The USD/CAD continued to exhibit a strong trading streak during the previous trading session as the after-effects of the BoCs economic policies continue to have an effect on the Canadian dollar, with the CAD weakening across the board during the previous session as a result. The USD/CAD is trading just above 1.3300 points and could be in for more consolidation within its trade highs for today unless the US dollar suddenly drops in value.
The Bank of Canada has already made it clear that the Canadian economy has not made any substantive progress during the past months, and this stagnation might prompt the central bank to make interest rate adjustments in the coming months. Economic data coming from this region was generally good, but low oil prices have already become a matter of concern for the BoC since the country is hugely reliant on oil, and this is why it is highly possible that the BoC might decide to implement rate cuts towards the end of 2017. This is also why the CAD continues to drop in value, and why corrections in this particular currency has always been met with strong buys. If the currency pair manages to reach 1.3500 points, then the pair could possibly reach up to 1.4000 which could be easily achieved within the year if the Fed hikes its interest rates and the BoC implements a rate cut.
Canada will be releasing its CPI data as well as its retail sales data during the New York trading session, and if any of these two data comes out as weak, then this will be merely a confirmation of a weakening Canadian economy, and the pair could possibly go upwards to 1.3400 and could even reach 1.3500 points.
The EUR/USD pair underwent a lot of volatility during yesterdays trading session after it initially plummeted to 1.0600 points for a short period but eventually climbed towards the higher trading regions and is now continuing to trade within these price highs. The euro currency is known for its resilience against the fluctuations of the USD, and while other currencies become adversely affected with the movement of the US dollar, the euro has always been able to counter these effects and the USD always finds it hard to oppose the movements of the EUR.
The ECB released its statement regarding the central banks rates yesterday which was immediately followed by a press conference, and Draghi had already stressed that the central bank is not very keen on minimizing the banks QE anytime soon. Moreover, Draghi also stated that the ECB chose not to act on the regions inflation issues since this was mainly caused by the surge in energy prices. This statement from the central bank stirred some concerns from market investors, therefore putting downward pressure on the EUR/USD pair and causing the currency pair to drop to 1.0600 for a brief period. However, the euro was again able to revert its losses during the North American trading session even though there was no actual reason behind the dollar weakness. The USD continues its losing for today and is expected to undergo more consolidation as the day progresses.
There are no scheduled economic data to be released from both the EU and the US for today, and as such, the current market trends are expected to be dominant in the financial market for today.
The US dollar finally regained the majority of its losses yesterday after the country released a series of positive economic data, as well as from a handful of fundamental adjustments which occurred in the country during the previous trading session. However, although the dollar strength has already returned, it remains to be seen whether this will eventually continue to become a long-term trend or merely dissipate as a short-term correction for the USD, and with Trumps inauguration tomorrow, the US dollar is in for some interesting movements in the future.
The USD remained docile during the entirety of yesterdays Tokyo and European trading session. However, the EUR/USD failed to make significant developments after going through 1.0700 points since it was relying on economic data in order to make actual progress. The CPI data from the US was eventually released and met market expectations, inducing more upward pressure on the USD but was immediately lost in the face of increased volatility in the market. But the real game-changer was Yellens speech later in the day, wherein the Fed chair reiterated that if the slew of positive economic data from US continues, then the market could be in for another Fed rate hike anytime soon. This dollar-positive movement has then caused the EUR/USD pair to climb up to 1.0620 points and has now settled just above this particular region. The pair is expected to undergo more pressure as the dollar continues its winning streak across the board.
The ECB will be releasing its rate statement during todays trading session and will be subsequently followed by a press conference from the central bank. There are no changes expected from the ECB, however it is expected that the central bank would probably highlight its most recent achievements to the market audience. US will also be releasing the Philly Fed Index as well as the Unemployment Claims data, both of which are expected to increase volatility and lend additional support for the USD.
The Business PMI of New Zealand showed positive results, however, the data for the Building Permits posted negative figures. The commodity currency NZD got some support from the dynamic prices of oil. The recent data of the United States weighed on the kiwi.
The Asian recovery run out of steam subsequent to the 0.7200 level testing. The barrier seems hard to break. The NZD decline after it touched the level in the Asian hours and stayed under the resistance region during the EU session.
As shown in the 4-hour chart, the price remained on top of the moving averages yesterday. Both 100 and 50-EMAs directed an upward trajectory, the 200-EMA is neutral based on the mentioned timeframe. Resistance lies at 0.7200, support is found at 0.7150.
MACD grew less which showed some weakening on the buyers position. RSI headed northbound after it left the neutral territory.
Failure to reacquire 0.7200 will send the market some reversal. A steep breakout under 0.7150 could initiate an easing through 0.7100.
The Housing Price Balance came in the red for December, the figures presented worse-than-expected outcome which stalled the recovery of the British currency on Thursday. The sterling had a stronger stance yesterday, enabling the GBP/USD to approach its recent highs found in the 1.2400 level. The Cable reversed few of its losses after the softening of the dollar across the board.
The spot met a local bottom at 1.2250, shifted its course and began to rallied up breaking the 1.2300 region amid EU sesion. The pair cross the level and proceeded northwards intended to reach the 1.2400 target.
The buying interest gradually dwindle during the North American trading. The price suffered from a downward rejection and drag lower but it resumed to develop in the middle of 100 and 200-EMAs shown in the 4-hour chart.
The 50 and 100-EMAs is confined in the neutral area while the 200-EMA keep on ployed lower. Resistance arrived at 1.2400 level, support lies at 1.2300.
The MACD ascended which post a buy signal. RSI dropped the neutral zone, en route overvalued zone.
The pound is still under the possible risk of a deeper fall. The GBP had a limited movement due to the 1.2400 hurdle and 200-EMA. As the spot dip below the 1.2300 support region, a downtrend will initiate immediately. We do not eliminate the probable easing within 1.2200. The price will touch 1.2450 if the break occurred on top of the 1.2400 handle .
The ECB decided to keep its rate unchanged as the deposit rate maintained -0.4% and 0.0% for the interest. Meanwhile, the greenbacks stabilized on the back of the positive data in the US considering the Initial Claims for the number of jobless individuals is in the green and Housing Starts presented some solid figures. Investors are focused on the inauguration on Trump scheduled on Friday.
The downward momentum failed to hold 1.0650 as the sellers found a strong hurdle that pushed the pair upwards.
The single European currency was able to regain most of its losses that took place on Thursday. The price drove the 1.0650 level before the onset of EU session and continued to lead through 1.0700 region. On the other hand, the upward impetus lived shortly and the recovery slowed down on top of 1.0650. The pair were pulled lower by the renewed selling interest.
Moreover, the price broke 1.0650 and test the mark 1.0600 during the outset of American trades.
The EUR/USD showed a neutral-to-bullish position amid European hours. According to the 4-hour chart, the spot hovered above the moving averages. The 100-EMA cross above the 200-EMA. The 100 and 50-EMAs accelerated while the 200-day moving average is flat as shown in the same chart.
Resistance touched 1.0700 handle, support entered 1.0650 mark. The MACD indicator weakened along with the soft position of the buyers. RSI pierced through the neutral zone.
The pair appeared to bearish. In case a break occurred below 1.06550, a negative indication would rise and signaled for further risk easing of the EURUSD approaching 1.0600, ahead of the 1.0550 region.
Subsequent to the speech made by Janet Yellen, the US dollar abated. But the greens reversed few of its losses on Friday on the back of the inauguration speech of Donald Trump.
The greenbacks attempted to reach 115.00 barrier amid Asian hours. The bulls pushed the level prior to the onset of the EU trading. The price was unable to maintain its upward impetus and turn back through 115.00 eventually.
The 4-hour chart indicates that the price rebounded to the 50-EMA during the Asian session and it further moved between the 50 and 100-EMAs in the Euro hours. The 100 and 50-EMAs employ a downward trend while 200-EMA was confined in the flat lining. Resistance touched the 116.00 level, support hit 115.00 area.
The MACD histogram arrived in the positive zone and if it hovered on its position, the buyers will strengthened. RSI stayed around the overvalued territory.
The general outlook for the pair remained to be bullish as it rack up through the resistance region 116.00.
The USD/JPY could fail and return to the downside in case the 115.00 handle were unable to support the bullish investors.
The EUR/USD increased for the past few days following the sluggish stance of the greenbacks. The single European dollar benefited from the position of the greens as it climbs to 1.0700 and further extended its gains. The USD weakened with no definite reason as others deemed for the general correction while some claimed its all because of the skepticism for Trumps administration. However, the American currency is clearly at a disadvantage point against the euro.
The EUR is relatively buoyant for the previous week, much more when its U.S peer manifested some strength. The euro continued to bounce back from a limited correction and eventually broke the 1.0700 level, en route 1.0840 region.
There are some issues that the weakness are caused by the speech of Trump coupled with the curtailment for the rest of Obamacare. Moreover, there exist a general risk about the US Presidents team and their plans and these uncertainties weighed on the USD.
As the last week of January enters, the economic news is lessened while the upcoming is a beginning for the USD towards an unidentified state which brings higher volatility.
The US and Euroregion do not have major reports to be released for today, what we expect is the continuous fall of the greens.
The GBP/USD maintain a stronger stance in trading as the dollar softened. Meanwhile, the pair seems ready to gain further throughout the day. Even though the pound declined below 1.2000 due to concerns about the Brexit movement, it remained steady for the previous week. Moreover, British PM May presented some guidelines and asserted that the nation is set for the hard Brexit, this confirmation lessened the risks and disorientation regarding the referendum which also helped the GBP to edged higher and traded strongly for this morning.
The United Kingdom is currently facing a crucial week as the Supreme Court of the country is expected to make an approved decision in relation to the European membership. Considering the fact that the court will require the government to obtain an approval from the Parliament appealing for Article 50 could initiate the process of withdrawing the UK from the EU. In case it was certified, we expect some volatility against the sterling. Nevertheless, there is a possible delay due to some criticism and arguments that are more likely to arise.
The sequential events with regards to the ruling and dollar weakening are able to lead the Cable towards 1.2500 by which the pair are going to aim for the marks 1.2700-2800.
As for this day, theres no major news from the US and UK thus the greens instability presumably would dominate for the GBPUSD.
The USD/CAD pair continues to trade within a tight range and consolidated for the most part of yesterdays trading sessions. The CAD was recently subject to an increased pressure after the Bank of Canada expressed it plans to implement an interest rate cut in the next few months as a result of the Canadian economy becoming increasingly stagnant after not showing much development in the recent economic readings. This added pressure in the CAD has however helped in offsetting the dollar weakness during the past few days.
The Canadian dollar is probably the only currency which the USD has gained in relation during the past few sessions and has continued to maintain its gains over this currency, while other major currencies have increased in value and has left the dollar behind. The US dollar has been in hot water recently, especially since the market is generally uncertain on Trumps administration policies and how the newly-minted president plans to run the US economy. The market is constantly kept on its toes as Trump continues to act brash in spite of the initial euphoria during the US elections, where the market had hoped that Trumps election might be generally be good news for businesses around the world. However, the current administration might have to undergo a lot of work before finally regaining the markets confidence.
There are no major news releases from both the Canadian and the US economy, and as such, the USD/CAD pair is expected to experience more consolidation and ranging during todays session. Since the weakness of both currencies are apparently cancelling each other out, the currency pair is unable to make any significant progress and the bulls might have a hard time pushing the currency pair towards 1.3400 points and higher.
Todays trading session is expected to be very critical for the GBP/USD pair since UK is now awaiting for the release of the countrys SC ruling with regards to its eurozone membership, as well as the Brexit process, which is set to be released during todays session. The GBP/USD pair has increased in value over the past 24 hours as part of market anticipation, with the currency pair closing yesterdays session at over 1.2500 points after months of being unable to go over 1.2500 due to repeated pummeling from bears of the said currency. However, since yesterday was a generally good day for the sterling pound, the market is expecting that this currency pair would be able to reach 1.2700 or even 1.2800 in the short-term outlook for the GBP/USD pair.
The UK Supreme Court will be releasing its decision on whether the Article 50 will have to undergo scrutiny from the Parliament or otherwise, since the Article 50 is an essential factor on the carrying out of the Brexit process. The market is generally anticipating that the SC will be approving the Article 50 invocation, and if this does happen, then this will ensure that the whole of the Brexit process will be well-thought of, and this will ensure that equal distribution of ideas instead of the power becoming limited to select people in the government. This is expected to drive up the value of the GBP, but then there are also some risks that the Parliament approval might cause delays in the Brexit process since all views and ideas must be taken into consideration as part of the process.
There are no major news releases from the UK except for the SC ruling for the Brexit process, as well as from the US.
The EUR/USD pair continues to exhibit a strong trading streak as the USD continues to lose its value. The USD has recently been showing weakness and has been consistently dropping in value in spite of initial expectations that the USD will be increasing in value. The market is still unsure on how to approach this recent activity from the USD, although the Fed has already announced that it will be hiking its interest rates at least 2-3 times for the rest of 2017. This particular bit of news should have created an upward support for the US dollar and should be good news for the US economy as well, but then again the Trump administration has just come in, and in terms of fiscal, trade, economic, and particularly foreign policies, the international market is still uncertain on Trumps stance, and this is why a lot of investors are still somewhat hesitant to invest in the reserve currency.
As a result, the EUR/USD pair is now about to enter a very critical region of 1.0800-1.0840 points and the market will be monitoring the currency pairs movement within this range, especially if the currency pair will be undergoing a major correction or otherwise.
For todays trading session, Germany and France will be releasing their respective PMI data, while the UK will be releasing today the SC ruling with regards to the countrys EU membership. This particular bit of news is expected to affect the UK economy as a whole, and will ultimately have an indirect impact on the direction of the euro. As the market is expected to be subject to heightened volatility in the coming days, traders are advised to ensure tight stop losses for their trades.
The dollar softened on the back of D.Trumps inaugural speech coupled with the Bundesbanks report about high inflation. The Deutsche Bundesbank forecasted a 2% inflation for this month, this warning is mentioned on their recent monthly report. Moreover, the outlook is said to develop more than 2% or may even exceed the price stability of the ECB.
As the session opened yesterday, the EURUSD rallied and arrived near the 1.0750 region where resistance is found. While the 100-EMA stayed above the aforesaid level. A break below the candles bottom would show a continuous long-term bearish pressure in the market amid Monday trading.
Conversely, a close on top of the 100-EMA would trigger the buyers to make several attempts in approaching through the 1.0850 handle.
The support entered the 1.0640 region close to 10-day MA. Relative Strength Index (RSI) employed an upward trajectory. Likewise, MACD suggests an upward momentum.
Donald Trumps program for the economic stimulus lacks clarity which considered to be the reason for the softening of the US dollar. Moreover, the positive sentiment prevailed on the commodities, particularly on Copper by which demand had surged for the Australian dollar on Monday.
The AUDUSD is confined in the short-term ascending channel trading within its recent highs yesterday. The price was able to expand its buying momentum during the morning trades. The AUD pushed the 0.7550 level amid Asian hours and posted its daily high at the mark 0.7575.
The spot decreased eventually and turn back to 0.7500 handle.
As shown in the 1-hour chart, the price lead the 50-EMA downwards and test the 100-EMA, the entire moving averages headed higher. Resistance lies at 0.7600, support sits in the 0.7550 region.
The MACD histogram showed some weakness against the position of the buyers after it decreased. The RSI hovered around the overvalued territory near the neutral zone.
According to the 4-hour chart, technicals signaled an upward expansion. The first bullish target is probably the 0.7600 barrier. If this point were reached, there would be another extension through the 0.7650 mark.
The British currency was able to gain more strength on the back of the depreciation of dollar. The USD decreased subsequent to the inauguration speech of President Trump which presented unclear implications about his future arrangements.
Meanwhile, the sterling extended its gains on Friday and continued to trade in the green zone yesterday. The GBP/USD escaped from the 7-week descending channel on Friday. The price pushed the 1.2400 level during the Asian session and moved northbound amid the EU trades.
The upward momentum slowed down below the 1.2500 region and a renewed bout of selling interest brought an impact to the spot.
According to the 4-hour chart, the price leads the moving averages (50, 100 and 200 EMAs) upwards and hovered on top of it. The 100 and 50-EMAs resumed its ascending trend while the 200-EMA trail behind. Resistance touched 1.2500 level, the support entered 1.2400 area.
The MACD indicator signalled strength for the buyers as it continually grew. RSI stayed in the overvalued zone and pointed higher.
The Cable appears to be bullish at present. If the pair surpasses 1.2500, the next target will be the mark 1.2550.
The Australian dollar was not that affected by the final decision of the new president, Donald Trump, to draw back from the Trans-Pacific-Partnership on Monday. This could be because the price set into the market soon after the results of the U.S. Presidential election has been released months ago or simply because the investors are neutral and plays indifferent from the outcome.
Other than the TPP deal, Trump has also mentioned imposition of border tax for corporate businesses that becomes a threat to those who moved out of U.S. for production.
Another concern is the remarks of Steven Mnuchin to retaliate the currency manipulation and the strengthening of greenback that may affect the economy negatively. Most especially the short-term trading may be heavily influenced since the value of U.S. dollar is relative to the condition of U.S. economy and confidence of investors in America.
On the other hand, the Australian dollar appreciated in the midst of weaker U.S. dollar. The pair closed at .7583 with an increment of 0.0031 equivalent to 0.40%. This may persist for some to me and boosted for short-term with the current mindset of Trump. Trading activity on Monday demonstrates the goal of Trump to weaken the greenback which would in turn increase the competition in the U.S. market including both good and services. Hence, it can be postulated that a trade war may occur and the same time the traders already anticipate high volatility in the market for this year. This is highly possible for countries to want to go against the greenback.
As for major economic data, the latest quarterly Australian Consumer Inflation are soon to be released with Economists expecting figures of 0.7 percent headline inflation and 0.5 percent core inflation.
The USD/CAD pair dropped to its trading lows following uncertainties over the trade relations between US and Canada, as well as the increasing oil prices, especially since the oil inventory data is expected to decrease which will automatically translate to the effectiveness of the production cuts, thereby stopping the supply flow and ultimately increasing oil prices, which will then be good news for the Canadian economy.
The Trump administration, unlike the Obama administration, has been creating uncertainties and concerns for the market, especially since most of Trumps proposed policies are more injurious than beneficial. This has already been seen in the economy after Trump cancelled the Trans-Pacific Partnership and now has his eyes set on the NAFT agreement between US, Canada, and Mexico. If the NAFTA indeed does become cancelled, then this could be disastrous for the Canadian economy and could also adversely affect the US economy. However, the market is still hoping that the attention would be shifted to the trade relations between US and Mexico instead of the US and Canada trade relations. These economic risks, along with surging oil prices, has triggered a decrease in the value of the USD/CAD pair.
The USD/CAD pair is expected to undergo added volatility after the oil inventory data is released during todays session. The upward movement of the pair is expected to continue today unless the pair manages to cleanly break through 1.3000 points.
The international market has been awaiting with bated breath the results of the Supreme Court ruling of UKs eurozone membership. The SC eventually ruled that Theresa May and the UK government will have to pursue the approval of the Parliament before Article 50 can be invoked, but then the ruling did not seek for the approval of Ireland, Wales, and Scotland for Article 50. This bit of news was already expected by the market since the SC merely reiterated the previous ruling of the lower court.
While the ruling from the SC was generally good news for the market as well as for the sterling pound, a sell the fact, buy the rumor move was seen in the market yesterday and the GBP/USD pair plummeted through 1.2500 and even hit 1.2420 points after the SC ruling was released into the market. But the currency pair was able to recover from its losses and is now situated just below 1.2550 points, with the GBP/USD pair possibly moving further to 1.2700 and possibly even up to 1.2800 points. While this move might be good news for the sterling pound in the short term, its long term effects could induce additional pressure on the GBP in the medium term.
There are no major economic data scheduled to be released from the UK for todays session, but the US will be releasing its oil inventory data which could possibly increase the overall risk surrounding the markets as of present. The GBP/USD pair is expected to experience more consolidation for today with bullish undertones.
The EUR/USD pair encountered a hard-pressed resistance region during the previous trading session, with the pair merely consolidating just below this region instead of being able to break past through this barrier. However, the USD was able to get some rest as President Trump chose to keep quiet yesterday and this has caused the dollar to maintain its stance against other major currencies and has also contributed to the consolidating movement of the EUR/USD pair.
Since the market is obviously very jittery and kept on its toes as a lot of players are waiting for President Trumps next move, this just shows how the market is concerned about the Trump administrations next move, as majority of traders and investors do not know what to expect from Trump. The international stock market seems to have temporarily put aside the possible risks which come with the movements of the Trump administration, but the USD is now carrying the burden of these uncertainties. This is also the reason why the US dollar is still unable to make a significant leap in spite of the US economy looking generally positive and with the Fed hinting at possibly another interest rate hike in the next few months.
The German IFO business climate data is due to be released during todays session, with this particular piece of data expected to add up to the generally positive German economy. The oil inventory data from the US will be released today, and any decrease in this particular data should lend upward support for oil prices and increase market-related risks.
NZD/USD Technical Analysis: January 25, 2017
As the Asian session emerged, the bullish momentum appeared to be short-lived yesterday. The price failed to hold its gains and reversed down from the 0.7250 level. Sellers expanded their profits breaking the price through 0.7200 region amid the EU trades. The selling interest was unable to maintain its position upon reaching the region and endured price rejection upwards.
The NZD/USD is confined on top of the moving averages based on the 4-hour chart. The 100 and 50-EMA kept its bullish stance while 200-EMA was flat. Resistance touched 0.7250 mark, support entered 0.7200 handle.
The MACD tool still presented the same position as buyers strength continued to grow. The RSI settled close to the oversold readings, confirming another lower trend.
Meanwhile, the 0.7250 barrier is the next bullish target. In case, a return occurred towards 0.7150 there is a probable decline against the 0.7100 support.
The USD/CAD pair is currently bearing the majority of the downward pressure coming from the dollar weakness which was caused by the Trump administrations movement. The currency pair has already plummeted by 300 pips during the course of 2-3 days and is now trading dangerously close to 1.3000 points, a very critical region for the pair if the uptick for the USD/CAD continues to occur. The market is now closely monitoring the next move of the Trump administration, especially since President Trump is expected to scrap NAFTA next after recently making alterations to the TPP arrangement as well as to Obamacare.
Although any adjustments made to NAFTA might not have a significant impact on the Canadian economy, this is expected to largely affect the US economy, and could possibly cause global unrest as this could impact trade relations between a lot of countries and the market is expressing concerns on what might happen to other trade agreements as well. The CAD received support from the stability of oil prices which has incurred a bullish undertone. These occurrences have caused the crash of the USD/CAD pair during the past few days, but the market is expecting the USD to regain its strength in the coming sessions which could then help in putting upward pressure on the currency pair.
There are no major economic data coming from Canada today but the US will be releasing its unemployment claims data for today and if this comes out as positive, then this could help in supporting the USD and the USD/CAD pair could be prevented from hitting rock-bottom at 1.3000 points. Traders are advised to closely watch the pairs movement since any break beyond 1.3000 could possibly be a sign of changing trends in the pair.
The sterling pound has been consistently increasing in value after a period of constant downward pressure ever since the conclusion of the Brexit vote. From trading to just below 1.2000 points, the GBP/USD pair has now recovered and has reached just below 1.2700 points without any significant corrections during the past few weeks. This was partly due to the clearing up of the Brexit process, as the market does not like any kind of uncertainty, whether on a positive note or a negative note.
The initial confusion surrounding the Brexit process had previously put downward pressure on the movement of the sterling pound, but as Theresa May finally laid out her plans for the hard Brexit process last week including a wholly different kind of negotiations on the free tradezone, this has lended some much-needed support for the sterling pound. In addition, the UK Supreme Court has also made it clear that the Parliament must approve first before the invocation of Article 50, thereby ensuring stability during the entirety of the Brexit process. All these have erased any uncertainty on the Brexit process and has caused the GBP/USD to jump upwards and steadily go towards the 1.2700-1.2800 region.
UK will be releasing its Preliminary GDP data today and this particular bit of data is expected to carry out the recent string of positive economic readings for the region in spite of the pressure from the Brexit process. The GBP/USD pair could then propel its way towards 1.2700 and could possibly exceed this level which could then become a crucial point for the bears and bulls of this currency pair.
The EUR/USD pair exhibited ranging and consolidation movements within the range of its trading highs during the previous trading session, with the market already coming to terms with the fact that the Trump administration is indeed here to stay for the next four years and is already preparing for whatever Trump might be implementing in the days and months to come. This has helped the market make sense of Trumps movement in some way, and if it becomes evident that Trump might not be completely altering things, then the dollar could be in for some eventual increase in value.
The EURs movement has been largely dominated by the dollars waxing and waning, with the market now shifting its focus to the President and his next move instead of the Feds movements. This is why in spite of repeated comments from Fed officials that the central bank will be implementing 2-3 rate hikes this year, this has done nothing to lift up the value of the USD. In addition, the EUR/USD pair is also steadily moving towards the resistance-heavy area of 1.0800 points, and with the dollar strength coming back anytime soon, the currency pair might be subject to corrections and could possibly revert back to its previous lows of 1.0400 points.
The Eurogroup meetings will be held during todays sessions, with the meeting centering on geopolitical and economic concerns, but there are no major announcements that are expected to stem from this particular assembly. US will also be releasing its unemployment claims data for today, however the EUR/USD is expected to continue ranging and consolidating and will most likely spend the rest of the trading session at 1.0700-1.0800 points.
GBP/USD Technical Analysis: January 26, 2017
The UK CBI Industrial Trends Orders increased as the new year enters which provided decent support for the GBPUSD. Meanwhile, many investors weigh up to the remarks of Mark Carney. The GDP of the United Kingdom for the fourth quarter is highly anticipated by the market as traders expects for a modest decline.
The cable maintained a rangebound position during the morning trades on Wednesday. The price currently trades in a tight range near 1.2500. The renewed buying impetus pushed the pair through 1.2600 level succeeding the opening of London session. The spot resumed its development above the moving averages based on the 4-hour chart. The 50-EMA crossed over the 100-EMA upwards and both moving averages employ an ascending trend, while the 200-EMA headed downwards. Resistance touched 1.2600, support reached 1.2500 mark.
The MACD still sits on the same area which favored strength for the buyers. RSI consolidated in the overvalued zone confirming a new higher move.
The bearish outlook will be preserved in order to lead risks downwards to 1.2400 for the upcoming weeks. Moreover, the price sustained its bullish slope. The pair is bound to move closer to the 1.2700 range but the spot are compelled to take out 1.2600 first so as to renew the bullishness.
US President Trump plans to restore the two major oil pipelines, Keystone XL and Dakota Access, weighed on the Canadian currency but the loonie was able to recover in spite of the drop in oil prices.
The US dollar preserved its stance against the CAD. The sellers paused to consolidate their gains subsequent to the sharp sell-off. The price is confined on top of the 1.3120 level during the morning trades followed by a rejection in the Asian trades. The greens were pushed upwards by a renewed buying interests in the middle trading session of Europe.
Moreover, rate hike got failed and the downward pressure returned to the 1.3120 mark. The loonie lead the 50 and 100-EMAs downwards as stated in the 4-hour chart.
The USDCAD kept intact under the moving averages as the 100-EMA pointed downwards, 200 and 50-EMAs are neutral. Resistance is found at 1.3190, support settled around 1.3120.
The MACD pierced through the negative zone and if it kept its position, sellers will get the favor for further strengthening. RSI consolidated in the oversold territory.
The general outlook appeared to be bearish after the fall to the support area 1.3050 but the pair seems oversold. The possible 1.32 minor correction still have the tendency to emerge.
The AUD/USD declined on Wednesdays trading session. The price stayed giving enough support at 0.75 and below. Although, it was able to reverse forming a bullish candle and it seems that the uptrend will persist towards the 0.7750 level. Yet, signs of breakdown would not be good but it needs to align with the downtrend of the gold market. With a lot of noise present in the lower channel, traders should expect high volatility in the market.
The market continues to be actively traded during the London Trading session. The Short-Term Interest Rate Trading (STIRT) market seems to be surprised with all the speculations intervening the market. The near-term trading may be favorable for equities and commodity markets with chances for higher returns but not active for the currencies. Moreover, the outcome of trading in Dow index overnight with the retreat of copper from a 19-month high that capped the near-term drop and its oversupply. Relying on the surged of the price, the Aussie will continue to attract investor for the near-term trading while the downtrend of the greenback continues.
NZD/USD Technical Analysis: January 26, 2017
The NZD/USD pair slumped on Wednesdays trading session but recovered placed as a support. The Resistive level at 0.7350 is also coming strong that makes it an opportunity for short-term buyers. However, it may take some time to reach those levels while levels lower than the 0.72 mark also stands as supportive levels. This could affect the trading and become choppy but the bullish tone could persist in the short-term. For now, trading long term cannot be clearly imagined.
The inflation in New Zealand hike more than what was expected reaching the .7300 figure bringing tighter correlation between New Zealand and Australian CPI. Traders are cautious with the possibility of lower inflation for New Zealand as the results of yesterdays CPI was lower than expected. Although the pair rallied higher than the .7300 mark and placed steadily with 30 pips difference. The Reserve Bank of New Zealand moves in a dovish tone to control the strength of the currency which has obstructed the impetus of the pair.
The GBP/USD pair was able to regain its footing and erase all the losses it had incurred during the latter part of last week. Although the increase in the value of the sterling pound was mainly because of the actual pound strength and not because of any drop in the value of the USD, the movement of the GBP was largely influenced by the stance of the US dollar. The US dollar has been relatively weak today and this has caused the GBP to increase in value and trade just below 1.2600, where it could possibly increase further in value.
The drop in the dollars value was mostly due to Trumps policies, which did not sit well with majority of citizens as well as some members of the financial market. In addition, Trumps attempts to alter trade agreements has already concerned quite a number of government leaders and it has already been clear that Trumps recent movements are not to the best of interest of everyone involved in these issues. This has then prompted a drop in the USDs value, and has set out the ground for the recovery of the sterling pound.
There are no major news releases scheduled for today, although the US will be releasing a string of highly important economic data for this week. The GBP/USD pair is most likely to trade with a bullish tone for todays sessions.
The USD/CAD pair closed down the week on a much lower note as compared to the previous trading week after the Canadian dollar exhibited strength across the board and the USD weakened in value yet again even though it was able to recover during the latter part of the week. This particular recovery of the US dollar looks like it will be here for the long run, and this is why dollar bulls are putting added confidence to the performance of the US dollar in the next trading sessions. In addition, the Trump administration has already went about making changes and fulfilling its campaign promises, such as the shifts in Obamacare and the Mexican border wall, and the pulling out of US from trading agreements with Canada and other neighboring countries. This has created unrest in the market, and could open the doors for a possible trade war which is very bad news even for the US economy.
This has then prompted the USD/CAD pair to drop significantly in value from 1.3450 to 1.3000 points, but was saved by the sudden surge in the USDs value as the previous week came to a close. The Canadian dollar also received support from the resiliency of oil prices, which managed to stay put in spite of the recent increase in the value of the US dollar. Market players are expecting this uptick in the USD/CAD to continue and could possibly extend up to 1.4000if it manages to stay just above 1.3000 points.
The Canadian GDP will be released this week, and governor Poloz from the Bank of Canada will also be releasing a statement this week. On the other hand, US will be releasing a string of important economic data including the NFP, wage earnings, as well as the statement from the FOMC. These are all expected to induce volatility in the market, and traders should either exercise caution or wait for things to settle before trading with this currency pair.
The USD/JPY pair was subject to high volatility last week, but the price action of the currency pair was practically the same since the currency pair merely reflected the range during the past week. However, in spite of this marked stagnancy, the market was still able to post gains during the past week. The USD/JPY pair closed down the previous trading week at 115.047 points after increasing by 0.514 points or +0.45%.
For this week, the Bank of Japan is set to release its Monetary Policy statement, the BoJ, Policy Rate, and the BoJ Outlook Report. Investors are expecting that the Japanese central bank will be maintaining its current monetary policy and will be doing the same for its interest rates, which presently stands at -0.10%. In addition, the central bank would also likely say that its current outlook for the Japanese economy is positive and that it expects its national economy to continue its steady improvement.
Meanwhile, the Federal Reserve is also expected to maintain its current benchmark interest rate but could also leave out hints with regards to the timing of its interest rate hikes in the future. Market traders are anticipating that the Fed would release its opinions on President Trumps recent slew of executive decisions during his first week in office and what these executive orders mean for the central banks decisions in the future.
The US will also be releasing its Non-Farm Payrolls report this week and is expected to show that the US economy increased jobs by 170,000 for January, although unemployment rates remain stagnant at 4.7%. Average Hourly Earnings for US will also be released this week and is expected to have a reading of 0.3%.
The European currency slowed down followed by the improvement on the dollars stance. The euro were left flat-out due to the absence of the market-moving news in the calendar. The EUR resumed to move down smoothly overnight and break away from the near-term rising channel. The euro had traded mixed as the Asian trades opened and hovered in the tight ranges of 1.0650-1.0690.
The EURUSD is confined in the neutral position in the morning EU session and met renewed bids within 1.0700 level. It further rallied around the level, en route 1.0750 prior to the outset of NY hours.
According to the 4-hour chart, the price leads the 50-EMA lower and headed northwards together with the 100-EMa. The spot hovered on top of the 100 and 200-EMAs eventually. Resistance is seen at 1.0750, support hit 1.0700.
The MACD proceeded to the negative zone and if the histogram stayed in this area, the position of the sellers will improve. The RSI lies in the oversold territory near the neutral ground.
A close on top of the 1.0700 mark will produce renewed bullish indicator which is possible to advance towards 1.0750.
The sterling softened on the back of the demand growth for the greenbacks. The GBPUSD was able to recover few of its losses subsequent to the meeting between Trump and May. The US data showed some pessimism which further hit the pair higher.
The British currency lose its value against its U.S peer during the night trades on Thursday. The spot were removed from 1.2600 level and placed in 1.2500 region amid Asian session. The pound extend its losses during EU hours, en route 1.2500. However, the level stalled the sellers progress and kicked the spot higher. The price resumed its development on top of the moving averages as shown in the 4-hour chart while the 100 and 50-EMAs stirred upwards and the 200-EMA sits in the neutral position. Resistance touched 1.2600, support jump in the 1.2500 mark. The MACD histogram weakened which further slowed down buyers position. The RSI escaped from the overvalued territory and came in through the neutral zone.
The bullish outlook generally exist in the market while the pair got an opportunity to make recovery in case it surpassed 1.2600. A breakout within the 1.2600 handle would direct to 1.2700. Furthermore, the prevailing selling pressure could impact the spot and pushed below the mark 1.2500.
The American dollar was able to sustain a bid tone last Friday. Meanwhile, the markets highly anticipated for the further plans of Trump coupled with the GDP of the country for the fourth quarter. The NZDUSD kept intact in the ascending channel pattern on Friday. The price were pushed by the downward impetus toward its lower limit last 26th of January. Moreover, a recovery lasted overnight showed insignificant results. The European traders solely managed to drive the spot upwards
The pair was able to expand its recovery during the NA session. The price continuously sits on top of the moving averages according to the 4-hour chart. The 100 and 50-EMAs moved higher while 200-EMA is positioned in the neutral trend mentioned in the similar chart. Resistance entered 0.7300, support reached the 0.7250 region. The MACD indicator confirmed weak buyers position as it decreased steadily.
Bullish sentiment was likely to prevail for today. The short-term goal for the pair is 0.7311.
The AUD/USD pair closed lower at .7546 with an increase of 0.0014 or 10.78% on Friday since the release of economic data of Australian Consumer Inflation report that pulled down the U.S. dollar higher than what was expected in the last quarter in 2016. This could prompt the central bank to reduce its benchmark interest rate for this year.
There are no major Economic news from Australia to be released today but several data are scheduled to published from U.S. such as Core PCE Price Index, Personal spending, Personal Income, Pending Home Sales and Loan Officer survey later in the afternoon GMT time.
The main trend is heading upward in the daily chart but there is not enough momentum as the price reversed as it reached the .7608 level on Tuesday last week. However if the trade continues above the said level, it is possible for the upsurge to continue and establish .7511 as a new trading floor The trading range swayed between .7777 and .7159 levels with retracement levels from .7541 to .7468 area. The market extend across this range giving an upside tone with the retracement levels as support levels.
The near-term range lies within the .7159 to .7608 level. If the market reached the .7383 to .7330 area proceeding its reversal trend, this becomes the next floor target as it closes with a bearish tone.
The trading closed at 0.7546 on Friday and the next direction of the pair will depend on traders activity with Fibonacci level at 0.7541. If the current trend prolonged, this implies the strong stance of buyers leading the market. The followed uptrend with the possible resistance levels at .7568, .7588 with the last level to reach at .7598 before the highest level at .7608 mark. If it skips the .7608 level, the uptrend may continue towards the next target at .7639 level giving a bullish tone to the market.
However, if the price maintained lower than the .7608 level moving across the .7528 downtrend angle, indicating sellers dominating the market. It could go much lower towards the .7468 level. This could induce the market to jump towards the .7399 ad .7384 as the next support range. Overall, the price trend for this pair will depend on the market reaction to .7541 level to determine whether buyer or sellers will dominate the price for this day.
USD/CAD Technical Analysis: January 30, 2017
The USD/CAD pair declined in the week while testing the 1.30 level or lower for support. The former uptrend line continues to move offering strong resistance. Its support level is found at 1.3018 followed by a rebound towards the 1.3053 mark. This rebound may be a signal to consolidate a downtrend at 1.3387 level and could further go down towards the 1.2900level. If a break above the 1.3230 Resistance level, this finishes the decline of the pair.
For now, it is more favorable to trade in short-term instead of long-term trades. Traders should monitor the oil market as it has a big impact to the Canadian dollar which is not performing well while the traders are still uncertain of what to do next.
The Euro has recovered this morning trading amid the high risk and uncertainty in the market that has also affected the U.S. dollars. It seems that the current global condition reverses where that safe haven assets such as dollar and gold as seen as a go-to investment because of its stability but this is not happening. The greenback gives off high risk with market concerns on the changes in U.S. policies while yen and gold gain with risk off sentiment of the traders.
Change in U.S. administration following Trumps inauguration and its team looks into update of campaign promises such as modification of Obamacare, immigration rules in wholesalers and muslim ban and other migrants making it difficult for them to come back in the country attracted public controversy. The stand of the U.S. who is aiming for a renegotiation of NAFTA and other trade agreements, is significant in the global trading swaying the balance in trades where some leaders had dissatisfaction where this is heading. This has increased the uncertainty on what will happen in the next 4 years altering U.S. policies and influencing market sentiment that drags the dollar down while the pair gains from it.
With the recent Chinese New Year holiday, there is no new major economic news expected to be released today. Hence, the market is in consolidation while later on, market should expect high volatility with the release of economic data in the middle to later of the week. The U.S. dollar may continue to weaken for some time while the EUR/USD pair would remain in consolidation state with a tone of bullishness.
The Japanese yen inched higher as opposed to the US dollar as a result of a flight-to-safety trend across the market, which was triggered by investor reactions to a sudden drop in global equity markets. Meanwhile, stocks were sold off as a result of Donald Trumps immigration ban. The USD/JPY pair closed off the previous trading session at 113.778 after decreasing by -1.10% or 1.269 points.
A lot of investors have sought the protection of the Japanese yen after protectionism concerns arose due to the immigration ban since these could possibly have a negative effect on both exports and imports and could also create substantial risks for the economy. Towards the latter part of yesterdays session, the Japanese Household Spending data came in with a reading of 0.3%, exceeding market expectations of 0.8% and the previous reading of -1.5%. However, the unemployment rates for the country remain stagnant at 3.1%. Meanwhile, the Bank of Japan chose to maintain its current benchmark interest rates at -0.10%, a move that was generally anticipated by the majority of market players. The central bank also increased its GDP forecast to 1.4% as opposed to its past prediction of 1.0% back in October. In addition, the BoJ also stated that it is expecting an inflation surge of around 2% come the fiscal year 2018.
Interest rate differentials could have a positive effect on the USD/JPY pair since the central bank chose to maintain its interest rates while the Fed hinted at high-frequency rate hikes for 2017. In the short term, the USD/JPY could be driven by volatility coming from the equity markets. However, the dollar-yen relationship could possibly be influenced by the positive interest rate differentials.
The GBP/USD pairs activity has been very disappointing during the past 24 hours, which could be largely due to the fact that the market is nearing the end of the month. Towards the end of every month, the UK government is required to pay its membership fees to the European Union, and this usually amounts to 1 billion euros, and this usually induces volatility in the movement of the sterling pound. These monthly dues from the UK are usually masked by the banks which process these transactions, but these show more often than not, and this contributes to the drop in the value of the GBP.
Market analysts have constantly saying that the direction of the sterling pound would most likely be influenced by the Brexit process, and this has been already seen with the increased pressure on the GBP/USD pair. This particular pressure on the pound is expected to continue until such time that the Brexit process is finally completed, and this is also the reason why the pound climbed up to trading highs near 1.2700 but eventually corrected and is now expected to hit 1.2300 points in the short term. The GBP will remain to be one of the weaker currencies, and although there might be a few intermittent reversions at the expense of the dollar weakness, these are not expected to follow through in the long term.
There are no major news releases from the UK set to be released today but the US will be releasing its consumer confidence data. Month end flows are expected to come in today as this is the last day of the month, and traders are advised to take the necessary precautions to protect themselves from the onslaught of additional volatility today.
The EUR/USD pair was subject to a lot of volatility during the past trading sessions. The currency pair initially began yesterdays session on a positive note, but eventually dropped in value as the USD weakened across the board and negative concerns and uncertainties in the international economy increased, which then adversely affected all currencies including the EUR/USD pair. The currency pair has since then moved towards 1.0620 points before slightly recovering during the North American trading session and climbed up back to 1.0700 points.
Trumps immigration ban has not sat well with a lot of world leaders, and this has rattled the entirety of the financial market, with a lot of market players losing confidence over the US dollar. Trumps newly-laid out economic and foreign policies is also a cause for concern in the market, and the effects of these uncertainties are starting be felt in the markets as well. The EUR/USD could possibly continue its consolidation for today since there are expected month end flows for today. The market is also expecting to see some position adjustments for this year.
For todays trading session, ECB governor Mario Draghi will be releasing a statement during the London session, but this is not expected to lend that much volatility into the market as Draghi very rarely gives out anything substantial with regards to the present economic status of the European Union in his speeches.
Many investors await for the release of GDP scheduled tomorrow. Meanwhile, the decline in oil prices shocked the commodity currencies including the Canadian dollar. Moreover, the terrorist attack on the Quebec mosque last Sunday further made a slight impact against the Loonie.
Meanwhile, the greens resumed its short-term bullish signal on Monday and it resumed to climb higher subsequent to a short period of consolidation amid Asian hours. The USDCAD strengthen during the earlier trades in Europe and advance to 1.3190. But the upside impetus stalled at 1.3158 level where the major stayed prior to the opening of NA session.
The spot is confined under the moving averages as indicated in the 4-hour chart. The 50-EMA made an upward crossover to the 100-EMA. The 50 and 200 EMA are neutral while 100-EMA en route lower. Resistance entered 1.3190 level, support plunge in at 1.3120.
The MACD increased which signaled sluggish stance for sellers. RSI lies around the neutral territory.
The 1.3120 support region paid attention by the market. A gap within this region would open an opportunity for the 1.3090 range, lowering to 1.3050.
The UK calendar seems empty on Monday as the markets fixate on the Bank of England on Wednesday.
The GBPUSD break higher as the new week starts. The spot plunge towards 1.2600 as the price found a decent hurdle. The Cable rebounded through the barrier and turned lower in the opening which closed the bullish gap. The spot kept pressured around 1.2500 amid EU hours, however, did not make it regain the level. The sterling pound stayed overhead of the moving averages as shown in the 4-hour chart. Moreover, the 100-EMA crossed above the 200-EMA. The 100 and 50-EMAs ployed northbound while the 200-EMA appeared to be neutral-bearish. Resistance touched 1.2600 level, support sits in 1.2500 handle.
The MACD histogram fell off which signaled weak position against the buyers. The RSI indicator departed from the overvalued area and pointed southbound.
The technicals prefer a downside movement. If the 1.2500 level gapped lower it will direct the cable pair to 1.2400.
The single European currency takes no attention to the upbeat of Spains GDP and it continued to weaken on Monday. The markets await for the impending meeting of the ECB while there are speculations the Consumer Price Index would be in the green.
The EURUSD break upwards in the daily open yesterday. The price reaches the region 1.0700 up to 1.0740 amid Asian hours.
The negative stance of the dollar was reversed as the Asian session took place. Bullish investors were unable to resume their gains as they decided to give way to the sellers. While the bears managed to lead the spot towards 1.0700. Before the opening of the New York trades, a renewed selling interest developed.
The pair made an even break downwards and touched 1.0650 level. The price pushed the 50-EMA lower while the 100-EMA was tested as indicated in the 4-hour chart during the middle session of Europe. The 100 and 50-EMA directed upwards, 200-EMA is flat. Resistance is mentioned at 1.0700 region, support is shown at 1.0650 handle.
The MACD lies at the middle point. Should the indicator arrive in the positive zone will indicate added strength for the buyers, however, an entry through the negative territory will signal sellers ability to dominate the market. RSI comes in the neutral zone, en route southwards.
It is recommended for the 1.0750 resistance to test again prior to the pairs rally as it approaches 1.8000 range. But the spot might change and it becomes bearish for this moment. If the price focuses on the mark below 1.0650, the 1.0550 level is possible to open.
The USD/CAD pair was subject to a lot of pressure during the past trading sessions, majority of this pressure caused by Trumps implementing policies on trade, immigration, and currencies which has led to a large of number of market players into thinking that Trumps onslaught of policies might soon lead to a trade and currency war against other major economies.
Trumps movements has not boded well for the US dollar after the dollar weakened significantly across the board and has caused the USD/CAD to experience a slight reversion at 1.3100 as a result of highly positive employment readings for the region. However, this bounce in the pair diffused quickly as the announcement from the FOMC was unable to induce some positivity within the market, causing a USD sell-off and has caused the USD/CAD to retreat back to 1.3000 and is currently trading weakly just under this particular region. The areas of 1.2960 and 1.3000 has recently been tagged as a highly critical support region and the currency pair might experience a major trend change if the pair manages to break cleanly through this region, and with the pair nearing this range, traders are advised to closely watch the subsequent movements of the currency pair.
There are no major economic readings to be released from both Canada and US for today, although the US will be releasing its unemployment claims data. The weakness in the dollar is expected to continue for today and could cause the USD/CAD to continuously consolidate while the market waits for the readings of the NFP report which is scheduled to be released tomorrow.
The EUR/USD pairs strong stance for the whole month of January was mostly due to dollar weakness as a result of Trumps recent policies and brash sentiments which has affected the countrys economy. The market initially had a positive outlook for the US dollar after the Fed hinted at additional rate hikes in the coming months, however they failed to consider the Trump administrations ability to have a major effect on the world economy.
Immediately after Donald Trump assumed office, his administration already made on good on his campaign policies such as building a Mexican border wall and implementing an immigration ban in the US, which has sparked outrage among several world leaders and US citizens. His team also made major changes in Obamacare and has also proceeded to ban immigrants from certain Muslim countries. This has caused widespread concern in the market and has led to dollar sell-offs and has enabled the EUR/USD pair to close down the month of January near the critical resistance barrier of 1.0800 points.
For the month of February, there is an expected onslaught of major economic data to be released which includes the FOMC minutes meeting and the NFP data from the US, but the market is most likely to put more emphasis on Trumps governance and his future implementing policies. The euro might eventually crack and plummet once the dollar regains its footing and starts going back up, with the euro possibly returning to its monthly lows last December.
The GBP/USD pair had a generally good run for January in spite of the fact that the Trump administration has begun to take its reins in the US economy and started implementing policies which has adversely affected the market and the international economy as well. This has then resulted to a major sell-off in the USD which has helped in boosting the value of the GBP/USD pair. This particular currency pair is also the only pair which has increased in value due to the pound strength, making it very attractive for the pound bulls.
Theresa May has also finally clarified her stance and point of action for the Brexit process and has also stated that the UK will be exiting completely from the Eurozone in order to establish a completely different trade relationship with the region. In addition, the SC has also ruled that the invocation of the Article 50 must first undergo deliberation and approval by the Parliament excluding Scotland, Wales, and Ireland, which lended support for the currency pair and induced it to climb up to 1.2650 points.
For the month of February, market players will be mainly focusing on the movement of the USD as the Trump administration implement more policies. But this does not mean that the market will be focusing less on Brexit, since the UK government will finally be carrying out its plans for the nation. But there is still a major sell-off expected in the GBP/USD pair since there is still the lingering Brexit process in spite of the highly positive economic data coming from the US.
The Bank of New Zealand disclosed a mixed data as of yesterday. Meanwhile, the Jobless Rate came in negative. The Employment Change matched the expectations and the Participation Rate increased. The bulls continued to handle the market. The NZD continued to reverse its Tuesdays low seen at 0.7250 and made a minor reversal in the mid-EU session. The spot nearly touched 0.7300 upon the easing of buying pressure. The price rebounded in the 100-EMA shown in the 1-hour chart. The spot is sandwiched between the 50 and 100-EMAS. The moving averages preserved its bullishness mentioned in the same chart.
Resistance is at 0.7300, support is at 0.7250 range. The MACD is trading on the upside. The RSI lies around the neutral territory. According to the 4-hour chart, a bullish sentiment dominated the market. A break on top of 0.7300 would suggests an increase through 0.7350.
The Manufacturing PMI of the United Kingdom met its projected result where the British currency got some support. The sterling successfully removes its losses yesterday. The bullish trend currently reigns over the market.
The buyers found a hurdle around the 1.2600 level and retreated amid Asian hours. The GBP/USD keep moving closer to 1.2600 region prior to the London opening. The buyers were able to push the barrier throughout the middle session of the European hours and resumed its bullishness eventually. The Cable remain to develop on top of the moving averages indicated in the 4-hour chart. The 100-EMA cross the 200-EMA in an up direction. The 100 and 50-EMAs preserved their bullish pattern while 200-EMA kept a bearish-neutral stance. Resistance touched 1.2700, support lies at 1.2600.
The MACD histogram is situated in the centerline. If the indicator approaches the negative zone, it will imply added strength for the sellers while an entry towards the positive territory will signal buyers ability to manage the market in general. RSI proceeds in the overvalued area.
The pair is possible to move near the 1.2700 mark .
The American dollar remained in the pressured area on the back of the remarks made by the trade advisor of D.Trump, accusing the countries China, Germany and Japan about exploitation over undervalued currencies.
Moreover, the single European currency obtained support from the positive figures of inflation within the euro region. The investors currently awaits for the Fed meeting.
The ascending trend of EURUSD remained unchanged on Wednesday. The euro kept intact versus its U.S rival following the rally during the morning trades on Tuesday. The buyers have consolidated their gains as it grasp the spot in the flat trend under the level 1.0800. The price pushed the 50-EMA towards a higher point as seen in the 4-hour chart. The spot is confined overhead the moving averages. The 50 and 100-EMAs preserved a bullish stance while 200-EMA was in the flat lining. Resistance approached 1.0800, support hit 1.0750 mark.
The MACD increased which signaled buyers strength. RSI stayed in the overvalued territory after it left the neutral zone.
The bulls were able to lead the overall mark. We will impose a buy order in case the pair made a breakout near the 1.8000 resistance level. A close on top of the barrier will generate gain through 1.07500. Furthermore, the hawkish comments of Yellen could possibly bring back the sellers to the market. The most possible scenario is a dipped on the lower point of 1.0750.
The GBP/JPY pair broke higher than the Tuesday candle on Wednesday's trading session. This indicates a bullish tone for the pair after breaking above the hammer pattern on Tuesday implying for the price to move higher while a strong resistance is found at 145 handle. Hence, it is possible for the price to fall which would be a buying opportunity in the short-term charts. If the price breaks higher than the current psychological level, the price could further go up towards the 148 handle. On the other hand, it may not be favorable for selling the pair since the 140 level sits as a support level.
The greenback surged against loonies on Wednesday's trading session as the price hovers looking for psychological levels. If the price was able to break higher than the range for the day, the next price could reach to 1.32 handle. However, a breakdown lower than the 1.30 level is not a good sign moreover, if the price breaks even lower than the Tuesday range. Traders should monitor the oil market as it has an inverse correlation for the pair and will have an impact to the Canadian dollar.