Gold looking Bullish again

September 22, 2016 Forex Analysis

XAUUSD, Daily

Gold hit a two week high yesterday (September 21) following the FED rate announcement, and closed at 1335.18. Technically it broke up through and closed above the 20 DMA and the 50 DMA on the Daily chart. Although one strong candle does not an autumn move make, it was significant as it also closed above the 38.2 Fibonacci retracement level from the July high of 1374.89 and the August low of 1304.52.

The higher time frame Monthly chart remains bullish, whilst the Weekly chart is neutral and has support around 1315 and resistance at 1350. The Parabolic SAR remains negative and I expect some profit taking and a retracement from current levels, however a close above 1325 remains positive, following all the central bank announcements this week. Additionally, late September tends to be a strong time of the year for gold as the Asian wedding season starts in earnest. An entry at 1333.40 was triggered with Target 1 at the psychological 1350.00, north of the Bollinger band and the 61.8 Fib level at 1348.00 and Target 2 below the July high at 1366.00.

The 1315-1310 zone should provide longer term support and below that 1304 and 1300.

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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EURGBP Hits Target 2 – Sterling Suffering

September 21, 2016 Forex Analysis

EURGBP, Daily

The third of the GBP short positions that had been initiated earlier in the month also hit Target 2 yesterday (September 20). The EURGBP LONG entry at 0.8460 from September 12 spiked to Target 2 (0.8624) yesterday as the woes continued for sterling. These three trades have netted in excess of 770 pips.

Meanwhile, an interesting piece in the Wall Street Journal suggests what the Fed signals today will be more important than the headline policy decision. According to a WSJ report, especially in the summary of economic projections and the press conference. The WSJ takes a look at 5 areas specifically: 1) A December Signal? 2) The Path Forward? 3) What’s the Risk? 4) Where’s Full Employment? and 5) Dissents? These are mostly self-explanatory, but highlight whether Yellen and Co. will give a more concrete signal about December, how they will characterize the rate path (dots), if they reassess the balance of risk, how they define full employment, wage trends and explain low inflation, and will they keep everyone on board in doing so? This is a good framework for considering the aftermath of the decision.

The USD currently trades at EURUSD 1.1142, USDJPY 100.76 and GBPUSD 1.2960 before the announcement and the following press conference.

Janne Muta

Chief Market Analyst

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EURAUD Rolled over to Target 1

September 21, 2016 Forex Analysis

EURAUD, Daily

Yesterday I wrote “The EURAUD rallied strongly from the August low below 1.4450 to a high at 1.5065 last Thursday (September 14). The high was capped for three days by the 200 DMA, and the subsequent fall broke the 20 DMA yesterday. This three candle down move and break and hold of the 20 DMA on the Daily timeframe, triggered a SHORT position at 1.4820, with Target 1 at 1.4700 and Target 2 at 1.4580.

The strong down move continued yesterday. Target 1 at the psychological 1.4700, and the 50 DMA were breached earlier today for a gain of 120 pips. If the pair close today below the 1.4700 level and the Parabolic SAR remains positive then further downside to Target 2 (1.4580) is possible. Today would be the 5^th strong down day following the rejection of the 200 DMA on September 15, so some relief in the down move could be expected, the short term stochastics are over sold.

Janne Muta

Chief Market Analyst

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EURAUD Rolling over after rejecting 200DMA

September 20, 2016 Forex Analysis

EURAUD, Daily

As global markets await the thoughts of the BoJ and the FOMC tomorrow (Wednesday) another currency pair appear to be rolling over and returning to their longer term downtrend.

The EURAUD rallied strongly from the August low below 1.4450 to a high at 1.5065 last Thursday (September 14). The high was capped for three days by the 200 DMA, and the subsequent fall broke the 20 DMA yesterday. This three candle down move and break and hold of the 20 DMA on the Daily timeframe, triggered a SHORT position at 1.4820, with Target 1 at 1.4700 and Target 2 at 1.4580.

The longer term Monthly chart is also trading below its 20 period MA and also has support around the 1.4700 level. The 14 Day ATR is currently around 150 but the Parabolic SAR has yet to revert.

Janne Muta

Chief Market Analyst

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US Housing Starts sag too

September 20, 2016 Forex Analysis

GBPUSD, Daily

U.S. housing starts underperformed with a 5.8% August drop after small upward revisions, with a 0.4% permits decline that left a weak report overall, though both measures appear poised for quarterly gains in Q3 with persistent growth in starts under construction. Starts weakness was concentrated in the south, though it was spread across the single and multi-family components. Starts and permits continue to ratchet higher from weak Q4 levels.

The dollar dipped following the housing starts data, which were much worse than expected. EURUSD ticked up 10 points to 1.1186, as USDJPY fell to 101.78 from over 101.85. However, the pound is the day’s loser, showing 0.5% declines versus the dollar and euro and a 0.6% fall versus the yen and trading at or near one-month lows against all of the G3 currencies. It’s all about Brexit, which, after a summer lull of political activity and a run of data showing a better than expected economic rebound from the initial post-vote wobble, is back at the centre of investors’ big-picture concerns. Earlier in the month, for instance, Japan’s foreign minister published a 15-page document warning that Japanese companies in the UK, which have created 440k jobs, would consider moving to the EU if Britain did not retain full access to the single market, avoids customs controls on exports, and continues “passporting” rights that allows UK-based non-EU businesses to trade across the EU. A report from the UK’s Financial Conduct Authority today, meanwhile, showed that 5,500 UK-registered firms rely on “passports” to do business in the EU. So far the only guidance from the UK government, which is grappling with the magnitude of task ahead, is that “Brexit means Brexit,” which has done little answer the core question of whether the Britain is heading for a hard exit or a soft exit, the latter being a scenario where full access to the single market remains, but at the likely cost of not taking back full border controls.

Janne Muta

Chief Market Analyst

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GBPCAD adds to Sterling Weakness

September 20, 2016 Forex Analysis

GBPCAD, Daily

The pressure on the pound continued today following some relief yesterday. The GBPUSD (Cable) level at 1.30000 remains a very key area, buyers came in around here yesterday but so far today its GBP being sold short and the pair are currently trading at 1.2970 with worries over upcoming Brexit negotiations beginning to weigh significantly.

The GBPCAD breached and broke the key 20 DMA on Friday following the rejection of the 200 DMA last Wednesday and Thursday. Yesterdays close below the 20 DMA and the turn of the Parabolic SAR on Friday suggested further weakness and a SHORT trade was entered on Mondays close at 1.7202. The 50 DMA could provide support before a further move lower to Target 1 at 1.7022 and further down to Target 2 at 1.6830.

Weakness in the Oil price is hampering the CAD currently; however, the on-going uncertainty surrounding the Brexit negotiations continue to undermine the pound.

Janne Muta

Chief Market Analyst

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GBPJPY & Cable Hit Target 2 – Sterling Sags

September 19, 2016 Forex Analysis

GBPJPY, Daily

Sterling suffered on Friday from reports on Bloomberg that the UK finance minister (Philip Hammond) is ready to accept the fact that the UK may have to give up single-market membership in the European Union to achieve the immigration restrictions voters demanded in the Brexit vote. Cable closed the day and week down 1.8 percent and GBPJPY slumped from north of 135.00 to close under 133.00.

The slip in sterling has helped both our SHORT GBP trades reach Target 2 – GBYJPY (132.80) and GBPUSD (1.3070) for a net gain on both trades of over 600 pips.

2016-09-19_16-58-32

Today the USD has traded softer and corrected some of its outperformance from Friday, Market conditions have been thin with Tokyo markets absent and with market participants largely on the sidelines ahead of the Fed and BoJ policy decisions this week. USDJPY ebbed back under 102.00, breached Friday’s low on route to a four-session low at 101.69. EURUSD traded in a narrow orbit of 1.1150. Cable recouped some of the sharp losses seen on Friday, lifting above 1.3080, well over half a big figure up on the day.

However, the close of the day and week below the psychological 1.3000 level is definitely one to watch. Next break lower would be the August low of 1.2860, the post Brexit low of 1.2780 and then 1.2500.

Janne Muta

Chief Market Analyst

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About Janne Muta, HotForex’s Chief Market Analyst

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Copper – In every trade there is a lesson

September 16, 2016 Forex Analysis

Copper, Daily

Following the Commodity Webinar I posted a LONG position on Copper on September 7 and suggested that it was time for copper to catch a bid …… “the strong close yesterday (a 7 day high and strong body on the candle together with a break above the seven day range) triggered a LONG trade at 2.0874. Target 1 is 2.1150 which coincides with the 20 DMA and 23.6 Fib level and Target 2 is 2.1450. The current 14 day ATR is 0.200. This trade is very much against the long term monthly down trend and bear market in Copper that has been in place for some six years.”

Following a positive start last week the traded was closed on Monday (September 12) as it spiked down intra-day to just below the floor of the recent congestion zone, only to close the day positively at 2.1011. Subsequently, following good industrial news from China on Wednesday it has gone on to hit both Target 1 and Target 2 for what would have been a net gain of 576. Instead I had a net loss of 210.

The moral of this one is to always double check your positions; if I had doubled checked the Risk Reward ratio the trade would have remained open. Another entry in the trading journal and another reminder that the market is always right and the market will do what it will do.

Janne Muta

Chief Market Analyst

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NZDUSD – Trendline Support and Tweezer Bottom

September 16, 2016 Forex Analysis

NZDUSD, Daily

The NZD has had a great 2016 so far and continues to look strong against the AUD and USD. The NZDUSD traded as low as 0.6328 back in January and since has rallied to its recent high on September 7 at 0.7484, a move of some 18%. The inevitable profit taking that was triggered by the Tweezer Top on September 8 and the subsequent move down to some long term support and Tweezer Bottom, tweaked my interest yesterday for a move to the LONG side. The support area around the confluence of the 50 DMA, 38.2 Fibonacci level and the long term monthly channel suggest evidence of further upside potential. The break and hold of the 20 DMA on yesterday’s weak US data confirmed the entry at 0.7280. Target 1, a little over the 14 Day ATR is at 0.7370 and Target 2 close to the recent high at 0.7450.

The Parabolic SAR remains negative as the pair trade below 0.7300 and any break of the 50 DMA and 38.2 Fibonacci level could move the pair lower. However, the RBNZ are expected to cut interest rates again before the year end following their 25 basis point cut (from 2.25% to 2.00%) in the Official Cash Rate last month. Governor Wheeler said at the time “…further policy easing may be required to ensure that inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data.” As the FED is widely expected to remain unmoved on rates next week the fundamentals remain positive for the Kiwi.

Janne Muta

Chief Market Analyst

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About Janne Muta, HotForex’s Chief Market Analyst

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EURGBP Hits Target 1 and BOE – No change

September 15, 2016 Forex Analysis

EURGBP, Daily

On Monday (September 12^th) I wrote “The EURGBP created a Hammer candle low on Tuesday (September 6) at 0.8332 from the recent high (August 12) at 0.8723. Two strong up days last week, through the 23.6 Fibonacci level and a touch of the 50 DMA and 38.2 Fib level spiked my interest on Friday. A close above the 0.8360 level on the Daily candle would generate a LONG position from here. Target 1 would be 0.8540 and Target 2 0.8624”

The trade hit Target 1 yesterday (September 14) for an 80 pip gain; this was the third of the three SHORT GBP positions to complete this week for a net gain of 375 pips.

The BOE,as widely anticipated made no change. Sterling is down by an average 0.3% on the day versus the G3 currencies, although off intraday lows. Despite the less pessimistic tone of the MPC minutes relative to August, policymakers stuck to forecasts for economic slowdown. The minutes noted that “a majority of members expect to support a further cut … at one of the MPC’s forthcoming meetings during the course of this year” — if, that is, the outlook at the November forecast round “is judged to be broadly consistent” with the August Inflation Report projections. The BoE are likely to remain on hold into 2017, seeing some sustainability in the recent economic revival and with the MPC likely to wait for the detailing of expected fiscal stimulus measures at the government’s mid-government budget review on November 23. Further out, there is risk of further easing measures, anticipating that the eventual commencement of exit negotiations with the EU will sharpen concerns about the near- to medium-term success of project Brexit.

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”