Signals Articles

Pound Picks up as PM Uncertainty Fades

Forex Analysis
2016-07-11_14-52-28

GBPUSD, Daily             

The next UK Prime Minister appears to Theresa May as her only opponent to be the next leader of the ruling conservative party, Andrea Leadsom, withdraws from the contest.  Mrs Leadsom was the last of the Leave campaigners to be in the running for the top job in UK politics, the UK votes for a Brexit and none of its leaders are left standing.

Sterling immediately responded positively on the news as cable spiked over 1.3000 before falling back and EURGBP tested the 0.8500 level. At the same time the UK100 rallied this morning to 6650 and officially entered a “bull market” having rose 20% since its most recent low of 5565 at the beginning of February.  The strong rally in the UK100 has a strong correlation to the fall in the value of sterling since the Brexit vote. Many of the companies within the UK100 earn most of their revenue in US Dollars, but report in UK pounds thus helping their immediate short term outlook.

Cable could recover from these 1.300 levels as the political situation in the UK continues to clarify itself. However, with the BoE MPC meeting this week and expected to announce a rate cut AND more quantitative easing, the stock market and bond market rallies are likely to be the main beneficiaries.

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

jmutaJanne 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.

NFP surprise: 287 thousand new jobs

Forex Analysis
Chart_16-07-08_15-36-43
EURUSD, Daily
U.S. nonfarm payrolls surged 287k in June from a revised 11k increase in May (was 38k) and 144k in April (was 123k), with a net -6k revision. The labor force rebounded 414k following declines of 458k and 362k in May and April, respectively, while household employment was up 67k from a 26k May increase.
The unemployment rate rose to 4.9% from 4.7%. Average hourly earnings edged up 0.1% from 0.2%. The workweek was steady at 34.4. Private payrolls climbed 265k, with the goods producing sector seeing a 9k increase, while construction unchanged, with manufacturing rising 14k. The service sector added 256k, with education/health, and leisure/hospitality each rising 59k, while information was up 44k. Government jobs increased 22k. The mixed report probably won’t have much impact on the markets.

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

jmutaJanne 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.

UK Pre Brexit Deficit Widens

Forex Analysis
2016-07-08_13-05-22

GBPUSD, Weekly            

UK trade deficit widened to GBP 2.3 bln in May data, out from the GBP 1.3 bln deficit since in May last year. The goods deficit widened by GBP 500 mln to GBP 9.9 bln, with exports falling by GBP 2.1 bln while imports declining by GBP 1.6 bln. That was the biggest goods deficit for the month of May on record, according to the ONS stats office. The services surplus rose to GBP 7.6 bln.

The impact of the recent sharp decline in the pound will be mixed to negative, benefitting exporters but also pushing up costs of imported components for many. The UK imports far more goods than it exports. Goods such as cars will become more expensive to the UK consumer, with 85% of demand is met by imported cars while domestic manufacturers rely heavily on imported parts. The trade deficit has acted a drag on UK economic growth, which fell to 0.4% in the first three months of this year, but a far more significant impact comes from the poor performance of the UK’s foreign investments.

The pound is trading softer in London trade, with Cable having ebbed to the low 1.2900s and EURGBP having lifted above 0.8570. Signs of weakening UK business and consumer sentiment, and an ebb in economic activity are keeping a lid on the pound. A survey of UK consumer confidence by Gfk, conducted after the Brexit vote (between June-30 to July-5), dove to -9 from -1, which is the sharpest drop in the data series since 1994. Think tank NIESR said yesterday that it estimates UK GDP went negative in June after stagnating in May. Footfall on high street shops is down and car sales and property market transactions are also down. There are bright spots, with exporters such as Burberry, a high-end fashion retailer, likely to benefit from the weaker pound, while a trade deal with India may happen within a year (a deal between the EU and India has been held for years by the former’s concerns about wine and car trade). But it’s unlikely the good-news stories will offset the probability that the UK ends up with a net-worse trade deal with the EU, given the terms the UK wants. The reason the pound is trading nearly 12-14% lower is because markets are discounting a shock to the UK economy’s terms of trade.

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

jmutaJanne 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.

AUDNZD & GBPJPY both hit Target 1

Forex Analysis
2016-07-08_11-15-16

AUDNZD, Daily             

On Monday I looked ahead for a falling AUDNZD rate as news data and momentum continued to weigh on the pair. I wrote “A clear, breach and break of 1.0450 level on the Daily time frame will generate a SELL position with Target 1 1.0340 and Target 2 at 1.0173”.

In a highly volatile week my entry at 1.0450 was triggered on Tuesday (July 5th) and Target 1 at 1.0340 was reached this morning (July 8th). The Kiwi has had a strong week and continues today, Target 2 at 1.0173 remains the next level.

The GBPJPY post from Tuesday suggested that at 133.00 the pair could easily fall to 131.50 which it duly did in the following hours. As pressure on sterling continues and the flight to quality and safe havens rolls on Target 2 at 128.5 and 125.60 are still in play. As I stated on Tuesday “as we move lower these targets become more difficult to achieve, however, momentum is to the downside and although technically oversold, never underestimate the power of fear and greed”. 

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

jmutaJanne 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.

USDCAD Hit Target 1

Forex Analysis
Chart_16-07-08_11-05-46

USDCAD, 240 min

I wrote on USDCAD yesterday saying that it had created a daily shooting star in Wednesday’s trading and said that I expected the pair to break below the support. The idea was to look for sell signals after rallies if price breaks below 1.2940.My targets were: 1.2905 (T1) and 1.2860 (T2). The pair broke below the support and provided a sell signal near 1.2940 as it rallied back to the level. This lead the market lower well beyond my target one and all the way to 1.2876 before it rallied massively on the back of EIA oil reserve report causing the price of WTI crude to drop by over three dollars from $48 to $44.90. The report rekindled bearish supply-demand imbalance concerns. Crude is now trading just below the $45.60 – $45.80 area that used to support price and is worth keeping an eye on. Oil looks technically bearish with next minor support in crude is at $44.76 while the next daily support area can be found at $42.50 – $43.00. This should support USDCAD and provide further push higher in the pair.

Even though the USDCAD is trading now near the upper daily Bollinger Bands the two higher highs in the daily chart from July 4th and yesterday (together with price of oil being bearish) are indicating the price has upside momentum and could mean that the pair pushes higher towards the June 27th highs at 1.3120. The nearest minor support can be found around 1.3000 (next at 1.2985) while nearest minor resistance levels in USDCAD is at 1.3020 while 1.3395 – 1.3108  is a more significant resistance area. July 6th high at 1.3056 is another level to pay attention to. Today’s NFP announcement could bring volatility and should the number deviate strongly from expectations then supports and resistances are more likely to be broken with higher volatility.

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

jmutaJanne 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.

German Trade Data worse than expected

Forex Analysis
2016-07-08_10-07-22

EURUSD, Daily             

Germany posted a seasonally adjusted trade surplus of EUR 22.1 bln in May, down from EUR 24.1 bln in the previous month, as exports dropped -1.8% m/m, after rising just 0.1% m/m in April. Imports rose a modest 0.1% m/m after falling -0.3% m/m in the previous month. The three months accumulated trend rate still improved thanks to the strong April number, but the fall back in exports, coupled with weak production and orders data for May confirms concerns about a marked slowdown in growth in the second quarter of the year. Hopes were for a rebound in the second half, but the Brexit referendum will also hit Germany and the Eurozone as a whole so that the overall growth outlook is looking bleaker for the whole of Europe now.

Moody’s have also cut UK and Eurozone growth prospects due to the shock to confidence following the Brexit vote for both areas and the political contagion that could spread.

UK GDP  

  • 2016 – down to 1.5% from 1.8%
  • 2017 – down significantly to 1.2% from 2.1%

Eurozone GDP

  • 2016 – down to 1.5% from 1.7%
  • 2017 – down to 1.3% from 1.6%

EURUSD remains range bound prior to the NFP later today around the 1.1075 – 1.1100 zone.

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

jmutaJanne 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.

Central Banks Squeezing Sovereign Debt

Forex Analysis
2016-07-07_15-40-01

EURUSD, H4            

Central banks are squeezing sovereign debt according to a WSJ article, “A buying spree by central banks is reducing the availability of government debt for other buyers and intensifying the bidding wars that break out when investors get jittery, driving prices higher and yields lower. The yield on the benchmark 10-year Treasury note hit a record low Wednesday. The squeeze could get worse if central banks in Japan and Europe decide, as expected, to step up their stimulus efforts following Britain’s vote to leave the European Union. The world is running out of positive-yielding safe-haven bonds, among those feeling the worst pinch are pension funds and life insurance firms in Japan, Europe and the U.S. Those investors now face tougher competition for the high-grade, long-term bonds they need to match their long-term liabilities.” Even central banks are having trouble finding needed bonds as yield curves turn deeply negative, with nearly half of German bonds ineligible for repurchase below the ECB’s -0.4% depo rate.

Two positive US data points add to the NFP melting pot for tomorrow:

US initial jobless claims fell 16k to 254k in the July 2 week, more than unwinding the 12k bounce to 270k in the last week of June (revised from 268k). The 4-week moving average dipped to 264.75k from 267.25k (revised fro 266.75k). Continuing claims dropped 44k to 2,124k, from a revised 29k increase to 2,168k (revised from 2,120k). The BLS said no special factors impacted, however 6 states did estimate claims. And there are usually some difficulties in seasonal adjusting around holidays too. The claims data continue to suggest a healthy employment report for June.

The 172k June ADP rise nearly matched our estimate, though it undershot our 200k private nonfarm payroll estimate with a 210k total payroll gain, after a slight trimming in the 168k May ADP rise to 168k (was 173k) that narrowed the gap to the 38k private payroll rise in that month. We had expected an undershoot given the impact of strikes and weather on the BLS data that doesn’t impact ADP. The “as reported” ADP figures have run 18k/month weaker than private payrolls since the October 2012 methodology change. Yet, we’ve seen recent ADP overshoots of 148k in May, 26k in April and 33k in March, after undershoots of as much as 122k in four of the prior five months. The ADP as-reported average absolute error since the Moody’s methodology change is 50k, versus a 45k average absolute error over this period for the survey median.

EURUSD moved down marginally to 1.1070, GBPUSD gave up the 130.00 handle and USDJPY moved north of 101.10.

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

jmutaJanne 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.

NFP Friday: Are we in for another surprise!

Forex Analysis
nfp

Tomorrow Friday 8th July is one of the most important days in July from traders’ perspective. Both institutional and retail traders alike globally are focussing on the US June Non-Farm Payroll report (at 12:30 pm GMT) after the May payroll growth number came in surprisingly low at 38.000 jobs (73.000 when adjusted for Verizon strike). Now the question is whether this number was an outlier or a real indication of the US jobs market slowing down significantly.

We assume that it is likely that the June number was an outlier. As the three month average before the horrendous May reading was 181.000 analyst expectations for the July number range from 160.000 to 210.000 we believe the June payroll increase to be in between these forecasts. The consensus is expecting 178.000 new jobs. The ADP employment number published today (172.000) indicates that this number isn’t probably too far from the actual release tomorrow. However, the NFP number has surprised from time to time as we know.

If the actual number deviates strongly from the expectations market volatility usually increases and could create trading opportunities or even an intraday trend after the initial and often unpredictable see sawing settles down. We do not recommend holding geared positions into the event or taking geared positions during the initial volatility that arises from the announcement. However, we are looking for trading signals 20 to 30 minutes after the announcement.  We will keep you updated via the analysis.hotforex.com analysis page and my Facebook page (HotForex Janne Muta) with some live commentary on the results and market action.

Come and join us tomorrow around 12:30 pm GMT. If the number differs strongly from analyst expectation tomorrow could be an interesting and exciting day!

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

jmutaJanne 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.

Daily Shooting Star in USDCAD

Forex Analysis
Chart_16-07-07_10-19-34

USDCAD, 240 min

USDCAD created a daily shooting in yesterday’s trading and is now trading at support at 1.2943. The pair is trading between 4h moving averages (30 and 50 SMA). The 15 min chart shows a series of lower high values in the high values over the last two hours. Only one of the recent candles at the time of writing has tried to challenge this pattern. This suggests that market is not trying turn higher from this support. Nearest resistance is at 1.2940 (next at 1.2930) while the nearest support is at 1.2940 (next at 1.2930).

The 4h Stochastics are oversold indicating that the market could rally before breaking lower. However, this would need to be confirmed by the price action. With the daily shooting star candle created in yesterday’s trading I’m preparing for this market to break lower rather than rallying higher first. If price breaks below 1.2940, I looking for sell signals after rallies with targets as follows: 1.2905 (T1) and 1.2860 (T2). Should the market however rally higher first I would be looking for sell signals at 1.3017 – 1.3030 sell area. If this was the case my targets are higher as follows: 1.2975 (T1) and 1.2340 (T2).

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

jmutaJanne 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.

Mr Draghi remains quiet – FOMC, ADP & NFP ahead

Forex Analysis
2016-07-06_17-14-22

EURUSD, Daily           

How long can Mr Draghi stay stumm? Eurozone stock markets continue to sell off sharply and Eurozone spreads remain volatile, while Italy’s banking problems are looking ever more threatening. That the Eurozone can escape serious negative implications from the UK is clearly wishful thinking and while central bankers have been eager to hand part of the responsibility for the Eurozone’s economic health back to politicians, it is clear that those in charge on both sides of the channel were simply not prepared for the outcome of the referendum. Nor are they willing to work together in order to limit the fallout of Brexit. So its back to central banks, but while the BoE already moved to free up pressure on UK banks and hinted at further easing over the summer, Draghi has been remarkably absent from the public stage so far. Wait and see remains the order of the day and that may also be because many of the ECB’s options are facing serious challenges. A tweaking of the capital key rule in the QE purchases as suggested by some, would only increase EMU fatigue in Germany and likely face fresh legal challenges. Further deposit rate cuts will add to pressure on banks. A relaxation of state aid rules for banks may be needed in Italy, but could push a finalisation of the banking union out even further. So Draghi may be busy behind the scenes trying to evaluate political and legal risks to more radical steps, but likely will be forced to resort to tweaks and minor changes that will leave markets disappointment.

The risk off rush continues, USDJPY struggling with 100.00, GBPUSD struggling with 130.00 and Gold comfortably north of 1360.

The post Brexit EURUSD rally petered out yesterday and we trade below the 200 DMA, however, with attention now turning to the FOMC minutes later today at 18:00 GMT, the ADP numbers tomorrow and the main event NFP on Friday this could simply be movements ahead of the news. Technically, on the Daily timeframe the support area is down at 1.0930 – 1.0825 and resistance at 1.1160 and 1.1220.  My preference would be for SHORT positions from here, dependent on the news flow.

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

jmutaJanne 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.