Daily Market Analysis by HotForex

[HotForex]

USD Gaining Slightly Againts The Major Currencies

EURUSD, Daily

The pair found support from the 1.0804 intraday support and rallied a little bit higher on Friday before failing to penetrate the 1.0900 resistance. Now that we have the FOMC meeting coming this week it might well be that market participants aren’t prepared to make strong directional commitments before they’ve seen the Fed press release. Therefore getting through this resistance might be a bit difficult before this release. The 50 day SMA and upper Bollinger Bands are right above the resistance level and Stochastic Oscillator is overbought with the nearest daily support level currently at 1.0667. At the time of writing EURUSD is trading at 1.0828 support level. There isn’t much in terms of economic releases today. This could lead to subdued trading conditions in USD pairs.

Currency Pairs, Grouped Performance (% Change)

USD is up against the majors but there are no single big movers in the USD pairs this morning. The same applies to most of the currency pairs with AUDCHF being an exception with 50 basis points move. After rallying strongly GBP has been slightly weaker against all the others but AUD. Sterling has been benefitting from the recent growth in the UK economy and now that the Fed has turned dovish, it is attracting money. After last week’s BoE minutes, market participants expect the BoE to be one of the first banks to raise rates, while most central banks are looking to drive their currencies lower with loose monetary policies and quantitative easing. US data is expected to be soft in the second quarter as well, which suggests that the will be no Fed rate hikes in the June meeting. Market participants look forward to the Fed’s mid-week press release for further clues on how the Fed sees the US economy developing. It is likely that the tune will stay carefully dovish but there probably will be no further clarity for the timing of the timing of the rate hikes.

Main Macro Events Today

- German April import price inflation rose to -1.4% y/y: The previous figure was -3.0% y/y, weaker EUR is pushing prices higher.
- US Markit Services PMI (April)
- RBA’s Governor Glenn Stevens Speech
- Japan Large retailers’ Sales (March)
- Japan Retail Trade (y/y) (March)

Click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

U.S. consumer confidence defied April gains in all other major confidence measures with a drop to 95.2 from a slightly revised 101.4 (was 101.3) in March, while cycle high was at 103.8 January. This measure was impacted by the recent bounce in gasoline prices and the petro-sector recession. This helped the USD to move lower and EURUSD higher into the resistance area. EURUSD is now trading above the 50 day SMA and inside the upper Bollinger Bands. Current price action takes place in proximity of the level (1.1035) that was able to turn the pair lower. Nearest support and resistance levels are at 1.0848 and 1.1035. EURUSD is moving higher for the 5th day in a row, which means that we are getting closer to the point where this market will correct lower. Therefore, price action around the release of FOMC statement should be monitored closely. This is the fourth time the market moves this high and towards the 1.1035 resistance after creating a higher low on April 13th. This lowers the probabilities of price reacting lower from the same resistance level. Therefore we should be careful and not take it granted that the market will turn lower from the same levels again. It could rally higher before reacting lower again. We should trade what we see, not what we expect.

Currency Pairs, Grouped Performance (% Change)

This morning GBP has been strong and AUD weak. Sterling has advanced most against the Australian dollar and New Zealand dollar while Australian dollar’s weakness has been evident across the board. This has a lot to do with the yesterday’s AUDUSD rally taking the pair to proximity of important resistance level at 0.8033. GBPAUD hit support yesterday at 1.9100 and is now reacting higher from the level. AUDCAD hit my 0.9636 target yesterday and is now reacting lower from the Bollinger Bands above it. AUDCHF has also reached a daily pivot and is ranging in intraday time frames.

Main Macro Events Today

• NZ Business Confidence: Strong economic growth and low inflation expectations kept confidence at elevated levels even though the measure declined from 35.8% to 30.2%
• US Advance GDP q/q: The first quarter GDP growth is likely to be 0.8% in its first release (the Q4 2014 growth was at 2.2%). Market risk is to the downside as weaker report could delay Fed’s first rate hike.
• FOMC Statement: The Fed has indicated that it will stay data dependent. September is the first likely date for a rate hike.
• Federal Funds Rate: No changes expected.
• RBNZ Interest Rate Decision and Monetary Policy Statement: On Apr

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

 

[HotForex]

Wheat Bullish At Major Support

Wheat, Weekly

US wheat hit five year low yesterday and bounced higher as traders covered the shorts. Over the last few weeks wheat has moved lower even with dryness in the southern Plains. Now with some rain in the south the dryness worries in the north west of the country could help this bounce to turn into an uptrend. Since failing to penetrate resistance at 544 in the beginning April wheat futures have moved lower. Now that weekly Stochastics are getting oversold price is trading right above an important support level. In fact, price has bounced from 466 support yesterday suggesting that there is more upside than downside potential in this market.

Wheat, Daily

Yesterday’s rally from 466 support created a bullish hammer candle while Stochastics are showing clear bullish divergence. A pivot low from beginning of March capped yesterday’s trading in wheat and price has since then been moving right below this 478 resistance. There is some resistance at 485’5 while the next significant daily resistance area has been created between 495 and 504 by Fibonacci retracement levels and a pivot candle. In addition, the 50 day SMA is hovering at 505’7 at the time of writing.

Wheat, 240 min

In intraday charts Stochastics is overbought which ties together with the price stalling at minor resistance (478’2). As the longer term (weekly) support is just at yesterday’s low it is likely that smaller time frame resistances like this will get broken. The 50% Fibonacci level coincides with the 485’5 level and therefore suggests that in the short term picture this retracement level is more significant than others. The last completed 4h candle is another hammer pointing to higher prices.

Conclusion

Wheat is trading above support created in 2010 and bounced significantly higher the last time it touched this level. Now price action indicates that US wheat will move higher over the coming days and weeks. My short term T1 at 485’5 and T2 at 500. For those interested in longer term trading the 500 level could well be T1 and 530 T2. This bullish view would be negated if price moved below the 466 support with no signs of quick recovery.


Janne Muta
Chief Market Analyst
HotForex

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

EURUSD traded pretty much according to what I anticipated. I wrote yesterday: This is the fourth time the market moves this high and towards the 1.1035 resistance after creating a higher low on April 13th. This lowers the probabilities of price reacting lower from the same resistance level. Therefore we should be careful and not take it granted that the market will turn lower from the same levels again. It could rally higher before reacting lower again.

The dollar plunged through the morning session, after much weaker Q1 GDP data dented sentiment, doubly so ahead of an FOMC announcement that was already expected to lean on the dovish side. EUR-USD opened just under 1.1000, and made its way to 1.1188 highs ahead of the Fed. The pair eased back slightly ahead of the statement release, before falling back on the Fed’s downgraded economic outlook, and on general profit taking. The high of 1.1188 in EURUSD was the low of 94.75 in DXY. This low coincided with a previous low and a support level from March 18th. At the time of writing EURUSD is moving above yesterday’s high and approaching the next resistance.

Currency Pairs, Grouped Performance (% Change)

The JPY strength was the theme earlier this morning. Weakest pairs throughout the morning were AUDJPY, CADJPY and NZDJPY. AUDJPY hit a resistance and is now reacting lower from it CADJPY is also reacting lower from a resistance but does not look as weak as AUDJPY. NZDJPY is trading at 50 SMA and close to lower Bollinger Bands and pivotal support. Now at the time of publishing this report it is the AUD weakness that dominates the picture while EUR has been rising against the majors with EURAUD up by over 1.5%.

Main Macro Events Today

• NZ Official Cash Rate: OCR remained unchanged at 3.5%. According to governor Wheeler it would be appropriate to lower the OCR if demand weakens, and wage and price-setting outcomes settle at levels lower than is consistent with the inflation target.
• BoJ Monetary Policy Statement: BoJ left policy unchanged and maintained the Y80 tln annual increase in the monetary base.
• German Retail Sales m/m: March retail sales unexpectedly declined 2.3% m/m, against expectations for a rebound from the dip in February, which was revised to -0.1% m/m from -0.5% m/m reported initially.
• German Unemployment Change: Stabilising growth is helping labour markets across the Eurozone. German jobless numbers dropped 8K (median -10K) in April, which left the seasonally adjusted unemployment rate unchanged at 6.4%, as expected. The German economy is strengthening and jobless rates are at very low levels, which together with the pick up in demand will ensure sizeable wage gains this year.
• Eurozone CPI y/y: No big change expected. Previous figure -0.1%.
• Canadian GDP: a fall of 0.1% in February is likely after the 0.1% drop in January. Forecast risk is to the downside given the hefty declines seen across manufacturing and drop in wholesale. Energy remains the wildcard. The BoC expects flat GDP in Q1, so an as-expected report would roughly back that outlook and have no impact on the policy projection.
• US Unemployment claims: Initial claims data should reveal a 290k headline, down from 295k last week and 294k in the week of April 11th. We saw the usual seasonal volatility around the Easter Holiday and claims in April look poised to average a higher 292k from 285k in March and 206k in February.

Click [delete]here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

 

[HotForex]

EURGBP Challenging 23.6% Fibonacci Retracement

EURGBP, Weekly

EURGBP has been moving higher since it hit my target level at 0.7022 in March. EURGBP had been moving too low for too long and had reached levels that acted as resistance in several occasions from 1998 to 2006. Now March monthly candle has created a doji while the April candle will be another doji if no spectacular price moves happen over today’s trading. This suggests that long term supply and demand are in relative balance at current levels.

Providing this week’s candle closes in proximity of current price levels or higher we very likely have a higher weekly low and a new pivotal candle in weekly time frame. This low coincides with the upper end of downward regression channel. Stochastics is neutral reflecting the price action being close to half way of the recent price range. EURGBP is currently trying to challenge the 23.6% Fibonacci retracement level. A close above last week’s high implies probabilities for the pair moving to next weekly highs have increased.

EURGBP, Daily

The pair has moved above its 50 day SMA that coincides with a previous resistance level at 0.7236 while another technical factor coinciding with this level is the 61.8% Fibonacci retracement. These levels are fairly close to the midrange and therefore do not bear that strong predictive value but it would still a positive if we saw this market closing above the 0.7236 level. Nearest significant support and resistance levels in the daily chart: 0.7132 and 0.7326.

EURGBP, 240 min

Price has broken out of the descending regression channel and has since then moved above resistance levels that have now turned into supports. Stochastics is getting overbought so it shouldn’t be too long from now that we see retracements to support levels. Nearest support at 0.7213 should be an interesting level to look at for long signals in such a case while 0.7285 is the nearest more significant intraday resistance level.

Conclusion

There is an attempt to create a market bottom but this pair however probably needs more consolidation before it’s completed. While EURUSD has moved beyond the recent highs that resisted the price advances EURGBP is still below the same highs and therefore inside the range. These pairs have recently had fairly strong correlation, and should the EURUSD correct lower from a resistance it is likely to have a negative impact on EURGBP. If EURUSD corrects lower and tests support levels successfully it is more likely that EURGBP will bottom out. A close above last week’s high implies probabilities for the pair moving to next weekly highs have increased. In such case the 0.7376 to 0.7422 range would be a reasonable target for short term trades. Short term momentum is currently to the upside but price is nearing the 0.7286 resistance. The Greek uncertainty coupled with elections in the UK could bring more volatility over the coming days and weeks. As usual, it makes sense to look for sell signals at resistance levels and buy signals at supports.

Trade these levels only if price action at the levels confirms my analysis. If you don’t know how to read price action, please join me to our free webinars and learn how to take your trading to the next level. Click the image below to register and participate for FREE!


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Janne Muta
Chief Market Analyst
HotForex

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

EURUSD has reacted lower from the resistance level (1.1279) I pointed out in my previous Currency Movers reports. On Friday US April ISM remained stuck at 51.5, below median 52.0 (vs 51.5 in March) while U.S. construction spending fell 0.6% in March, (below median 0.5%) and US Markit final PMI eased to 54.1 in April. The absence of Tokyo and London centres will ensure thin trade today. Through to Friday, the euro had climbed for seven successive days, but looks likely for a pause now. Greece remains an issue. Despite signs that the government in Athens has adopted an improved attitude, news reports from weekend negotiations suggest that fundamental differences remain with creditors, particularly on pension reform and privatisation proposals. Next daily support level is at 1.1035.

Currency Pairs, Grouped Performance (% Change)

At the time of writing Euro’s performance remains mixed while USD is only just slightly stronger than its peers. US Dollar Index is reacting higher from support level (94.91) I pointed out in my earlier reports but there has not yet been much movement which is evidenced by the above chart. The only exception is CHF that has been weak this morning almost across the board. EURCHF lagging behind the others as both currencies in this pair are reacting lower from a resistance. JPY slightly stronger than others with EURJPY reacting from a resistance. All in all there hasn’t been much movement this morning as Japanese and Brits are enjoying a day off.

Main Macro Events Today

• Chinese HSBC Final Manufacturing PMI

fell to a final 48.9 in April, down from the preliminary (or “flash) reading of 49.2 and the final 49.6 in March. The April figure fell short of expectations for little change from the preliminary report’s 49.2. Government’s stimulus efforts are falling short, with the government’s target for 7% GDP growth looking increasing optimistic. Further stimulus measures from the government and another rate cut from the PBoC are likely in store for the near term.

• Eurozone Markit Manufacturing PMI:

The April Manufacturing PMI fell to 51.9 from 52.2 and the services reading to 53.7 from 54.2, which brought the composite down to 53.5 from 54.0. Indicators still point to healthy expansion. The overall EMU Markit PMI is expected to come in at 51.9.

• US Factory Orders m/m

March factory orders are expected to grow 2.0%.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

EURJPY At Resistance And With Room To Fall

EURJPY, Weekly

As EURUSD moved higher last week, EURJPY rallied very strongly and reached the February highs. Last week’s close was inside the weekly pivot candle from February this year, roughly the same area that was earlier defined by October 2014 pivot low. As reaction to previous pivot levels and today’s price action now proves this area has psychological significance. The nearest support and resistance levels are 131.30 and 136.85. The 50% Fibonacci level coincides roughly with the 131.30 support. This is quite far away from the current price and therefore suggests current levels are good for those looking for shorting opportunities. Earlier today EURUSD has been reacting lower from a resistance while JPY has been slightly stronger than its peers across the board. With EURJPY also trading lower from a resistance this should be a good time to be bearish on EUR and bullish on JPY.

EURJPY, Daily

On Friday EURJPY hit resistance just above 135.02 and turned lower. This resistance was created by a pivot candle from February 11th and now price is trading 0.49% below the close from Friday. Stochastics is overbought and about to roll over while the pair has been trading outside the Bollinger Bands and is now edging close to the upper 2 stdv band. A close below the band would be a further confirmation of bearish mood in EURJPY. The nearest daily support level is at 131.29 with the 50% Fibonacci level and 50 day SMA not that far behind at 130.75 and 130.32 respectively. Movements below 38.2% Fibonacci level at 131.81 should be monitored for momentum reversal signals.

EURJPY, 240 min

As the pair has moved lower the Stochastic Oscillator has declined to overbought levels. However price is now trading below 134.23, a level that used to be an intraday support and should now act as a resistance. Nearest intraday support level is at 132.46 where lower Bollinger Bands and an old channel high coincide. The next support area consists of April 6th pivotal resistance area between 130.40 and 131.29. Currently the 50 period SMA is also inside area.

Conclusion

The pair is overbought in higher timeframes and in resistance which indicates it’s time for it to correct lower. At the time of writing EUR is weak against all the major currencies while JPY is holding up against all the others but CAD. This combined with the technical weakness in EURJPY suggests that the trading opportunities in this pair are in the downside. EURUSD being weak at resistance is also supporting the bearish view. My target one in for short term trades is at 131.50 and target 2 at 130.40.

Trade these levels only if price action at the levels confirms my analysis. If you don’t know how to read price action, please join me to our free webinars and learn how to take your trading to the next level. Participate for FREE!

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Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

On May the 1st I wrote: EUR is strong across the board this morning but at some point reversion to mean kicks in and this market will react lower. EURUSD started turning lower that very same day and has been moving lower since. It is breaking intraday supports and honouring resistance levels. Stochastics are rolling over and price is trading inside the Bollinger Bands. At the time of writing the pair is at 23.6% Fibonacci level that coincides with April 30th daily lows. The 1.1035 to 1.1052 support area is a likely target on the downside if the 23.6% level is violated. Yesterday was light on economic releases. US factory orders bounced 2.1% in March, right in line with median expectations versus -0.1% in February.

Currency Pairs, Grouped Performance (% Change)

As I suggested last week the US Dollar index has been strong since DXY hit support at 94.91 and after a slow start it has moved higher over the last couple of days. The AUD strength that followed the 0.25% rate cut has been a surprise and has raised eye brows on Bloomberg TV this morning. Aussie dollar is strong across the board with EUR, CAD and CHF being the weakest currencies against it. EUR being weak against everything else probably isn’t any surprise to regular readers of Currency Movers report. EURUSD trading lower from a resistance level has been dragging the other EUR pairs lower with it and this has created trading opportunities in these pairs. One of them was EURJPY which I analysed in yesterday’s Multi Time Frame article. GBP pairs have not moved much yet but with the election looming just a couple days from now there could be some more volatility ahead. EURGBP looks interesting as it rallied so strongly over the last week. After hitting my target range of 0.7376 to 0.7422 the pair has turned lower and could provide further opportunities for short term traders with volatility likely staying high.

Main Macro Events Today

RBA Cash Rate: The RBA cut the cash rate by 25 bp to a record low of 2.0%, as was largely expected. A reference to the currency in the statement gets to the crux, that a further fall in the Australian dollar is necessary. The RBA would have been discomforted by last week’s surge in AUD-USD to a three-month high at 0.8075. The central bank also cites weakness in capital expenditure as a key risk, and notes that spare capacity will remain in the economy for some time.
Spanish Unemployment isexpected to drop by 64.8k compared to previous change of -60.2k.UK Construction PMI isseento stay almost unchanged. Median figure points to a slight 0.2 point dip.
CAD Trade Balance is projected to improve to a C$0.9 bln deficit in March from the C$1.0 bln shortfall in February.US Trade Balance islikely to increase by 25% to -$44.5 bln in March (median -$40.3bln) from -$35.4 bln in February.
US ISM Non-Manufacturing PMI is expected to hold steady from 56.5 in April. This compares to a recent high of 58.8 in November.

Click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

Thursday morning I expected to see a move lower and then buyers stepping in between 1.1290 and 1.1223. The pair moved lower as expected and then signalled buys inside this range but there was no follow through and the lack of momentum turned to further down move. Currently EURUSD is trading at the May 5th daily highs. There has been again some attempt to take the pair higher but intraday resistance levels have halted the moves so far. As the time of Non-Farm Payrolls release is getting closer market reactions are likely to be subdued until the figures are released. As we have seen over this year NFP figure is capable of surprising both the markets and analysts. This figure can be in line or it can deviate strongly from the expectations. As there is no way of know what the figure will be and what the market reaction to this unknown figure is likely to be, committing to a trade beforehand is not recommendable. We should only trade when probabilities are on our side.

At the time of writing EURUSD is trading at a daily high from May 5th and has created a 4h hammer candle after it bounced higher from the 50 period SMA. In the daily picture the current price action takes place close to the upper Bollinger Bands and near February sideways range. The weekly candle with current price close to the Monday’s opening price suggests weakness over the coming few days. A strong rally higher would quite obviously negate this view. In 4h timeframe the Stochastic Oscillator is oversold while in daily chart Stochastics are rolling over from the overbought levels. This fits together with price wedging at resistance. Momentum has slowed down and I expect price needs to move lower before finding a level from which to bounce higher again. Region near weekly closing value (from end of March) at 1.0960 would be an interesting level to look for signals for long trades. Significant support levels for the pair are: 1.1035, 1.0970 and 1.0848 (50 day SMA close at 1.10867), while significant resistance levels are at 1.1400 and 1.1480.

Currency Pairs, Grouped Performance (% Change)

Changes have been nominal ahead of the Non-Farm Payrolls release. AUD has still been slightly stronger than others while GBP strength that we saw earlier today has eased a bit. JPY weakness is understandable as USDJPY has made a higher low yesterday and has moved nicely higher today.

Main Macro Events Today

- US Non-Farm Payrolls are likely to increase by 225k for April. An improvement over the 126k March headline but still lower than the 264k headline in February. The unemployment rate should tick down to 5.4% from 5.5% in March. The data should help underpin the dollar’s yield advantage over the euro following recent narrowing.
- Canadian Employment is expected to rise 15.0k in April (median is for no change) after the 28.7k gain in March. Employment managed to put together a solid total gain in March, but the details were weak. Business confidence remains subdued, suggesting a risk for a very modest jobs gain or outright decline in April that undershoots our estimates.

Click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

The euro is consolidating in early week trade after logging a three-month high against the dollar at 1.1466 on Friday. EURJPY and other euro crosses have also shown a similar price action. Recent signs of green shoots in economic vitality in the euro area and the associated view that the ECB may be obliged to taper its QE program at some point has supported euro. In addition, an optimistic view on the Greece situation, has helped to maintain the euro’s underpinning. In April Draghi said that the European Central Bank has no plans to curb or curtail its money-printing programme although it expects euro zone economic recovery to broaden and strengthen. Another likely reason for EURUSD strength has been the soft macro data coming from the US. From retail sales to PPI and Consumer Sentiment figures the data have been softer than expected.

Since last Tuesday EURUSD has rallied strongly and reached the proximity of 1.1480 resistance. After rising for four days the pair has reacted lower and is at the time of writing attracting buyers at 1.1370 intraday support. This level is also a daily candle high from 6th of May. With support levels being fairly close to the current prices a major correction lower without strong external event is not looking very likely. Therefore, after moves to support levels we should monitor price action for long entry signals. Daily close from 6th May coincides roughly with Friday’s low of 1.1324 and therefore is the nearest support level in the daily chart. Other support levels are at 1.1206 to 1.1232 (a 23.6% Fibonacci level) and 1.1035 to 1.1084 (a 38.6% Fibonacci level). The nearest resistances are 1.1480 and 1.1534. EURUSD is trading close to a resistance level but seems like it might be trying to push higher. However, as the weekly high of 1.1534 is relatively close it is better to trade the long side with a short term expectation only and monitor price action closely.

Currency Pairs, Grouped Performance (% Change)

Since the weekly close on Friday the 15th May we’ve seen USD and JPY weakness and EUR strength against the other major currencies. GBP has been also gaining against the majors but not as strongly as EUR. Today’s action has been a bit subdued with USD gaining against the others and EUR being strong only against the NZD. The latter has been weak pretty much against all the currencies today. Markets have been quiet this morning as we’ve only seen the early hours trading of the first day of the trading week with not much macro data to move the market.



Main Macro Events Today

Japan’s Tertiary Index, agauge of services fell by 1.0% m/m in March. Contraction was deeper than expected (-0.5%) after the 0.4% m/m gain in February.
Japan Industrial Production fell 0.8% m/m in March (consensus -0.3%) while y/y drop was 1.7% after the previous drop of 1.2%.
Switzerland Real Retail Sales surprised to the downside in March with a bigger than expected drop of 2.8% (consensus -2.0%).
NAHB Housing Market Index: no major change expected from last figures.

Click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

EURGBP BOTTOMING

EURGBP, Weekly

I wrote in April 30th saying that supply and demand seem to be in balance and that there is an attempt to create a market bottom but this pair however probably needs more consolidation before it’s completed. This far EURGBP has moved pretty much according to this script and is still supporting the view that this market is creating a base from which to move higher over the coming weeks.

After reacting lower from a resistance week before, the last week’s move higher was strong and created a weekly hammer candle. As sellers are strongly outnumbered by the buyers at the low of the weekly bar and price closes near the weekly highs, this is really a bullish sign that points to serious buying interest at the last week’s lows. Also, since the beginning of March this market has been creating higher weekly lows, yet another sign of buyers being decisive on EURGBP. The nearest support and resistance levels are at 0.7123 and 0.7405 with the next one at 0.7483. The 23.6% resistance level happens to be in almost in the middle of this range at 0.7431.

EURGBP, Daily

After moving higher for three days EURGBP is taking a breather. Price has moved above the 50 day moving average and is now trading near the middle of the recent price range. This is also evidenced by the Stochastics being just below the 50 level. This is a sideways market and therefore the best opportunities exist near the edges of the range. Therefore levels closer to the recent low of 0.7123 are attractive for those looking to open long positions. However, we need to study 4h charts in order to find potential levels as daily chart doesn’t give a detailed enough picture on levels below current price action.

EURGBGP, 240 min

Since Friday night price has been moving sideways and is trading close to 0.7240 support at the time of writing. This level coincides with a 50 period SMA. This level has potential to hold the market as there has not been much of downside thrust and volatility as measured by ATR (7) is low. However, should this level fail the next support level at 0.7202 is more significant as it coincides with the 50% Fibonacci level and the lower Bollinger Bands. The nearest 4h resistance level is at 0.7312.

Conclusion:

EURGBP is in a bottoming process after hitting a support that used to be a resistance level over a multiple of years. Last week’s hammer candle together with higher weekly lows at support points to buyers being willing to step in and drive the prices higher. Therefore, levels close to the lows of the current range are attractive and should the price correct to these levels again we should be looking for price action that justifies long entries. Currently price is trading at 0.7240 support which could be interesting for those trading markets intraday. I am interested in long trades at intraday support levels below the midway of the current range with following targets: Target 1 at 0.7312, Target 2 at 0.7370 and Target 3 at 0.7480.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

Silver Close Completion Of A Bottoming Process

HotForex Analysis Page

Silver, Weekly

Silver has now broken out of the bear channel. The breakout was preceded by a consolidation that started in December 2014 and lead to market creating higher lows at the weekly Bollinger bands. Currently Silver is trading relatively close to the upper Bollinger bands and has reacted lower from them and 50 week SMA. The 38.2% Fibonacci level that coincides roughly with weekly closing high from March has supported price this week. Support levels: 16.97, 16.36 and 15.55. Resistance levels: 17.77 and 18.50.

Silver, Daily

The move lower from the 17.77 resistance was a strong one. This one day move eroded more than three day’s gains. This suggests that there could be more downside volatility in store. The area from 16.37 to 16.60 looks interesting as a support level and a 50% Fibonacci level coincide with a sideways consolidation and an apex of a triangle formation. This area also coincides with the descending trendline that is now likely to provide support after resisting price moves higher earlier. Support levels: 16.88, 16.60 to 16.37 and 15.85. Resistance levels: 17.48 and 17.77.

Silver, 240 min

Lately the price of Silver has been finding support at 50 period SMA and the region of 17.00 dollars but the higher time frame picture hints the downside is not yet over and the best buy levels should therefore be at lower levels. The 16.60 level used to resist moves higher and Silver should therefore attract buyers if price moves to the level. At the time of writing Stochastics indicator is rolling over and suggests the downside momentum is resuming.

Conclusion

The long term picture is positive with Silver now trading above the descending trend channel. This market has consolidated, created higher weekly lows and now broken above the down trendline. Such action indicates that the bottoming formation is near its completion. Short term price is still relatively close to the upper end of the range and weekly Bollinger bands. This suggests that the best low risk buy opportunities are lower. I look for buy signals in the region of 16.37 to 16.60 where several technical factors come together. My targets for short term trades from the above mention region are 17.00 (T1), 17.48 (T2) and 18.00 (T3).



Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

Yesterday’s weaker than expected existing home sales in US and a dip in the Philadelphia Fed Manufacturing index supported forecasts for only tepid pick up in Q2 growth after a very weak Q1. The May Philadelphia Fed Survey disappointed. The figure came in at 6.7 instead of 8.0 expected by the analyst consensus. This increased expectations that the Federal Reserve will maintain its current dovish stance.

EURUSD has been trading in the low-to-mid 1.11s, above Wednesday’s 1.1060 low. There was a lack of substantive progress at the latest summit in Riga between the Greek government and creditors in bailout negotiations. The on-going Grexit uncertainty might have been the reason the euro’s upside has been curtailed, while the May German IFO today should affirm the slowing in growth momentum that was seen in the ZEW and PMI surveys. ECB’s Draghi and BoE’s Carney are set to speak at an ECB conference on central banking in Portugal and today’s European data calendar is unlikely to give markets any reason to cheer. Another speaker worthy of mention is the Fed Chair Janet Yellen speaking later on today.

The resistance area created by the May 11th pivotal low has been holding EURUSD back but yesterday’s daily low was higher than the previous day’s low. This with the fact that price has moved higher from today’s open suggests modest bullishness on EURUSD. Daily bar lows also seem to honour a trendline drawn from April low. Stochastics are oversold and the lower Bollinger bands are catching up with the price. US Dollar index is looking weak as it’s trading below the shooting star candle lows from day before yesterday. Nearest support and resistance levels: 1.1052 and 1.1324.


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[HotForex]

USDJPY Trading Near March High

USDJPY Weekly

USDJPY has been moving side ways since the beginning of December 2014. The deepest correction has the retracement to 38.2% Fibonacci level in mid-December and was followed by another in January that attracted buyers just above the previous low. Since then price has challenged the previous high once and after failing to penetrate the resistance it created a higher low. Now the pair has yet again moved to the upper weekly Bollinger Bands. At the same time we have the US Dollar Index at a level that resisted moves higher in March this year.

USD has been relatively strong against the JPY throughout period it has been correcting against the other currencies and as the weekly lows have been higher with the latest CPI number from States surprising to the upside it could well be that the upper end of this range will eventually give in. At the end of the day it is more likely that the US Fed will hike the rates before the Japanese central bank which could even come up with yet another round of stimulus.

USDJPY Daily

Last week’s rally lifted USDJPY to the upper end of the range that has limited the pair’s movements since the end of the last year. Stochastics is overbought and price is reacting lower after moving above the upper daily Bollinger Band and also very close to the March high. If today’s daily candle closes to current levels or lower price has created a bearish shooting star candle. Stochastics is about to move below its three day moving average and could give a bearish signal should the weakness continue. Nearest support and resistance levels are 120.84 to 120.50 and 122.02.

USDJPY 240 min

The pair fell lower after hitting a historical resistance at 121.68 and has since found support at a minor support level that coincides with a high from Wednesday last week. This lack of upside momentum and a correction lower has eased the overbought condition in this timeframe and brought the oscillators lower. The nearest more significant support area (120.83 – 120.61) is currently near the lower Bollinger Bands and 38.2% Fibonacci level while the next major resistance is at 122.02.

Conclusion

Price is trading close to a longer term resistance and we could see market creating an exhaustion candle (shooting star). Today’s price action however might not be that important as many significant markets have been on holiday. Whenever a market is trading close to a resistance one should be looking for shorting opportunities. This market is trading near its resistance levels and therefore I would only initiate long positions after a correction to a significant support. Due to divergent inflation expectations and relatively strong US economy the dollar yen pair should eventually move higher but as usual a low risk entry would be preferable.Taking advantage of corrections to significant support levels such as the range created by Friday’s low at 120.61 and 1.5 stdv Bollinger Bands at 120.83 would be a preferable strategy to buying close to a resistance. Look for confirming price action at the key levels. If aforementioned support level fails to attract buyers assumptions in this analysis need to be re-evaluated.


Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

EURAUD Up after A Hammer Candle Yesterday

EURAUD, Weekly

EURAUD is moving sideways in wide range with support area between weekly lows at 1.3680 and 1.3912 while upper end is limited by the 50 week SMA and 38.2% Fibonacci retracement roughly coinciding. The nearest weekly high at 1.4277 is almost at level with the 38.2% Fib level at 1.4317 while the previous weekly pivotal highs coincide with the 50 week SMA. As 50 week SMA is pointing down this sideways market has some long term downward tendency. The lower weekly highs contribute to this picture but the fact that the weekly lows have been somewhat equal in March and April points to weakness in downside momentum. The latest weekly pivot low (at 1.3912) being so much higher than the previous lows is a positive indication.

EURAUD, Daily

In the daily picture EURAUD is moving higher from the proximity of a support level created by a sideways move in April this year. Yesterday’s candle was a hammer that is a bullish signal (points to higher prices) and now Stochastics is giving a positive signal by crossing above the signal line. Hammer candle also created a higher low which supports the bullish daily picture. There are no major daily resistance levels nearby while the first daily candle high that could cause the price to stall is at 1.4197. Above this are the upper Bollinger Bands and then the weekly highs. Nearest support levels are at 1.3950 and 1.3912.

EURAUD, 240 min

In 4h timeframe the recent price move took EURAUD to upper Bollinger Bands and close to a 4h pivot candle low at 1.4117. Not so far from the level is also a 50% Fibonacci level (at 1.4112 measured from the May 22nd high to the recent low of 1.3950). Over the last two four hour candles price has retraced back to a recent pivot and found buyers between 38.2% and 50% Fibonacci levels (measured from yesterday’s low to today’s high). The reaction we have seen from this level is healthy and supports the positive picture in the daily time frame. The pair is close to its recent 4h range highs as also reflected in Stochastics being at overbought threshold. At the time of writing the reaction from support has been strong and has coincided with the upsurge in EURUSD from the region of support I suggested in my Currency Movers Report. If the EURUSD strength continues EURAUD is likely to move higher as well.


Conclusion

The long term picture (weekly) is range bound which gives opportunities for swing traders at the range edges. Now that the daily picture has indications that buyers could be taking price higher (higher low and a hammer candle with Stochastics pointing higher) we look for price action based buy signals when there are retracements to intraday support levels. The daily highs are natural target levels with first one being at 1.4197 and the next at 1.4277. A break into new highs (above 1.4115) and a daily close above yesterday’s high at 1.4092 would be further confirmations of the bullish tendency seen in the daily chart. A failure to move above these levels accompanied with downward intraday trends would negate the positive picture.



Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

Today’s Currency Movers

EURUSD, Daily

EU says that further progress is needed in Greece talks. Yet again Greek officials are suggesting a quick deal with creditors, although today, it admittedly sounded more like this was just what Greek wants rather than a done deal. By contrast, creditors remain pessimistic and an EU spokeswoman said there are still issues that need to be resolved, with further progress needed in talks that will continue in coming days. Varoufakis calls for Greek debt restructuring, while saying that the IMF has a very dark history over the past 20-25 years. A Greek government spokesman meanwhile said the country is not planning to bundle its IMF repayments and aims to have a deal by Sunday. She also said that she is working on a common document with creditors. Creditors meanwhile continue to highlight that there are still considerable differences and Varoufakis’ comments on the IMF highlight that his tone hasn’t softened. This obviously is not helping. Neither are the conflicting messages coming out of Greece and it should be clear by now that only when creditor officials announce that a deal is imminent we can actually believe it. Greek officials seem to equate their hope for a quick deal, with actual progress. At the same time ECB’s Nowotny has commented the wider Eurozone economy by saying that there is no “currency war” in a historical range, but he admitted that the ECBs quantitative easing program has helped the Eurozone economy by weakening the EUR. However, he also warned that widespread negative yields can’t be normal.

We have seen some short term bullish momentum since yesterday in EURUSD and need to now have some follow-through (or more consolidation) to avoid further decline. At the time of writing EURUSD is trading inside yesterday’s pin bar range after it fell back from 1.0950 where it was close to the 50% Fibonacci level and Monday’s low. After yesterday’s reaction higher from support level and a close inside the lower Bollinger band the likelihood of price turning higher has increased. However, I would now like to see price creating a higher low and close above yesterday’s high to further support the reversal indication. This would suggest that price could move through the moving average resistance and to next resistance where previous support and 38.2% Fibonacci levels coincide. EURUSD is now approaching the levels that attracted buyers yesterday. Intraday price action at these levels is of high importance as we are looking for indications on markets’ collective opinion of this potential momentum reversal. Should the current support fail, the next significant daily support level is at 1.0660.

Currency Pairs, Grouped Performance (% Change)

Today’s clear trend is the AUD and NZD weakness. When compared to the USD currencies more or less have had the same percentage change (± 40 basis points) except AUD and NZD that have fallen 122 and 155 basis points respectively against the USD. Apart from the slight USD strength today the Euro and CHF have had some strength against the other currencies while GBP and JPY have had a mixed performance. Again, it’s the AUD and NZD weakness that have moved EURAUD and EURNZD more than other EUR pairs.

Main Macro Events Today

- UK Gross Domestic Product (QoQ) Preliminary Q1 GDP came in sub-expectations at +0.3% q/q, half the median forecast and down from the 0.6% growth of Q4. Second estimation was expected at 0.4%, but the actual result was equal to previous 0.3%.
- US Initial Jobless Claims came in higher than expected. The 7k initial claims rise to 282k in the fourth week of May extends the 11k bounce to 275k (was 274k) in the BLS survey, as claims continue to reverse the tightness in the prior three readings that started with a 262k cycle-low at the end of April. Claims are still tight versus pre-May levels however, and are displaying a cyclical downtrend that became obscured in early-April by a temporary spike around the Easter holiday period.
- US Pending Home Sales (MoM) is expected to increase by 0.9% in April compared to previous result 1.1% in March. This is a leading indicator of the housing market in the US and the economy as a whole.
- Japan National CPI Ex-Fresh Food (YoY) is expected to increase by 0.2% in April. An increase is expected after Core CPI improved to a 2.2% y/y pace in March from 2.0% y/y pace in February and 2.2% y/y in January. But the trend deceleration should be worrying policymakers.

Click here to access the full HotForex Economic calendar.


Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

TODAY’S CURRENCY MOVERS

EURUSD, Daily

EURUSD managed to lift back above 1.0900 after skirting to a 1.0891 low on Monday following above-forecast US data. EURJPY is also trading just off three-week highs, and most other euro crosses are holding firm. A step-up in top-level political pressure at key Eurozone leaders to come up with a bailout deal that would be acceptable to the Greek government has given the euro an underpinning. On the dollar side, the rekindled Fed tightening theme got a minor boost yesterday with above-forecast May PMI and construction spending data. The US ISM May rose to 52.8 and lifted the measure above the 51.5 two-year low in April and May, following a slightly higher 52.9 in February and a lofty 57.9 recent-high in October. The ISM rise included component gains in all but shipments, which implies some abatement of headwinds from the oil-price hit to mining and the inventory overhang, the winter port strike and weather factors that have all impacted the various sentiment surveys since November.

EURUSD moved pretty much as expected yesterday. Market rallied higher from an intraday support level but then turned lower from levels fairly close to 4h 1.5 stdv Bollinger Band. The same intraday support in the region of 1.0904 held again yesterday and the pair is at the time of writing reacting lower after challenging a resistance just above yesterday’s high. If EURUSD can’t push above Friday’s high we are likely to see further consolidation and corrections before price is ready to move higher. The nearest daily support levels are at 1.0887 and 1.0820 while resistance levels are at 1.1006 and 1.1062. Should we get corrections closer that low it’d make sense to look for buy signs of stabilization and signals close to yesterday’s low at 1.0887.

Currency Pairs, Grouped Performance (% Change)

While USDJPY moved momentarily above 125 for the first time since 2002 it is the AUD that is roaring ahead strongest at the time of writing. Following the RBA’s decision to hold the rates at...

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[HotForex]

TODAY’S CURRENCY MOVERS

EURUSD, Daily

The dollar got clobbered in New York session yesterday. The move was led by EURUSD’s fast rise to highs over 1.1190, after opening near 1.1000. Stop loss buying was a key driver of the euro’s rally, with buyers surging in on the break of 1.1010, and again at 1.1100. The move started yesterday as the core CPI figure showed the European inflation jumped to almost 1% and exceeded expectations. I had been looking for EURUSD to turn higher from the support but the strength of the move was surprising. This helped the pair hitting my target level and moving beyond it yesterday.

Yesterday’s US reports revealed a modest underperformance for the factory goods figures for April, but a firm round of vehicle sales figures thus far for May. For the factory report, the equipment and orders data were modestly disappointing. In yesterday’s speech Fed’s Brainard underlined Fed’s approach to be data dependent and was slightly dovish. She said a range of labour market indicators will be watched closely, including wage growth and part-time employment in judging whether the economy is fully healed. This is consistent with her earlier dovish slant and appears to echo the view embraced by Yellen and others that the absolute level of the unemployment rate is not the Fed’s sole consideration in terms of the employment mandate.

Greece will not make IMF repayment if there is no prospect of deal. According to reports on Twitter the parliamentary spokesman of Tsipras’ Syriza coalition said Greece will not make the June IMF payment if there is no prospect of a deal with lenders. Both sides yesterday laid down their own proposals for an agreement, but reports suggest German PM Merkel is not optimistic of a deal before the start of the G7 meeting on Sunday and the first of Greece’s four IMF payments is due on June 5, although the IMF apparently may accept a bundling of repayments and a joint settlement later in the month.

Last Friday (May 29th) I wrote that if there is no strong decline today the weekly candle is will create a bullish pin bar. In this context the 50 day SMA is a minor resistance and we should see price moving higher next week. This move took place after some consolidation and was then powered by stronger than expected inflation numbers from Eurozone. Now EURUSD has moved above the previous week’s high but also to a level that used to act as a support in May. The higher timeframe picture usually dominates the smaller one and with weekly being so bullish I still expect market will work its way higher over the next two weeks and head towards the upper weekly 20 period Bollinger Bands (currently at 1.1440 and 1.1570). On daily and intraday level it is usual that there is some consolidation after such a strong move higher. We’ve seen this since the pair made the high of 1.1194 yesterday evening. If the pair attracts buyers above 1.1120 (trading now at 1.1131) it is likely that the recent highs will be challenged today. The nearest resistance levels are at 1.1208 and 1.1324 while the nearest daily support level is at 1.1006.

Currency Pairs, Grouped Performance (% Change)

AUD has been performing well against all the major currencies after the GDP improved so much from the Q4 2014 and yesterday’s rate decision. AUDUSD has now hit a historical resistance level at 0.7800 which has slowed it down and the pair corrected lower. NZD is still weak across the board while...Read the full article HERE!

 

[HotForex]

GBPAUD Trading At Resistance

GBPAUD, Weekly

Sterling has been trending higher against Australian dollar since August last year. In February GBPAUD hit a historical resistance at 1.9697 and it has taken the pair close to four months to move back above this resistance level. AUDGBP is now trading at Bollinger bands while Stochastics are overbought. There is a small cluster of Fibonacci extension levels just above the Bollinger bands between 2.0160 and 2.0313 and a historical resistance at 2.0991. Momentum has slowed down but the trend is still up.

GBPAUD, Daily

A week ago GBPAUD hit a resistance at February high at 2.0029. This caused the price to break out from a bearish wedge. Since then the pair has found support at 23.6% Fibonacci level at 1.9656 and rallied back to levels it dropped from. This looks like a classic return move that should be followed by a move lower. The nearest potential support level is in the region of 1.9408 to 1.94823 where 38.2% Fibonacci retracement, lower Bollinger bands and 50 SMA coincide. The next support area is between 61.8% and 50% Fibonacci levels while the nearest daily resistance is at 2.0057.

GBPAUD, 240 min

GBPAUD has moved inside the sideways range it formed last week. The pair is approaching the upper Bollinger bands but apart from Stochastics being overbought and slightly tilting to the right there are no signs of momentum slowdown yet in this timeframe as the latest bar closed near its high and the current bar is pushing into 1.5 stdv Bollinger Band. Even though price is close to very potential resistance levels I would like to see some price based evidence that the buyers have exhausted their resources before committing to the short side. The nearest 4h support is at a Fibonacci cluster above 1.9600. Nearest 4h resistance levels above 1.9907 are at 1.9998 and 2.0042.

Conclusion

Even though there has been some momentum slowdown the weekly trend is still higher. The historical resistance at 2.0991 is a logical target price in the weekly time frame. The daily timeframe has some weakness (price has broken out of a bearish wedge) and this suggests that the above resistance could still prove to be a problem for the bulls. If market corrects from this resistance it could however be a short term move as support is not that far and the weekly trend is pretty firmly to the upside. Look for support between 1.9600 and 1.9700 with a long term target at 2.0870 and medium term target at 2.0270. Short term and intraday traders could consider 2.0000 as a target.


Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotForex]

TODAY’S CURRENCY MOVERS

Read full artile at HotForex Analysis page.

EURUSD, Daily

Germany may be considering a staggered deal on Greek aid. Greece will apparently be required to commit to at least one economic reform to win partial access to bailout funds. German Chancellor Merkel was reportedly quoted as saying “where there is a will there is a way. The goal is to keep Greece in the euro area”. The ECB has agreed to increase the Emergency Lending Assistance to Greek banks by 2.3 billion euros. According to Bloomberg the ECB is trying to strike a balance between keeping Greek lenders afloat and safeguarding the country’s central bank, which provides the aid, as the government veers toward a debt default. This is the biggest weekly increase since February 18th.

Standard & Poor’s downgraded Greek bonds deeper into junk status, questioning whether Athens can pay its debts. Reuters reported that Tsipras emerged early on Thursday from talks with Chancellor Angela Merkel and President Francois Hollande to express confidence. “We decided to intensify the efforts to bridge the remaining differences and proceed, I believe, to a solution in the coming period.”

EURUSD traded most of the day yesterday below the 1.1380 resistance identified in my previous report with the result that yesterday’s candle formed a shooting star. There was a brief rally above the 1.1380 level yesterday with the pair creating a high print of 1.1386 but it wasn’t sustainable and rally failed. Most of the morning EURUSD was trading in a small range between intraday support and resistance levels. Market was truggling with...