FOREX PRO WEEKLY, July 31 - 04, 2017
- Thread starter Sive Morten
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Sive Morten
Special Consultant to the FPA
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EUR has hit our target recently @ 1.1730 area and now it is entering long-term monthly resistance range around 1.18-1.20. As we do not see any signs of retracement yet - we just wait... and those who have longs keep them...
Sive Morten
Special Consultant to the FPA
- Messages
- 18,648
Good morning,
(Reuters) - The dollar extended its modest bounce from 15-month lows on Wednesday, benefiting from a pause in selling of the battered currency as investors begin positioning for key events this week, notably Friday's U.S. employment report.
The dollar index against a basket of major currencies shook off a decline in Treasury yields and was a shade higher at 93.090 after bouncing from 92.777, its lowest since May 2016.
The euro was unchanged at $1.1806 after being nudged away from a 2-1/2-year peak of $1.1846 set the previous day.
The greenback has been weighed down by political turmoil gripping Washington and largely uninspiring U.S. economic data, particularly sluggish inflation, which is adding to uncertainty about the pace of future Federal Reserve policy tightening.
"The dollar has already weakened significantly, especially against its European counterpart, reaching a point where some participants began buying back the currency ahead of Friday's U.S. employment data," said Shin Kadota, senior strategist at Barclays in Tokyo.
"But these are mere position adjustments before the U.S. jobs data and the bearish trend for the dollar still remains intact," Kadota added.
The euro has gained about 12 percent against the dollar so far this year.
In addition to the political risks and monetary policy uncertainty that have plagued its U.S. peer, the common currency has drawn support from expectations that the European Central Bank would eventually begin phasing out its easy policy.
The U.S. currency was 0.15 percent higher at 110.535 yen, pulling away from a near seven-week low of 109.920 touched overnight.
"The dollar is being supported against the yen with U.S. stocks continuing to perform strongly, despite the potential risks they are faced with," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.
The Dow racked up a fifth straight record high on Tuesday, even as Wall Street loses confidence that President Donald Trump and a Republican-controlled Congress will be able to push through tax cuts and increased spending on infrastructure this year. [.N]
Sera at Sumitomo Mitsui Trust also said that the market is likely to take in stride a cabinet reshuffle planned on Thursday by Japanese Prime Minister Shinzo Abe, who hopes to revive his flagging ratings.
"Market participants of course will be watching how the cabinet reshuffle turns out. But few, if any, expect the reshuffle to have an impact on the market," Sera said.
For potential impact on the dollar, the market awaited the U.S. ADP jobs report and comments by San Francisco Fed President John Williams and Cleveland Fed chief Loretta Mester due later in the session.
The greenback, meanwhile, managed to bounce back against dollar bloc currencies such as the New Zealand and Canadian dollars.
The New Zealand dollar dropped to a one-week low of $0.7416 and was last down 0.5 percent at $0.7427 following lacklustre data.
The number of jobs created in New Zealand fell unexpectedly and wage inflation remaining tepid in the second quarter, adding weight to the prospect of the central bank keeping rates on hold at record lows for years.
The Canadian dollar struggled after being hit by a slide in crude oil prices.
The loonie extended its overnight drop to trade at C$1.2570 per dollar , pulled further away from a 25-month high of C$1.2414 reached last week.
The Australian dollar, another commodity-linked currency, was down 0.2 percent at $0.7953 following its ascent the previous day to $0.8066, its strongest since May 2015.
Currently guys, some signs of retracement start to appear across the board - on CAD, NZD. On EUR market shows no signs of changing tendency yet, but price enters in long-term resistance area on monthly chart - 1.18-1.20. GBP waits for BoE tomorrow...
Today, we will take a look at AUD again, as trading plan for yesterday has been completed. On AUD the major concern right now is wether price will continue action to 0.8150 target immediately or will show some pullback first.. Currently AUD keeps chances on upside continuation, but breakout of 0.7870 area could lead to appearing H&S pattern:
On 4-hour chart market keeps chances on butterfly pattern that we've discussed yesterday. Here is very important moment - previous lows in red circle. If market will drop below it - butterfly will be vanished:
But, another pattern could be formed - "222" Buy pattern. This in fact, will be last chance to turn situation on bullish road. If this will happen - 0.7915 area is the one that we should keep an eye on:
Thus, if you have bullish view on AUD - you could try to join either butterfly or "222" Buy. Speaking on butterfly - price stands right now around "culmination point". This position does not promise you success, but it gives minimal potential loss on trade as price stands almost around invalidation point.
Bears probably should wait for erasing of all potentially bullish patterns, and drop below 0.7877 level. In this case chances on daily H&S will significantly increase.
(Reuters) - The dollar extended its modest bounce from 15-month lows on Wednesday, benefiting from a pause in selling of the battered currency as investors begin positioning for key events this week, notably Friday's U.S. employment report.
The dollar index against a basket of major currencies shook off a decline in Treasury yields and was a shade higher at 93.090 after bouncing from 92.777, its lowest since May 2016.
The euro was unchanged at $1.1806 after being nudged away from a 2-1/2-year peak of $1.1846 set the previous day.
The greenback has been weighed down by political turmoil gripping Washington and largely uninspiring U.S. economic data, particularly sluggish inflation, which is adding to uncertainty about the pace of future Federal Reserve policy tightening.
"The dollar has already weakened significantly, especially against its European counterpart, reaching a point where some participants began buying back the currency ahead of Friday's U.S. employment data," said Shin Kadota, senior strategist at Barclays in Tokyo.
"But these are mere position adjustments before the U.S. jobs data and the bearish trend for the dollar still remains intact," Kadota added.
The euro has gained about 12 percent against the dollar so far this year.
In addition to the political risks and monetary policy uncertainty that have plagued its U.S. peer, the common currency has drawn support from expectations that the European Central Bank would eventually begin phasing out its easy policy.
The U.S. currency was 0.15 percent higher at 110.535 yen, pulling away from a near seven-week low of 109.920 touched overnight.
"The dollar is being supported against the yen with U.S. stocks continuing to perform strongly, despite the potential risks they are faced with," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.
The Dow racked up a fifth straight record high on Tuesday, even as Wall Street loses confidence that President Donald Trump and a Republican-controlled Congress will be able to push through tax cuts and increased spending on infrastructure this year. [.N]
Sera at Sumitomo Mitsui Trust also said that the market is likely to take in stride a cabinet reshuffle planned on Thursday by Japanese Prime Minister Shinzo Abe, who hopes to revive his flagging ratings.
"Market participants of course will be watching how the cabinet reshuffle turns out. But few, if any, expect the reshuffle to have an impact on the market," Sera said.
For potential impact on the dollar, the market awaited the U.S. ADP jobs report and comments by San Francisco Fed President John Williams and Cleveland Fed chief Loretta Mester due later in the session.
The greenback, meanwhile, managed to bounce back against dollar bloc currencies such as the New Zealand and Canadian dollars.
The New Zealand dollar dropped to a one-week low of $0.7416 and was last down 0.5 percent at $0.7427 following lacklustre data.
The number of jobs created in New Zealand fell unexpectedly and wage inflation remaining tepid in the second quarter, adding weight to the prospect of the central bank keeping rates on hold at record lows for years.
The Canadian dollar struggled after being hit by a slide in crude oil prices.
The loonie extended its overnight drop to trade at C$1.2570 per dollar , pulled further away from a 25-month high of C$1.2414 reached last week.
The Australian dollar, another commodity-linked currency, was down 0.2 percent at $0.7953 following its ascent the previous day to $0.8066, its strongest since May 2015.
Currently guys, some signs of retracement start to appear across the board - on CAD, NZD. On EUR market shows no signs of changing tendency yet, but price enters in long-term resistance area on monthly chart - 1.18-1.20. GBP waits for BoE tomorrow...
Today, we will take a look at AUD again, as trading plan for yesterday has been completed. On AUD the major concern right now is wether price will continue action to 0.8150 target immediately or will show some pullback first.. Currently AUD keeps chances on upside continuation, but breakout of 0.7870 area could lead to appearing H&S pattern:
On 4-hour chart market keeps chances on butterfly pattern that we've discussed yesterday. Here is very important moment - previous lows in red circle. If market will drop below it - butterfly will be vanished:
But, another pattern could be formed - "222" Buy pattern. This in fact, will be last chance to turn situation on bullish road. If this will happen - 0.7915 area is the one that we should keep an eye on:
Thus, if you have bullish view on AUD - you could try to join either butterfly or "222" Buy. Speaking on butterfly - price stands right now around "culmination point". This position does not promise you success, but it gives minimal potential loss on trade as price stands almost around invalidation point.
Bears probably should wait for erasing of all potentially bullish patterns, and drop below 0.7877 level. In this case chances on daily H&S will significantly increase.
Sive Morten
Special Consultant to the FPA
- Messages
- 18,648
Good morning,
(Reuters) - The dollar inched away from a 15-month low versus a basket of currencies on Thursday, but was still looking wobbly due to doubts about whether there will be another U.S. interest rate rise this year.
The dollar index, which measures the greenback's value against a basket of six major currencies, rose about 0.1 percent to 92.940. On Wednesday, it slid to 92.548, its weakest level since May 2016.
The greenback has been weighed down by political turmoil gripping Washington and by largely uninspiring U.S. economic data, particularly sluggish inflation, which is adding to uncertainty about the pace of future Federal Reserve policy tightening.
The euro eased 0.1 percent to $1.1847, backing away from a 2-1/2-year high of $1.19105 set on Wednesday - the common currency's highest level since January 2015.
In contrast to the political risks and monetary policy uncertainty that have plagued the dollar, the euro has drawn support from expectations that the European Central Bank would eventually begin phasing out its easy policy.
While the euro could run into some profit-taking ahead of the release of U.S. jobs data on Friday, it looks well supported, said Tareck Horchani, head of sales trading in Asia-Pacific for Saxo Markets in Singapore.
"I think overall it's still a buy on dips and it can go to $1.20," he said.
Against the yen, the euro slipped 0.2 percent to 131.08 yen , pulling back from Wednesday's high of 131.40 yen, the euro's strongest against the yen since February 2016.
The dollar inched 0.1 percent lower against the yen to 110.64, moving back toward a low of 109.92 yen set earlier this week, which was its lowest in more than six weeks.
The yen showed limited reaction to a cabinet reshuffle by Japanese Prime Minister Shinzo Abe, in which he reappointed key economic ministers while replacing his defence and foreign ministers.
Overall, the yen will probably be weighed down by the Bank of Japan's loose monetary policy, said Heng Koon How, head of markets strategy for United Overseas Bank.
With the BOJ having recently pushed back the timing for achieving its inflation target, it is likely to continue with its ultra-easy monetary policy stance for a longer period of time, Heng said.
"This supports our base case for a higher dollar/yen," he said, adding that he expects the dollar to be trading around 115 yen at the end of this year.
Sterling held steady ahead of the Bank of England's (BoE) interest rate decision due later on Thursday.
The pound last changed hands at $1.3220. On Wednesday, it rose to $1.3250, its highest in nearly 11 months.
The BoE looks set to keep interest rates at a record low once again on Thursday, with investors looking for signs that, faced with Brexit, it is getting nearer to raising rates for the first time in a decade.
So, as EUR shows no changes yet and GBP is waiting for BoE, we will continue to talk on our AUD setup. Daily chart shows that 0.7870 area is solid support as it includes MPP and daily OB. 4-hour chart shows that this is also WPS1. It means that AUD will not pass through it just occasionally, even under pressure of tomorrow's NFP data.
At the same time, on hourly chart we have our so-called "final bullish pattern" - "222" Buy pattern. And invalidation point of this pattern stands precisely below 0.7870 lows. As 4-hour butterfly chance has been erased - market carefully completed AB-CD on hourly chart and created our "222":
If market will fail to start upside action and drop below 0.7870 - this could lead to appearing of H&S on 4-hour chart and to deep retracement on next week:
Thus, if you have bullish view - think about this "222". Actually this is the only bullish intraday pattern that we have. For more confidence, you could wait some bullish reversal pattern on 5- min chart around 0.79 area, where price stands now...
Bears probably should wait for drop to 0.7870, erasing of all bullish paterns and retracement to right shoulder then.
(Reuters) - The dollar inched away from a 15-month low versus a basket of currencies on Thursday, but was still looking wobbly due to doubts about whether there will be another U.S. interest rate rise this year.
The dollar index, which measures the greenback's value against a basket of six major currencies, rose about 0.1 percent to 92.940. On Wednesday, it slid to 92.548, its weakest level since May 2016.
The greenback has been weighed down by political turmoil gripping Washington and by largely uninspiring U.S. economic data, particularly sluggish inflation, which is adding to uncertainty about the pace of future Federal Reserve policy tightening.
The euro eased 0.1 percent to $1.1847, backing away from a 2-1/2-year high of $1.19105 set on Wednesday - the common currency's highest level since January 2015.
In contrast to the political risks and monetary policy uncertainty that have plagued the dollar, the euro has drawn support from expectations that the European Central Bank would eventually begin phasing out its easy policy.
While the euro could run into some profit-taking ahead of the release of U.S. jobs data on Friday, it looks well supported, said Tareck Horchani, head of sales trading in Asia-Pacific for Saxo Markets in Singapore.
"I think overall it's still a buy on dips and it can go to $1.20," he said.
Against the yen, the euro slipped 0.2 percent to 131.08 yen , pulling back from Wednesday's high of 131.40 yen, the euro's strongest against the yen since February 2016.
The dollar inched 0.1 percent lower against the yen to 110.64, moving back toward a low of 109.92 yen set earlier this week, which was its lowest in more than six weeks.
The yen showed limited reaction to a cabinet reshuffle by Japanese Prime Minister Shinzo Abe, in which he reappointed key economic ministers while replacing his defence and foreign ministers.
Overall, the yen will probably be weighed down by the Bank of Japan's loose monetary policy, said Heng Koon How, head of markets strategy for United Overseas Bank.
With the BOJ having recently pushed back the timing for achieving its inflation target, it is likely to continue with its ultra-easy monetary policy stance for a longer period of time, Heng said.
"This supports our base case for a higher dollar/yen," he said, adding that he expects the dollar to be trading around 115 yen at the end of this year.
Sterling held steady ahead of the Bank of England's (BoE) interest rate decision due later on Thursday.
The pound last changed hands at $1.3220. On Wednesday, it rose to $1.3250, its highest in nearly 11 months.
The BoE looks set to keep interest rates at a record low once again on Thursday, with investors looking for signs that, faced with Brexit, it is getting nearer to raising rates for the first time in a decade.
So, as EUR shows no changes yet and GBP is waiting for BoE, we will continue to talk on our AUD setup. Daily chart shows that 0.7870 area is solid support as it includes MPP and daily OB. 4-hour chart shows that this is also WPS1. It means that AUD will not pass through it just occasionally, even under pressure of tomorrow's NFP data.
At the same time, on hourly chart we have our so-called "final bullish pattern" - "222" Buy pattern. And invalidation point of this pattern stands precisely below 0.7870 lows. As 4-hour butterfly chance has been erased - market carefully completed AB-CD on hourly chart and created our "222":
If market will fail to start upside action and drop below 0.7870 - this could lead to appearing of H&S on 4-hour chart and to deep retracement on next week:
Thus, if you have bullish view - think about this "222". Actually this is the only bullish intraday pattern that we have. For more confidence, you could wait some bullish reversal pattern on 5- min chart around 0.79 area, where price stands now...
Bears probably should wait for drop to 0.7870, erasing of all bullish paterns and retracement to right shoulder then.
Sive Morten
Special Consultant to the FPA
- Messages
- 18,648
Good morning,
(Reuters) - The dollar struggled near a 2-1/2-year low against the euro and a seven-week trough versus the yen on Friday in the wake of weak U.S. data, with traders awaiting the closely watched non-farm jobs report later in the session for potential relief.
The dollar index against a basket of six major currencies was 0.1 percent lower at 92.766, poised to lose about 0.6 percent on the week during which it fell to a 15-month low of 92.548.
The ailing greenback has come under pressure this week from fresh political turmoil in Washington as well as largely uninspiring U.S. economic data, which have added to uncertainty about the pace of future Federal Reserve policy tightening.
The market received a fresh dose of both factors overnight.
Data showed a much sharper-than-expected slowdown in growth in the services sector, while it was reported that a grand jury will investigate allegations of Russian meddling in the U.S. election.
Beleaguered dollar bulls looked to the U.S. jobs report due at 1230 GMT to turn its fortunes around, at least in the short term.
Economists polled by Reuters expect U.S. employers to have added 183,000 jobs in July, down from 222,000 in June.
The euro added 0.1 percent to $1.1879, within striking distance of $1.1910, its highest since January 2015 scaled midweek.
The dollar was steady at 110.085 yen after touching 109.855 overnight, its lowest since mid-June.
"Expectations for the Fed hiking interest rates within the year are already less than 50 percent and the figure could drop further if the jobs report disappoints, taking dollar/yen towards 109.00," said Yukio Ishizaki, senior currency strategist at Daiwa Securities.
Fed funds futures implied traders saw a roughly 44 percent chance of a Fed rate hike in December, according to CME Group's FedWatch tool.
"While bargain hunting by Japanese institutional investors is preventing dollar/yen from sliding too far below 110.00 yen, there is also significant demand for the yen stemming from its gains against the pound and the Canadian and Australian dollars," Ishizaki said.
Sterling took a battering overnight after the Bank of England voted 6-2 to keep interest rates at current record lows and lowered its forecasts for growth, inflation and wages, disappointing investors who expected a more hawkish message.
The pound was last at 90.43 pence per euro after retreating to a nine-month low of 90.485 pence overnight. It stood little changed at $1.3140 after losing 0.7 percent the previous day.
Against the yen, the pound extended losses from Thursday, when it slid 1.2 percent, to touch an 11-day low of 144.33.
Expectations had grown recently that the BoE would join its peers in taking a step towards normalizing monetary policy, so the message delivered by the central bank was seen as a big setback for sterling.
"The pound is on track to continue losing ground against other major currencies. And against the euro, we could see it eventually fall below the low marked during its 'flash crash' last October," said Makoto Noji, senior strategist at SMBC Nikko Securities.
The pound had suffered a steep drop to around 94.00 pence per euro early last October when investors were grappling with the prospect of a hard Brexit.
So, our AUD trade has started well yesterday - but be careful, action up is unstable and NFP are coming, so think about profit taking, or at least - move stop to b/e or even in porfit..
Today, it is absolutely impossible to ignore GBP in the light of recent BoE meeting. GBP now is very attractive currency for trading, as it has clear fundamentals and technical picture. As former as latter stand bearish.
On daily chart, as our major targets have been met around 1.3250 - market has formed bearish reversal session. Usually this kind of sesisons have logical continuation. GBP should show strongest bearish reaction on any positive on neutral NFP data, because nobody waits any more rate normalization in GB, while EUR stands in euphoria of coming changes in ECB policy.
Theoretically, we could get bullish grabber here, but taking in consideration good ADP numbers, chances on bullish reversal here are not significant. If drop down will happen - most probable destination point is 1.30 area. This is Fib support, daily OS, MPS1 and WPS1:
On 4-hour chart we see nasty black candle with tail close and minor pennant consolidation upon trend line. This is also mostly bearish picture:
On hourly chart, we should keep an eye on 1.3160-1.3170 area. Minor retracement still could happen before NFP as investors could take some profit after recent plunge. 1.3160 is AB-CD target and potential butterfly reversal point.
But, this is just technical picture guys. You have to decide would you like to go through NFP release, as situation could change depending on numbers that we will get...
(Reuters) - The dollar struggled near a 2-1/2-year low against the euro and a seven-week trough versus the yen on Friday in the wake of weak U.S. data, with traders awaiting the closely watched non-farm jobs report later in the session for potential relief.
The dollar index against a basket of six major currencies was 0.1 percent lower at 92.766, poised to lose about 0.6 percent on the week during which it fell to a 15-month low of 92.548.
The ailing greenback has come under pressure this week from fresh political turmoil in Washington as well as largely uninspiring U.S. economic data, which have added to uncertainty about the pace of future Federal Reserve policy tightening.
The market received a fresh dose of both factors overnight.
Data showed a much sharper-than-expected slowdown in growth in the services sector, while it was reported that a grand jury will investigate allegations of Russian meddling in the U.S. election.
Beleaguered dollar bulls looked to the U.S. jobs report due at 1230 GMT to turn its fortunes around, at least in the short term.
Economists polled by Reuters expect U.S. employers to have added 183,000 jobs in July, down from 222,000 in June.
The euro added 0.1 percent to $1.1879, within striking distance of $1.1910, its highest since January 2015 scaled midweek.
The dollar was steady at 110.085 yen after touching 109.855 overnight, its lowest since mid-June.
"Expectations for the Fed hiking interest rates within the year are already less than 50 percent and the figure could drop further if the jobs report disappoints, taking dollar/yen towards 109.00," said Yukio Ishizaki, senior currency strategist at Daiwa Securities.
Fed funds futures implied traders saw a roughly 44 percent chance of a Fed rate hike in December, according to CME Group's FedWatch tool.
"While bargain hunting by Japanese institutional investors is preventing dollar/yen from sliding too far below 110.00 yen, there is also significant demand for the yen stemming from its gains against the pound and the Canadian and Australian dollars," Ishizaki said.
Sterling took a battering overnight after the Bank of England voted 6-2 to keep interest rates at current record lows and lowered its forecasts for growth, inflation and wages, disappointing investors who expected a more hawkish message.
The pound was last at 90.43 pence per euro after retreating to a nine-month low of 90.485 pence overnight. It stood little changed at $1.3140 after losing 0.7 percent the previous day.
Against the yen, the pound extended losses from Thursday, when it slid 1.2 percent, to touch an 11-day low of 144.33.
Expectations had grown recently that the BoE would join its peers in taking a step towards normalizing monetary policy, so the message delivered by the central bank was seen as a big setback for sterling.
"The pound is on track to continue losing ground against other major currencies. And against the euro, we could see it eventually fall below the low marked during its 'flash crash' last October," said Makoto Noji, senior strategist at SMBC Nikko Securities.
The pound had suffered a steep drop to around 94.00 pence per euro early last October when investors were grappling with the prospect of a hard Brexit.
So, our AUD trade has started well yesterday - but be careful, action up is unstable and NFP are coming, so think about profit taking, or at least - move stop to b/e or even in porfit..
Today, it is absolutely impossible to ignore GBP in the light of recent BoE meeting. GBP now is very attractive currency for trading, as it has clear fundamentals and technical picture. As former as latter stand bearish.
On daily chart, as our major targets have been met around 1.3250 - market has formed bearish reversal session. Usually this kind of sesisons have logical continuation. GBP should show strongest bearish reaction on any positive on neutral NFP data, because nobody waits any more rate normalization in GB, while EUR stands in euphoria of coming changes in ECB policy.
Theoretically, we could get bullish grabber here, but taking in consideration good ADP numbers, chances on bullish reversal here are not significant. If drop down will happen - most probable destination point is 1.30 area. This is Fib support, daily OS, MPS1 and WPS1:
On 4-hour chart we see nasty black candle with tail close and minor pennant consolidation upon trend line. This is also mostly bearish picture:
On hourly chart, we should keep an eye on 1.3160-1.3170 area. Minor retracement still could happen before NFP as investors could take some profit after recent plunge. 1.3160 is AB-CD target and potential butterfly reversal point.
But, this is just technical picture guys. You have to decide would you like to go through NFP release, as situation could change depending on numbers that we will get...
butcher
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In the Usd/Cad , Stop grabber sell played out and market pushed back from monthly Cop.
At weekly; it is forming a nice thrust altough OS condition
And the daily Drpo buy is in play. I liked the DRPO becaouse of possible big wash and rinse on weekly/monthly but need to be cautious becaouse the market is looking very strong on sell side. I already moved stop to breakeven.
If the DRPO is good and market can reach 1.2741-1.2770 zone we can look to fade the daily buy against the weekly and monthly sell. But this time need to be cautious due to wash and rinse on weekly. So if the the market doesnt hold the resistance pushes above it we need to look ways for getting out on lower timeframes.
At weekly; it is forming a nice thrust altough OS condition
And the daily Drpo buy is in play. I liked the DRPO becaouse of possible big wash and rinse on weekly/monthly but need to be cautious becaouse the market is looking very strong on sell side. I already moved stop to breakeven.
If the DRPO is good and market can reach 1.2741-1.2770 zone we can look to fade the daily buy against the weekly and monthly sell. But this time need to be cautious due to wash and rinse on weekly. So if the the market doesnt hold the resistance pushes above it we need to look ways for getting out on lower timeframes.
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