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EUR/JPY could extend breakdown on euro “overshoot” and rising risk concerns
August 17, 2017 – Thursday’s release of minutes from July’s European Central Bank policy meeting resulted in a knee-jerk fall for the euro, as concerns were expressed over the possibility of the common currency “overshooting.” These concerns by the central bank are well-warranted, as the euro has risen on a steep trajectory against its major counterparts since April of this year.
At the same time, while geopolitical risks have been muted for the time being after the recent nuclear missile threats from North Korea (along with President Trump’s threats in response) temporarily faded into the background, safe-haven assets like gold and the Japanese yen stand poised to resume their recent rallies when impending risk concerns inevitably return. In the US, the latest political trouble in the White House has provided elevated volatility in the markets. Key business leaders and members of Congress, most notably Republicans, have abandoned support for President Trump in the past few days over highly controversial remarks made by the President in the aftermath of a violent rally in Charlottesville, Virginia. Worries that conflicts between Trump and Congress will disrupt key pro-business initiatives weighed heavily on equity markets Thursday.
The combination of an ECB-pressured euro and the likelihood of rising geopolitical risk concerns boosting the safe-haven yen has the potential to extend the recent EUR/JPY breakdown. Last week, the currency pair made a tentative breakdown below a key uptrend line that represents the sharp 4-month bullish trend that launched from the April 115.00-area lows. After the trendline breakdown, price rebounded to re-test the underside of the trendline before falling once again on Thursday after the ECB release.
With further euro pressure and yen demand, EUR/JPY could be poised to extend its breakdown below last week’s lows. In that event, a drop below the 128.00 support level could target the next major downside objective at the key 126.00 support level, which also represents a major 61.8% Fibonacci retracement.
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Can gold sustain breakout as stocks extend drop?
Owing to the risk-off tone in the markets, gold is up for the third consecutive day. At a good $1300 per troy ounce, the yellow precious metal climbed to its best level since November of last year before pulling back slightly.
The safe haven metal’s slow and steady ascend throughout this year has been warning us that something big was about to happen. Get the full story http://on.forex.com/2vKH8wc
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Ok, don’t say you didn’t invite me.
So what do we do when we are at a mean point??? This question is for everyone but FX.com.
Also look at the ATR, this becomes more important as we scale down in time.
Now could a miracle happen, might we close above, the mean by the end of this month, sure, and Nibiru could actually exist, but I don’t think so. So at least on the monthly we are parked right at the Mean.
Rinse and Repeat
Now it gets interesting, for me anyway, another feature is the ATR might be breaking above its chanel
So here is the 4hr, notice the ATR divergence
Well I guess my point is I agree with the following [quote=“FOREX.com, post:2, topic:112113”]
safe-haven assets like gold and the Japanese yen stand poised to resume their recent rallies when impending risk concerns inevitably return.
[/quote]
I am not a big Fib fan, but, the price action seems to indicate either a big retrace or a change in Trend.
The Ever Level Headed VIPER
This post is intended for educational purposes only, and should not be construed as investing or trading advice. If you follow any of these concepts you will lose some or all of your assets. This post is also not a solicitation for funds.
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Gold rises towards critical juncture amid heightened market risk, weak dollar
August 21, 2017 – Despite earlier signs of a potential recovery, the US dollar continued to fall on Monday amid generally lackluster US economic data in recent weeks and a Federal Reserve that has become even more divided and dovish than usual as of the last FOMC meeting. This sustained pressure on the dollar comes just as geopolitical concerns have risen recently, due in large part to the overhanging threat of North Korea’s nuclear capabilities and the ongoing troubles and controversies plaguing US President Trump and his administration.
As the prototypical safe-haven asset, dollar-denominated gold has been boosted sharply by this combination of rising geopolitical concerns and a heavily weakened US dollar. Get the full story http://on.forex.com/2vXJZ3p
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Markets turn choppy ahead of Jackson Hole
In this largely data-void week, markets are likely to remain choppy. Many investors and traders are looking forward to the Jackson Hole Symposium which starts on Thursday, where heads of key central banks may provide clues about the path of their respective monetary policies.
Ahead of the Jackson Hole, the US dollar’s selling has paused for the time being. Having trended lower for much of this year, most of the bad news might be priced in. So without any fresh catalyst from either the US or elsewhere it may refuse to significantly fall further. Meanwhile sentiment towards the British pound remains negative and so if the dollar were to stage a more meaningful comeback then the GBP/USD would be the one to watch as it could drop heavily.
At the time of this writing, the GBP/USD was testing last week’s low at 1.2830. The FX markets may also find direction from the equity and commodity markets. Crude oil slumped yesterday but both contracts have bounced back a tad from their respective key technical levels, although this was having very little impact on the USD/CAD which at the time of writing was higher ahead of this afternoon’s Canadian retail sales figures. Copper recovery continues and the Australian dollar remains largely in favour as a result, though the AUD/USD pair was down as a result of the US dollar recovery. Stocks have also managed to stage a small recovery. Consequently, the perceived safe haven Japanese yen, Swiss franc and gold have all eased back.
In the event of a dollar comeback and stock market recovery the USD/JPY and USD/CHF may find strong support. However if equities turn lower again then these dollar pairs could drop the most due to safe haven demand. Gold needs to climb above $1295 to $1300 resistance area in order to attract fresh technical momentum buying. If it manages to do that then this may attract the attention of the bears in the equity markets and in turn in the USD/JPY and USD/CHF FX pairs.
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EUR/USD braces for Yellen and Draghi at Jackson Hole
A combination of highly anticipated speeches from Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi at the Jackson Hole Symposium later this week has the potential to shake EUR/USD out of its recent trading range.
Since hitting a multi-year high just above the 1.1900 level in early August – a high not seen since early 2015 – EUR/USD has pulled back into a trading range bounded roughly between 1.1900 to the upside and 1.1700 to the downside. This trading range has come on the heels of an accelerated uptrend that pushed the currency pair up from its April lows above 1.0500 to the noted early-August high around 1.1900.
The Economic Symposium, hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming, is scheduled to start on Thursday. Get the full story http://on.forex.com/2xt5hVR
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Hey Dude or Dudette, I never realized how close Jackson Hole was to the Yellowstone Caldera. I wonder what would happen if, awww never mind. 
Oh great post, everyone here in the MuleShed is holding their breath, and the Mules give me no indication, short or long, so I am on the side right now.
The Ever Geological VIPER
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NZD/USD drops to major support as kiwi extends correction
Against the New Zealand dollar, the US dollar has extended its strength, pressuring NZD/USD down to a major support area around 0.7200 as of Thursday.
Previously in a sustained rally from a low of 0.6816 in early May up to a two-year high of 0.7556 in late July, NZD/USD began a serious correction early this month after Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler suggested that the central bank is open to possible currency intervention in order to cap the New Zealand dollar’s strength.
Get the full story http://on.forex.com/2w8yTby
Yellen’s policy silence pressures dollar and supports gold
The heavily anticipated speech by Federal Reserve Chair Janet Yellen in Jackson Hole on Friday disappointed Fed-watchers who were hoping for a glimpse into possible monetary policy moves on the horizon.
As the dollar fell against all of its major counterparts – most notably against the euro, which was trading in anticipation of a speech by European Central Bank President Mario Draghi in Jackson Hole later in the day – the price of gold surged back above its intra-range trend line after dipping below it earlier on Friday.
Get the full story http://on.forex.com/2xjm1zJ
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North Korea tensions spark flight to quality
Risk-sensitive stocks have fallen sharply while perceived safe-haven gold, Japanese yen and Swiss franc have soared higher.
Sentiment has been hit above all by raised geopolitical concerns after North Korea fired what is thought to be a ballistic weapon over northern Japan in the early hours of Tuesday.
Get the full story http://on.forex.com/2vGzI9P
Dollar selling eases but pressure remains
At the weekend, Hurricane Harvey wreaked havoc in Texas and is set to dump more heavy rain in the coming days. If the economic costs of the hurricane turn out to be significant then the Fed may have to be even more patient in normalising monetary policy.
Also weighing on the dollar has been the sharp rise in risk aversion following North Korea’s launch of a missile over northern Japan overnight.
Get the full story http://on.forex.com/2iFZRV2
EUR/USD eases further as dollar extends rebound on stronger GDP, ADP
From being one of the strongest to one of the weakest currencies in space of two days. That’s right, the euro is actually falling for once. The single currency is partly lower because of the drop in the EUR/USD exchange rate as the dollar firms up across the board thanks to short covering and positive surprise in US data.
But with some euro crosses like the EUR/GBP also being lower, this suggests there’s actual internal weakness in the currency. Get the full story http://on.forex.com/2wjgniD
NFP Preview: Could US jobs data aid dollar rebound?
The official US monthly non-farm payrolls report will be released on Friday, September 1. Due to the fact that some of the key leading indicators will be released after the NFP, it is even more difficult to predict this month’s headline figure with any reasonable degree of confidence. Still, judging by the only leading indicator we have had – the ADP private sector payrolls report, which came in better than expected on Wednesday – we may see a positive rather than a negative surprise compared to the consensus forecasts.
NFP Jobs Created and Potential USD Reaction
. >210,000 Strongly Bullish
. 180,000-210,000 Moderately Bullish
. 150,000-180,000 Moderately Bearish
. <150,000 Strongly Bearish
Get the full story http://on.forex.com/2eHXTPv
Thursday’s European Central Bank (ECB) policy decision and press conference will be watched closely for clues regarding the bank’s current stance on monetary policy, including its views on Eurozone inflation, interest rates, and potential tapering of the ECB’s massive quantitative easing (QE) program.
A key currency pair that should be impacted significantly by the tone of Thursday’s ECB decision will likely be EUR/JPY, especially given the recent resurgence of the Japanese yen on safe-haven demand amid heightened market risk factors.
Get the full story on http://on.forex.com/2j3e52q
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Combined, heavy pressure on the dollar along with a yen that has remained solidly supported helped push USD/JPY down to a low right around the key 108.00 support level before rebounding.
This important level has served as both major support and resistance for the currency pair in the past, with the most recent instance occurring in mid-April, when USD/JPY bounced cleanly off 108.00 and subsequently rose sharply for the next several weeks.
Get the full story http://on.forex.com/2gLECwR
EUR/USD rally showing signs of exhaustion after dollar’s big slump
These types of candles point to exhaustion and with the RSI also in a state of negative divergence with price (as it has made a lower high near ‘overbought’ level of 70), one can make a case for a EUR/USD reversal here.
Get the full story http://on.forex.com/2wQqF8G
chart source: eSignal and FOREX.com
Gold drops as North Korea tensions subside – for now
Risk-sensitive assets created large gaps at the start of this week’s trading session in Asia overnight. Index futures gapped up before pushing higher which saw the Dow future gain more than 100 points.
In contrast, safe haven gold, which had hit a new 2017 high on Friday, found itself around $15 lower when trading got underway.
Get the full story http://on.forex.com/2jg8plT
chart source: eSignal and FOREX.com
AUD/USD rally at risk of pullback as US dollar bounces
Monday’s US dollar bounce off last week’s multi-year lows prompted several dollar-based currency pairs to buck their trends, at least on a short-term basis.
AUD/USD was no exception, as the pair pulled back further from last week’s failed test of the key 0.8100 level.
Get the full story http://on.forex.com/2xgG7Nz
GBP/CHF one to watch ahead of BoE, SNB
In the lead-up to the Bank of England and Swiss National Bank decisions scheduled for Thursday, sterling has been rallying for at least the past two weeks, and GBP/CHF has been boosted sharply by this run.
Get the full story http://on.forex.com/2h2tcsy
