Daily analysis of the Forex market, Chf-Yen daily chart
Chf-Yen: the pair, after the break out of 109.70 resistance area and after having reached new historical tops at 110.25, is currently drawing a bearish candle below the previous level. If the false breakout will be confirmed, I will look for short trading signals to trade the range of Chf-Yen with a target in the support area 107. If there will be a new bullish move, I would look for a long trading signal in order buy this pair with a target in the next resistance 111.
Macroeconomics news
Today we had the release of two important documents of monetary policy, the Minutes of the Bank of England and the Federal Reserve (in a few hours).
From the United States we also received data on retail sales (better than expected) and inflation (as the forecast).
The major stock indices closed the session around the parity (waiting for the Fed). The American indices are, in this moment, slightly positive.
The Forex shows a weakness for the New Zealand dollar, the Euro and the precious metals; strength for the Usdollar. Obviously we will analyze the situation after the Fed’s Minute.
Tomorrow we will have another important market mover (actually within a few hours): the monetary policy meeting of the Bank of Japan, with the decision on the continuation or increase of the monetary stimulus. We will also see the speeches of Mario Draghi (ECB) and Glenn Stevens (RBA); the consumer confidence in the euro zone; the jobless claims and the manufacturing data from the United States.
Also this week has begun with very few important market movers before " taking off " in terms of volatility with very interesting news from some central banks.
The most awaited news arrived from the United States where the Federal Reserve, with the publication of the minutes of the last policy meeting showed an openness to tapering (reduction of monetary stimulus ) as early as next meetings, without waiting for the confirmation of macroeconomic data.
The markets reacted with a strong buying of dollars, confirming the bullish short-term trend of the USD.
From the United Kingdom (Minute) and from Japan (rates decision) we received the confirmation on the current monetary policies considering the positive effects that they are generating in both economies (gradually picking up).
From Europe, Mario Draghi has reassured market participants about the nonexistence of a deflation risk for the euro zone confirming, at the same time, the ongoing assessment regarding the possibility of negative interest rates on euro deposits.
Stock markets continue their bullish movements (at the moment we are not seeing the usual year-end sales!) generating new tops, especially for the Dow Jones that closed above16,000 points for the first time in its history.
Wishing you a very nice weekend, I leave you my usual weekly outlook with all the macroeconomic information and the trading opportunities for the next week.
Regards
Maurizio Orsini
P.S: due to some work commitments, I will not publish my usual articles of Monday and Wednesday but I’ll see you directly next Friday with my weekly video.
The week ending today has been characterized by different news from the United States, Europe and Japan.
The American market movers came in the first part of the week, because of the Thanksgiving holiday and the closure of the US markets, with positive data relating to a lower unemployment and an increasing confidence (University of Michigan).
We received good news also from Germany, in the labor market and inflation, and from Japan with an increase in manufacturing output and a stable inflation at 1.1%.
Pay attention to the volatility we will have in the coming days because of different monetary policy meetings and the important data on the U.S. labor market.
I consider everything in my usual weekly video along with some interesting observations on the monthly charts!
Daily analysis of the Forex market, Usd-Cad weekly chart
Usd-Cad: the Loonie is located within a short-term bullish move, above the moving average, which has been stronger in the past two weeks. Even the outlook is more bullish than bearish, Usd-Cad is reaching a key area (1.0660/1.07) which is also an important level in the weekly and monthly time frame. A possible strategy might be to wait for the price to show a clear movement in this level and to open a selling countertrend position in case of a short price action set up or, on the contrary, a purchase entry only after the break out of the resistance (confirmed by a long trading signal).
Macroeconomics news
Today we received good news from China with a manufacturing output that was stable but higher than expected. Manufacturing data also came from the UK, from Germany and the euro area (the production increased even above the expectations) and from the United States
The major stock indices had a different move: more positive the Asians, more negative the European and around the parity the American ones.
The Forex market shows a new strength for the dollar and weakness for the euro and the precious metals.
Tomorrow we can remember, besides medium importance market movers, the monetary policy meeting in Australia. The consensus of the analysts is for keeping interest rates unchanged at the current level of 2.50%.
Daily analysis of the Forex market, Aud-Yen weekly chart
Aud-Yen: the cross is within a short period of laterality between 92.40 and 94.50 levels, and the moving average 21 has no direction in both daily and weekly time frames. The price of Aud-Yen is momentarily closer to the just mentioned support and so a clear signal might be considered to trade the range with a new rise up to level 94.50. Considering the weakness of the Australian Dollar, we could also see a bearish break out (confirmed by a short trading signal) to revise the price in the next key support level in zone 91.
We knew this week was going to be particularly volatile and indeed we saw strong intraday moves and changes of directions.
We had four monetary policy meetings in recent days and all basically confirmed the current guidelines: in Australia Governor Glenn Stevens confirmed the overnight rate at 2.50%, maintaining the outlook for new expansionary actions in order to depreciate the domestic currency still considered “uncomfortably high”; in Canada Mr. Stephen Poloz left rates unchanged at 1%, considering the positive effects of this policy over the economy, whose growth is broadly in line with the Bank’s projections of its October Monetary Report; in the UK “chairman” Mark Carney confirmed the interest rates at 0.50% as well as the asset purchase plan at 375 billion pounds per month; also governor Mario Draghi, in yesterday’s ECB meeting, confirmed the euro rate at 0.25% highlighting the availability for future new monetary measures (negative rates on euro deposits? New LTRO for the bank sector?) but providing no clear information about that.
The stock market, after last November highs turned down by discounting the possible imminent tapering of the Federal Reserve, as a consequence of the good U.S. macroeconomic data (higher GDP and lower unemployment) and of the report received by the different Fed’s districts released last Wednesday (Beige Book).
Next week should be much less volatile, with two policy meetings that I comment in my weekly video along with my usual chart analysis, anticipating the longer analysis I always realize every Friday.
Daily analysis of the Forex market, Aud-Nzd daily chart
Aud-Nzd: the pair, after the confirmed break out (November 22 and 29) of the bottom level of the medium term lateral move (1.12), is continuing the downward trend began last March. The strong New Zealand dollar has quickly covered the bullish gap formed at yesterday’s opening and the pair is now close the 1.0920 major support area. In this zone we might consider a long countertrend trading set up to take advantage, after the falling, of a momentary technical correction that could push Aud-Nzd up to the moving average in the key level 1.11. Obviously, in case of a bearish break out the outlook would be to look for a short price action signal to follow the continuation of the trend.
Macroeconomics news
After the volatility of the last week, the next one started with a couple of highly relevant market movers: Japan’s GDP (lower than expected at 0,3%) and the inflation in China (slightly higher in November).
Among the other medium importance news of today we can remember the Swiss labor market data (steady) and the German industrial production (rising but much less than expected).
The major stock indices had contrasted moves today without a clear direction.
The Forex market shows a strength for euro and pound with an attempt to recover for the Usd and the precious metals.
Tomorrow’s economic calendar will present the estimation of gross domestic product, the industrial and manufacturing production in the UK; the confidence in Australia’s economy; the Chinese industrial production.
Daily analysis of the Forex market, UsOil daily chart
UsOil: the price of this raw material, after having touched in late November the relative low at $92, has shown an upward movement that pushed the UsOil up to the important resistance zone $98,50/99. This upward move could also be considered, looking at the weekly chart, as a correction of the previous medium-term downtrend, by a bearish continuation flag, which is also reaching the 38% level of Fibonacci retracement. This area is both a static resistance (tested several times in the past) as dynamic (the moving average 21 is coming down, in the weekly chart, as a further resistance level!) and this is very interesting to be prepared for a potential clear price action set up to open a sell position, with a first target in the intermediate support $96 and then in the next zone $92.
If, on the contrary, the UsOil would break the key level $99 to the upside the strategy would be to wait for a technical pullback and a long trading signal to enter a bullish trend to the next area of resistance $102.
Macroeconomics news
The main news of the economic calendar today will come near the end of the session: the monetary policy meeting of the Reserve Bank of New Zealand with the likely confirmation, according to the forecasts, of interest rates by the Governor Graham Wheeler. In the morning we also received the German inflation data, steady at 0,2% as expected.
The stock market were initially contrasted but turned down in the second part of the session.
The Forex market shows a recovery for the dollar, strength for the euro and weakness for oil and precious metals.
Tomorrow we will receive from Australia the labor market data; from Europe the data on industrial production and the monthly report of the ECB; from Switzerland the interest rate decision (no change expected); from the United States the retail sales and the jobless claims.
The decline of the financial markets continues with the major stock indices that, after the November highs, are moving to their support levels.
This week highlighted two monetary policy meetings (New Zealand and Switzerland) without any change in the current policies and interest rates (respectively 2.50% and 0%).
From the United States we had a rising unemployment that will make the meeting of the Federal Reserve of the next week even more interesting. Fed’s board will not only decide about the level of interest rates but also on the tapering, which now appears to be very close to its beginning.
In today’s video I don’t comment the economic calendar but only the situations and the trading opportunities of my naked charts!
Daily analysis of the Forex market, Gbp-Usd daily chart
Gbp-Usd: after breaking the medium term laterality between 1,59 and 1,6250 levels Gbp-Usd is inside another short term range and might test again the upper level 1,6450.
The trend is clearly upward, above the moving average 21, both in the daily as in the weekly time frame. The strategy could be to seek a price action set up in the former resistance, now support, 1.6250 or also to evaluate the breakdown of today’s top (which also coincides with the moving average in the H4 time frame) to see a new movement of appreciation of Gbp-Usd to the next major area of resistance 1,66.
Macroeconomics news
The week of Fed’s meeting begins with a day dedicated to manufacturing. In fact, we have received this important market mover from different geographical areas: Japan (above expectations), China (negative data), Germany and the euro zone (above the forecast) and the United States (more than expected, as well as the industrial production).
We also had the speech of Mr. Mario Draghi to the European Congress with the confirmation of a weak growth in the last quarter, a still high unemployment and a monetary policy in line with what has already been clarified in the last meeting and the monthly report of the ECB.
The major European stock indices today closed a very positive session (especially Paris and Frankfurt). Asian markets were weak while American ones are still in a positive move.
The Forex market shows at the moment a slight weakness for the USD and a better session for the Australian and Canadian dollar.
The economic calendar tomorrow will show us the Minutes of the last meeting of the Reserve Bank of Australia, the inflation in the UK, in the euro area and the United States, the German ZEW index.
Daily analysis of the Forex market, Gbp-Cad daily chart
Gbp-Cad: the pair arrived, after the bullish movement of late November, at level 1,7540 and then began a phase of short-term correction that is drawing a typical technical analysis continuation pattern (flag). Yesterday the daily chart showed a price action long signal right in the bottom of this pattern (in the intermediate level 1,7230) but not strong enough, so it has been better to wait for a confirmation, also because of the pound’s weakness to other currencies and because of the volatility expected today. Gbp-Cad, after the excellent British macroeconomic data just released, broke up yesterday’s candle confirming the continuation of the trend and the strength of the static and dynamic support (close to the moving average 21). Therefore it is absolutely possible to evaluate a long entry (maybe looking for a momentary rebound in order to improve the risk-return ratio!) to enter this potential upward continuation that might reach the take profit target in the technical projection of the flag, in 1,77 area.
Macroeconomics news
This morning we received the usual monthly data of the German IFO index which slightly rose as forecasted.
Several news came today from the UK: the Bank of England has published the Minutes of the latest monetary policy meeting (showing the unanimous consensus of the members for the current monetary guidance) and we also received data on the British labor market, with the unemployment falling to 7,4%, which represents the 4-year low.
At the end of the session we will know the gross domestic product of New Zealand and, especially, the results of the monetary policy meeting of the Federal Reserve (the last for chairman Ben Bernanke that is going to finish his second term next January!) with the rates announcement and a possible change in the asset purchase plan. This news is highly awaited by the market because the U.S. central bank, after several months, might finally provide definitive information about a gradual reduction of the monetary stimulus.
Today we had a very positive close for the Japanese stock market ( +2 % ). The European indices closed above the parity while the American ones are still uncertain waiting for the Fed.
The Forex Market is showing a slight weakness of the dollar and the precious metals, strength for the pound and the Swiss franc.
Tomorrow’s economic calendar will show only moderately important market movers: the British retail sales and several data from the United States (Philadelphia Fed index, superindex and jobless claims) .
The most important news of this week was undoubtedly the decision of the Federal Reserve to start reducing its accommodative monetary policy. The latest economic data showed an improvement in the U.S. economy, especially the unemployment which fell to 7% and very close to the target of 6,5%, so that Ben Bernanke decided to cut the monetary stimulus spending from 85 to 75 billion dollars each month. The reaction of the financial markets was obviously a strong return to the risk-on, that changed the short-term trend back to historical highs (S&P and Dow Jones).
Also the British pound had a very positive week after the very good macroeconomic data, confirming the UK as one of the countries in the world where the growth is proceeding steadily in the right way.
We also had the monetary policy meeting in Japan with the Central Bank confirming the current asset purchase plan to reach the inflation target level of 2%.
As always, I leave you my weekly video and also this time (after the appreciation I received last Friday) I focused more on the technical analysis and trading opportunities of my naked charts!
My articles and videos will resume after Christmas holidays (Wednesday 8 January).
I wish you a nice Holy Christmas and a good start to the new year!
Regards
Maurizio Orsini
The first “real” trading week of the year has been characterized by a very intense economic calendar, especially in the second half.
Wednesday, the Federal Reserve released the minutes of the last December’s monetary policy meeting underlying that the decision to proceed to a reduction in the asset purchase has been taken, almost unanimously, due to the reduction of their effects on economy.
In Europe we had two monetary policy meetings with a common decision not to change the interest rate levels . The Bank of England and the ECB left their respective guidelines unchanged and Governor Mario Draghi spoke of a situation of weak and modest growth for the euro area also in 2015.
Today the U.S. Department of Labor will release the employment data (Non Farm Payrolls) and we will see if yesterday’s good jobless claims’ results will be confirmed.
I leave you my weekly video showing you only the strategies and the trading signals of my naked charts with the opportunities for the next week.
The first “real” trading week of the year has been characterized by a very intense economic calendar, especially in the second half.
Wednesday, the Federal Reserve released the minutes of the last December’s monetary policy meeting underlying that the decision to proceed to a reduction in the asset purchase has been taken, almost unanimously, due to the reduction of their effects on economy.
In Europe we had two monetary policy meetings with a common decision not to change the interest rate levels . The Bank of England and the ECB left their respective guidelines unchanged and Governor Mario Draghi spoke of a situation of weak and modest growth for the euro area also in 2015.
Today the U.S. Department of Labor will release the employment data (Non Farm Payrolls) and we will see if yesterday’s good jobless claims’ results will be confirmed.
I leave you my weekly video showing you only the strategies and the trading signals of my naked charts with the opportunities for the next week.
US Oil daily Price Action chart
[B]US Oil[/B]: in the last two weeks the price of the US Oil has lost nearly $9 going from $100 to $91.20 last Thursday. The movement has been particularly strong but appears to decrease in intensity close to the support area $91.50. The best trading strategy to adopt depends on what the Price Action will show precisely at this level: a strong bullish trading set-up, confirming the support, could be considered for a countertrend entry (in that case you must have a perfect risk management!) with a possible short-term target in area $95; on the contrary, a bearish break out (but the dollar is strong enough to facilitate it?!) would confirm the continuation of the previous short-term movement with the possibility to find a short Price Action signal to enter on sale, with targets on areas $90 and $95.50. In all the time frames I usually use (weekly, daily, 4 hours) the US Oil is bearish and below the moving average 21, so that it would be better to prefer a trade in the direction of the trend!
Economic Calendar
After the last days of high volatility, the current week is beginning with calm and without market movers of great importance, as we can only remember some lower importance news from Oceania and the election of Mr.Mario Draghi as “Governor of the Year”!
The stock markets’ uncertainty of last Friday, due to the negative labor market data from the U.S., changed into a positive move for the main indices, especially Milan and Madrid; still uncertain the Us stock market.
The Forex market, in this moment, shows the weakness of the dollar and especially of the euro and British pound; a strength of the yen and commodity currencies.
The forex calendar tomorrow will present data on inflation in the UK, industrial production in the euro area and retail sales in the U.S…
Eur-Usd daily Price Action chart
Eur-Usd: the daily chart shows a not very clear short-term situation, with the price that repeatedly broke the moving average 21 which lost its clear direction. The 1.3620/1,36 level has been particularly important for the price in the last three months, so it could be interesting to consider a long price action signal in this area, taking into account also the push that Eur-Usd might receive from the medium term uptrend line to a potential target on area 1.38. Attention to possible bearish break outs because the dollar strength in the last two sessions could also generate a violation of the static and dynamic support, changing the outlook from long to short and preferring, in that case, a short trading signal. As always it’s up to the price to suggest the correct strategy!
Economic Calendar
Today’s economic calendar shows medium importance market movers among which we mention the data on German gross domestic product (down by 0.4% below expectations) and, above all, the release (within a few hours) of the Fed’s Beige Book, which is an economic report very important for the next monetary policy decisions.
The Japanese Nikkei had a positive session, partially recovering yesterday’s losses, and also the European indices had a positive move as well as the US stock market.
The Forex market shows, before Fed’s Beige Book, a positive session for the dollar and the us oil, weakness for the euro and the pound, a slight recovery for the yen.
The economic calendar for tomorrow will present data on the Australian labor market, the ECB monthly report, several inflation data (Germany, the euro zone and the U.S.), the jobless claims in the United States.
This week has been characterized by many medium importance market movers and by the absence of monetary policy meetings. Anyway we had a couple of confirmations of the current monetary guidance from two important geographical areas. In the U.S.A, the Federal Reserve (with the release of the Beige Book) confirmed the gradual growth of the U.S. economy and the improvement of the labor market with the necessary reduction of the asset purchase plan; in the Euro zone the European Central Bank stressed (in its monthly report) a continuation of the weak growth throughout 2014, with the inflation still below the 2% target (but without the risk of deflation) and the interest rates to remain at a low level for a long time.
We actually had stable levels of inflation in the euro zone and Germany and an increase in the United States where we also received positive weekly data from the labor market (less new jobless!).
Pay attention the volatility next week, with the two rate decisions in Japan and Canada.
I leave you my usual weekly video with the only technical analysis and trading opportunities!
Eur-Usd daily Price Action chart
Eur-Usd: as I also explained last week, the daily chart shows a short term situation not very clear however the current appreciation of the dollar could give a greater clarity. As a matter of fact in 1.3620 level I was expecting a buying signal but (as featured in my alternative strategy) the strength of the dollar has created a bearish break out of the static and dynamic support 1.3570 changing, as a consequence, the outlook from long to short. Now we need to check that this downward violation is confirmed; so the presence of a Price Action signal in the just broken level would represent not only a confirmation but also an interesting short opportunity with first target in the 1.34 area.
Economic Calendar
The new week starts with some macroeconomic data from China. The gross domestic product in the last quarter had a decrease (7.7%) but not as analysts were expecting, industrial production was stable and there was even a slight recovery in retail sales. Also Japan released its industrial production data which were slightly below the previous ones. In a few hours we will also receive from New Zealand the inflation rate.
With the close of the U.S. stock market due to the Martin Luther King Day, the major global indices closed a little below Friday’s levels a low volatility session.
The Forex shows a rebound for the dollar and weakness also for the UsOil and precious metals; strength for the british pound.
Tomorrow’s economic calendar will present only (among the major market movers) the Zew index about the German economic sentiment.
