31 / 05 / 2016 | Technical Analysis

EUR/USD: Gains traction to trade at 1.1162

North American Session
EUR/USD has been trading sideways since the 18th of May 2016, with the pair trading in a broad range between the levels of 1.1244 and 1.1098.

The major rose during the course of the day on Monday, hitting the daily high of 1.1145. Today, the pair initially fell to the session low of 1.1123, but subsequently bounced up reaching 1.1162. The major’s reaction was muted to the mixed eurozone reports released earlier, but now seems to have gained momentum as markets shift their attention to U.S. economic reports and especially the core PCE price index, the Fed’s preferred inflation measure.

In the event that the price breaks above 1.1188, the pair could rise up to 1.1215 and 1.1244 in extension.

On the flip side, in the scenario where the price breaks below 1.1098, the pair could find support at 1.1070 and 1.1058 respectively.



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
 
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31 / 05 / 2016 | Market News

Aussie and kiwi strengthen, while yen trims gains

The Aussie and Kiwi dollars edged higher against their U.S. counterpart on Tuesday on strong economic reports from both Australia and New Zealand, while the Japanese yen trimmed earlier gains on household spending, unemployment rate, and industrial output data.

The USD/JPY pair fell 0.04% to 111.07, as a report released earlier in Japan indicated that household spending for April increased by 0.2%, well above expectations for a 0.6% drop seen on a month-over-month basis. In addition, the unemployment rate was unchanged at 3.2% in line with expectations, while provisional industrial production for April increased by 0.3%, exceeding expectations for a 1.5% fall month-over-month.

The 2016 fiscal year in Japan began with slower wage hikes for employees working at large companies, keeping households wary with the latest reports suggesting some spending momentum.

The AUD/USD pair jumped 0.86% to 0.7244, the highest level since the 23rd of March 2016, following an upbeat building approvals report. The Australian Bureau of Statistics showed on Tuesday that building approvals rose by 3.0% in April, surprising expectations for a 3.0% fall. In March, building approvals were downwardly revised to a 2.9% increase.
 
Another report indicated that the country’s current account deficit narrowed to A$20.8 billion in the three months to March, from un upwardly revised reading of A$22.6 billion in the last quarter of 2015. Economists had expected the account deficit to narrow to A$19.5 billion in the fourth quarter of 2015.
 
The NZD/USD pair advanced 0.45% to 0.6725, amid data showing that the New Zealand ANZ business confidence index inched up to 11.3 in May from a 6.2 reading in April.
 
However, the U.S. dollar remained underpinned, after the Fed Chair Janet Yellen said last Friday that it would be appropriate for the central bank to hike rates in the near-term if the economy and the labour market continue to gain traction.
 
The U.S. dollar index was steady at 95.74, hovering near the previous session’s two-month highs of 95.96.
 
On Monday, demand for the yen remained vulnerable, following a report from the Japanese Prime Minister Shinzo Abe saying that the planned sales tax hike might be delayed for a second time, after a similar tax hike in April 2014 affected the economic recovery.

Investors’ focus is now turned to a string of U.S. reports due later in the day, including data on personal spending and consumer confidence, for fresh signals on the economy’s strength. In addition, market participants will be closely monitoring the eurozone CPI, core CPI and unemployment rate reports.
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31 / 05 / 2016 | Technical Analysis

EUR/JPY: Falling Below the 124 Handle

European Session
The EUR/JPY pair has been trading upwards since the 27th of May 2016, with the buyers lifting the price from as low as 122.22 to as high as 124.13.

The cross rallied during the course of the day on Monday, reaching the intraday high of 123.92. Today, the pair initially fell to the session low of 123.53 to subsequently bounce up to 124.13. As of writing the pair trades at 123.75.

The EUR/JPY pair found support against the backdrop of a weakening yen, amid concerns over a delay in sales tax hike and also on a strong close of the Nikkei 225 index.  Nevertheless, the upside remains vulnerable as the euro has weakened over a soft German retail trade report. Focus today will be on the German employment report and the EU flash CPI estimate.

In the event that the pair attempts to test the 124.13 level again and manages to break above it, the price could reach 124.34 and 124.58 in extension.

Alternatively, in the scenario where the price breaks below 123.67, the pair could find support at 123.42 and 123.18 respectively.



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
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30 / 05 / 2016 | Technical Analysis

GBP/USD: Hits session highs at 1.4637

North American Session
The GBP/USD pair has been trading downwards since the 26th of May 2016, with the pair falling from as high as 1.4740 to as low as 1.4588.

The major fell during the course of the day on Friday, with the price reaching the intraday low of 1.4604. Today, the pair initially dropped to the session low of 1.4588, but subsequently gained traction and moved to session highs of 1.4637. Despite the recent dollar strength fuelled by expectations of a near-term rate hike, the sterling has been an outperformer as opinion polls have shifted against an exit from the E.U.

In the event that the price keeps rising higher and breaks above 1.4646, the price could then find resistance at 1.4680 and 1.4714 in extension.

Conversely, in the scenario that the price breaks below 1.4588, the pair could then find support at 1.4557 and 1.4534 respectively. 



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.


 
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30 / 05 / 2016 | Market News

Dollar broadly higher on Fed June rate hike bets

The greenback hit a one-month high against the Japanese yen on Monday and remained broadly higher against its other counterparts, after remarks By Fed Chair Janet Yellen increased the possibilities of a rate hike in the coming months.

Furthermore, political developments in Tokyo also lent support to the dollar against the yen. The Japanese Prime Minister Shinzo Abe said on Monday that he would postpone a sales tax hike scheduled for next April by two and a half years. Japanese officials are also expected to compile a supplementary budget to stimulate the economy, a move which could be followed by further easing measures by the Bank of Japan.

The dollar inched above 111.00 against the yen hitting 111.03 for the first time since late April, and was last trading up 0.5% at 110.97.

The greenback strengthened after Janet Yellen stated on Friday that a near-term interest rate hike would be appropriate if the labour market and the economy continued to strengthen. The Federal Reserve Chair’s rate hike endorsement took the already-bullish greenback even higher to two-month highs.

The dollar was already boosted, following the release of a U.S. report indicating that the deterioration in first quarter growth was not as severe as initially forecasted.  The U.S. Commerce Department revealed that GDP rose at an annualized rate of 0.8% in the first quarter, above the initial projection of 0.5%.  

The U.S. dollar index hit 95.77 on Friday, the highest level since the 29th of March, before settling at 95.73, gaining 0.62% for the day.

The single currency reached a two-and-a-half month lows at 1.1097 on Monday, while the U.S. dollar index hit a peak of 95.94, marking its highest level in two months.

Elsewhere, the Australian and New Zealand dollars edged lower against their U.S. peer on Monday, as falling oil prices weighed on commodity currencies.

The Australian dollar fell 0.29% to 0.7160, after reaching the bottom of 0.7148 earlier. A drop below 0.7145 would take the Aussie to a three-month trough. The NZD/USD pair dropped 0.33% to 0.6682, the lowest level since the 28th of March.

An economic report released earlier in Australia on Monday revealed that company operating profits fell by 4.7% in the three months to March, as opposed to expectations for a 0.1% increase and after a 2.8% decline in the last quarter of 2015. In the meantime, oil prices fell lower amid expectations for an increase in Canadian oil sands production this week.

Investors’ today will be looking at the Japanese retail sales report and preliminary data on consumer inflation from Germany and Spain. Meanwhile, trade volumes are likely to remain thin for the day, amid bank holidays in the U.S. and the U.K.
 
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30 / 05 / 2016 | Technical Analysis

USD/CHF: Hits two-month highs at 0.9955

European Session
The USD/CHF pair has been rallying since the 26th of May 2016, with the bulls lifting the price from as low as 0.9872 to as high as 0.9955.

The pair rose sharply during the course of the day on Friday, reaching the intraday high of 0.9945. Today, the pair extended its gains reaching two-month highs at 0.9955, amid ongoing momentum behind the dollar, fuelled by Janet Yellen’s hawkish remarks of a June rate hike.  Investors now await the KOF indicator for new impetus on the Swiss franc.

In the event that the price breaks above 0.9979, the pair could escalate up to 1.005 and 1.0046 in extension.

Alternatively, in the scenario where the price breaks below 0.9924, the major could find support at 0.9887 and 0.9855 respectively.



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
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27 / 05 / 2016 | Technical Analysis

USD/CAD: Edges higher at 1.3065

North American Session
The USD/CAD pair has been trading downwards since the 24th of May 2016, with the bears leading the price from as high as 1.3187 to as low as 1.2911.

On Thursday, the pair fell down to 1.2911, but found enough support to turn things back around and form a hammer. Today, the major rose sharply, reaching the session high of 1.3065, as oil retreated from the $50 psychological mark.

In the event that the price breaks even higher, the pair could extend its gains up to 1.3082 and 1.3133 in extension.

On the flip side, in the scenario where the pair breaks below 1.3004, the price could go down to 1.2969 and 1.2937 respectively.


Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
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27 / 05 / 2016 | Market News

Dollar holds steady ahead of Yellen’s speech

The greenback was steady against its other major counterparts on Friday, as market participants remained cautious ahead of a speech by the Fed Chair scheduled later in the day, amid increasing speculation over an imminent rate hike.

EUR/USD was little changed at 1.196, as investors were awaiting the release of U.S. economic data, as well as remarks by the Federal Reserve Chair Janet Yellen for new indications on the timing of future rate hikes.

The dollar posted significant gains earlier in the week, amid increasing expectations of a possible rate hike in June, following last week’s Fed meeting minutes that flagged an upcoming interest rate rise in the event that the economy continues to improve.

USD/JPY was steady at 109.71, after the release of the Tokyo consumer price index report. Earlier on Friday, official statistics showed that the consumer price index dropped by an annualized rate of 0.5% in May, exceeding expectations for a 0.4% fall.  Core CPI, excluding fresh food, also declined by 0.5% last month, against expectations for a 0.4% slip.

The report also indicated that Japan’s national CPI declined by an annualized rate of 0.3% in April, in accordance with expectations. Core CPI dropped by 0.3% last month, as opposed to expectations for a 0.4% fall.

The U.S. dollar index, which tracks the greenback’s performance against a group of six other peers, was last steady at 95.14.

Overnight, the greenback fell to a one-week low against the other major currencies, as investors took profits from the dollar’s recent rally to two-month highs, amid strong U.S. data.

A report from the U.S. National Association of Realtors indicated that pending home sales increased by 5.1% in April, well above expectations for a 0.6% rise, reaching the highest level in more than 10 years.

The data came after the U.S. Department of Labor reported that the number of people filing for unemployment benefits in the week ending 21st of May fell by 10,000 to 268,000, from the previous week’s total of 278,000. Economists had expected initial jobless claims to drop by 3,000 to 275,000.

In another report, the U.S. Commerce Department indicated that durable goods order increased by 3.4% in April, as opposed to expectations for a 0.5% increase. Core durable goods orders, excluding volatile transportation items, increased by 0.4% last month, against expectations for a 0.3% rise.

Attention now turns to the U.S. gross domestic product report, seen rising at 0.9% from 0.5% in the previous quarter, as well as the GDP price index, expected to remain unchanged at 0.7%. Investors will also be monitoring the Michigan consumer sentiment index, expected to fall to 95.4 from 95.8 previously, and the Michigan consumer expectations, seen falling to 86.6 from 87.5 in the previous reporting period. The highlight of the day will be the speech by the Federal Reserve Chair Janet Yellen. 
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27 / 05 / 2016 | Technical Analysis

EUR/USD: Major Levels 1.1179 and 1.1200

European Session
The EUR/USD pair has been moving upwards since Wensday, the 25th of May 2016, with the price rising from 1.1129 up to 1.1216.  

On Thursday, the EUR/USD dropped from 1.1216 to 1.1168 and then the price range between the levels of 1.1168 and 1.1200. As of writing the pair price is currently trading at 1.1180.
 
In the event that the seller manages to force the price below the level of 1.1162, profit targets could be set at 1.1149 and 1.1129 respectively.
 
In the scenario where the price breaks above the level of 1.1212, the pair could escalate up to 1.1239 and 1.1264 in extension.


Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
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26 / 05 / 2016 | Technical Analysis

GBP/USD: Consolidating around 1.4700

North American Session
The GBP/USD pair has been on a winning streak since the 23th of May 2016, with the bulls lifting the price from as low as 1.4442 to as high as 1.4739.

The price rose during the course of the day on Thursday, with the price reaching the intraday high of 1.4728. Today, the major kept rising to three-month highs of 1.4739, but subsequently fell lower to consolidate around 1.4700.

The sterling took a breather from its rally, as downbeat U.K. gross domestic product revision sparked a downward momentum in the cable. The report showed that the economy grew by 0.4% in Q1, slower than the 0.6% pace in the last quarter of 2015. However, the major found support from the upward consolidation in oil prices and higher European stocks.

In the event that the price manages to break above the barrier of 1.4739, the pair could find resistance at 1.4770 and 1.4803 respectively.

Alternatively, in the scenario where the price breaks below 1.4662, the pair could find support at 1.4591 and 1.4554 in extension.



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
 
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