Thread: Daily Market Analysis from ForexMart

The AUD/USD pair’s 50-MA level for the recent trading session reached the 0.7608 trading range, with trades now at 0.7590 in spite of the widening of the 10-year yield spread for AU-US. High yielders further reaped benefits during the second quarter of yields in the international market. The 10-year yields for Australia increased by 7 bps while the 10-year US yields increased by 3 bps.

Analysts are stating these higher yields could have negative impacts on all aspects of the risk spectrum since this could lead to a drop in high-yielding currencies such as the NZD.

Should the AUD/USD recover, then the bid tone recovery could go up into the resistance level of 0.7608 for the 50-DMA and could possibly go further up to 0.7626 for the 10-DMA. However, if the previous support levels of 0.7580 would be reached by the pair, then this could lead to a possible drop to 0.7553, with sell-offs further extending to 0.7526 which is the 100-DMA level for the GBP/USD pair.

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The NZD/USD weakened during the last trading session after the USD regained some of its lost value, with the demand now testing within the 0.71 range. The USD remained sturdy throughout the Asian trading session due to the US treasury yields increase caused by rising oil prices. This also heightened the possibility of an interest rate hike this coming December, along with an exhaustion on the part of central banks and a deepening of the yield curve on the international market.

The currency pair is now dependent on the market sentiment, particularly now that the Reserve Bank of New Zealand’s Assistant Governor is set to deliver a statement with regards to the country’s low inflation rates.

Since the NZD/USD is already trading lower than the 50-DMA and 100-DMA levels, an acceptance rate lower than 0.71 might have a significant impact on the bulls. Should the currency pair break through the support levels of 0.7049, then this could possibly reveal the 0.70 handle. On the other hand, an increase from Friday’s low of 0.7110 might lead to a steeper retracement level to 0.7155 for the 100-DMA and 0.7204 for the 10-DMA.

The USD/JPY pair closed the last trading session at 103.516 points during the last trading session, dropping by -0.08% or 0.085 after investors flocked to the safe haven currency due to a break in crude oil and stock prices, wiping out the currency pair’s gains during the earlier part of the trading session.

The USD was backed by support from statements that the 10-year yields for the US were at its highest levels in over four months. Due to positive interest rate differentials, the dollar consistently appreciated against the JPY during the past eleven trading sessions, however, the carry trade exhibit last Tuesday proved to be crucial for the US dollar.

Analysts are saying that this particular scenario might be could possibly occur again on Wednesday’s trading session due to the impending release of the Federal Reserve’s meeting minutes. These minutes will be of use to market players in order for them to gauge the overall sentiment of Fed officials with regards to the expected interest rate hike in December. Although the meeting minutes from the Fed usually only cause little volatility in the market, analysts are saying that this particular report might become an exception, especially since the USD/JPY is expected to have a reaction to Treasury yields movement and might reflect its price action in the previous trading session.

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The EUR/JPY pair was able to retain its support on the 50-DMA and expected to incur additional losses in the light of an expected increase in the USD/JPY pair. The cross-currency pair is now at 114.40 points, going above the 38.2% Fibonacci retracement of 114.09 points. The EUR/JPY dropped yesterday to 114.01 points after constant rejection in the 100-DMA in the past week.

All eyes are on Bank of Japan as BoJ Governor Kuroda is slated to make a speech today. Meanwhile, European industrial production data is also expected to be released today. But the major announcement for today will be likely coming from the Federal Reserve’s Esther George and William Dudley, who is expected to announce that there is a huge possibility for an interest rate hike in December.

For the cross-currency pair’s technical indicators, the pair’s break through at 114.09 could possibly lead to a low of 112.79, which could then lead to a leveling of 112.00. On the other hand, an increase over the 10-DMA of 144.76 could cause another break at the 5-DMA of 115.05, which could ultimately lead to a confluence of 115.60.

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The EUR/USD pair was able to extend the sell-off during the Asian trading session and is now targeting the monthly pivot support at 1.1024 points. The decrease in the value of the EUR/USD might be attributed to the sudden controversial drop of the EUR/GBP pair, which shook the whole market in general. The strengthening of the USD has also added pressure on the pair, particularly now that the US dollar is now transacting against risky currencies such as the NZD and AUD.

On the other hand, the bearish break through of the pair at the 1.11 range again served as a level support for the pair, a function well-used since August. The EUR/USD pair experienced a small recovery after increasing up to 1.1068 before weakening further to 1.1042 points.

The daily chart for the currency pair shows the trend line going around the 1.1042 range. A break below this particular range could cause a test of the 1.10 range, and might lead to a weakening of up to 1.0911. On the higher side, if the pair goes over its daily high of 1.1068, then this could lead to the pair reaching the 5-DMA of 1.1115 and possibly the 200-DMA of 1.1169.

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In the outset of the US session, the greenbacks heightened and together with the loonies attained the resistance region at 1.3280 despite of the news regarding the undermined the spot price of the oil. The USD CAD remained unaffected even though the FOMC minutes were not released yet. The pair attempted to make a breakthrough over the upper extreme of 1.3290 though it fall short once again and finally settled around 1.3282

Consolidation is still anticipated for a few more days since there is no driving force present that lead the currencies to the level of resistance.

When the fundamentals realized that the issue regarding petroleum prices negatively influence the economy of Canada then it would finally be visible. As a result, there is a possible price modification that would elevate to the 1.3280 resistance, at the same time obtaining the next spot at 1.35 and 1.4000.

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The pound and greens remain in an uncertain period, the price became affected due to the current events plus some fundamental determinants including the general strength performed by the USD and the risks associated with Brexit, these made the pair to cut loose its gains from the 1.2325 high to 1.2300 region. The subject matter have its way until the EU session which also added to the afflicted factors is the UK Parliament discussion regarding the Brexit activities. This occurrence decreased the pair into 1.2200. Following the statement from FOMC during the US conference because there are three protesters who insisted for a quick hyperinflation. This event is defined to be hawkish as per the market and this made the USD to gain more strength but the GBPUSD approached a lower position at 1.2100.

This morning a major news aided the pound and greens to immediately recuperate due to a weak trades from the Chinese investors, seeing the two to achieve 1.2188 region.

Mainly, GBP/USD is surrounded by news risks considering the fact that its has failing background which cause it to a complicated method in acquiring confident trades. As a result, it is recommended to steer clear of sterling and dollar until it obtain a well-established regions.

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The Aussie further improved its strength after the price of petroleum products had increased also. Consequent on the testing of its lowest low last 20th of September, the AUDUSD made a sudden upturn in the midst of Asian session held on Wednesday. Last Tuesday, the commodity currency easily regains its previous deficit. Seeing the bullish spike procured a brief momentum only, it made the AUD and USD to stand in a constrained area. While in the beginning of the NY meeting the price deal with value depreciation.

The moving averages shore up over the upward momentum while it persist to slowed down and manifested a bearish slope. The 50-EMA intervenes the 100 and 200-EMAs then proceeded to a lower position. Resistance step in the 0.7600 level, support captured the 0.7540 region. MACD had softened but uphold strength for the sellers then ended up in the negative zone. The RSI oscillator grow less. The Australian and U.S dollar remained to be bearish.

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The GBP/USD pair had a stagnant run during the last trading session after the sudden drop in its value last week. The pair had an average day-to-day range of a minimum of 200 pips. The currency pair is now consolidating between 1.2130 and 1.2550 points, with a possible break in the resistance level of 1.2550 opening the way for the pair to reach 1.2360, allowing the pair to have selling opportunities. The currency pair is now trading within the 1.2557 range and analysts are awaiting whether the pair would break through resistance or come down at the support level.

The GBP/USD continues to be affected by the Brexit, and analysts are speculating the pair will continue resonating its effects for another two years, or until such time that the UK finally completes the referendum.

Market players are now waiting for an announcement from the Bank of England’s Governor Carney, as well as a statement from the Federal Reserve’s Janet Yellen and the release of the retail sales data later today. Expect an increased volatility for the pair at the close of today’s trading session. Analysts are generally throwing caution to the wind with regards to transacting with this particular currency pair, especially due to the Brexit and the recent drop in the Chinese economy.

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The last trading session went bad for the EUR/USD pair due to the release of China’s trade data, which turned out to be extremely lower than expected, with the data showing that the nation’s exports were the most affected sector. The trade data has now led to investors becoming uncertain with regards to the state of the Chinese economy, especially since the Chinese market is one of the largest markets in the world and any movement would certainly affect all major economies. As a result, the Asian stock markets experienced a significant decrease, as well as the S&P500 for the region. Meanwhile, the USD increased its trading value, causing the EUR/USD to reach support levels at 1.1000 points.

The selling for the pair increased in activity which caused the pair to hit support at 1.1000, even going as far as 1.0985. However, the currency pair eventually recovered from the support level and went up to 1.1050 points, with the pair now at the 1.1054 trading range.

Market players are now expecting increased volatility with regards to this currency pair due to the Fed’s statement which is scheduled to be released within the day, as well as the retail sales data to be released from the US. The pair could possibly go into reversal but is expected to immediately get back to its previous trading range during the session.

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