Thread: Daily Market Analysis from ForexMart

USD/JPY Fundamental Analysis: April 25, 2017

The USD/JPY pair had a very volatile trading session last Monday although it managed to finish the session on a much higher note as investors reacted to the first round of the French national elections. However, the currency pair dropped slightly, an indication that investors were pretty much sure of the election results and were now moving towards other geopolitical events such as the North Korean issues and an impending shutdown in the US economy. The JPY could possibly resume its rally if concerns over geopolitical issues would increase over time. Meanwhile, the USD was also unable to stabilize itself due to a drop in Treasury yields and a very dismal US economic data.

As of the moment, the results of the French elections are showing that Macron could easily eclipse Le Pen in the second round of the elections, which is scheduled on May 7. The USD/JPY pair is not expected to make a significant reaction to the election unless Le Pen would be able to surpass Macron’s current lead in the elections. On the other hand, a looming government shutdown is expected from the US economy could possibly happen once the shutdown deadline of April 28 would fail to see the government passing enough legislations to ensure that certain branches of the government would not have to cease operating. Although the economy itself still has some back up funds which could ensure the economic stability of the country for several more months, this is not a good sign for the economy and investors are expected to act in accordance to this particular occurrence. Once this happens, then investors could possibly move towards safer assets such as the Japanese yen.
But the main focus of USD/JPY investors for this week are the events in North Korea, with the demand for safer assets expected to stay in place due to tensions created by the North Korean missile and nuclear program.

EUR/USD Technical Analysis: April 26, 2017

On Tuesday, the Euro bulls were able to win back the driver’s seat following a neutral position in the night.

The major were removed from the region 1.0850 during the morning trades of Europe as it moved and rallied near its fresh peaks found at 1.0900 mark.

The price halted within the 1.0900 in which the EURUSD eyes some renewed offers. The single European currency had moderately eased eliminating its entire gains in the morning eventually.

As shown in the 4-hour chart the technical indicators appeared to be bullish. Resistance touched 1.0900 level, support pierced through 1.0850 range.

Moreover, a close over 1.0900 is expected to yield fresh bullish indicator in order to move further. It could probably reach the 1.0950 hurdle but correction is not ruled out as a means of filling the gap.

The general situation persists to manifest the same scene as of Tuesday. The British currency seems rangebound amid day trades. The price has already reached the band’s lower limit during the first part of the day and rebounded afterward.

The spot stalled having touched the range’s upper limit while technical indicators are in mixed signals.

Moreover, the Exponential Moving Averages (EMAs) trailed lower while the RSI together with the MACD showed positive indications. Resistance entered 1.2900 level, support entered 1.2800 area.

A negative scenario is projected to take place. In case that the GBPUSD touched below the 1.2800 support region will trigger a downtrend in the near future.


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Investors on the USD/JPY pair chose to pay no mind to the relatively weak economic data coming from the US and instead shifted its focus on the recent increase in the demand for high-yield assets such as stocks, as well as an increase in the yields of US Treasuries. The USD/JPY pair closed down the previous session at 11.824 points after increasing by +0.30% or 0.335 points.

A drop in the US economy’s inflation and factory rates has put out any possible expectations for an interest rate hike this coming June from the Fed. Meanwhile, the PCE index dropped by 0.1 points last March, the index’s largest decrease ever since September 2001. In addition, the Core PCE Price Index increased by 1.6%, which is its smallest gain since July 2016. US Treasury yields surged yesterday after the US government managed to avoid a possible shutdown after clinching a deal for government funding. Equity prices also managed to climb higher, which also heightened the demand for high-risk assets and diminished the demand for the Japanese yen.

The USD/JPY pair could possibly find more support just as long as there is a demand for high-yield assets. However, the currency pair quickly became range-bound since investors are now bracing themselves for the Fed’s interest rate decision this coming Wednesday. As of the moment, the Federal Reserve is not expected to implement an interest rate hike this coming Wednesday, however the USD/JPY could possibly be influenced by the central bank’s statement tomorrow. Traders are advised to look for any clues with regards to the Fed’s next timing for its interest rate hike.

The EUR/USD pair exhibited a ranging and consolidation during the duration of yesterday’s session. It was a market holiday yesterday in several parts of Europe and Asia, and this is why the market volatility and liquidity levels were on a low during the previous session. In addition, traders are also proceeding with caution since the first week of the month is usually characterized by an influx of economic readings from last month.

These factors were the main reason why the currency pair consolidated within a small range of less than 50 pips. Today could be considered as the legitimate start of the week, and now that there is an expected surge of data coming from last month, the market is expected to undergo some significant volatility for today. The EUR/USD pair ran at 200 pips during the previous week following the results of French national elections, and this is why the currency pair could possibly be subject to corrections, although it has yet to be seen just how significant these corrections would be. The 1.0850 trading range is expected to ward off any corrections at least for the time being while the market waits for the release of economic data this week. The FOMC meeting minutes, the NFP report, and a speech from Yellen will be released within the week which could induce volatility in the pair. However, the market will be looking out for any hints of a Fed rate hike this June and if this does not happen, then the EUR/USD pair could possibly test the 1.1000 trading range.

For today’s session, there are no major economic releases from both the EU and US economy for today, and the EUR/USD pair is expected to undergo a consolidation with bearish undertones for the rest of today’s session.


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Yesterday was a very slow trading day for the GBP/USD pair as the market holidays in Europe and Asia left several trading desks vacant, thereby decreasing the amount of market volatility. The currency pair had briefly attempted to test its range highs at 1.2945 points but then eventually dropped in value as the day progressed before finally closing down yesterday’s session at 1.2900 points.

There is little market volatility nowadays in spite of Trump being as crass as usual with regards to his public comments on Twitter regarding US relationships with other countries such as Russia and China, mostly because market players have somehow gotten used to the President’s attitude. As a result, the GBP/USD pair was largely affected since it still has no definite course of action as of late. However, it is only a matter of time before the expected surge of economic data which usually occurs during the first week of a new month. The GBP/USD pair is expected to exhibit more consolidation until all the scheduled economic reports are released within the week, starting from the FOMC minutes this coming Wednesday.

For today’s session, the UK economy will be releasing its Manufacturing PMI data during the EU session, with the said reading expected to follow the recent slew of positive economic data from the region during these past few months. If this indeed happens, then the cable pair could possibly test its range highs yet again within today’s session.


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The U.S. dollar against the Canadian dollar broke at 1.37 level during the Tuesday session. The oil market is not performing well which pulls the Canadian dollar along. The psychological level between 1.3.63 and 1.37 is strongly resistive as seen in the weekly chart which may not be favorable in selling the pair.

Besides oil concerns, the Canadian housing market is along being problematic particularly in Toronto and Vancouver area. There is a bubble market over the summer housing market with some of the shadow lenders starting to be affected as it drops to lows. This put the currency under pressure added to the oil market which complicates the situation further.
Pullbacks in the trend could open buying opportunities for the pair with the target of 1.40 level and may reach even up to 1.45 which is already expected for this summer.

However, if the pair breaks lower than the 1.36 handle, it is a sign to sell the pair but could be far from happening. Traders should catch on pullbacks which is would be a wise decision for this pair considering the oil market to trigger the pair to break lower.

The EURUSD remained steady on its position as it trades in a comparably tight range regardless of the massive data from the European region such as unemployment and PMI.

While the agreement made in Greece together with IMF and EMU is expected to maintain the pair in a higher stand.

While central bankers were on the news and brought challenges towards Mario Draghi in pursuing a dovish sentiment. The pair extends its consolidation on the first day of Europe’s long weekend and created a bull flag pattern which serves as the pause to stimulate.

Traders are anticipated to postpone its action prior to the U.S Non-Farm Payrolls scheduled on Friday or the fulfillment of second-round election in France preceding the major to reach its renewed highs.

Resistance lies at 1.0955 close on its previous week’s high while the support came in at 1.0843 next to the 10-day moving average.

The momentum kept a favorable stance since the MACD were printed in black along with an upward sloping path reflected in the histogram. This event had influenced to the advancing positive trajectory pointing to a greater exchange rate.

An upward trend of the Relative Strength Index is seen at 67 posted on the upper side of the neutral range.


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The New Zealand dollar against the U.S. dollar was traded with high volatility during the Tuesday session. The pair consolidated higher than the 0.69 handle that is a significant psychological level. It is traded in a very tight trading range with highs around the 0.6935 level and it is apparent that there is not much changes in the trading activity. It may not be practical to go long on this pair as it cannot be predicted is the 0.69 level will be sustained. For now, it is best to short this pair and be prepared for choppiness in the market. Another option is just to wait in the sidelines although the next move higher than the 0.6935 level could indicate a short-term bullish.

A break lower than the 0.69 level could move the pair towards the 0.6850 mark in the lower channel that is being supportive enough for the pair. Traders could wait in the sidelines until this pair stabilizes as it continues to move downward although this is still uncertain as seen in the forming trading sessions.

A breakdown in the current psychological level could push the price lower towards the 0.65 handle but could take place in a longer period. The pair opens selling opportunities as seen in the short-term charts but traders should still be cautious as it might fluctuate unexpectedly or wait afterwards.

The USD had a very positive trading session yesterday as a result of a positive economic dollar-related news. This then helped the dollar to eclipse the value of other currencies, and the EUR/USD pair was no exception. The currency pair had started out yesterday’s session on a somewhat slower pace as the market anticipated the release of important economic readings and had spent the majority of yesterday trading within its range highs. However, as the said financial data started coming in, the dollar was able to capitalize on this slew of good news and prop itself up higher, putting significant downward pressure on the currency pair which is now trading at just under 1.0900 points.

The first bit of good news came in the form of the ADP employment report, which surprisingly came out as expected, considering the fact that last month’s NFP report had failed to meet market expectations. Up next was the manufacturing report which also came out as positive, and this increased the USD’s value even more. However, by this point, the dollar was still somewhat at par with the value of the euro since the market chose to standby for the release of the FOMC meeting minutes. The said minutes were released halfway during the NY session, and since there was no accompanying press conference the market had no choice but to pick on the results of the minutes itself. The Fed did not give any indication of the schedule of the next rate hike, however it pointedly ignored the somewhat tame economic growth in the Q1, which the market took as a signal that the central bank might be preparing for another June rate hike. This triggered a dollar buy which pushed down the EUR/USD pair towards under 1.0900 points.

As of this point, the market is starting to price in a June rate hike although there are still no definite hints as of the moment. For today’s session, the market is expecting the release of the US unemployment claims data while Draghi will be speaking during the latter part of the NY session. There is little volatility expected today as the NFP report is due to be released tomorrow. The EUR/USD pair is expected to trade with bearish undertones for the rest of today’s sessions.


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