Akriti

Forex Technical Analysis USD/CAD 2013-09-06

Downside bias seems to be getting stronger than the upside with the currency pair unable to breach resistance at 1.0560 and creating a small daily double top pattern with neckline at 1.0468. That neckline has been breached and the pair is now targeting support at 1.0365.

Looking at the oscillators, Stochastic is in neutral zone heading downwards, MACD is positive but has dropped below its signal line that is an early bearish sign. Average Directional Index suggests strong trend and the +DI still above the –DI however their difference has significantly narrowed.

We would therefore expect the prices to move lower at least to support at 1.0365, around the valid up trend line in the following sessions. However, major jobs report later today could increase volatility so we cautiously trading.

http://www.ifcmarkets.com/uploads/images/tanalysis/7930d6fe498fc5587e6754900495f874da7ef8b6.png

US Dollar Strengthens Ahead of Non-Farm Payrolls, Unchanged ECB and BOE

In yesterday session data favored the greenback that has been strengthening against the Euro, the Japanese Yen and Swissy but has been in consolidation versus the Aussie, the Canadian and the Sterling. In general the US dollar index surged to resistance at 82.62 underpinned by stronger US Jobless claims, followed by private sector ADP non-farm report coming out in line with expectations.

Moreover, the US ISM Non-Manufacturing PMI rose to the outstanding 58.6 for August, beating estimates at 55.2 and was up compared to 56 for July. Confidence indicators are further strengthening increasing potentials for reducing asset purchases in addition to that we are closely monitoring NFP report since this would be a determining factor for Fed’s policy.

The Euro sank from resistance at 1.3217 to a new 6-week low at 1.3110, against the US dollar after ECB left its monetary policy unchanged with the key rate at 0.50%. Mario Draghi said that economic activity is picking up but downside risks remain strong. Addionaly, ECB growth forecast for the 2013 was upgraded to -0.4% from -0.6% but for 2014 growth downgraded to 1% from 1.1%. We consider the ECB current policy not so clear compared to BOE and FED with investors being concerned about it and that weighs on the Euro that drops even though recent confidence indicators and GDP data should have underpinned it.

http://www.nettradex.com/downloads/images/dov/Euro_06092013.png

For sure US dollar’s strength in recent sessions also had its own significant part in EURUSD downward development. Another currency pair displaying greenback’s strength was the USDJPY that inched above 100 reaching at 100.23 but quickly retreated to 99.70 as major resistance area around 100 weighs on the pair. At the same time the cable advanced yesterday to resistance at 1.5661 backed by stronger Service PMI reading as well as on unchanged monetary policy by BOE, however as soon as US data were released the pair dipped to support at 1.5572, consolidating mainly in the area of 1.5661/1.5574.

We would prefer in today’s trading to hold a limited trading position in market before Non-Farm Payrolls report to avoid surprises, even though we believe that it would be in line with estimates.

Forex Technical Analysis USD/CHF 2013-09-05

Upside bias continues in the USDCHF pair trading as prices have breached resistance at 0.9393 in yesterday trading and peaked at 0.9415. Moving average of oscillator has approached zero line and likely to turn positive soon, confirming bullish structure.

However, DeMarker oscillator is above 0.70 increasing risk for bulls but due to the positive trend we consider the subjective line at 0.90 the upside limitation. We consider therefore that there is some room for further highs for the pair, likely to rise as high as 0.9435 in the intraday, where the upper Bollinger band is located.

http://www.ifcmarkets.com/uploads/images/tanalysis/d1872e633a9883a1ccc57f06b385baa5b14ea16c.png

Yen Weakened as BOJ Held Unchanged Monetary Policy, Eyes on ECB, BOE

Bank of Japan decided to leave its monetary policy unchanged as it was broadly expected, maintaining its key rate near zero levels and monetary base to continue expanding by ¥60-70 trillion yen per annum. In addition, BOJ restated its goal to achieve inflation of 2% and will continue with quantitative and qualitative tools for as long as necessary. The Japanese Yen softened as slight risk improvement was reflected on NIKKEI 225 that rose by 0.08%, pushing the USDJPY pair to inch as high as 99.97. The pair though was capped by concerns on Syria as the Senate Foreign Relations Committee voted in favor of military action. Moreover, in technical terms it would be hard for the USDJPY to overpass the ultra-strong cap at 100 nevertheless an upbeat NFP report could give the appropriate boost to breach it.

http://www.nettradex.com/downloads/images/dov/JPY_05092013.png

Turning now to Bank of Canada decision, the central bank held key rate unchanged at 1% as it was widely anticipated but sounded a bit hawkish saying that” the considerable monetary policy stimulus currently in place will remain appropriate… gradual normalization of policy interest rates can also be expected”. The US dollar retreated against the Canadian to the lower level of the 1.0566/1.0472 sideways area.

The US dollar on the other hand was underpinned by US Beige book suggesting that economic activity has expanded by modest to moderate pace including data from early July to August 26 for twelve US districts. The economic activity improved as consumer spending increased in most of the twelve districts amid strong demand for autos and dwelling products. The US dollar index drew support line at 82.04 and bounced up to 82.35. Lower volatility though has been expected ahead of NFP report. The greenback gained the most against the Swissy surging by 0.50%, breaching resistance at 0.9380 and reaching as high as 0.9404, upside bias is most likely to continue in the intraday.

Looking ahead, investors turn their attention to European currencies as the ECB and BOE are going to release their monetary decisions. Both are expected to maintain current policies unchanged. ECB is facing recently improved data for Germany and France but peripheral members did not escape debt crisis yet, lastly most of EZ PMI reports suggest activity is picking up. The Euro though has been down trending against the US dollar, currently is consolidating between 1.3217/1.3137 tight zone before major fundamental events.

Uniqueness of the Method

GeWorko method is an innovative market analysis method by means of which you can create asset portfolios from a variety of financial instruments available on the platform and determine the price of one portfolio relative to the price of another one, thus creating a new and unique composite instrument (PCI). The ideology of the method is based on the conception of the traded pair relation B/Q, adopted in Forex market, where the asset B (the base) is traded against the asset Q (the quoted). And it is possible to form both a very simple structured composite instrument, when each portfolio consists of one asset, and a very complex one with a wide range of assets in each of the portfolios. The program allows to set a specific weight to each of the assets in the overall structure.

See more: http://www.ifcmarkets.com/en/new-opportunities/portfolio-trading-expanding-the-range-of-trading-instruments

Forex Technical Analysis USD/JPY 2013-09-04

Upside momentum was contained by resistance at 99.77 slightly below the key cap at 100. We consider the psychotically important area around 100 a major resistance that would limit the bullish bias of the currency pair for the following sessions.

Moreover, the Williams’ percent range is in the overbought zone weakening bullish attitude of investors but the Average Directional Index confirms strong uptrend. We are concerned about fundamental events of the week as well as risk of a Syria war could increase selling pressure on the pair. Nonetheless, in technical terms we would expect prices to consolidate in the intraday between 99.77/99.13 range with uptrend resuming after Williams oscillator eases.

http://www.ifcmarkets.com/uploads/images/tanalysis/3888dbb90bf29d32b692885d82b15af2cc91e615.png

Aussie Gains on Upbeat GDP, USDJPY Capped by Syria and Key 100 Level

Yesterday’s upbeat US ISM Manufacturing PMI reinforced speculation that the Federal Reserve will start unwinding asset purchases, underpinning USDJPY pair. Nonetheless, USDJPY is weighed as a military strike by USA and France against Syria is getting more likely. US congressional leaders are pushing for action while UK parliament denied operation before UN report. The US dollar against the Japanese Yen jumped on manufacturing data to 99.84 but quickly retreated slightly, weighed by key resistance at 100 and ahead of BOJ monetary statement the currency pair most probably will remain in 99.84/99.14 consolidation zone.

Australian economy surprised traders yesterday by growing more than expected, defying forecasts and recent RBA concerns that falling mining investment is hurting its performance. The Aussie GDP grew in the 2nd quarter by 2.6% in annual terms beating estimates of 2.4% and up compared to previous quarter at 2.5%, quarterly grew by 0.6%, more than estimated 0.5%. The AUDUSD resumed its upside bias and surged to cap at 61.8% of 0.9231 to 0.8890, at 0.9102. As of writing though the pair breached that resistance shifting focus to lid at 0.9231.

http://www.nettradex.com/downloads/images/dov/AUDGDP_04092013.png

RBA’s recent comments that is ready to cut further key rates “should the economy materially worsens” are likely not to be repeated after stronger growth. At the moment market is discounting possible reversal of RBA’s dovish tone and for that reason we would expect the Aussie to remain bullish in the intraday.

Looking ahead, European PMI reports are watched followed by GDP release for the second quarter. The EURUSD dropped to 5-month low in recent trading as the greenback was strengthening on tapering expectations while concerns over Euro zone debt crisis persist. Back to data front, Canadian monetary policy decision is also in focus, widely anticipated that the BOC will maintain 1% key rate. The USDCAD has been in 1.0566/1.0472 tight range ahead of the monetary decision.

Theoretical bases of GeWorko Method

The concept of GeWorko method is based on two simple assumptions:

The value of any asset may be expressed in U.S. dollars, so portfolio instruments can be easily compared with each other;

If analysis methods are applied to individual assets, they can be also applied to more complex structures, such as personal composite instruments (PCI) GeWorko.

When the value of one portfolio is expressed relative to the value of another, the resulting ratio indicates the number of units of the second portfolio, which currently has the same value as the first portfolio. In other words, it is the price of the first portfolio, expressed in the second one. The value, or the ratio, changes along with the prices of assets included in each portfolio.

See more: http://www.ifcmarkets.com/en/method-geworko/how-it-works

Forex Technical Analysis AUD/USD 2013-09-03

The currency pair recent downside bias was limited by key support at 0.8846 a more than a 3-year low, coexisting with the lower Bollinger band at that point. In addition, Bollinger bands are squeezing prices as in the recent trading the pair volatility reduced and has been fluctuating between 0.9230/0.8846 tight range.

Prices reached the lower boundary of the range and shifted to upside bias in the intraday, Williams’ percent range also suggested that earlier. We would expect the currency pair in the intraday to continue higher towards resistance at 0.9230 and perhaps until the end of the week we expect to see a Bollinger band break.

http://www.ifcmarkets.com/uploads/images/tanalysis/82fcbcb4292c7f86b9cfd4f1bed9136d6e0cde23.png

Aussie Strengthens as RBA Holds Key Rate at 2.5%, USDJPY Continues Upside

The RBA earlier today at its meeting decided as it was expected to maintain key rate at 2.50%. In its statement, the RBA reiterated that expects the mining investment to drop with the economy in a transition phase, growth is a bit below trend, unemployment rose slightly and inflation is under control. Moreover, RBA said that even though the Australian dollar depreciated still remains at high levels and its value could reduce further, helping growth. The AUDUSD rose above psychological level at 0.90 and was lastly seen at 0.9044. We consider that the currency pair is in 0.9232/0.8847 range trading pattern with longer term prevailing downtrend likely to drive prices lower eventually.

The USDJPY yesterday breached key cap at 99.14 and continued higher today underpinned by BOJ data that the monetary base growth pace increased to 42% from 38%. That improved risk sentiment driving NIKKEI 225 higher by 2.81% which dragged the currency pair to fresh 1-month peak at 99.69, which is a bit away from the psychological 100 level. We expect the USDJPY to be weighed by resistance at 100 and likely the risk on Syria to resume increasing pressure on the pair, in addition we are eagerly anticipating the BOJ monetary statement on Thursday although no change is projected.

Elsewhere, the US dollar against the swissy surged as high as 0.9371 straight from support at 0.9168. The USDCHF found support near the bottom of the 0.9750/0.9145 longer term wide range and turned to upside bias. Surprisingly stronger GDP data for Switzerland did not helped much its currency that kept losing against the greenback.

http://www.nettradex.com/downloads/images/dov/CHF_03092013.png

Looking ahead, the most important event to watch today is the US ISM Manufacturing PMI indicator. Tomorrow we will be focusing on Aussie GDP figure, European Services PMI, EZ Retail Sales and later on the Bank of Canada Rate Statement.

Greenback Gets Stronger, USDJPY Eases on Data and on Risk of Syria

The US dollar soared to 4-week high on growing expectations that the FED will reduce the amount of asset purchases per month as macro data have been positive in the recent sessions. Yesterday the US Bureau of Economic Analysis said that the GDP grew by 2.5% in the 2nd quarter, faster than earlier estimated at 1.7% and today is expected that the Consumer Spending will display increase in July as well. The US dollar index advanced to 82.03 which is the 161.8% of the correction from 81.68 to 81.08, thus we would expect some consolidation before the upside resumes, ahead of next resistance at 82.50.

The USDJPY eased lower to support at 98.06 firstly due to stronger CPI and Unemployment for Japan and on consolidating equities. The Japanese National CPI for July was in line with expectations rising by 0.7%, up compared to 0.2% in June, while National CPI excluding fresh food rose by 0.7%, higher than projected and up from previous month of 0.4% increase. Unemployment rate surprisingly dropped to 3.8% in July from 3.9% in June and lastly Industrial Production advanced by 3.2% in July up from -3.1% in June. The recent data supported well the Japanese Yen, setting pressure on the USDJPY which was also weighed by falling NIKKEI225 on risk of military strike against Syria by USA, UK and France. Downside momentum resumed as of writing with the USDJPY sinking lower, was lastly seen at 97.91.

The Euro was one of the biggest losers against the greenback in the recent trading as risk averse sentiment increased selling pressure on the common currency. In addition, yesterday weaker German jobs report and CPI, as well as previous comments of German Chancellor Merkel about Greece that was a mistake to accept it as a full member in the Euro zone, made the Euro heavier. However, the August 20 CFTC report indicated that the net long position in the Euro increased by $3.5B to $6.2B, it seems now that the pair is getting into correction phase and could head towards the 61.8% of the 1.2755 to 1.3451, at 1.3020.

http://www.nettradex.com/downloads/images/dov/EUR_30082013.png

Forex Technical Analysis EUR/USD 2013-08-30

Downside bias was somewhat blocked by the 161.8% of the 1.33 to 1.34 correction, around 1.3237. We can see that prices have been consolidating around that level in the recent trading with intraday trend being negative and downside momentum strengthened by the breaching SMAs.

However the momentum oscillators like Williams’ percent range and Stochastic are overextended down suggesting that the currency pair would consolidate or bounce up to reset oscillators.

Therefore, we consider the pair is more likely not to continue lower in the intraday with downside resuming in the following week.

http://www.ifcmarkets.com/uploads/images/tanalysis/649eaa2c816aa46d28d3105d67a9896a43e8e654.png

Portfolio Trading – Expanding the Range of Trading Instruments

For many traders, engaged in active trading in financial markets, the availability of a large number of trading instruments is very important. If a trader has worked out a trading system (mechanical or visual, based on the recognition of some iterative graphical images) the more instruments are available, the more frequently there may arise opportunities to enter the market.

See more: http://www.ifcmarkets.com/en/new-opportunities/portfolio-trading-expanding-the-range-of-trading-instruments

Oh it is good post and i like this post.

Thank you for the reply Dear Ayush001

Risk Aversion Gets Milder With Global Equity Indices Rebounding, US Dollar Strengthens

Milder risk aversion has led the USDJPY to recover previous losses as the military strike to Syria is delaying. UN Security Council is not convinced about the use of chemical weapons with Russia and China opposing military action. US President Barack Obama did not decided on whether to launch a retaliatory strike with just his allies, UK and France sidestepping UN, while UK and France say that they are ready to go.

Last night, US indices bounced up on technical retracement as well as on calmer risk aversion, S&P 500 rose by 0.27%, Dow jones industrial Average gained 0.33% and NASDAQ closed up by 0.41%. Asian indices followed in recouping previous session’s losses with NIKKEI 225 surging by 0.91%. NIKKEI was also supported by weakening Japanese Yen, with the USDJPY bouncing back and rising as of typing above the 50.0% resistance of 99.14 to 96.82, at 97.89. Retracement is likely to be capped by 61.8% at 98.23 because most probably risk aversion will return stronger in the market with the military strike launch.

http://www.nettradex.com/downloads/images/dov/YEN_29082013.png

The greenback is getting stronger as of writing against its major peers. The US dollar index penetrated its key resistance at 81.68 and is heading for 81.88 ahead of Preliminary US GDP release for the 2nd quarter, expected to improve to 2.2% and Unemployment Claims. The Euro versus the US dollar was under increased selling pressure and dipped from 1.3382 to currently 1.3269 earlier today with investors anticipating German unemployment and CPI report later on Thursday.

Elsewhere, the British pound rebounded yesterday against the greenback on less hawkish than anticipated BOE Governor, Mark Carney speech reaching resistance at 1.5549. It seems though that the Syria risk still weighs on the currency pair, likely to drive it back below 1.55. The USDCAD found key resistance near almost 2-year high at 1.06 the previous week and retraced to 1.0472, at the moment is consolidating due to stronger US dollar and recently rising Oil prices are not helping loonie.

Forex Technical Analysis USD/CAD 2013-08-29

The currency pair drew a resistance line at 1.0541 where the upper Bollinger band is located, approaching to almost 2-year high around 1.0600 and then retraced to 1.0470. In the daily chart up trend prevails and that increases chances for higher levels, however psychological resistance at 1.06 places a heavy lid on prices.

There are no contrarian signals from Stochastic oscillator, coupled by MACD in positive ground and the ADX indicating a strong bullish structure for prices. Therefore, we would expect prices to overcome resistance at 1.0541 and surge as high as 1.0607, at that point we would reconsider our trading view.

http://www.ifcmarkets.com/uploads/images/tanalysis/f849244a660bf31f0dbbc2f9342463bfeb5ef997.png

Risk-off Shadows Currency Markets as War Concerns Accumulate over Syria

Currency markets have been moving by risk averse due to concerns over military strike of USA, France and UK against Syria. The Japanese Yen has been strengthening considered safer currency while Aussie and Sterling have been losing as riskier currencies, the Euro and the US dollar were mostly unchanged.

US equities closed with losses on Tuesday session with S&P 500 falling by 1.59% and the Dow Jones Industrial Average declining by 1.14%. Asian shares followed also weighed by possible attack to Syria with NIKKEI 225 closing lower by 1.51% and Hang Seng dipping by 1.48%. The USDJPY last night continued all the way to a new 2-weeks low at 96.87 and then made technical retracement back to 97.33 as oscillators went into oversold zones.

Concerning losing currencies, the Aussie against the greenback dropped below support at 0.8932 and is moving towards 3-year low at 0.8846. The Australian dollar is under selling pressure due to investor’s risk- off as well as on dovish comment by RBA Governor, Glenn Stevens the previous week, in addition the S&P/ASX 200 declined by 1.05% earlier today. The sterling drew resistance at line at 1.5549 and then plummeted to 1.5505 versus the US dollar, as the USA, UK and France are finalizing plans for military operations against Syria. It is likely that we would see further selling pressure on these currency pairs because comments by UK Prime Minister David Cameron and US Secretary of State, John Kerry, indicating that are convinced of the use of chemical gas by Syrian government.

Lastly, the Euro against the US dollar remains in 1.3408/1.3328 sideways zone, losing slightly in immediate trading due to weaker than expected German Consumer Climate. On the data front, M3 Money Supply for EZ would be released and then investors will focus on BOE Governor Speech and US Pending Home Sales.

Forex Technical Analysis USD/CHF 2013-08-28

The lower boundary of the longer-term 0.9753/0.9149 daily range is currently limiting downside bias and is likely reverse momentum to upside. Williams’ percent range is near its bottom line at 100 suggesting that bulls will return to the market.

However, all the SMAs are above prices and the medium term trend is negative, therefore we consider chances for either side almost equal. We come to the expectation, that the USDCHF is more likely to continue into sideways zone with upper level at 0.9250 where 20 and 10 SMA are consolidating and lower boundary the 0.9149/0.9129 zone.

http://www.ifcmarkets.com/uploads/images/tanalysis/17713f2a6a2e2bf3d1ca81fb62eef6aea65c662e.png

Advantages of Portfolio Trading

GeWorko Method gives you the opportunity:

1. to create your own trading instruments.

2. analyze markets

3. trade composite instruments

See more: http://www.ifcmarkets.com/en/method-geworko/advantages-of-portfolio-trading

US Dollar in Sideways, Aussie Negative Bias Resumes, German IFO Expected to Improve

The greenback did not move much from yesterday; it was volatile during Durable Goods Orders release on Monday but mainly the US dollar index remains in 81.44/8.18 short-term tight range. US Durable Goods Orders dropped by 7.3% in July, much more decline than anticipated at 3.0% while in June Orders rose by 3.9%. The US dollar index dipped suddenly from 81.44 to 81.24 but then quickly recovered back its losses and extended further into previously mentioned sideways zone.

There is much of discussion about asset tapering and recently the NABE survey indicated that only 10% of its responders expect that FED would begin lowering asset purchase program at the 3rd quarter of 2013 while 39% expect that in the 4th quarter of 2013. Thus, traders are cautious at their trading; we believe that the current market price for the US dollar incorporates asset tapering on Sep. 18. Should that expectations fade the greenback would lose value and perhaps could revisit support at 80.72.

The Japanese Yen strengthened on risk averse after the weaker US Durable Goods Orders report. US indices closed in negative ground followed by Asian indices with NIKKEI225 closing lower by 0.69%. In addition, NIKKEI was weighed by Japanese government strongly supporting implementation of Sales-Tax increase from 5% to 8% in April 2014. The USDJPY dropped to key support at 98.04 and as of typing bounced slightly up, currently at 98.18.

The Aussie against the US dollar is falling towards support at 0.8932, below that level follows the 3-year low at 0.8850. Previous week meeting minutes revealed that RBA is willing to further reduce interest rates below 2.50% as the economy goes through a transition period. The mining sector significant role to growth declines, according to Governor Glenn Stevens, with demand from other parts of the economy expected to improve as Aussie depreciates.

Looking ahead, investors are focusing on German IFO business climate expected to increase to 107.1 for August from 106.2 in July. Recent European data revealed that Eurozone is on the right path to recovery supporting the common currency. One more positive sentiment indicator today, would further support the Euro and likely to drive it back above 1.34 against the US dollar.

Forex Technical Analysis USD/JPY 2013-08-27

The currency pair is in downside bias declining towards support at 97.66 where the surging trend line is located and coupled by 100 SMA. Thus we expect that level to hold declining prices in the intraday.

In addition, the Williams’ percent range indicates that the pair is oversold since the oscillator is almost at its bottom. Reinforcing possible upside reaction is that the shorter-term Commodity Chanel Index dropped below the subjectively set -150 line where previous troughs were observed and is increasing.

We would expect therefore the key support at 97.66 to hold declining USDJPY and perhaps then prices would extend into 98.39/97.66 tight consolidation area.

http://www.ifcmarkets.com/uploads/images/tanalysis/cdcad462ffb6fc88f1e9e444f499fd0f33f964e9.png

Steady Start of the Week with Major Currency Pairs in Sideways Trading

Currency market started the week steadily with most of the pairs fluctuating in sideways zones. The greenback has been barely changed on Monday morning with the US dollar index remaining around 81.33 while on Friday evening dropped sharply from 81.56 to 81.18 on disappointing housing data. US New Home Sales decreased to 394K in July, substantially more than expected and down from 455K the previous month. The latter could weigh further on the greenback however expectations that asset purchase facility would reduce on FED September 18 meeting, underpins the US dollar.

At the Jackson Hole Symposium academics referred to asset tapering saying that the FED should reduce the $45 bln monthly treasury purchase and continue the $40 bln monthly mortgage purchase. Treasury yields rose to record peak at 2.90% on speculation of cutting down asset purchases on September and as Lawrence Summers gains chances for Bernanke successor as FED Chairman.

Concerning Europe, the common currency against the greenback recovered back to resistance at 1.3408 on Friday to ease back early on Monday around 1.3379. Later on the week Euro zone Unemployment Rate would be released expected to remain unchanged at 12.1% and CPI to drop to 1.4% from 1.6%. Recent data revealed that Germany, Europe’s largest economy is increasing its growth rate and PMI data are improving further, strengthening recovery. Regarding monetary policy of ECB, on one side has low inflation, providing some room for further easing however on the other side recent upbeat data offset that chance. Technically the Euro was limited by daily top of the range at 1.3451 and moved to support at 1.3297, currently found resistance at the 61.8% of 1.3451 to 1.3297, at 1.3393 and thus we consider corrective move has ended.

Lastly, the USDJPY drew resistance at 99.10 near major psychological resistance at 100 and turned its bias to the downside, falling to support at 99.41. BOJ governor’s comments that highly aggressive monetary policy starts to show results as job sector improves and inflation expectations appear to rise with no risk to financial stability, eliminated speculation for further monetary easing inducing the Yen to recover. Thus we consider the USDJPY could breach the support at 98.41 falling lower towards downside boundary at 97.76.

Forex Technical Analysis GBP/USD 2013-08-26

The currency pair was limited by the upper boundary of 1.5751/1.4832 long-term daily range, shifting to downside bias and falling to support at 1.5533 where the 200 SMA is located. According to the surging trend line, the medium-term trend is to the upside and that could be respected should the prices do not fall below 1.5432.

Looking at momentum oscillators, Stochastic has still room to move lower and William’s percent range just escaped overbought zone suggesting downside is more likely. In addition, the trend oscillator OsMA just turned into negative territory.

We suspect that prices would continue their bearish bias and go as low as 1.5432 where a strong support is located. At that point chances seem for either direction almost equal.

http://www.ifcmarkets.com/uploads/images/tanalysis/67cb19f29979f47b94b21f93c07e66697a3bfb37.png

Yen Weakens as Risk Sentiment Improves Driving Yen Crosses Higher

The Japanese Yen weakened further against its major counterparts as stronger PMI data from China, Europe and US suggested that expansion prevails in global economy lifting risk appetite, thus investors abandoned the safety of the Yen. Furthermore, US 10 year treasury yields rose to new high at 2.89% indicating that investors move their money out of bond markets to riskier assets as asset tapering expectation is growing among market participants. All that underpinned US equities last night followed by NIKKEI 225 that close higher by 2.21%, helping USDJPY to breach resistance at 98.63 yesterday and surging earlier today to 99.10.

http://www.nettradex.com/downloads/images/dov/YEN_23082013.png

In addition, the EURJPY penetrated the resistance at 130.97 yesterday and rose to 132.33 as Japanese Yen was weakening further. Yen crosses bias is turning bullish on recent data as well as on speculation that Haruhiko Kuroda BOJ governor could take further stimulus measures because inflation is still well below target and growth was less than projected in the 2nd quarter. We consider though the USDJPY is overextended and near major resistance at 100 in the intraday with the EUJPY also close to top of the longer term range at 132.75. Thus we are cautious that pairs may consolidate in the immediate term but next week fundamentals could drive them above their upside limitations.

http://www.nettradex.com/downloads/images/dov/EURJPY_23082013.png

Elsewhere, we saw the EURUSD bouncing up to 1.3371 from 1.3297 on profit taking as the US Jobless Claims were disappointing inducing the greenback to make a correction. Early today final GDP figure for Germany confirmed growth and we expect the EURUSD to consolidate between 1.3371/1.3343 tight zone, because both currencies’ fundamentals are supportive. Aussie pulled back to resistance at 0.9044 yesterday on Chinese PMI and is consolidating currently near 0.90. USDCAD strongly advanced from 1.0358 to 1.0542 most likely to go up to 1.0604 before we see some profit taking. Main events today are 2nd estimate UK GDP, CPI figures for Canada, US New Home Sales and Jackson Hall Symposium second day.

Forex Technical Analysis USD/JPY 2013-08-23

The currency pair bias has been strongly to the upside with prices walking on the upper Bollinger band and in some cases even closing above that band. Moreover, we see a newly established surging trend with higher high and higher low as well as penetration of the 200 SMA in the 4-hours chart.

However, Stochastic entered overbought zone and rose to previous peak line at 85 coupled by William’s percent range (14) peaking at its highest point at 0.00, OsMA also rose significantly but remains slightly below its earlier trough line. Adding to that, major resistance area around psychological level of 100 limits further the upside.

We would expect therefore the prices to retreat somewhat towards support at 98.39 as a corrective reaction for the bullish wave from 96.91 to 99.13.

http://www.ifcmarkets.com/uploads/images/tanalysis/6617e8f99a4cfd6bf38cc28dbcd12a22d5042ddc.png