Daily Market Analysis from ForexMart

[Andrea ForexMart]

Fundamental Analysis for AUD/USD: April 6, 2016

After months of rally, the Australian dollar finally experienced a setback as the week started with disappointing data and a slowly recovering US dollar.

Retail sales for the month of February was unchanged from the previous month’s 0.3 percent, a big letdown from the forecasted 0.1 percent increase.

According to the Australian Bureau of Statistics, retail sales of household goods and department stores posted the highest increases with 0.4 percent, while the food sector decreased by 0.2 percent.

During Tuesday’s monetary policy meeting, the Reserve Bank of Australia (RBA) decided to hold onto its 2.00 percent interest rate, sending the AUD to the bears. RBA governor said in a statement that the “economy is continuing to rebalance following the mining investment boom.”

Contrary to an expected verbal intervention to weaken the AUD, Stevens did not jawbone the currency which has risen steadily since the start of the year, even sounding dovish toward its appreciating value.

Inflation hit a seven month low of 1.7 percent while the RBA’s target range is from 2 to 3 percent. Trade deficit rose to A$3.410 billion in February from January’s A$3.156 billion. It was projected to shrink to A$2.600 billion.

After days of losses, the USD picked up over the weekend due to a positive nonfarm payroll that further strengthened the labor market.

The pair touched 0.7536 today, recording a five-day low. Heads are now turned to Fed’s meeting later today.

[Alfamart]

simple analytics for simple trader like me

Will sell EURGBP if EURGBP breaks the trendline,
and i will consider to look sell signal on other EURO pair or Buy signal on other GBP pair

[Alfamart]

Brexit Wins: New Targets For GBP/USD, EUR/GBP - BTMU
Source : EFXNews

While the Brexit vote was a shock (we attached a 40/45% probability), we are not surprised by the initial currency market reaction. Cable still remains within our forecasted one-month range between 1.3000 and 1.5000.

In our previous base case scenario assuming that the UK voted to remain within the EU we were expecting cable to stabilise in the year ahead at around the 1.5000-level. However, the initial sharp pound weakness following the Brexit vote is fundamentally justified and is not overshooting in the near-term. The heightened political uncertainty in the UK including today’s resignation from Prime Minister Cameron with a new Conservative leader to be elected in early October, will continue to weigh heavily on the pound. The increased risk of recession in the UK and looser BoE policy in the year ahead justify a weaker pound. Capital inflows into the UK will also be dampened making it more challenging to the finance the UK’s elevated current account deficit requiring a weaker pound.

In these circumstances, we expect cable to fall into the mid-1.2000’s in the second half of this year before rebounding modestly back above the 1.3000- level in 2017 as heightened uncertainty gradually eases. The pound is already significantly weak according to our long-term valuation models which should help to dampen further downside unless there is a run on the pound.

We expect further more modest upside for EUR/GBP as well rising towards the mid to high 0.8000’s in the second half of this year before falling back towards the 0.8000-level in 2017. It is consistent with our alternative Brexit scenario outlined prior to the release of the referendum results.

Best Regards
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[Alfamart]

  
Here Is How To Position If BoJ Convenes An Emergency Meeting To Ease

• EURUSD: Upticks are seen as an opportunity to sell at better levels. We are bearish and look for resistance in the 1.1130 area to cap a move lower towards initial targets near Friday’s 1.0910 lows and then the 1.0840 area. Beyond there we are looking towards 1.0710.
• USDJPY: We are bearish and would prefer to fade upticks towards the 103.55 former range lows. Our targets are back to Friday’s 99.00 lows and further out towards the 94.80 area.
• GBPUSD: We are overall bearish and would look to use upticks as an opportunity to sell at better levels. The 1.3505 former range lows are expected to provide selling interest for a move lower towards targets near 1.3015 and then the 1.2750 area.
• AUDUSD: We are bearish and would use upticks towards 0.7520 as an opportunity to sell at better levels. A move below our initial targets near 0.7285 would signal lower towards the 0.7145 lows.
• NZDUSD: We would prefer to fade upticks in range towards resistance near 0.7175 and look for a move below our initial targets near 0.6960 to confirm downside traction. Our next targets are towards the 0.6810 area.
• USDCAD: We are cautiously bearish given the increased volumes on upticks and would fade upticks towards 1.3190. A move below targets near 1.2655 would signal lower towards the 1.2460 year-to-date lows.
  

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[Alfamart]

Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB

EUR/USD: Bearish: Diminished bearish momentum but downside risk is still clearly intact.

The rebound from last Friday’s low of 1.0909 has been more resilient than expected as EUR touched a high of 1.1155 yesterday. However, most indicators are still in bearish territory and the greater risk still lies of the downside. The 1.0909 low is acting as a major support but a break of this level could lead to a rapid drop the mid-March low of 1.0820. Only a move above 1.1210 would indicate that a short-term low is in place.

GBP/USD: Bearish: A move to 1.3000 would not be surprising.

We view the current movement as a short-term consolidation phase that is expected to lead to an attempt lower to take out the post-Brexit low of 1.3120/25 (for a move to the major 1.3000 level). However, it has been a week since Brexit and the lack of follow through has dented the downward momentum somewhat but confirmation of an interim low is only upon a break above 1.3600.

AUD/USD: Neutral: Expect choppy trading between 0.7305/0.7510. [No change in view]

AUD is rebounding quickly from the 0.7325 low seen on Monday. While the up-move appears to have scope to extend higher and test the strong 0.7510 resistance, a clear break above this level is not expected. In other words, we are holding on to our neutral view for now and expect AUD to continue to trade choppily within a 0.7305/0.7510 range

.

NZD/USD: Neutral: In a broad 0.6975/0.7170 range. [No change in view]

NZD came close to the major 0.6975 support on Monday (low of 0.6971) but rebounded sharply. The up-move is viewed as part of a broader consolidation and not the start of a sustained rally. That said, a test of the major resistance at 0.7170 would not be surprising. Overall, we continue to hold a neutral view and expect further range trading between 0.6975/0.7170.

USD/JPY: Neutral: In a broad 101.00/105.00 range.

While USD has been edging higher over the last several days, the up-move is lacking in momentum and the movement is viewed as part of a consolidation phase and not the start of a sustained rally. The outlook remains mixed, even from a short-term perspective and market seems undecided about what to do with this pair. Overall, we expect further range trading that is likely contained within a 101.00/105.00 range.

Best Regards

Market Commentary Team

[aganijak]

Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY

EUR/USD: Bearish: Room to extend lower but 1.0820 is a major support.

While EUR dropped to 1.0995/00 last Friday (lowest level seen this month), downward momentum is far from impulsive and it is doubtful that this pair would accelerate lower from here. However, looking further ahead, a move to 1.0820 cannot be ruled out just yet as long as 1.1185 is intact. In the meanwhile, further short-term sideway trading above the recent 1.0909 low seems likely and only a clear break below this level would indicate that the next bearish leg lower has started.

GBP/USD: Bearish: To take partial profit at 1.2700.

While downward momentum continues show signs of weakening, only a move above 1.3150 would indicate that a short-term low is in place. Until then, another leg lower to 1.2700 cannot be ruled out just yet even though the odds for such a move would continue to diminish with further consolidation above the recent low of 1.2795/00.

AUD/USD: Bullish: Target 0.7600 followed by 0.7650.

The break above 0.7560 last Friday bodes well for our bullish AUD view and we continue to target a move to 0.7600 followed by 0.7650. 

NZD/USD: Shift from neutral to bullish: Target 0.7360.

The clear break above 0.7280 and the strong daily and weekly closing last Friday suggests that the outlook for NZD has shifted to bullish once again. From here, the immediate target is for a move to 0.7360.

USD/JPY: Neutral: Room to retest 99.05/10. [No change in view].

The downward pressure is still on the downside and as indicated yesterday, a retest of the post-Brexit low of 99.05/10 would not be surprising. That said, downward momentum is patchy at best and a sustained break below 99.05/10 seems unlikely. Only move back above 101.60 would indicate that the downward pressure has eased.

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[aganijak]

ForexMart Gold Analytics

Time Frame H4
Support 1326.68
Resistance 1358.37

[aganijak]

Derivatives Strategy: What If Both EUR/USD and USD/JPY Go Down? - SocGen
{/IMG]

Our latest forecasts embed a moderately bullish dollar view for the coming months, implying that the standard negative correlation between EUR/USD and USD/JPY will prevail.

However, the negativity of this correlation is not bullet-proof: triggered by the Brexit vote, we saw an aggressive sell-off in the volatility space. We suspected that this would happen, regardless of the outcome, given the massive positioning in terms of hedges. Although risk-on conditions currently prevail and we favour risk-friendly spot trades (long GBP/JPY, short EUR/SEK), investors should be aware that the relief phase could be short-lived and see an abrupt end in a few weeks.

EUR to possibly come under renewed pressure... The Italian banking sector is in the eye of the storm, and our Fixed Income strategists fear that another half-hearted ‘solution’ is in the pipeline. Stress in peripheral credit risk would clearly weigh on the euro. Moreover, the UK has been the main source of negative risk sentiment and still is. Though BoE easing is already priced in, it may not appease markets and a new wave of turbulence may arise if discussions about Article 50 activation heat up. .

.. while the JPY would be bid Investors did not miss the opportunity to again select the yen as their currency of choice during the recent market jitters. USD/JPY has bounced above 104 and could appreciate more while the relief phase continues. If risk sentiment sharply deteriorates again, there will be more room at the bottom, as the pair tested 100 this month. The past incursions of the correlation between EUR/USD and USD/JPY into positive territory did not last very long but were nonetheless lengthier than the current spike. This could signal an unexpected market move that we would recommend trading via options. 

Recommendation Buy  basket sell on EUR/USD and USD/JPY,

[aganijak]

EUR/AUD: A Good Summer Buy - Deutsche Bank

EUR/AUD has lost most ground, butwe expect that cross in particular to outperform in the coming weeks.

On the Aussie leg, we expect another disappointing CPI print for Q2 will compel the RBA to cut the cash rate in August. Our local economists have penciled in a core inflation print of 1.5% y/y, well below the target band, and think this will be sufficient for the RBA to act. Moreover, the risk to this call is likely skewed to the downside considering that currency strength in Q2 also had a greater disinflationary impact in New Zealand than most long-term models predicted. With the rates market still sitting on the fence at ~13bps priced, a soft CPI print should see significant follow-through in the currency.

As for the euro leg, we consider the market too dovish in pricing a ~7bp lower depo rate by year-end. This week’s meeting should make it clearer that the ECB won’t panic over Brexit and, if necessary, would likely prefer to adjust QE in the autumn. But that prospect should be less bearish for the euro than a rate cut, and the meeting thus poses some upside risk to the euro. In the US and Japan, by contrast, currency-bullish policy re-pricings won’t likely happen before September. Over the summer, the Fed will likely remain reluctant to hint at any tightening by year-end, and the Abe administration should manage to keep alive some market expectations of a large fiscal stimulus in the autumn.

...In valuation terms, lastly, the euro is just as well protected against the Aussie as the yen, having struggled for years to undershoot PPP by more than 20%.

[aganijak]

when i saw theese six JPY pair, i found all of them already formed a sell pattern,
ussually i never trade with h4 because it is long term time frame.
but let us see

I am waiting theese news

Here we go, sell All JPY

[aganijak]

Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
 

EUR/USD: Shift from neutral to bullish: Target a move to 1.1280.

The expected recovery in EUR was more robust and resilient than expected. The ease of which the 1.1150 resistance was taken out suggests further upside pressure. At this stage, the potential appears to be limited to 1.1280. Stop-loss for the bullish view is at 1.1060

GBP/USD: Neutral: Undertone has improved but 1.3320 is a major resistance.

The neutral phase in GBP that started more than 2 weeks ago is still intact. As highlighted in recent updates, while shorterterm upward momentum has improved, a sustained up-move in GBP is likely only if there is a clear break above the strong 1.3320 resistance. At this stage, the odds for a break of this level are not high even though they have increased considerably. Overall, the positive undertone would continue to improve as long as GBP stays above 1.3100.

AUD/USD: Neutral: Bullish if daily closing above 0.7600.

AUD is currently pressuring the top end of our expected 0.7440/0.7600 sideway trading range. Upward momentum has improved considerably and a daily closing above 0.7600 would indicate that a move towards 0.7675/80 (and possibly beyond) has started. Overall, this pair is expected to stay underpinned in the next few days with solid support at 0.7490.

NZD/USD: Shift from neutral to bullish: Overbought but room to extend higher to 0.7325.

We clearly underestimated the recent NZD strength as it continues to surge higher. The outlook has shifted to bullish but shorter-term indicators are severely overbought. That said, further extension to 0.7325 would not be surprising. Strong support is at 0.7150 but only a break below 0.7080 would indicate that the bullish expectation is wrong.

USD/JPY: Shift from neutral to bearish: Severely oversold but room to extend further 101.10.

The 3% plunge in USD last Friday has shifted the outlook to bearish. However, the rapid drop is clearly oversold but based on the current momentum, further extension to 101.10 would not be surprising (next support is at July’s low of 100.00/05). In order to maintain the current momentum, any rebound should not move back above 104.20.

 

Edited August 1, 2016 by aganijak

[aganijak]

USD/JPY, EUR/USD: What The Yield Spread Says?

The US/Japanese real 10year yield spread moved back out to 50bp after the payroll data, but just eye-balling the yield spread and USD/JPY suggests we’d need a 20bp move up in US real yields to have any chance of seeing USD/JPY 110. My hopes of that happening haven’t revived on these figures, and as for the 50bp move in relative yields that would point the way to USD/JPY120... that’s going to take better US data and a massive change of heart by the BOJ. Maybe a risk-friendly set of US numbers is enough to keep USD/JPY from breaking 100 for now, but the most we can hope for is that a 100-105 range is enough to give the Nikkei a bid...

The EUR/USD chart isn’t any more encouraging. The 10-year real yield differential, at 1.02%, is exactly at the average of 2016, and did I mention that the EUR/USD average this year is 1.1150? ½% below that is probably a fair discount for the Eurozone’s proximity to the UK. I’d rather get my duration kick in the Eurozone than the US (or the UK for that matter, though that’s not exactly working out at the moment).