GBPAUD Continues Lower

April 14, 2016 Forex Analysis

GBPAUD, Weekly

This pair are looking to continue their downward movement as the AUD recovers (following good jobs data today) and the pressure continues on the GBP due to persistent Brexit fears and dovish tones from the BOE. As the AUD strengthens and the GBP weakens in the short term we are looking for SHORT trades on any retracement from current levels.

The “real possibility” of Brexit, as the IMF termed it in this week’s release of its semi-annual world outlook, adds to the pressure on sterling. This is also why it failed to sustain gains in the wake of Tuesday’s UK inflation data, which showed March headline CPI rising more than expected to a cycle high of 0.5% y/y. The IMF also revised UK growth down to 1.9% for this year, down from 2.2%, and this assumes the UK remaining in the EU. As for Brexit risk, the latest FT poll tracker shows a narrow 1 percentage point lead for the Remain camp, with 43% compared to the 42% support for the Leave camp, narrowing over the last couple of weeks from respective levels of 45% and 40%.

I’m therefore looking for sell signals inside my 1.8526 – 1.8610 sell area (50% and 38.2% Fibonacci retracement levels) with Target 1 (T1) at 1.8010- 1.8000 (Weekly low, 200 DMA and round psychological number) and Target 2 (T2) at 1.7845 (Next support level).

Only trade based on my analysis and trade ideas if you agree with the analysis and if you are (after substantial testing) confident that you can assume the risk. Should you need further training on trading and risk management please attend any of our free webinars.

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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US Retail & PPI figures weaker than expected

April 13, 2016 Forex Analysis

USDJPY, 60min

US retail sales fell 0.3% in March with the ex-auto component up 0.2%. But the 0.1% dip in the February headline and ex-auto sales were each revised up to unchanged, which offsets some of the headline disappointment. Sales excluding autos, gas, and building materials was unchanged from a 0.4% gain previously (revised from 0.1%). Pacing the headline weakness was a 2.1% drop in car sales, with clothing off 0.9%, while eating and drinking establishments fell 0.8%. Building materials climbed 1.4%, with healthcare up 1.0%, along with a 0.9% rebound in gas station sales.

US March PPI dipped 0.1% with the core rate off 0.1% too, both underperforming expectations. There were no revisions to February with a 0.2% headline decline, and a flat core reading. On an annual basis, final demand PPI slowed to a -0.1% y/y clip versus unchanged previously, with the core rate dipping to 1.0% y/y from 1.2% y/y.

The USD fell broadly after the weaker than expected retail sales, and the cooler PPI outcomes. EURUSD rallied to 1.1325 from just above 1.1300 as USDJPY fell under 109.10 from near 109.35. Next upward resistance on the 60 min chart is the 200 MA at 109.56, with support around 109.00 – 108.90.

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”

Is USDCAD a sell after a rally?

April 13, 2016 Forex Analysis

USDCAD, 240 min

USDCAD has been moving lower in recent days while the WTI crude has rallied. Now the pair is oversold and therefore vulnerable to contra trend moves. Stochastics is well below the oversold threshold in the daily chart and USDCAD has moved below the lower Bollinger bands. Crude oil is looking a bit weak today and could incite a rally in the inversely correlated USDCAD. The intraday price action indicates that the markets are indeed trying to move USDCAD higher from the current levels. How far the market then should move before we could consider shorting it? I’m eying an area between the 50% and 61.8% Fibonacci levels that coincides with a line-on-close low (at 1.2896) from 31^st of March. There is another potential low at 1.2853 but due to a support being fairly near to this level I prefer to take action near the 1.2896 low.

I’m therefore looking for sell signals inside my 1.2880 – 1.2910 sell area with Target 1 (T1) at 1.2780 -1.2809 and Target 2 (T2) at 1.2728-1.2750. Only trade based on my analysis and trade ideas if you agree with the analysis and if are (after substantial testing) confident that you can assume the risk. Should you need further training on trading and risk management please attend my free webinars. I’d love to help you become more confident in your analysis and trading.

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”

EURAUD reacting higher near the Bollinger bands

April 13, 2016 Forex Analysis

EURAUD, Daily

EURAUD dropped 1.32% yesterday and produced a nice trade (> 100 pips) for those that attended yesterday’s Live Analysis Webinar. Today the pair is trading near the daily Bollinger bands and looks like it could move higher from the current levels. This buy area was discussed yesterday in the webinar and now’s the time to consider taking the advantage of it. EURAUD is reacting higher at the time of writing and could retrace yesterday’s move. Stochastics in the daily timeframe are near oversold levels while all my oscillators (Stochastics, RSI and MFI) are deeply oversold in the four hour chart.

This morning we had a signal to go long in the buy area between 1.4716 and 1.4794 so those that attended yesterday’s Live Analysis Webinar knew when and how to get long. Should the market provide another buy signal, we could still consider going long on this market. My Target 1 for this trade is in 1.4907 – 1.4930 bracket and Target 2 in 1.4980 – 1.5040 range. Only trade these ideas if you agree with the analysis and are (after substantial testing) confident that you can assume the risk.

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”

EURGBP attractive near the regression channel low

April 12, 2016 Forex Analysis

Market Analysis — 12 April 2016

EURGBP attractive near the regression channel low

EURGBP, 240 min

EURGBP has been in an uptrend lately and is still breaking above recent pivotal highs. It has been attracting buyers after pull backs have taken the pair near S&R levels. Now that EURGBP has retraced from a new 22 month high it could be soon reviving buying interest from those that look to participate in this uptrend after a decent pullback. The pair is oversold in terms of Stochastics oscillator (7,3,3) while it tried to bounce from the 38.2% Fibonacci level. I expect the uptrend to continue but think that the current level is a bit too risky to trade long and expect the pair first to make another leg lower. This would bring it to my buy area. The regression channel low and the area between the 61.8% and 50% Fibonacci levels, together with the March high at 0.7946 should mean that quite a few market participants view this area as a potential area for long trades.

I am looking for long entry signals between 0.7938 and 0.7994 with Target 1 at 0.8080 – 0.8120 bracket and Target 2 at 0.8160 – 0.8180.

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”

Dow Jones approaching weekly resistance

April 11, 2016 Forex Analysis

Dow Jones (USA30), Weekly

Following Chair Yellen’s more Dovish comments and the relatively bullish jobs report the USD continues to weaken and the US stock markets continued to rally. From the February lows the S&P500 (SPX500) has rallied 11% (from 1818 to 2020) and the Dow Jones Industrial Average (USA30) has performed even better adding 2230 points from 15,590 to 17,820 a gain of over 14%. The Surging Yen this week has caused some selling off in the equity markets but where do we go from here and is there any more upside potential in this rally?

Fundamentally, there is a lot of negativity around, US corporate profits are down, the last earnings season was poor and anticipation is for worse to come in the reporting season starting this week. Also, many US stocks are trading on very high multiples. Sentiment too is uncertain, as there are continuing questions over the Chinese economy and the state of their Banks in particular, while the Oil market remains highly over supplied with weak global demand. This week we have had the risk-off rally as the Japanese yen (JPY) appreciated as much as 3.5% and the USDJPY fell to under 108, all this and a very uncertain US election ahead.

With a very mixed news and sentiment picture what do the charts tell us? Technically, for now the rally is still intact and has some support, however, there are signs that all the negative sentiment and what some see as a divided FED are beginning to take hold of the equity markets.

Our preference is for SHORT positions with the Target 1 at 15,950 from our entry levels around the 17,900 – 18,330 level and Target 2 at 15,300. The earnings season which starts today is anticipated to be poor and the market has already priced this in so any good news could likely rally the Dow from here. However, the downside is looking to prevail.

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”

GBPUSD hit both targets!

April 11, 2016 Forex Analysis

GBPUSD, 240 min

I suggested in my GBPUSD analysis at the end of March that we should look for shorts as the pair created a daily shooting star candle and fell outside the rising channel. My trade idea was to look for sell signals inside sell area between 1.4395 and 1.4445 with target 1 at 1.4174-1.4214 and Target 2 at 1.4033-1.4085. The pair rallied to my sell area yesterday and produced a sell signal on the same day.

In my update I mentioned that the USD could be strong after the solid jobs report while the GBP is likely to remain weak due to Brexit concerns. I also said that the probabilities of GBPUSD hitting the target 2 are still there but as the pair is now near to the lower end of the range we might see some volatility before the target can be hit. The trade idea worked exactly the way I suggested. It’s pretty neat, when it happens as there obviously are also those trades that don’t go to the plan. Now both targets have been hit and depending on the strategy applied this trade idea produced between 150 to 350 pips.

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”

GBPJPY – A Tail of 2 Targets

April 8, 2016 Forex Analysis

GBPJPY, Daily
On Wednesday I posted my thoughts on the divergence between the sentiment towards the GBP and JPY. This along with the technicals from the charts suggested more downside for the pair. This duly ensued as the pair traded lower and then retraced up to my entry over 155.00. The overnight and early morning move yesterday was very substantial and my initial (T1) 80 pip target 154.20 was achieved over night. Target 2, a further 80 pips at 153.40 followed quickly in the European morning session.

This move was much more aggressive than I imagined, but this can happen as momentum builds and both my targets were achieved within 24 hours. A net gain of 160 pips, interesting.

Trends, be they in sentiment, chart patterns or fundamentals have a self-sustaining momentum and will run until they exhaust the energy that started them. Markets also over react and the huge surge we have had in the JPY this week will inevitably cool, as we are seeing this morning, before the trend is re-established (probable) or runs out of energy completely (less probable).

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”

Strong Canadian Jobs Data helps CAD

April 8, 2016 Forex Analysis

CADJPY, Daily

Canada employment surged 40.6k in March (median 12.5k) after the 2.3k dip in February. Full time employment jumped 35.3k in March after the 51.8k drop in February. Part time employment edged 5.3k higher in March on the heels of a 49.5k jump in February. By sector, growth was in the service sector where 74.7k jobs were created, led by a 24.9k rise in health care and social assistance and a 17.7k gain in accommodation and food after those sectors saw large job declines in February. Goods sector employment fell 34.1k in March, knocked lower by a 31.8k plunge in manufacturing, a 5.5k drop in construction and a relatively sedate 2.1k dip in natural resource jobs. The unemployment rate pulled back to 7.1% in March from 7.3% in February. The participation rate was 65.9 in March, matching the 65.9 in February. This is a mostly solid report overall, which is supportive of the expected constructive growth outlook from the BoC next week, although the tumble in manufacturing, and declines in construction and resource jobs will underpin a still cautious tone from the Bank.

The Canadian dollar is the biggest mover and shaker today, showing just over a 1% gain against the USD and just over a 1.5% advance on the JPY. The CAD’s gain has been fuelled by the strong Canadian employment report and strong rise in oil prices today, while the yen has ebbed amid an improvement in risk appetite and on the view that the recent surge in the currency raises the odds for the BoJ extending NIRP at its April 27th-28th meeting while shifting the MoF toward hitting the forex intervention button. The CAD-JPY cross had lost 6.5% in just over a week, so was perhaps due a rebound.

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”

GBPUSD – The “Fog of Uncertainty”

April 8, 2016 Forex Analysis

GBPUSD, Daily

Today’s worse than expected production and trade data which shows the industrial and manufacturing sector to be in more of a funk than thought. Cable has given back most of the gains seen during an earlier run higher to 1.4141, retreating back under 1.4090.

UK industrial output unexpectedly fell by 0.3% m/m and 0.5% y/y, down from the 0.2% and 0.1% respective growth rates of January. The median forecasts had been for a 0.1% m/m rise and a 0.0% y/y outcome. Manufacturing data were even worse, contracting 1.1% m/m, while the February trade report showed the visible goods deficit to be GBP 12.0 bln after an upwardly revised January deficit of GBP 12.2 bln. It’s been no secret that the production sector has been the weak spot of the UK’s economy, and more timely survey evidence suggests this is a worsening trend. The risk of Brexit is a factor at play. A survey published by Deloitte this week found that a “fog of uncertainty has descended on the corporate sector” as a consequence of uncertainty about EU membership.

The negative data adds to the already negative sentiment and although the Brexit premium is priced in the one thing that markets HATE more than anything else is uncertainty.

Sub 1.4000 looks probable, however there is support around Thursday’s close of 1.4050. 1.3900 and 1.3860 remain key downside targets in the longer term. Short term we have 1.4050 proving support on the 4 hour and Daily chart. The previous support at 1.1410 appears to have broken down earlier this week.

Preference remains for more SHORT positions below 1.4105-1.4112 level with T1 back to 1.4050 and T2 1.3962. On the upside the pair will need to break 1.4200 and 1.4260 for long positions to be considered.

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”