Thread: Daily Market Analysis from ForexMart

The concerns regarding about the American regulator's hawkish actions, the Bank of Japan's idleness on it's last meeting, the decrease of oil prices and the issue of British exit from the EU being resumed were the main cause of risk aversion.

The press conference of Janet Yellen was the investor's center of attraction and the market did not hope for any revision of rates from the Federal Reserve. As we have all known, Yellen's statement did not have any difference from the previous statements. The regulator stated that the Fed will heighten the rates only if the regulator finds growth and the labor market positive tendency as the monetary authorities will closely monitor incoming macroeconomic data. Yellen did not confirmed the date of the next rate hike yet and said that Fed's attainment should involve a lower pace of rate growth. The EUR/USD pair grew.

Two important releases was published by the UK. First is the unemployment rate for January which occurs at the reported level wherein the recent value was -5.1% and the report was 5.1%. Next is the Average Earnings including bonus for January which came in at the level 2,1% wherein the recent value was 1.9% and the report was 2.0%. The GBP/USD pair increased by the end of the trades.

The USD/JPY was expected to leave the flat soon but this can be very volatile. Japan's economy continuously shows a slowdown and it does not need a sturdy yen. Simultaneously, the strong dollar is not a pleasing factor for the US Federal Reserve due to the negative impact to US exporters brought by the strong dollar. The USD/JPY pair decreased by the end of the trades.

EURUSDH417.jpg

The Fed's decision to keep the monetary policy unchanged cause the dollar to descend aggressively in opposition to the Swiss franc. As we have anticipated, the regulator was certain to left the policy unchanged as the National Bank of Switzerland hold its meeting on Thursday.

The first support occurs at 0.9660 and at 0.9580 subsequently. The first resistance resides at 0.9750 and at 0.9850 subsequently.

A confirmed and a sturdy sell signal has been found. The price is below the Ichimoku Cloud and it is below the Chikou Span. The Tenkan-sen forms a descending movement and the Kijun-sen displays a horizontal movement. The downward movement will remain until the price is below the Cloud.

The MACD indicator is in a negative location. The price is declining.


USDCHFH418.jpg

The Fed meeting has gone by and the regulator made changes in his plans and declared only two rate hikes instead of four. The market also remained unstable after the meeting.

The demand for euro as a funding currency keep on growing in spite of the fact that the "risk appetite" is also increasing. This factor was completely disregarded by the market which manifested the presence of strong buyers. The dynamics of the debt market signified varied trends as the 10-year government bonds yield in Germany increased in connection in the UK, but decreased to US Treasuries. The EUR/USD pair decreased by the end of the trades.

We did not received any significant macroeconomic data from the UK. We think that investors will be more attentive on the dynamics of oil market. Improving the highest of the last trading week, black gold fell by 3%. The demand for oil affected the pound/dollar pair in a usual positive way. The GBP/USD grew by the end of the trades.

The dollar/yen pair marked a new low for the last 14 months. This kind of aggrandizement of the yen could be a menace to exporters and may also disgruntle the monetary authorities of Japan. The US issued consumer confidence from the University of Michigan wherein it showed 91,7 contrary to the reported 92,1. The USD/JPY pair grew by the end of the trades.


EURUSDH421.jpg

As the United States and Japan government bonds yields divergence decreased to some extent, the debt market dynamics manifested an averaged demand for the Japanese currency. This also cause to lessen the appeal of the US assets. The USD/JPY pair grew a bit by the end of the trades.

The first support occurs at 111.40 and at 110.60 subsequently. The first resistance lies at 112.20 and at 113.00 subsequently.

A confirmed and a sturdy sell signal has been found. The price is below the Ichimoku Cloud and it is below the Chikou Span. The Tenkan-sen forms an ascending motion and the Kijun-sen displays a horizontal motion. The descending movement will remain until the price is below the Cloud. The MACD indicator is in a negative location. The price is retrieving.


USDJPYH422.jpg

Being halted from increasing in opposition to the major currencies on Tuesday, the dollar still gained support caused by the investors who stick on being heedful as a round of terrorist attacks in Brussels killed 26 people and left more than 100 injured. This devastating events in Brussels affected the euro and the British pound negatively.

The market slightly strengthened in the absence of important macroeconomic reports. Likewise, US releases did not help to enliven the market. The existing Home Sales for February embark at a low level wherein it was lessened by 7.1% whereas analysts had hoped for a more moderate fall of 2.8%. The Chicago Fed National Activity Index for February embarked at -0.29 contrary to the reported +.025 and the previous value of +0.41.

Our focus will be on the IFO Institute release. The dynamics of Gross Domestic Product of Germany is closely corresponded with this indicator and investors always keep an eye on it. This indicator has been consistently giving a negative trend for the last three months. In the midst of euro's growth, the market did not anticipated the data to be better than the consensus report. However, the data embarked at the level of 106,7 contrary to the reported 106,0. The euro/dollar pair decreased.

An Inflation Report was released by the UK. As expected, the sturdy labor market data pointed to the forecast that was a little better than the consensus report. The average monthly income was 0.2% in the last three months which would heighten inflationary pressures whilst the unemployment in UK is at the bottom-most level now since 2005. The Consumer Price Index embarked at the level of 0,3% y/y and 0,2% m/m contrary to the reported 0,4% y/y and 0,4% m/m. The pound/dollar pair aggressively declined by the end of the trades.

As of now, we are not expecting a sturdy increase of quotations. The investors were not pleased with the United States' poor macroeconomic data wherein the Existing Home Sales for February lessened by 7.1%. The home sales reduced by 6.7% from January to March which only certified again the assumptions that the Americans started to save more than spending. The dollar/yen pair became stronger.

EURUSDH23.jpg

Sterling continued its low trajectory on Wednesday amidst negative economic data, terrorism attacks in Europe, and rising worry surrounding the Brexit.

The Bank of England announced a stagnant 0.3 percent inflation rate, missing the projected 0.4 percent rise. The news was paired with a looming interest rate cut, which has been standing at 0.5 percent since 2009. The nearest rate increase is in another three years, while the US is expecting at least two rate hikes this year, pushing the dollar upward.

UK’s controversial 2016 budget was also bad news for the ailing pound. Many were disappointed with budget cuts, with Secretary of State for Work and Pensions Duncan Smith resigning on Friday over lower disability benefits.

The pound fell further from its 1.4251 after the inflation announcement.

The first support occurred at 1.4094 and 1.4024 subsequently. The first resistance was at 1.4304 and 1.4375 subsequently.

The MACD indicator is at positive location. The price is falling.

GBPUSDH423.jpg

The efficacy of the stimulus measures held by the European Central Bank is drawing near its boundary as stated by the president of the Netherlands Bank, Klaas Knot. He thinks that the ECB monetary policy instruments have been worn out.

The first support occurs at 1.1150 and at 1.1050 subsequently. The first resistance resides at 1.1260 and at 1.1350 subsequently.

The price is along the Ichimoku Cloud and it is over the Chikou Span. The Tenkan-sen forms a horizontal movement and the Kijun-sen shows a descending motion creating a "Dead Cross".

The MACD indicator is in a negative location. The price is correcting.

EURUSDH428.jpg

The British pound slightly recovered from last week’s trading as it hit a daily high at 1.4180, taking advantage of the dollar’s respite. However, the pound’s strength is expected to be short-lived as the uncertainty of the Brexit looms over the market.


A bearish outlook on the pound remains leading to the EU referendum in June. On the other end, a stronger dollar is anticipated in the following days as investors remain hopeful for a rate hike in the near future based on Fed officials’ vague remarks.


The first support occurred at 1.4098 and 1.4028 subsequently. The first resistance was at 1.4149 and 1.4220 subsequently.


The MACD indicator is at a negative location. The price is falling.


GBPUSDH428.jpg

The dollar managed to recover most of its losses which is an aftermath of the Federal Reserve meeting, and is being in demand continuously. In the midst of the Catholic Easter celebration, the traders' activity was inferior. We are hoping that today the volatility shall resume as the traders' return from their holidays' activities.

The Gross Domestic Product forecast of the US is somewhat strong and is quite surprising which of course sustained the dollar as well. The GDP was altered upwards. In the fourth quarter, the US economy increased by 1.4% contrary to the previous estimate of +1.0% and an increase of 2% in the third quarter. In favor of an early rate hike, these figures became another cause of disagreement which was consistently uttered by the Fed's representative in the past week wherein it also turned out to be supporting the demand for the dollar. The US has issued the Pending Home Sales for February wherein the data occurs at the level of 3,5% and the report was 1.0%. The EUR/USD pair slightly increase by the end of the trades on Monday.

The GBP/USD was still weak and continuously move down in the midst of concerns regarding the effect of Brexit. High risks in Brexit effect enkindled growth in volatility for the pound and the pair. The GBP/USD grew by the end of the trades.

In favor of the United States, the inflation forecast for February between Japan and US modified their differential of CPI indicators. In January, the spread was 0.1% and grew by 0.43% in the last month of winter. The USD/JPY pair reduced by the end of the trades.


EURUSDH429.jpg

The Australian dollar edged up in today’s trading after mixed US data weighed down the dollar.


The US’ core PCE in February posted a dismal growth of 0.1 percent, missing the 0.2 percent forecast. The core PCE price index also performed below expectations as it rose annually by 1.7 percent. Meanwhile, consumer spending was went up by 0.1 percent, meeting government forecasts.


The US economy experienced a 1.4 percent growth in Q4, topping a 1.0 percent forecast, which carried the dollar slightly.


The Aussie dollar, which has risen by about 3.7 percent this year, is expected to continue a slow climb as talks of the currency’s overvaluation is still in the air. Investors are still waiting if the RBA will cut interest rates to keep it from further ascent.


A speech by Fed Chairwoman Janet Yellen later today may sway investors to buy back the dollars.


The pair is now facing a ceiling at 0.7572 and can be seen testing 0.76.


The first support was at 0.7519 and 0.7481 subsequently. The first resistance was 0.7585 and 0.7623 subsequently.


The MACD indicator is at a negative location. The price is falling.


AUDUSDH429.jpg