Thread: Daily Market Analysis from ForexMart

After the cut rate handed by the BoE so as to avert the unfavorable impact brought by Brexit, the sterling pound remained closed at Friday.

The GBP/USD continued to perform a short-term bearish pattern. The price of the pair is placed between 1.3000 and 1.3100 levels. Following the support stands at 1.2900 while the resistance is established at 1.2900.

The momentum indicators, MACD and RSI disposed a sell signal which changed the indicators slightly on Friday.

The trading instrument continuously move below the 50,100 and 200 EMAs as presented in the 4-hour chart.

The GBP/USD is expected to mark a downward trend towards 1.2900 since the pair's outlook would gain a temporary growth close to 1.3175 at which the 50 and 100 EMAs exists.

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The USD/JPY pair plummeted by 11 points, trading at 102.34 after the release of China’s inflation data proved to be better than its forecast. This helped the yen to rally since the Chinese economic situation might see some improvement. Investors are now awaiting more data from Japan, Bank of Japan comments and government statement about stimulus programs. The JPY was initially sent higher by investors, however its fiscal stimulus failed to meet the high expectations set by the market. The USD, on the other hand, went up by a significant amount following a positive US labor market report, erasing most of JPY’s early-week gains.

The Japanese economic stimulus remains as the main focus since BoJ will be releasing its Summary of Opinions from the monetary policy announcement last July 29. This particular BoJ statement has previously caused the JPY to surge since the new policy fell short of its previous expectations. The Bank of Japan is currently in a tight position as it has little room for more stimulus after its easing regulatory policies. However, BoJ predicts that it will be able to reach its headline inflation rate by 2017. However, only its officials believe in BoJ’s ability to reach its targets, since both businesses and consumers are in disagreement with BoJ’s prediction.

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The National Australia Bank indicated a downward direction in Business Conditions. Aside from it, the financial markets sustained under pressured condition just as when oil prices had a markdown.

AUD/USD established a positive result on Tuesday since the movement of the financial instrument progressed upward near its upper limit. The resistance stands at 0.7700, the support can be seen at 0.7600.

As expected, the MACD is situated in the positive zone. MACD histogram ascended and determined the strength in the buyers. The RSI arrived in the overbought condition.

The price of the pair oscillates in the 1-hour chart with 50-EMA. Its 50,100 and 200 day EMAs remained to upsurge, therefore all EMAS are in a higher position.

AUD/USD is expected to have a short-term recovery close to 50-EMA or 0.7600 level whereby the pair is overbought and the currency price is going to have a growth and increase in the investment price.

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The EUR/JPY pair went down further after Wednesday’s session, trading at 113.006, going down by 0.264 or -0.23%. The tight trading range remained as a result of the absence of major economic and political news from Japan and the eurozone. However, Japan’s Tertiary Industry Activity Index was released before the opening of Wednesday’s session and showed an increase by 0.8%, exceeding the initial report expectations which only predicted a 0.3% increase.

Volatility and volume levels were particularly light during Wednesday, since the Japanese public holiday on Thursday will mean closed markets, with volumes expected to be below average. Some major market players will also be having an extended weekend, as most of them will be absent on Friday as well. The EUR/JPY is expected to weaken further due to disappointments caused by stimulus programs from BoJ and the Japanese government, and the ECB is not expected to release another statement until September 8.

The overall trend prediction for EUR/JPY is a decrease in its rates, and is expected to continue, with a possible post-Brexit low of 109.519. An increase in selling pressure is also expected to manifest during the latter part of this year, especially once UK files Article 50 and formerly relieves its membership in the European Union.

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Current updates about the increased in the funds rates of U.S Fed for this year seems uncertain for the market since the pair USD/JPY gained a lower position and its trading position swing lowers and reached a downtrend risk with 101.00 level of support.

The resistance level of the pair is positioned at 101.40, the support can be seen at 100.40

The momentum indicator MACD turn over the negative zone whereby identifies the seller's strength, RSI has been settled in the oversold position.

Presented in the 4-hour chart, the USD/JPY is inclined to the 50-EMA but move away again from it though the 50-EMA sustained an overwhelming level of resistance placed in the region of 102.00. The pair intersects in the 50, 100 and 200 moving averages directed towards the lower level of the selected time frame.

Since the pair is highly pressured, the recent price of the pair is expected to expand in the 102.00 economic region where the 50-EMA is spotted. The pair's price may also move back and forth at the level of 100.40.

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The USD/JPY pair weakened further following the release of the Jobless Claims Report, with traders clamoring for a response from the Bank of Japan. Should the weak state of the pair continue, then the BoJ will have to release a statement sooner or later.

Thursday’s session showed a remarkably low volatility in the market which only became active after the release of the US Jobless Claims Report. A positive US labor data strengthened the USD, causing traders to push prices upward. The instrument rallied at 101.40 and broke the level, with the resistance coming in at 102.50 and support levels at 101.40. The MACD is currently at the center level, and a histogram entry at the positive side will mean an increase in buyers’ strength. On the other hand, sellers will regain its control of the market should the MACD go over the negative side. The RSI indicator is projected to increase after going over the oversold area.

The 50 and 100 EMAs were broken by prices in the 1-hour chart, after which the EMA pairs further increased its strength. The 200-EMA now acts as a barrier for the USD/JPY pair, with the moving averages going down within the said time frame. The USD/JPY will possibly move to test the next bullish target at 102.00, along the area of the 200-day moving average.


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Subsequent to the decision of the RBNZ to implement an interest cut rate of 0.25%, the New Zealand's currency increased on its one-month high. Upon arriving at its highest level, the NZD/USD have regressed towards a downward state. The mark price directed from 0.7335 to 0.7225. The resistance stands at 0.7250, the support can be seen at the level of 0.7150.

As shown in the histogram, MACD sloped move towards a lower point and the pair signalled a seller's strength. Furthermore, the fluctuated in the overbought position.

The price of the pair is heading to 50-EMA as indicated in the 1 hour chart . The 50, 100 and 200 EMAs ascended to the top.

Analysts viewed the pair to be bearish and remained to be under-pressure. Trader's stop is situated at the 0.7150 region.

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The AUD/USD pair ended last week’s session below its recent high of 0.77, trading at 0.7646. However, the pair remains strong as it enters into a new trading week after traders adjust to Friday’s sudden decrease, although China will be weighing in on the markets following a possible stimulus from PBOC. On the other hand, the RBA reduced its rates by 25 bps and the RBNZ followed suit, applying a 25 bps reduction rate as well.

Prior to this particular move of New Zealand and Australian central banks, RBA’s Glenn Stevens previously denied that cutbacks on interest rates can help in improving the Australian economy. Stevens also added that Australia’s economic slowdown is only natural, given its constant growth during the past few years. He also noted that Australian households will take a while before they can start spending again since a significant amount of domestic debt has put households in tighter positions.


The RBA representative also added that Australia’s lack of a demographic dividend has contributed to the slowing down of the GDP growth. The demographic dividend is the slow growth of the overall working population as compared to the general population growth, a problem which is also being dealt with by Japan. However, Steven’s speech did not have any impact on the AUD, which is up by 0.4% against the US dollar after the USD decreased its value following the release of the US productivity data since traders have already speculated that the Federal Reserve would not have an increase in its rates.


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The NZD/USD pair weakened its stance and traded down at 0.7177, although this is still a relatively strong value compared to its counterparts. Investors are taking into consideration China’s mixed signals and the lack of stimulus from the People’s Bank of China. The RBA and RBNZ statements on its rate decisions are making investors and traders uneasy. The retail sales volume rose by 2.3% last June, which is the biggest increase in the last nine years. This is in comparison with a 1% increase last year.

According to Statistics New Zealand, the increase was mainly caused by surges in vehicle sales, personal and pharmaceutical products, and more people spending on eating and drinking out. The retail sales’ total value rose from 2.2% last quarter to almost $20 billion. According to Westpac economist Satish Ranchhod, consumers are benefiting from low inflation and interest rates, which are putting money back in domestic pockets. A strengthened tourist season and strong migration rates are also helping in the surge in spending figures.

Zespri has also stated that it has already improved its pre-export checking procedures, which has already been approved by the MPI, who is currently advising China with regards to kiwifruit exports. Kiwifruit sales has also exceeded last year’s total volume sales, with another 7 million kiwifruit trays in line for export this coming season.

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The AUD/USD pair closed down Tuesday’s session on a slightly higher level, after the trading range widened following traders’ reactions to several financial events. The AUD was previously subject to pressure after a statement from RBA can possibly mean that the Reserve Bank of Australia might be considering another interest rate cut. However, the USD went down following dovish comments from Fed, increasing the overall value of the Aussie.


Investors are now awaiting the release of the Wage Price Index, and economists are expecting the quarterly report to be at 0.5%. However, union members are expecting a weaker range for the Wage Price Index, which can lead to volatility after its release. The Fed will also be releasing its July meeting minutes and traders will be anticipating the next scheduled rate cut.
The daily swing chart is showing a generally upward trend, although momentum has a possibility of going downward. Based on the pair’s current pricing at .7690, the AUD/USD pair’s direction will likely be determined by the reaction of traders to the .7695 short-term pivot. An increase in selling pressure is possible should there be a downward bias on a sustained move under .7635, while an upward bias will develop if there is a sustained move over .7755.

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