average hourly earnings showed zero growth, confirming the deflationary pressures in the US economy.

As a result, expectations for the Fed’s rate hike in 2015 fell sharply and are gradually switching to March 2016. Short-term USD prospects worsened: next week we expect to see more downside versus the safe haven currencies. As for the commodity block pairs, USD depreciation is limited. For the mid-term investors it is advised to use the current pullback as a buying opportunity for the greenback.

On the new week United States are to release a bunch of important figures. Watch the ISM non-manufacturing PMI on Monday and the trade balance on Tuesday. Market attention will be focused primarily on the FOMC meeting minutes release on Thursday. On the September 17th meeting 13 out of 17 member supported a rate hike in 2015. Investors hunger for more details of the long-awaited meeting.

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http://fxbazooka.com/en/analitycs/show/6618

 

[riki143]

Forex Analytics
Danske Bank: trade signals for Oct. 5

Open positions:*

EUR/USD: Hold SHORT at 1.1269, TAKE PROFIT 1.1017, STOP LOSS 1.1333

USD/CHF: Hold LONG at 0.9695, TAKE PROFIT 0.9903, STOP LOSS 0.9639

EUR/JPY: Hold SHORT at 134.85, TAKE PROFIT 131.30, STOP LOSS 135.45

EUR/CHF: Hold LONG at 1.0910, TAKE PROFIT 1.1186 (revised), STOP LOSS 1.0823

GBP/JPY: Hold SHORT at 182.00, TAKE PROFIT 179.32, STOP LOSS 183.43

EUR/GBP: Hold LONG at 0.7375, TAKE PROFIT 0.7501 (revised), STOP LOSS 0.7300

Trade ideas:

USD/JPY: BUY at 119.60, TAKE PROFIT 122.13, STOP LOSS 118.59

GBP/USD: BUY at 1.5160, TAKE PROFIT 1.5318, STOP LOSS 1.5085

AUD/USD: Possibly SELL higher

USD/CAD: SELL at 1.3327, TAKE PROFIT 1.2952, STOP LOSS 1.3435

EUR/CAD: Possibly SELL

____________________________________________________________

*Danske Bank applies trailing stop orders (moved together with the price)

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http://fxbazooka.com/en/analitycs/show/6630

 

[riki143]

Forex Analytics
AUD/USD: weekly wave analysis
5 October 2015

Daily. Development within the long downtrend A is over. At the last section we see the formation of the initial phase of the upward correction B.

Weekly. This week we will likely see the pair’s growth, in line with the current layout of the chart. We expect the pair to form impulse [c].

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http://fxbazooka.com/en/analitycs/show/6634

 

[riki143]

Forex Analytics
USD/JPY: weekly wave analysis
5 October 2015

Weekly. Here’s the layout of the multi month uptrend. Let’s review the layout of the wave (IV) at the more detailed chart.

H4. The market is moving in the ‘endless’ sideways triangle [iv]. This week we may see the end of the wave e, and then the pair will resume moving down in the new wave [v].

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http://fxbazooka.com/en/analitycs/show/6633

 

[riki143]

Forex Analytics
GBP/USD: weekly wave analysis
5 October 2015

Daily. After a powerful decline within the impulse [A], we saw a complicated correction , which took form of an atypical triple three. It seems that at the last section the decline within the new trend [C] has already started.

H4. The pair has built the downside impulse 1, after which we saw the beginning of the upward correction 2. We cannot rule out the possibility that this wave will take form of a simple bullish Zigzag. As a result, this week we expect the pair to keep rising in line with the approximate trajectory shown at the chart.

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http://fxbazooka.com/en/analitycs/show/6632

 

[riki143]

Forex Analytics
EUR/USD: weekly wave analysis
5 October 2015

Daily. The pair keeps moving within the upward corrective wave (4). This wave is taking form of a rather complicated double triple. Currently EUR/USD is forming its final part y. Let’s view the layout at Н4.

H4. We are probably seeing the development of the small correction (B), after which the market’s growth will continue. The approximate scheme of the potential future move is shown at the chart, though we recommend trading with caution as the market is forming complicated price patterns.

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http://fxbazooka.com/en/analitycs/show/6631