Free Forex Analysis for 10.23.2015

October 23, 2015 Forex Analysis

Free Forex Signals for 10.23.2015

ECB Prepares Ground For December Easing. The ECB did what markets wanted and laid the groundwork for further easing measures in December. The question seems to be not if, but which measures the central bank can take to bring inflation back towards 2%, with the possibility of a deposit rate back on the table. Yields came down and the curve flattened from the short end, on the indication that the cut off point for negative yields under the QE program will be lowered further. The reliance of markets on ECB measures is increasing and what were initially exceptional measures becomes quickly the new normal.

EUR pairs are trending lower. Over the last five days euro has lost some ground across the board but the single currency has also been losing ground over the last month especially against the commodity currencies (AUD, CAD, NZD). In this report we will take a look at euro performance against them to reveal the concerted sell off in the currency. We will also identify the major support and resistance levels in these markets.

EURAUD, Daily

After the parabolic move in August EURAUD has been in a distribution phase and moved sideways. This is typical after an uptrend. Lately the pair has created lower highs and yesterday’s surprise from Mario Draghi caused the price to break below the rising trendline that has been in place since April this year. At the time of writing price is trading between a weekly pivotal high from December last year (1.5332) and August this year (1.5301) while July weekly high is just below at 1.5277. The 100 day SMA coincides with this and is currently at 1.5256. EURAUD is near major support level but the recent pivotal low from October 12^th at 1.5400 and the sideways move that followed together with the further easing promises from the ECB could keep the market in a sell the rallies mode. Keep monitoring price action at resistance levels for momentum reversal signals. Price action at resistance levels will tell us how if the sentiment will stay euro negative. The 1.4991 – 1.5154 support bracket looks like a potential reversal point and could therefore work as a short target.

EURCAD, Daily

Just like EUR has been losing value against the AUD the other commodity currency CAD has been favoured by the markets over the last few weeks. This happened as EURCAD started to move sideways after a strong uptrend and an exhaustion move took place at the end of August. This week the pair tried to get back inside the rising regression channel but failed. The failure was helped by the Draghi speech and price has since fallen below the October 7^th pivotal low. The June 4^th and July 10^th highs at 1.1460 and 1.4253 coincide roughly with a 100% Fibonacci extension level at 1.4195. The pair is trading just below a 1.4604 resistance which could turn it towards 1.4442 target. Eventually the 100% Fibonacci level at 1.4191 should come into play should the price advances be rejected at the resistance levels. I’ve left the Fibonacci extension levels off the chart to improve readability.

EURNZD, Daily

The third commodity currency NZD has strengthened 7.36% on average against all the currencies since the latter half of the September while EURNZD has lost 8.45% during the same period. EURNZD has been trending lower since it broke below 1.7500 support in September and has now moved below 100 day SMA. The pair is approaching 1.6054 level that supported price in June and is moving below the descending regression channel. In the weekly picture this same level coincides roughly with the weekly lower Bollinger Bands while a cluster of long term moving averages are within the 1.5 and 2 SD bands. All three (50 period, 100 period and 200 period) weekly averages are clustered between 1.5809 and 1.5974. The weekly Stochastics (7) are well into the oversold zone. Due to several technical factors in the proximity (weekly timeframe) the majority of the down move could be now behind us. The price is however still trending lower which suggests that there could be opportunities in the short side if we wait patiently for rallies to find their exhaustion points. Look for rally failures at resistance levels with a target at 1.6050 region.

Janne Muta

Chief Market Analyst

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About Janne Muta, HotForex’s Chief Market Analyst

jmuta Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.

Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.

“My mission is to help you to become a confident and successful trader”

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EURJPY Analysis for 10.23.2015

October 23, 2015 Forex Analysis

The 133.42 – 134.05 target hit in EURJPY. I pointed out in my October 15th analysis how EURJPY failed to challenge the channel top and fell down from it. My view at the time was that it was too late to short the pair as it was trading near support levels. Therefore, I suggested that we should sell the rallies. I wrote at the time: looks like there could be some short opportunities should the market rally first. Now that the market has dropped down to 137.35 support it is too late to be an aggressive seller but the sell opportunities could be found at or near 136.33 resistance (if momentum reversal signals confirm the idea) while the support range at 133.42 – 134.05 is likely to be an area to attract buyers and would therefore make sense as a target level for short trades.

Market rallied from the support, hit the 136.33 resistance and fell down to the target range suggested in the report. Currently the pair is trading inside my target range and is about to create a bullish pin bar in 4h chart. This suggests to me that it is time to close the short trade and bank the profits. The trade brought over 230 pips profit to our traders.

Join me next Tuesday at 12:30 GMT (follow the link below) to a Live Analysis Webinar and I will teach you how to study the price charts and help you to find trades like this. The webinar is free so you can bring your friends too!

Janne Muta

Chief Market Analyst

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Macro Events & News for 10.23.2015

October 23, 2015 Forex Analysis

FX News Today

The EURUSD pair dropped nearly 240 pips yesterday while EU stock markets jumped on the comments from the ECB president Mario Draghi that the European Central Bank is “committed to further easing”. Traders took this comment as a clue that the ECB is not happy with having a strong currency in the current Eurozone economic environment. The EURUSD Asia session reached a low at 1.1072. EURJPY dropped into a multi-week low, and the EURGBP has broken its 100-day moving average at 0.7213, trading on the downside side of this average for the first time since late summer. Since it is now clear that the ECB is fearful of a stronger EUR, the EUR is likely to stay under general pressure. However, the EURUSD price may bounce a bit before any test of 1.1000 round number.

The ECB’S comments yesterday sparked a rally on stock markets that continued in both Asia and U.S. stock markets. Further gains in Europe stock markets looks likely as the ECB prepares for additional easing measures.

Main Macro Events Today

• EUR Market PMI: French, German Composite PMIs surprise on the upside. France reported a slight improvement in the manufacturing PMI to 50.7 from 50.6 and a rise in the services reading to 52.3 from 51.9. Germany meanwhile saw a slight decline in the manufacturing number to 51.6 from 52.3, but a jump in the services reading to 55.2 from 54.2. The latter left the composite at 54.5 up from 54.1 in September. In France the composite improved to 52.3 from 51.9, indicating acceleration in overall economic activity against expectations for declines in both countries.

• CAD Consumer Price Index: It’s expected CPI to expand at a 1.2% y/y pace in September, a slowdown from the 1.3% y/y clip in July and August. CPI is seen as flat on a month comparable basis in September after the identical flat reading in August. Gas prices plunged 7.5% in September compared to August, which is expected to weigh on month comparable CPI. The BoC’s core CPI index is seen rising 0.3% in September, a bit stronger than the usual 0.2% gain seen during the month as currency weakness provides and extra boost. Annual core CPI growth is expected to expand at a 2.2% y/y rate in September following the 2.1% clip in August. The expected core CPI figure would, of course, leave the measure at the BoC’s 2.0% midpoint. However, Governor Poloz has maintained that run-up is transitory and not reflective of a tightening in supply conditions.

• USD Market Manufacturing PMI: Consensus calls for a 52.8 number vs the previous 53.1. The macro data continues to face headwinds from an inventory overhang and a petro-sector recession, even though housing, the labor market, and real consumer spending continue to improve.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

ECB Committed to further easing

October 22, 2015 Forex Analysis

EURUSD is down 1.16% at the time of writing after Draghi reaffirms ECB commitment to further easing. ECB will no longer “wait and see” but “work and assess”, according to Draghi, who said there was a rich discussion on the potential measures the ECB could take and that the relevant committees have been tasked to examine the pros and cons of the individual measures.

Draghi voiced his concern over growth prospects: “Concerns over growth prospects in emerging markets and possible repercussions for the economy from developments in commodity markets signal downside risks to the outlook for growth and inflation. The degree of monetary-policy accommodation will need to be reviewed at our December meeting when new macroeconomic projections will be available.” The message was clear that there should be further easing ahead this year. This was quickly reflected in price as EUR was sold against all the major currencies.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

EURUSD Analysis for 10.22.2015

October 22, 2015 Forex Analysis

EURUSD, 240 min

The sideways move over the last three days has been a reflection of both market participants’ carefulness ahead of ECB meeting and the fact that the pair is trading between support and resistance levels. ECB leaders gather today in Malta and Mario Draghi will be speaking on European economy. We do not expect the ECB to announce new QE measures today. This expectation is in line with the analyst consensus. Inflation is below ECB target but Draghi has expressed satisfaction on increased lending in the Euro area. This suggests no need for new QE measures.

At the time of writing EURUSD is trading at a support created by previous pivot highs and 50% Fibonacci retracement. The 100 period SMA coincides with this support while the Stochastics Oscillator points to the pair being oversold in both the 4h and daily time frame. The last week’s bearish pin bar together with the upper weekly Bollinger Bands has been limiting the moves to the upside. Nearest support and resistance levels are at 1.1295 and 1.1388. The support can be found at 1.1260, a 61.8% Fibonacci level which coincides with 50 day SMA. Look for a move higher towards the 1.1388 resistance if no new QE promises or measures are introduced.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

Macro Events & News for 10.22.2015

October 22, 2015 Forex Analysis

FX News Today

French business confidence mixed, with the overall headline number unexpectedly rising to 101 from 100, but manufacturing confidence falling to 103 from 104 and the production outlook indicator slumping to 2 in October, while the September reading was revised down to 5 from 7 reported initially. The own company production outlook held up better, with the reading declining only slightly to 13 from 14 in the previous month, highlighting that concerns about global developments and the slowdown in emerging markets rather than actual weakness at company level are the main factors.

Bank of Canada Constructive on Growth as Forces Awaken. The Bank of Canada maintained the 0.50% setting for the overnight rate target, matching widespread expectations. While the growth projections for 2016 and 2017 were trimmed, the outlook remains constructive as the projected recovery in Canada’s economy takes hold. The return to full capacity was moved ahead to mid-2017 but Governor Poloz explained that the shift was within the range anticipated in July. The bank is comfortable with the current state of policy and the economy, content to remain on the sidelines as the forces unleashed by 50 basis points in rate cuts in the first half of this year continue to ease the adjustment to lower oil and commodity prices.

BoC Poloz praised the constructive evolution of the economy, answering a question on just how high the debt to income ratio can go. He noted that Canada does not have much experience with ratios this high, but that other countries run higher ratios (not that he’s saying higher ratios are ok, he added). But he is pleased the Bank identified the right forces in the economy when things were uncertain in January. Those forces continue to growth, he noted, and the constructive evolution gets the economy back to better growth. On the CAD, he said the currency has been moving roughly in-line with the terms of trade (ToT), which it has done historically. He noted that “roughly” comes with lots of advisement, as the zone around ToT movements is not trivial. Further solidifying his status as one of the most entertaining of the current crop of central bankers, he likened these moves to walking a dog with a stretchy leash — you get footprints (from the dog) that are not straight like a railroad track. His Q&A has ended.

Main Macro Events Today

ECB Rates Decision: ECB seen on hold, focus on presser. We expect the central bank to stay on hold today, as does the overwhelming majority of analysts in the latest Bloomberg survey, with only one expecting further easing measures already this week. This does not mean that an extension or expansion of the QE program will be off the table however and Draghi’s comments at the press conference will likely strike a fine balance between justifying the current wait and see stance and assuring markets that the ECB is ready and willing to act again if necessary. Comments suggest that the low inflation environment is once again becoming a concern and December, when the updated set of economic projections is due, will become a major focal point for a decision on additional steps.
US Initial Jobless Claims: Claims data for the week of October 17 is out today and should reveal an increase to 264k (median 265k) from 255k last week. We expect the average for October to be 270k from 269k in September. This supports our call for a 190k employment headline which would follow a 142k increase in September.
US Existing Home Sales: September existing home sales data today should reveal a 1.7% increase to a 5.400 mln (median 5.350 mln) headline following a 5.310 mln August figure and 5.580 mln in July which set a high back to 2007. Other housing measures are coming in mixed for the month with the NAHB holding steady at 61 in September, starts rising to 1.206 mln but permits slowing to 1.103 mln

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

Macro Events & News for 10.21.2015

October 21, 2015October 21, 2015 Forex Analysis

FX News Today

Japan’s trade deficit narrowed 88.1% y/y to 114.5 bln JPY from a revised -569.4 bln JPY (was -569.7 bln JPY). Imports dropped 11.1% y/y, while exports edged up 0.6% y/y. The latter was the slowest pace in more than a year as shipments around Asia softened, with those to China dropping 3.5%. Exports to the U.S. were strong, however, up more than 10%, largely on autos and pharmaceuticals. On the month the deficit widened 4.8% with exports down 1.7% for a third straight decline, while imports fell 1.9%, a second consecutive monthly slide. The Nikkei is higher on the day as the trade data increases hopes for more stimulus.

Bund futures already recovered opening losses and are rising in tandem with Gilts and stock markets. Volatility has returned ahead of the ECB meeting tomorrow. Japanese trade numbers boosted hopes of further stimulus in Japan and reminded European markets that even if the ECB continues to sit on the fence tomorrow, this doesn’t mean the end for an expansion of the QE program. Most analysts expect Draghi to announce a move in December.

Canada’s election and the economy: The liberal majority victory provides some solace to a market that was prepared for a minority government and all the lack of certainty that vote by vote coalition gathering brings. Of course, a Trudeau majority victory brings a greater tolerance for Federal deficits. Harper ran deficits after 2009′s global upheaval but had been focused on bringing finances back to balance. Trudeau, in contrast, campaigned on running modest (C$10 bln) deficits for the next three years to finance infrastructure projects in a bid to boost Canada’s flagging economy. We would point out that the extended time lag between approval and actual construction typically precludes infrastructure “investment” from having any impact on the economy in the near-term. Meanwhile, Trudeau plans to fund tax cuts for middle income earners by raising taxes on the top 1%. As for the corporate tax rate, Trudeau said during the campaign that the current 15% is “fine.”

Main Macro Events Today

Bank of Canada Rates Decision: No change is expectedto the 0.50% rate setting in today’s announcement. Economic data has been consistent with a return to GDP growth in Q3 after the oil price shock left back to back erosion in Q1 and Q2. The Bank’s Q3 GDP estimate of 1.5% is destined for a substantial upward revision (we see a 3.0% gain) in the Monetary Policy Report. But reduced global and U.S. growth prospects promise to trim the 2.3% estimate for 2016 GDP (we see 2.2%). Hence, we expect the growth and inflation outlook to back expectations for no change in rates for an extended period.

BOE’s Governor Carney speech. In today’s Speech Carney will comment on how Britain’s EU membership will impact the Bank of England’s ability to manage the economy and protect the banking sector.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

Free Forex Analysis for 10.21.2015

October 21, 2015October 21, 2015 Forex Analysis

Free Forex Signals for 10.21.2015

EURAUD, Daily

EURAUD Daily, the AUD has given back some recent gains against the majors over the last few trading sessions, leaving the outlook for the AUD to continue a narrow trade range as concerns about inflation subside, while commodities seek out a bottom. Technically, the Daily EURAUD observations include: bearish 10,50 SMA crossover spotted, price trades within a downward slopping trend channel, and stochastic oscillator indicates positive upward momentum. My conclusion for the Daily supports long positions with a price target near the 1.5840 inside swing area.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

Macro Events & News

October 20, 2015 Forex Analysis

FX News Today

The fact that a recent ECB survey indicates rising demand for company loans and mortgages, it is a net positive development that the ECB measures are starting to take root. The central bank said in the release of its latest bank lending survey that banks are using the liquidity created by the quantitative easing measures to grant more loans. Meanwhile banks are reporting rising demand for company loans as well as lending for house purchases. A large part of the trouble within the Eurozone has been the lack of confidence from borrowers to borrow funds from banks. The whole point of the ECB QE program is to stimulate the Eurozone’s economy through making borrowing attractive enough for business to borrow and invest those borrowed funds back into their business. The hope of the ECB is that those businesses will create jobs and get the economy moving.

Fed’s Williams repeated his preference for an early move to raise interest rates. The Fed board member was speaking on Bloomberg and he said that he sees good arguments on both sides of the timing of a FED rate hike. But a 0% interest rate stance will not likely be needed in the future. He said the economy is strengthening, but noted that there are some concerns to the future economic outlook.

ECB’s Linde: Inflation trend is somewhat worrying. The Spanish central bank head stressed that the ECB has manifested that it can extend the QE program if needed, although he also said that the third Greek bailout deal has mitigated risks in Europe and that Spain is well positioned to deal with external challenges. No clear call for further easing, although so short ahead of the meeting, this would be unusual. Still, as Nowotny before him, Linde also voiced concerns about the inflation numbers, instead of highlighting that the weak headline rates are driven by the drop in oil prices, as Draghi has done so far.

Main Macro Events Today

• EUR German producer price inflation: dropped to 2.1% y/y in September, from -1.7% y/y in the previous month. Expectations had been for an unchanged headline rate and the drop further into negative territory was to a large extent due to lower energy prices, which fell 1.1% m/m and were down 6.1% y/y. Basic goods prices were also lower over the month.

• GBP BOE’s Governor Carney Speech: Sterling has been shining since data last week showed a drop in UK unemployment below 5.4%, which is for the first time in the cycle below the point at which the BoE expects labor market constraints to push price pressures upward. Traders will seek clues in Mr. Carny’s speech about when a rate hike could be expected.

• USD Housing Starts: Housing starts are expected to edge up to a 1,130k unit pace in September following the 3.0% drop to 1,126k in August. July set a high back to Oct ’07 and compares to a low of 521k in April ’09. Forecast risk: upward, as the NAHB remained firm. Market risk: downward, as a run of weaker data could impact rate hike time-lines. Permits are expected at 1,150k in September from 1,161k in August.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokersofficial website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

Free Forex Analysis for 10.20.2015

October 20, 2015 Forex Analysis

Free Forex Signals for 10.20.2015

AUDUSD, Daily

The pair is trading in a triangular formation near a descending regression channel (drawn from July 30th high). There was a close below 0.7265 low but no downside momentum or follow through. This suggests that price that the September pivot high is likely to support prices over the coming days and market is likely to eventually push higher from its support. The sideways movement might therefore continue. Last week’s high and low are key levels to look at. The nearest resistance levels are at 0.7364 and 0.7382, two pivotal highs that coincide with the upper Bollinger Bands and a 100 period SMA. Price should move to these highs and could turn lower from there in which case the 0.7260 support should work as an initial target for shorts. If price breaks out of the sideways formation the Fibonacci extension levels at 0.7471 and 0.7640 could come into play. The latter one coincides with a historical resistance level and is therefore more significant as a resistance level. In case the last week’s low gets violated the weekly high at 0.7085 should work as a target level.

GBPAUD, Daily

The pair has rallied to a level that used support price in September. Yesterday’s high was almost at the level with 2.1355 resistance and today we’ve seen a move lower. At the time of writing price is reacting higher from a 4h pivot and a 50 period SMA but with a higher time frame resistance above this is likely to remain intraday noise for those looking for bigger moves based on the daily chart. If price corrects lower from the 2.1355 resistance the 50% and 61.8% Fibonacci levels provide a logical target area. These levels (2.1006 and 2.1047) coincide roughly with a 100 period moving average. The 4h chart points to 2.1302 – 2.1380 being an important resistance area while the 2.1006 – 2.1047 bracket coincides nicely with support area visible in the 4h chart. I’m looking for shorts between 2.1302 – 2.1380 with a view of taking profit between 2.1006 – 2.1047.

RBA minutes reveal a more upbeat view than expected

The central bank noted that “growth in output had continued at around the average pace of recent years” and that while global traded was “subdued” it had “picked up recently.” The board also noted that weakness in June-quarter growth had reflected “temporary, weather related disruptions to resource exports,” in addition to an ongoing decline in mining investment.

The RBA also noted “further evidence” that the economy is rebalancing from the resource sector toward non-mining activity, and was also fairly upbeat on the employment market. As for the risks, the board said that recent data “continue to raise concerns” about the outlooks for China and East Asia, which are Australia’s biggest markets for its resource exports. The swaps markets is pricing in odds of 58% for the RBA to cut interest rates in November, down from 65% ahead of the minutes (according to the FT). The Aussie dollar is also trading higher.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokersofficial website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”