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FXTimes Team
The EURUSD advanced further on Monday, as ECB President Mario Draghi gave a positive assessment of the Eurozone recovery, while consumer confidence in the region rose to its highest level in nearly eight years.
The EURUSD climbed to a session high of 1.0946. The pair would subsequently consolidate at 1.0893, advancing 0.5 percent. Short-term resistance is seen near the 1.0920 region. On the downside, support is likely offered at 1.0735.
The euro is enjoying one of its strongest rallies of the year. The short-term trend appears to be reversing as the US dollar continues to backtrack following the Federal Reserve’s cautious policy statement.
European Central Bank President Mario Draghi underscored the region’s recovery on Monday when he testified before European Parliament on Monday. The central bank chief said declining energy prices and quantitative easing were lifting the euro area economy.
“The most recent data and survey evidence show that growth is gaining momentum. The basis for the economic recovery in the euro area has clearly strengthened. This is due to in particular the fall in oil prices, the gradual firming of external demand, easy financing conditions driven by our accomodative monetary policy, and the depreciation of the euro,” Draghi told the European Parliament on Monday in Brussels.
The ECB chief also acknowledged that, while inflation could weaken further in the short-run, it should return to target range within the next two years. Annual Eurozone inflation improved to -0.3 percent in February from -0.6 percent in January.
In a separate report on Monday the European Commission said consumer confidence rose to nearly eight-year high in March, reflecting higher real incomes from declining energy prices and renewed optimism in the recovery.
The European Commission’s preliminary measure of consumer confidence rose to -3.7 in March from -6.7 in February. The March rate was the highest since July 2007.
The USDCAD continued to backtrack on Monday, as the Canadian dollar benefited from broad US dollar weakness amid tumbling crude prices.
The USDCAD declined 80 pips to 1.2504 and has now fallen more than 300 pips since the US Federal Reserve’s policy statement last Wednesday. Initial support is likely found at 1.2490 and resistance at 1.2670.
Meanwhile, the US dollar index was down 0.8 percent to 97.11.
Absent of any Canadian data, the loonie continued to benefit from a weaker US dollar, despite tumbling energy prices. Global benchmark Brent crude fell 0.5 percent to $55.03 a barrel. West Texas Intermediate for May delivery was little changed at $46.59 a barrel.
Crude prices declined earlier in the day after Saudi Arabia’s oil minister said OPEC would not reduce output amid a record US shale boom. OPEC continues to pump more than 30 million barrels per day, with output exceeding production targets for nine straight months.
The oil price collapse is beginning to weigh on Canada. The province of Alberta, home of Canada’s oil and gas industry, is forecast to enter into a mild recession this year. The Canadian economy as a whole is expected to grow just 1.5 percent in the 12 months through June, nearly one percentage point below last year’s estimate.
The price of global crude fluctuated on Tuesday, as the US dollar rose against a basket of currencies for the first time since last Thursday following upbeat economic data.
Global benchmark Brent crude tumbled 0.9 percent to $55.42 a barrel as of 17:33 ET. US crude advanced 0.1 percent to $47.51 a barrel.
The US dollar rebounded on Tuesday, climbing 0.2 percent against a basket of trade-weighted currencies. The US dollar index settled at 97.20 at the end of the North American session. The dollar pared losses against the euro, which climbed to a session high of 1.1027. The EURUSD would subsequently consolidate at 1.0918, declining 41 pips.
Crude prices could face a volatile session on Wednesday as the US Energy Information Administration reports on crude stockpiles for the week ended March 20. US crude stockpiles have climbed to new record highs in each of the last ten weeks, intensifying the global supply glut that has halved crude prices over the last nine months.
Stockpiles are expected to rise by another 5 million, reaching a new record high. Stockpiles rose nearly three times as much as forecast in the week ended March 13, data showed last week. Another hefty buildup in supplies could weigh on prices at a time when OPEC is preparing to keep production elevated.
[I]- The FXTimes Team[/I]
The USDJPY was little changed on Friday, as Japan’s inflation rate eased for a seventh straight month, placing more pressure on the Bank of Japan.
The USDJPY was trading at 119.36, advancing 0.1 percent. The outlook on the USDJPY has turned bearish following last week’s FOMC rate announcement. However, US dollar pairs appear to have moderated following the selloff.
The USDJPY faces near-term support at 118.48 and resistance at 119.74.
In economic data, Japan’s inflation rate eased in February, a sign the BOJ will have to introduce additional stimulus measures to achieve price stability. Japan’s annual CPI rate rose 2 percent in February, slightly below the median estimate of 2.1 percent. Annual CPI had increased 2.2 percent in January. Inflation in the world’s third-largest economy is forecast to decline further in 2015, placing more pressure on policymakers.
Stripping away the effects of last April’s sales tax hike, Japan’s inflation rate was flat in February after increasing 0.2 percent the prior month.
The Japanese government last year raised its sales tax for the first time in 17 years. The rate rose to 8 percent from 5 percent in an effort to reduce Japan’s debt.
[I]- The FXTimes Team[/I]
In these days, Knowing about the latest trading tips will always makes so creative and getting best results.
Technical Bias: Bullish
Key Points
• Australian dollar surged higher against the New Zealand Dollar, as the latter one weakened a lot recently.
• AUDNZD remains a buy on dips pair, as long as it is above 1.1150.
• New Zealand Employment Change published by the Statistics New Zealand registered an increase of 0.3% in Q2 2015, lower compared with the forecast of 0.5%.
• New Zealand Unemployment Rate was unchanged at 5.9%.
Technical Analysis
The AUDNZD pair enjoyed a decent run towards the upside, as the pair traded higher and cleared an important resistance area at 1.1150 which might act as a support if the pair corrects lower from the current levels. There was a major bearish trend line formed on the 4-hours chart of the AUDNZD pair, which was cleared to open the doors for more gains in the near term.
The most important point is the fact that the pair is now well above the 200 and 100 simple moving averages (H4), i.e. a bullish sign. As long as the pair is above the 200 SMA (H4) more upsides are possible.
If the pair corrects lower from the current levels, then an initial support lies around the 38.2% Fib retracement level of the last wave from the 1.0896 low to 1.1309 high, which is coinciding with the 200 SMA (H4).
– Fxtimes Team –
The Euro Zone’s Producer Price Index (PPI) figures for June disappointed and signaling deflation remains an issue in Europe, as monthly basis, the index fell 0.1% compared to previous 0.0%. Yearly basis, it met expectations falling 2.2% compared to May reading of -2.0%.
In the US, Factory Orders surged in June, driven by a big gain in commercial airplanes, up 1.8% in the month, but economic optimism slipped 2.5% in August, posting a reading of 46.9, below the past 12-month average.
The dollar turned sharply higher in the American afternoon, following Atlanta’s FED President Dennis Lockhart pledging for a September lift off in rates, unless “significant deterioration” in data occur.
The EUR/USD pair, which was contained by the 1.1000 level, sunk to fresh lows below the 1.0900 level, and even extended below the past week low of 1.0892, and maintains a strong bearish momentum in the short term by the end of the US session, with the 1 hour chart showing that the technical indicators head sharply lower below their mid-lines, and that the price has accelerated well below it moving averages, having been unable to advance beyond the 100 SMA.
In the 4 hours chart the technical picture is also strong bearish, albeit the pair may hover around the current level and even bounce some before extending its decline. A break below 1.0860 should see the pair extending its decline this Wednesday towards the 1.0800/20 price zone, where buying interest has been containing the downside since late May.
Meanwhile the GBP/USD pair has been trading in quite a limited range since the week started, with buying interest surging around 1.5560 and sellers aligned in the 1.5630/40 price zone. The pair tested the base of the range a couple of times this Tuesday, dragged lower early in the European session after the UK Construction PMI unexpectedly slowed in July, printing 57.1 and retreating from a 4-month high of 58.1 in June.
The pair bounced again from the level with the release of the US data, but and points to break below it following FED’s Lockhart comments on rates, as the 1 hour chart shows that the technical indicators have extended to lower lows, maintaining their strong bearish slopes in negative territory. In the 4 hours chart, the price is struggling around a horizontal 20 SMA, whilst the technical indicators have turned lower around their mid-lines, still unable to confirm additional declines. In this last chart, the price has failed to establish above a now bearish 20 SMA ever since the day started, inclining the balance towards the downside for the upcoming hours.
Key Points
• Aussie Dollar was crushed against a basket of currencies, as the employment report published during the Asian session missed the mark.
• Employment Change released by the Australian Bureau of Statistics came in at 38.5K, more than the market expected in July 2015.
• The disappointing part was the fact that the Unemployment Rate increased to 6.3%.
Technical Analysis
The AUDUSD spiked down after the employment report was published during the Asian session. The pair traded lower, but managed to find support near the 100 and 200 hourly simple moving averages confluence area. Moreover, there is also a descending channel formed on the hourly chart, which is aligned with the stated confluence area.
However, there is a lot of bearish pressure on the pair, which could easily result in a break lower. If the pair closes below the channel support area more losses are likely.
On the upside, the channel resistance area is a solid resistance, as the 50 hourly SMA is also positioned around it.
– By Fxtimes Team –
The latest PMI data showed the rate of expansion in eurozone economic activity slowing slightly at the start of the third quarter. However, growth remained close to June’s four-year high. Meanwhile, the final Markit Eurozone PMI® Composite Output Index posted 53.9 in July, down from 54.2 in June and above the earlier flash estimate of 53.7.
The dollar edged mixed against its rivals yesterday, down against the EUR, before claiming a new two weeks high. The generally positive tone of the American currency on speculation the FED will move rates next September, was hit by a series of soft data.
The ADP survey showed that the private sector created just 185K new jobs in July, well below expectations of 215K. The local Trade balance posted a wider-than-expected deficit of 43.8 billion in June, up $2.9 billion from $40.9 billion in May, revised.
The EUR/USD, that fell down to 1.0847 earlier in the day, jumped to a daily high of 1.0935, from where it turned back south following the release of the US ISM non-manufacturing report, up to 60.3, the highest in a decade, although the dollar was unable to sustain its gains, and the pair slowly climbed back higher to end the day around the 1.0900 mark.
The EUR/USD pair one-hour chart however, presents a limited upward potential, as the price remains well below its 100 SMA, whilst the technical indicators are losing their strength, but holding in positive territory. In the 4 hours chart, the 20 SMA turned sharply lower above the current price, whilst the technical indicators have recovered from oversold levels, but are still far from suggesting an upward recovery.
Selling interest is now aligned around 1.0950, and the bearish pressure will likely prevail as long as the level holds. The market may enter in wait-and-see mode on Friday, ahead of the release of the US Nonfarm Payroll report, which is set to be a make it or break it, in regards of the dollar trend.
Key Points
• Euro traded higher against the Aussie Dollar, but facing a major barrier on the upside.
• The Australian HIA/AiG Performance of Construction Index, released by the Australian Industry Group and the Housing Industry Association posted a minor rise from 46.4 to 47.1 in July 2015.
• Australian Home Loans released by the Australian Bureau of Statistics registered an increase of 4.4% in June 2015, which was lower when compared with the forecast of +5%.
Technical Analysis
The Aussie Dollar suffered losses against the Euro yesterday, as the employment report released in Australian ignited bearish pressure. The EURAUD pair traded higher, but faced a major resistance around an important bearish trend line on the hourly chart, which stopped the upside move.
One key point to note is that the upside was stalled around the 50% Fib retracement level of the last drop from the 1.5093 high to 1.4730 low. The bearish trend line is coinciding with the 100 hourly simple moving averages, pointing towards the significance of the trend line.
Moreover, the hourly RSI is below the 50 level, and showing a lot of bearish signs. So, if the pair corrects higher, it might find resistance on the upside.
On the downside, the last swing low of 1.4730 could be tested one more time.
Australian HIA/AIG Performance of Construction Index
Today during the Asian session, the Australian HIA/AIG Performance of Construction Index, which is considered as an indicator that measures the conditions on the short and medium term in the construction market was released by the Australian Industry Group and the Housing Industry Association. The outcome was way above the market expectation, as the Australian HIA/AIG Performance of Construction Index climbed to 47.1, up from the last reading of 46.4.
The report stated that “the three-month moving average of The Australian PCI was unchanged in July, at 47.1 points“.
Trade Idea
Selling rallies closer to the 100 hourly SMA area is a good option.
– By Fxtimes Team –
The EUR/USD pair closed the day above the 1.0900 with some limited intraday gains, helped by a US report showing that the monthly job cuts reached its highest level since 2011, as employers announced plans to shed 105,696 workers in July.
Usually not a big market mover, the report became relevant ahead of the US NFP report. Weekly unemployment claims came out better than expected, printing 270K in the week ending July 31 against a forecast of 277K, but above the previous week reading of 267K.
The dollar traded generally lower during all of the American session, but contained within its recent range against the EUR, as investors switched to wait-and-see mode ahead of the release of the US Nonfarm Payroll report early Friday.
Technically, the 1 hour chart shows that the pair is unable to advance beyond its 100 SMA, whilst the technical indicators have turned lower around their mid-lines, lacking bearish strength, but at least suggesting the upside will remain limited.
In the 4 hours chart the price is hovering around a bearish 20 SMA, the Momentum indicator heads south below its 100 level, and the RSI indicator hovers around 48, supporting the shorter term view, and maintaining the risk towards the downside.
Meanwhile the USD/JPY pair has spent most of the day consolidating below the 125.00 level, extending its decline intraday down to 124.59, dragged lower by a sharp decline in Wall Street. The limited retracement in the pair is due to the upcoming release of US employment figures, which will determinate whether the pair may reach a fresh year high, or lose the 124.00 level once again.
In the meantime, the 1 hour chart shows that the price remains well above its 100 and 200 SMAs, but that the technical indicators have retreated from their mid-lines, and maintain a bearish bias, and supporting a slide down to 124.45, the immediate support.
In the 4 hours chart, the price is well above its moving averages, the Momentum indicator holds above the 100 level, and the RSI indicator turned slightly lower from overbought readings, now around 60, supporting a limited slide as seen in the shorter term.
The GBP/CAD extended its decline down to 2.0204 on Friday, as Pound maintained its weekly tone against all of its major rivals, although the pair bounced following the release of the US Baker Hughes report, showing that oil drilling rose for a third straight week, sending WTI to a fresh 6-week low of 43.69, dragging Canadian dollar lower.
The cross ended the week with losses, but flat on Friday, with the daily candle showing a long lower wick, suggesting buying interest may continue surging on dips.
Technically, the 4 hours chart however, maintains a strong bearish tone, with the price below a bearish 20 SMA and the technical indicators resuming their declines after correcting oversold levels.
Meanwhile Gold prices closed the week on a flat note, with spot unchanged weekly basis around $ 1,094 a troy ounce. On Friday, the metal initially fell to the base of the daily triangle that has contained the price ever since bottoming at 1,071 in July, to later bounce and found selling interest at the top of the same figure, maintaining its range trading for one more week.
The lull physical demand in India, and fears the FED will raise its rates as soon as next September, have kept the commodity under pressure for most of the last three months. Now in a consolidative stage, the daily chart shows that the 20 SMA has extended its bearish slope down to the 1,100 region, from where the price retreated on Friday, whilst the technical indicators continue to correct higher from extreme oversold levels, suggesting the downward potential has diminished somehow.
In the shorter term, the 4 hours chart shows that the price is above a horizontal 20 SMA, whilst the technical indicators are turning lower above their mid-lines, still within neutral territory. Some follow through any of the trend lines that form the figure is now required to see a cleared directional strength in the metal.
Key Points
• Euro remained higher against the Swiss Franc and looks set for more upsides in the near term.
• Euro Zone Sentix Investor Confidence released by the Sentix GmbH declined to 18.4 from 18.5 in August 2015.
• Greece Industrial Production released by the National Statistics Service declined by 4.5% in June 2015, more than the market expected.
• EURCHF has a major support area formed around 1.0750, which must hold for more gains.
Technical Analysis
The EURCHF pair continued to move higher, as buyers were in control. There are a couple of bullish trend lines formed on the hourly chart, which are acting as a catalyst in the near term. Moreover, the pair is comfortably placed above the 100, 200 and 50 hourly simple moving averages, which is a positive sign for buyers.
If the pair corrects lower from the current levels, then it might find support around the highlighted trend line support area. Moreover, the 23.6% Fib retracement level of the last wave from the 1.0621 low to 1.0790 high may also come into play. The 50 SMA is positioned just below it to serve as a support.
On the upside, a break above the last high is needed to set the path for more gain towards the next hurdle of 1.0840.
Euro Zone Sentix Investor Confidence
Earlier during the London session, the Sentix Investor Confidence, which is a monthly survey and points the market opinion about the current economic situation and the expectations for the next semester was released by the Sentix GmbH. The forecast was lined up for an increase from the last reading of 18.5 to 20.2 in August 2015. However, the outcome was just below the forecast, as the Sentix Investor Confidence came in at 18.4.
Trade Idea
We can attempt a buy trade as long as the EURCHF pair is above the 50 hourly SMA.
– By Fxtimes Team –
The GBP/USD pair closed last week near the highest of its latest range, but still limited below the 1.5670/80 region, where selling interest has been containing advances since early July.
There was no relevant macroeconomic data in the UK to guide investors, but the Pound continued finding some support on the idea that the BOE will enter the tightening path after the FED, probably in the first half of 2016.
Technically, the 4 hours chart shows that the price is above a bullish 20 SMA, although the technical indicators have turned lower, with the Momentum indicator about to cross its 100 level towards the downside.
In the same chart, the 200 EMA remains horizontal, reflecting the ongoing lack of directional strength, around 1.5670. Overall, market’s sentiment favors the upside, yet some follow through beyond 1.5710 is required to confirm additional gains for the upcoming sessions.
Key Points
• British Pound rocketed higher against the US dollar after the UK CPI release.
• UK Consumer Price Index released by the National Statistics registered an increase of 0.1% in July 2015, compared to the same month a year ago whereas the market was expecting no change.
• In terms of the monthly change, the UK CPI decreased by 0.2% in July 2015.
• GBPUSD climbed higher and trading near a major resistance confluence area of 1.5700.
Technical Analysis
The GBPUSD pair surged higher after the positive UK CPI release, as buyers gained control. The pair climbed by more than 60 pips, and now trading near a critical resistance area. The last swing high of 1.5700 acted as a barrier for buyers on many occasions, and it might continue to do so.
We need to see if there is a break above the highlighted resistance area or not moving ahead, as it would be very crucial move in the near term.
The GBPUSD pair is well above the 100 and 200 simple moving average (H4), which is a positive sign.
UK CPI
Earlier during the London session, the UK Consumer Price Index, which measures the price movements by the comparison between the retail prices of a representative shopping basket of goods and services was published by the National Statistics. The forecast was of no change in the CPI in July 2015, compared to the same month a year ago. However, the outcome was better than the forecast, as the UK CPI increased by 0.1%.
In terms of the monthly change, the UK CPI decreased by 0.2% in July 2015, compared to the preceding month. This was also on the higher side compared with the forecast of a 0.3% decline. Overall, the data was positive for the GBPUSD pair, and helped buyers to gain traction.
Trade Idea
We can attempt a buy trade if the GBPUSD breaks and settles above the highlighted resistance confluence area.
– By Fxtimes Team –
Majors traded in quite limited ranges on Monday, as the market was looking for some major US catalyst this Wednesday, in the form of US CPI and the latest FOMC Minutes.
The calendar was soft, with the EU Trade Balance for June resulting in a surplus of €26.4B, which supported the EUR temporarily in the European morning. In the US, the NY manufacturing index tumbled to -14.9, the lowest in six years, against expectations of a 5.0 advance. Nevertheless, the dollar managed to close the day generally higher across the board.
As for the technical picture, the EUR/USD fell down to an intraday low of 1.1058, but managed to close the day a few pips above the 38.2% retracement of its latest bullish run, from 1.0847 to 1.1213 at 1.1075.
The pair presents a short term negative tone, as in the 1 hour chart, the price was rejected by its 100 SMA and holds now below a bearish 20 SMA, whilst the technical indicators present a tepid bearish tone in negative territory. This financial trading course may be very useful if you are not sure how the Simple Moving Averages (SMAs) work in forex trading.
In the 4 hours chart, the 20 SMA turned south around the 23.6% retracement of the same rally, whilst the technical indicators maintain their bearish slopes in negative territory, supporting the shorter term view. Should the price extend below 1.1060, the downside is open for further declines down to the 1.0980 price zone.
good news thread, can you post some major news regarding the Greek crisis and oil?
Key Points
• Euro traded towards 137.60 against the Japanese Yen where sellers defended gains successfully.
• Euro Area Current Account published by European Central Bank posted a surplus of €25.4 billion, more than the forecast.
• Euro Area Construction Output was also released during the London session by the Eurostat, which registered a decrease of -1.9% in June 2015.
• EURJPY is trading lower and looks poised for more losses in the near term.
Technical Analysis
The EURJPY remained under the bearish pressure, which can be clearly seen in the hourly chart. There is a bearish trend line formed on the hourly chart as well, which is acting as a barrier for buyers every time they manage to take the price higher.
Recently, there was a failure noted around the highlighted trend line, which was sitting around the 61.8% Fib retracement level of the last drop from the 137.90 high.
If the EURJPY pair corrects higher moving ahead, then it might face resistance around the trend line resistance area. On the downside, the pair might target a fresh low below the 137.00 handle.
Euro Area Current Account
There were a few economic releases lined up today in the Euro Area, including the Current Account and the Construction Output data. First, the Current Account, representing the net flow of current transactions, including goods, services, and interest payments was published by European Central Bank. The forecast was of a €19.2B trade surplus in June 2015. However, the outcome was positive, as the trade surplus was €25.4B.
Second released was the Euro Area Construction Output, which measures the output of the construction industry, in both the private and public sectors. The outcome was disappointing, as the seasonally adjusted production in the construction sector declined 1.9%.
Overall, there was some bearish pressure noted on the Euro, which might continue to increase moving ahead.
Trade Idea
We can attempt a sell trade if the EURJPY pair corrects higher and trades closer to the highlighted bearish trend line.
– By Fxtimes Team –
The Great Britain Pound (GBP) extended upside movement against the US Dollar (USD) on Thursday, increasing the price of GBPUSD to more than 1.5670 following the release of the Federal Open Market Committee (FOMC) minutes. The technical bias remains bullish due to a Higher High and Higher Low in the recent wave on daily chart.
Technical Analysis
As of this writing, the pair is being traded around 1.5679. A hurdle may be noted near 1.5751, the 23.6% fib level ahead of 1.5800, the psychological number and then 1.5928, the swing high of the last major upside rally as demonstrated in the following daily chart.
