EURUSD Analysis

October 19, 2015 Forex Analysis

EURUSD, Daily

EURUSD printed a low of 1.1308 earlier today. At the time of writing this, price has managed to make a small price recovery and trades around 25 pips off the day’s low. Price has broken the 1.1340 support level. The EURUSD market will now focus on the ECB policy meeting later this week; ECB president Draghi is expected to hint at the expansion of the QE program. With the break of the 1.1340 support, this raises the fears for EURUSD bulls for a potential price return towards the 1.1280′s. On the daily observations, looking back 3 months, current price remains without clear direction. However, I do have a bullish bias towards a retest of the 1.1460′s – 1.1560′s, provided that price can manage a clean close above the 1.1370 (38.2% Fibo July low – August high), otherwise we could see a price breakdown below the 1.1280′s.

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

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”

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

S&P 500 Approaching a major resistance

October 19, 2015 Forex Analysis

S&P 500, Weekly

In my previous report from September 7^th I took the view that ES (S&P 500 e-mini future) will not go below 1813 over the coming weeks. I also said that I’d be closing shorts and opening longs at around 1850 support while ES was trading at 1933 at the time. This worked out very well. Price retraced to 1860 where it pivoted and has been rallying since. I also predicted that this rally will take ES to 2046 resistance. We are at the time of writing 24 index points away from this prediction becoming fulfilled.

Market is getting overbought in terms of Stochastics Oscillator while it is getting close to the 2034 – 2046 resistance area. The 50 week SMA (currently at 2054) coincides roughly with this area. These technical factors together with other factors in the daily timeframe create a technical resistance that I expect will turn the price lower again. Support levels in the weekly chart are at 1813, 1861 and 1943.75 while resistance levels are at 2034.25, 2046 and 2104.70.

S&P 500, Daily

Since rallying strongly higher from 1860 support the upside momentum in ES has slowed down. The pivotal resistance area between 1982 and 2011.75 was a challenge to the bulls and price had to correct lower for a couple of days after hitting the 2011.75 resistance. This was highlighted by the Stochastics Oscillator. After price found support at 50 day SMA last week, we’ve seen another push higher but this has taken place with a lower volume. Price is now trading at the upper Bollinger Bands and near the resistance levels mentioned earlier. The 100 and 200 day SMAs coincide with the 2034 and 2046 resistance levels. As per usual these resistances are created by levels that used to support price. Stochastics and Money Flow are in the overbought zone wile RSI is indicating weakness by diverging from the price action (bearish divergence).

S&P 500, 240 min

The 4h chart reveals how there are no signs of market turning yet. Therefore another push higher should be in the cards. It also reveals the potential support levels that could cause the short sellers some challenges. The first one is at 2011.75, the pivotal high from September 17^th while the 23.6% Fibonacci level almost coincides with the 1982.50 support. The importance Fibonacci support is at 1925 (61.8%).

Conclusion

Market is overbought and getting near important resistance levels. I expect that we will see a reaction lower from 2034 – 2046 range. I’m looking for price action confirmation for short trades inside this range with targets at 1982.50 (T1) and 1945 (T2). By taking partial profits at T1 the probabilities of my trade being successful are increased. I expect that the ES will create a higher low between 1943.75 and 1973 where the 100 week SMA currently is. The stock market is still in a topping formation that followed a 6 year bull market. A market top in my experience is not a good time for long term stock investments.

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”

Economic Week 19 October 2015

October 19, 2015 Forex Analysis

Main Macro Events This Week

United States: Housing releases dominate the economic calendar. The sector has disappointed with relatively moderate growth despite the improved job market and still low mortgage rates. This week’s reports aren’t likely to alter that assessment. The NAHB homebuilder sentiment index (Today) is projected steady at 62 in October, the best level since 2005. September housing starts (Tuesday) are seen edging up to a 1.130 mln pace, rebounding from a 7.1% cumulative decline in July and August. Existing home sales for September (Thursday) are projected rising 1.7% to a 5.40 mln clip to unwind part of the 4.8% August drop. The August FHFA home price index (Thursday) and weekly MBA mortgage numbers (Wednesday) are also slated. The only other report of note is the flash Markit manufacturing PMI for October. Chair Yellen (Tuesday) will give brief welcome remarks at a Labor Department event. Governor Brainard (Today) will discuss removing unnecessary regulation. Dudley and Powell (Tuesday) are speaking at a money market conference. And Governor Powell will also speak on market liquidity.
Canada: The Canadian calendar is highlighted by the Bank of Canada’s rate announcement (Wednesday) and the Monetary Policy Report. We expect no change to the current 0.50% setting, alongside a cautiously constructive outlook for growth and inflation that is supportive of no change in rates for an extended period. The Federal election will be held today. As for economic data, the September CPI is seen slowing to a 1.2% y/y pace, but with a flat month comparable reading as a drop in gasoline prices competes with the typical seasonal jump in clothing prices. The Bank of Canada’s core CPI is expected to nudge higher to a 2.2% y/y rate in September following the 2.1% clip in August. Retail sales are expected to rise 0.2% in August after the 0.5% gain in July. Wholesale shipments (Tuesday) are seen rising 0.3% in August after the flat reading in July.
Europe: All eyes will be on the ECB this week. Eurozone inflation is back in negative territory and uncertainty about the global growth outlook is rising, which is putting intense pressure on Draghi to extend or expand the QE program. However, the ECB has already provided an unprecedented amount of stimulus and the measures have eased credit conditions and bolstered confidence. Inflation is expected to pick up again toward the end of the year and with domestic demand robust, we don’t see the risk of a deflationary spiral. What the Eurozone needs are structural reforms, not an ever-easy policy stance. And in this situation, Draghi is likely to maintain the wait and see approach, at least for now, although his comments are likely to be sufficiently dovish to keep markets happy, even if a steady hand policy will likely disappoint some and push up yields, at least temporarily. The economic calendar this week focuses on preliminary PMI readings for October (Friday), which we expect to show a further slowdown in the pace of expansion in both services and manufacturing. The EMU’s manufacturing reading is seen falling to 51.7 from 52.0 and the services reading to 53.4 from 53.6 in the previous month. Preliminary Eurozone consumer confidence numbers for October are also expected to head south with growing concerns about the global growth outlook starting to spook consumers. The Eurozone also has BoP and current account data, Italian orders numbers and German PPI inflation.
United Kingdom: The week ahead is pretty quiet, which will leave the focus of sterling markets on external data and developments and Chinese growth data. UK government borrowing (Wednesday) is the first data of note, followed by official retail sales data for September (Thursday).
China: Growth was expected to slow to a 6.5% y/y pace, from the 7.0% clip seen in Q1 and Q2 but came in at 6.9%. The figure fell short of the 7.0% official forecast, but was so slight that the damage on global market sentiment remained negligible. Even the bigger drop was not expected to weigh on stocks due to the “good news is bad news” psychology and hopes of more PBoC stimulus. The better than expected data may not help sentiment much though, as the Chinese data are often viewed to be doctored. September industrial production (Today) is forecast to dip to 6.0% y/y from 6.2% in August. September retail sales (Today) are penciled in at 10.7% y/y gain, down slightly from the prior 10.8% outcome.
Japan: In Japan, the September trade report (Wednesday) also is eagerly awaited for growth insights though balance is likely to be impacted significantly by weakness in imports (y/y) amid low energy prices. Indeed, the JPY 569.4 bln August deficit is expected to reverse sharply to a surplus of JPY 50 bln. The pace of export growth is seen holding steady, though the increasingly sluggish growth in the region may limit exports as well. The August all-industry index (Wednesday) is expected to fall 0.4% m/m, as compared to the prior 0.2% gain.

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”

Macro Events & News

October 16, 2015 Forex Analysis

FX News Today

Bund futures are outperforming and yields heading south, while Eurozone spreads narrow, as weak inflation numbers bolster hopes of further ECB easing. Pressure on Draghi to at least set the stage for a widening or extension of the QE program next week are mounting amid the uncertainty about the global growth outlook. Nowotny’s comments yesterday that even core inflation is clearly below target further fuelled speculation of additional measures, although the Austrian central bank head called for structural reforms rather than hinting at ECB action.

The Eurozone posted trade surplus of EUR 19.8 bln in August, down from EUR 22.4 bln in the previous month. Exports were up 6.0% y/y in August, versus nominal import growth of 3.0% y/y, although considering that lower oil prices are suppressing the nominal import bill, real import growth will have been higher.

Eurozone final CPI was confirmed at -0.1% y/y, in line with the preliminary number and down from 0.2% y/y in the previous month. The breakdown confirmed that the drop back into negative territory was driven by a sharp decline in energy prices, which were down -1.7% m/m and -8.9% y/y, versus -7.2% y/y in August. Core inflation remains much higher at 0.9% y/y, but as Nowotny highlighted yesterday, this is also considerably below the ECB’s 2% limit for price stability. So more arguments for the doves at the ECB although the amount of stimulus in the system is already substantial and while central bankers want to keep markets happy they also seem wary of additional action, especially as monetary policy alone can’t fix the Eurozone’s problems.

Main Macro Events Today

Canada Manufacturing: We expect shipments, due today, to tumble 1.5% m/m in August after the 1.7% gain in July. A 3.6% plunge in exports values provides a compelling reason to forecast a pull-back in manufacturing shipments during August.
US Industrial Production: September industrial production data is out Friday and we expect a 0.2% (median -0.2%) headline decline for the month which follows a 0.4% decline in August. This would bring capacity utilization down to 77.3% from 77.6% in August. The September employment report was weak and we saw declines in hours worked as well as employment in both manufacturing and mining which will likely weigh on the release.
US Michigan Consumer Sentiment: The first release on Michigan Sentiment is out on Friday and should reveal a headline increase to 89.0 (median 88.4) from 87.2 in September. The already released IBD/TIPP poll for October improved to 47.3 from 42.0 in September and the Bloomberg Consumer Comfort survey is poised to average 45.0 for the month.

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”

EURJPY failed to challenge the channel top

October 15, 2015October 15, 2015 Forex Analysis

EURJPY, Weekly

After swinging strongly at the end of 2014 and in the first part of this year EURJPY is moving sideways with a slight downside slope. Price has struggled this week to move higher due to a weekly pivotal candle low at 137.06. The level also coincided with an almost flat 50 week SMA, which highlights the sideways nature of this market. Stochastics is reflecting this by moving sideways near the 50 point mark. The major weekly support and resistance levels are at 132.19, 133.17, 137.06 and 139.04.

EURJPY, Daily

After rallying higher last week, the pair has been trading sideways for the last three days. The loss of upside momentum was due to several technical factors. The upside was limited by the upper Bollinger Bands but also by 100 period SMA. Furthermore, these coincide with declining channel top and a pivotal high from September 17^th. Stochastics rolling over near the overbought territory was another signal to focus on the short side. Support and resistance levels in the daily chart are 135.35 and 137.08 while lower Bollinger Bands coincide with a pivotal support area between 133.43 to 134.25.

EURJPY, 240 min

After hitting a pivotal resistance at 136.67, EURJPY moved sideways before falling lower at the time of writing this report. Price fell down to 50% Fibonacci level (at 135.17) that roughly coincides with the 135.34 support in the daily chart and has bounced slightly at the time of writing. The 4h support and resistance areas are at 133.42 – 134.05 and 136.33 – 136.75.

Conclusion

The pair is moving sideways with a slight tendency to the downside but a weekly low from three weeks ago was a higher low and suggests some indecision by the markets. Price has now fallen down to a weekly high from two weeks ago. If the pair finds support between 133.17 and 135.12 a breakout from the channel to the upside looks more likely. However, the daily picture 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. Should this level fail, the area between 132.30 and 133.15 should come into play

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”

Gold is trading at 1169 resistance

October 12, 2015 Forex Analysis

Gold is trading at 1169 resistance

Gold, Weekly
In my previous report I took the view that the price of gold has scope to move somewhat higher – even up to 1200 – 1232 range. I also wrote that we should see some bottoming action above the 1097 support and that could correct lower from the levels current at the time of the report. I said that if 1135 level breaks the next significant daily support level is in 1098 -1112 bracket. All this played out well. Price moved lower and after a wild swing higher moved to a support range I mentioned. After printing a weekly bar low at 1103 price has had a significant rally from this support range.

After creating two higher weekly lows the price of gold last week broke through and is now trading outside of medium term bearish channel. The width of the channel points almost exactly to the upper end of the long term bear channel at approx. 1260. This level roughly coincides with the 23.6% Fibonacci level at 1252. Gold is currently trading near 61.8% Fibonacci level and a previous support (now a resistance). At the same time Stochastics has moved right at the threshold of overbought territory. Price is getting close to the 50 week moving average while the upper Bollinger Bands are not very far from the current market price. The nearest resistance is at a pivotal weekly high at 1169 while nearest major weekly support is at 1103.

Gold, Daily

Price is trading near a resistance area between 1169 and 1187 created by a previous sideways move. While moving averages (30 and 50 SMA) indicate the short term trend is higher Stochastics is overbought while price is trading above the upper 2 standard deviation Bollinger Bands. The nearest potential support is at 1152 – 1154 region while the resistance area is wider, from 1169 to 1187. Since August the price of gold has formed a triangular formation and a projection from the triangle points to 1221 – 1232 resistance range.

Gold, 240 min

Price is trading near 1169 resistance and right at the top of a regression channel while Stochastics are in the overbought zone and moving sideways. This is a sign of momentum slowing down. At the same time price is trading outside the upper Bollinger Bands. Previous pivotal candle high at 1170 is very near to the current market price. The nearest 4h hour support level is at 1158.50 while the area between 1135 and 1143 is support range. Should this not hold, the next support range at 1104 – 1112 comes into play.

Conclusion

The higher lows in the weekly chart point to higher prices but there are several technical factors likely to slow the price down. Historical resistance at current levels, together with the proximity of 50 week SMA and the upper Bollinger Bands that coincide with 50% Fibonacci retracement are a challenge for the bulls. I expect this combination to turn the price of gold down to 1104 – 1125 support range. The 4h support range at 1104 – 1112 is a likely level to cause a rally should the price correct that far. Look for momentum reversal signals in the lower timeframes to confirm the analysis for both longs and shorts.

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”

EUR rallies as US Jobs report disappointed

October 2, 2015 Forex Analysis

US nonfarm payrolls rose 142k in September, with the jobless rate at 5.1%. August’s 173k job gain was bumped down to 136k, with July’s 245k now 223k, for a net -59k revision. Average hourly earnings were unchanged from a 0.4% increase previously (revised from 0.3%). The workweek slipped to 34.5 from 34.6. The labor force dropped 350k, with household employment down 236k. The labor force participation rate fell to 62.4% from 62.6%. Private payrolls increased only 118k (versus ADP’s +200k) with the goods sector seeing a 13k decline, with manufacturing falling 9k, while construction was up 8k. The service sector climbed 131k, supported by leisure, hospitality’s 35k gain.

EUR pairs are up across the board. EURUSD shot up to 1.1296 resistance while the next daily resistance level is at 1.1463. Nearest intraday resistance levels are at 1.1330 and 1.1388. The 50 week simple moving average is currently at 1.1405 and coincides with the upper Bollinger Bands. Gold rallied strongly at the announcement and is trading right below 1136 resistance.

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”

AUDUSD at support while markets prepare for NFP Friday

September 28, 2015 Forex Analysis

AUDUSD, Weekly

Slowdown in the Chinese economy is pictured well in the AUDUSD weekly chart. The downtrend started roughly at the same time as copper, peaking in 2010, and has continued ever since with the declining copper prices. Speculators bought massive amounts of copper while the Chinese economy was still expected to keep on growing. Since then the Chinese authorities have been steering the economy away from investment and export lead growth into an economic model that relies more on domestic consumption. This transition, however, will take time and does not benefit metal producers such as Australia as much as government investment driven growth, which means that money is not pouring into raw material intensive infrastructure projects.

We are living in the time of deleveraging and the excess supplies are being worked out. Therefore prices are likely to stay low for the foreseeable future. The latest move lower from a resistance (identified in Sept. 18^th Currency Movers report) wasn’t a surprise but was rather pretty much in line with this development.

This week’s two important fundamental events are Chinese Caixin PMI on Thursday and the US Non-Farm Payrolls on Friday. The latter obviously moves the Fed due to the employment being half the Fed’s mandate together with the price stability. The former though is something new for the Fed to consider but since the latest comments by the Fed Chair Yellen it has been evident that the central bank is taking this globally significant economy into consideration in their policy.

AUDUSD, Daily

The pair rallied from current levels to where several technical factors came together and caused the price to turn lower again (a pivotal low at 0.7213 coincided with 50 day SMA and the upper Bollinger Bands). Price eventually formed two shooting star candles after which the original momentum resumed. Then I wrote in Sept. 24^th Currency Movers report that: AUDUSD is approaching daily Bollinger bands and support which indicates that it is time to close the shorts opened after the shooting stars were formed. This worked perfectly as the pair bounced from my support of 0.6950 after briefly moving below it.

Since returning to lower Bollinger Bands price has created a bullish pin bar but there has been no follow through. The pair has moved sideways inside the pin bar range since the Asian session on Friday. Stochastics are oversold and price moves near the regression line. Thursday’s pin bar low coincided with the 1.5 standard deviation lower Bollinger Band. The nearest support levels are at 0.6904 and 0.6941 while the nearest daily resistance level is at 0.7140. In addition, the weekly low value from last week is at 0.7063, only 20 pips above the 0.7043.

AUDUSD, 240 min

The intraday picture suggests indecision. Price is trading sideways without major attempts to move to either direction. The upside has been limited by a resistance at 0.7026 while the lower end was rising. This created a triangle that points to the 0.6938 – 0.6966 support bracket. The rising lower end is now broken while the Stochastics are rolling over and support the view of AUDUSD moving lower and retesting the support. However, at the time of writing the pair has attracted some buying at 4h Bollinger Bands.

Conclusion

The fundamental picture gives no reason to turn bullish on commodities or commodity currencies, and market participants wait for the Chinese PMI figure and the US NFP number to get further clarification on fundamentals. The economic growth in China has been trending lower. It is therefore likely that the trend will prevail until there are signs of a turn around. This applies to the long term trend in AUDUSD as well. However, based on the monthly chart the pair is now at the upper end of a potential turn around level, level that turned the price higher in 2009. Short term price is fluctuating above a support at 0.6938 – 0.6966 and a resistance at 0.7026. There should be intraday trading opportunities in side this band. If price moves below 0.6904 and there is no fast rally higher I expect the price to move beyond the latest lows. In the case of market rallying strongly from proximity of the low, the resistance bracket between 0.7138 – 0.7277 is likely to come into play.

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”

GOLD TRADING AT DAILY RESISTANCE AFTER A HIGHER WEEKLY LOW

September 21, 2015 Forex Analysis

Gold, Weekly

Gold created a higher low in the weekly chart at levels where the downside was getting limited. I wrote in the previous report that after moving lower for three weeks it is not likely that price will have another significant down move and added that the Fed’s not expected to hike rates (only 28% probability for September rate hike). And furthermore, gold was trading relatively near levels that attracted buyers the last time. Now, whenever a market can’t move lower the probabilities of it moving up are higher. Gold rallied over the last three days with the market’s anticipating Fed’s decision to leave the rates untouched.

After last week’s close was decisively higher than the previous week’s high we now have a higher pivotal low in place. This is an early indication that the market might be attempting to rally from here. In terms of the long term down trend the price of gold has lately been close to the lower end of its likely range. Together with the higher low this suggests that we might see a corrective move inside the long term downtrend. For this to happen we should see some base building first. This would mean price reacting lower and testing the support again or creating another higher low. Weekly support and resistance levels are at 1097 and 1170.

Gold, Daily

The price of gold rallied to pivotal resistance between 1134 and 1147. This bracket is fairly close to the upper daily Bollinger bands while Stochastics are in the overbought area. The same goes with the RSI (7) and Money Flow Index (7). The move higher from 1098 support has been strong. Pivotal resistance area was reached with three wide range candles. However, this doesn’t mean that the price can’t correct lower. Price is trading at resistance and we should follow the intraday resolutions to get clues if and when gold starts to roll over. There is some support at 1136, caused by the daily high from Thursday last week. Significant daily support and resistance levels are at 1112 and 1147.

Gold, 240 min

Lack of momentum is not surprising after such a quick move into a significant resistance. This is manifested in a sideways move that has created a small triangular flag formation and indicates that some of the players have cashed their chips after the three day rally. Stochastics is pointing downwards suggesting overbought conditions while price is trading inside a pivotal resistance created on September 1^st. The nearest significant 4h support and resistance levels are at 1123 and 1147.

Conclusion

In the long term (weekly) picture we have early signs of an attempt to move to the upper parts of the channel. The lack of commitment from the Fed to raise rates has helped to create a higher weekly low, which is a significant indication of strength coming into this market and acts as an early indication that the price of gold has scope to move somewhat higher – even up to 1200 – 1232 range. However, before that we should see some bottoming action above the 1097 support. In the daily time frame price is at a resistance that coincides with the upper Bollinger Bands which suggests that the market could correct lower from here. RSI, MFI and Stochastics are right at the overbought area supporting the idea. Intraday support at 1135 holds the price up but at the time of writing but if that level breaks the next significant daily support level is in 1098 -1112 bracket. If gold breaks out of the triangle to the upside and manage to move beyond the 1147 resistance, the next likely target range is at 1170 – 1186.

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”

AUDUSD Creating A Shooting Star At Resistance?

September 9, 2015 Forex Analysis

AUDUSD, Daily

AUDUSD rallied on the back of positive developments in the price of copper and Chinese stock market yesterday. Today the pair hit a resistance level at 0.7045 and after a brief move above the level the pair failed to maintain the gains and rolled over. The 0.7045 level supported price on August 24^th and created a weekly low that was later on penetrated. Stochastics is trying to move higher from oversold levels but in a downtrend such moves are typical and don’t provide the same value as in a sideways range. Oscillators tend to fluctuate near oversold levels when markets are trending lower.

The fact that 2 sd regression channel high coincides with today’s high suggests that this level is a potential turning point for AUDUSD. The level also coincides roughly with a 23.6% Fibonacci level at .4029. The next support level is at the recent low (0.6900) while weekly chart suggests that the pair has further to fall and should eventually hit a support level at 0.6532.

AUDUSD, 240 min

Traditional trend line based channel analysis in 4h chart provides us a different picture. Price has broken out of the bearish channel and is currently trading at the upper Bollinger Bands but also above 50 SMA. Stochastics is turning down from overbought zone indicating that upside momentum is reversing. However, the fact that price has been able to climb above the 50 SMA for the first time since the pair started to move lower in August 21^st could complicates the picture for shorts. Another potential complication is the pin bar that suggests price could move higher from the moving average support. The next resistance level is at 0.7099 while support levels can be found at 0.7015, 0.6950 and 0.6895.

AUDUSD, 60 min

The hourly timeframe reveals how price has created a pinbar at an intraday support at 0.7020, a level that coincided with the lower Bollinger Bands. This led to a rally that tried to challenge the latest high. At the time of writing this challenge is failing as the pair hasn’t been able to push into new highs.

Conclusion

AUDUSD is technically in a down trend and fundamentally should remain so as the Fed is more likely to raise rates than the RBA this year. The next significant long term support level is at 0.6532 which could be reached by November this year if the decline continues at the same rate as the pair has declined since May this year. Short term price has rallied to a previous support that has potential to turn price lower. However, there has been no strong momentum to the downside after price created a shooting star candle in the 4h chart in the Asian session today. Price has been fluctuating between 0.7015 and 0.7060 and has found support from 4h 50 SMA. This increases probabilities of price breaking higher and testing the next resistance level at 0.7099. Those looking to short at current levels should seek for bearish signals in the lower intraday timeframes before initiating shorts. If price keeps on making higher lows, look for a move to 0.7099. If price breaks lower from current levels my target 1 is at 0.6960 and target 2 at 0.6920. Lower highs in intraday resolutions indicate weakness and increase likelyhood that price will move lower.

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”