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Daily Market Analysis

Fed divide sparks Dollar weakness




Bullish Dollar investors were left empty handed on Wednesday following the balanced FOMC minutes which provided little clarity on when the Fed may break the tradition of central bank caution. Although a majority of Fed members were in agreeance of the current economic outlook post Brexit, the visible divide on when to raise US rates left the Dollar vulnerable to losses. Before the passive FOMC minutes, some hawkish Fed members came forward to plant the idea of a September US rate hike but this did little to dispel the period of uncertainty. The overall outlook for the US economy is still somewhat encouraging but conflicting data this month has caused US rate expectations to constantly fluctuate. Dollar sensitivity remains a recurrent theme in the currency markets with anxiety potentially mounting ahead of September’s FOMC meeting.

Investors may direct their attention towards the unemployment claims report which could offer further insight on the health of the US economy in a time of global uncertainty. If US employment continues to display signs of resilience in a period of instability then optimism could heighten over the Fed taking action before the end of 2016. The Dollar Index remains under pressure and is currently bearish on the daily timeframe. The breakdown below 94.50 could entice sellers to drag prices lower toward 94.00.





UK retail sales defy expectations

Sterling bulls were installed with inspiration on Wednesday following July’s blockbuster retail sales of 1.4% which dispelled concerns over a slowdown in economic momentum. The persistent pound weakness may have enticed tourists to spend in the UK while good weather boosted cloth sales. This has been a solid week for the Sterling with the string of positive domestic data not only questioning the persistent Brexit fears but also elevating overall sentiment. While recent data has been undeniably encouraging, it still may be too early to gauge the ramifications of the Brexit to the UK economy.

As of now, expectations remain elevated over the Bank of England implementing further stimulus to stabilise the UK economy while the lingering uncertainty continues to haunt investor attraction towards the Sterling. Although the GBPUSD lurched towards 1.3170 following the firm releases, the potential divergence in monetary policy between the Fed and BoE could encourage sellers to install repeated rounds of selling. From a technical standpoint, the GBPUSD is in the process of fulfilling the prerequisites of an uptrend on the daily timeframe but bears could sabotage this if prices fail to close above 1.3100.







Japanese trade shrinks in July

Sentiment towards the Japanese economy received repeated blows following the dismal trade data for July which reinforced concerns over slowing economic growth. Exports tumbled by roughly 14% simply representing the worst decline since the global financial crisis with Yen’s resurgence weighing heavily on overseas shipments. The negative sentiment was complimented with a mammoth 25% collapse in imports which renewed fears of weak consumer spending across the Japanese economy consequently leaving the Bank of Japan under further pressure.

Despite the influx of weak data which continues to heighten fears over the health of the Japanese economy, the Yen has strengthened which has nothing to do with an improved sentiment but risk aversion. Japan remains entangled in a losing battle with static inflation while the unstable global landscape continues to expose the nation to downside risks. Although the BoJ have repeatedly discussed the possibility of further intervention to stimulate growth, previous instances of under delivery of stimulus measures have caused such statements to fall on deaf ears.

With risk aversion rife in the markets, Yen strength could be a dominant theme which may ensure the USDJPY remains depressed. From a technical standpoint, the USDJPY is bearish on the daily timeframe as there have been consistently lower lows and lower highs. A decisive breakdown below 100.00 could open a path towards 99.00.







Eurozone July CPI 0.2%


Uncertainty caused by Brexit has noticeably pressured the Eurozone with the overall economic outlook still unstable as anxiety weighs heavily on sentiment. Concerns still linger over the soft second quarter GDP while optimism over the ECB reaching the golden 2% inflation goal continues to diminish. Although July’s inflation figure hit expectations at 0.2% this still remains somewhat static with expectations heightening of further stimulus measures implemented by the ECB.

The EURUSD lurched higher this week and this has nothing to do with an improved sentiment towards the Euro but Dollar weakness. If Dollar weakness persists amid the fluctuating US rate hike expectations then EURUSD bulls could send the pair higher. From a technical standpoint, prices have turned bullish on the daily timeframe and a breakout above 1.1300 could open a path towards 1.1400.






WTI crude challenges $47

The rising optimism towards a potential production OPEC freeze deal in September has sparked speculative boosts in oil prices which paved a path for bulls to send oil towards $47.00. Regardless of these short term gains, oil still remains fundamentally bearish and recent reports of Saudi Arabia output hitting record levels could pressure prices in the future. Concerns still linger over the excessive oversupply in the markets while fears of a decline in demand have weighed on prices. While current gains are impressive it should be kept in mind that the combination of Dollar weakness and oil price sensitivity has created the explosive gains. If the informal OPEC meeting in September concludes without a production freeze then current gains could be swiftly relinquished. Although WTI bulls are back in control, bears could still have a chance below $44.








Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

U.S Dollar under pressure as FED minutes disappoints




Global equities traded in a choppy manner yesterday after the FED July minutes left market participants confused.

In the U.S, stocks closed mostly higher with the Dow rising by +0.12% and S&P500 by +0.19% after suffering from heavy selling pressure in early U.S trading session.
Conversely, European stocks fell sharply on Wednesday as investors were waiting cautiously for the release of the latest FED minutes. The German DAX ended the day sharply lower losing as much as -1.30%.

In the commodity market, Gold was little changed ending the day at $1348 per ounce after the recent minutes showed the need for more economic data, while Oil rally continue as crude prices edged towards $47 per barrel.

Meanwhile,the FOMC meeting minutes did not specify the timing of the next rate hike as Federal Reserve policy makers had divided views on the U.S economy growth. This lack of consensus has brought uncertainty back to the table, which led to a choppy trading towards the U.S Dollar. Both EUR/USD and GBP/USD closed slightly higher at 1.1288 and 1.3040 respectively, while the Japanese Yen surged again pushing USD/JPY to as low as 100.03 following the minutes report.

Now let us have a look at the recent price action in both the Dollar index along with USD/JPY pair


Dollar index

From a technical standpoint, we can see that the Dollar has failed to break above 95.90/96.00 hourly resistance for the third time this week, which signals a clear slowdown in the bullish momentum in the near-term.

In addition, the index has ended last week in the negative territory. Therefore, another re-test of 92.0 support remain possible during the weeks ahead especially if the Greenback keeps trading below 95.10 peak.

Looking at the biggest picture, the Dollar index is showing a bearish head and shoulders reversal pattern in the weekly chart, and prices can be in the process of forming the right shoulder actually. If this technical picture is validated, then we should expect a big drop in the Dollar by the beginning of Q4 and prices can target 90.00-88.00 zone easily in the coming months. However, a weekly close below 92.00 area is needed to confirm these theoretical targets.

Support: 94.00-93.50-92.00

Resistance: 95.10-95.90-96.20





USD/JPY

The pair keep fighting to print fresh yearly lows as bulls did not throw the sponges yet.

Looking at the hourly chart, prices keep following a bearish wave structure, which keeps the negative trend intact in this pair. In the daily chart, the pair keep printing lower highs/ lower lows since 114.90 peak and consequently the upside potential is likely to remain limited.

For the time being, the pair may continue its path in the direction of 99.00 handle as far as prices keep trading below 101.20 peak and a daily close below the psychological support of 100.00 today, will reinforce this scenario.

Support: 99.80-99.50-99.00

Resistance: 100.65-101.20-102.70/80










Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Daily Technical Outlook - August 18-

EUR/USD

The Euro rallied as expected after bulls managed to overtake 1.1230 hourly resistance and by now, another extension to the upside remain possible and can reach as high as 1.1375/1.1400 resistance zone.

Technically, the single currency has turned bullish in the near-term as prices broke above the hourly bearish trend line that comes from 1.1612 peak reinforcing the positive outlook in this pair.

In the meantime, a corrective move to the downside is likely as momentum indicators are clearly overbought. Meanwhile, 1.1240 is considered as the short-term support and the pair should remain well supported above this level. From a wider angle, 1.1045 represents the bullish pivot in the daily chart and only a clear break below this level, will put the single currency under pressure again. Otherwise, the Euro should continue heading north in the coming sessions.

Support: 1.1240-1.1200-1.1150

Resistance: 1.1375-1.1400-1.1450





Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Daily Technical Outlook - August 18-

GBP/USD

The Sterling jumped strongly near its yearly lows and found strong demand at 1.2860 level yesterday. In addition, prices broke above 1.3000 barrier, which triggered a big rally in the pair.

However, when looking at the daily picture, the trend remains bearish and as far as prices keep trading below 1.3370 peak, the upside potential is likely to stay limited. Therefore, traders should expect a strong rejection near 1.3180/1.3200 resistance zone if the pair continue its recovery in the coming hours.

In the near-term, 1.3095 is seen as a major support and a daily close below it will confirm that the recent correction has ended. Conversely, a clear breakout above the mentioned resistance should confirm a trend change in the daily chart.

Support: 1.2995-1.2940-1.2885

Resistance: 1.3070-1.3095-1.3120





Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Daily Technical Outlook - August 18-

GOLD

Gold failed to overtake 1357 hourly resistance for the third time in a row and the yellow metal showed another negative rejection candle yesterday. As of now, we can see that momentum indicators are beginning to turn lower, which warns about a potential corrective wave in the next days.

Technically, a re-test of the yearly high around 1375 level still possible. However, gold has shown three consecutive lower highs (1375-1367-1357) from its yearly peak and we will focus on a daily close below $1328 support to confirm a bearish reversal in the next hours. In the flipside, a break above 1357 resistance will bring the bullish outlook in the short-term and should expose $1375 soon.

To summarize, the positive trend started to show some signs of weakness in the hourly chart and traders should not be surprised if gold extend its losses soon as far as 1357 peak remain intact.

Support: 1333-1328-1320

Resistance: 1352-1357-1367






Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Daily Technical Outlook - August 18-

AUD/USD

The pair lost some of its bullish momentum by the end of last week as bears managed to push prices below 0.7700 handle.

Looking at the recent price action, the Aussie found strong resistance after reaching the daily resistance of 0.7760 , which is considered as the last barrier before to reach the yearly high of 0.7830 and by now, a deeper correction in the direction of 0.7595 support remain possible.

This support represents the 61.8% retracement of the entire bullish cycle that began from 0.7495 low, and therefore we may see some buyers around it.

Actually, we maintain the positive outlook for the pair in the daily chart and only a close below 0.7495 level, will confirm a bearish reversal. While in the hourly chart, the trend has turned neutral and prices should break above 0.7720 resistance to re-gain its strength.

Support: 0.7625-0.7595-0.7495

Resistance: 0.7720-0.7760-0.7830




Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Daily Technical Outlook - August 18-


USD/CAD

The pair has become strongly bearish after breaking below 1.3000 psychological support.

The pair has erased the entire gains posted after the recent NFP release, reinforcing the bearish outlook in the near-term. Actually, 1.2920 zone turned resistance in the hourly chart and as far as this level holds, we believe that the pair has found a top at 1.3250 and should see further weakness towards 1.2650/75 zone in the coming days.

Meanwhile, prices have reached a major support level, which stands at 1.2760 as it represents the 61.8% retracement of the recent recovery seen from 1.2445 low. Therefore, a corrective wave to the upside may begin soon.

Conversely, only a break above 1.2917 peak will cancel this negative view and should push prices into a larger correction to the upside.

Otherwise, USD/CAD will remain under pressure in the short-term.

Support: 1.2760-1.2675-1.2650

Resistance: 1.2840-1.2865-1.2920





Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Oil’s resurgence struggles to keep stocks buoyed




Global stocks traded lower on Friday as the ongoing debates between Fed policymakers over future US rate hikes sparked jitters consequently overshadowing oil’s sharp resurgence. Asian markets concluded depressed after some Federal Reserve officials suggested the idea of a US rate hike in September which repelled investors from riskier assets. European equities were punished by Asia’s bearish contagion with most major stocks drifting lower as market participants reassessed the health of the global economy. Although Wall Street was uplifted by the rebound in oil prices that provided energy companies a welcome boost, losses could be realised if the Fed debate takes center stage.

The short term gains seen in global stocks have been undeniably impressive but go against the fundamentals which does raises questions about the sustainability of the current market rally. Concerns over the global economy still linger in the background while uncertainty remains a persistent theme which has left most investors anxious. Although speculative boosts in oil prices have somewhat elevated global sentiment, it should be kept in mind that fears over the excessive oversupply are still present. Central bank caution is still a theme in the markets and this could weigh heavily on global confidence consequently leaving stocks vulnerable to further losses. With the ingredients of a bear market still present, investors should remain alert as it could take an unexpected catalyst to rapidly halt the stock market rally.

Sterling bears are back in action

Sterling bulls were provided a lifeline this week following the string of impressive UK data which reduced some post-Brexit anxieties while also elevating sentiment towards the UK economy. Inflation figures were solid on Monday and employment data provided a pleasant surprise on Tuesday while July’s retail sales defied expectations at 1.4% consequently questioning if the impacts of a Brexit has any impact on the UK economy. While the recent data has been unquestionably encouraging, it still may be too early to gauge the ramifications of the Brexit to the UK.

Uncertainty is still a recurrent theme which continues to haunt investor attraction towards the Sterling consequently leaving prices vulnerable to heavy losses. With expectation heightened over the Bank of England implementing further stimulus to stabilise the UK economy, Sterling weakness could persist moving forward. Although the pound bulls may be installed with some inspiration in the short term if UK data continues to display signs of improvement, the thick cloud of uncertainty could ensure upside gains are capped. From a technical standpoint, although the GBPUSD broke above 1.3100, bears could reclaim back control if prices fail to stabilise above this level.






Dollar sensitivity intensifies

The Dollar was on the slippery slope this week as expectations kept changing over if the Fed will break the trend of central bank caution by raising US interest rates. Although Wednesday’s divided FOMC meeting minutes left most Dollar bullish investors empty handed, recent debates from some Fed policy makers on US rates have sparked speculations of a potential September rate increase. It seems likely that the Fed remains on standby in wait for further positive core economic data to justify raising US interest rates in December. Fluctuating US rate hike expectations could intensify Dollar sensitivity consequently creating explosive movements moving forward.

Oil enters bull market

Oil prices surged ferociously for the six straight days with Brent officially entering a bull market as expectations heightened over a potential output freeze deal in the upcoming informal September OPEC meeting. Oil sensitivity has intensified the speculative boosts in prices with bulls exploiting every opportunity provided to install repeated rounds of buying. Although the current gains are unquestionably impressive, it goes against the narrative of excessive oversupply and questions the sustainability of the current rally. With the last OPEC meeting leaving investors empty handed, there is a threat that the pending informal meeting will end without a deal laid out which could leave oil prices extremely vulnerable to heavy losses. Although sentiment remains bearish towards this commodity the technicals are pointing to the upside with bulls observing $49. While part of oil's resurgence has been hopes of a freeze deal, it should also be kept in mind that Dollar vulnerability may have played a key part.

Commodity spotlight – Gold

Gold was trapped in a wide range this week with prices meandering between $1357 and $1335 as uncertainty grew over when the Fed may raise US interest rates in 2016. This metal has always been highly sensitive to US interest rate hopes and with current expectations clouded; prices could remain in limbo moving forward. Risk aversion still lingers in the markets and such could provide a boost to prices in the medium term. With no key US economic data releases today price action and Dollar weakness could propel Gold slightly higher. From a technical standpoint, bulls must keep above $1315 to maintain the current daily bullish uptrend.






Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Dollar bounces on profit taking ahead of the weekly close




There were only few economic releases for today without any figures scheduled for the U.S trading session.

Beginning with Germany, the PPI MoM came out higher than expected at 0.2% against forecasts of 0.1%. Meanwhile, we have seen a depreciation compared to the previous month.

In the U.K, the public sector net borrowing decreased significantly by -1.5B in July from 7.5B previously. While in Canada, USD/CAD jumped to as high as 1.2892 level following weak economic data. The Canadian retail sales for the month of June retreated to -0.1% down from 0.0% previously. In the meantime, inflation contracted in the previous month as the figures showed deflationary pressure persisting with the MoM inflation change falling to reach -0.2% down from 0.2%, in addition, the YoY figures missed estimates and declined towards 1.3% compared to 1.5% in June.

USD/CAD rallied following this release, as the short-term technical picture matched the fundamental one sending the pair higher today. Looking at the 4-hour chart, prices have reached the 61.8% of the entire recovery that began from 1.2445 low and therefore, we were expecting to see strong buyers around this level, which stands at 1.2765. The pair managed to bounce strongly to reach as high as 1.2892 in early U.S trading session.

As of now, another extension to the upside remain possible in the coming days as the near-term trend switched from bearish to neutral. Meanwhile, the daily trend still negative, and consequently the upside potential is likely to remain limited in this pair as far as 1.3085 peak is in place.

Technically, the recent jump can reach as high as 1.2900-1.2930 resistance zone before the downside pressure resume.







Looking at the U.S Dollar price action ahead of Janet Yellen speech in Jackson Hole, the Greenback bounced on Friday as profit taking has begun ahead of the weekly close.

The Dollar recovered near 94.00 weekly support and by now, prices are testing an important bearish trend line in the hourly chart, and should see some sellers in the coming hours.

Overall, the bearish trend remain intact below 96.00 area in the daily chart, while in the hourly chart, if the recent recovery continue to gain some ground, then we expect this corrective wave to end around 94.90/95.00 resistance levels for another dip below 94.00 support.






GOLD

Gold failed to overtake 1357 hourly resistance for the third time in a row and the yellow metal showed another negative rejection candle yesterday. As of now, we can see that momentum indicators are beginning to turn lower, which warns about a potential corrective wave in the next days.

Technically, a re-test of the yearly high around 1375 level still possible. However, gold has shown three consecutive lower highs (1375-1367-1357) from its yearly peak and we will focus on a daily close below $1328 support to confirm a bearish reversal in the next hours. In the flipside, a break above 1357 resistance will bring the bullish outlook in the short-term and should expose $1375 soon.

To summarize, the positive trend started to show some signs of weakness in the hourly chart and traders should not be surprised if gold extend its losses soon as far as 1357 peak remain intact.

Support: 1333-1328-1320

Resistance: 1352-1357-1367






AUD/USD

The Aussie was the weakest currency in the FX market today as bears succeeded to push prices from 0.7700/0.7720 resistance zone.

Looking at the recent price action, the Aussie found strong resistance after reaching the daily resistance zone, which is considered as the last barrier before to reach the yearly high of 0.7830 and by now, a deeper correction in the direction of 0.7550 support remain possible.

However, we should for a daily close below 0.7600 support to confirm another extension to the downside in the pair.

Actually, our view has turned bearish in the short-term and as far as the pair keep trading below 0.7685 peak, downside pressure will persist.

Support: 0.7595-0.7550-0.7495

Resistance: 0.7685-0.7720-0.7760








Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

WTI Crude wobbles above $47



WTI Crude was vulnerable to losses on Monday with prices challenging $47 as Iraq’s ongoing quest to reclaiming market share dampened expectations over the possibility of September’s informal OPEC meeting concluding with a freeze deal. Oil’s weakness was complimented with Dollar’s resurgence from the renewed hopes over the Federal Reserve raising US interest rates in 2016. It is becoming increasingly clear that the explosive movements observed in oil were powered by sentiment rather than fundamentals which question the sustainability of the rally. Inflated expectations over OPEC securing a freeze deal enticed bullish investors to attack while oil price sensitivity intensified the speculative boosts in prices. Although the gains were undeniably impressive, WTI still remains fundamentally bearish with concerns over the excessive oversupply haunting investor attraction.

Saudi Arabia has already suggested that intervention in the markets may not be needed and such may have thrown a wrench into the clockworks. Although OPEC has skillfully exploited the oil price sensitivity to create explosive appreciations in oil this could come at a cost. The cartel remains notorious for holding meetings which conclude with investors left empty handed and if September follows the same pattern then WTI could be open to steep losses. From a technical standpoint, a strong breakdown below $46 could open a path towards $44.

The BoJ pressured to act

The Bank of Japan remains under pressure to act, as the combination of soft domestic data and a strengthening Yen amid risk aversion weigh heavily on the Japanese economy. Inflation continues to follow a negative path while global developments have exposed the nation to downside risks. Bank of Japan Governor Haruhiko Kuroda has pledged to boost monetary stimulus if needed, but with a history of under delivering monetary measures is the market listening?

The previous expectations of Helicopter money have been discounted with the central bank potentially funding infrastructure projects in a bid to jumpstart economic growth. With speculations still mounting over the BoJ easing monetary policy further in an attempt to regain economic stability, the Yen was open to losses on Monday. Overall, sentiment still remains bearish towards Japan with the Yen trapped in a fierce tug of war against risk aversion and optimism over the BoJ unleashing further monetary measures.

The USDJPY experienced a sharp incline last week with Dollar’s resurgence acting as a driving force. Prices are trading above the daily 20 SMA but the MACD still trades to the downside. A sharp breakout above 102.50 could encourage buyers to send the USDJPY towards 103.50.









Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

What to look at for the week ahead 29-08-2016




Fundamentals:

The U.S Dollar surged on Friday following Yellen comments in Jackson Hole that the case for an interest rate hike in 2016 has strengthened.
The Greenback traded strongly higher across the board as the Dollar index added 0.84% at the time of the weekly close.

Yen retreated by 1.3% to 102 per dollar after FED chair fueled rate hike bets in 2016 while Bank Of Japan chief Kuroda said he is ready to add further stimulus measures if needed.
The Euro closed below 1.1200 handle, in the meantime, the British pound trimmed the majority of last week gains to stabilize at 1.3120 level.

As of the week ahead, investors will be looking at the U.K PMI, in addition to the GDP figures from Canada and the Australian retail sales, while the focus will be on the U.S Non-Farm payrolls on Friday.

The U.S Economy is expected to add 180 000 additional jobs in August slightly below the year-to-date average which stands at 186K. It is important to note that last month figures were robust and showed a job gains of 255 000. Meanwhile, any number above 150K will reinforce FED officials view that the economy has reached full employment, which may have a positive impact on the next rate hike decision and consequently another rally in the U.S Dollar remain possible.



Technicals:

Looking at the technical outlook of some major currency pairs for the week ahead.

EUR/USD

The Euro retreated on Friday as the Dollar strengthened across the board fueled by the rate hike bets from the U.S following Yellen comments in Jackson Hole.

Technically, the single currency turned bearish in the hourly chart after prices managed to break below 1.1240 support. Therefore, a continuation to the downside in the direction of 1.1160-1.1110 support zone remain possible during the week ahead before to see some demand in the pair. In the meantime, a retracement towards 1.1240/60 new resistance zone (former support) is likely to find strong sellers. In the daily chart, the trend remain bearish below 1.1365 (61.8% retracement from 1.1600 peak to 1.0900 low) and as far as prices keep trading below this level, the upside potential should be limited in the Euro.

Support: 1.1160-1.1110-1.1050

Resistance: 1.1240-1.1260-1.1330







GBP/USD

After the recent rally seen in cable, the pair traded lower by the end of last week on the back of US Dollar strength.

From a technical standpoint, the Sterling remain positive in the hourly chart as far as 1.3025 support is in place. Meanwhile, the focus shifted to 1.3072 level, which represents the 50% retracement of the entire recovery that began from 1.2865 support.

Therefore, a bounce can happen around this level in the coming days and another extension towards 1.3170 resistance is likely. In the opposite, if the pair trades higher in the beginning of this week, then we expect sellers to appear between 1.3170 and 1.3196 resistance levels.

Looking at the biggest picture, the trend remain bearish in the daily/weekly charts and as far as 1.3370 peak is intact, any rally should be short-lived in this pair.

Support: 1.3110-1.3072-1.3025

Resistance: 1.3170-1.3197-1.3230







GOLD

After several attempts to break above 1357 hourly resistance that failed, prices succeeded to break below the support zone of $1333/1328 in the daily chart, which can clear the path to a re-test of 1310-1305 support zone in the next days.

Technically, gold turned bearish in the near-term as prices has shown four consecutive lower highs (1375-1367-1357-1342) from the yearly peak of $1375, which reinforces the probability of further weakness in the coming days. As of now, $1322 represents the short-term resistance level while the most important barrier stands at 1328 for the week ahead.

To summarize, gold remain under pressure and the upside potential is likely to be limited.

Support: 1315-1310-1305

Resistance: 1322-1328-1331







USD/JPY

The pair managed to preserve the psychological support of 100.00 and we have seen a big jump on Friday especially after the strong break above 100.93 resistance level.

Technically, prices showed an upside reaction each time the pair tried to break below 100.00 support as Bank of Japan officials continue to eye this level.

In the near-term, and when looking at momentum indicators, we can see that the pair has more potential to the upside. Therefore, another rally in the direction of 102.60/80 resistance zone cannot be ruled out.

In the flipside, a drop towards 101.50 level should give strong support to USD/JPY.

Meanwhile, when looking at the daily chart, the pair keep printing lower highs/ lower lows since 114.90 peak and consequently, the selling pressure is likely to resume after the current correction finds and end.

In extension, a daily close above 102.80 resistance should send prices to as high as 103.30/60 before to see new sellers.

Support: 101.50-101.25-100.93

Resistance: 102.60-102.80-103.30/57







Source : http://www.forextime.com/market-analysis

 

Daily Technical Outlook - August 29-

EUR/USD

The Euro retreated on Friday as the Dollar strengthened across the board fueled by the rate hike bets from the U.S following Yellen comments in Jackson Hole.

Technically, the single currency turned bearish in the hourly chart after prices managed to break below 1.1240 support. Therefore, a continuation to the downside in the direction of 1.1160-1.1110 support zone remain possible during the week ahead before to see some demand in the pair. In the meantime, a retracement towards 1.1240/60 new resistance zone (former support) is likely to find strong sellers. In the daily chart, the trend remain bearish below 1.1365 (61.8% retracement from 1.1600 peak to 1.0900 low) and as far as prices keep trading below this level, the upside potential should be limited in the Euro.

Support: 1.1160-1.1110-1.1050

Resistance: 1.1240-1.1260-1.1330




Source : http://www.forextime.com/market-analysis

 

Daily Technical Outlook - August 29-

GBP/USD

After the recent rally seen in cable, the pair traded lower by the end of last week on the back of US Dollar strength.

From a technical standpoint, the Sterling remain positive in the hourly chart as far as 1.3025 support is in place. Meanwhile, the focus shifted to 1.3072 level, which represents the 50% retracement of the entire recovery that began from 1.2865 support.

Therefore, a bounce can happen around this level in the coming days and another extension towards 1.3170 resistance is likely. In the opposite, if the pair trades higher in the beginning of this week, then we expect sellers to appear between 1.3170 and 1.3196 resistance levels.

Looking at the biggest picture, the trend remain bearish in the daily/weekly charts and as far as 1.3370 peak is intact, any rally should be short-lived in this pair.

Support: 1.3110-1.3072-1.3025

Resistance: 1.3170-1.3197-1.3230






Source : http://www.forextime.com/market-analysis

 

Daily Technical Outlook - August 29-

GOLD

After several attempts to break above 1357 hourly resistance that failed, prices succeeded to break below the support zone of $1333/1328 in the daily chart, which can clear the path to a re-test of 1310-1305 support zone in the next days.

Technically, gold turned bearish in the near-term as prices has shown four consecutive lower highs (1375-1367-1357-1342) from the yearly peak of $1375, which reinforces the probability of further weakness in the coming days. As of now, $1322 represents the short-term resistance level while the most important barrier stands at 1328 for the week ahead.

To summarize, gold remain under pressure and the upside potential is likely to be limited.

Support: 1315-1310-1305

Resistance: 1322-1328-1331






Source : http://www.forextime.com/market-analysis

 

Daily Technical Outlook - August 29-

USD/JPY

The pair managed to preserve the psychological support of 100.00 and we have seen a big jump on Friday especially after the strong break above 100.95 resistance level.

Technically, we have seen a strong reaction each time the pair tried to break below 100.00 support. Bank of Japan officials eye this level, and we may continue to see some interventions from time to time around this level. Meanwhile, when looking at the daily chart, the pair keep printing lower highs/ lower lows since 114.90 peak and consequently the upside potential is likely to remain limited.

For the time being, the pair may continue its path in the direction of 99.00 (2016 low) followed by 98.00/97.50 monthly support zone in the coming weeks. This scenario should remain valid as far as prices keep trading below 102.80/103.55 barrier.

However, in the near-term a retracement to the upside remain cannot be ruled out and may target 100.90/101.20 resistance zone before the bearish pressure resume.

Support: 100.00-99.53-98.00/97.50

Resistance: 100.93-102.80-103.55





Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Dollar Index edges higher



The rising optimism over the Federal Reserve breaking the tradition of central bank caution by raising US interest rates in 2016 has inspired the Dollar bulls with the Dollar Index edging higher towards 96.00. Although expectations continue to fluctuate over the possibility of a US rate rise in September, the 54% probability that the central bank could act in December continues to make the Dollar attractive. Sentiment remains bullish towards the US economy with the string of positive domestic economic data releases providing a compelling reason for the Fed to raise US rates before year end. With the period of uncertainty dispelled from last week’s hawkish comments from Yellen, the Dollar could be set for further gains as bets intensify over the Fed hiking rates.

The main focus this week will be the monthly US Non-Farm payroll figures for August which if exceeds expectations could encourage more Fed members to join the hawkish camp. Dollar bulls were rampant last week and the momentum has trickled into the new week with the Dollar Index trading towards 96.00. From a technical standpoint, although prices are still in the boundaries of being bearish on the daily timeframe, a decisive breakout 96.00 could open a path towards 96.50.




Commodity spotlight – WTI Oil

WTI Oil was left vulnerable to losses on Monday as the combination of Dollar resurgence from renewed rate hike hopes and concerns over the excessive oversupply of oil in the global markets encouraged sellers to attack. The heightened expectations over OPEC securing a freeze deal in September’s informal meeting have been quelled by comments from Saudi Arabia and Iraq who continue to unleash record output into the markets. With the Dollar potentially strengthening further as rate hike speculations intensify, future speculative boosts in oil prices triggered by OPEC could be capped. August’s sharp rally which defied the fundamentals has already displayed signs of exhaustion, with the awful combination of oversupply fears and anxiety over demand waning ensures WTI remains depressed. All eyes will be on September’s informal meeting and if it concludes without a solid deal then Oil could be open to steep losses. From a technical standpoint, a strong breakdown below $46 could open a path towards $44.


Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Oil bears dominate on a stronger USD




Oil markets continue to drift lower on the charts as the USD strengthens on the back of recent hawkish comments from the FED and in the build up to non-farm payroll this week. With the market expectation likely to be for a strong reading as the labour market has continued to deliver in the wake of expectations it will weaken. There has been calls internally from OPEC to support a production cut and moments ago Iraqi Prime Minister Haider Al-Abdai was looking to support an oil output freeze in an effort to stabilize prices and stop oil sliding any further, as the financial stress continues to be an issue for OPEC nations and even Saudi Arabia which is burning through cash reserves. The only issue for this is that many nations including Saudi Arabia have done this to fight of other oil producing nations and establish OPEC as a dominant player, however so far supply has not fallen at all and continued to increase in some regards, especially with Iran looking to boost production to 4.75 million barrels from 3 million and Libya which is rebuilding production as well. So a freeze may be some time off, especially with how fical OPEC can be internally.

Oil on the charts has been very bearish as of late and I expect it to continue to stretch lower in the short term as the bears have complete control. The next level of major support can be found at 45.78 and the expectation is that it will likely continue to slide lower to this level. If there is no output freeze then I would anticipate further sliding to 44.58 as the next level of support; beyond this level I would struggle to see further major gains unless market conditions change rapidly.

The Australian dollar has been looking weaker against the bears as of late as it struggled to gain any sort of traction on the charts. Data earlier in the week was lacklustre, but the recent building approval data was strong with a rise of 11.6% on the back of a rush for apartment approvals helping to boost the numbers. This comes on the back of the previous months data which showed a decline of -4.7% which worried economists as interest rates were looking to shift lower. Despite the good result it's the USD strength which is driving markets at present, and the weak Australian economy has so far failed to find any sort of ground for future rate rises to encourage fixed interest traders.

On the charts the AUDUSD has been well and truly taken by the bears and is getting pushed through support at 0.7517 and the 38.2 fib retracement and testing the 100 moving average. A push through here will signal strong bullish momentum and we could see the AUDUSD slide lower to 0.7450 which is currently just below the 0.50 fib retracement level and likely to be the next major zone traders look to target. Either way while the USD continues to be the in-trade all eyes will be on the AUDUSD to see how much it can take before traders look to take some of those gains.


Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Dollar rally continue fueled by FED’s rate hike bets




The Dollar index ended little changed at 95.60 on Monday as investors awaits August Non-Farm payrolls due by the end of this week.

The Euro extended its losses and fell by -0.10% yesterday, the British pound edged lower and has lost -0.22% while the Japanese Yen plunged to reach 3-week high against the Dollar at 102.40 as rate hike bets increased significantly following Yellen recent Hawkish comments in Jackson Hole last Friday.

In equity markets, the DowJones closed 108points higher and S&P500 was up 0.5%. In the meantime, Gold managed to recover from 5-week low of $1315 per ounce while Oil prices retreated by nearly 2% on Monday to settle at $46.98 on surging OPEC output.

As of today, few economic releases were scheduled in the both the European and U.S trading sessions, however, we have seen some big movements in the FX market.

Beginning from Europe, German Import price index came out above expectations at 0.1% in July while it was anticipated at -0.1% only. In the meantime, inflation contracted in August as both the MoM and the YoY figures missed forecasts and registered 0.0% and 0.4% compared to estimates of 0.1% and 0.5% respectively.

In the U.K, mortgage approvals decreased to 60.9K down from 64.2K previously while the net consumer credit saw a deterioration in July as the figures showed a decrease by 1.2b against 1.9b in June.

In the U.S, the consumer confidence index jumped to 101.1 up from 96.7 previously and above estimates of 97.0

The U.S Dollar resumed its recovery today as the Dollar index added +0.40% at the time of this report to trade at 95.97 level, which is considered as a major resistance in the near-term. Therefore, traders should focus on prices reaction around the 96.00 handle to confirm the bullish reversal signal given on Friday.

Technically, a break above this resistance should expose 96.25/50 area in the coming days, and from where strong sellers may appear. From a larger perspective, the Dollar keep trading sideways in the weekly chart, as investors remain skeptical about the date of the next interest rates hike. Consequently, volatility can persist in the near-term unless we see a clear break above 97.65 peak or below 93.00 weekly support.

Meanwhile, we can see that bulls managed to preserve the higher lows structure that began from 92.95 low, which may lead to further gains in the Greenback especially if a daily close above 96.50 level happens.






Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

Dollar firm ahead of ADP report



Dollar bulls received ample encouragement on Tuesday following the impressive consumer confidence report which bolstered sentiment towards the US economy. The Consumer Confidence Index (CCI) for August lurched to its highest level in almost a year at 101.1 consequently reinforcing expectations over the Federal Reserve raising US rates in 2016. For an extended period, economic data from the States has repeatedly exceeded targets while the slightly easing concerns over the unstable global landscape continue to provide leeway for the Fed to take action. Clarity and direction on US rate hike timings were gifted to investors following Yellen’s hawkish speech last week and it has now become a matter of when rather than if rates will be increased.

Attention may be directed towards Wednesday’s ADP private sector payroll report which could offer further clarity on how the US labour force is faring in a period of global uncertainty. If the ADP follows a positive pattern and exceeds expectations, then the Dollar could surge higher as bets intensify over the Fed potentially pulling the trigger in December.

Dollar bulls are relentless and this may be displayed on the Dollar Index which has lurched towards 96.00. From a technical standpoint, prices are turning bullish on the daily timeframe and a decisive breakout above 96.00 could open a path towards 96.50.





Yen weakens on stimulus hopes

Bank of Japan Governor Haruhiko Kuroda’s pledge to boost monetary policy if needed has spurred expectations of the BoJ taking action in the future consequently weakening the Yen. The terrible cocktail of repeatedly soft domestic data and a strengthening Yen from risk aversion continues to weigh heavily on the Japanese economy and this has pressured the central bank considerably. Even though there is optimism over the BOJ taking further action, with its history of under delivering monetary measures, will investors be left empty handed once again? Previous speculations of Helicopter money have been quelled with talks of funding infrastructure projects as a method of jump-starting its ailing economy. Overall, sentiment remains firmly bearish towards Japan with the Yen potentially weakening further as bets mount over the BoJ taking action.

The combination of Dollar strength from renewed US rate hike expectations and Yen weakness from stimulus hopes has encouraged bulls to install heavy rounds of buying on the USDJPY. Although prices are currently respecting a bearish trend on the daily timeframe, a decisive breakout above 104.00 could spell trouble for the bears.






Commodity spotlight – WTI Oil

WTI Oil pierced below $46 on Wednesday as the concerns over the excessive oversupply of oil in the global markets haunted investor attraction towards the commodity. Fears are mounting that U.S crude stocks may have expanded further last week while optimism continues to diminish over OPEC securing a freeze deal agreement in September’s informal meeting. With Dollar strength becoming a dominant theme in the markets, WTI could be pressured further moving forward. The ingredients for a bear market are visible and the awful combination of oversupply concerns and faltering demand fears could encourage bears to send WTI Oil lower. From a technical standpoint, a strong breakdown below $46 could open a path towards $44.



Source : http://www.forextime.com/market-analysis

 

Daily Market Analysis

AUD bears position themselves ahead of data




The Australian dollar continues to be controlled by the bears as it looks set to close below the 38.2 fib retracement line, as a combination of a stronger USD based on increased betting in a FED rate hike and weakness in the Australian economy take its toll on the economy. However, the next 12 hours are likely to set a precedent for momentum for the AUDUSD as capex data is expected to be released and retail sales; in addition Chinese data is also out on Manufacturing with expectations it will show a minor contraction. Capex data and retail sales for me will be the big mover, as capex data will show overall investment internally from firms in the Australian economy and will be an indicator if firms are looking to increase that investment. Expectations are however low with a predicted reading of -4.2% q/q. Retail sales however are also expected to dip to 0.3% and this will have a large impact on the appetite for Aussie bulls if that is indeed the case.

Technically speaking it's very much a bearish trend for the AUDUSD as it continues to slip down the charts. Expectations are now building around the 50.0 fib level at present as it looks likely we will see the AUDUSD look to test this key level at 0.7450 as the bears look to take a big swipe out of the commodity currencies. It's possible that we will see a sharp pull back from this point up the charts to the 38.2 retracement level and then further bearish momentum back down the chart as traders look to take a breather and the possibility of rate hikes increase for the USD adding further fundamental pressure.

Oil markets jumped sharply into the red today as expected crude oil inventories showed a large build up of 2.28M barrels (0.92M exp). This is a slightly smaller increase than the previous week, however it's still a large build up and to add further fuel to the fire recent OPEC data showed production at record levels as they globally pumped 40K more barrels in August than July, putting total production at 33.50Mbpd. Output has so far been limited in Nigeria and Libya, but they have a large amount of production capacity and it is looking like only a matter of time before the pressure comes on them and they look to rapidly increase production. This in turn could put real pressure on oil bulls and the bears look likely to be in for a field day.

Market movements have so far been very much in favour of the bears with the H1 chart showing big swings on news out of OPEC and oil inventories. Expectations are now building that we will see oil look to push the key support area of 44.50 as the bears look to push oil lower. With the USD strengthening and production increasing it is creating a very bearish scenario for oil traders and even the technical's are showing strong signs that the bears are likely to stay in control for some time.


Source : http://www.forextime.com/market-analysis