Stale Market Analysis from ForexBrokerInc

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EURUSD

There’s little to be added to our Friday’s review as EURUSD continues sliding down of that 61.8% retracement seen last Friday. Today’s EU session brought EURUSD to as low as 1.0660 and current retrace to 1.07-1.0720 will be seen as another opportunity to join the bear run till 1.0620 and 1.05 respectively.

GOLD

The price of Gold withheld yesterday’s selling pressure at around $1190 per troy ounce. Increased volumes at around $1190 and continuation of the price, printing higher lows, allows suggestions that the price of gold is likely to advance above $1230/oz. With economic calendar being rather quiet for Gold this week, a gradual break above $1210 will provide a stronger signal for a new bull run. On the other side, a break below $1188 could see sharper movements down, aiming at $1170.

 

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EURUSD

There’s been little direction this week with 1.0660 confirming during today’s EU session a solid intraday support with 1.0820 seen as a resistance. The market pauses at around level 50 on the H4,RSI(14) awaiting clearer direction. Break below the intraday support would signal a new bear run till 1.0520, on the other side a break above 1.0820 would attract Euro buyers till the next area of 1.1020.

USDCAD

The loonie remains supported by the increase in the price of oil and intraday levels of 1.23 and 1.21 are seen as resistance and support respectively. With the Bollinger Bands becoming tighter and the price finding a resistance at the level of 50 on the H4,RSI(14) a move towards 1.2180 is likely with the RSI having a lot of room before failing into oversold area. Break below 1.2180 would signal further movements towards 1.1980



Traders should bear in mind today’s New Home Sales (USD) data release as well as tomorrow Eurogroup will held a meeting (EUR) and Durable Goods Orders (USD) data release, as all three economic events will have an impact on currencies.

 

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The US Dollar Index (DXY) continues its decline for the 6th consecutive day dropping below 94.50 during today’s EU session. Yesterday’s weak GDP reading and dovish statement by FED’s Janet Yellen signals that FED is far from hiking interest rates. With little to change in the current sentiment on DXY and as GBP and EUR break through some key resistance levels, markets are expected to continue disappoint the Dollar in the coming weeks of trade.

EURUSD

With quite impressive price action trading seen since the end of last week the Euro continues to pay off when bought on any retracements versus the Dollar. The pace and volumes on the break above 1.10 continues signaling that EURUSD is far from seeing 1.05 and below anytime soon. Inflation in the Eurozone within ECB’s expectations and Employment rate at ‘fairly okay’ level, well at least not increasing. Technically speaking, another bull run can be expected to test 1.13-1.1320 I next week’s trade with major support at 1.10-1.1020. Despite RSI,H4 being in overbought area, the Daily still has room to go up before climbing past the overbought mark. Traders will be looking to push the EUR higher and buy any retracements. Despite tomorrow’s economic manufacturing data releases for US, don’t expect high volatility as most EU markets are going to be closed due to Labour Day.

 

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Highlights: Bank of England decided not to change the £375B asset purchase program and kept interest rates at 0.5%. Yesterday’s decision was welcomed by traders, more on this below. The US Dollar Index (DXY) resumed recent downtrend and is set to test major support. The long-dollar bet that the greenback will continue to rally seems to be coming under a pressure given Fed being unlikely to raise interest rates this year and the trade deficit (trade balance) grew to multi-year high of $-51.37B, as reported last Tuesday by the Bureau of Economic Analysis.



EURUSD

There’s little change in Eurozone’s fundamental outlook as the EU still faces internal troubles with Greece. Recent price action – buy dips – continue to pay off. However, as there’s not an awful lot to fundamentally support the Euro, any gain will be connected with probable further greenback selloff.

With the RSI(14),H4 chart showing another divergence and plenty of room before falling into an overbought area, the market is likely to test 1.1350, break above could see fast paced move towards 1.15. Less likely scenario is a break below this week’s low at 1.1130, then below major support at 1.10-1.1020.



GBPUSD

The British Pound continues strengthening not only versus the greenback but versus most of currencies. The majority win for Conservative party in parliamentary election in the UK last week was widely approved by investors and traders around the world. Together with last week’s trade deficit report for March being better than for previous month by some £0.68B and steadily growing manufacturing and production, the UK is what some may see ‘in a good course for economic recovery’.

With the RSI(14),H4 chart showing divergence in the overbought area, GBPUSD is likely to retrace from current levels to 1.55 before resuming its way up. Traders will be looking to buy dips and join bull run above 1.57 towards 1.59. On the other side, a break below 1.55 could see closing the gap around 1.5250.



USDCAD

Following our view for the last few weeks, there’s a little change as the Loonie continues adding pressure for the US Dollar. With Oil prices pushing higher and overall sentiment being against the greenback, USDCAD is likely to break 1.20 and test 1.16s price level in coming weeks.

 

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The US Dollar Index (DXY) recovers from yesterday’s bottom at 93.15 and finds resistance at 94.00 mark.

The move towards today’s resistance may be seen as nothing more than profit taking from recent bear runs on Dollar and is unlikely to continue during next week’s trade. Better, only just, GDP readings for the Eurozone give little brighter light at the end of the tunnel for the Eurozone troubles. Same goes for UK where GDP Estimate reading showed an increase by 0.1% to 0.4% for the first three quarters of 2015.

EURUSD

The single currency finds more buyers across the board of currencies and thus signaling continuation in the recent bullish trend versus the greenback. Thursday’s rally left Euro bulls a bit disappointed having been unable to stay much above 1.14, however after a short correction 1.15 target will be on agenda next week. The area of 1.1350 remains fairly supported but break below 1.1320 could see potential retrace to 1.1180 – 1.1200

GBPUSD

The cable trims recent gains but since the British Pound broke through some key resistance levels across the majors’ board with ease and not much retrace, the market is likely to come down towards 1.5550 before another bull run above 1.58 targeting 1.60 will occur.

Traders should bear in mind some key economic events, which will occur next week as high volatility is expected.

Wednesday 20/May Non-monetary ECB meeting

Wednesday 20/May Bank of England interest rate decision vote

Wednesday 20/May FOMC Minutes

Thursday 21/May ECB Monetary Policy Meeting Accounts followed by ECB President Mario Draghi’s speech

Friday 22/May ECB President Mario Draghi’s speech followed by Inflation data from US

 

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Friday Market Update 22/5

EURUSD faced a test below 1.11 heading towards Wednesday’s publication of Minutes from Federal Open Market Committee Meeting but since the report was understood by traders as dovish, volumes picked up and Euro started to recover. Our expectation for the Euro-Dollar remains unchanged and as the move below 1.11 didn’t really attract sellers, we continue to see Euro-Dollar being traded at 1.15 – 1.16 rate in the coming weeks providing the market doesn’t break the key support at 1.10 – 1.1020.

The RSI,14 on H4 chart bounces off of the oversold area and daily RSI shows a bounce from the mid-point signaling a good support and plenty room for Euro-Dollar to move up.

Heads of a few central banks are due to speak today with ECB’s Mario Draghi scheduled for 9:30 EST.

For this reason we expect high liquidity during and after the speech.

GBPUSD

Pound-Dollar goes in-line with our expectations this week and remains in the raising channel.

The nine members of Bank of England’s Monetary Policy Committee voted to keep interest rate unchanged. Despite lower than expected inflation numbers in the UK, the retail sales data soared. This could’ve been expected as lower inflation is better for an average consumer, as this simply lets them buy more.

Today, Bank of England’s governor Carney is due to speak, at the same time as Mario Draghi from ECB at 9.30 EST.

Technically speaking, Pound-Dollar is expected to raise towards 1.60 with 1.50-55 remaining a solid support.

Oil

Oil too, in line with our expectations reached 58.50 and found a good support at this price level. Oil buyers who missed opportunity to buy at 58.50 could receive another chance at around 59.50 where the market is likely to move before another bull run is expected.

Traders should also be aware and ready for FED’s Yellen speech at 1 in the afternoon EST time.

With also Bank of Japan’s governor Kuroda speech scheduled for today (9:30 AM EST time), today looks to be a very busy day for traders. With high volatility expected, we recommend using Stop Orders on all open orders or minimize the exposure to avoid disappointment.

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The USD Dollar Index (DXY) rises for the third consecutive day on Tuesday and Dollar bulls will be looking at a close above 97 points to regain faith in Dollar --- and continue with the rally.

USDJPY

The dollar climbed to a fresh 8-year high versus Yen at 122.90 during today’s EU session.

Bank of Japan and Government are committed to maintaining the current monetary policies, which are asset market friendly and bearish on the currency. Recent rallies against the Dollar were not noticed on Dollar-Yen and thus break above 122 could’ve been expected.

In order to extend gains, traders will be looking to close this week above 122 where the intra-day support is located. The Daily RSI falls into overbought area and short retracements are expected.

EURUSD

Euro buyers cut their exposure and take heavy positions off the market below 1.11 and since then a fast paced bearish rally continued till 1.09 hit during today’s EU session.

Rate 1.09 falls on 61.8% fibo retracement on the wave from 1.055 and 1.1450 where a pull up is expected. Remaining Euro bulls should be protecting this level as a break below 1.09 may force the market to test 1.0750 and eventually 1.0550. For any move up to take place, daily close above 1.10 is a must. Then too, 1.09 should attract both bull and bear traders where more orders and volumes will decide where the market goes from there.


GBPUSD

Pound buyers may be left slightly disappointed after the break below 1.55 as today’s EU session saw GBPUSD traded below 1.54.

Pound is likely to be traded at 1.5350, a 61.8% retracement on the wave from 1.51 and 1.58. 1.5350 should provide more direction and despite the current Dollar rally and break from the upper channel, the Pound is still likely to continue towards 1.60 and current levels may be seen as a good opportunity to join. A break below 1.5350 may see a fast pace break towards 1.5250


There are multiple key events in the Economic Calendar for today and later this week. Traders are advised to be aware of them before making trading decisions. We also recommend using Stop Losses on each and every trade.

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Market Update 2/06

EURUSD

Heading towards Tuesday’s US session, Euro-Dollar climbed above 1.10 on better than expected Inflation data for the Eurozone.

With Greece apparently reaching an agreement among Troika, current price should attract more Euro buyers. It is important however that EURUSD ends today’s US session above 1.10.

First target for buyers will be price around 1.11 from where a short retracement can be expected.

Second target for buyers will be price around 1.12 level and break above should provide a confirmation that the market is ready to continue going up.

On the other hand, a close below 1.10 will attract strong selling interest.

Traders will be looking for clues during ECB’s Monetary Policy Statement and Press Conference scheduled for Wednesday at 8:30 am Eastern Time.

USDJPY

There’s little change in the direction on Dollar-Yen after the fast paced break and close above 122.

Having been in an 8 day consecutive move up, Dollar-Yen traders can expect a short correction as the 14 period RSI is well in the overbought area.

It seems that for the price to break and stay above 125 would need to test 122 first. Having said that, a break and close above 125 on the daily chart would indicate possible sharp movements towards 127.



GBPUSD

With last week being anti-Sterling, Pound-Dollar is currently testing a break above the declining price action channel. Pound-Dollar traders will be looking at a daily close -- as close below 1.5250 will attract sellers till 1.5150. The 14 period RSI on Four Hour charts shows divergence and thus it shouldn’t take much for Pound-Dollar to raise again. Daily close above 1.5250 will indicate a possible sharp movements towards 1.55 amid this week’s economic data.

VARIOUS

There are multiple events in this week’s economic calendar that will surely provide a lot of liquidity to the currency market and thus we advise our clients to get familiar with them before making trading decisions.

We also advise our clients to use Stop Loss orders each time you place a trade to minimize the risk and avoid any disappointments.

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Market Update 10/06

Current setups across major currency pairs signal a continuation of an anti-Dollar trade.

The Euro, Pound and Canadian Dollar show good trading opportunities.

Let’s start with Pound-Dollar

Since last week’s drop to 1.52 after the NFP release, and in line with our expectations and analysis from last Friday, the market attracted a significant number of buyers. Pound finally breaks away from the declining channel and new highs can be expected.

With UK’s GDP Estimate reading and Bank of England’s governor speech later today, it is important that Pound Dollar breaks and holds above 1.55. Such scenario in the next several hours of trade should attract more buyers and rally can continue with next targets around 1.5580 to eventually test May’s highs at 1.58.

On the other side a break below 1.54 on possible dovish outlook by the Bank of England could see Pound-Dollar declining to 1.52 where it all started last week.

Let’s take a quick at Euro-Dollar

Euro too, in line with our expectations found enough at 1.11 to attract buyers and current setup signals possible moves towards 1.16 rate in near future. Ideally, buyers will be hoping for a close above 1.1380 while supporting 1.1080 as break below should see a fast paced move towards 1.10.

Last but not least, the Loonie, Dollar-Canadian Dollar

The loonie remains heavily supported by higher oil prices and the decline towards 1.2250 was imminent and in line with our expectations during yesterday’s live webinar session. Short retracement can be expected from 1.2250 to about 1.2360-80 area before another bear run is expected. However, a daily close below 1.2250 this week, will most likely attract another bear run much sooner and till 1.20.

That’s all for today, don’t forget to check out the Economic calendar and use of stop loss orders.