stock exchanges were weak in a day with several macroeconomic indicators. The change in employment in Germany was higher than expected; from the euro zone we had a better inflation data but also a new record in unemployment to 12.1% (although in line with analysts’ expectations). Canada’s GDP was higher than expected (+1,7%), as well as the U.S. consumer confidence.
Tomorrow will begin the first of three days of high volatility with the U.S. manufacturing index and the Fed rate decision.
ANALYSIS
Usd/Yen: the weakness of the dollar continues to affect this currency pair that is getting closer to 96.40 support area in which I will try to look for one of my Long trading signals to enter the possible upward move with a target area at 100. In case of bearish breakout, of course, my view would change into short and I would follow the new downward trend.
today’s session was characterized by a lack of liquidity due to the closure of the major world stock markets (Germany, Italy, France, Spain, Brazil, Russia, Singapore, Hong Kong).
From a macroeconomic point of view we had from the United States the ISM Manufacturing index (respecting analysts’consensus) and especially the interest rate decision of the Fed with the confirmation of the previous level of 0.25%.
Great expectations for tomorrow with the meeting of the ECB (there will be this rate cut or not?) and for the press conference by Mario Draghi that, as always, will cause high volatility in the movement of the euro.
ANALYSIS
Aud/Nzd: this pair is consolidating in these days just above the support 1.2050, with a series of internal candles, whose breakout could generate a downward move to the next key area 1.1940.
the most important market mover today is certainly the interest rate decision of the ECB that, encouraged by the last negative fundamental data, finally confirmed the reduction of the rate of 25 basis points to 0.50%. The equity markets were “waiting” the ECB meeting and then turned into positive.
Mario Draghi, in his press conference, stressed that the expansionary monetary policy will continue until it is needed, even opening up the possibility of negative interest rates on deposits in euro (generating a strong fall in the same currency).
Be careful, because the volatility of this week is not over but, on the contrary, it will increase tomorrow with the most important monthly market mover of Forex which is the Non Farm Payrolls, from the United States along with the unemployment data, beware your open positions in USD!
ANALYSIS
Aud/Yen: the medium-term uptrend continues its downward correction and is now approaching the support area 99.70/99.50. A bullish setup of my trading system at this level could lead to a long position trade with target on 105. On the contrary, the breaking of the support may take the pair to the next key level 97.30.
EURJPY: The strange thing on this cross is that, in spite of the price spike upwards and later downwards on Thursday (May 2, 2013), the bearish possibility on the market is still strong, even in the face of the present sideways market. That is why the price could not move upwards determinedly yesterday. So, a downwards move is still expected.
the week is ending confirming the high volatility, characterized by two important interest rate decisions and by the U.S. NFPR (labor market data) that have generated significant movements in the currency market.
Also the next week we will have two rate decisions (in Australia and UK) but we should not see concrete changes in monetary policy.
Equity markets remain at historical levels (with the “risk-on” that is still present despite the statistically month of May famous for profit taking) providing potential profit opportunities in the event of a trend reversal with short trading signals.
I just realized my usual weekly analysis to see the macro situation and some of the most interesting trading/investment opportunities for the next week, in order to confirm the good start of the month that I and the “Forex Friends” are having!
Have a great weekend and see you next Monday.
Maurizio Orsini
P.S: I apologize for the change in the sound but I prefered to change the microphone and close the webcam!
after the big volatility of the recent days, we start a week with macroeconomic data probably less impressive: this morning we had the data on retail sales in the euro zone (at -0.1% as expected), while tomorrow we will have the interest rate decision in Australia (expected at 3%).
The major stock indexes closed the session with weakness highlighting a technical correction after the rising of the previous week.
ANALYSIS
S&P: the american index confirms the upward momentum (especially after the good data on US unemployment) and broke up the 1600 points historic highs! The correct analysis, now, is to evaluate the confirmation of this breakout in order not to run into false movements: a pullback of the price to test the former resistance, now support, with a long trading signal of my method would be very interesting for a purchase entry in CFD.
equity markets were influenced by U.S. stock exchanges strength and resume today the upward movement of last week confirming, for example with the German DAX, the breakout of important resistance levels.
The most important macroeconomic data of the day was certanly the decision of the Reserve Bank of Australia to cut the interest rate by 25 basis points (from 3% to 2.75%) to support an economy that is not in crisis, but it is beginning to show a fundamental warning and it’s always affected by the slowdown in China. Tomorrow in the night (European time) we will have from Oceania the unemployment rate in New Zealand and, a few hours later, the Chinese inflation.
ANALYSIS
GAS: the weakness of this cfd continues getting closer to the support area $3.86 (last level before my take profit at $ 3.70!). In case of a strong bullish reverse signal in this key area I could close my position earlier, with a very good result, and evaluate a purchase countertrend entry with a very short-term target in $4.05 level
stock indices basically closed another positive session today, in the absence of particularly important market movers, confirming the “risk on” of this period.
In a few hours we will have the inflation data from China but before the unemployment rate in New Zealand. From this country we also had today the communication by the central bank governor, Graeme Wheeler, about a direct intervention just made in the currency market to reduce the appreciation of the NZD (and it might not be the last Bank direct intervention for this purpose!). Sales pressures also continue for the Australian dollar with several analysts who are expecting other possible interest rate cuts, as well as yesterday, even reaching 2% by the end of the year (probably with a cut of 25 basis points up to next June!).
Tomorrow, in addition to the ECB monthly report, we will also pay special attention to UK with the decision on interest rates and quantitative easing from the Bank of England (pay attention to your opened positions in pounds!).
ANALYSIS
US Oil WTI: the problems between Syria and Israel (from a fundamental point of view) and the interesting situation in the monthly chart (in a technical point of view) push up the price of the crude oil which still remains above the EMA21 and within a short term uptrend. I look forward to see a technical pullback in the intermediate support at $95.50 to return in the trend upward with first target at $97.50 and then $99.
today we have seen positive data from Oceania with the unemployment rates lower than expected in New Zealand (6.2%) and Australia (5.5%). From China we had an inflation higher than expected (2.4% vs. 2.1% previously).
As mentioned yesterday, we saw a high volatility in the pound with the Bank of England’s decision to keep the interest rates and the asset purchase unchanged (respectively at 0.50% and £375 billion per month) and we will see, with the Minute to be published in a couple of weeks, which has been the specific view of the BoE’s members.
Stock markets closed a flat session without high volatility (with a worste performance for Milan and Paris).
Tomorrow we will analyze the Canadian labor market data.
ANALYSIS
Usd/Cad: we are in a medium-term bullish movement, but in a short term downward trend and close to a very important static and dynamic support level. As a matter of fact, the breakout of the parity level could accelerate the fall of the price to the next support at 0.9930 firstly and 0.9830 later. So beware of a possible bearish break to evaluate a sale entry but always in the presence of one of my trading signals, to avoid false breakouts!
Today I prepared a short video for those traders who would like to change their point of view in Forex trading, leaving a stressful operating system by a more relaxed and clear way of trading. Enjoy!
See you tomorrow with my weekly analysis!
Maurizio
The USDJPY has broken out northwards out of the recent consolidation phase. The year 2009 was the last time the pair traded above the 100.00 level. The price has moved upwards by over 200 pips this week. This seems to be the beginning of a long bullish journey, for the barrier at 100.00 has been done away with.
this week is ending with the confirmation of the strength of the equity markets that fail to have an important corrective movement, on the contrary, they are rising up to new highs.
We had two interest rate decisions with the confirmation of 0.50% in England and the cut by the Reserve Bank of Australia at 2.75% (which might not be the last of 2013).
A direct intervention in the currency market was realized by the central bank of New Zealand showing how the two countries of Oceania are very focused on stimulus measures to support its economy and the trade balance.
The week, in Forex market, closes with a strong purchase of U.S. dollar and a return of the weakness for the yen that could generate (even in the same direct exchange) excellent trading opportunities.
Next week we won’t have interest rate decisions, but a series of market movers that will affect different currencies. Let’s see which they are, togheter with some interesting situations of chart analysis, in my usual weekly video!
Have a great weekend and see you next Monday.
Maurizio Orsini
Very dangerous position (USD/CAD) as resistance may break or may not! Some may look for a Long as there is also a chance that the price may bounce from the resistance! I prefer not to go at this stage and would like to see whether the resistance hold or not!
In my opinion, the strong rebound of UsdCad close to the parity, is a clear sign of recovery of the bull market. Here wave 4 runs out (the two corrective legs are equal in wideness) and the price of oil should have reached a top. Stop the long strategy below the 200-days moving average of 0.9990.
A gartley has just hit the USD/CAD daily if you look carefully.
however what I didn’t notice was the trendline channels, but as you have drawn them in, it looks like the bounce has hit the upper trendline and is going back down again? i thought it would go a little bit higher before coming back down.
today will begin the Eurofin summit in Brussels that will analyze the "not so positive"fundamentals data of the euro area as well as the particular situation of the euro, especially after the words of Mario Draghi who opened to negative rates deposits.
Also from Eurozone we will have tomorrow several important data as the inflation in Germany, theproduction industrial in the euro zone and the ZEW sentiment on the German economy.
The only major market mover today was the U.S. Retail Sales which was better than expected and let the stock markets closed a session with slight losses.
ANALYSIS
Usd/Yen: the short-term laterality was broken up last Thursday (and confirmed the following day). The price action is showing a strengthening of the rising trend, so I’ll try to find one of my trading signals in the previous key level 100 to enter this bullish move with first target on area 103.50.
today we had three important market movers from Europe, the inflation in Germany (-0.5% in April and in line with expectations), the German ZEW (36.4 slightly above the previous data, but lower than market’s expectations) and the industrial production in the euro area (equivalent to 1% and much higher than expected).
Tomorrow from Europe we will have the GDP data in Germany and the euro area and from England the inflation report and the jobless claims.
We had a new positive session on financial markets, which continue their upward trend of the last period, while in Forex market we had a strength for dollar and euro and weakness for the commodity currencies.
ANALYSIS
Eur/Usd: the price seems to confirm the bearish violation of the medium-term laterality with the actual candle which tested again the previous resistance level at 1.30 showing a higher pressure on sale. The break out of 1.2930 area could generate a downward acceleration up to 200 pips (in line with the confirmation of the bullish breakout of the Dollar Index occurred today).
France slips “technically” into recession reporting a first quarter GDP contracted by 0.2%. We had a negative data from Germany, too with a modest growth in the first quarter, below market expectations, that still succeeds in avoiding recession being slightly in positive territory (+0.1%). Good news don’t even come from Europe where the GDP fell by 0.2%, resulting, also in this case, below expectations.
From England we had an improvement in jobless claims and the positive outlook of the BoE about the british growth.
Tomorrow we will have the GDP in Japan and the inflation data in Europe and the United States.
ANALYSIS
Gold: it finally recovers the short direction breaking the $1410 support. Now I wait for a technical correction to retest the level just broken, looking for one of my trading signals (required to confirm the bearish breakout) to go on sale with a first target on area $1320.
Greetings.
Maurizio Orsini
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today we have to highlight the excellent recovery of Japan (with a GDP above expectations) that begins to benefit the particularly accommodative policy of prime minister Mr. Shinzo Abe.
We also had the inflation rate in Europe (confirmed at 1% as expected) and in the United States (at 1,1% lower than forecasts). Stock markets contrasted.
Tomorrow the most important market mover will be the inflation rate in Canada estimated slightly lower than the previous one.
ANALYSIS
Gas Natural: after touching the resistance level $4.08 (during the retrieve phase) the price seems to resume the short term bearish movement that, in case of breakout of the support $3.85, might go directly to the static and dynamic area $ 3.65. We can evaluate a short entry, perhaps taking advantage of a brief intraday bullish move to improve the risk-reward ratio of the trade.
