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Date : 25th March 2015

EURUSD: A DAILY SHOOTING STAR POINTING TO DOWNSIDE.



EURUSD has risen over the last two weeks after the Fed Chair Yellen said in her statement that there are worries over the export growth in the US economy due to the strong dollar. Yesterday’s new home sales and CPI figures could didn’t help the pair to push through the resistance at 1.1040.

The dollar rallied in the aftermath of the warmer U.S. inflation report, quickly sold off from there, then dragged itself up through the remainder of the morning session. EURUSD fell to 1.0936 from 1.0995 after the CPI data, before climbing to session highs of 1.1029, and then falling to session lows of 1.0890. U.S. new home sales rebounded 7.8% to 539k in February, much better than expected and the strongest since April 2008. Back months were revised with January boosted to 500k from 481k previously, while December’s 482k was nudged down to 479k. The February overall-CPI was 0.2% (median 0.2%), while the core index was 0.2% (median 0.1%). Year over year growth accelerated to unchanged from -0.1% and the core y/y growth held at 1.7%. January’s was the slowest pace of y/y growth since -0.2% in October ’09. Energy prices grew 1.0%, with a 2.4% gasoline price increase. Food prices were 0.2% after after remaining unchanged last month.

The monthly chart reveals an important trendline support in the region of the recent bounce from 1.0459. This could be a supporting element that keeps the pair from plummeting to parity for some time, especially so if the Fed continues using dovish language in their statements. Important weekly support level in the weekly chart is at 1.0459 while the resistance levels are at 1.1098 and 1.1460.



EURUSD, Daily

A daily shooting star candle suggests the pair will move lower today. High Stochastics value supports the view. If the market rallies today levels closer to yesterday’s high would be attractive shorting levels.Support area from 1.0460 to 1.0620 is a reasonable target but it would make sense to close the short trades as price approaches the level at some 20 pips higher.



EURUSD, 240 min

The pair has moved sideways above the 1.0883 support and over the last two candles below the ascending trendline. The 4h Bollinger Bands (currently at 1.0988 and 1.0240) would be preferable shorting levels but should the support break before price rallies, then smaller timeframe price action should be used to enter the short trades as per my teaching in the webinars.



EURUSD, 60 min

The resistance (red line) at 1.0938 has been resisting moves higher this morning while EURUSD has made higher lows above the lower Bollinger Bands. This suggests that pressure is building against the 1.0938 minor resistance level and price might well rally towards the potential sell area at 4h Bollinger Bands.

Conclusion:

Price reacting lower from a resistance and creating a Shooting Star candle indicates weakness. However, price trading at support and creating higher lows suggests that price might well move higher today and provide an opportunity to look for short signals at 4h Bollinger Bands.

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.

[HFblogNews]

Date : 25th March 2015

GERMAN MARCH IFO JUMPED TO 107.9.



German March Ifo jumped to 107.9 (median 107.3) from 106.8 in the previous month. The higher than expected reading was boosted by a sharp rise in the expectations index, which came in at 103.9, after 102.5 in February. The current conditions indicator improved to 112.0 from 111.3. The diffusion index, which gives the balance of positive and negative answers shows improvements in all sectors, with the exception of the construction industry, where sentiment turned even more negative, despite the sharp rise in house prices. The March reading meant the Ifo improved to 107.1 in Q1 from 104.5 in Q4 last year. German growth this year is set to come in much stronger than anticipated, and the fact that economic momentum was already strong ahead of the ECB’s QE start means there is some risk of overheating in the German economy. Wages growth is set to pick up and in the long run this will cut German competitiveness and weigh on the medium term outlook and the Bundesbank will need to keep a close eye on the property market.

EURUSD reaction was subdued and the pair stayed between two intraday support and resistance levels (1.0937 and 1.0968) with a high at 1.0974. This level coincides with rising trendline and the upper Bollinger Bands in 60 min timeframe.

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.

[HFblogNews]

Date : 26th March 2015

S&P 500 AT SUPPORT AFTER 4.67% DROP IN SMH.



The US stock market declined for a third day in a row yesterday. Dow Jones Industrial Average lost 1.62% while Nasdaq and S&P 500 declined by 2.37% and -1.46% respectively. This has impacted the Asian and European markets today with Nikkei 225 futures in the red by 1.54% Dax futures down by 2.01% at the time of writing. US equity volatility index VIX shot higher yesterday. VIX moved up to 15.44 as NASDAQ -1.6% was sucking the S&P 500 into negative territory. VIX is well up from the previous session lows 12.59. In proximity of the mid-March range index will be hitting the daily Bollinger Bands.



S&P 500 e-mini futures, daily

RSI is indicating that the weekly S&P trend is getting weaker. Momentum has slowed down since December last year and this has led to RSI creating lower highs while the S&P e-mini futures (ES) made and all-time high in February. ES has now created a lower weekly high and retraced back to the 50% Fibonacci level at 2040.



S&P 500 e-mini futures, daily

ES created a lower high just below the weekly pivot candle and is currently trading at the daily Bollinger Bands and 50% Fibonacci level. This level also coincides with a daily pivot candle from March 13th. Stochastics is getting oversold but a lower high at 2100 is a sign of weakness and could mean that this market moves lower before finding support.



S&P 500 e-mini futures, daily

Here’s another look at the daily chart with a perspective a bit further away. With ES not being able to move above the February high price has created a bearish wedge is currently moving outside the wedge formation. If current support at 2032 breaks it could mean that the trajectory has changed and we will have a new less steep trend channel that defines the moves over the coming weeks. This would bring the grey trendline into play. Also, should the price stay below the black trendline technical picture would deteriorate substantially.



Semiconductor Sector ETF (SMH), Daily

Analysis on US sectors reveals that over the last 10 trading days professional money has been moving away from Financials and Industrials and into Utilities and Health Care stocks. This of course is a bearish fact suggesting that the long only fund managers see the market being weak and feel the need to do what they can to minimize the market impact as they cannot hedge their positions with derivatives. The massive drop in the Semiconductor stocks after a lower high in the index ETF supports this view. However, the support area is getting also relatively close suggesting that the market is not likely to continue in a free fall but will find support over the coming few days. As futures have declined today it is possible that these stocks will open fairly close to the support levels. Picture in the technology and industrials sector ETFs is somewhat similar indicating that they have a bit further to fall before they meet potential support levels.



S&P 500 e-mini futures, 240 min

The down move paused at the rising trendline but the selling pressure prevailed. ES is now approaching the 2032 low with oscillators deeply in the overbought territory and has reacted higher from the support level.

Conclusion:

At the time of writing ES is trading at a support level and it remains to be seen if the traders are willing to seriously bid for the market here. Support levels usually lead to at least some sort of rallies but there needs to be follow-through after the initial reaction. In that sense nearby resistance levels can be problematic as they tend to invite selling. There is a resistance level at 2052 while the violated trendline is at 2050. In addition, the 4.67% drop in the Semiconductor stocks could make the market participants careful today. The wedge formation is pretty much violated after today’s move lower. Only if we see a strong rally higher and a close inside the formation is the technical picture salvaged.

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.

[HFblogNews]

Date : 27th March 2015

EURGBP CORRECTING LOWER AND BREAKING SUPPORT LEVELS.



I suggested in my previous EURGBP analysis that as long as the market keeps on moving lower and there is no price based evidence to the contrary there is no hurry to close the short trades. I noted that an exception to this would be price hitting the 0.7022 support level which could well bounce the price higher and therefore is a logical target level. Price is in a downtrend and we should be looking to sell rallies as long as the approach works. However, once the 0.7022 target is hit the pair is at a major consolidation level and selling rallies might get trickier. The pair indeed hit the 0.7022 target level and rallied higher quite substantially. Selling rallies has definitely been trickier since then as price pretty much rocketed through the resistance level.

The pair is trading below a weekly low from February at 0.7340 after trying to penetrate the resistance area above the level. Now that EURUSD is reacting lower from a resistance EURGBP is moving lower as well. They key support levels are 0.7220 (weekly pivot candle high) and 0.7022 a historical support. Nearest resistance levels are at 0.7340 and 0.7405. Weekly close above the pivotal weekly candle high is a longer term bullish sign as this has not happened since October last year and could signal that the pair has a bottoming process ahead.



EURGBP, Daily

Run up higher was followed by a relatively narrow range candle in the upper Bollinger Bands two days ago. In yesterday’s trading price closed below previous day’s low suggesting a turn around. Stochastics is overbought and signalling a momentum change, thus supporting the bearish view. Today price has moved outside the rising trendline and March 18th daily high and 23.6% Fibonacci retracement level coinciding.



EURGBP, 240 min

Price has indeed broken the steeper trendline (grey line) and has now reached another that can be drawn by using the pivot points at A and B. There is a resistance level at 0.7318 that was created when the pair found support at the now violated trendline (grey). Next intraday support is at 0.7260 while the 61.8% Fibonacci level suggests support at March 19th low at 0.7150 (point B).

Conclusion:

Long term: Weekly close above the pivotal weekly candle high is a longer term bullish sign as this has not happened since October last year and could signal that the pair has a bottoming process ahead. This could lead to a double bottom or to price creating a higher low. Time (and price action) will tell. The range between 0.7022 and 0.7105 is definitely worth keeping an eye on should the price move that low. Buy signals inside this range would indicate demand at those levels.

Short term: Price has violated 23.6% Fibonacci level and a support level created by a daily high and a secondary trendline. Therefore it makes sense to look to sell the rallies intraday. This would give us an opportunity to follow price action resistance levels identified in the above charts, especially 4h chart, and see if market is acting weakly or strongly. I would look at levels below 61.8% Fibonacci level as target as they should attract buyers.

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.

[HFblogNews]

Date : 30th March 2015

WEEKLY HAMMER AT SUPPORT SEND USDCAD HIGHER.



USDCAD (weekly) has been moving sideways since the beginning of February. The proximity of the year 2009 high has caused the sideways move. I suggested in my analysis at the time that USDCAD should move above the latest highs as US economy is stronger than the economy in Canada. The fact that USDCAD has maintained the support well and has now created a weekly hammer candle at the support supports my view. Bears might point out that Stochastics oscillator and RSI (7) have created lower highs and therefore signal that the momentum is waning. This however, is what happens each time price moves sideways. Therefore, oscillators do not tell us anything we wouldn’t know by reading price action. Nearest support and resistance levels are at 1.2409 and 1.2835. The year 2009 high at 1.3064 would be the next major resistance once price moves beyond the 1.2835.



USDCAD, Daily

Price action in the daily chart points to the upside. USDCAD has found support from the area near the 38.2% Fibonacci level and the lower Bollinger Bands. Last week Stochastics moved to oversold territory and the 50 day moving average catched up with the price. Friday’s close well above the hammer candle high was a bullish sign and created a hammer candle in the weekly chart as well.



USDCAD, 240

After being held back by the 50% Fibonacci level and a pivot high price is now breaking higher. This is very much in line with the bullishness in daily and weekly charts. The pair broken out of the wedge formation and projection from the formation points to the resistance zone between 1.2724 and 1.2760. Support levels are at 1.2621, 1.2531 and 1.2409.

Conclusion:
Long term technical picture is bullish as institutional buying has created a hammer candle at the support. The latest weekly low was also higher than the pivot low in the weekly chart from the mid February. Short term picture supports this as price has broken out of a wedge formation in the 4h chart and has closed above the Friday’s daily hammer candle. As the setup in the higher time frames is favourable I am looking for pullbacks to technical levels at 60 and 15 min charts. The range at 1.2724 – 1.2760 is my target for this price move.

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.

[HFblogNews]

Date : 1st April 2015

USDJPY MAKES HIGHER DAILY LOWS.



USDJPY has been moving sideways since November last year and is now reacting higher from a support at 118.33. Since then the pair has briefly penetrated the November high and has created a series of higher weekly lows between 115.57 and the latest low at 118.33. This suggests that the pair should move higher once the consolidation period has ended. A trigger for this could be further monetary easing from the Japanese central bank. Even though the pair has reacted higher from support it is still relatively close to the support levels.



USDJPY, Daily

USDJPY moved down to 118.33 last week but the move rejected and created a hammer candle. Since then price has reacted higher as is usual after such a move and has now retraced back to this pivotal candle with reaction higher in today’s trading. Today’s low coincides with a 50 period SMA, the lower Bollinger Bands and a rising trendline. This suggests that the pair will move higher over the coming days. The nearest support is at 119.41 and the important resistance levels at 121.55 and 1.2202.



USDJPY, 240 min

After breaking out of a wedge formation the pair was consolidating for a while. This consolidation pattern created a support from which price has now reacted higher from. Now we have a hammer candle and some follow through but price is struggling with a minor resistance at 120. Stochastic oscillator is at 34 points and is about to cross over the signal line to the upside. The channel width points to an area between resistance levels at 121.09 and 121.50.

Conclusion:

USDJPY has been a bit sluggish to move higher over the last three to four days, even though we have had bullish signals and the market has been trading close a support. This raises some questions but as long as this pair stays inside the bullish channel (see the daily chart) and makes higher lows it is safe to assume that the pair will move towards my short term target area between 121.09 and 121.50. Price has found support from a 50 period SMA and a previous 4h resistance. Should there be retracements to this level I would look for buy signals with a target at 121.09. If there is no bigger retracement I will be looking to take benefit from smaller timeframe technical levels.

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.

[HFblogNews]

Date : 2nd April 2015

UK CONSTRUCTION PMI BELOW EXPECTATIONS.



GBPAUD reached a historical resistance at 1.9697 (a spring 2009 low) in February and has since reacted lower from this level. Over the last two weeks the pair has been rallying strongly and is nearing the resistance area again. Fundamentals and the strong weekly trend support the bids in GBPAUD but price has rallied strongly and reached a potential resistance level. Therefore it pays to monitor the market more closely and time the entries at support levels in pullbacks.

Sterling has been trending higher against the Australian dollar as it is likely that the Reserve Bank of Australia will cut the interest rates either in April or May while the UK economy is rather strong. A recent editorial in The Australian that said “a cut in interest rates either next month or in May is a virtual certainty,”. A 25 basis points cut at the May policy review is likely, which would take the cash rate to a record low 2.0%.

Australian economy is slowing while the commodity prices have dropped significantly. Growth has slowed, with GDP rising 0.5% q/q in Q4, but slowing to a 2.5% y/y pace from +2.7% y/y in Q3. The RBA’s Index of Commodity Prices has tumbled. The index has fallen by 20.6% y/y in SDR terms through February, driven by lower prices for bulk commodities. At 72.5, the index is at its lowest level since December 2009, extending pullback from a 124.7 peak in July 2011. In addition, inflation has slowed, with CPI dropping to 1.7% y/y in Q4 from 2.3% y/y in Q3.

At the same time UK data improves and even though the elections cause a certain level of anxiety in the markets (no one likes uncertainty) the GBPAUD has been rather strong lately. Incoming UK data has been rather strong. The future data should be positive for sterling, though concerns of a hung parliament outcome at the May-7 general election are likely to crimp enthusiasm for the UK currency and assets, especially if the Scottish Nationalist Party ends up holding the balance of power. UK Markit manufacturing PMI survey came in at 54.3 in March, fractionally above our survey median for 54.3 and improving from February’s 54.1 reading. This is the third consecutive month of improvement, affirming that activity in the sector is reaccelerating after a soft patch in Q4 last year.

UK construction PMI was much worse than expected at 57.8 in March, down from February’s 60.1 and well below the Reuters median forecast for 59.5. The 2014 overall average was 61.8, so the data points to a drop-off in momentum. The decline in March was largely reflective of a slowdown in civil engineering activity growth, which the survey found may be related to uncertainty ahead of the too-close-to-call May-7 general election. Job creation also remained below 2014 levels. However, at 57.8 this still signals a robust level of activity while business confidence rose to a nine-year high. Sub-contractor charges rose at the fastest pace since the survey began in 1997. Overall, the strong outlook offsets the decline in the headline, and the slowdown in activity in some areas may pick up after the May election.

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.

[HFblogNews]

Date : 3rd April 2015

EURUSD APPROACHING RESISTANCE AFTER NFP DISAPPOINTMENT.



The EURUSD rallied after the combination of a disappointing NFP release, and downward back revisions in the figures. The pair is approaching a resistance area created by a combination of technical factors. The resistance levels of 1.1052 and 1.1098 coincide with 50 day MA and the upper Bollinger Bands. This resistance has been tested twice and after the latest test EURUSD made a higher low. This suggests the pair will be trying to move higher from here. The next important daily resistance levels are closer to the 1.1460 which could well come into play now that the NFP release was such a disappointment.

The analysts expected an increase of 246k jobs but we got only 126k. The 126k U.S. March payroll rise with 69k in prior downward revisions and a 0.2% drop in hours-worked, combined with big goods-sector declines for payrolls and hours-worked lowered production estimates for March.

Price action at the resistance levels is going to be interesting to follow. If the pair corrects lower from it I expect the correction to be rather subdued. The surprisingly weak jobs figure means that now the Fed doves have further evidence of softening economy and a better case to postpone the rate hike. This is seen in the markets across the board as the USD is being sold against other currencies across the board.

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.

[HFblogNews]

Date : 13th April 2015

EURAUD BOUNCING HIGHER FROM SUPPORT.



EURAUD, Weekly

The pair has been making lower highs and lower lows since December 2014 suggesting that the long term momentum is to the downside. Unless the pair creates a higher low at 1.3725 the weekly picture remains bearish. The 38.2% Fibonacci retracement coincides roughly with the recent pivot high while the 50% level is approximately at level with a pivot candle low (1.4476) from February this year. This suggests to me that the resistance area between 1.4340 and 1.4530 is strong and any near term price advances to the level are likely to be met with selling. Nearest important support levels are at 1.3725 and 1.3190.



EURAUD, Daily

With the trend to the downside and the pair at support the Stochastics is now oversold. Should today’s candle close above the Friday’s high we’d have both a price based bull signal and Stochastics closing above its 3 period MA (red line). There could be some resistance around the 1.4076 level as it has acted as a support and resistance in the past. Should the pair move beyond this level the next resistance area would be in the region of upper Bollinger Bands and the upper end of the regression channel.



EURAUD, 60 min

The pair has broken out of the descending regression channel and has since moved above recent reaction highs at 3849 and 3883. Now that EURAUD is retracing back to those levels I expect that there is a good chance market will find support at those levels.

Conclusion

Longer term picture is pointing to the downside as the pair makes lower highs and lower lows. This setup should therefore favour those looking to sell the rallies. Resistance levels between 1.4340 and 1.4530 could work out as short entry level should the market rally there. Short term traders could take advantage of a potential momentum reversal at 1.3849 and 1.3883 with a target at or near 1.4050. Look for momentum reversal signals to confirm the analysis.

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.

[HFblogNews]

Date : 14th April 2015

GBPNZD RANGING ABOVE SUPPORT.



GBPNZD, Weekly

The pair has just recently moved higher from weekly support level 1.9379 while another one supported price at 1.9244 sent price higher in the beginning of January. For the last three to four weeks price has been bouncing between this support and a resistance created by a weekly low (at 2.000) from December last year. Stochastics is oversold and price action takes place near lower Bollinger Bands suggesting the pair should have more upside than downside potential. On the bearish side however I should mention the fact that the pair creates lower weekly highs suggesting selling pressure coming in at fairly close to the support. This is not a very bullish sign and could lead to further consolidation at support or eventually price breaking lower.



GBPNZD, Daily

Price is reacting lower from a resistance at 1.9700. This resistance is created by a daily pivot candle from April 7th and coincides with a 50% Fibonacci level at 1.9691. Stochastics are pointing higher and the RSI has created a higher low while the latest low at 1.9380 was roughly equal to the low from March this year. This bullish divergence supports the upside bias but the price needs to break above the current resistance in order to create a higher high. Should the pair keep on making lower pivotal highs the pressure against the support would increase and the support could break. It is therefore essential to follow the price action over the coming days.



GBPNZD, 240 min

The four hour picture shows in more detail how price has been reacting to the resistance and other technical factors. Price has broken out of the downward sloping channel but has then run into a resistance. After this the pair created a pivot from which it has now reacted lower but has been (over the last two complete bars) been supported by the channel high and a 50 period moving average. Stochastics, RSI and MFI have all rolled over confirming that there isn’t much upside movement or momentum over the last few bars. This suggests the best (low risk) buying opportunities would be at lower levels. As per usual it makes sense to be a buyer at a support and look for selling opportunities at resistances.

Conclusion

Long term picture (next four to six weeks) suggests that this market has more upside than downside potential as it is trading near an important support area and has been consolidating above it. However, should this sideways movement keep on for an extended period of time the probability that the market will move lower does increase. Also, I don’t like the fact that we have lower weekly highs. This kind of price action is not bullish as it suggests indecisiveness in this market. We would need to see price starting to build a series of higher lows and breaking above the previous weekly highs in order to get a confirmation for the upside biased long term view. The short term picture (from intraday to next few days) has a bullish element as it has broken out of the downward channel but price is currently trading just below a resistance level. As we should always look for selling opportunities at resistance levels and buying opportunities at supports I am keeping an eye on smaller time frame sell signals at 240 min Bollinger Bands and look for buy signals in the region of 1.9460 support.

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.