GBP/JPY Forecast – British Pound To Regain Traction Vs Japanese Yen

GBP/JPY Forecast – British Pound To Regain Traction Vs Japanese Yen

  • – The British Pound is following a bullish pattern and remains supported at 145.40 against the Japanese Yen.
  • – There is a contracting triangle pattern forming with resistance at 146.40-50 on the hourly chart of GBP/JPY.
  • – Today in Japan, the Foreign investment in Japan stocks (July 28) figure was released by Ministry of Finance.
  • – The outcome was below the last reading of ¥377.0B (revised) and posted ¥292.4B.

 

Foreign Investment in Japan Stocks

Today in Japan, the Foreign investment in Japan stocks (July 28) figure was released by Ministry of Finance. The market was positioned for a minor rise from the last reading of ¥341.0B.

 

However, the actual result was neutral, as the Foreign investment in Japan stocks (July 28) came in at ¥292.4B, down from the last reading. The last reading was revised up from ¥341.0B to ¥377.0B. When we look at the foreign bond investment, there was an increase from the last revised reading of ¥946.7B to ¥1,178.6B.

 

Overall, the GBP/JPY pair may continue to move higher and might test the 146.20 and 146.40 levels in the near term.

 

GBP/JPY Technical Analysis

The British Pound remains in a nice uptrend and recently traded towards 146.50 against the Japanese Yen where it faced sellers. There was a downside correction initiated in GBP/JPY from the 146.41 high and the pair moved towards 145.50.

 

GBP/JPY Technical Analysis British Pound Japanese Yen

 

The pair traded below the 23.6% Fib retracement level of the last wave from the 144.46 low to 146.41 high. However, the downside move was protected by a major support area near 145.50-40. It also represents the 50% Fib retracement level of the last wave from the 144.46 low to 146.41 high.

 

Moreover, there is a contracting triangle pattern forming with resistance at 146.40-50 on the hourly chart of GBP/JPY. There are chances that the pair may resume the trend and could soon break the 146.00 initial resistance.

 

On the upside, the most important resistance is near 146.40. A successful close above 146.50 would lift the market sentiment in the near term. On the downside, the most important support and buy zone remains near 145.60-50.

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AUD/USD Forecast – Aussie Dollar Looks Set To Decline Vs US Dollar

AUD/USD Forecast – Aussie Dollar Looks Set To Decline Vs US Dollar

  • – The Aussie Dollar recently struggled and broke the 0.7930 support against the US Dollar.
  • – There was a break below a major bullish trend line with support at 0.7920 on the hourly chart of AUD/USD.
  • – Today in Australia, the Consumer Price Index for Q2 2017 was released by the RBA and republished by the Australian Bureau of Statistics.
  • – The outcome was below the forecast of 2.2%, as there was a rise of 1.9% in the CPI (YoY).

 

Australia’s Consumer Price Index (CPI)

Today in Australia, the Consumer Price Index for Q2 2017 was released by the RBA and republished by the Australian Bureau of Statistics. The market was positioned for the CPI to rise by 2.2% compared with the same quarter a year ago.

 

However, the actual result was below the forecast of 2.2%, as there was a rise of 1.9% in the CPI, even down from the last reading of 2.1%. In terms of the quarterly change, there was an increase of 0.2%, which was below the forecast of 0.4%. The report stated that:

The most significant price rises this quarter are medical and hospital services (+4.1%), new dwelling purchase by owner-occupiers (+0.9%), tobacco (+1.0%) and beer (+1.0%).

 

Overall, the AUD/USD pair may continue to move down and could even break the 0.7890 support for a move towards 0.7860.

 

AUD/USD Technical Analysis

The Aussie Dollar recently traded towards 0.7980-90 against the US Dollar where it faced sellers. There were more than two attempts by the AUD/USD pair to test the 0.8000 level, but the pair failed to gain bullish momentum and declined.

 

AUD/USD Technical Analysis Aussie Dollar US Dollar

 

The pair moved lower and cleared a major bullish trend line with support at 0.7920 on the hourly chart. There was even a break below the 0.7910 support and the 100 hourly simple moving average, and the pair traded as low as 0.7891 today.

 

It is currently correcting higher, but facing sellers near the 38.2% Fib retracement level of the last decline from the 0.7969 high to 0.7891 low. The broken support trend line near 0.7920 is also acting as a hurdle for more gains.

 

So, there is a chance of sellers gaining momentum in the short term and taking the pair back towards 0.7890 or even below 0.7880.

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Market Update – July 25, 2017

Market Update – July 25, 2017

The Forex market moves in a typical summer trading mode: the Asian sessions are very slow and only economic news matters. That’s normal for July.

 

But this doesn’t mean we won’t see any movement this week. There are two potential events that may move the market. Both of them from the United States.

 

FOMC in Focus

 

Tomorrow, the FOMC will release the statement and all eyes are on the dollar. The market prices in no changes from an interest rate point of view.

 

But you won’t know how the market will truly react. If you remember, the last two rate hikes from the Fed were met with dollar selling across the board.

 

This time there will be no press conference to follow the FOMC release. As such, chances that the Fed will hike rates are quite small. Moreover, it is unlikely the USD will stay so low. I mean, the interest rate differential between the dollar and the other major currencies is growing by the day.

 

Only Bank of Canada lifted the interest rate. The rest, starting with the ECB and continuing with the BOE and RBA, simply did nothing. In the meantime, the Fed hiked the rates multiple times.

 

US Advance GDP on Friday

 

Next Friday we’ll find out the true state of the US economy. GDP (Gross Domestic Product – shows the total value of the goods and services an economy produces) will be released. Because this is the Advanced number, it tends to be the most volatile one.

 

Traders will look to see if the recent IMF downgrade of the US economy will be confirmed. If not, look for the dollar to start gaining some.

 

The Forex Price Action

 

Recently, the Forex price action was a one-way street: a lower dollar. Even the GBP managed to climb above the all-important 1.30 psychological level. But, at the current level, the dollar looks interesting.

 

The AUDUSD was one of the biggest movers. It seems like the market dies to break above 0.80. RBA did help. The wording around the latest policy was clearly hawkish.

 

Conclusion

 

While summer trading conditions dominate, the market still looks for a reason to dump the USD. At the moment of this writing, the EURUSD just broke above 1.17. This is a 2-year high on the pair, and bulls only want to push the pair higher.

 

However, this week’s data is decisive. Look for volatility to increase as we approach the two releases.

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Gold Price To Continue Higher Towards $1260 Vs US Dollar

Gold Price To Continue Higher Towards $1260 Vs US Dollar

  • – Gold price maintained a bullish tone and traded above $1250 against the US Dollar.
  • – There is a connecting bullish trend line with support at $1252 forming on the hourly chart of gold versus the USD.
  • – Recently in the US, the Manufacturing Purchasing Managers Index (PMI) (Prelim) for July 2017 was released by the Markit Economics.
  • – The outcome was above the forecast, as there was an increase from the last reading of 52.0 to 53.2.

 

US Manufacturing PMI

Recently in the US, the Manufacturing Purchasing Managers Index (PMI) (Prelim) for July 2017 was released by the Markit Economics. The market was positioned for no change in the PMI from the last reading of 52.0.

 

The actual result was above the forecast, as there is an expectation of an increase from the last reading of 52.0 to 53.2 in the PMI. Moreover, the US Composite Output Index posted a new month high of 54.2. The report added that:

The pickup in business activity growth was driven by a steeper increase in manufacturing production in July (‘flash’ output index at 54.3, up from 52.6 in June). Meanwhile, service providers indicated that activity growth was unchanged from June’s five-month peak.

 

Overall, there can be minor corrections in Gold price, but it remains supported above the $1250-52 levels.

 

Gold Price Technical Analysis

There were good gains in Gold price since it traded above the $1245 and $1250 level recently against the US Dollar. The upside move was decent, as there was a new monthly high formed at $1258.76 from where a correction was initiated.

 

Gold Price Technical Analysis

 

The price traded below the 23.6% Fib retracement level of the last wave from the $1242.61 low $1258.76 high. The downside move was prevented by a connecting bullish trend line with support at $1252 on the hourly chart of gold versus the USD.

 

Moreover, the 38.2% Fib retracement level of the last wave from the $1242.61 low $1258.76 high also acted as a support zone. The price is already recovering from $1253 and may continue to move higher.

 

On the upside, a retest of $1258 is most likely in the near term. Above $1258, the price may break $1260 for further gains in the near term.

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EUR/GBP Forecast – Euro Correcting Lower Towards 0.8920 Vs British Pound

EUR/GBP Forecast – Euro Correcting Lower Towards 0.8920 Vs British Pound

  • – The Euro after trading as high as 0.8994 against the British Pound started a downside move.
  • – There are two important bullish trend lines with support near 0.8910 forming on the hourly chart of EUR/GBP.
  • – Today in the Euro Zone, Manufacturing Purchasing Managers Index (PMI) for July 2017 (Preliminary) was released by the Markit Economics.
  • – The outcome was below the forecast, as there was a decline in the PMI from the last reading of 57.4 to 56.8.

 

Euro Zone Manufacturing PMI

Today in the Euro Zone, Manufacturing Purchasing Managers Index (PMI) for July 2017 (Preliminary) was released by the Markit Economics. The market was positioned for a decline from the last reading of 57.4 to 57.2.

 

The actual result was below the forecast, as there was a decline in the PMI from the last reading of 57.4 to 56.8. Moreover, the headline IHS Markit Eurozone PMI was down for the second time and now sits at 55.8. The report added that:

Despite coming off recent highs, the index remained at an elevated level by historical standards and signaled one of the strongest expansions seen over the past six years.

 

Overall, the EUR/GBP pair may correct a few pips towards 0.8820-10, but likely to gain bids on the downside.

 

EUR/GBP Technical Analysis

The Euro was in a solid uptrend from the 0.8700 swing low against the British Pound and traded above the 0.8800 handle. The uptrend in the EUR/GBP pair was such that the pair even traded close to the 0.9000 handle.

 

EUR/GBP Technical Analysis Euro British Pound

 

A high was formed near 0.8994 where the pair faced strong offers and a correction wave was initiated. The pair is now below the 23.6% Fib retracement level of the last wave from the 0.8833 low to 0.8994 high.

 

On the downside, there are two important bullish trend lines with support near 0.8910 forming on the hourly chart of EUR/GBP along with the 100 hourly simple moving average. Moreover, the 0.8915 level is the 50% Fib retracement level of the last wave from the 0.8833 low to 0.8994 high.

 

So, if the pair continues to move down, there can be strong buy zones near 0.8825, 0.8820 and 0.8810 in the short term.

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EUR/USD Forecast – Euro Consolidating Gains Above 1.1620 Vs US Dollar

EUR/USD Forecast – Euro Consolidating Gains Above 1.1620 Vs US Dollar

  • – The Euro surged higher recently and cleared the 1.1600 handle against the US Dollar.
  • – A descending channel pattern with resistance at 1.1515 on the hourly chart of EUR/USD was cleared for an upside move.
  • – Today in the Euro Zone, the current account figure of Greece for May 2017 was released by the Bank of Greece.
  • – The outcome was around the forecast, as there was a trade deficit of €-0.582B (YoY), a bit more than the last €-0.462B.

 

Greece Current Account

Recently in the Euro Zone, the current account figure of Greece for May 2017 was released by the Bank of Greece. The market was positioned for a trade deficit of €-0.50B compared with the same month a year ago.

 

The actual result was around the forecast, as there was a trade deficit of €-0.582B (YoY), a bit more than the last €-0.462B. One important point to note was an increase of more than 15% in non-oil exports of goods and there was a rise of 17.5% in oil exports. The report added that:

A €145 million rise in the surplus of the services balance is for the most part due to a 40.4% rise in net – mainly sea – transport receipts, as well as to higher net travel and other services receipts. In May 2017, non-residents’ arrivals and the corresponding receipts showed an increase of 1.5% and 1.7%, respectively.

 

Overall, the EUR/USD pair may correct a few pips from the current levels, but more likely to find support near 1.1620-1.1600.

 

EUR/USD Technical Analysis

The Euro this week surged higher and broke the 1.1550 and 1.1600 resistance levels against the US Dollar. The EUR/USD pair traded as high as 1.1676 recently and currently consolidating in a range above the 1.1640 level.

 

EUR/USD Technical Analysis Euro US Dollar

 

To initiate the upside move, there was a break above a descending channel pattern with resistance at 1.1515 on the hourly chart and the 100 hourly simple moving average. The pair is now forming an ascending channel or a flag pattern with support at 1.1630 and resistance near 1.1670.

 

An initial support is around the 23.6% Fib retracement level of the last wave from the 1.1478 low to 1.1676 high, which is also near the channel support.

 

So, if the pair dips from the current levels, it may find support near 1.1630 for another ride above the 1.1670 level in the near term.

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USD/JPY Forecast – Can US Dollar Recover Vs Japanese Yen?

USD/JPY Forecast – Can US Dollar Recover Vs Japanese Yen?

  • – The US Dollar recently traded lower to test the 111.50 support against the Japanese Yen.
  • – There is a key bearish trend line with resistance at 111.85 forming on the hourly chart of the USD/JPY pair.
  • – Today in Japan, the Merchandise Trade Balance Total for June 2017 was released by the Ministry of Finance.
  • – The outcome was below the forecast of ¥484.7B, as the trade surplus was ¥439.8B.

 

Japan’s Merchandise Trade Balance

Today in Japan, the Merchandise Trade Balance Total for June 2017 was released by the Ministry of Finance. The market was expecting a trade surplus of ¥439.8B compared with the last deficit of ¥203.4B.

 

The actual result was below the forecast of ¥484.7B, as the trade surplus was ¥439.8B, and the last reading was revised up from ¥203.4B to ¥204.2B. Imports of goods and services in June 2017 were up by 15.5%, more than the forecast of 14.6%. Exports of goods and services in June 2017 were up by 9.7%, more than the forecast of 9.5%.

 

Overall, the USD/JPY pair has a chance to recover in the short term, but it faces resistances such as 112.30 and 112.80 on the upside.

 

USD/JPY Technical Analysis

The US Dollar declined during the past few days and traded below the 112.80 and 112.30 support levels against the Japanese yen. The USD/JPY pair even broke the 112.00 handle and the 100 hourly simple moving average to trade towards 111.50.

 

USD/JPY Technical Analysis US Dollar Japanese Yen

 

The pair after trading as low as 111.54 started a recovery and broke a key bearish trend line with resistance at 111.85 forming on the hourly chart. It is currently attempting a move above the 23.6% Fib retracement level of the last decline from the 113.57 high to 111.54 low.

 

The pair faces a monster hurdle on the upside near 112.30. The 38.2% Fib retracement level of the last decline from the 113.57 high to 111.54 low along with the 100 hourly simple moving average is positioned at 112.30.

 

Above 112.30, the next hurdle is at 112.80, which was a support earlier and now a resistance. So, if the pair has to continue higher, it has to break 112.30 and 112.80 for sustained gains.

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USD/CHF Forecast – US Dollar Recovery Won’t Be Easy Vs Swiss Franc

USD/CHF Forecast – US Dollar Recovery Won’t Be Easy Vs Swiss Franc

  • – The US Dollar stated a downtrend after trading close to 0.9699 against the Swiss Franc.
  • – There is a bearish trend line with resistance at 0.9565 on the hourly chart of the USD/CHF pair.
  • – Today in the US, the Net Long-Term TIC Flows for May 2017 was released by the US Department of Treasury.
  • – The outcome was above the forecast, as the net flows were $91.9B, more than the expectation of $20.3B.

 

US Net Long-Term TIC Flows

Today in the US, the Net Long-Term TIC Flows for May 2017 was released by the US Department of Treasury. The market was expecting the Net Long-Term TIC Flows to be around $20.3B, compared with the last $1.8B.

 

The actual result was above the forecast, as the net flows were $91.9B, more than the expectation of $20.3B. The last reading was also revised up from $1.8B to $9.7B.  On the other hand, the total Net TIC Flows were down from the last revised reading of $74.4B to $57.3B. The report added that:

The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $57.3 billion.  Of this, net foreign private inflows were $87.2 billion, and net foreign official outflows were $29.9 billion.

 

Overall, the USD/CHF may continue to move higher, but it is facing a major resistance zone near 0.9560-70.

 

USD/CHF Technical Analysis

The US Dollar struggled to break above the 0.9690-0.9700 levels against the Swiss Franc and moved down. During the downside move, the USD/CHF pair broke the 100 hourly simple moving average and a bullish trend line at 0.9650 on the hourly chart.

 

USD/CHF Technical Analysis US Dollar Swiss Franc

 

The pair traded as low as 0.9523 and currently correcting higher. It has managed to move above the 23.6% Fib retracement level of the last decline from the 0.9632 high to 0.9523 low.

 

However, there are many hurdles on the upside such as 0.9565 and 0.9580. There is also a bearish trend line with resistance at 0.9565 on the hourly chart. Moreover, the 38.2% Fib retracement level of the last decline from the 0.9632 high to 0.9523 low is also near the trend line.

 

So, if the pair continues to move higher, it may face resistance near 0.9565 and 0.9570. Selling rallies can be considered as long as the pair is below the trend line resistance at 0.9570.

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Market Update – July 18, 2017

Market Update – July 18, 2017

If there’s one word to define this week, that’s inflation. Eurozone Final CPI, UK CPI, and New Zealand one – they all came softer than expected. Yet another sign central banks face a massive task in their pursuit of higher inflationary levels.

 

The other thing to watch, and, perhaps, even more important, is the ECB (European Central Bank) interest rate decision and press conference this Thursday. While no one expects the ECB to announce at this meeting, you’ll never know how the press conference will go.

 

Draghi and the ECB tested the markets so far with “rumors” about future ECB tapering. However, Euro couldn’t care less. It deals now above 1.15.

 

Lowest Volatility Ever

This summer seems to be special. The VIX (Volatility Index) shows these are the calmest markets ever. There’s a saying that when the VIX closes below 10, it’s Christmas. That is correct, because, during holidays, volatility usually dries up.

 

The whole summer has been like this. As such, traders faced adverse conditions, regardless their strategy. Some strategies may work in such an environment, but they’ll be tested to the limit when conditions return to normal. And, they will.

 

USD and U.S. Politics

Trump’s administration still offering hints about possible fiscal and tax reform to be delivered this 2017. Until then, the market reacts to the inability of the healthcare bill to get enough votes. As such, traders sold the dollar, as it happened in the previous Asian session.

 

However, while the dollar falls across the board, it doesn’t feel like melting. Hence, bulls are probably just around the corner.

 

Summer Trading at Its Best

 

Summer trading conditions must be correctly interpreted when buying or selling currencies. If one expects strong and aggressive moves, think twice. Typically, the market consolidates in Asia, then go for Asian highs or lows, only to reverse by the end of London or North America.

 

Despite this, we had some solid trends, at least on the lower time frames. AUDUSD is one of the pairs that enjoyed the biggest rally. It sits now above 0.79 and 0.8 seems to be just around the corner.

 

This Thursday, the focus will be on what the ECB will do. No one expects a massive announcement this time of the year, but trading is based on expectations. If Draghi hesitates or leaves room for interpretation when it comes to the faith of the quantitative easing program, the market will react strongly. My take is that the ECB will have something to deliver for both bulls and bears. We’ll find out soon enough.

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Gold Price Looks Poised For Gains Above $1238 Vs US Dollar

Gold Price Looks Poised For Gains Above $1238 Vs US Dollar

  • – Gold price continued to decline and moved below the $1218 support against the US Dollar.
  • – There is an ascending channel pattern with resistance at $1238 forming on the hourly chart of gold versus the USD.
  • – Today in China, the hosing price index for June 2017 was released by the National Bureau of Statistics.
  • – The outcome was neutral, as there was an increase of 10.2%, just below the last 10.4%.

 

Chinese Housing Price Index

Today in China, the hosing price index for June 2017 was released by the National Bureau of Statistics. The market was positioned for an increase of about 10% in June 2017 compared with the previous month.

 

The actual result was neutral, as there was an increase of 10.2%, just below the last 10.4%. Recently, there was a report released by the National Bureau of Statistics, titled “Steady and Sound Development Momentum of National Economy was More Visible in the First Half Year”. It highlighted a few positive points such as a year-on-year increase of 6.9 percent in the GDP by 38,149.0 billion yuan in Q1 2017, and acceleration in the Industrial Production.

 

Overall, there can be more gains in Gold price in the near term above $1238-1240 if it stays above $1220.

 

Gold Price Technical Analysis

It seems like Gold price has a good bullish run recently as it moved above $1225 and $1230 against the US Dollar. The upside move was solid, as there was a H4 clove above the $1230 resistance, suggesting buyer’s strength.

 

Gold Price Technical Analysis

 

The price is following an ascending channel pattern with resistance at $1238 on the hourly chart. At the moment, the price is trading near the channel resistance at $1238. So, there is a chance of a minor dip towards $1236-35 in the short term.

 

On the downside, an initial support is around the 38.2% Fib retracement level of the last wave from the $1232.71 low to $1238.21 high.

 

The price remains supported near buy zones at $1235 and may soon resume its upward movement. A break above $1238 could open the doors for more gains above $1240 in the near term.

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