Thread: Daily Market Analysis from ForexMart

The EUR/JPY pair continued its tight range-trading during Wednesday’s session after trading at 113.195, since traders are now focusing on the minutes from the US Federal Reserve Bank’s July meeting.


The lack of significant economic news from both Japan and the eurozone has led to decreased volatility and volume levels, with the currency pair now range-bound after reaching its lowest level in a month last August 5 at 112.308. However, this unnatural chart pattern might lead to excessive volatility levels, and investors should brace themselves for possibly unexpected economic news.

The ECB is not expected to release a statement until September 8 and the BoJ has apparently run out of economic stimuli, so traders must expect a dull period for the EUR/JPY pair until economic stimuli drives the pair back in activity.

On Thursday, investors are expected to react to several Japanese reports, including the Adjust Trade Balance, where it is expected to be released at 0.14 trillion yen. Japanese exports are expected to decrease by up to 14.0%. Meanwhile, July’s trade balance is expected to fall from 693 billion yen to 284 billion yen.

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During the Asian trades session, the pair had restored its position to JPY 100.77 and stops at the 101.14 area which sets off the USD/JPY pair to lead with a rate of 100.74. Furthermore, the rate of the USD increased with the aid of the NY Fed President Dudley whilst the yen became weak due to its prime minister who allowed the intervention of the financial regulators whenever the levels of the rate remained indecorous.


The pair is anticipated to trade over the level of 100.77 and the range of the limit is JPY 99.90-JPY 101.67 and descends perfectly.

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The USD/CAD pair went down by 26 points as the USD further decreased its value, with both gold and oil experiencing an upsurge. The said pair is currently trading at 1.2819, with the CAD continuing its present positive value. The CAD temporarily went over the 78-cent level of the USD as the greenback fell in relation to a lot of currencies as oil prices continued to rise.
One of the reasons for the CAD’s recent gains is the sudden upsurge in oil futures, with per barrel amounting to more than $47. Another reason for the currency’s gain is the weakening of the US dollar after calls for the Federal Reserve to take extra caution when it comes to increasing its interest rates. The CAD has been steadily increasing its value during the last 7 trading sessions before the meeting of the Federal Open Market Committee yesterday, which led to a decrease after the release of the meeting’s statement.
Investors are now expecting the release of the Canadian Consumer Price Index monthly report for its yearly and monthly data. Yearly data is expected to fall at 1.3% from last month’s 1.5%, while the monthly data is also expected to go down by -0.1% from last month’s 0.2%. Should the actual data fail to match the expected data release, then traders can expect volatility in prices as the market will try to adapt to the released financial information.


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As presented over the 4-hour chart, the euro and dollar reached an indecision level since the US Dollar further weakened. The time frame of the currency pair maintained a higher point of movement thus heading on an accelerated trend lines.

The increase of EURUSD is pulled by the resistance level of euro whereby set at 1.1320, the support comes between the Eur 1.1207-Eur 1.1230.

The pair is predicted for probable decrease in distinction to EUR 1.1320. The procurement of a long investment position is suited on settling against the said level.

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The NZD/USD pair is currently trading at 0.7264 points after gaining a 1% increase during the week due to an upsurge in dairy prices and a generally positive data flow. The positive data for dairy prices was due to an increase in the global dairy auction, with the average pricing going up from 12.7% to $2731 per tonne, with a 6.6% increase during the auction.
Speculators in the market had predicted a 25-point basis cut as central banks are pushing for inflation rates to go back at the 1-3% rate in order to counter high currencies. The governor of the Reserve Bank has also stated that they are willing to further cut down on interest rates since there is a renewed pressure on the NZD as international conditions are continuing to weaken and interest rates remain low. He also stated that the Reserve Bank is currently having difficulties to meet its target inflation rate since the exchange rate must decline first in order to make way for added inflation.
The financial market could also become undermined if the surges in the housing market continue, while the domestic economy remains on the positive side due to an added strength in its tourism and migration data, as well as low interest rates. Commodity prices also increased by at least 2%, its highest index since October 2015.


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The AUD/USD is trading flat while the Aussie dollar bounced off the 3-month trend line support. The USD appeared to be bearish with an evening star candlestick pattern against the AUD which ventured a downside risk.


Price during the month of May tested the rising peak of the support while limiting the downside risk. The support is seen at 0.75787 which measured the July 27 result of 0.7421 low. Preferably, a change occurred over the prevailing trend on August 11 at 0.7756 high and makes it easier to oppose the August 11 result at 0.7760 top.

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As the USD/JPY strengthened, the US dollar corresponded in the same manner. Furthermore, the vice chair of FED announced yesterday about the return on investment prior to the end of the year. The pair executed an open close movement which generated a gap during the outset of the day trading with a resistance formed at 100.77 level. The pair signaled a slight interruption to an upward momentum though the gap did not moved back on its basic level which indicated a sharp bullish signal. The pair responded a pullback of 100.32 upon the European session. USD/JPY is anticipated to trade within the range of 99.90-107.78.

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The EUR/USD pair had little response to the positive composite PMI data, with the EUR trading up to 25 points before the data release and remained at 1.1345 near its highest range point as the USD continued to weaken. Manufacturing PMI data went below its expected range but went above the 50-divider line.

The economic status of the eurozone maintained its status in August, with its growth showing that it is unlikely to be cut back as a result of a possible fallout following the Brexit referendum. The composite PMI for the eurozone rose in July, from 53.2 to 53.3 points, going above the 50 level which separates expansion from contraction and is the best reading for the region in seven months. IHS Markit has stated that the eurozone’s economy remains on the steady side, with an estimated 0.3% GDP for this quarter, similar to the first half average of 2015.

Speculators are now awaiting the Federal Reserve’s chairwoman Janet Yellen’s statement at the Jackson Hole Symposium this coming Friday. Investors will be monitoring this symposium as this has been the platform used by the Fed to warn of either a tightening or a loosening of monetary policy.


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The USD/CAD pair went higher during Wednesday’s session, trading at 1.2942 after increasing by 0.0031 or +0.24%. This increase in the pair was due to speculations that Fed Chairwoman Janet Yellen will be delivering a possibly hawkish statement on Friday’s Jackson Hole Wyoming central bankers’ symposium. The CAD also weakened after a sudden build caused crude oil prices to go lower than 1.50%. This sharp sell-off occurred after an unexpected stockpile increase as stated by the US Energy Information Administration, causing renewed concerns about the surplus in international supply.
The government of Alberta, Canada raised its 2016-17 budget deficit forecast to C$10.9 billion last Tuesday, after the disastrous wildfire that ripped through the region caused damages in Fort McMurray’s oil sands hub.
If the USD continues to strengthen against the CAD and crude oil prices further decrease, then the daily pattern chart shows an upside shift in momentum. However, crude oil prices can also experience a sudden surge especially if Janet Yellen’s statement on Friday turns out to be dovish, or both OPEC and non-OPEC countries opt for a production freeze. Large payoffs are expected, however, if crude levels go lower than this month’s levels and if the Fed’s statement signals at least one rate hike before the year comes to a close.

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The currency pair EUR/USD remained squeezed early yesterday and decreased during the closing of the trading session at 1.1275 or -0.27% whereas investors are focused more about the symposium participants held in the place of Jackson Hole, Wyoming along with the upcoming speech from the Chair of the Fed, Janet Yellen with regards on the possibility of a hawkish movements for the percentage rates on USD.

As the New York Fed chair, William Dudley declared that there is probably a rate hike in September, the euro is said to be affected upon the 25-basis point rate or 18%. Presuming the approval of Yellen for the increase in September would indicate a bearish pattern for the EUR/USD.

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