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Crude Oil Price Remains in Uptrend Above $50.40 Vs US Dollar

Crude Oil Price Remains in Uptrend Above $50.40 Vs US Dollar

  • – Crude oil price is still in an uptrend and is currently trading above the $50.40 level against the US Dollar.
  • – There is a monster breakout pattern forming with resistance near $51.00 on the hourly chart.
  • – Recently in the US, the EIA Crude Oil stockpiles report (Sep 11, 2017) was released by the Energy Information Administration.
  • – According to the report, the EIA Crude Oil stockpiles were 4.591M compared with the forecast of 3.493M.

 

EIA Crude Oil Stockpiles Report

Recently in the US, the EIA Crude Oil stockpiles report (Sep 11, 2017) was released by the Energy Information Administration. The market was positioned for the EIA Crude Oil stockpiles to be 3.493M compared with the last reading of 5.888M.

 

However, the actual result was on disappointing, as the EIA Crude Oil stockpiles were 4.591M compared with the forecast of 3.493M. Yesterday, the Fed interest rate decision was also scheduled. The central bank made no changes in the rates, but they went ahead with the hawkish tone.

 

It seems like oil prices were not affected much after the release, and remains supported on the downside above $50.40.

 

Oil Price Technical Analysis

The past few days were excellent for crude oil buyers, as there was a rise in prices above the $49.00 and $50.00 levels. The price is following a major uptrend and it even broke the $51.00 level recently to trade as high as $51.11.

 

Oil Price Technical Analysis

 

Later, the price started a downside correction and moved below the 23.6% Fib retracement level of the last wave from the $49.73 low to $51.11 high. On the downside, there are many supports starting with the $50.60 level followed by the 100 hourly simple moving average.

 

The 38.2% Fib retracement level of the last wave from the $49.73 low to $51.11 high is also at $50.58 to act as a support. It seems like there is a monster breakout pattern forming with resistance near $51.00 on the hourly chart.

 

Therefore, there is a clear a support forming near $50.40. As long as the price is above the $50.40 support, the price could attempt an upside break above the $51.00 handle in the near term.

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NZD/USD Forecast – New Zealand Dips Supported Near 0.7300 Vs US Dollar

NZD/USD Forecast – New Zealand Dips Supported Near 0.7300 Vs US Dollar

  • – The New Zealand Dollar climbed towards 0.7340 where it faces sellers against the US Dollar.
  • – There are two important bullish trend lines forming with support near 0.7300 and 0.7285 on the hourly chart of the NZDUSD pair.
  • – Today in New Zealand, the Current Account figure for Q2 2017 was released by the Statistics New Zealand.
  • – The outcome was better than the forecast of $-0.875B, as there was a trade deficit of $-0.620B.

 

New Zealand Current Account

Today in New Zealand, the Current Account figure for Q2 2017 was released by the Statistics New Zealand. The market was aligned for a trade deficit of $-0.875B compared with the last surplus of $0.221B.

 

The actual result was better than the forecast of $-0.875B, as there was a trade deficit of $-0.620B. Looking at the Current Account – GDP Ratio, there was a decrease of 2.8% in Q2 2017, which was less than the forecast of -3%. The report added that:

 

New Zealand exported a record $5.8 billion worth of services in the June quarter, seasonally adjusted, while importing a record $4.5 billion worth of services.

 

Overall, the NZD/USD pair might correct a few pips lower towards 0.7285, but it remains supported on the downside.

 

NZD/USD Technical Analysis

The New Zealand Dollar was able to climb higher this week and traded above the 0.7300 level against the US Dollar. The NZD/USD pair traded as high 0.7341 where it faced offers and then started a short-term correction.

 

NZD/USD Technical Analysis New Zealand Dollar US Dollar

 

The pair traded recently traded below the 23.6% Fib retracement level of the last wave from the 0.7247 low to 0.7341 high. On the downside, there are two important bullish trend lines forming with support near 0.7300 and 0.7285 on the hourly chart.

 

The first trend line is very important near 0.7300 since it is just above the 50% Fib retracement level of the last wave from the 0.7247 low to 0.7341 high.

 

The second trend line support at 0.7285 is also crucial since the 100 hourly simple moving average is positioned around 0.7275. Overall, the pair remains supported on dips towards 0.7300-0.7285. On the upside, the recent high near 0.7340 is a major resistance zone for further gains.

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Market Update – Sepember 19, 2017

Market Update – Sepember 19, 2017

The Forex market participants prepare for one of the most important economic events this year: the Fed’s next FOMC meeting. What makes it so unique?

 

Several things do. First, the Federal Reserve of the United States is in the middle of a tightening cycle. It raised the interest rates for the federal fund’s rates from zero to over one percent.

 

The market sold the U.S. Dollar. A quick look on the EURUSD pair tells you the dollar doesn’t have many friends these days.

 

It had the same trajectory against the AUD, CAD, and even against the GBP.

 

Second, the Fed prepares to wind down the balance sheet. While no one believes it will succeed, the Fed did try to communicate its normalization policies.

 

Finally, it won’t raise rates this Wednesday. At least, that’s a general impression. Still, the meeting is significant for the fate of the US dollar moving forward.

 

Fed and Forward Guidance

 

The Federal Reserve is the first central bank to introduce the forward guidance principle. Under it, it pledged to better communicate to the market participants its intentions.

 

So it did. The idea appealed to other central banks jurisdictions around the world. The ECB, Bank of England, and even Bank of Japan followed suit.

 

The current message From the Fed is that the quantitative tightening (shrinking the balance sheet) would be a tedious process. To use Yellen’s own words, it’ll be like “watching an oil pain dry.”

 

I tend to disagree. For in starting such a process, the Fed will be engaged in a two-way tightening process. One that began with the interest rates rising cycle, and the other one that’ll start Wednesday with unwinding the balance sheet.

 

It’ll be a double positive for the dollar. However, there’s a catch. The info is far from being new. And yet, the dollar tumbled, not rose.

 

Trump Tax Cuts and North Korean Missiles

 

The recent weeks saw the Trump’s tax cuts plans and North Korean missiles influencing the Forex market more than any other economic news. Not even the NFP move mattered as the markets discounted it in the days that followed.

 

If Trump sees the tax-cutting plan approved, it’ll be the third arrow in the direction of a stronger dollar. On the other hand, the reality of a North Korean showdown, limits any risk traders may want to take.

 

Conclusion

 

The FOMC meeting and the press conference to follow will end up bringing volatility back to the Forex market. Critical levels currently hold for some time: the 1.20 on EURUSD, 0.80 on AUDUSD and 0.96 on USDCHF.

 

Expect them to hold still until the press conference. All bets are off shortly after it.

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Gold Price Remains at Risk Below $1310 Vs US Dollar

Gold Price Remains at Risk Below $1310 Vs US Dollar

  • – Gold price started a downside move from the $1340 swing high against the US Dollar and traded below $1310.
  • – There is a declining and contracting triangle pattern forming with resistance at $1310 on the hourly chart of gold versus the USD.
  • – Recently in the US, the Net Long-Term TIC Flows report for July 2017 was released by the US Department of Treasury.
  • – The outcome was below the forecast of $42.3B, as the Net Long-Term TIC Flows were $1.3B.

 

US Net Long-Term TIC Flows

Recently in the US, the Net Long-Term TIC Flows for July 2017 were released by the US Department of Treasury. The market was positioned for a rise in flows from the last reading of $34.4B to $42.3B.

 

The actual result was below the forecast of $42.3B, as the Net Long-Term TIC Flows were down to $1.3B. The total Net TIC Flows were $-7.3B, down from the last revised reading of $5.9B. , The report added that:

 

The sum total in July of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $7.3 billion.  Of this, net foreign private inflows were $6.0 billion, and net foreign official outflows were $13.3 billion.

 

Overall, gold price might continue to struggle in the short term and could even break the $1300 handle.

 

Gold Price Technical Analysis

After an impressive run, Gold price found sellers above $1350-60 levels against the US Dollar and started correcting lower. The price declined and broke a couple of important support levels like the 100 hourly simple moving average, $1340, $1325 and $1310.

 

Gold Price Technical Analysis

 

The price recently traded as low as $1304.56 and attempted a minor correction. However, it is struggling to even test the 23.6% Fib retracement level of the last decline from the $1334.21 high to $1304.56 low. There are many hurdles on the upside, and it seems like there is a declining and contracting triangle pattern forming with resistance at $1310 on the hourly chart of gold versus the USD.

 

The price might continue to face sellers and it is most likely to decline below the recent low of $1304.56. Above $1310, the $1315 level and the 38.2% Fib retracement level of the last decline from the $1334.21 high to $1304.56 low are key hurdles.

 

To sum up, gold price remains in the bearish zone and sellers might soon attempt a break of the $1300 handle in the near term.

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AUD/USD Forecast – Aussie Dollar To Break Higher Vs US Dollar

AUD/USD Forecast – Aussie Dollar To Break Higher Vs US Dollar

  • – The Aussie Dollar after trading below the 0.7980 level against the US Dollar started a recovery.
  • – There is a major bearish trend line forming with resistance near 0.8030 on the hourly chart of AUD/USD.
  • – Recently in Australia, the New Motor Vehicle Sales for August 2017 was released by the Australian Bureau of Statistics.
  • – The outcome was above the forecast of -1%, as there was no decline in sales (MoM).

Australia’s New Motor Vehicle Sales

Recently in Australia, the New Motor Vehicle Sales for August 2017 was released by the Australian Bureau of Statistics. The market was positioned for a decline of 1% in sales compared with the previous month.

 

The actual result was above the forecast of -1%, as there was no decline in sales. The yearly change in the sales was +1.7%, but was lower than the last increase of 1.8%.  The report added that:

 

When comparing national trend estimates for August 2017 with July 2017, sales for Sports utility vehicles and Other vehicles increased by 0.8% and 0.7% respectively. By contrast, Passenger vehicles decreased by 0.4%.

 

Overall, the AUD/USD pair is currently attempting an upside break above 0.8030, and it succeeds, there can be more gains.

 

AUD/USD Technical Analysis

The Aussie Dollar was under a bearish pressure this past week and moved below the 0.8050 and 0.7980 support levels against the US Dollar. The AUD/USD pair traded as low as 0.7955 from where a recovery was initiated.

 

AUD/USD Technical Analysis Aussie Dollar US Dollar

 

The pair traded higher and move above 23.6% Fib retracement level of the last decline from the 0.8124 high to 0.7955 low. The pair also moved above the 0.8000 handle and the 100 hourly simple moving average. At the moment, the pair is trading near a major resistance at 0.8030-35.

 

On the upside, there is a major bearish trend line forming with resistance near 0.8030 on the hourly chart. The trend line resistance is also near the 38.2% Fib retracement level of the last decline from the 0.8124 high to 0.7955 low.

 

Once there is a proper close above the trend line resistance at 0.8030, the pair could head towards the next resistance at 0.8060. On the downside, the 0.8000 handle and the 100 hourly SMA are decent supports and buy zones.

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EUR/USD Forecast – Can Euro Move Above This Vs US Dollar?

EUR/USD Forecast – Can Euro Move Above This Vs US Dollar?

  • – The Euro is currently trading below 1.1950 against the US Dollar, and struggling to gain momentum.
  • – There is a major bearish trend line forming with resistance near 1.1920 on the hourly chart of EUR/USD.
  • – Recently in the US, the Initial Jobless Claims (Week Ending Sep 9, 2017) were released by the US Department of Labor.
  • – The outcome was above the forecast of 300K, as there was a decline in claims from 298K to 284K.

 

US Initial Jobless Claims

Recently in the US, the Initial Jobless Claims (Week Ending Sep 9, 2017) were released by the US Department of Labor. The market was positioned for an increase in the claims from the last reading of 298K to 300K for the week ending Sep 9, 2017.

 

The actual result was above the forecast of 300K, as there was a decline in claims from 298K to 284K. The 4-week moving average now stands at 263,250, which is around 13,000 more than the previous week’s unrevised average of 250,250. The report added that:

 

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending September 2, unchanged from the previous week’s unrevised rate.

 

Moreover, the US CPI rate was also released, which exceeded forecast and came in at 1.9% (YoY), whereas the forecast was +1.8%.

 

EUR/USD Technical Analysis

The Euro declined from the 1.2090 swing high against the US Dollar, and traded below the 1.2020 support area. The EUR/USD pair even broke the 1.2000 level, 1.1950 support and the 100 hourly simple moving average.

 

EUR/USD Technical Analysis Euro US Dollar

 

It traded as low as 1.1837 from where it started a correction. The pair has already moved above the 38.2% Fib retracement level of the last decline from the 1.1994 high to 1.1837 low. However, the pair faces many hurdles, including a major bearish trend line forming with resistance near 1.1920 on the hourly chart.

 

Moreover, the 50% Fib retracement level of the last decline from the 1.1994 high to 1.1837 low is also acting as a resistance near 1.1920. Therefore, a break above 1.1920-1.1940 won’t be easy.

 

As long as the pair is below the 1.1940, sellers remain in control and there can be a retest of 1.1850 in the near term.

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USD/JPY Forecast – Can US Dollar Hold This Vs Japanese Yen

USD/JPY Forecast – Can US Dollar Hold This Vs Japanese Yen

  • – The US Dollar is in an uptrend and recently traded towards 110.70 against the Japanese Yen.
  • – There is a major ascending channel forming with support at 110.40 on the hourly chart of the USD/JPY pair.
  • – Today in Japan, the Industrial Production report for July 2017 was released by the Ministry of Economy, Trade and Industry.
  • – The outcome was around the forecast, as there was a decline in the Industrial Production by 0.8% (MoM).

 

Japan’s Industrial Production

Today in Japan, the Industrial Production report for July 2017 was released by the Ministry of Economy, Trade and Industry. The market was positioned for a decline of 0.8% compared with the previous month.

 

The actual result was around the forecast, as there was a decline in the Industrial Production by 0.8%. Looking at the yearly change in the production, there was a rise of 4.7% in July 2017, similar to the last +4.7%. On the other hand, the Capacity Utilization declined by 1.8% in July 2017, compared with the last increase of 2.1%.

 

Overall, the USD/JPY pair might correct a few pips towards 110.00, but downsides remain supported in the near term.

 

USD/JPY Technical Analysis

The US Dollar made a decent ground this week and moved above the 110.00 resistance level against the Japanese yen. The USD/JPY pair recently traded as high as 110.72 where it faced sellers and currently consolidating gains.

 

USD/JPY Technical Analysis US Dollar Japanese Yen

 

At the moment, the pair is trading near the 23.6% Fib retracement level of the last wave from the 109.35 low to 110.72 high. Moreover, there is a major ascending channel forming with support at 110.40 on the hourly chart.

 

It seems like sellers might succeed in breaking the channel support at 110.40. In the mentioned scenario, the next immediate support sits at 110.20, which is near the 38.2% Fib retracement level of the last wave from the 109.35 low to 110.72 high.

 

However, the most important support is near 110.00, which is just around the 50% Fib level of the same wave. The overall trend is still bullish for USD/JPY, but there can be a few downside corrections in the short term.

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GBP/USD Forecast – British Pound Downsides Remain Supported Vs US Dollar

GBP/USD Forecast – British Pound Downsides Remain Supported Vs US Dollar

  • – The British Pound surged higher this week and traded as high as 1.3328 against the US Dollar.
  • – The GBP/USD pair recently broke an ascending channel with support at 1.3310 on the hourly chart.
  • – Today in the UK, the Claimant Count Change for August 2017 was released by the National Statistics.
  • – The outcome was above the forecast of 0.6K, as the change was -2.8K.

 

UK’s Claimant Count Change

Recently in the UK, the Claimant Count Change for August 2017 was released by the National Statistics. The market was positioned for a change of 0.6K in the Claimant Count.

 

However, the actual result was above the forecast 0.6K, as the change was -2.8K. The ILO Unemployment Rate also posted a decline in July 2017 (3M) from 4.4% to 4.3%. The report added that:

 

There were 1.46 million unemployed people (people not in work but seeking and available to work), 75,000 fewer than for February to April 2017 and 175,000 fewer than for a year earlier.

 

Overall, the GBP/USD pair might correct a few pips towards 1.3250-40 in the near term, but remains supported on the downside.

 

GBP/USD Technical Analysis

The British Pound is in a major uptrend as it traded above the 1.3250 level this week against the US Dollar. The GBP/USD pair even broke the 1.3300 handle today and traded as high as 1.3328 before facing tiny sell offers.

 

GBP/USD Technical Analysis British Pound US Dollar

 

The pair is currently correcting lower and already moved below the 23.6% Fib retracement level of the last wave from the 1.3160 low to 1.3328 high. Moreover, the pair broke an ascending channel with support at 1.3310 on the hourly chart.

 

It seems like the pair could correct further towards 1.3250, which is near the 50% Fib retracement level of the last wave from the 1.3160 low to 1.3328 high. Furthermore, there is a bullish trend line on the same chart at 1.3255.

 

Therefore, an extension of the current correction is likely to find support near 1.3250. Only a close below the 1.3240 level would call for a test of the 1.3200 support. On the upside, the pair faces an immediate resistance at 1.3310, followed by the last high at 1.3328.

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Market Update – September 12, 2017

Market Update – September 12, 2017

Important week for the Forex traders as inflation data takes center stage. Today we had the first release, out of the United Kingdom, and the pound soared on the news.

 

Inflation jumped to 2.9%, which is rapidly moving away from the desired 2% level the Bank of England (BOE) targets. It makes an interesting BOE meeting two days from now as the debate is what to do to slow this uprising trend in prices.

 

In a way, it is an irony. The central bank used the stimulus program to create inflation, but now that it picks up too fast, it’ll have to raise the rates.

 

U.S. Inflation in Focus

It is not the same on the other side of the Atlantic. The Fed has a dual mandate: to keep inflation below or close to two percent and to create jobs. While the second part of the mandate is completed, the problem comes from the CPI. It stubbornly stays low.

 

But, in comparison with the BOE, the Fed is already in the middle of a tightening cycle. It raised the federal funds’ rates from zero to one percent. And, it keeps a hawkish tone.

 

Yet, the dollar enjoyed a bearish trend. And, the stock market is close to record highs.

 

What would reverse the course for the dollar? Inflation, of course. Therefore, traders should keep an eye on the inflation data coming two days from now.

 

If we see an uptick, it may be just what the Fed wants before raising rates again.

 

Quantitative Tightening

 

Next week the Fed is expected to reveal the monetary policy ahead. While it is unlikely to see a rate hike, traders will focus on the quantitative tightening program.

 

The Fed vowed to unwind the balance sheet and it may start doing that by selling 10bn worth of bonds starting with next month. And, to announce more details about the process at the next meeting.

 

From my point of view, the risk is that the move is not priced in. It may represent a hawkish boost for the dollar and a nasty U-turn in the recent dollar trend.

 

Conclusion

 

One thing is for sure. Smart money will position for the move way before the retail traders will. And, it is quite possible that they already did.

 

Another source of relative volatility may come from the SNB (Swiss National Bank) as it is due to set the rates for the period ahead. The CHF acted as a safe-haven lately, but all spikes have been sold. Parity on the USDCHF is key for future prices.

 

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EUR/GBP Forecast – Euro Eyes Major Correction Vs British Pound

EUR/GBP Forecast – Euro Eyes Major Correction Vs British Pound

  • – The Euro after a nasty ride towards 0.9300-0.9310 made a top against the British Pound.
  • – The EUR/GBP pair broke a major connecting bullish trend line with support at 0.9095 on the hourly chart.
  • – Today in the Euro Zone, the French Nonfarm Payrolls for Q2 2017 report was released by INSEE.
  • – The outcome was below the forecast of +0.5%, as there was a rise in payrolls by 0.4% (QoQ).

 

French Nonfarm Payrolls

Today in the Euro Zone, the French Nonfarm Payrolls for Q2 2017 report was released by INSEE. The market was positioned for an increase in the Nonfarm Payrolls by 0.5% compared with the previous quarter.

 

The actual result was below the forecast of +0.5%, as there was a rise in payrolls by 0.4%. Looking at the net payroll job creation, there was an increase of 0.3% to 81,400, which makes it the eleventh consecutive quarter of growth. The report added that:

 

The payroll employment increased by 76,800 in the private sector and by 4,600 in the public sector. Year on year, it rose by 303,500 net jobs (that is +1.2%): 276,300 jobs were created in the private sector and 27,200 jobs in the public service.

 

Overall, the EUR/GBP pair might continue to decline and could even break the 0.9060 support to test the 0.9040 level.

 

EUR/GBP Technical Analysis

The Euro was in a super uptrend and traded above the 0.9280 resistance against the British Pound. The EUR/GBP pair traded well above the 0.9300 handle before it faced strong offers and started a downside move.

 

EUR/GBP Technical Analysis Euro British Pound

 

There downside move was strong, as the pair broke many supports like 0.9250, 9200, 9180 and the 100 hourly simple moving average. The pair recently cleared a crucial pivot zone at 0.9130 and the 0.9110 swing low.

 

It seems like the pair might soon test the 1.618 Fib extension of the last wave from the 0.9117 low to 0.9202 high at 0.9064 low. If sellers remain in control, there can be even be a test of the 0.9040 support area.

 

Overall, the EUR/GBP pair has started a major downside correction and could even test the 0.9000 handle in the near term.

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