"Fort Financial Services"- fundamental and technical analysis
31.08.2015
Fundamental analysis
The American currency continued its winning streak at the end of the week – the dollar index basket closed the trades at the mark of 95.81. The Japanese, European and the US stock indices growth have added arguments for the concerns reduction about the world economic growth, but the US GDP strong data and other indicators increased the demand for the US dollar which further strengthened against major opponents. The second quarter US GDP second estimate was revised in the positive direction by 1.4% to the level of 3.7%. The US jobless claims number has declined by 6 thousand for the last week. Positive economic data once again led investors to think about the federal funds rate increase at the FOMC September meeting.
There was the world leading stock markets moderate demand during the day which also put pressure on the funding currencies that are the euro and the Japanese yen. In this context, the US currency enjoyed confident demand against its major competitors. As a result, the EUR/USD pair has finished the trading day with the price decrease, the pair GBP/USD had declined by the end of the day and the USD/JPY had increased.
Technical analysis
Euro (EUR)
General overview
There was again the Germany and the US negative bond yields which makes investments in the US assets attractive. Investors are studying the Germany inflation data. The CPI increased to 0,0% from 0,2% that was earlier.
The euro corrective decrease reached the strong support level of 1.1260 that was broken downwards. The small rebound upwards was formed. The resistance level of 1.1260retesting was followed by the rebound downwards.
The price is finding the first support at 1.1150, the next one is 1.1050. The price is finding the first resistance at 1.1260, the next one is at 1.1420.
There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen shows a downward movement and the Kijun-sen shows a horizontal movement and form a “Dead Cross”. The downward movement will be until the price is under the Cloud.
The MACD indicator is in a negative territory. The price is decreasing.
Trading recommendations
If the price fixates below the support 1.1150, it may continue the downward trend in the short term. The potential targets are 1.1050 and 1.0925.
Pound (GBP)
General overview
The UK National Statistics Office published the second GDP estimate for the second quarter. Most of macroeconomic releases pointed to the fact that there will not be revision in the positive direction, as the unemployment in the second quarter has grown by 0.1%. On the other hand, the United States revised the first GDP estimate by 1.4%.
Sellers have broken through two strong support levels of 1.5460, 1.5390.
The price is finding the first support at 1.5300, the next one is 1.5200. The price is finding the first resistance at 1.5390, the next one is 1.5460.
There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen shows a downward movement and the Kijun-sen shows a horizontal movement and form a “Dead Cross”. The downward movement will be until the price is under the Cloud.
The MACD histogram is in a negative territory. The price is consolidating.
Trading recommendations
The sellers need to break below 1.5300 for a steady downward movement. The way to the marks 1.5200, 1.5100 will be opened after this breakthrough.
Yen (JPY)
General overview
The Japan retail sales rose by 1.6% y/y in July, still the growth by 1.1% y/y was expected. Last month the unemployment rate was 3.3%, which is 0.1% lower than in June and below economists' expectations by 3.4%. Household spending declined by 0.2 % in July with the price correction after a decrease by 2.0% in June. Economists had expected an increase by 1.0%.
The pair shows the dollar’s strengthening. The resistance level of 121.60 was tested.
The price is finding the first support at 120.40, the next one is at 119.20. The price is finding the first resistance at 121.60, the next one is at 122.40.
The price is in the Cloud and it is under the Chinkou Span. The Tenkan-sen and the Kijun-sen show an upward movement and form a “Golden Cross”.
The MACD indicator is in a neutral territory. The price is growing.
Trading recommendations
We recommend going long with the first target – 122.40. When the price consolidates above the first target it may go to the level of 123.50.
Franc (CHF)
General overview
The Swiss GDP for the second quarter increased by 0.2% q/q and rose up by 1.2% y/y. The data was better than economists' expectations by 0.1% q/q 0.8% y/y. The private consumption growth was 0.3%, investments in equipment + 1.5%, Swiss exports fell by 0.2% in the second quarter.
The US dollar is recovering its positions, reaching the strong resistance level of 0.9650. This level was short-term broken upwards then there was a rebound downwards.
The price is finding the first support at 0.9540, the next one is at 0.9370. The price is finding the first resistance at 0.9650, the next one is at 0.9750.
The price is in the Cloud and it is above the Chinkou Span. The Tenkan-sen shows an upward movement and the Kijun-sen shows a horizontal movement and form a “Golden Cross”.
The MACD indicator is in a positive territory. The price is growing.
Trading recommendations
We advise to long with the first target - 0.9650. When the pair consolidates below the first target, we can open deals to the level of 0.9750.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman.