Thread: Daily Market Analysis from ForexMart

EUR/NZD Technical Analysis: January 17, 2017

A break higher than the minor resistance of 1.5007 is seen from 1.5235 level. This is followed by a next break at 1.5193 completes the second wave towards the 1.5837 third wave level. Beyond the third level indicates a long-term position while trying to confirm the latest correction completes the zig-zag correction. On the other hand, the support levels could go towards the 1.4778 level before the next unexpected surge comes in.

Currently the Resistance level of the pair comes in at 1.5007 then 1.5050 towards 1.5193 levels while the Support level is seen at 1.4841 then 1.4810 towards the 1.4778 levels. The Pivotal turn is at 1.4895 level with buying opportunity when the price breaks more than the 121.687 level.

The EUR/USD pair traded weakly during the previous trading session with the weak euro having more effect on the currency pair than the recent dollar weakness. The international economy is now very concerned with UK’s hard Brexit process, since this could spell disaster not only for UK but also for countries within the eurozone. Although the hard Brexit could have less negative effects for the UK, this could instead affect EU countries since most of them are doing business with UK, and the removal of a free trade zone with UK and the rest of the EU could become very disastrous for a lot of EU countries.

This was one of the reasons why the EUR/USD pair corrected largely during yesterday’s session and plummeted down to 1.0600 points yesterday and even went lower for some time. The currency pair could have experienced much larger corrections if not for the US bank holiday yesterday.

For today’s trading session, there are no important economic data coming from the eurozone but Theresa May will be speaking during the New York session with regards to the guidelines of the expected hard Brexit. May’s speech could have a negative effect on the value of the euro and traders are expected to take extra caution when it comes to trading with this particular currency pair.

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The GBP/USD pair exhibited heightened volatility during the previous trading session as the dollar lost strength and the sterling pound regained much of its footing in the market. Theresa May’s speech yesterday helped in clearing up some of the murkier parts of the Brexit process, and this has helped in placating various investors and has minimized concerns surrounding the Brexit process, thereby increasing the value of the sterling pound. This has then prompted investors to pull out their funds from the USD, thereby causing the dollar to drop in value.

Theresa May has highlighted in her speech yesterday that the UK will indeed be going for a hard Brexit and will be eliminating any kind of access from the eurozone. However, the PM has reiterated that the UK government will be negotiating with eurozone leaders in order to have a different kind of trade relations with the European bloc. Since this has eliminated confusions surrounding Brexit matters, thereby increasing the pair’s volatility levels. The GBP/USD pair initially dipped to 1.2015 points prior to Theresa May’s speech but quickly climbed up to a daily high of 1.2414 points.

However, there are still a handful of concerns surrounding the Brexit process, and the expected invocation of Article 50 is also seen as a possibly risk for the stance of the currency pair as well as the UK economy. As such, these are expected to continuously pressure the GBP in the next few days.

For today’s session, UK will be releasing its claimant count change data as well as its average earnings data, while US will be releasing its CPI data later today. It remains to be seen whether these data sets would be continuing the string of good economic data during the past few days. If the UK data comes out as positive, then this push the pair upwards to 1.2500 points, although this might not be enough to actually push the currency pair beyond this particular barrier.

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The Prime Minister of UK, Theresa May laid out few ground rules yesterday regarding the possible flow of the Brexit process. Global risks were also expected to lessen and in whatever time it might occur, it will likely weigh on the dollar.

The greenbacks were seen to be on its weaker stance prior this event that will hit the currency much harder. This will caused for the USD/CAD to test 1.3000 over and over, there is also a sudden solid bounce upwards.

The USD continued to suffer from the drawbacks due to the risky environment from Trump’s administration which continue to confuse traders and investors because of its vague plans.

Moreover, the expected thrice rate increase of the Fed will likely be supported by the dollar with the medium and long term, however the near-term risk that surround the new US government causes the dollar to soften.

Another test of lows is assumed to occur in case the Canadian data will present an optimistic result. Since the economic data from the region is relatively strong and identify whether this upbeat is from the BOC statement about rate policy or from the media conference of the BOC Governor.

Furthermore, the BOC is scheduled to hold its rate for today, in case the statement came in hawkish, the 1.3000 level are needed to test again.

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EUR/USD Fundamental Analysis: January 18, 2017

The EUR received a much-needed boost from yesterday’s trading events, wherein the USD plummeted and weakened while the sterling pound regained its previous losses across the board. This has then caused the EUR/USD pair to break through the 1.0600 barrier after quite a time and even went up as high as 1.0700 points, where it traded momentarily before settling just below 1.0700 points.

In spite of the fact that Theresa May has indeed announced that the UK is headed for a hard Brexit process, the concerns surrounding this particular occurrence have somewhat diminished, prompting investors to pull out from the USD and onto high-risk areas such as the stock market. The US dollar has since then weakened, and the clarity of the Brexit process has helped in pushing the euro higher. Although the hard Brexit would most probably have an adverse effect on eurozone trades, the renewed clarity of the process has helped placate investors and has created upward support for the EUR/USD pair. The currency pair is now seen to possibly reach the 1.0850 trading region.

There are no major economic readings set to be released today from the eurozone, but the US will be releasing its Core CPI and CPI data during the New York session, and these will be closely monitored by investors since a string of good economic data could increase the chances of a Fed rate hike in the near future.

The JPY increased significantly in value against the USD after the majority of investors fled the USD after Donald Trump expressed his concerns that the US dollar might be becoming too strong for the US economy to handle. The US 10-year Treasury Yields plummeted to 2.307% during the early hours of yesterday’s trading session, possibly its lowest intraday levels since November 2016. This has then lended support for the bears of the USD/JPY pair after the currency pair traded at the lower regions of 112.67 points before making a slight recovery.

However, there came a slew of negative US data, such as the New York Empire State Manufacturing Index, which dropped to 6.5% from its previous reading of 9.0%. This reading is indicative of slower business growth in the region for this month. Since the USD/JPY was able to extend over 114.00 points, the currency pair is more than ready to extend sideways. The pair’s 4-hour chart shows that its momentum indicator retains its bearish stance and is still within the negative side of the chart, while RSI indicators for the currency pair are pointing to the downside. The 100 SMA for the USD/JPY pair has also lowered significantly.

Support levels for the USD/JPY are expected to manifest at the 112.65 points, while resistance levels could possibly appear once the pair hits 113.35 points.

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AUD/USD Technical Analysis: January 19, 2017

The Australian Dollar presented some optimism compared with its U.S peer that receives support from the dynamic pricing of oil. The awaited data from the labour market is deemed to support the Aussie at the same time.

The tone of the market remains to be positive. The AUD/USD is confined on its 2-week highs near the 0.7550 level. The price hovered around a very tight range and tends to go into a lower position. The 4-hour chart showed the spot stick on top of the moving averages. The 100 and 50-EMAs preserved its bullish tone while 200-EMA is flat. Resistance hit 0.7550 mark, support is found at 0.7500 range.

MACD lied in the same level which confirmed buyer’s strength once again. The RSI is currently on the consolidation period and entered the overvalued zone.

Forecasts mentioned for a further short-term downward correction. In case the closing trades are set under 0.7750, the price will impose a sell signal. The possible target of the bears is 0.7500.

Hard Brexit issues continued to affect the cable pair. The British currency weakened in spite of the upbeat in the labor market data as the unemployment stat maintained its rate and Claimant Count Change rose.

The sterling is in the red versus its American rival on Wednesday. The GBP/USD climb the edge of the overbought area and pointed downwards amid Asian hours. Sellers take out the 1.2400 level during the morning trades and tested the mark 1.2300 in the EU session. However, the mark stalled the progress of sellers. Having touched the level, the price reduced and stayed on top of the region prior to the onset of NY trading.

According to the 4-hour chart, spot bounced off to 200-EMA. The entire moving averages moved downwards. Resistance highlighted 1.2400 region, support entered 1.2300 area.
The MACD slowed down which favored seller’s strength. RSI kept intact in the overbought zone.

Moreover, the 4-hour chart showed a prevailing bearish tone.The primary target 1.2200 showed some signs as it will be going short followed by the consolidation phase, the pair is expected to move ahead through 1.2100 handle.

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EUR/USD Technical Analysis: January 19, 2017

The American dollar was able to rub out its losses versus the euro prior to the speech of Yellen yesterday. The greens further acquired some support from the consumer price index of U.S which met the expectations of investors. Moreover, the decision of the ECB about its interest rate will be announced later this day.

The market structure remained to be bullish on Wednesday. The single European currency executed an upside impulse and return from its weekly high towards 1.0716.
The ongoing rebound is deemed to be corrective during the profit-taking behind the current rally. The EUR/USD retreated under the 1.0700 level amid morning trades on Wednesday and it hovered throughout the level as the EU session took place.

The 4-hour chart shows the price resumed its advancement on top of the moving averages. The 100 and 50-EMAs continued to be bullish while 200-EMA stayed on the neutral position shown in the same time chart. Resistance sits at 1.0700, support lies at 1.0650 region.
The MACD histogram falls which indicate weak position of the buyers. The RSI oscillator kept around the overvalued territory.

The pair is expected to moved near the immediate support 1.0650. In case the level breaks, the support will return to 1.0600. However, the EUR will receive short-term support as much as 1.0500 remained intact.

The USD/CAD pair was previously situated in a very critical support region and has reverted in the region just below 1.3000 points. The Bank of Canada has already released its statement regarding the central bank’s rates, and the bank also held a press conference later in the day. The pair’s strong bounce was seen as the US dollar and the Canadian dollar went in highly opposite directions during the previous trading session.

The USD had already regained its lost strength and has exhibited positive activity across the board after Yellen announced that the Fed could possibly go for more rate hikes in the future if the economic data from the US continues to be positive. On the other hand, the Bank of Canada announced that it will be making no changes on its current interest rates. However, the succeeding press conference from BoC’s Poloz has made it clear to investors that the Canadian economy has not shown any progress and has instead stayed in the same place. Moreover, Poloze expressed his sentiments regarding a possible trade war under the Trump administration, and this has adversely affected the CAD and has caused the USD/CAD pair to revert back from the 1.3000 trading range and was able to shot up through 1.3100 and even through 1.3200 where it currently sits above as of present time.

Market players are expecting that the USD/CAD pair might be in for a strong uptrend and could possibly reach 1.4000 points. For today’s trading session, Canada will be releasing its Manufacturing Sales data, while US will be releasing its oil inventory data as well as the Unemployment claims data. These are expected to induce volatility in the pair. However, it is highly likely that the USD/CAD pair will be in for an uptrend in the long run.

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