Technical Analysis by Alpari

[Alpari]

Alpari: Technical Analysis

Eurobulls Losing Control of the Situation

Yesterday’s Trading:
On Tuesday the euro/dollar traded by the LB all the way to market close. The euro dropped slightly after the release of the US’ managers’ purchases data which met expectations. After the close of the European session, the EUR/USD lost all of its gains from the first half of the day.
The American dollar strengthened throughout the market in response to an announcement by the US Fed’s Dennis Lockhart. He announced that the FOMC’s 16-17th September meeting will see him voting for an interest rate hike and he will only abstain from doing so if there is a significant worsening of the economic situation in the country.
The US manufacturing orders in June increased by 1.8% (forecasted: 1.8%, previous: reassessed from -1.0% to -1.1%).
The euro dollar, including in Asia, was down from 1.0987 to 1.0847. The pair is trading close to the D3 line. To get a clearer picture, we need to have a look at some of the older time periods: the weekly and the daily. More about this below.
Main news of the day:
• At 11:30 EET, the UK is publishing its July service sector PMI;
• At 12:00 EET, the Eurozone is releasing its June retail sales figure changes;
• At 15:15 EET, the US’ ADP July labor force number changes will be in the public eye;
• At 15:30 EET, Canada and the US are releasing their June external trade figures;
• At 17:00 EET, the US will present its July service sector business activity index from the Institute of Supply Management.
Market Expectations:
Friday’s American labor market report is fast approaching. In connection with this, attention is firmly focused on the ADP’s publication of data on employment numbers for July and the service ISM. The UK PMI and Eurozone retail sales figures will keep have an effect on the market until the US stats are out. The market has been in a sideways trend for a while now, so the market participants are reacting to pretty much every little bit of news.
Technical Analysis:
• Intraday target: maximum: 1.0898 (Europe opening), minimum: 1.0825 (in the States), close: 1.0855;
• Intraday volatility for last 10 weeks: 130 points (4 figures).

Hourly
The euro/dollar has fallen from the 45th to the 157th degree. In part, the rate is rebounding from this degree and after which the fall will continue to the 180th degree. If the euro goes straight for the 180th degree, there’ll most likely be a powerful rebound before Friday’s NFP and tomorrow’s Bank of England meeting.

Daily
The price has left Monday’s price range. The euro/dollar has returned to the 1.0807-1.0818 price zone. The dotted line goes through the close price, so it’s really important where the euro/dollar closes today. If it goes lower, it means that we’re going lower than 1.0807. If not, then we’re heading back to 1.0930. Now to the Weekly tab.

Weekly
Dennis Lockhart’s announcement attracted the sellers to the market. Yesterday they broke Monday’s minimum. There is a risk that it could depart to 1.0730/40 before Friday’s NFP. This is where the support is. As soon as the sellers have passed it, the dollar will resume its rally.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Pound/Dollar Returns Yesterday’s Losses

The market is continuing its pressure build up before the Bank of England convenes and Friday’s publication of US labor market data. Comments made by Atlanta Federal Reserve chief, Lockhart, offered support to the USD yesterday. He announced that the Fed is ready to raise its base rate in the near future and that he himself will be voting for a hike at the next meeting on 17th September. By these remarks, Lockhart changed the balance of power on the market and piled more pressure on the euro.

The service sector PMI figures for Eurozone countries came out today. On the whole the data isn’t bad, with the exception of Italy whose PMI was less than forecasted. The reaction to these European statistics was weak. The euro/dollar has consolidated around 1.0867 for the moment. The euro is under pressure after retail sales figures came out showing a significant fall.

The Spanish service sector PMI for July was 59.7 (forecasted: 55.5, previous: 56.1).

The Italian service sector PMI for July was 52.0 (forecasted: 53.0, previous: 53.4).

The French service sector PMI for July was 52.0 (forecasted: 52.0, previous: 52.0).

The German service sector PMI for July was 53.8 (forecasted: 53.7, previous: 54.4).

The Eurozone service sector PMI for July was 54.0 (forecasted: 53.8, previous: 54.4).

The UK service sector PMI for July was 57.4 (forecasted: 58.0, previous: 58.5).

The June retail sales index for the Eurozone stood at -0.6% MOM and 1.2% YOY (forecasted: -0.3% MOM, 1.9% YOY; previous: 0.1% MOM, 2.6% YOY).

Due to a fall in the euro/pound, the pound dollar rose to 1.5634. The UK business activity index in the service sector ended up a little worse than expected, but this didn’t stop the pound sterling hurtling upwards and away from its Asian minimum by 100 points.

I don’t share the optimism that pound buyers have at the moment with the Bank of England due to convene tomorrow. The pound/dollar has been stuck in a sideways trend for a few weeks now, so any sharp fluctuations tomorrow shouldn’t come as a surprise.

Market participants are waiting for the ADP index and the ISM index for the US service sector. It’s expected that the ADP will indicate a July employment creation growth in the private sector of around 210,000 - 215,000. If the data exceeds expectations by 15-20 thousand, the dollar is bound to strengthen once more. A rise in the service sector ISM is also expected. I think that the market is swinging at the moment so that participants can get in to favorable positions before the news comes out. The pound is now repeating its movements from 29th July.

Vladislav Antonov, Alpari analyst

 

[Alpari]

Alpari: Technical Analysis

Euro Still Trading at LB

Yesterday’s Trading:

Wednesday was a volatile one for the euro. Weak ADP saw the euro/dollar rise to 1.0933. Strong ISDM saw the euro return to 1.0849. After Europe’s close, the euro recovered to the LB.
The number of July private sector jobs in the US stood at 185,000 (forecasted: 220,000, previous: 237,000).
The July US service sector business activity index was 60.3 (previous: 56.0, forecasted: 56.2).

Main news of the day:
• At 9:00 EET, Germany is publishing June values for factory orders;
• At 11:30 EET, the UK is releasing data on manufacturing production and industrial production;
• 14:00 EET, the Bank of England will make an interest rate announcement and publish its minutes for their meeting;
• At 14:45, Mark Carney will give a speech;
• At 15:30, the US will publish its weekly report on initial unemployment benefit applications.

Market Expectations:

The market managed to carry the pair all the way to Thursday at the same level as Friday’s close. Today the market is waiting to see what the Bank of England is going to say. They will let us know about any interest rate decision, publish the results of the monetary policy committee’s voting (they used to be published two weeks later) and an inflation report. 45 minutes later, Mark Carney will give a speech. This is all going to happen before the US payrolls are out.

Technical Analysis:
• Intraday target: maximum: 1.0970 (Europe opening), minimum: 1.0890 (in the States), close: 1.0895;
• Intraday volatility for last 10 weeks: 130 points (4 figures).

The euro/dollar is trading by the LB. I’m looking at a growth of the euro to 1.0970 because of the Bank of England meeting, but then it will head back to the LB. If the pound heads up quickly after the meeting, the euro/pound will fall. As a result, the euro/dollar will be under pressure. Due to this, any growth on EURUSD should be quite reserved.
If the pound/dollar breaks the 1.5675 after the Bank of England meeting, you’d do better to abstain from selling euros until Europe closes.

Hourly

Daily

The sellers couldn’t strengthen below the dotted line (drawn along the close price). Yesterday I wrote that if the euro closes above it, I expect a return of the rate to 1.0930. The Asian maximum is fixed at 1.0933. The current price model has upped the risk for a return to 1.1057. Any eurobull success will depend on the NFP data. Now to the Weekly.

Weekly

The euro/dollar closed with a growth on Wednesday. This isn’t an indicator for the weekly graph, but it means that there are risks the candle will close with a low tail. This is bad news for sellers.

Vladislav Antonov, Alpari analyst

 

[Alpari]

Alpari: Technical Analysis

Euro Consolidating as it Waits for NFP Report

Yesterday’s Trading:

The euro/dollar was trading by the LB on Thursday, waiting for the key NFP report to come out. The US stats published yesterday offered an insignificant amount of support of the dollar.
According to the report, the number of initial unemployment benefit applications for the week ending 1st August increased by 3,000 to 270,000 (forecasted: 273,000, previous: 267,000)

Main news of the day:
• At 09:00 EET, Germany’s June manufacturing volume and July balance of trade is out;
• At 09:30 EET, the Bank of Japan is holding a press conference;
• At 11:30 EET, UK June balance of trade figures are being published;
• At 15:30 EET, the US is publishing its unemployment level, its NFP and July figures for number of employed;
• At 15:30 EET, Canada is giving an indication of the number of construction permits issued in June, as well as July numbers for changes for number of employed and its unemployment level;
• At 17:00 EET, Canada is releasing its July manager’s business activity index from Ivey.

Market Expectations:

Market participants are waiting for US labor market data to come out. They are counting on the data shedding light on the situation concerning US interest rates and they are hoping that the data will indicate which way the dollar is going to go for the month. Canadian stats are also out with the NFP, so volatility at 15:30 EET will be high. It will be similar stuff for the pound after the Bank of England has convened.

Technical Analysis:
• Intraday target: maximum: n/a, minimum: n/a, close: n/a;
• Intraday volatility for last 10 weeks: 130 points (4 figures).

Hourly

My forecast runs up to 15:30 EET. I’ve no idea how the NFP is going to come out and I’m not going to bother guessing. Although I will say one thing, it’s worth having a look at the NFP data. The ADP index is Wednesday’s driver and the NFP is Friday’s. Between them there is no correlation.

Daily

In yesterday’s report I wrote about how with the current price pattern (1.0807 minimum and 1.0847 maximum), the risk of a return to 1.1057 has increased. Any eurobull success will be directly linked to Friday’s NFP data. If the report comes out below 185,000, we will see a sharp fall of the dollar throughout the market. If it meets expectations or comes out better, we’re looking at the rate moving to 1.0800/1.0750. Now to the Weekly.

Weekly

Today is an important day for the dollar and the euro. The US Fed is keeping an eye on the labor market data and will be analyzing all the indicators in order to set a date for an interest rate rise. Here there’ll be a lower or trend line break.

Vladislav Antonov, Alpari analyst

 

[Alpari]

Short-term Trading Idea FX USD/SEK – Bear Speculation

Trading opportunities on currency pair: the USD/SEK has broken from the 8.8359-8.8830 zone. A double peak is forming. A further fall in the dollar and the idea coming off will see a first target set at 8.0571 and a second at 7.7231. A growth of the USD/SEK above 8.5960 will see a cancelling out of the scenario.

The USD has started to lose positions after the publication of the FOMC minutes. After they came out, many market participants expect the US central bank to decide to leave interest rates unchanged in September.

I’ve made a trend line on the weekly graph. A break in this line will see us receiving a confirmation of a double peak. A second confirmation of this will come from a fall in the dollar below 8.0310. The dollar has fallen sharply against the euro, franc and yen. Commodities currencies have seen a slight fall due to the price of oil dropping.

The next FOMC meeting will take place on 16-17th September. Traders will keep track of data coming out of the US. Positive stats will offer support to the dollar and negative ones will pile on the pressure.

Since 8.0310 is supporting the fibo level and the channel, we’re looking at 8.0571 as a first target and 7.7231 as a second. If the price lifts above 8.5960 (last weekly candle’s maximum) from current level, better forget about this idea. The price will quickly return to 8.8359.

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[Alpari]

Short-term Trading Idea FX EURUSD – Bull Speculation: Break in Trend Line

Trading opportunities on currency pair: the euro/dollar has broken the trend line and, due to a collapse in stock markets, has hastened upwards. I’ve marked out three price levels on a large W-shaped pattern: 1.1533 (03.02.15 maximum), 1.1750 (along the upper limit of the channel) and 1.2227 (50% of the fall from 1.3993 to 1.0461). A return of the rate to 1.1150 and below will cancel out the scenario.

The euro has received unexpected support from a stock market plunge and a cooling of expectations regarding the Fed’s interest rate decision for September. Last week, the euro/dollar grew by 271 points (+2.43%) to 1.1386.

When the dollar strengthens, investors take credit in euros at a low rate and spread their funds outside of Europe. Now they are closing short positions in euros and returning back their capital (carry trading).

First there was a false break in the trend. From 1.1213 the price returned to 1.1016. After the FOMC published its minutes, the eurobulls won back all their losses and brought the rate up to 1.1384. It’s now unlikely that the buyers will force the rate back to the 1.1436-1.1466 zone, or more precise, to 1.1533 (3rd February, 2015 maximum).

A W pattern is forming. The buyers’ success will depend on stock market fluctuations and American data. The worse the stats, the higher the euro will head against the dollar. Note the beginnings of a correction on the euro/pound. How long the correction phase on the cross will take place for is hard to say. It will become clear after the closing of the monthly candle.

If we split the complex model into parts, we can see two W shaped patterns which form a single large W. On the monthly timeframe, the correction will look like a regular A-B-C triangle. As part of this correction one can work for the meanwhile with a rise over the course of two weeks. 6th September will see a completion of the growth phase and 4th September will see the payrolls out. If the NFP data is weak, the dollar’s fall could resume with a new and more powerful lease of life. As such, 6th September is a key day.

I’ve marked out three price levels on a large W-shaped pattern: 1.1533 (03.02.15 maximum), 1.1750 (along the upper limit of the channel) and 1.2227 (50% of the fall from 1.3993 to 1.0461).

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[Alpari]

Upward Euro Trend Losing Pace

Hourly
Yesterday’s Trading:

On Monday the Asian and European stock market indices fell on average by 5%, the American indices fell by 3.5%. Due to their fall, the euro/dollar lifted by 300 points to 1.1712, the dollar/yen fell by almost 600 points to 116.13. After a sharp strengthening of the euro and the yen, by the end of trading we could see a correction taking place on dollar pairs. Including today’s trading in Asia, the American dollar has managed to win back its losses against the yen by 380 and by 180 points against the euro.

On Friday the VIX index rose by 23.7% and by 115.2% over the course of last week to 28.03. The Volatility IndeX is known as the index of fear and reflects trader expectations on the S&P500. The more fear that investors have, the more the VIX costs and vice versa. A growth in the VIX sees sales of shares and purchases happen when the index is down. If the index is higher than 25, investors get on their bike because of the risk and with any value higher than 30 they start really panicking.

Yesterday the American market managed to survive black Monday. From trade opening, stock markets moved into the red. The VIX lifted to 46.34 during trading (closed 40.74).

The last time it reached 48 points was in August 2011. Back then the SP500 market index fell by 20% over the course of 12 trading days (from 1347.50 (22/07/2011) to 1076.50 (09/08/2011)). Over the course of the last four trading days the index has crumbled by 12.94% to 1831.00.

On Friday, the SP500 broke the trend line of the 4-year bull trend. On Monday, a development on this break began. After the VIX reaches 46.34 on the American session, one can expect a stabilization of the market.

The US Fed’s Lockhart announced that the central bank’s decision to alter the base rate will depend on fundamental factors.

Main news of the day:

At 9:00 EET, Germany is publishing its Q2 GDP;
At 11:00 EET, the IFO business climate index, the current conditions index and expectations index for August are out;
16:45 EET, the August US PMI for the service sector from Markit will come out;
At 17:00 EET, July sales of new builds and August consumer confidence values will be out;
At 19:25 EET, The Bank of Canada’s Lawrence Schembri will give a speech.

Market Expectations:

Investor attention is still fully focused on the Chinese stock market. On Moday, the Asian stock market was seeing mixed trading. The Japanese Nikkei grew by 0.89%, the South Korean Kospi was up by 1.47%, the Australian ASX added 2.54%, the Shanghai SE Composite Index lost 4.33%, and the Hang Seng was up 1.62%. Futures on the DIJA are trading up by 2.23%, as is the SP500 by 2.24%.

Technical Analysis:

Intraday target: maximum: 1.1605 (Europe: 67 degrees), minimum: 1.1512 (in States: 90 degrees), close: 1.1580;
Intraday volatility for last 10 weeks: 119 points (4 figures).

The euro/dollar has corrected from a 1.1712 maximum to 1.1518 (157 degrees). The new impulse was quickly extinguished. The Euro had to rebound to the U3 line. At the moment the pair is trading around 1.1554. If the W shape is by the LB line, we can consider a growth to 1.1712, and since the price way off the trend and the majority of Asian stock indices are trading in the positive zone, today I will limit myself to a correctional phase of two days. It’s fully plausible that the euro will return to 1.1605. From the 67th degree I expect a fall to 1.1512.

Daily
By the end of the week I expected 1.17 to be reached, but now due to the American indices falling, the euro/dollar reached the upper limit of the channel on Monday. The resistance is set at 1.1466-1.1533 has been broken. Now this zone is a support. A fall below 1.1466 will be the nail in the coffin for any growth.

If the euro stays above 1.1533, a growth new target can be set at 1.1992. This is another price channel. It might not reach 1.1992 since the U3 crosses 1.1860 on the daily. Over the course of two days, a consolidation is possible. Now to the Weekly.

Weekly
The 90th degree has been passed. The 112nd at 1.1773 is the new target. The target on the daily is a little higher.

 

[Alpari]

Euro Stabilizing at Balance Line

Hourly
On Tuesday the growth of American and European stock markets kept the situation stable on the currency market. The euro/dollar fell to 1.1396. The US indices came out up 2.5%.

They didn’t manage to stay in the black though. In the last hour before the close of the trading session, they slipped into the red. Market participants are concerned that Asia is going to crumble again. After all, the European and American indices grew even with a mixed closing of the Asian indices.

Tuesday saw the Dow Jones Industrial Average down by 204.91 (-1.29%) to 15,666.44 points. The S&P 500 closed down by 25.60 (-1.35%) at 1867.61 points. The NASDAQ Composite closed down by 19.8 (-0.44%) at 4,506.50 points.

Statistics in the US came out positive. Traders didn’t really give them much attention, since China and the stock markets are is still dominating the picture. The euro returned from a minimum to 1.1560.

The US August consumer confidence index stood at 101.5 (forecasted: 91.5, previous: reassessed from 90.9 to 91.0).

July US Construction of new homes was 507,000 (forecasted: 505,000, previous: reassessed from 482,000 to 481,000).

Main news of the day:

At 13:00 EET, the UK is publishing a retail sales report;
At 15:30 EET, the US is releasing order numbers for durable goods;
At 17:00, the FOMC’s William Dudley will give a speech.

Market Expectations:

I think that the market swings will continue throughout Wednesday. There isn’t much news out, so investor attention will still be on stock market movements. The Asian stock indices are trading mixed. A large part of them are now in the positive.

Technical Analysis:

Intraday target: maximum: 1.1580 (Europe: 157 degrees), minimum: 1.1485 (in States: 67 degrees), close: 1.1530;
Intraday volatility for last 10 weeks: 119 points (4 figures).

From the 180th degree, the euro renewed to 135 degrees. The pair is now having a time-out at the balance line. Trades in Asia aren’t making much noise. Taking into account that the stochastic is still loading, in the first half of the day I’m considering a growth for the euro to 1.1580. After the test of 157 degrees I’m expecting a fall to 1.1485.

Daily
Due to European and American stock market indices gaining back ground, the euro/dollar fell below the support to 1.1396. As we see, the bulls managed to take the rate to 1.1560. A long tail is really dangerous as it means the euro’s strengthening could continue if it doesn’t return to the 1.1356 minimum in the next two days. I’ve gone for a flat today since the stock market situation is still uncertain. Now to the Weekly.

Weekly
On Tuesday, the euro/dollar fell to 1.1356. Imagine the candle for the week closes around 1.14. This would see a weekly pinbar form. After this the traders will once again look at a fall in the euro to around 1.1050. The target of is 1.1773 is still valid.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Euro Trying to Break From D3

Hourly
Yesterday’s Trading:

Wednesday saw the euro/dollar close down. The main fault of the fall lies with the British pound which fell by two figures. Sales of the pound were caused by the publication of a UK inflation survey. According to YouGov, the year expectations fell from 1.6% to 1.4% which could lead to a delay of an interest rate rise by the Bank of England. The dollar then received support by some US stats and a growth in stock indices.

The base index for durable goods orders in the US stood at 0.6% (forecasted: 0.4%, previous: reassessed from 0.6% to 1.0%). The total volume increased by 2.0% against a forecasted -0.4% and previous 4.1% (reassessed from 3.4%).

The situation on US stock markets is stabilizing. By Wednesday’s close, the DJIA lifted by 619.07 (3.95%) to 16,285.51 points. The S&P 500 closed up by 72.9 (3.9%), reaching 1,940.51 points. The Nasdaq composite closed up by 191.00 (4.24%) to 4,697.50 points.

First the euro/dollar rate fell to the D4: 1.1351. Then, after a correction to 1.1437, the rate followed the pound by falling to 1.1291.

Main news of the day:

At 8:45 EET, Switzerland is releasing Q2 GDP values;
At 15:30, the USA is releasing its weekly report on initial unemployment benefit applications and a revised Q2 GDP value;
At 20:00 EET, an economic symposium will take place at Jackson Hall.

Market Expectations:

News worth a look at on Thursday includes revised US Q2 GDP data. The data will have a real effect on the market if it is reassessed. Technical analysis should come off today.

Technical Analysis:

Intraday target: maximum: 1.1375 (in States: 67 degrees), minimum: 1.1305 (Europe), close: 1.1334;
Intraday volatility for last 10 weeks: 119 points (4 figures).

After a two-week fall of the euro, I am more inclined to believe in a return of the price to the LB. The longer the price is so off the scale, the more powerful rebound to the trend will be. The euro/dollar returned to the MA channel in the last hour. It was a rebound of 45 degrees. From here it’s possible that it will slip down to 1.1305. Then it will head back upwards. Since the oscillator stochastic is up, the direction will depend on the stats that come out.

GBP/USD Hourly Graph

Daily
The sellers have closed off the growth from 1.1016 to 1.1712 by 62%. This indicates that the balance is tipped in favor of the eurobulls. If the buyers manage to keep the rate below 1.14 on the weekly, a reverse candle pinbar will form. Have a look at the weekly and the last candle there.

In the current climate, the buyers could still bring the euro back to 1.1450. The wave analysts will be considering a five-waver forming from 1.0847. As far as I’m aware, when 4 waves recoil by 38%, the fifth wave has a high chance of updating the maximum and is usually equal in amplitude to the first wave. A 62% rebound means considering that wave 5 won’t quite form. This means that the price could approach 1.16 and sharply U-turn downwards. How then will we know whether there will be growth to 1.16? I think that the critical resistance level is at 1.1405. Breaking through it will open the road to 1.1560 and then we’re on. Now to the Weekly.

GBP/USD Daily Graph

Weekly
A weekly pinbar is forming. After this, traders will again be looking at a fall in the euro to around 1.1050. After yesterday’s fall of the euro, the 1.1773 target is no longer valid.

Vlad Antonov, Alpari Analyst

 

[Alpari]

Euro Expected to Recoil before Weekend

Hourly
Yesterday’s Trading:

On Thursday the euro/dollar closed down. The USD strengthened on the back of Q2 US GDP and employment data being better than expected. Strong GDP data increased the possibility of an increase in the US base rate this September.

The revised GDP figure showed a Q2 growth from 2.3% to 3.7% YOY. The forecast was 3.2%. The number of applications for unemployment benefit in the country fell from 277,000 to 271,000.

The Dow Jones Industrial Average was up by 369.26 (2.27%) to 16,654.77 points for the year at close on Thursday. The S&P 500 closed up by 47.15 points (2.43%) to 1,987.66 points. The Nasdaq Composite closed up by 115.2 (+2.45%) to 4,812.57 points.

The euro/dollar was way off the trend all day. After Europe closed, a correction from a 1.1202 minimum began. The rate corrected itself to 1.1278 and is currently around 1.1264.

Main news of the day:

At 11:30 EET, the UK is publishing Q2 GDP values;
At 12:00 EET, Germany will release consumer price data for August;
At 15:30 EET, the USA’s July values on personal incomes and expenses and the base index for expenses on consumer products will be out;
At 17:00 EET, Reuters/Michigan August consumer confidence index will be in the public eye;
At 20:00 EET the Jackson Hall economic symposium will be underway.

Market Expectations:

Taking the three-day fall of the euro into account, I’m expecting a return to the LB. A growth may by steeper than I’ve forecasted since it’s Friday today (closure of short positions before the weekend).

Look at the euro rally for the 20th, 21st and 24th August. Three days of growth, two days being way off the trend and then a sharp fall by 300 points. I don’t expect a growth by 300 points, but why not one to 1.1330. The key event of the day is Q2 GDP for the UK being out. If you think the States often reassess their initial numbers then the Brits hardly ever do. If they don’t reassess them, a growth of 30 points on the pound due to a correction is expected. The euro/dollar will follow the pound.

Technical Analysis:

Intraday target: maximum: 1.1330 (in Europe: 112 degrees), minimum: 1.1225 (in Europe), close: 1.1280;
Intraday volatility for last 10 weeks: 119 points (4 figures).

The euro dollar has returned to the MA channel. Be careful with purchases, since the stochastic is pointing upwards. The market could repeat yesterday’s movement, but with less amplitude.

If the euro/dollar heads quickly for 1.13, it’s worth waiting for a break in the trend line. I’ve limited myself to a growth to 112 degrees.

Daily
So, the euro/dollar is down from a 1.1712 maximum by 5 figures (500 points – 4 figures after the point). A pinbar has formed on the weekly. The sellers need to hold on to their positions at the current level. Taking into account that today is Friday and traders want to close their short positions before the week’s end, it’s likely that we’ll see a rebound to 1.1330. The sellers need to stick to their guns around 1.1370 and not give the buyers chance to close higher. Now to the weekly.

Weekly
On the weekly period we can see a pinbar has formed. The sellers need to stand firm at the current level. A red would be better than a green for a further fall in euro. If the euro/dollar drops to 1.1130 by Tuesday, the pinbar will also form on the monthly. In which case everyone will again be talking about the dollar and it reaching parity with the euro. For today, however, I’m expecting a euro rebound.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Market reviews

Short-term Trading Idea FX EUR/GBP – Bull Speculation: Possible Break in Upper Limit of Channel

Trading ideas for currency pair: the euro/pound is trading by the upper limit of the channel. It’s likely that, after a correction, the resistance will be broken and the rate will rise by 61.8% from the break point (the fibo from the channel) to 0.7751.

For the past three weeks, the euro has strengthened significantly against the UK pound. The euro and the yen became defense mechanisms when the Asian and US stock markets were crumbling and when oil falls.

Also, aggressive UK pound sales have been caused by the publication of an inflation report for the country. The YouGov data shows that one-year expectations fell from 1.6% to 1.4%, and this might just lead to the Bank of England putting off an interest rate hike.

Last Thursday the ECB convened. The regulator left rates unchanged at 0.05%. M. Draghi informed us about the QE program at a press conference and he also lowered his GDP growth and inflation growth forecasts for the Eurozone.

Due to a slow-down in economic growth throughout developing markets and a fall in the price of oil, this year’s GDP was dropped from 1.5% to 1.4%, in 2016 – to 1.7% and in 2017 – to 1.8% with inflation down from 0.3% to 0.1%. After Draghi gave his speech, the euro/dollar fell by 140 points to 1.1086.

Due to the upcoming Bank of England meeting due on 10th September, the euro/pound cross could renew to 0.7344 after the pinbar. One member of the UK Monetary Policy Committee at their last meeting voted for a rise in interest rates. It will be interesting to see how many vote for this time. I, however, only expect one to do so.

Now to the weekly graph. The EUR/GBP has headed upwards on the back of bull divergence. Look at the channel which can be drawn from the three points. The upper limit of the channel gives us the first target if an upward correction takes place. As we see, the euro/pound already reached it. From 0.7421 the rate rebounded. 0.7389 is a horizontal resistance at the closing price.

On the graph there’s a cut-out from the GBP/USD’s daily time period. From March to May this year, this pair has undergone an analogous situation. Due to the bull divergence, the pound/dollar grew to the upper limit of the channel, rebounded, pinbarred, had a slight fall, broke the channel and grew by more than 61.8% from the channel’s range.

If the 0.7389 resistance is passed, this is exactly the behavior that we will be able see on the weekly graph in the coming time. At the same time, there are many unknown parameters and contradictions amongst the key pairs (the ECB could extend its QE program if inflation is low, it’s unclear how many MPC members will vote for an interest rate hike in England on Thursday and, indeed, whether the US Fed will put its rates up on 16-17 September).

If we leave the technical factors aside, after a break through the resistance, wait for a growth in the EURGBP to 0.7751 (161.8% from the channel).

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Trading Ideas

Short-term Trading Idea FXGBP/USD Bear Speculation: Leaving the Channel

Trading opportunities on currency pair: last week the pound/dollar broke two supports. The risks of a break in the upper limit of the channel are still there. In this case, the pound will remain under pressure. The target zone is between 1.4646 and 1.4879. A closing of the candle above 1.5275 will cancel the scenario for a fall.

Aggressive UK pound sales have been caused by the publication of an inflation report for the country. The YouGov data shows that one-year expectations fell from 1.6% to 1.4%, and this might just lead to the Bank of England putting off an interest rate hike.

Real pressure on the pound came from a strong growth on the pound/dollar cross. The euro became a defense mechanism when the Asian and American stock markets were crumbling, so the currency was bought in every pair, including the euro/pound.

For the moment, we have the following parameters for the pound. The pound/dollar has broken the horizontal 1.5329 support (8th July, 2015 minimum). After Friday’s NFP report came out from the US, the pound/dollar broke the lower limit of the A channel. The market closed down on another horizontal support, 1.5169 (1st June minimum).

To further understand this idea, I recommend you take a look at the idea I’ve done on the euro/pound. The cross is having a significant effect on the pair, so I had to extend my analysis.

The ECB convened and the NFP came out positive, although August US job creation was set at 170,000 (+200,000 forecasted) and June and July’s values were reassessed upwards. US August unemployment was down by 0.2% to 5.1% (forecasted: 5.3%). The US August hourly wage index was up 0.3% (forecasted 0.2%, previous: 0.2%).

The dollar started to react to the report by falling, but then strengthened. After the payrolls on Monday, the key pairs will often move against their Friday movements. Plus, national holidays are ongoing in Canada and the US. Not much volume will be traded today. Monday could see a correction on dollar pairs.

If we take the euro/pound cross technical picture into account, one can suppose that a fall in the pound against the dollar will continue to the 1.4346-1.4879 support zone. The horizontal 1.4946 level is forming from a Match-April 2015 consolidation.

The euro/pound is trading at the upper limit of the canal on the weekly time frame (see euro/pound idea). It’s possible that we’ll see a depart upwards to 61.8% from the channel. The pound/dollar has already broken the A channel. This 61.8% from the channel passes through 1.4879. This will be the pound’s main target until the month ends.

If the Fed put its rate up when it convened on 16th-17th September, the target will be reached earlier. If not, this idea may become invalid. A close of the day higher than 1.5275 will cancel out the scenario for a fall. Once again, here you need to keep an eye on which candles start forming above 1.5275 before closing.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Trading Ideas

Short-term Trading Idea FX AUD/CAD – Bear Speculation: Development on 6th April Ideas

Trading opportunities for currency pair: the important levels have been passed. Weak statistics from Australia and a lack of risk taking are keeping the pressure piled on the Aussie. Most likely, the 0.8977 target will be broken by the end of the week. If oil quotes rise and the speed of the AUD/CAD fall doesn’t slow up, the target could shift along the A channel from 0.8977 to 0.8802.

In an idea that I did on 6th April, I was waiting for a break in the support and a fall in the rate to 0.8977 due to further expectations of the Australians relaxing their monetary policy and a fall in the price of iron ore. For eight months the sellers have been trying to strengthen below 0.9390. In the end, they’ve broken through.

In a week the AUD/USD fell 250 points to 0.6907. The AUD/CAD fell 278 points to 0.9168. The Australian dollar has fallen under pressure after the publication of disappointing retail sales data for the country. Retail sales in July fell unexpectedly.

On Tuesday the Australian Reserve Bank left their base rate unchanged at 2%. The regulator made note of the fact that the Australian dollar is falling due to the fall in commodities’ prices. Due to the slowdown in growth for the mining industry, the RBA is trying to support the economy with low interest rates, The RBA governor, Glenn Stevens, announced that keeping the rates as they are sits in keeping with the current economic conditions.

As for the Canadian, at the moment it’s looking better than the Australian since the oil price has rebounded from 42.20. In addition, Canadian data is coming out better than Australian. Participants staying clear of risks is a reason the Australian dollar remains under pressure.

On Friday Brent attempted to increase in price after a Baker Hughes report came out. According to the data, the number of drilling rigs in the US for the week beginning 28th August fell by 13 to 864. In terms for the year, it is a 1061 fall. The number of oil drilling rigs fell by 13 to 665. The number of gas drilling rigs remained unchanged at 202. There has been a significant fall in operating oil drilling rigs over the last three months.

The dollar is strengthening throughout the market after the NFP came out flying and held back a rise in oil quotes. Monday is a holiday in Canada and the US, so the markets will be closed. Due to this, Brent could reach 51 USD per barrel. A growth in oil prices will offer support to the Canadian dollar. Due to this, the AUDCAD fall will hasten.

The important levels have been passed. More than likely, the 0.8977 target will be reached by the end of the week. If oil quotes rise and the speed of the AUD/CAD fall doesn’t slow up, the target could shift along the A channel to 0.8802.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Market reviews

Pound/Dollar: Due to Dollar Fall Losses Resume

Hourly

On Monday the pound/dollar rose to 1.5287 due to euro sales in the euro/pound cross. Trader activeness on the American session was low due to the state holiday in the US and Canada. The growth continues today in Asia. At the moment, the pound/dollar is trading above 135 degrees, at around 1.5367. I didn’t bother re-doing my forecast. The target on it has been re-fulfilled. From the U3, I’m expecting a correction towards the LB.

Daily

The GBP/USD has broken from the support and is currently heading back to 1.5367. For now the price is trading just below 1.5436; we’re talking about a correction.

Weekly

The weekly candle closing above 1.5439 will cancel the 1.5110 target before the FOMC convenes.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Market reviews

Euro/Dollar: Eurobulls Trying to Win Back Thursday’s Losses

Yesterday’s Trading:

On Monday the euro/dollar was trading in a range of 50 points due to a bare economic calendar and it being a state holiday in Canada and the US. The market formed a resistance at 1.1176 yesterday and today in Asia the eurobulls broke it. Purchases of the euro have resumed after Japan published Q2 GDP data.

Main news of the day:

At 09:00 EET, Germany will release its June balance of trade figures;
At 12:00 EET, revised Eurozone GDP for Q2 will be released.

Market Expectations:

German trade balance values are out, along with a revised Eurozone GDP. The economic calendar for this evening is empty.

Technical Analysis:

Intraday target maximum: 1.1263 (in Europe), 1.1152 (Asian), close: 1.1205;
Intraday volatility for last 10 weeks: 130 points (4 figures).

Hourly

The euro is up to 1.1217 against the dollar. Since Friday’s maximum of 1.1188 has been exceeded, all that can be considered is a further strengthening of the euro to the U3 at 1.1265 along the channel (the black line). The 112th degree goes through 1.1253. In the 1.1253 – 1.1265 zone, growth could stop. Since the evening’s calendar is bare, I expect the pair to correct to the U1 on the American session. It would be better if the euro corrected itself to the LB. The euro is trying to win back Thursday’s losses that were incurred during Draghi’s speech.

Daily

I made a channel with the grey lines. There’s no reason why correctional movement to 1.1245 isn’t on the cards, but not above it. If the day closes above 1.1245, the eurobulls will shift back to the trend line. This is somewhere around 1.1320. After such growth, forget about a fall until 16-17 September when the Fed is due to convene. We will see how the American markets open after the holiday. Now to the Weekly.

Weekly

The euro is trying to break from the daily LB. The situation at the moment hasn’t really changed after a growth to 1.1218. A close of the week above 1.1332 would cancel the pinbar signal with a 1.1712 maximum.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar: Readying for Fall to 1.10

Yesterday’s Trading:

On Tuesday there was no real news about the euro. Due to a fall in the euro/pound cross and a general fall in the dollar rate, the euro/dollar was yo-yoing. The fluctuations in one direction were from 50 to 70 points.

Main news of the day:

• At 10:30 EET, the UK is releasing its July manufacturing production values, industrial production values and trade balance;
• At 11:00 EET, the RBA’s assistant governor, G. Debelle, will give a speech;
• At 15:15 EET, Canada is releasing data on August foundation laying for housing and at 15:30 EET will let us know how many construction permits were issued in the country in July;
• At 17:00 EET, the UK is releasing its revised GDP assessment for Q3 from NIESR. This will take place simultaneously with the Bank of Canada making known its decision on interest rates and its representatives giving an accompanying speech;
• At 17:00 EET, the US is releasing its job vacancy level and labor turnover for July.

Market Expectations:

In Asia the euro/dollar returned to the LB due to a growth in the Chinese indices and an increase in risk taking. Just as yesterday, there’s no planned news for the euro today. Taking into account that the euro is in the third day of a correctional phase, I’m starting to think that there’ll be a fall against the US dollar. I reckon that the euro/dollar will set the tone for the euro/pound today after the release of UK industrial manufacturing data.

Technical Analysis:

• Intraday target maximum: 1.1215 (Asian), 1.1109 (in US – 90 degrees), close: 1.1135;
• Intraday volatility for last 10 weeks: 130 points (4 figures).

Hourly

The euro/dollar has returned to the LB from a 1.1215 maximum. The rebound was 45 degrees. We have an upward channel. Since the AC indicators and the stochastic are facing downwards and the AO is facing upwards, in the first half of the day I expect the euro to grow to 1.12 and then fall on the American session to 1.1109. There’s another option though: a flat around the LB until the Bank of England convenes.

Daily
Yesterday I made a price channel on the graph. Today I have highlighted this channel with black lines. The eurobulls didn’t manage to strengthen above 1.1245, so I’ll take a risk in saying that there’ll be a retreat in the rate and a fall of the euro to 1.10 before the week’s end. Now to the Weekly.

Weekly
The euro/dollar is consolidating. The last weekly candles look like a doji. This means I’m looking at a fall for the euro. A close of the week above 1.1332 will cancel the pinbar signal from a 1.1712 maximum.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Market reviews

Short-term Trading Idea FX GBP/AUD – Bull Speculation: Bounce From Trend Line

Trading opportunities on currency pair: the GBP/AUD rate is near the trend line. For the past four days the pound has been falling due to the Bank of England downing their GDP and inflation forecasts. Taking into account that a mixed bag of Chinese data came out on Sunday, it’d be better to consider buying pounds on the trend. A rebound will see a W-shape pattern form. The target for it would be 2.2375. Growth will cancel out with any break in the trend line and in which case a second scenario will get underway. Sales should be considered after the price has returned to the trend.

The last idea I did on GBP/AUD was on 3rd August. In it I considered a strengthening of the pound along the trend to 2.1967 by 15th August due to expectations that the Bank of England will put up its base rate and the price of iron ore will stay low.

Although the price level was reached, I considered the scenario cancelled out when the trend line was broken. After the break, the GBP/AUD fell to the 23.6% fibo level. From here the price rebounded and on “Black Monday” (24th August) the quotes reached 2.2375.

On this day the Shanghai SE Composite Index fell 8.49%, the Hang Seng was down 5.17% and US indices were down 3.5%. Due to the fall of the indices there was a growth in demand for protected assets (euro and yen) and a decline in demand for commodities currencies. As a commodity currency, the AUD lost 200 points against the USD. The euro/dollar shot up 300 points to 1.1712, the dollar/yen fell by almost 600 points to 116.13. The VIX (fear index), which indicates market volatility, reached 46.34 before closing at 40.74.

Over the course of the next five trading days, the GBP/AUD switched into a correctional phase and corrected by 977 points to 2.1398. The pair is currently stuck in a sideways trend. I’ve corrected the trend line along the 2.0873 minimum.

So what’s new since 3rd August? The Bank of England convened. Iron ore prices have gone up. The Chinese stock market situation still hasn’t calmed down.

The Bank of England left rates unchanged at 0.5% and kept bond purchases at 375 billion pounds. According to the meeting’s minutes, only one vote was cast for rates to go up with the remaining eight against. The MPC votes cast fit the forecast.

Firstly the pound reacted with a growth to this news, but then fell. The Bank of England reassessed down its inflation forecast for the next 12 months and dropped its Q3 GDP forecast from 0.7% to 0.6%.
Nevertheless, we can see an interesting technical picture on the GBP/AUD. The price is by the trend line. Many are worried by one thing: is it a rebound or a break?

The situation for the Aussie is ambiguous. For the moment it is growing on the back of expectations that the regulator is not going to drop its base rate this year; instead mounting the stimulative economic pressure in the next. On the other hand, a mixed bag of stats came out of China yesterday. August industrial production was down, whereas retail sales were up. For the moment I’d say that it’s better to buy pound along the trend. Any rebound will see a W-shaped pattern forming with a 2.2375 target.

The pound has been trading in a sideways trend for fourteen days straight. It has been strengthening against the Aussie since May this year (4 months). Due to the fact that the AO indicator is overloaded, I made a second scenario just in case the trend line is broken. The indicator needs to unload to the zero line. If a break happens, we’re looking at a fall of the pound to 2.0912 due to a technical correction.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Market reviews

Short-term Trading Idea FX AUD/NZD – Bull Speculation: Break in the Resistance

Trading opportunities on currency pair: the AUD/NZD has broken from the support and strengthened above the resistance. If the upward movement continues, I’d expect a continuation of the growth. The targets are 1.1420 and 1.1565. The idea will cancel out with any fall below 1.0895.

The Aussie has broken from the support after the Reserve Bank of New Zealand (RBNZ) dropped its base rate by 0.25% to 2.75%. The decision met expectations, but the New Zealander lost against all other currencies.

The RBNZ governor, Graham Wheeler, stated that there may be even further relaxation of monetary policy, depending on the economic data that comes in. Since no one expects the RBA (Reserve Bank of Australia) to put its rates up this year, the likelihood of a return of the AUD/NZD to 1.1398 and then to 1.1563 has increased.

It’s worth noting that trades have finished above the correction al model. This is important since the line goes along the closing prices. I’ve marked out two targets for the next two weeks: 1.1420 and 1.1565.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Market reviews

Short-term Trading Idea FX USD/NOK – Wait and See: Possible Rebound or Break Below 8.10

Trading opportunities for currency pair: the dollar has broken the trend line and is trading below the lower limit of the channel. Any increase in pressure on the dollar and growth of oil quotes will see the rate shift to 7.8950.

The last idea I did on the USD/NOK was on 29th June. Due to a lack of growth for oil quotes, I considered a break in the trend line and a growth of the dollar to a maximum since 10/04/15 (8.1563). The break took place and the USD/NOK rose to 8.3985.

The pair has been consolidating for 48 trading days in a channel with a 3,400 point range. The oil price has stabilized at $49 per barrel. A correction for the USD has started with the FOMC meeting approaching. Investors are worried that the US Fed will stave off an interest rate hike on 17th September.

The USD/NOK has broken the trend line and is now by the lower limit of the channel. On Monday the pair could correct to 8.2150/70. Afterwards we’ll have to have a look at how the buyers are set up according to the correction. Any increase in pressure on the dollar and growth in oil quotes will see the rate shift to 7.8950.

Vladislav Antonov, Alpari Analyst

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar: Euro Pressure Could Increase

Yesterday’s Trading:

On Monday the USD grew against the euro. The eurobulls took note of the technical factors and ignored the strong industrial production data from the Eurozone.
The euro/dollar rolled back to the LB after a break in the trend at 1.1325. From here the rate rebounded and is currently trading at 1.1327. Taking into account that the LB is moving upwards, the price didn’t stray too far from it.

Main news of the day:
• At 11:30 EET, the UK is publishing its August CPI, PMI, RPI and its core output for the month;
• At 12:00 EET, Germany is September releasing it business climate index from ZEW, along with its July balance of trade;
• At 15:30 EET, the USA will see data released on August retail sales and business activity in the manufacturing sector from the New York Fed;
• At 16:15 EET, the US will release data on changes in industrial production volume for August.

Market Expectations:
Trader’s attention is still focused on the upcoming FOMC meeting. If the ambiguous US reports and instability of the stock markets force the US Fed to delay a rate rise, the euro/dollar will continue its upward correction.
Today the ZEW report on Germany and the Eurozone will be published, with inflation data from the UK out, as well as US data on retail sales and industrial production. The UK stats are more important than those of the Eurozone. If the inflation indicator turns out less than forecasted, this will cause sales of the pound in the crosses, including that of the euro/pound. In this case the euro will receive a temporary support from the cross and then will also fall. If the data turns out good, in the first half of the day you can expect to see the euro strengthening against the dollar.

Technical Analysis:
• Intraday target maximum: 1.1354 (in Europe), 1.1282 (in the States), close: 1.1305;
• Intraday volatility for last 10 weeks: 125 points (4 figures).

Hourly
The euro/dollar is trading by the second trend line and the LB. From Europe opening I’m waiting for a growth to 1.1345-1.1354 and then a break in the trend and a fall to 1.1282.

Daily
The euro/dollar renewed to 1.1372. There’s still a little bear candle about and the stochastic will form a signal to give the green light for euro sales. The bulls have control of the market at the moment and could update the maximum if the US data comes out weak. Now to the Weekly.

Weekly
There’s much to say here.

Vladislav Antonov, Alpari Analyst