Thread: Daily Market Analysis from ForexMart

The Goods Trade Balance and Total Trade Balance established an optimistic data on Friday along with the strengthening of the sterling pound. The British currency procured some ground during the earlier trading session on Friday. Buyers drove the prices towards a higher position and tested the 1.2600 level amid the European session. The upward impetus short-lived consequent to the test, following the GBP’s rollback below the level. As indicated in the 4-hour chart, the cable pair rebounded through the 50-EMA. Moving averages uphold its bullish bias.


Resistance lies in the 1.2600 are, the support sits at the 1.2500 region. The MACD histogram pierced through the negative range. When the MACD stayed in the negative zone, sellers will obtain more strength. The RSI is within the neutral territory.


The GBPUSD is expected to weaken upon the break below the 1.2600 level. Likewise, this could lead the prices towards 1.2500.

The Japanese yen experienced downward pressure during Monday’s session due to the OPEC production deal as well as the positive market sentiment with regards to the Fed rate hike scheduled this December. Japan had recently released its Machinery Order and turned out to be positive, but even this particular economic data’s effect paled in comparison to the aforementioned events which had a much larger impact on the safe haven currency.


The price of the USD/JPY pair reverted from 116.00 points and went back to the 115.00 trading range. As seen in the currency pair’s 4-hour chart, the price of the USD/JPY stayed just above its moving averages and continued to inch higher. Resistance levels for the USD/JPY pair is seen to be at 116.00, while support levels are expected to come in at 115.00 points.


The MACD indicators for the currency pair increased, showing a surge in buyer strength. Meanwhile, its RSI indicators were able to remain within the overvalued regions. The market is now monitoring the pair’s current position at 116.00, and if the USD/JPY manages to break through this region, then the pair could possibly hit the 117.00 trading region.

The USD/CAD pair remained under 1.3120 points and has now clinched its tenth day in the lower rung of the trading range. The CAD dropped during the previous trading session due to a 5% increase in crude oil prices after the OPEC meeting last week, which included non-OPEC oil-producing countries, with the participants altogether agreeing to implement production cuts on oil. Participants who were not OPEC members all agreed to productions cuts amounting to a total of 600,000 bpd, with Russia contributing a total cut of 300,000 bpd. Saudi Arabia has also expressed its possible plans to further cut back on its production of oil. However, in spite of the uncertainty on whether oil producers would be able to push through with their planned production cuts, an increase in oil prices would most definitely help in augmenting US shale production and could offset the production cuts announced last week.


The Canadian trade market would be able to benefit from steady increases in crude oil prices, as the USD/CAD’s 200 EMA is presently at 1.3075 points and is in line with 1.3040 on the lower region of the trading chart. Resistance levels for the USD/CAD pair is at the 1.3175-1.3185 trading region, and the pair shows signs of becoming oversold. Market players are now expecting a retrace if the 200 EMA maintains its current levels within the week.

The GBP traded on a more positive note during Tuesday’s trading session due to the release of the UK inflation data, which came out better than the initial market expectations. The GBP/USD rose in value and was able to reach 1.2723 points before settling at 1.2710 points after increasing by +0.31% or 0.0040 points.


The inflation data from the UK exhibited a 1.2% increase last November, going well above the market expectation of 1.1%. The report also showed that the main catalysts for inflation in the region were culture, recreation, and clothing. The Core CPI data came in at 1.4%, again exceeding expectations of a 1.3% data release. Due to the positive economic data from the region, analysts are now saying that UK inflation could possibly reach the initial 2% goal during the first few months of 2017. However, this improvement might not be able to have much of an impact to the Bank of England’s impending decision-making this coming Thursday with regards to its adjustments in interest rates. BoE governor Mark Carney has also previously stated that the central bank would be willing to endure inflation overshoots if this would mean an increased economic support.


Wednesday’s trading session is expected to be somewhat light and muted as the Fed meeting looms close. However, since the GBP/USD had mostly positive reactions with regards to the shadow of the expected Fed rate hike, the present inflation data from the UK should be able to underpin the currency pair.


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The pair EUR/USD traded lower this day with a tight range and low volume of trading. The major players are on the sidelines waiting for Fed’s final announcement.


The final CPI resulted lower than the expected 0.3% from the actual 0.1% reading. This shows the inflations date for wholesalers. The most recent German ZEW survey indicates augmentation with an expectation at 14.2 higher than the prior 13.8. It is predicted to come in at 16.5.


The market is now focus on Fed’s data with the NFIB Small Business Index forecasted at 96.7 higher than the former 94.9. The prices are anticipated to reach 0.3% compared to last month’s 0.5%. The U.S. Treasury 30-year bond should also be looked out for by traders with interest rates anticipated to be higher than the 2.90% on November 10 as it closed at 3.1748% yesterday.

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The New Zealand dollar depreciated as more investors go for safe haven assets since commodity prices dropped in spite of the tension brought by the Federal Reserve's interest rate decision this week. The pair NZD/USD weakened by 17 points to 0.6698 after the greenback rebounded since the decline on Friday influencing the cross trades while the commodity prices remain low.




Currencies that are heavily influenced by commodities dropped to its lowest recorded rate for more than six years because of a drop in oil prices. Concerns in U.S. Junk bonds reemerged while majority are feeling pressured by the Fed's policy meeting this week. It is anticipated that the Federal Reserve Open Committee (FROMC) will proceed with the rate hike since the close to zero policy in December 2008 as the traders rely on hints for future changes.




The New Zealand's BNZ-BusinessNZ performance of services index for November will be announce today. While, Industrial production will also be released today from both Europe and Japan, as well as Tankan manufacturing index will be publicized by Japan.

The trade balance in the Euro area declined in October, same scenario with the volume of exports but the import volume increased despite the decrease in the value of European currency. Moreover, the euro made a recovery on Friday. Traders broke the price and reached 1.0450 as they made some reversal on its previous losses. Meanwhile, buyers were unable to regain the level which caused an ascending motion of impetus to fade thereupon the price move towards a lower area. The 50-EMA pass over the 100-EMA downwards as shown in the 4-hour chart. The entire moving averages headed lower. Resistance touch the 1.0450 range, support lies at 1.0400.

The MACD histogram strengthened which means the positions for the sellers softened. RSI is in the oversold territory which indicates for another downward trend. According to speculations, the market will remain in the pressured area in case that EUR/USD fail to push the price higher, in return, the pair is expected to establish a weak point. The next target of the sellers is 1.0350 and 1.0400.

The decision of the BoE to remain a constant rates did not surprise the market at all, seeing the rates to exist at 0.25%. The British currency was able to gain strength in spite of the reverse movement of its American counterpart subsequent to rally that took place on Friday.
Moreover, the sterling had a stronger stance as it bounced off its losses during the trades on Friday. The current rebound are considered as bear’s activity in selling its stock in order to gain despite of the sharp rise last week. Recovery seems weak and even there is a dollar retracement, the greens established a solid position generally.

The 4-hour chart showed that the price tested the 200-EMA, while the 50-EMA headed towards a lower level, both 100 and 200- day moving averages sustained a bullish pattern. Resistance is seen at the 1.2500 region, support is at the 1.2400 level. The MACD histogram increased which means a weak position for the sellers. RSI stayed in the oversold levels.

It is best to go short within the 1.2400 handle as its first target. In case that a price consolidation arise below the first target, it is expected that the GBP/USD will moved in the 1.2300 mark. However, a break on top of the 1.25 handle would weaken the U.S dollar. The pound have the tendency to expand its recovery through 1.2550.

Along with the positive report from the German Business climate is the strengthening of the single European currency. But the upbeat of euro was impeded by a fresh selling interest.

Meanwhile, the market appeared to be calm within this week as the greenbacks slowed down towards its major rivals amid the Asian session. The EUR edged over the dollar and further recovered during the trades on Monday while the dollar continued to soften. Buyers pushed the price through 1.0475 level by which the seller’s resistance is found. The renewed selling pressure caused the pair to slid down the 1.0450 region in the post-EU open. Moreover, the pair approached the 1.0400 mark throughout the North American Trading session. The 50-EMA pass over the 100-EMA towards a lower point. The entire moving averages manage a descending trend. Current resistance touched the 1.0450 level, support settled within the 1.0400 area.

The MACD histogram declined as it indicated stronger stance for the sellers. RSI holds the oversold territory and signaled a downward movement.

Should the pair remained under the level of 1.0450 in order for the market to continue its moving to enter the 1.0350 and 1.0400 regions.

The Bank of Japan is expected to maintain its previous monetary policies and give more positive economic expectations, thereby cementing speculations that the central bank could possibly induce an interest rate increase instead of a rate cutback. Because of the lack of policy adjustments, USD/JPY traders will now be shifting their focus on BoJ’s Kuroda’s statement regarding the increase in Japanese yields. There are speculations that Kuroda could either talk about economic expectations for 2017 or the risks involved with a sudden surge in bond yields. However, it is more definite that Kuroda will be treading carefully with regards to increasing market expectations of an interest rate hike.

The Bank of Japan could possibly sustain its present pledge-to-guide short term rates at -0.1% and 10-year Japanese Government bond yields at around 0% in spite of a somewhat positive sentiment for the Japanese economy. However, traders are advised to be careful with regards to holding Japanese bond yields at 0%, since long-term interest rates have now increased due to speculations of a steadier US rate hikes and an inflation surge under the Trump administration. The Bank of Japan is now under pressure due to calls for the central bank to add
up its 10-year yields target.