Daily Market Analysis from ForexMart

[Andrea ForexMart]

EUR/USD Fundamental Analysis: May 21, 2018

The single European currency had a quite unfortunate week due to its own fundamentals. The predicted break of the EUR/USD pair under the 1.20 mark indicates the possible weakness to be nearly accurate. In the previous week, the euro/dollar pair had lowered down by 200 pips which are fairly huge considering that market players employ a tight 200 pip range in the past few weeks prior to that.

The tight range lasted for a long period of time and showed that the breakout would be massive. The upcoming data from the European region remains to be sluggish, which implies that there is a little bit of possibility for the QE tapering to happen in the next few weeks and led this speculation to a sell-off in the euro this week.

Also, the dollar resumed gaining strength in general combined with the weakening of the European currency that pushed the pair towards the 1.20 zone and beneath the 1.18 level amid the trading course of the week. As the currency pair closed the week under the region of 1.18, it indicates further weakness in the near term.

Ultimately, this week would have a slight pause for the euro and the focus for next week is the FOMC minutes of meeting which is widely anticipated to continue its hawkishness, pointing to further rate increases in the future. The market had already priced for two more rate hikes while the markets are expecting that the Fed will announce the raise at the end of the year. Aside from that, the inflation report hearings from the EU is expected but none of these data are in favor of the single currency. Hence, the euro would likely resume its sluggishness at the 1.15 mark.

[Andrea ForexMart]

GBP/USD Technical Analysis: May 22, 2018

The British pound slightly declined at the beginning of the Monday session as it reached the level of 1.34 before finding buyers. Since there are still signs of support, it looks like it supported the fight for buyers. Yet, there are some major concerns above.

Trading the British major currency pair slid down towards the psychological level of 1.34 before going up again. It has shown a significant amount of bullish pressure but there could also be signs of significant resistance in the previous uptrend line, established in the yellow ellipse on the chart. This gives a significant amount of resistance with a high probability of a rollover then we could look for the level 1.34 below, which was also supportive in the past. A breakdown below would allow the market for a decline up to the level of 1.33 and further to 1.30.

We should be cautious of any rally, at least not until a successful breakout to 1.3550. For now, we could reverse the whole situation completely, but I think there will also be a continuation of dollar strengthening in the short-term, which is likely to extend for the rest of the summer and continue its rally in the U.S. When a breakdown occurs below the uptrend line, this could become a problem for the British pound. Although, it may not necessarily be a problem as much as the strengthening of the U.S. dollar. I would look for some type of exhaustive candle near the area of 1.3475 to begin shorting this pair.

[Andrea ForexMart]

NZD/USD Technical Analysis: May 23, 2018

The New Zealand currency rallied during Tuesday’s trading session and further reached the level of 0.6975, prior a rollover and wiping out throughout the day. The ascending triangle was broken in the previous session and currently testing the possible support area. Nevertheless, the NZ dollar looks like to continue struggle under the hands of the US dollar since America have higher interest rates that could continue dominate the greens in general. Moreover, the commodity markets would likely to suffer also except the oil.

Looking forward, the market has the potential to cut through the 0.70 zone based on the trend from the ascending triangle. A move closer to the 0.70 region will enable us to meet more aggressive sellers that would take advantage of the cheap greenbacks. In this regard, selling the rallies could be an option and it takes some time before the break down of the market to the 0.6850 mark again. Eventually, it will test the 0.68 zone which serves the bottom of the longer-term consolidation.

The NZD/USD pair should be expected to be volatile but with some downward slant generally. While most rallies will not last long.

[Andrea ForexMart]

EUR/USD Technical Analysis: May 24, 2018

The euro had a significant decline during the Wednesday session and broke the area below 1.17. It seems that the market will proceed to lower, which could lead to the downfall of the euro. There are other problems with the European Union, as well as, Italian concerns.

The euro has broken lower as mentioned earlier and it seems that it goes down much lower. The major support level below would be the 1.15 level and will likely remain to be the goal. Short-term rallies could offer opportunities in selling this market against the greenback. The level of 1.1825 is slightly a ceiling although, it seems difficult to see a situation where there is a continuous short-term rally and lead to exhaustion later on.

If the pair breaks below the area of 1.15, the market could take out quite a bit of a value in there. I suggest to be careful about relying on the rally with a lot of negativity from the European Union as a whole. As the interest rates in the United States increases, it seems that greenback will gain more attention and have an effect on the forex market. There is a tendency for the market to look for the bottom as the euro declines importantly that could easily deceive new traders. The downtrend may be significant but it seems difficult to be sustained in longer-term and at least try to reach the level of 1.15.

[Andrea ForexMart]

GBP/USD Technical Analysis: May 28, 2018

The British pound against the U.S. dollar is moving higher towards the area of 1.3350 in a calm manner during the Monday session. Hence, we can expect a muted Monday session since the Memorial Day and the U.K. has also extended their Spring Bank holiday. Since most major pairs are not active at the beginning of the week, there is very low volatility for the week and less economic calendar for most of the week. The first data to be released will be on Wednesday, followed by Non-Farm Payrolls on Friday. Investors will monitor carefully for any signs that could induce volatility for the week.

The British major pair is trading close to the cyclical lows of 1.3305 at the last week of May after scheduled data for the week failed to support against the greenback. The macroeconomic of U.K. is influenced by two significant headlines including sluggish economic growth and decelerating inflation. The inflation target of 2 percent by the central bank is moving at a faster rate in line with the bank rate. This is due to the inflation-adjusted real wage amid the stale growth in the first quarter of the year. Both actions support the argument of the Bank of England following the bank rate with the forecast of Bank rate hike by 0.25% in February next year referring to the efficiency of money market rates.

Sluggish inflation of the Sterling is not so good as it gives them more time for the BoE before acting on the interest rates. The Bank of England Governor, Mark Carney, and the Monetary Policy Committee (MPC) external member, Gertjan Vlieghe, have the same sentiment when it comes to the monetary policy where they deem the interest rates to go up gradually in the next few years. The bearish trend resumed as exhibited on the daily chart after a period of consolidation at the beginning of the month, but has not yet found a bottom following the previous decline where the indicators showed moderate easing. We should anticipate the support level at 1.3280 / 1.3245 and resistance level at 1.3365 / 1.3400.

[Andrea ForexMart]

USD/JPY Technical Analysis: June 5, 2018

Yesterday, the U.S. dollar swayed sideways and reached the level of 109.50. The next target will probably be the 110 handle given a large whole number. It has shown some amount of resistance recently.

The greenback moved sideways against the Japanese yen during the Monday session, which was highly bullish in the past few days. As expected, the pair formed a hammer pattern on the weekly chart and the pair is likely to rise higher when it breaks the level above. It would probably reach the level of 110 and until it does, I would be cautious before placing a lot of money on it. If the pair declines from here, it would not be easy to short this pair since there is a lot of support found below.

The market will probably be sensitive in regards to trading the pair, given the rising concern on the trade war with the United States. If the market becomes anxious on the trade war, this is likely to affect the market with the greenback have a hard time in general. I think short-term pullbacks would offer a lot of opportunities, which can be seen in the present time. Thus, I would think twice before placing trades at least until a successful breakout on the said level of 110. We should bear in mind that the pair movements will be relative to the risk appetite that is why we should give attention to the stock market especially the S&P 500. Thus, it won’t be easy to work on this pair. If it rallies on the market, then this pair will probably rise higher as well.

[Andrea ForexMart]

GBP/USD Fundamental Analysis: June 6, 2018

The British pound is being traded above the 1.3400 level prior to the upcoming London market session driven by better risk sentiment. The currency has reached new highs this month after reaching as low as 1.3204 on 29th of May. It reached the levels higher than 1.3400. The dollar has further weakened amid better market sentiment which has a big impact on the Sterling Pound. The news on amenability to discuss the possibility of tapering the QE by the central bank could support the currency, yet this still remains on the hopeful list. Nonetheless, traders will probably opt to buy across the Eurozone that could push the pound higher as a consequence. There is a positive action in the previous two trading session in major macro data releases and the U.S. greenback could be on advantage today if the pound falls behind or the macro data from the U.K. turns out bearish.

Traders are looking out for Brexit related news, yet, Prime Minister may delays the publication of the government’s plan until the leader’s summit this month. Let along the upcoming GBP data on London is insufficient to induce momentum, except for a correction to the lower boundary of the channel.

There are speeches expected from the BOE Monetary Policy Committee member Silvana Tenreyro at 10:40 GMT and MPC member Ian McCafferty speaking at 16:00 GMT. Meanwhile, traders will center their attention to the US Trade Balance figures alongside Nonfarm Productivity and Unit Labor Costs for the first quarter to be released at 12.30 GMT. On a technical note, the pair will rise higher and a major breakout is yet to happen. Readings for short-term will give more gains in the future. We can expect the resistance level to be at 1.3420 / 1.3460 and support level at 1.3370 / 1.3335.

[Andrea ForexMart]

GBP/USD Technical Analysis: June 7, 2018

Yesterday, the British pound rose significantly after breaking the level of 1.34. It seems that there are signs of continuing the current trend. There is a massive support found at 1.33, at least in the short-term, which has been an important level more than once.

The British currency shows signs of strength a bit of a relief given the uptrend. The initial target would be above the level of 1.35 but if it can break higher then there is a chance for the price to reach 1.3650. Short-term pullbacks would offer a lot buying opportunities below and it seems that the market is trying to turn around for short-term. There are speculation of dollar shortage because of global liquidity that makes it unstable to be considered for long-term. Yet for short-term, it seems that buyers are leading the trend.

If it successfully turns around then we could break the level below 1.33 to test the level of 1.3250 and potentially reach 1.30. Choppiness would still be a problem that makes it ideal to trade in small positions. Then, once the market adjusted to how we want it to be, we can increase our trades. If the price break above 1.3650, this would be highly bullish and allows the price to further move. In the given rate, I am looking for a “buy-and-hold” strategy. For now, we can expect volatility at the very least in the next few days. The market will probably continue to give emphasis on short-term trades.

[Andrea ForexMart]

GBP/USD Fundamental Analysis: June 11, 2018

The pound/dollar pair continued to trade around the 1.3430 region on the back of the failure to create bullish momentum in the previous week, as it was beaten by the major handle and the markets are waiting for further progress in Brexit this week. Due to the scheduled FOMC rate hike in the upcoming week, the interest rate differential of the GBP and the USD is predicted to move in different directions which could hold the Pound on its starting position and push the British currency into the recent lows. Following the recently rejected Irish border solution, market participants await for further news within this week while the United Kingdom continue to negotiate in looking for the middle ground for the hard-line Brexiteers and the EU leadership in Brussels. Nevertheless, Prime Minister Theresa May was caught in between and trying to find fair solutions for both sides.

The upcoming week is projected to be really busy for the Sterling pound since 4 out of 5 trading session this week brought extreme impact to the UK calendar that could support a high level of volatility for market players. Today has plenty of data for Britain which will be all published at 08:30 GMT, however, the focus will be on the Manufacturing Industrial Production data which is expected to remain unchanged at 2.9%. The US session today appears to be in smooth sailing according to the economic calendar, but traders might deal with the G7 summit blowout, wherein US President Donald Trump leave the summit earlier and depart the US’ support of the G7 communiqué, following a Tweet from POTUS aboard Air Force One heads to Singapore for the Trump-Kim summit.

At the same time, the figures for Average Earnings Index +Bonus (Apr), Claimant Count Change (May), Core CPI & PPI input and Core retail sales in the next three consecutive trading sessions. Moreover, the daily chart indicates that the GBP/USD currency pair corrected higher from the lows of 1.3205 alongside the diverging technical oscillators. On the other hand, the Relative Strength Index (RSI) had an unexpected move towards the oversold area and bounced back to the GBP, which descends to the levels of the beginning of last week. The Slow Stochastic resumed moving in an upward trajectory. The daily chart of the 50-day and 100-day moving average formed a death star crossover, this means that there is an initial downside potential of the Cable pair to break the 1.3300 region prior attacking the area of 1.3200. The upside of the pair is necessary to break back above the 1.3380 to the 1.3450 target, which is the last week’s high.

[Andrea ForexMart]

GBP/USD Technical Analysis: June 18, 2018

The British pound was able to dodge the immediate impact of the rise of the dollar while the euro dropped by two significant points that dominate the market in the previous week. The dollar gained from the rate hike which started by the Fed and the positive outlook of the Fed in the economy.

The hawkish sentiments gave t chance to the dollar to rise and the dollar bulls to plan ahead with two more rate hikes to look forward to. The Fed gives similar signals which still yet to be seen if they would continue the process and they would implement this in a specific period of time later on. We have witnessed that the rate hike would have minimal impact on the market, especially on the pound.

It seems that everything is going smoothly in the UK as the Brexit negotiation starts to advance and there are no signs of risks yet. Hence, the pound maintained its position in the support area despite the strengthening of the dollar and activities in the eurozone. The European Central Bank decided to extend the easing program which in turn, weakened the euro. Although, these things did not really affect the pound as it continues to trade close to the area of 1.32.

There are some strong purchasing in this area, as well as at the level of 1.30. Once this is achieved, the lead will be in the hands of the bulls which is likely to be maintained in short term. It seems that there is also no major event to affect the movements and we can say that the price is in consolidation and persists to be within the range for the day.