UK retail sales disappoint and GBPUSD hits my T1

April 21, 2016 Forex Analysis

UK retail sales undershoots expectations, with the headline figure falling 1.3% m/m in March, well of the median forecast for a modest 0.1% contraction. The y/y figure came in at +2.7% versus the 4.4% figure expected. February data were also revised lower, with sales pinned at -0.5% m/m versus the -0.4% initially report, and at 3.6% y/y, down form the 3.8% number originally estimated. This follows a run of data pointing to moderating economic growth momentum in the UK economy, with the concern being that Brexit uncertainty is negative influencing activity. Sterling to a wallop on the data, which sent Cable to a fresh two-day low at 1.4300, though follow-through selling has been limited thus far.

Our GBPUSD trade idea is working well. Price touched my sell area before giving a sell signal and has since hit our Target 1 at 1.4306. Negative numbers on UK retail sales add to the bearish technical picture.

Janne Muta

Chief Market Analyst

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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.

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GBPUSD weak at the daily Bollingers

April 21, 2016 Forex Analysis

GBPUSD, 240 min

Yesterday we had disappointing labour data from UK. The headline claimant count for March fell by 6.7k, short of the median forecast for a 12k decline while the February figure was revised to -9.3k from the -18k reported initially. After the news GBPUSD rallied a bit but hit resistance near the daily Bollinger bands. This resulted in a lower high and a bearish shooting star candle in the 4h chart. Last night the support near 23.6% Fibonacci level (at 1.4342) was broken. This could provide us with an intraday short trade as the pair is now trying to rally a bit. It can of course turn from lower levels as well but I’d prefer to see the sell signals taking place inside my Sell Area. Those wanting to be more aggressive with their entries should be careful with position sizing. We also have Retail Sales data coming from UK later on today which should be factored in as it might cause additional volatility.

I’m looking for sell signals in GBPUSD at or inside my sell area between 1.4357 – 1.4410 with Target 1 at 1.4277 – 1.4306 and Target 2 at 1.4220 – 1.4250. Please remember to manage your risks and only trade these trade ideas if your analysis agrees with them. If you don’t know how to manage your trading risks professionally you are welcome join to my free webinars to learn more.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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About Janne Muta, HotForex’s Chief Market Analyst

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

Weak UK Labour Data

April 20, 2016 Forex Analysis

GBPUSD, 60min

UK labour data disappointed : The headline claimant count for March fell by 6.7k, short of the median forecast for a 12k decline while the February figure was revised to -9.3k from the -18k reported initially. The unemployment rate for February remained unchanged at the cycle low of 5.1%, as expected. The ex-bonus average household earnings figure in the three months to February was +1.8% y/y, down from 2.1% in the previous month and contrary to the Bloomberg survey’s median forecast for a rise to 2.3%. The bonus-included figure was unchanged at +2.2% y/y.

This was the first monthly increase in the jobless numbers since August 2015 the numbers will be scrutinized by both the UK government and the BoE. It will no doubt be quoted in the latest round of Brexit headlines too.

Sterling has taken a knock on the underwhelming data, and is presently showing a 0.3% decline on the day versus the euro, and a 0.2% loss against the dollar. GBPUSD currently trading at 1.4372 and EURGBP at 0.7904.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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About Janne Muta, HotForex’s Chief Market Analyst

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

Draghi’s speech and EURCAD

April 20, 2016 Forex Analysis

EURCAD, 240 min

Draghi’s speech is scheduled for today and starts at 10 am GMT while the ECB interest rate decision is due tomorrow. Draghi is widely expected to keep monetary policy unchanged at tomorrow’s council meeting. Indeed, with officials stressing that helicopter money may be an interesting academic idea but is not under serious consideration and the ECB focused on implementing the measures already announced the central bank is seen on hold for an extended period. With growth slowing down in core countries and the Brexit referendum adding to uncertainties, hopes of further action down the line remain, even if helicopter money may be too much of a leap. For now though the ECB remains on hold and at the moment September seems the earliest for a serious policy review.

Event’s such as speeches from central bankers have a potential to move the currency markets as much as the discussions between heads of oil producing states can move the crude oil and related currencies. With Draghi’s speech coming up and oil being volatile I am focusing on EURCAD, an FX pair that could be impacted by both. The pair is trading at the lower Bollinger Bands in weekly, daily and 4h charts has driven Stochastics to the oversold territory in Weekly and 4h timeframes. This together with Draghi’s speech coming up later on today creates a chance for this market to rally higher. The nearest 4h resistance level at 1.4482 coincides with 23.6% Fib-level and EURCAD breaks above it could rally up to my sell area at 1.4609 – 1.4680, an area that coincides with the 4h Bollinger bands and the area between 50% and 61.8% Fibonacci levels.

I’m looking for sell signals in EURCAD inside my sell area between 1.4623 – 1.4680 with Target 1 at 1.4350 – 1.4400 and Target 2 at 1.4200 – 1.4242. Please remember to manage your risks and only trade these trade ideas if your analysis agrees with them. If you don’t know how to manage your trading risks professionally you are welcome join to my free webinars to learn more.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex 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”

NZDUSD – Overbought on GDT

April 20, 2016 Forex Analysis

NZDUSD, 240min

The NZDUSD rallied strongly yesterday initially through the 0.70000 level and then higher to 0 .7050 area on the release of strong GDT data. GDT is the Global Dairy Trade auction of nine key dairy products. It’s very important for the NZ economy as rising diary product commodity prices is good for the countries trade balance and export income.

Prices rose 3.8% in the latest Global Dairy Trade (GDT) auction after a 2.1% gain previously. Although markets had been expecting prices to advance at the latest auction, the gain triggered a further advance for the New Zealand currency ahead of a key interest rate decision next week. After prices declined in the first four auctions of 2016, there have been gains in three of the last four releases which will provide some relief over short-term prospects for the industry. Despite the recent recovery, prices remain around 15% lower than the recent peak in September 2015 and over 50% lower than the prices prevailing in early 2014.

The appreciation of the NZD has been significant over the last few days and I can see some weakness if the 0.7000 level fails to hold. The 240 min chart shows the retrace from the upper Bollinger Band overnight and a Target 1 area of 0.6950 (20 DMA) and possibly to Target 2 at 0.6938 (50 DMA).

Alternatively, the higher time frames have strong weekly support and I would look to go LONG (reversal of my SHORT trade) between 0.6965 and 0.6936 with a Target 1 0.7050 and Target 2 0.72025.

2016-04-20_1034

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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About Janne Muta, HotForex’s Chief Market Analyst

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

German ZEW – Better than expectations

April 19, 2016 Forex Analysis

German ZEW investor confidence better than expected, with the headline reading rising to 11.2 from 4.3 in the previous month and versus our median of 8.0. The current conditions indicator meanwhile came in weaker than expected at just 47.7, down from 50.7 in March. This confirms that the overall improvement mainly reflects a stabilisation in market confidence and receding risk aversion, while actual conditions in the German economy are pointing to a loss of momentum in the second quarter and going ahead, as the Bundesbank also highlighted yesterday.

The centre also said that growth prospects in China and worries over Brexit were both a “drag” on the German economy. The EURUSD maintained its momentum from Thursdays lows and is currently trading at 1.1338, finding resistance at the 50 DMA.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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About Janne Muta, HotForex’s Chief Market Analyst

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

AUDUSD – Target 2 Achieved – Interesting

April 19, 2016 Forex Analysis

USDAUD, Daily

I first posted March 23^rd on the strengthening Australian dollar as commodity prices recovered from their early year nadir and the negative sentiment (for now) over China began to wane. The news flow from Australia continues to be received in a positive light and the good jobs data last week helped the pair get very close to Target 2, before finally closing above it yesterday.

This trade is a good example of the cycles within cycles that occur on the currency markets and that patience is one of the key assets of a successful trader. The trade reversed for 2 days before recovering and hitting Target 1 (0.7690 +110 pips) within the following 4 days.

The extended target at Target 2 (0.7730 +150 pips) was more interesting. The pair did not have the energy on this initial attempt at the psychological 0.7700 to hold above this level. It then reversed for another 5 days, but again finding support at another round number, this time 0.7500. The rally in the pair from April 8^th posting higher highs and lower lows allowed it to finally close over 0.7700 on Friday, yesterday’s large volatility allowed Target 2 to be achieved.

Although the rally in this pair may have further to run Target 1 and Target 2 have been accomplished and this trade is now closed.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex 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”

Doha oil meeting failure and USDCAD update

April 18, 2016 Forex Analysis

USDCAD, Daily

AUD and CAD got hammered as the Doha meeting on oil restrictions failed and caused substantial concerns over the oil cartel OPEC’s ability to restrict and control the oil production. This caused the oil futures to open significantly (3.86%) lower today while it also caused the commodity currencies to gap overnight. According to Reuters tensions between Saudi Arabia and Iran were blamed for the failure, which revived industry fears that major government-controlled producers will increase their battle for market share by offering ever-steeper discounts.

Among others the USDCAD pair jumped above my sell area. I wrote two last week that USDCAD is oversold and therefore vulnerable to contra trend moves. I mentioned that Crude oil was also looking weak and I thought it might incite a rally in the inversely correlated USDCAD. This is indeed what indeed happened: market rallied higher and provided us a great sell signal that led to a nice move lower and a profitable trade. My T1 was hit on Thursday providing our traders with up to 100 pips depending on the strategy applied. Those that closed the whole position at T1 or followed the risk management rules laid out in my Position Management webinar weren’t hurt by the weekend gap. This gap is yet another reminder that it’s the risk management that is the single most important feature in our business plan.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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About Janne Muta, HotForex’s Chief Market Analyst

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

Looking to sell USDJPY if it rallies further

April 15, 2016 Forex Analysis

USDJPY, 240 min

Earlier today the yen eked out fresh lows against the dollar and euro, among other currencies, in what has been generally lacklustre trade in Asia. A solid set of Chinese data failed to lift spirits in most Asian stock markets, with investors in need of a breather after a week of strong rallies. A major earthquake was reported to have hit Japan’s Kyushu island. It caused damage and very unfortunately deaths but hasn’t caused a tsunami. This morning’s Japanese industrial production numbers for February came in at -5.2% while the previous number was -6.2%. There was no immediate reaction to the number even though the JPY strengthened a little bit later on.

USDJPY has rallied from Monday’s low of 107.63 until the pair corrected lower today. It is now trading relatively near the 109.10 support which coincides with 23.6% Fibonacci level. I’m interested in the levels near the 50% Fibonacci retracement (at 110.72) for short entries as it coincides with 110.65 level that used to be an important support for the pair. The 50% level adds to this levels significance.

Should the pair rally to my sell area between 110.25 and 111.00 I will be looking for sell signals inside the sell area. The target 1 (T1) area is between 109.08 and 109.75 while those looking for a longer term target might choose to exit at target 2 between 104.75 and 105.50. I recommend using strict risk management as per usual. If you don’t know how to manage your trading risks professionally you are welcome join to my free webinars to learn more about it.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex 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”

Coffee makes a successful retest of support

April 14, 2016 Forex Analysis

Coffee, Weekly

It’s been a year since my last analysis Coffee futures market. At the time Coffee was trading at $142.10 and I gave three targets of which lowest was at $115. Coffee hit all those targets and turned higher at $111.05, in the scheme of things very close to my $115 target level. The theme in my 2015 coffee analyses was shorting the market but now a year later it’s time to start looking at the long side as both technical and fundamental reasons suggest this market is tightening over the coming months.

In March coffee futures rallied over 16% on the dry weather forecasts that prompted Brazil the second biggest producer to cut its forecast for the next harvest to levels well below consensus estimates. There’s actually been a drought in the top Brazilian coffee production region, Espirito Santo. This has led to banks raising their target prices for the coffee futures, adding to the bullish sentiment in coffee but at the same time the fact remains that the coffee rallies are vulnerable to any news on new large crops.

Technically the rally in prices seen in March was significant. It was the first time since October 2014 that the price of coffee was able to rally above the upper weekly Bollinger Bands. This was a clear breakout from the trading range and triangle formation that have kept the prices from advancing since November 2015 and suggests that the bottoming process is now nearing the end. Price declined back to the 30 period moving average and $121 support level created by weekly candle highs in February. This week’s price action has stayed above the support.

Coffee, Daily

In the daily chart we can see how the price of coffee dropped down to $121.13 support that coincided with the 61.8% Fibonacci retracement level. From this level price has bounced again today which means that we have a successful retest in place. The 38.2% Fibonacci level at $126.62 is a minor resistance while the sideways move above $131.64 could prove to be a tougher level to penetrate. If today’s close is above $122.50 we have a bullish pin bar in the daily chart, which could be seen as a confirmation of the bullish view on the price of coffee.

Conclusion

As we have the dry weather causing draught in the important coffee producing regions in Brazil the prices are likely to be supported on the fundamental basis over the coming months. At the same time the technical picture supports long trade ideas on coffee. If market manages to create a bullish pin bar today, we have a potential lift-off that could take the prices to at least $126.60 resistance but possibly further to $131.60 resistance near the recent high. These are short term targets while in the longer term picture (over several weeks) price could move to August 2015 highs and a likely significant resistance at $140 dollars.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex 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”