Currency Trading Analysis By forum.forex

GBP/JPY Price Forecast Nov-26, 2021

The ¥152.50 level being broken above would be a huge victory for the buyers, and at this point it looks very possible. As far as selling is concerned, we need to break down below the 200 day EMA to truly fall apart. At that point, we would almost certainly test the ¥150 level, which is what I look at as the “floor in the market” for the buyers. Breaking down below all of that would send this into a massive downtrend, or than likely causing massive destruction.

The pair is highly sensitive to risk appetite, which of course is waning at the moment. Nonetheless, if we do find ourselves breaking above there, then it is very likely that the entire thing would have been shrugged off as far as the virus is concerned, which is something that the markets have done multiple times. Because of this, I remain optimistic, but I also recognize you probably have to deal with quite a bit of volatility in the process of trying to recover. Quite frankly, the biggest regret I have on this is that I was not awake to see it touched the 200 day EMA.

For USD/JPY, the road ahead in the first quarter of 2022 will likely remain heavily glued to market expectations of how hawkish the Federal Reserve will be. In December, the central bank doubled the pace of tapering asset purchases, which will now see it end in early 2022. This will likely give the central bank maneuverability should it need to raise rates sooner than expected.

This will of course depend on how inflation evolves. Headline price growth is at its fastest pace in almost 40 years in the United States. Expectations are that price growth will remain above the central bank’s target next year, with Core PCE running around 2.7% in 2022. However, a key risk could come if inflation expectations become “de-anchored.”

USD/JPY

Current level – 115.86

At the time of writing, the currency pair is consolidating in the range between 115.51 – 116.32 as the inertia of the bulls was thwarted at the beginning of this year’s trading. The current depreciation of the greenback against the yen could be seen as a corrective move unless the bears fail to overcome the support at 115.51. In the event of such a pessimistic scenario, we could witness a further deepening of the sell-off towards the support area at 115.18.

Jan-31, 2022, Currency Trading Analysis, By forum.forex

GBP/USD continues its attempts to settle above the resistance level at 1.3420 while the U.S. dollar is moving lower against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get below the support level at 97. In case this attempt is successful, the U.S. Dollar Index will move towards the next support level at 96.70 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on general market sentiment and the developments in U.S. government bond markets. The yield of 2-year Treasuries stays close to recent highs as bond traders remain worried about inflation and potential Fed’s moves.

Moreover, Last week, the U.S. dollar index (DXY) rose by 1.8%, returning to the levels of June 2020.

However, today DXY is declining. According to the data presented last Friday by the Commerce Department’s Bureau of Economic Analysis, the growth in personal income of U.S. households slowed to +0.3% in December (against the forecast and the previous value of +0.5%), and spending decreased by -0.6% against the growth of +0.4% in November. At the same time, the preliminary consumer confidence index from the University of Michigan fell to 67.2 (against the forecast of 68.7 and the value of 68.8 in December).

Australia’s Q4 inflation data released last week far exceeded forecasts. Taking into account the fact that the Australian labor market continues to strengthen, creating conditions for accelerating wage growth, this allows many economists to predict the beginning of the tightening of the RBA policy earlier. According to their new forecast, the RBA will raise the key rate in August 2022, and not in the fourth quarter, as previously expected. If the RBA leaders confirm the possibility of such a scenario at the meeting on Tuesday, the AUD may receive good support. Today the AUD is strengthening, including in the AUD/USD pair, having received support from the positive data on Australian producer prices published on Friday and from the positive data on private sector lending published today. Australia’s private sector lending rose 0.8% in December, better than the +0.5% forecast, albeit lower than the previous +1.0%.

Feb-28, 2022, Currency market technical analysis and Russia Ukraine crisis forecast.

EUR/USD Price Forecast: Technical outlook

The EUR/USD daily chart shows that the pair is downward biased. Why? The daily moving averages (DMAs) reside above the spot price, aiming lower, indicating that the downtrend might accelerate in the near term. Nevertheless, Monday’s gap down increased buying pressure on the pair, but as long as Ukraine – Russia’s war does not stop, the EUR/USD would be subject to market mood swings unless a peace agreement is reached.

Therefore, the EUR/USD would remain downwards. The pair’s first support would be 1.1200. Breach of the latter would expose the 2021 November 24 pivot low at 1.1186, followed by February 24 YTD low at 1.1106.

EUR/USD price is currently trading at 1.1197. The 1.1185 and then 1.11659 levels are the next downside targets, followed by the low for the day at 1.11414. The low last week reached 1.11056. That low took out the low from January 28th and took the price to the lowest level since May/June 2020.

On the other hand, Russia conflict that escalated on Saturday, amid Western countries imposing stringent sanctions to Russia, to some of its government officials, and to Russian oligarchs linked to the Vladimir Putin regime. At the time of writing, the USD/JPY is trading at 115.07.

In the meantime, US Treasury yields closely correlated to USD/JPY price action behavior fall. The US 10-year benchmark note falls eleven basis points, from 1.927% to 1.873%, a headwind for the USD/JPY. The greenback, sought as a safe-haven asset, rises as portrayed by the US Dollar Index, which measures the buck’s value vs. a basket of rivals, sits at 96.81, up 0.20%.

Thank you

Mar-04, 2022, EUR/USD, GBP/USD trading analysis and US job market data updates.

Weekly close above 1.10 may slightly take the edge off the euro’s sharp losses of late.

“With no end in sight to the war in Ukraine and more event shocks ahead (like the nuclear power plant yesterday), the EUR is at risk of losses to 1.08 in the short run.”

“EUR/USD now faces limited support markers until psychological floors in the 1.09 and 1.08 zones.”

“A weekly close above the figure may slightly take the edge off the currency’s sharp losses of late, but upward momentum remains limited and there are no clear signs of a reversal being in the works.”

Moreover, Energy prices will hurt growth in the euro area more than in the US.

“The repercussions for energy prices are most severe in Europe due to its energy dependency on imports. The US is in comparison energy self-reliant and a net petroleum exporter. It is also worth noting that European households spend a higher proportion of their income on heating/gas/electricity compared to American households. Hence, the economic ramifications will be more pronounced for the European economies than in the US.”

On the other hand, Non-farm Payrolls was released this morning to the tune of +678k . This is the final NFP release ahead of the March FOMC rate decision where the bank is expected to hike rates for the first time since 2018. But, perhaps more importantly, this would be the first step towards paring back some of the outsized accommodation that had been set since the onset of Covid.

Jobs data has remained in focus as this has been the Fed’s pressure point for liftoff. Inflation raged throughout last year but the bank continually avoided any element of tightening for fear of choking off the labor market recovery.

Overall, the job gains continue to show strong growth with the unemployment rate falling as well toward full employment. However, the wage data was contained with earnings on the month virtually flat and the YoY declining to 5.1% from 5.5%.

*. EURUSD is continuing to trade near session lows
*. GBPUSD is also trading lower (higher USD).
*. Dow -234 point.
*. S&P -28 points
*.NASDAQ -80 points

Thank You

Mar-11, 2022, Currency Trading weekly Analysis and Market Forecast, By Forex Forum.

EUR/GBP Analysis Today

EUR/GBP has stabilised on Friday just to the south of the 0.8400 level as traders mull how the Ukraine war and related global economic impact effects the UK/EU economic outlook, as well as the outlook for BoE/ECB policy. Speaking of, after Thursday’s more hawkish than expected shift in the ECB’s QE policy (towards ending net purchases in Q3 despite Ukraine uncertainties), EUR/GBP rallied to one-month highs in the 0.8430s, but these gains were short-lived. The pair has since dropped back to the 0.8375 area, down about 0.7% from Thursday’s peaks, with about 0.2% of that drop coming on Friday, with better-than-expected UK January GDP figures likely weighing a tad.

On the other hand, YEN WEAKNESS AND OIL DEPENDENCY FAVORS USD/JPY BREAKOUT.

The Japanese Yen has been a rather frustrating pair to watch due to its tendency to trade in a sideways manner since the invasion of Ukraine. Typically, in times of geopolitical uncertainty, the Japanese Yen appreciates in line with its ‘safe-haven’ appeal, but not this time.

Japanese Yen crosses have largely benefitted from a recent depreciation in the Asian currency as it sees its trade balance continue to struggle. The value of Japanese imports have outpaced exports since August last year apart from November when it temporarily recovered above zero.

Thank you

Mar-13, 2022, Forex trading daily analysis and Currency market latest updates, by Forex Forum.

EUR/USD – BEARISH

The US Dollar ended little changed against the Euro this past week, but it should be noted that EUR/USD trimmed all its gains that it once achieved from earlier in that period. While this is primarily a technical piece, it should be noted that the ongoing situation in Ukraine continues to play a key role for the single currency. An escalation in conflict would likely further pressure the Euro in the week ahead.

Closing under the March 7th low at 1.0806 exposes the bottom from April 2020, making for a key zone of support from 1.0727 – 1.0793. Beyond that sits the 2020 low at 1.0636 and under that is the 138.2% Fibonacci extension of 1.0496. In the event of a turn higher, keep a close eye on the 50-day Simple Moving Average (SMA) as well as the former 1.1122 – 1.1186 support zone. The latter could step in as new resistance.

On the other hand, It’s no secret that USD/JPY has been trending consistently higher for nearly six months now, but some traders have been caught off guard by the ferocity of Friday’s move through resistance.

USD/JPY, the pair has been riding its 50-day EMA higher since September, though the price action over the last four months could be better characterized as an ascending triangle, with higher lows showing increasing pressure on a horizontal level of resistance, in this case at 116.35. The textbook explanation for the pattern is that once an instrument breaks above its resistance line as we saw Friday.

March-21, 2022, Currency Trading analysis and daily market forecast, By forex forum.

Price action in the Japanese Yen remains bearish as USD/JPY and cross-JPY showing little signs of pulling back. There have been several reasons as to why the Japanese Yen has received little support. Firstly, the energy shock has worsened Japan’s terms of trade (as shown below), keep in mind that Japan is a net energy importer. Additionally, with global central banks either raising rates or signalling an intention to raise rates, wider rate differentials have weighed against the Japanese Yen.

As such, USD/JPY continues to track US 10yr yields in lockstep. Elsewhere, seasonal factors are also extremely bullish USD/JPY, in which the pair has had a tendency to ramp higher into the end of the month, before peaking in the first week of April. Subsequently, I remain bearish Yen for the rest of the month and will look to reassess in the first week of April, should there be signs of an overshoot.

Now while I have mentioned several factors explaining why the Japanese Yen can keep selling off in the short run. With USD/JPY comfortable above 119.00, the key barrier to watch is the 120 figure, which if breached would put me on high alert for intervention risks. This could be the catalyst to prompt USD/JPY to continue tracking its seasonal pattern and peak in the first week of April.

On the other hand, EUR/USD adds to the bearish note seen on Friday, although the pair trades mostly within the familiar range on Monday.

In case sellers push harder, the 1.1000 neighbourhood should offer decent contention. This area is also underpinned by the temporary support at the 10-day SMA at 1.0997 prior to the weekly low at 1.0900 (March 14).

The medium-term negative outlook for EUR/USD is expected to remain unchanged while below the key 200-day SMA, today at 1.1525.

Elsewhere, USD/JPY is usually the clearest trade on rising rates and it’s living up to its reputation today as it climbs above Friday’s high to 119.45.

The dollar has added an additional 20 pips across the board in the past few minutes as the market continues to digest hawkish talk from Powell.

The rates market is reflecting that as well, with US 5-year yields now up 18 basis points on the day to 2.32%. The Nasdaq dip buyers today are getting carried out, with the index now down 1.6%.

On the other hand, The Pound US Dollar (GBP/USD) exchange rate is making gains today despite there being no clear catalyst for the movement. The Pound (GBP) may be seeing a technical correction following a slump last week after the Bank of England’s (BoE) interest rate decision. Additionally, an uptick to UK bond yields may also be helping GBP to climb.

At time of writing the GBP/USD exchange is at around $1.1399, which is up roughly 0.3% from this morning’s opening figures.

Thank You

April-04, 2022, Currency market analysis and forecast, by forex forum

US dollar news

The EURUSD is trading to a new session low and in the process is testing the next swing area between 1.09576 and 1.09675 (see earlier post here). There is some cause for pause against the area. However, a move below that level will target the low from last week at 1.0944.

The move to the downside today got a shove below the 200 hour MA (green line), and has also moved below the 50% of the range since the March low at 1.0994. An upward sloping trend line on the hourly chart was also broken in the downward move.

Moreover, The US dollar is robust at the start of the week, with the DXY higher on the day so far by nearly 0.5% and for three straight sessions. US yields are firmer due to the narrative surrounding the Federal reserve and as civilian killings in north Ukraine keep the safe-haven appeal alive in financial markets. In turn, the euro is on the backfoot and weighed also by the prospect of increased sanctions.

At the time of writing, EUR/USD is trading lower by 0.7% and some change after falling from a high of 1.1054 to a low of 1.0960. The euro is trapped between mixed sentiment surrounding the path of the European Central bank, Ukraine crisis risks to the economy and runaway inflation in the US which, for now at least, is supporting demand for the greenback.

On the other hand, AUD/USD reversed course after taking out the 2021 low (0.6993) in January.

The exchange rate traded above the 50-Week SMA for the first time since July after clearing the yearly opening range in March. AUD/USD may continue to retrace the decline from last year as the exchange rate is on the cusp of testing the October high (0.7556), but the diverging paths for monetary policy may curb the bullish price action. The Federal Reserve looks to implement a series of rate hikes over the coming months, while the Reserve Bank of Australia (RBA) remains in no rush to switch gears.

As a result, the advance from the yearly low (0.6968) may turn out to be a correction as the 50-Week SMA continues to reflect a negative slope. The exchange rate may attempt to further retrace the decline from the 2021 high (0.8007), if it manages to penetrate the former support zone around the October high (0.7556).

Elsewhere, USD/CHF Price Forecast: Technical outlook

The USD/CHF bias is neutral-upwards. Its daily chart depicts a subsequent series of higher highs/lows since the beginning of 2022. March 31 dip towards the 200-day moving average (DMA) at 0.9209 was rejected, forming a “spinning top” candlestick, meaning failure to commit between buyers/sellers.

Upwards, the USD/CHF first resistance would be 0.9280. Once cleared, a test of February’s ten high at 0.929600 is on the cards, immediately followed by 0.9300. A decisive break would open the door toward January 31 daily high at 0.9343.

On the downside, the USD/CHF first support would be the 50-DMA at 0.9258, followed by April 1 daily low at 0.9215, and then the 200-DMA at 0.9209.

On the other hand, Moscow has implemented two things. First, they now demand the sale of natural gas to unfriendly countries in the form of Ruble (USDRUB) . Thus, if the U.S. and its allies want to buy natural gas from Russia now, they must pay in Ruble. Second, Moscow offers to buy Gold domestically at a fixed price of 5000 rubles per gram. The Bank of Russia therefore has linked Ruble to Gold (XAUUSD) . Since Gold also trades in US Dollars, this effectively sets a floor price for the ruble in terms of US Dollars.

So, What Do You Think About It?

Thanks and regards
forum.forex

April-05, 2022, Currency trading technical analysis and daily market forecast, By forex forum.

At 161.79, GBP/JPY is nearly 0.5% at the time of writing, after travelling from a low of 160.49 to reach a high of 161.97. The yen is under pressure as US yields and the dollar climb. Yields took off after US Federal Reserve Governor Lael Brainard put the focus back on the possibility of aggressive monetary policy tightening ahead of tomorrow’s minutes of the prior Fed meeting.

Brainard said she expects rapid reductions to the Fed’s balance sheet alongside methodical increases to the benchmark rate. This has sprung life into the US dollar and the yen is bearing the brunt of it.

''The Bank of England and market economists have warned that UK inflation could peak at 8% in the coming months and, due to the impact of the Russia/Ukraine conflict, both energy prices and headline inflation may remain elevated for longer, analysts at Rabobank said.

On the other hand, EUR/USD FACES INTENSIFYING PRESSURE

As proposed sanctions and a more hawkish Fed continue to weigh on the Euro, EUR/USD continues to slide towards the March low, holding as support at 1.085.

With Fed officials suggesting that they could start reducing the balance sheet as early as May, proposed sanctions and an optimistic ISM report have placed further pressure on EUR/USD which remains well-below the 50-day MA (moving average).

As long as the 1.100 mark holds as resistance, the 1.085 remains key with a break below bringing the April 2020 low into play at 1.0756.

Elsewhere, The USD/JPY advances for the third straight day, despite yen-related remarks by the Bank of Japan (BoJ) Governor Kuroda, who stated that “forex moves are somewhat rapid,” spurring a 30-pip drop in the pair, though recovered of late on broad US dollar strength. At the time of writing, the USD/JPY is trading at 123.58.

USD/JPY Price Forecast: Technical outlook.

The USD/JPY keeps trending higher. However, it is worth noting that the Relative Strength Index (RSI) at 73.90 at overbought conditions reacted with less force to the upside on the rally towards current prices, meaning that the USD/JPY might be subject to a mean reversion move.

However, the uptrend remains intact unless the USD/JPY falls below 121.27. That said, the USD/JPY first resistance would be 124.00. A breach of the latte would expose solid supply zones, like 124.30, followed by the YTD high at 125.10.

Thank You

April-13, 2022, Currency trading technical analysis and market forecast, by forex forum.​

Currency market analysis

The EUR/USD rebounded sharply during the last hours and climbed from 1.0820 to 1.0878, reaching a fresh daily high. The move higher took place amid a decline of the US dollar across the board. The greenback lost momentum as US yields turned to the downside.

The US 10-year yield fell from 2.75 to 2.65%, reaching the lowest level since Friday, while the 30-year dropped from the multi-year high at 2.87% to 2.76%. The recovery in Treasuries weighed on the greenback.

On the othe hand, Overnight, USD/JPY shot above the 2015 high at 12585, up to a high so far of 12631.

This put it at its best levels since early 2002. It is currently flirting with losing that level, and on that if we do see a reversal after breaking out to a 20-year high it could catch a lot of market participants wrong-footed.

We obviously got here so fast through a lot of buying, so even without looking at various sentiment indicators one can conclude a lot of folks are long. Looking at one futures indicator, though, DSI (Daily Sentiment Index) shows over 90% have a long bias.

A fake-out breakout above the 2015 high and failure could send USD/JPY into pullback mode. What I will be watching here is for a weekly closing print that’s not only below the 2015 high, but the emphatic spike-high reversal week ending on April 1. That would require a weekly close below 12510.

Elsewhere, The GBPUSD has broken to a new session high and in the process has moved above its 100 hour moving average at 1.30285.​

That break higher comes after the pair moved to the lowest level since November 6 earlier in the day after taking out the swing low from April 8 at 1.29818. The low price reached 1.2971 before rotating back to the upside.

Helping the technical view in the near term is that the last swing low - before the recent move to the upside over the last few hours - could only get to 1.29899 before the push back higher. With the price back above the 100 day moving average, the buyers are taking another shot at the upside.

Thank You

April-14, 2022, Currency trading technical analysis and forex market latest analysis, By forex forum.​

Currency trading analysis, april-14

GBP/JPY hit fresh more than six-year highs on Thursday, eclipsing Wednesday’s 164.84 peak by about one pip. However, despite a sharp rise in US, UK and global developed market bond yields (apart from in Japan), the pair was not able to muster a convincing bullish break towards 165.00. Rather, the pair on Thursday slipped back to test the 164.00 level once again and at current levels in the 164.40s, trades with losses of about 0.2% on the day.

The lack of bullish momentum could have something to do with the risk-off tone to US equity market trade – typically, GBP/JPY is correlated to other risk assets like US stocks. It could have something to do with the fact that, since the start of the month, GBP/JPY has already put in a solid nearly 3.0% rally from the sub-160.00 levels, and was thus due some profit-taking/consolidation.

On the other hand, US TREASURIES LOWER, US AND UK INFLATION HIGHER​

On Tuesday and Wednesday we saw US and UK headline measures of inflation (inclusive of fuel and food which tend to exhibit the most volatile price changes) which both beat expectations. Upward surprises in inflation data seems to be the norm but the market took more notice of the fact that US core inflation (excluding food and fuel) data rose less than expected. A lower core inflation reading suggests that maybe inflation isn’t as widespread throughout the economy as previously observed and that we could start to see a slow down in general price increases.

GBP/USD: KEY TECHNICAL LEVELS

Sterling wasted no time surpassing 1.3080 which leaves 1.3190 as the next level of resistance as this level temporarily capped prices in March. As mentioned earlier, the real test for the pound is that zone of resistance around 1.3265 which coincided with the mid-point of the descending channel and effectively repelled the GBP/USD advance in March.

The fairly large option expiry later today could see prices head lower. In that case, 1.3080 returns as support followed by the psychological level of 1.3000.

Thanks

May-06, 2022, Weekly Currency trading forecast, by forex forum.​

Currency trading weekly analysis may-06, 2022

The British pound appears to regain composure but remains losing in the day, down 0.06%, after the Bank of England hiked rates by 25-bps on Thursday. At the time of writing, the GBP/USD is trading at 1.2352.

US employment figures came positive, and the BoE expects inflation to reach 10%
Global equities remain down during the North American session, while the US 10-year Treasury yield rose to a YTD high of around 3.131%. Albeit higher US yields, the greenback is giving back some earlier weekly gains, as portrayed by the US Dollar Index, a gauge of the buck’s value against a basket of six currencies, down 0.18%, sitting at 103.370.

Elsewhere, The dollar slipped against a basket of currencies on Friday after two volatile days as investors focused on how aggressive the Federal Reserve will be in hiking rates as it tackles rising inflation.

The dollar index hit a 20-year high overnight on safe haven demand, following a sharp stock selloff on Thursday driven by concerns about the Fed’s aggressive tightening and as European currencies weakened on worries about growth in the region.

It retraced some of these gains, however, as investors evaluated how much of the Fed’s hawkishness is already priced into the greenback, and as some analysts argued that inflation may be nearing a peak.

Data on Friday showed that U.S. job growth increased more than expected in April. Average hourly earnings increased 0.3% after advancing 0.5% in March. That lowered the year-on-year increase in wages to 5.5% from 5.6% in March.

Moreover, the EURUSD is remaining near its lows going back to 2017.​

However, the price is trying to stay above its shorter-term 200 hour moving average at 1.05516 and its 100 hour moving average at 1.05425. The current price is trading at 1.0577. The low price for the cycle reach 1.04703 last week.

On the other hand, Earlier this morning the Reserve Bank of Australia (RBA) released its monetary policy statement. Listed below are the important issues addressed by the central bank:

  1. Inflation forecasts have been revised higher and is expected to remain elevated above the 2%-3% range.

  2. No concern over weakening AUD – trading around similar levels pre-pandemic as well as the start of 2022.

  3. Tight labor market with low unemployment levels.

Price action on the daily AUD/USD chart shows bears looking to test the 0.7000 psychological support zone for the third time since December 2021.​

Thank You

May-11, 2022, Daily Currency market technical analysis and forecast, by forex forum.​

forex trading analysis

Economists at Commerzbank are seeing depreciation pressure for the Chinese yuan over the coming year. They forecast USD/CNY at 6.70 and 6.80 by the year-end of 2022 and 2023 respectively.

A weakening bias for CNY​

“A strong dollar due to policy tightening is likely to the main theme in the coming years, while China has much smaller room to maneuver which implies a downside risk for the Chinese currency.”

USD/CAD KEY TECHNICAL LEVELS

Moreover, Looking at USD/CAD, its no secret that the US dollar has been running hot, buoyed by the initial safe-haven appeal of the Ukraine invasion, now being supported by an aggressive rate hiking cycle by the Federal Reserve Bank. Earlier today we have seen what can be described as the market front-running a potentially lower inflation data print as USD/CAD reversed off the topside of the zone of resistance at 1.3030.

Resistance currently lies at 1.3030 but could move to 1.2960 if we witness a move lower in USD/CAD after the inflation print.

The weekly USD/CAD chart underscores the significance of the zone of resistance (blue rectangle) as it coincides with prior resistance of 1.2960 and the 38.2% Fib level of the March 2020 major move lower.

USD/JPY Technical analysis​

Elsewhere, USDJPY move back above its 200 and 100 hour moving averages The USDJPY has moved higher on the back of the dollar buying after the CPI data showed higher than expected inflation last month. Technically, the price moved back above its 200 hour moving average at 130.17. The price also extended back above its 100 hour moving average at 130.421. That 100 hour moving average is being breached to the downside as I type. Technically, that neutralizes the bias as the price now trades below the 100 but above the 200 hour moving average.

The high price today extended to 130.806 which was a swing high going back to last Friday’s trade. That was also the high for the trading week. Sellers leaned against that level on the 1st test. It would take a move above that level to increase the bullish bias going forward.

Thank You

May-17, 2022, Currency Market Daily Analysis and Forecast, by forex forum.​

US Dollar Market Analysis

The market mood in the New York session remains positive, carrying on the mood from the Asian and European sessions. US equities are recording gains between 1% and 2.67%.

EUR/JPY Price Forecast: Technical outlook​

On Tuesday, the EUR/JPY surged above the 50-day moving average and the head-and-shoulders neckline in the 134.95-135.25/35 area, threatening to invalidate the chart pattern. In the near term, the bias, which shifted to neutral-upwards, as of writing is upwards.

With that said, the EUR/JPY’s first resistance would be 137.00. Break above would expose 138.00, followed by May 9 swing high at 138.32. On the flip side, the EUR/JPY first support would be 136.00. A breach of the latter, the next support would be the head-and-shoulders neckline around 135.25-35, followed by April’s 27 daily low at 134.77.

On the other hand, The dollar fell for a third straight day on Tuesday, pulling back from a two-decade high against a basket of major peers, as an uptick in investors’ appetite for riskier bets diminished the U.S. currency’s appeal.

Upbeat earnings views from Home Depot (NYSE:HD) and United Airlines along with optimism around the easing of China’s crackdown on tech and COVID-19, helped to lift risk sentiment.

The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, was down 0.7% at 103.41, its lowest since May 6. The index hit a two-decade high last week supported by a hawkish Federal Reserve and worries over the global economic fallout from the Russia-Ukraine conflict.

GBP/USD

Elsewhere, The British Pound soared on Tuesday, buoyed by broad-based U.S. dollar weakness, but more importantly, strong UK economic data. In late trading during the New York session, GBP/USD was up 1.3% to 1.2482, posting its largest single day rally since October 2020.

Earlier today, UK employment figures showed that the country added 83,000 workers in February, beating expectations for a net increase of 5,000 jobs handsomely. With this result, the unemployment rate fell 3.8% to 3.7%, hitting its lowest level in nearly half a century.

Technical Analysis

GBP/USD rebounded from 1.2250, the 2022 low, rising above 1.23. The bullish crossover on the MACD is keeping buyers hopeful of more upside.

Bulls will look to retake 1.2410, the April 28 low, before 1.25, the 20 SMA, and then 1.2635, the May high.

Failure to retake resistance at 1.2410 could see the price rebound lower, back below 1.23. A fall below 1.2155 is needed to create a lower low.

Thank You

Source: Forex Forum EUR, USD, JPY, GBP, CAD, AUD Market Analysis and Daily Forecast | Page 5

May-18, 2022, Daily Currency Trading technical analysis and market forecast, by forex forum.​

Daily Currency Trading technical analysis and market forecast (1) copy.jpg

GBP/USD jumped in excess of 1.3% on Tuesday, its best performance in nearly 18-months after the UK Jobs Report showed that the labor market remains in rude health. The unemployment rate fell to 3.7%, its lowest level in 50-years, while average earnings including bonuses rose by 7% in March as employers paid more to keep existing staff.

Retail trader data show 69.52% of traders are net-long with the ratio of traders long to short at 2.28 to 1. The number of traders net-long is 12.59% lower than yesterday and 19.96% lower from last week, while the number of traders net-short is 40.21% higher than yesterday and 50.83% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.

Moreover, The pound fell against the dollar on Wednesday after data showed British inflation rising to 9%, the highest level in 40 years.

At 0846 GMT, sterling was down 0.9% against the U.S. dollar at $1.23820.

The drop reverses most of the gains made on Tuesday when the pound touched its highest level since May 5.

Strong labour market data had boosted expectations that the Bank of England would have to further increase interest rates, but the latest inflation numbers are fuelling fears that the threat of recession may temper how far the central bank can go.

“Yesterday it looked like with wage growth rising and unemployment so low it meant that the bank had more room for manoeuvre,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown

EUR/USD​

On the other hand, The Euro US Dollar exchange rate began the last seven days on a downward trend after German inflation figures came in well below forecast. A widening of the Eurozone trade deficit on Monday may have also contributed to the fall.

The pair’s recovery was aided by a surprisingly hawkish stance from the European Central Bank (ECB). A speech from ECB President Christine Lagarde signalled that a summer 2022 rate hike was likely. Strong GDP growth figures for the Eurozone on Tuesday may also have helped to lift the EUR/USD pair.

Moreover, The European currency is strengthening against the US dollar today. Yesterday preliminary eurozone GDP data for the first quarter was released, exceeding market expectations. The European economy grew by 0.3% in quarterly terms instead of 0.2% and by 5.1% in annual terms instead of the expected 5.0%.

Overall, the European economy showed resilience even despite the negative impact of rising inflation and the Russia-Ukraine crisis, in particular supply chain disruptions and declining business confidence. Also note today’s comments from European Central Bank official Klaas Nota, who said that the regulator may raise interest rates by 50 basis points at once at its July meeting.

In general, the number of supporters of monetary policy tightening within the European regulator continues to grow.

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May-23, 2022, Daily forex trading analysis and currency market forecast, by forex forum.​

Currency trading analysis may-23, 2022

The USD/JPY edges lower and records minimal losses of 0.01% in the North American session, courtesy of a positive mood and a weaker greenback. At the time of writing, the USD/JPY is trading at 127.84.

USD/JPY Price Forecast: Technical outlook

The USD/JPY remains neutral-upward biased from a daily chart perspective, albeit approaching April’s 26 swing lows at around 126.94, was unable to break support. Nevertheless, the pair could shift its bias to neutral if USD/JPY bulls fail to break the 20-DMA at 129.23, exposing the major to selling pressure.

The USD/JPY 1-hour chart shows that the pair is trapped between the 50 and 100-hour simple moving averages (SMAs) at 127.98 and 128.19, respectively, but it is upwards. Why? The 20-hour SMA resides below the exchange rate, while the Relative Strength Index (RSI) shifted bullish above the 50-midline. Therefore, the USD/JPY bias is upwards.

USD TECHNICAL ANALYSIS: DXY OUTLOOK IN THE DAYS AHEAD​

On the other hand, The US Dollar Index (DXY) is continuing its recent run of weakness as it pulls back sharply from recent highs. The extremes in bullish sentiment suggested the dollar needed to cool off, and so the recent slide isn’t surprising.

The question is, is whether the USD can reassert its bullish ways quickly, or if it will need some time to digest the run before continuing higher. It’s also possible we are seeing a larger reversal, but at this time that appears to have a lower probability than an eventual trend continuation.

In any event, the DXY is trading around its first level of support via a swing low created on May 5 at 102.35. This is below the trend-line extending higher from the late March low, but even though the trend-line has been broken it doesn’t mean we will necessarily see further weakness.

USD/CAD

Elsewhere, The USDCAD is lower on the day with the price opening at its high and trading down to its low in the North American session. The last 13 or so hours have seen the price trade up and down with a high near 1.2807 and a low at 1.27659.

On the downside, the pair stalled near a lower downward sloping trend line on the hourly chart, AND the 50% midpoint of the move up from the April 21 low. Those levels come in near 1.27668. On the topside, the 100 hour MA is the key resistance today and going forward. That MA comes in at 1.28197.

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May-24, 2022, Daily Currency trading technical and fundamental analysis, by forex forum.​

24 may 2022, currency trading analysis

The Russian rouble strengthened to levels not seen since March 2018 against the dollar on Tuesday, boosted by export-focused companies selling foreign currency to pay taxes and shrugging off a slight easing of capital controls.

The rouble has firmed about 30% against the dollar this year despite a full-scale economic crisis in Russia, making it the world’s .

The rouble is steered by capital controls imposed in late February to shield Russia’s financial sector after Moscow’s decision to send tens of thousands of troops into Ukraine prompted unprecedented Western sanctions.

At 1110 GMT, the rouble was 2.5% stronger against the dollar at 56.36, hovering around this level for the first time in more than four years.

Against the euro, the rouble gained 3% to 58.24, its strongest in seven years.

EUR/GBP​

On the other hand, EUR/GBP: Retail trader data shows 49.92% of traders are net-long with the ratio of traders short to long at 1.00 to 1. In fact, traders have remained net-short since May 16 when EUR/GBP traded near 0.85, price has moved 1.33% higher since then. The number of traders net-long is 12.30% lower than yesterday and 8.89% lower from last week, while the number of traders net-short is 17.92% higher than yesterday and 31.60% higher from last week.

USD/JPY

Elsewhere, The USDJPY is moving sharply lower after flash PMI data, US new home sales, and Richmond Fed manufacturing indices all shocked the markets with lower values.

Looking at the USDJPY, it has moved down to test the 50% midpoint of the last trend move higher from the end of March corrective low. That level comes in at 126.306. The low price just reached 126.38.

Looking at the hourly chart, the 50% level corresponds with swing levels going back to mid April before the price shot higher on April 18 and April 19. A move below that level would open the door for a rotation back down toward the 61.8% retracement at 125.14.

EUR/USD​

The main indices of the Polish stock market slightly corrected Monday’s growth today (WIG-20 -0.23% around 15:30). WIG-Chemia reached its new 3-year high during today’s session.

Celon Pharma’s share price was approaching its historic low in 2016 (-2.51% at around 3:30 pm). More than 10 percent The share prices of Ten Square Games fell to the lowest level since the end of 2019, which yesterday announced the results for the first quarter of this year. (PLN 25.59 million of net profit).

In Europe this afternoon the declines of the main indices prevailed (DAX -0.95%, CAC 40 -1.05%).

The euro, after a strong increase against the US dollar on Monday, continued to rise a day later (+0.2%). The zloty was appreciating (EUR / PLN -0.4%, USD / PLN -0.6%). The zloty was the strongest against the euro since the end of February.

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May-25, 2022, Daily forex trading analysis and currency exchange forecast, by forex forum.​

Daily forex trading analysis and currency exchange forecast, by forex forum. copy.jpg

EUR/USD corrects lower following a failed attempt to extend the daily range further north of the 1.0750 zone, sparking a subsequent correction of nearly one big figure to the vicinity of 1.0640.

The renewed strength in the dollar sponsored the move lower in spot, which it has also met some help from lower yields on both sides of the ocean.

No news from earlier comments from ECB-speakers, as practically all of them joined the summer rate hike narrative in place in the last couple of weeks.

In the euro calendar, earlier results saw the German GDP Growth Rate expand 3.8% YoY in Q1 and the Consumer Confidence tracked by GfK improve marginally to -26 for the month of June. In France, the Consumer Confidence came in short of expectations in May at 86 (from April’s 87).

Elsewhere, GBP/USD stalls below $1.26​

The weakening dollar has given GBP/USD space to bounce, and since mid-month the pair has been able to move back towards the early May highs at $1.26. But a weaker set of purchasing manager index (PMIs) yesterday meant that the pound ran into some selling pressure, and as a result, the pair has been unable to maintain upward progress, and is now at risk of turning lower.

Fresh declines would bring the May low back into view, down towards $1.22 and potentially lower, with $1.208 the next big level to watch.

JPY/USD

On the other hand, Turning to the economic calendar, the focus will be on April U.S. PCE scheduled for Friday. U.S. markets are closed next Monday for the Memorial Day holiday and traders are starting to leave their desks for the long weekend, so liquidity conditions could deteriorate further in the coming days. Thin liquidity could amplify price volatility if key data surprises relative to expectations. Check out the forum.forex Economical calendar to see what traders expect.

In terms of technical analysis, USD/JPY has bounced off support in the 126.50 zone and seems to be heading towards trendline resistance near 127.40. If price manages to clear this hurdle, bulls could launch an attack on 128.40, the upper boundary of a short-term descending channel. On further strength, the focus shifts higher to 129.75. On the flip side, if sellers return and spark a bearish reversal, initial support spans from 126.50/126.15. If this area is breached on the downside, USD/JPY could be on its way towards the psychological 125.00 level.

US dollar

The U.S. dollar snapped a two-day losing streak on Wednesday ahead of the release of the minutes from the U.S. Federal Reserve’s May meeting, which investors will parse for clues about further interest rate hikes.

The minutes are due at 2 p.m. EDT (1800 GMT). U.S. Federal Reserve Chair Jerome Powell has promised to continue hiking rates until there is clear and convincing evidence that inflation is under control.

The U.S. dollar index, which measures the greenback against a basket of peer currencies, was up 0.491% at 102.25, at 10:15 a.m. (1415 GMT).

The dollar had fallen to a one-month low on Tuesday after European Central Bank chief Christine Lagarde flagged an end to negative interest rates in the euro zone in the third quarter.

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May-26, 2022, Daily Currency market forecast and forex market analysis, By forex forum.​

Currency Trading analysis, may-26, 2022

EUR/USD Rises Amid Improved Market Confidence.

On the euro side of the equation, the ECB is increasingly turning against several months ago. The bank now vouches for a policy acceleration and exits from negative interest rates by the end of the third quarter. This pivot could soon open the door to a 50 bps boost and increase support for European currencies, or at least prevent more depreciation. The stars appear to be ready for the EUR/USD recovery going forward in the summer.

Technical analysis EUR/USD

EUR/USD is approaching its best level since late April. After rising in the past few weeks. with the latest advances Both looked ready to test cluster resistance again. It covers from 1.0750 to 1.0800 if the bull can break through this ceiling to an uptrend. Buying interest may accelerate This paves the way for a move towards 1.0940. Conversely, if sellers recover and prices drop. Initial support will be at 1.0642, followed by 1.0470.

Rouble Analysis​

On the other hand, The Russian rouble slumped around 10% against the dollar in volatile trade to a two-week low on Thursday as the central bank cut interest rates to 11% and suggested more cuts would follow as inflation risks subside.

The central bank cut its key rate by 300 basis points for the third time in a row, softening the cost of borrowing again after an emergency rate hike to 20% in late February days after Russia sent troops into Ukraine.

At a banking conference in Moscow, Governor Elvira Nabiullina said the central bank had prevented an inflation spiral and would lower its 2022 inflation forecast from 18-23%, reiterating the bank’s signal that it may cut rates further at its next meeting on June 10.

By 1420 GMT, the rouble was around 10% weaker against the dollar at 65.70 , its weakest since May 12 and tumbling from 55.80, its strongest level since February 2018 which it hit on Wednesday.

It had lost 14% to trade at 69.50 versus the euro, also a two-week low, having touched a seven-year high of 57.10 in the previous session.

USD/JPY

Elsewhere, The Japanese Yen has finally been finding some footing against the US Dollar. Over the past two weeks, USD/JPY declined by over 2 percent. That was the worst 2-week period since June 2020. This has been in stark contrast with general Yen weakness going back all the way to the beginning of 2021. Is this near-term noise, or is more smooth sailing ahead for the Japanese currency?

Against the US Dollar, it is a different fundamental story. Both the US Dollar and Japanese Yen exhibit anti-risk dynamics. The more important focus for USD/JPY is thus on relative monetary policy between the Federal Reserve and the Bank of Japan. The latter has not been doing much in terms of shifting its dovish view, but the markets are starting to reprice what the former could do in the future.

USD/JPY TECHNICAL ANALYSIS

With that in mind, traders ought to treat USD/JPY’s recent breakout with a grain of salt. The pair just barely closed under the April 27th low at 126.952. Moreover, the 50-day Simple Moving Average remains in play and can reorient the pair to the upside. Such an outcome would place the focus on 131.256 resistance. Otherwise, confirming a breakout under the SMA could spell further trouble for USD/JPY. That would place the focus on the former 125.108 – 123.862 resistance zone.

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