Daily Analysis

HFblogNews · March 5, 2015

Date : 5th March 2015

EURUSD BROKE SUPPORT AHEAD OF ECB MEETING.

I said in my previous analysis that the shooting star candle indicated that the price will stay in the downtrend and concluded that the support levels are more likely broken and resistance levels honoured. The intraday move I hoped to see did not materialize and EURUSD kept on creeping gradually lower until the support was broken. This was another one of those situations where the market did not give us the high probability entry level I was hoping to have. At the same time I should emphasize that trading against the trend (buying against a support in a downtrend) is not a high probability trade. That is why the emphasis in my analysis was on finding short entries against resistance levels after a possible rally. Now that the support is broken the game has obviously not changed at all. Selling rallies still is the high probability trade in this market.

Now that the price has moved below the 1.1098 support level it has changed its role and become a resistance. The next potential support level in the weekly chart is at 1.0765 and could work as a target for short trades for those looking to trade the weekly downtrend. Stochastics stays in the oversold zone even though there is some divergence in the indicator due the recent sideways move. The ECB comes out today with the latest rate decision but no change is expected. There might be some details revealed on the 1.1 tr EUR QE plan though.

EURUSD, Daily

Since my last analysis EURUSD moved sideways for three days before dropping below the 1.1098 support. This is a good example of when a time based exit should be applied by those trading against a support level. I said earlier that trading against the trend is not a high probability game but there are always aggressive traders that hope that there will be an exception to the rule and market shoots higher against the trend. These traders should be even more cautious if there is no positive reaction and the price keeps on creating lower daily highs. This is obviously a sign of market being weak and any long ideas should be scrapped. We don’t have to fight against the market. Rather we seek opportunities to agree with it.

Currently price is reacting higher from the 61.8% Fibonacci extension level while the 261.8% Fibonacci extension level coincides with the 1.0765 support level and therefore adds to its significance. The resistance levels above are the 1.1098 (previous weekly support) and the proximity of 1.12 level with the 100% extension level. Price is oversold in terms of Stochastics oscillator which suggests that we might get an opportunity to sell the resistance levels.

EURUSD, 60 min

Price is trending lower in a relatively narrow regression channel and is at the time of writing reacting lower from a minor resistance level at 1.1060, which is also a pivot low in 240 min chart. The other resistance levels are 1.1152 and the zone from 1.1096 to 1.1112 that coincides with the upper Bollinger Bands.

Conclusion:

Market is still trending lower with resistance levels above. I am therefore still short oriented and look for lower time frame timing signals at resistance levels with a target at 1.0765. ECB rates decision is not expected to move the markets but commentary on the QE program could cause additional volatility. This emphasizes the need to follow the market action at the resistance levels and trade only the high probability setups.

Join me on Live Analysis Webinar on Tuesday 10th of March at 12:30 pm GMT. Register HERE for FREE and as usual it is better to log in early to get your seat!

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 6, 2015

Date : 6th March 2015

S&P MOVING SIDEWAYS ABOVE THE DEC 2014 HIGH.

I suggested in my previous S&P 500 analysis that the market could be correcting lower. This was based on both technical and sector analysis. On February 25th I wrote: over the last six trading days the money flows have been once again favouring the Utilities and Health Care sectors over all the other sectors, while Energy and Financials have lagged the most. All this put together indicates that we could see the S&P 500 slowing down and possibly correcting lower in the course of the next few trading days. Index was trading at 2011.25 points at the time of my analysis and is trading at the time of writing at 2098.75 (-87 points).

Today’s an NFP Friday and the markets are likely to be in a waiting mode as the unemployment readings are important indicators for the Fed in deciding the timing of the first rate hike. Consensus expectation is 240K new jobs and should the number deviate strongly to the downside it’d be likely that the Fed would be more patient and delay the start of the rate hikes. Another important data point is the Average Hourly Earnings which will give an indication on the ability of consumers to consume. The Nonfarm Payrolls, Average Hourly Earnings, Labour Force Participation Rate and Unemployment Rate for the month of February are published today at 13:30 GMT. For other economic releases, see the HotForex Economic Calendar here.

The last two weekly bars have been narrow bodied Dojis. This indicates lack of demand and increases probabilities that this market will correct lower. As there has been no upside momentum over the last two weeks, Stochastics is overbought and turning lower. In addition, the upper Bollinger Bands are near and have been limiting upside. Support and resistance levels in weekly picture are: 2062.50, 2088.75 and 2117.75.

S&P 500, Daily

After wedging a bit at the time of my previous analysis S&P 500 e-mini future (ES) moved out of the rising regression channel. Price has been supported by the pivot high at 2088.75 and 23.6% Fibonacci level with a new resistance at the latest high (2117.75). Support at 2062.50 coincides with the lower Bollinger Bands and the 38.2% Fibonacci retracement. Should ES correct further the next important support level is 2020.50. The fact that price has been reacting higher from the proximity of 2088.75 level in suggests that this level is seen as an important support.

S&P 500, 240 min

Index futures have attracted buyers at 2085 area but the resistance from both the descending trendline and the previous support at 2101 level have this far blocked the moves higher. At the time of writing there isn’t much momentum to either direction as market waits for the NFP release but the moves from 2085 have been strong (hammer candles). This suggest there will be buyers at this level today. Should this level be broken the next support level at 2062.50 coincides roughly with the 1.618 Fibonacci extension level. It is also a former resistance which adds to the significance of this level.

Conclusion:

In the longer term picture US stock market is now fairly overbought and the last two weeks’ weekly narrow body candles indicate that there is not much willingness to pay higher prices for equities but no strong need to sell off either. At the same time technology, the heaviest sector in the S&P 500 index is close to channel top and Apple the heaviest weighted stock in this sector looks like it could correct lower after a bearish weekly candle last week. Even if this correction takes place I still believe this market can move higher and therefore look for buying opportunities at support levels.

Technicals and macro view are giving a slightly mixed message: if the employment numbers are weak the Fed is likely to start rate hikes later which would be good for the stock market. However, at the same time strong employment numbers would indicate an improving economy, which again is a reason to stay long in Stocks. Market reactions to today’s NFP release are therefore an important indicator of things to come in the near future. If market finds support either at 2085 or 2062.50 and reacts higher with good momentum (that takes ES into new highs) the technical picture stays positive and supports the long term bullish view.

In regards to short term trading ideas I am looking for minor time frame reversal signals at the above mentioned support and resistance levels once the employment numbers are released and the market is likely to have some volatility again. Market is not likely to move strongly before the employment release later on today. Should there be no strong deviation from the consensus expectation the nearest technical levels will be honoured but higher deviation from expectations will be translated into stronger whipsaws in price. If the latter is the case, then momentum reversal traders should be looking to trade levels further away from the current price.

Join me on Live Analysis Webinar on Tuesday 10th of March at 12:30 pm GMT. Register HERE for FREE and as usual it is better to log in early to get your seat!

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

hotforex · March 6, 2015

S&P Moving Sideways Above The Dec 2014 High - S&P Moving Sideways Above The Dec 2014 High | HotForex Analysis

I suggested in my previous S&P 500 analysis S&P 500 in new all time highs | HotForex Analysis that the market could be correcting lower. This was based on both technical and sector analysis. On February 25th I wrote: over the last six trading days the money flows have been once again favouring the Utilities and Health Care sectors over all the other sectors, while Energy and Financials have lagged the most. All this put together indicates that we could see the S&P 500 slowing down and possibly correcting lower in the course of the next few trading days. Index was trading at 2011.25 points at the time of my analysis and is trading at the time of writing at 2098.75 (-87 points).

Today’s an NFP Friday and the markets are likely to be in a waiting mode as the unemployment readings are important indicators for the Fed in deciding the timing of the first rate hike. Consensus expectation is 240K new jobs and should the number deviate strongly to the downside it’d be likely that the Fed would be more patient and delay the start of the rate hikes. Another important data point is the Average Hourly Earnings which will give an indication on the ability of consumers to consume. The Nonfarm Payrolls, Average Hourly Earnings, Labour Force Participation Rate and Unemployment Rate for the month of February are published today at 13:30 GMT. For other economic releases, see the HotForex Economic Calendar here.https://www.hotforex.com/en/trading-tools/economic-calendar.html

The last two weekly bars have been narrow bodied Dojis. This indicates lack of demand and increases probabilities that this market will correct lower. As there has been no upside momentum over the last two weeks, Stochastics is overbought and turning lower. In addition, the upper Bollinger Bands are near and have been limiting upside. Support and resistance levels in weekly picture are: 2062.50, 2088.75 and 2117.75.

S&P 500, Daily

After wedging a bit at the time of my previous analysis S&P 500 e-mini future (ES) moved out of the rising regression channel. Price has been supported by the pivot high at 2088.75 and 23.6% Fibonacci level with a new resistance at the latest high (2117.75). Support at 2062.50 coincides with the lower Bollinger Bands and the 38.2% Fibonacci retracement. Should ES correct further the next important support level is 2020.50. The fact that price has been reacting higher from the proximity of 2088.75 level in suggests that this level is seen as an important support.

S&P 500, 240 min

Index futures have attracted buyers at 2085 area but the resistance from both the descending trendline and the previous support at 2101 level have this far blocked the moves higher. At the time of writing there isn’t much momentum to either direction as market waits for the NFP release but the moves from 2085 have been strong (hammer candles). This suggest there will be buyers at this level today. Should this level be broken the next support level at 2062.50 coincides roughly with the 1.618 Fibonacci extension level. It is also a former resistance which adds to the significance of this level.

Conclusion:

In the longer term picture US stock market is now fairly overbought and the last two weeks’ weekly narrow body candles indicate that there is not much willingness to pay higher prices for equities but no strong need to sell off either. At the same time technology, the heaviest sector in the S&P 500 index is close to channel top and Apple the heaviest weighted stock in this sector looks like it could correct lower after a bearish weekly candle last week. Even if this correction takes place I still believe this market can move higher and therefore look for buying opportunities at support levels.

Technicals and macro view are giving a slightly mixed message: if the employment numbers are weak the Fed is likely to start rate hikes later which would be good for the stock market. However, at the same time strong employment numbers would indicate an improving economy, which again is a reason to stay long in Stocks. Market reactions to today’s NFP release are therefore an important indicator of things to come in the near future. If market finds support either at 2085 or 2062.50 and reacts higher with good momentum (that takes ES into new highs) the technical picture stays positive and supports the long term bullish view.

In regards to short term trading ideas I am looking for minor time frame reversal signals at the above mentioned support and resistance levels once the employment numbers are released and the market is likely to have some volatility again. Market is not likely to move strongly before the employment release later on today. Should there be no strong deviation from the consensus expectation the nearest technical levels will be honoured but higher deviation from expectations will be translated into stronger whipsaws in price. If the latter is the case, then momentum reversal traders should be looking to trade levels further away from the current price.

Join me on Live Analysis Webinar on Tuesday 10th of March at 12:30 pm GMT. Register HERE for FREE and as usual it is better to log in early to get your seat! https://www.hotforex.com/en/trading-tools/trading-webinars.html

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 9, 2015

Date : 9th March 2015

GBPUSD HIT THE TARGET AND RETURNED TO RECENT LOWS.

In my previous analysis in GBPUSD from February 6th I took a view that with such a show of strength as we had seen in the market the only logical conclusion was to look for buying opportunities until there was price action based evidence to the contrary. Retracements to support levels should be monitored for momentum reversal signals. I pointed to 1.5487 to 1.5541 as a target area for successful swing entries. The pair overshoot the area by 11 pips before it turned lower again and formed a weekly shooting star candle providing the price action based evidence to switch the bias from long to short. It has now reached levels that are a potential buy level.

After Friday’s upsurge in the US Dollar index (caused by a surprisingly positive NFP reading) GBPUSD price has moved down to levels where it started its up move in the beginning of February. This area coincides with the lower weekly Bollinger Bands and higher end of the downward regression channel. RSI (7) is diverging suggesting bullishness at current levels. This combination of technical factors has caused a move higher today confirming that buyers are still interested to bet for Sterling at these levels. This price action looks very much like a bottoming process and the fact it takes place in weekly time frame adds to its significance. With relatively strong economic output and well developing job market the UK is at the moment one of the strongest economies globally and we could see a rate hike in the latter half of this year. This is reflected in the GBPUSD. We will have more comments on the UK economy tomorrow as Bank of England’s Governor Mark Carney will speak at 14:35 GMT.

GBPUSD, Daily

In the daily chart GBPUSD moved deep below the lower Bollinger Bands suggesting the price was very much oversold on Friday evening. The Stochastics and RSI confirmed the idea and are now beginning to point higher. In the daily time frame this market is now ranging sideways and we should therefore look for trading opportunities at the edges of the range. The lower end of the range obviously is where we look for buy opportunities while the upper end of the range at or close to the February high can work as an area for short term long trade exits or short entries (should the price action so indicate). The 1.5036 is a high for a pivot candle at the bottom of the range and therefore points to the region of potential support. This level has already supported price in the beginning of February and seems to attract buyers now as well. The previous support at 1.5220 is now likely a resistance area.

GBPUSD, 240 min

Four hour chart shows how Friday’s move lower was an overshoot as price extended from the trend defined by the regression channel. Now price has reacted higher from 1.5036 support and retraced back to the channel bottom where it is showing signs of weakness. The 0.382 Fibonacci level coincides with the 1.5220 resistance while the 0.618 level is at same levels with a former minor support (now potentially a resistance) and the upper Bollinger Bands.

Conclusion:

Even though the DXY is moving into new highs GBPUSD is still above the January lows after it moved above more than 12% from the January lows to February highs. Weekly chart is telling to longer term position traders that this market is possibly in a bottoming process as the price has moved out of the downward sloping trend channel, moved past four weekly highs and is now finding support just above the recent support area. Such an increase in volatility is usually a sign of a trend change. Shorter term traders could benefit from the longer term price action by trading the swings between the range edges using the support and resistance levels provided above.

Join me on Live Analysis Webinar on Tuesday 10th of March at 12:30 pm GMT. Register HERE for FREE and as usual it is better to log in early to get your seat!

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 11, 2015

Date : 11th March 2015

EURGBP SETUPS HAVE MADE HUNDREDS OF PIPS.

We got it right again in EURGBP. The pair rallied to a resistance level I gave in my last analysis and has then sold off heavily. My view on March 2nd EURGBP analysis was that out of major EUR crosses, it is the EURGBP that is the weakest and therefore makes it an ideal market to sell the rallies. I wrote then that the zone from 0.7300 to 0.7314 is an area we should be looking for momentum reversal signals as the channel midline and the upper Bollinger Bands coincide with the zone. EURGBP rose to 0.7301 on that day and has since dropped over 200 pips. We have now had two very good sell signals in EURGBP lately. The first sell signal as per my analysis came at just below 0.7596 and now the other in proximity of 0.7301. My analysis and the signals that I teach in my webinars have made several hundred pips in EURGBP for our traders. If you would like to learn how to catch moves like this you are welcome to join me to free webinars here.

As the EURGBP is basically collapsing at the time of writing the weekly picture does not provide us with a lot to analyse. With trend lower indicators are oversold and price is hugging the lower Bollinger Bands. The nearest weekly support and resistance levels are 0.7022 a former resistance level from 2006 and 2007 and the last week’s low at 0.7183.

EURGBP, Daily

Price has extended below the regression channel and has for the first time since January 26th closed outside the lower Bollinger Bands. This suggests that the trend has moved too far too quickly. This increases probabilities for a corrective move against the prevailing trend over the coming few days.

EURGBP, 240 min

EURGBP trend is extended in 4h chart as well. In case there will be a move against the trend over the coming few days potential resistance levels that could turn price lower again are 0.7130 and 0.7180. The lower level is clearly a minor resistance level as it is a spot where price tried to hold the channel bottom. This caused a sideways move visible in the 60 min chart and could act as a resistance should the market be weak.

Conclusion:

As long as the market keeps on moving lower and there is no price based evidence to the contrary there is no hurry to close the short trades. Exception to this would be price hitting the 0.7022 support level which could well bounce the price higher and therefore is a logical target level. Price is in a downtrend and we should be looking to sell rallies as long as the approach works. However, once the 0.7022 target is hit the pair is at a major consolidation level and selling rallies might get trickier. Currently I am looking at 0.7130 and 0.7180 as potential shorting levels in case there is a rally higher and 0.7022 area as a target for short trades.

Join me on Live Analysis Webinar on Tuesday 17th of March at 12:30 pm GMT. Register HERE for FREE and as usual it is better to log in early to get your seat!

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

hotforex · March 11, 2015

EURGBP Setups Have Made Hundreds of Pips - EURGBP Setups Have Made Hundreds of Pips | HotForex Analysis

We got it right again in EURGBP. The pair rallied to a resistance level I gave in my last analysis and has then sold off heavily. My view on March 2nd EURGBP analysis was that out of major EUR crosses, it is the EURGBP that is the weakest and therefore makes it an ideal market to sell the rallies. I wrote then that the zone from 0.7300 to 0.7314 is an area we should be looking for momentum reversal signals as the channel midline and the upper Bollinger Bands coincide with the zone. EURGBP rose to 0.7301 on that day and has since dropped over 200 pips. We have now had two very good sell signals in EURGBP lately. The first sell signal as per my analysis came at just below 0.7596 and now the other in proximity of 0.7301. My analysis and the signals that I teach in my webinars have made several hundred pips in EURGBP for our traders. If you would like to learn how to catch moves like this you are welcome to join me to free webinars here.https://www.hotforex.com/en/landing-pages/hf-webinars.html?id=118

As the EURGBP is basically collapsing at the time of writing the weekly picture does not provide us with a lot to analyse. With trend lower indicators are oversold and price is hugging the lower Bollinger Bands. The nearest weekly support and resistance levels are 0.7022 a former resistance level from 2006 and 2007 and the last week’s low at 0.7183.

EURGBP, Daily

Price has extended below the regression channel and has for the first time since January 26th closed outside the lower Bollinger Bands. This suggests that the trend has moved too far too quickly. This increases probabilities for a corrective move against the prevailing trend over the coming few days.

EURGBP, 240 min

EURGBP trend is extended in 4h chart as well. In case there will be a move against the trend over the coming few days potential resistance levels that could turn price lower again are 0.7130 and 0.7180. The lower level is clearly a minor resistance level as it is a spot where price tried to hold the channel bottom. This caused a sideways move visible in the 60 min chart and could act as a resistance should the market be weak.

Conclusion

As long as the market keeps on moving lower and there is no price based evidence to the contrary there is no hurry to close the short trades. Exception to this would be price hitting the 0.7022 support level which could well bounce the price higher and therefore is a logical target level. Price is in a downtrend and we should be looking to sell rallies as long as the approach works. However, once the 0.7022 target is hit the pair is at a major consolidation level and selling rallies might get trickier. Currently I am looking at 0.7130 and 0.7180 as potential shorting levels in case there is a rally higher and 0.7022 area as a target for short trades.

Join me on Free Webinar on Tuesday 17th of March at 12:30 pm GMT. I will show you live how to analyse the markets and look for setups for high probability trades. Register HERE https://www.hotforex.com/en/trading-tools/trading-webinars.html for FREE and as usual it is better to log in early to get your seat!

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 13, 2015

Date : 13th March 2015

CADJPY TRADING IN A RANGE AFTER A SHOOTING STAR CANDLE.

CADJPY has weakened substantially since November last year and has over the last weeks bounced higher from a support at 91.78. The support is loosely defined by the lower Bollinger Bands and a pivot candle from March 2014. Last week price reacted lower from a weekly low creating a shooting star candle and confirming a resistance level at 96.74. A couple of weeks ago the pair bounced from 94.17 forming a support level.

CADJPY, Daily

There was a shooting star last week in the daily chart as well. CADJPY has since then moved sideways between resistance at 96.74 and a rising trendline. The resistance coincides roughly with 38.2% Fibonacci level (drawn from December 2014 high to the January 2015 low) and upper Bollinger Bands. Bollinger Bands are narrowing which indicates that the pair is nearing a breakout but to which direction? The last two days indecision is clearly visible in the chart. Stochastic Oscillator is close to being oversold and is about to cross over its signal line. This together with the rising trendline encourages the bulls but the above shooting stars and resistance that are relatively close dampens the enthusiasm.

CADJPY, 240 min

The pair has been making lower highs and breaking support levels since the move to 96.74 was rejected. Fluctuations created a triangle that was resolved to the downside and provided one shorting opportunity on a rebound as the pair tested the lower end of the triangle and failed to penetrate it. Since then we have had a new lower low and lower high as the pair has been moving towards the lower end of the range. Projection from triangle points to 50% Fibonacci level (near 94.17 support). Should that support fail the next interesting support level is at 93.03 as it coincides with a 261.8% Fibonacci extension. I have left the extension levels off from the chart to improve readability.

Conclusion:

Trading in the middle of the range is always tricky while the easiest money is made at the edges and the pair is currently trading pretty much in the middle of the range. However, the weekly and daily shooting stars at 96.74 resistance level indicate willingness to sell the CADJPY at those levels while the lower highs and lower lows in 4h chart suggest that the pair should be testing the 94.17 level in not so distant future. This far the 38.2% Fibonacci level and the rising trendline have prevented the price moving lower. In addition there was bullish divergence in the Stochastic Oscillator at the time the pair bounced higher from the trendline. The intraday picture therefore has both bullish and bearish elements while the weekly shooting star points to lower prices from current levels.

The wide range candle from the beginning of February indicates that demand between 91.78 and 94.17 was strong. Quick moves into this area should be therefore met by willingness to bid the pair higher. Should such a quick move happen I would be interested in long signals at or near to the 93.03 support. I will be monitoring the levels close to the upper daily Bollinger Bands (at around 96.20) and the shooting star high.

Join me on Live Analysis Webinar on Tuesday 17th of March at 12:30 pm GMT. Register HERE for FREE and as usual it is better to log in early to get your seat!

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

hotforex · March 13, 2015

CADJPY Trading In A Range After A Shooting Star Candle - Read more: CADJPY Trading In A Range After A Shooting Star Candle | HotForex Analysis

CADJPY has weakened substantially since November last year and has over the last weeks bounced higher from a support at 91.78. The support is loosely defined by the lower Bollinger Bands and a pivot candle from March 2014. Last week price reacted lower from a weekly low creating a shooting star candle and confirming a resistance level at 96.74. A couple of weeks ago the pair bounced from 94.17 forming a support level.

DCADJPY, Daily

There was a shooting star last week in the daily chart as well. CADJPY has since then moved sideways between resistance at 96.74 and a rising trendline. The resistance coincides roughly with 38.2% Fibonacci level (drawn from December 2014 high to the January 2015 low) and upper Bollinger Bands. Bollinger Bands are narrowing which indicates that the pair is nearing a breakout but to which direction? The last two days indecision is clearly visible in the chart. Stochastic Oscillator is close to being oversold and is about to cross over its signal line. This together with the rising trendline encourages the bulls but the above shooting stars and resistance that are relatively close dampens the enthusiasm.

240CADJPY, 240 min

The pair has been making lower highs and breaking support levels since the move to 96.74 was rejected. Fluctuations created a triangle that was resolved to the downside and provided one shorting opportunity on a rebound as the pair tested the lower end of the triangle and failed to penetrate it. Since then we have had a new lower low and lower high as the pair has been moving towards the lower end of the range. Projection from triangle points to 50% Fibonacci level (near 94.17 support). Should that support fail the next interesting support level is at 93.03 as it coincides with a 261.8% Fibonacci extension. I have left the extension levels off from the chart to improve readability.

Conclusion

Trading in the middle of the range is always tricky while the easiest money is made at the edges and the pair is currently trading pretty much in the middle of the range. However, the weekly and daily shooting stars at 96.74 resistance level indicate willingness to sell the CADJPY at those levels while the lower highs and lower lows in 4h chart suggest that the pair should be testing the 94.17 level in not so distant future. This far the 38.2% Fibonacci level and the rising trendline have prevented the price moving lower. In addition there was bullish divergence in the Stochastic Oscillator at the time the pair bounced higher from the trendline. The intraday picture therefore has both bullish and bearish elements while the weekly shooting star points to lower prices from current levels.

The wide range candle from the beginning of February indicates that demand between 91.78 and 94.17 was strong. Quick moves into this area should be therefore met by willingness to bid the pair higher. Should such a quick move happen I would be interested in long signals at or near to the 93.03 support. I will be monitoring the levels close to the upper daily Bollinger Bands (at around 96.20) and the shooting star high.

Join me on Free Webinar on Tuesday 17th of March at 12:30 pm GMT. I will show you live how to analyse the markets and look for setups for high probability trades. Register HERE for FREE and as usual it is better to log in early to get your seat! https://www.hotforex.com/en/trading-tools/trading-webinars.html

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 16, 2015

Date : 16th March 2015

COPPER’S RELATIVE STRENGHT DUE TO CHINA.

Copper is in a long term bear channel and moved in February to a level that has supported price in the past. This was also the first time since year 2008 that Money Flow Index moved into overbought zone in Monthly timeframe. In February 2007 price touched 2.40 level and moved higher over the next two years. Now there was another bounce from the same level and the price of Copper is on the rise for the second month in a row. The nearest resistance level is approx. at 2.72 while the next major resistance is at 2.88.

Copper, Weekly

Copper (an industrial metal) has been stronger performer than precious metals since the latest US Jobs report came in with a surprisingly high number and strenhgtened the US dollar. While Gold and Silver have declined by almost 3% since March 5th Copper has at the time of writing gained 1.1%. However, the US rate hike expectations mean the US dollar strengthens and buying power amongst non-USD based investors decreases for dollar based assets such as Copper. This combined with slowing economic growth in China slows down the Copper bulls and has caused the price to fluctuate below resistance levels. On the other the hand price has held up and even edged higher as market participants believe that easier lending conditions should improve demand in China, the biggest consumer of Copper globally. The price of copper has made two weekly lower highs since touching the 2.72 resistance level (a former support from June 2010) while the MFI (7) is overbought and Stochastics are close to the same levels and hinting that the momentum is waning. This could lead to further fluctuation between the 2.59 support and a high of 2.73 from couple of weeks ago. Other support levels are 2.55 and 2.40, a high and low of the January pivot candle high and low.

Copper, Daily

The price of copper is near to the upper Bollinger Bands and Stochastics is getting overbought. Price has just recently bounced from a support at 2.59 forming yet another higher low. This was technically a good sign as it confirmed the level that used to resist price moves higher is now a support. The fact that this level now coincides with the lower daily Bollinger Bands makes it more significant support area.

Conclusion:

Fundamental factors that both support the price of Copper and resist its move higher translate into a ranging market, price action that honours the technical levels at both ends of the range. Levels near to 2.59 support level used to resist moves higher and are now providing support while the move to 2.72 resistance was rejected. This suggests that short term traders should look for trade opportunities at or close to these levels while longer term position traders might want to consider longs closer to the 2.40 support and shorts closer to the 2.88 resistance levels. This is the likely range copper futures over the coming weeks and months as major news stories or surprises on either the US Federal Reserve’s rate policy or Chinese consumption of Copper they might provide the trigger to move the price of Copper to these levels. Chinese premier Li Keqiang commented that the government will be ready to support the Chinese economy should the slowdown in growth affect employment and incomes. He wasn’t specific on the measures the government might use but a hope of economic stimulus in China should support the price of Copper. Against this backdrop traders might want to be buyers near support levels rather than trying to find shorts. This view would be negated if the US Fed indicated that it would hike rates more than expected. However, it is likely that the Fed will be cautious in raising rates.

Join me on Live Analysis Webinar on Tuesday 17th of March at 12:30 pm GMT. Register HERE for FREE and as usual it is better to log in early to get your seat!

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

hotforex · March 16, 2015

Copper’s Relative Strenght Due To China Read more here: Copper?s Relative Strenght Due To China | HotForex Analysis

Copper is in a long term bear channel and moved in February to a level that has supported price in the past. This was also the first time since year 2008 that Money Flow Index moved into overbought zone in Monthly timeframe. In February 2007 price touched 2.40 level and moved higher over the next two years. Now there was another bounce from the same level and the price of Copper is on the rise for the second month in a row. The nearest resistance level is approx. at 2.72 while the next major resistance is at 2.88.

Copper, Weekly

Copper (an industrial metal) has been stronger performer than precious metals since the latest US Jobs report came in with a surprisingly high number and strenhgtened the US dollar. While Gold and Silver have declined by almost 3% since March 5th Copper has at the time of writing gained 1.1%. However, the US rate hike expectations mean the US dollar strengthens and buying power amongst non-USD based investors decreases for dollar based assets such as Copper. This combined with slowing economic growth in China slows down the Copper bulls and has caused the price to fluctuate below resistance levels. On the other the hand price has held up and even edged higher as market participants believe that easier lending conditions should improve demand in China, the biggest consumer of Copper globally. The price of copper has made two weekly lower highs since touching the 2.72 resistance level (a former support from June 2010) while the MFI (7) is overbought and Stochastics are close to the same levels and hinting that the momentum is waning. This could lead to further fluctuation between the 2.59 support and a high of 2.73 from couple of weeks ago. Other support levels are 2.55 and 2.40, a high and low of the January pivot candle high and low.

Copper, Daily

The price of copper is near to the upper Bollinger Bands and Stochastics is getting overbought. Price has just recently bounced from a support at 2.59 forming yet another higher low. This was technically a good sign as it confirmed the level that used to resist price moves higher is now a support. The fact that this level now coincides with the lower daily Bollinger Bands makes it more significant support area.

Conclusion

Fundamental factors that both support the price of Copper and resist its move higher translate into a ranging market, price action that honours the technical levels at both ends of the range. Levels near to 2.59 support level used to resist moves higher and are now providing support while the move to 2.72 resistance was rejected. This suggests that short term traders should look for trade opportunities at or close to these levels while longer term position traders might want to consider longs closer to the 2.40 support and shorts closer to the 2.88 resistance levels. This is the likely range copper futures over the coming weeks and months as major news stories or surprises on either the US Federal Reserve’s rate policy or Chinese consumption of Copper they might provide the trigger to move the price of Copper to these levels. Chinese premier Li Keqiang commented that the government will be ready to support the Chinese economy should the slowdown in growth affect employment and incomes. He wasn’t specific on the measures the government might use but a hope of economic stimulus in China should support the price of Copper. Against this backdrop traders might want to be buyers near support levels rather than trying to find shorts. This view would be negated if the US Fed indicated that it would hike rates more than expected. However, it is likely that the Fed will be cautious in raising rates.

Join me on Free Webinar on Tuesday 17th of March at 12:30 pm GMT. I will show you live how to analyse the markets and look for setups for high probability trades. Register HERE for FREE and as usual it is better to log in early to get your seat! https://www.hotforex.com/en/landing-pages/webinar-market.html?id=118

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 19, 2015

Date : 19th March 2015

US FED DOVISHNESS CAUSED EURUSD TO SPIKE.

EURUSD is now trading at 1.0640 support. Yesterday the pair moved all the way back to 1.1040 after the US Fed Chair Yellen took a more dovish stance on the economy. She removed patience from the vocabulary but indicated that strong dollar and slowing export growth are risks for the economy. According to Janet Yellen the change in forward guidance did not alter the timing of the first tightening and that a hike in April remained unlikely.

The tone of the statement also suggested a June hike is not likely to happen, especially since the FOMC downgraded its assessment of the economy in the opening paragraph. According to them “economic growth has moderated somewhat” thanks in part to slowing export growth. The Fed also seemed less confident that inflation pressures are transitory, which will continue to be “monitored closely.” The policy paragraph now states that rates will rise when the Fed sees “further improvement in the labor market and is ‘reasonably confident’ that inflation will move back to its 2 percent objective.”

It is interesting how no one paid attention to the headline inflation while oil prices were high. The focus was on CPI as it allowed the central banks to maintain the easy money policies. Now, suddenly it is the headline figure that seems to be in central banks’ focus. In the light of this the current wording in the Fed’s policy paragraph gives them more freedom in terms of continuing with the zero rates policy.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 25, 2015

Date : 25th March 2015

EURUSD: A DAILY SHOOTING STAR POINTING TO DOWNSIDE.

EURUSD has risen over the last two weeks after the Fed Chair Yellen said in her statement that there are worries over the export growth in the US economy due to the strong dollar. Yesterday’s new home sales and CPI figures could didn’t help the pair to push through the resistance at 1.1040.

The dollar rallied in the aftermath of the warmer U.S. inflation report, quickly sold off from there, then dragged itself up through the remainder of the morning session. EURUSD fell to 1.0936 from 1.0995 after the CPI data, before climbing to session highs of 1.1029, and then falling to session lows of 1.0890. U.S. new home sales rebounded 7.8% to 539k in February, much better than expected and the strongest since April 2008. Back months were revised with January boosted to 500k from 481k previously, while December’s 482k was nudged down to 479k. The February overall-CPI was 0.2% (median 0.2%), while the core index was 0.2% (median 0.1%). Year over year growth accelerated to unchanged from -0.1% and the core y/y growth held at 1.7%. January’s was the slowest pace of y/y growth since -0.2% in October ’09. Energy prices grew 1.0%, with a 2.4% gasoline price increase. Food prices were 0.2% after after remaining unchanged last month.

The monthly chart reveals an important trendline support in the region of the recent bounce from 1.0459. This could be a supporting element that keeps the pair from plummeting to parity for some time, especially so if the Fed continues using dovish language in their statements. Important weekly support level in the weekly chart is at 1.0459 while the resistance levels are at 1.1098 and 1.1460.

EURUSD, Daily

A daily shooting star candle suggests the pair will move lower today. High Stochastics value supports the view. If the market rallies today levels closer to yesterday’s high would be attractive shorting levels.Support area from 1.0460 to 1.0620 is a reasonable target but it would make sense to close the short trades as price approaches the level at some 20 pips higher.

EURUSD, 240 min

The pair has moved sideways above the 1.0883 support and over the last two candles below the ascending trendline. The 4h Bollinger Bands (currently at 1.0988 and 1.0240) would be preferable shorting levels but should the support break before price rallies, then smaller timeframe price action should be used to enter the short trades as per my teaching in the webinars.

EURUSD, 60 min

The resistance (red line) at 1.0938 has been resisting moves higher this morning while EURUSD has made higher lows above the lower Bollinger Bands. This suggests that pressure is building against the 1.0938 minor resistance level and price might well rally towards the potential sell area at 4h Bollinger Bands.

Conclusion:

Price reacting lower from a resistance and creating a Shooting Star candle indicates weakness. However, price trading at support and creating higher lows suggests that price might well move higher today and provide an opportunity to look for short signals at 4h Bollinger Bands.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 25, 2015

Date : 25th March 2015

GERMAN MARCH IFO JUMPED TO 107.9.

German March Ifo jumped to 107.9 (median 107.3) from 106.8 in the previous month. The higher than expected reading was boosted by a sharp rise in the expectations index, which came in at 103.9, after 102.5 in February. The current conditions indicator improved to 112.0 from 111.3. The diffusion index, which gives the balance of positive and negative answers shows improvements in all sectors, with the exception of the construction industry, where sentiment turned even more negative, despite the sharp rise in house prices. The March reading meant the Ifo improved to 107.1 in Q1 from 104.5 in Q4 last year. German growth this year is set to come in much stronger than anticipated, and the fact that economic momentum was already strong ahead of the ECB’s QE start means there is some risk of overheating in the German economy. Wages growth is set to pick up and in the long run this will cut German competitiveness and weigh on the medium term outlook and the Bundesbank will need to keep a close eye on the property market.

EURUSD reaction was subdued and the pair stayed between two intraday support and resistance levels (1.0937 and 1.0968) with a high at 1.0974. This level coincides with rising trendline and the upper Bollinger Bands in 60 min timeframe.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 26, 2015

Date : 26th March 2015

S&P 500 AT SUPPORT AFTER 4.67% DROP IN SMH.

The US stock market declined for a third day in a row yesterday. Dow Jones Industrial Average lost 1.62% while Nasdaq and S&P 500 declined by 2.37% and -1.46% respectively. This has impacted the Asian and European markets today with Nikkei 225 futures in the red by 1.54% Dax futures down by 2.01% at the time of writing. US equity volatility index VIX shot higher yesterday. VIX moved up to 15.44 as NASDAQ -1.6% was sucking the S&P 500 into negative territory. VIX is well up from the previous session lows 12.59. In proximity of the mid-March range index will be hitting the daily Bollinger Bands.

S&P 500 e-mini futures, daily

RSI is indicating that the weekly S&P trend is getting weaker. Momentum has slowed down since December last year and this has led to RSI creating lower highs while the S&P e-mini futures (ES) made and all-time high in February. ES has now created a lower weekly high and retraced back to the 50% Fibonacci level at 2040.

S&P 500 e-mini futures, daily

ES created a lower high just below the weekly pivot candle and is currently trading at the daily Bollinger Bands and 50% Fibonacci level. This level also coincides with a daily pivot candle from March 13th. Stochastics is getting oversold but a lower high at 2100 is a sign of weakness and could mean that this market moves lower before finding support.

S&P 500 e-mini futures, daily

Here’s another look at the daily chart with a perspective a bit further away. With ES not being able to move above the February high price has created a bearish wedge is currently moving outside the wedge formation. If current support at 2032 breaks it could mean that the trajectory has changed and we will have a new less steep trend channel that defines the moves over the coming weeks. This would bring the grey trendline into play. Also, should the price stay below the black trendline technical picture would deteriorate substantially.

Semiconductor Sector ETF (SMH), Daily

Analysis on US sectors reveals that over the last 10 trading days professional money has been moving away from Financials and Industrials and into Utilities and Health Care stocks. This of course is a bearish fact suggesting that the long only fund managers see the market being weak and feel the need to do what they can to minimize the market impact as they cannot hedge their positions with derivatives. The massive drop in the Semiconductor stocks after a lower high in the index ETF supports this view. However, the support area is getting also relatively close suggesting that the market is not likely to continue in a free fall but will find support over the coming few days. As futures have declined today it is possible that these stocks will open fairly close to the support levels. Picture in the technology and industrials sector ETFs is somewhat similar indicating that they have a bit further to fall before they meet potential support levels.

S&P 500 e-mini futures, 240 min

The down move paused at the rising trendline but the selling pressure prevailed. ES is now approaching the 2032 low with oscillators deeply in the overbought territory and has reacted higher from the support level.

Conclusion:

At the time of writing ES is trading at a support level and it remains to be seen if the traders are willing to seriously bid for the market here. Support levels usually lead to at least some sort of rallies but there needs to be follow-through after the initial reaction. In that sense nearby resistance levels can be problematic as they tend to invite selling. There is a resistance level at 2052 while the violated trendline is at 2050. In addition, the 4.67% drop in the Semiconductor stocks could make the market participants careful today. The wedge formation is pretty much violated after today’s move lower. Only if we see a strong rally higher and a close inside the formation is the technical picture salvaged.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · March 27, 2015

Date : 27th March 2015

EURGBP CORRECTING LOWER AND BREAKING SUPPORT LEVELS.

I suggested in my previous EURGBP analysis that as long as the market keeps on moving lower and there is no price based evidence to the contrary there is no hurry to close the short trades. I noted that an exception to this would be price hitting the 0.7022 support level which could well bounce the price higher and therefore is a logical target level. Price is in a downtrend and we should be looking to sell rallies as long as the approach works. However, once the 0.7022 target is hit the pair is at a major consolidation level and selling rallies might get trickier. The pair indeed hit the 0.7022 target level and rallied higher quite substantially. Selling rallies has definitely been trickier since then as price pretty much rocketed through the resistance level.

The pair is trading below a weekly low from February at 0.7340 after trying to penetrate the resistance area above the level. Now that EURUSD is reacting lower from a resistance EURGBP is moving lower as well. They key support levels are 0.7220 (weekly pivot candle high) and 0.7022 a historical support. Nearest resistance levels are at 0.7340 and 0.7405. Weekly close above the pivotal weekly candle high is a longer term bullish sign as this has not happened since October last year and could signal that the pair has a bottoming process ahead.

EURGBP, Daily

Run up higher was followed by a relatively narrow range candle in the upper Bollinger Bands two days ago. In yesterday’s trading price closed below previous day’s low suggesting a turn around. Stochastics is overbought and signalling a momentum change, thus supporting the bearish view. Today price has moved outside the rising trendline and March 18th daily high and 23.6% Fibonacci retracement level coinciding.

EURGBP, 240 min

Price has indeed broken the steeper trendline (grey line) and has now reached another that can be drawn by using the pivot points at A and B. There is a resistance level at 0.7318 that was created when the pair found support at the now violated trendline (grey). Next intraday support is at 0.7260 while the 61.8% Fibonacci level suggests support at March 19th low at 0.7150 (point B).

Conclusion:

Long term: Weekly close above the pivotal weekly candle high is a longer term bullish sign as this has not happened since October last year and could signal that the pair has a bottoming process ahead. This could lead to a double bottom or to price creating a higher low. Time (and price action) will tell. The range between 0.7022 and 0.7105 is definitely worth keeping an eye on should the price move that low. Buy signals inside this range would indicate demand at those levels.

Short term: Price has violated 23.6% Fibonacci level and a support level created by a daily high and a secondary trendline. Therefore it makes sense to look to sell the rallies intraday. This would give us an opportunity to follow price action resistance levels identified in the above charts, especially 4h chart, and see if market is acting weakly or strongly. I would look at levels below 61.8% Fibonacci level as target as they should attract buyers.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

hotforex · March 30, 2015

Weekly Hammer At Support Send USDCAD Higher

USDCAD (weekly) has been moving sideways since the beginning of February. The proximity of the year 2009 high has caused the sideways move. I suggested in my analysis at the time that USDCAD should move above the latest highs as US economy is stronger than the economy in Canada. The fact that USDCAD has maintained the support well and has now created a weekly hammer candle at the support supports my view. Bears might point out that Stochastics oscillator and RSI (7) have created lower highs and therefore signal that the momentum is waning. This however, is what happens each time price moves sideways. Therefore, oscillators do not tell us anything we wouldn’t know by reading price action. Nearest support and resistance levels are at 1.2409 and 1.2835. The year 2009 high at 1.3064 would be the next major resistance once price moves beyond the 1.2835.

Follow the link to read the full analysis

Weekly Hammer At Support Send USDCAD Higher | HotForex Analysis

HFblogNews · March 30, 2015

Date : 30th March 2015

WEEKLY HAMMER AT SUPPORT SEND USDCAD HIGHER.

USDCAD (weekly) has been moving sideways since the beginning of February. The proximity of the year 2009 high has caused the sideways move. I suggested in my analysis at the time that USDCAD should move above the latest highs as US economy is stronger than the economy in Canada. The fact that USDCAD has maintained the support well and has now created a weekly hammer candle at the support supports my view. Bears might point out that Stochastics oscillator and RSI (7) have created lower highs and therefore signal that the momentum is waning. This however, is what happens each time price moves sideways. Therefore, oscillators do not tell us anything we wouldn’t know by reading price action. Nearest support and resistance levels are at 1.2409 and 1.2835. The year 2009 high at 1.3064 would be the next major resistance once price moves beyond the 1.2835.

USDCAD, Daily

Price action in the daily chart points to the upside. USDCAD has found support from the area near the 38.2% Fibonacci level and the lower Bollinger Bands. Last week Stochastics moved to oversold territory and the 50 day moving average catched up with the price. Friday’s close well above the hammer candle high was a bullish sign and created a hammer candle in the weekly chart as well.

USDCAD, 240

After being held back by the 50% Fibonacci level and a pivot high price is now breaking higher. This is very much in line with the bullishness in daily and weekly charts. The pair broken out of the wedge formation and projection from the formation points to the resistance zone between 1.2724 and 1.2760. Support levels are at 1.2621, 1.2531 and 1.2409.

Conclusion:

Long term technical picture is bullish as institutional buying has created a hammer candle at the support. The latest weekly low was also higher than the pivot low in the weekly chart from the mid February. Short term picture supports this as price has broken out of a wedge formation in the 4h chart and has closed above the Friday’s daily hammer candle. As the setup in the higher time frames is favourable I am looking for pullbacks to technical levels at 60 and 15 min charts. The range at 1.2724 – 1.2760 is my target for this price move.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · April 1, 2015

Date : 1st April 2015

USDJPY MAKES HIGHER DAILY LOWS.

USDJPY has been moving sideways since November last year and is now reacting higher from a support at 118.33. Since then the pair has briefly penetrated the November high and has created a series of higher weekly lows between 115.57 and the latest low at 118.33. This suggests that the pair should move higher once the consolidation period has ended. A trigger for this could be further monetary easing from the Japanese central bank. Even though the pair has reacted higher from support it is still relatively close to the support levels.

USDJPY, Daily

USDJPY moved down to 118.33 last week but the move rejected and created a hammer candle. Since then price has reacted higher as is usual after such a move and has now retraced back to this pivotal candle with reaction higher in today’s trading. Today’s low coincides with a 50 period SMA, the lower Bollinger Bands and a rising trendline. This suggests that the pair will move higher over the coming days. The nearest support is at 119.41 and the important resistance levels at 121.55 and 1.2202.

USDJPY, 240 min

After breaking out of a wedge formation the pair was consolidating for a while. This consolidation pattern created a support from which price has now reacted higher from. Now we have a hammer candle and some follow through but price is struggling with a minor resistance at 120. Stochastic oscillator is at 34 points and is about to cross over the signal line to the upside. The channel width points to an area between resistance levels at 121.09 and 121.50.

Conclusion:

USDJPY has been a bit sluggish to move higher over the last three to four days, even though we have had bullish signals and the market has been trading close a support. This raises some questions but as long as this pair stays inside the bullish channel (see the daily chart) and makes higher lows it is safe to assume that the pair will move towards my short term target area between 121.09 and 121.50. Price has found support from a 50 period SMA and a previous 4h resistance. Should there be retracements to this level I would look for buy signals with a target at 121.09. If there is no bigger retracement I will be looking to take benefit from smaller timeframe technical levels.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · April 2, 2015

Date : 2nd April 2015

UK CONSTRUCTION PMI BELOW EXPECTATIONS.

GBPAUD reached a historical resistance at 1.9697 (a spring 2009 low) in February and has since reacted lower from this level. Over the last two weeks the pair has been rallying strongly and is nearing the resistance area again. Fundamentals and the strong weekly trend support the bids in GBPAUD but price has rallied strongly and reached a potential resistance level. Therefore it pays to monitor the market more closely and time the entries at support levels in pullbacks.

Sterling has been trending higher against the Australian dollar as it is likely that the Reserve Bank of Australia will cut the interest rates either in April or May while the UK economy is rather strong. A recent editorial in The Australian that said “a cut in interest rates either next month or in May is a virtual certainty,”. A 25 basis points cut at the May policy review is likely, which would take the cash rate to a record low 2.0%.

Australian economy is slowing while the commodity prices have dropped significantly. Growth has slowed, with GDP rising 0.5% q/q in Q4, but slowing to a 2.5% y/y pace from +2.7% y/y in Q3. The RBA’s Index of Commodity Prices has tumbled. The index has fallen by 20.6% y/y in SDR terms through February, driven by lower prices for bulk commodities. At 72.5, the index is at its lowest level since December 2009, extending pullback from a 124.7 peak in July 2011. In addition, inflation has slowed, with CPI dropping to 1.7% y/y in Q4 from 2.3% y/y in Q3.

At the same time UK data improves and even though the elections cause a certain level of anxiety in the markets (no one likes uncertainty) the GBPAUD has been rather strong lately. Incoming UK data has been rather strong. The future data should be positive for sterling, though concerns of a hung parliament outcome at the May-7 general election are likely to crimp enthusiasm for the UK currency and assets, especially if the Scottish Nationalist Party ends up holding the balance of power. UK Markit manufacturing PMI survey came in at 54.3 in March, fractionally above our survey median for 54.3 and improving from February’s 54.1 reading. This is the third consecutive month of improvement, affirming that activity in the sector is reaccelerating after a soft patch in Q4 last year.

UK construction PMI was much worse than expected at 57.8 in March, down from February’s 60.1 and well below the Reuters median forecast for 59.5. The 2014 overall average was 61.8, so the data points to a drop-off in momentum. The decline in March was largely reflective of a slowdown in civil engineering activity growth, which the survey found may be related to uncertainty ahead of the too-close-to-call May-7 general election. Job creation also remained below 2014 levels. However, at 57.8 this still signals a robust level of activity while business confidence rose to a nine-year high. Sub-contractor charges rose at the fastest pace since the survey began in 1997. Overall, the strong outlook offsets the decline in the headline, and the slowdown in activity in some areas may pick up after the May election.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · April 3, 2015

Date : 3rd April 2015

EURUSD APPROACHING RESISTANCE AFTER NFP DISAPPOINTMENT.

The EURUSD rallied after the combination of a disappointing NFP release, and downward back revisions in the figures. The pair is approaching a resistance area created by a combination of technical factors. The resistance levels of 1.1052 and 1.1098 coincide with 50 day MA and the upper Bollinger Bands. This resistance has been tested twice and after the latest test EURUSD made a higher low. This suggests the pair will be trying to move higher from here. The next important daily resistance levels are closer to the 1.1460 which could well come into play now that the NFP release was such a disappointment.

The analysts expected an increase of 246k jobs but we got only 126k. The 126k U.S. March payroll rise with 69k in prior downward revisions and a 0.2% drop in hours-worked, combined with big goods-sector declines for payrolls and hours-worked lowered production estimates for March.

Price action at the resistance levels is going to be interesting to follow. If the pair corrects lower from it I expect the correction to be rather subdued. The surprisingly weak jobs figure means that now the Fed doves have further evidence of softening economy and a better case to postpone the rate hike. This is seen in the markets across the board as the USD is being sold against other currencies across the board.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

Edited April 3, 2015 by HFblogNews

hotforex · April 3, 2015

Approaching Resistance After NFP Disappointment

The EURUSD rallied after the combination of a disappointing NFP release, and downward back revisions in the figures. The pair is approaching a resistance area created by a combination of technical factors. The resistance levels of 1.1052 and 1.1098 coincide with 50 day MA and the upper Bollinger Bands. This resistance has been tested twice and after the latest test EURUSD made a higher low. This suggests the pair will be trying to move higher from here. The next important daily resistance levels are closer to the 1.1460 which could well come into play now that the NFP release was such a disappointment. Price action at the resistance levels is going to be interesting to follow. If the pair corrects lower from it I expect the correction to be rather subdued. The surprisingly weak jobs figure means that now the Fed doves have further evidence of softening economy and a better case to postpone the rate hike. This is seen in the markets across the board as the USD is being sold against other currencies across the board.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · April 13, 2015

Date : 13th April 2015

EURAUD BOUNCING HIGHER FROM SUPPORT.

EURAUD, Weekly

The pair has been making lower highs and lower lows since December 2014 suggesting that the long term momentum is to the downside. Unless the pair creates a higher low at 1.3725 the weekly picture remains bearish. The 38.2% Fibonacci retracement coincides roughly with the recent pivot high while the 50% level is approximately at level with a pivot candle low (1.4476) from February this year. This suggests to me that the resistance area between 1.4340 and 1.4530 is strong and any near term price advances to the level are likely to be met with selling. Nearest important support levels are at 1.3725 and 1.3190.

EURAUD, Daily

With the trend to the downside and the pair at support the Stochastics is now oversold. Should today’s candle close above the Friday’s high we’d have both a price based bull signal and Stochastics closing above its 3 period MA (red line). There could be some resistance around the 1.4076 level as it has acted as a support and resistance in the past. Should the pair move beyond this level the next resistance area would be in the region of upper Bollinger Bands and the upper end of the regression channel.

EURAUD, 60 min

The pair has broken out of the descending regression channel and has since moved above recent reaction highs at 3849 and 3883. Now that EURAUD is retracing back to those levels I expect that there is a good chance market will find support at those levels.

Conclusion

Longer term picture is pointing to the downside as the pair makes lower highs and lower lows. This setup should therefore favour those looking to sell the rallies. Resistance levels between 1.4340 and 1.4530 could work out as short entry level should the market rally there. Short term traders could take advantage of a potential momentum reversal at 1.3849 and 1.3883 with a target at or near 1.4050. Look for momentum reversal signals to confirm the analysis.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · April 14, 2015

Date : 14th April 2015

GBPNZD RANGING ABOVE SUPPORT.

GBPNZD, Weekly

The pair has just recently moved higher from weekly support level 1.9379 while another one supported price at 1.9244 sent price higher in the beginning of January. For the last three to four weeks price has been bouncing between this support and a resistance created by a weekly low (at 2.000) from December last year. Stochastics is oversold and price action takes place near lower Bollinger Bands suggesting the pair should have more upside than downside potential. On the bearish side however I should mention the fact that the pair creates lower weekly highs suggesting selling pressure coming in at fairly close to the support. This is not a very bullish sign and could lead to further consolidation at support or eventually price breaking lower.

GBPNZD, Daily

Price is reacting lower from a resistance at 1.9700. This resistance is created by a daily pivot candle from April 7th and coincides with a 50% Fibonacci level at 1.9691. Stochastics are pointing higher and the RSI has created a higher low while the latest low at 1.9380 was roughly equal to the low from March this year. This bullish divergence supports the upside bias but the price needs to break above the current resistance in order to create a higher high. Should the pair keep on making lower pivotal highs the pressure against the support would increase and the support could break. It is therefore essential to follow the price action over the coming days.

GBPNZD, 240 min

The four hour picture shows in more detail how price has been reacting to the resistance and other technical factors. Price has broken out of the downward sloping channel but has then run into a resistance. After this the pair created a pivot from which it has now reacted lower but has been (over the last two complete bars) been supported by the channel high and a 50 period moving average. Stochastics, RSI and MFI have all rolled over confirming that there isn’t much upside movement or momentum over the last few bars. This suggests the best (low risk) buying opportunities would be at lower levels. As per usual it makes sense to be a buyer at a support and look for selling opportunities at resistances.

Conclusion

Long term picture (next four to six weeks) suggests that this market has more upside than downside potential as it is trading near an important support area and has been consolidating above it. However, should this sideways movement keep on for an extended period of time the probability that the market will move lower does increase. Also, I don’t like the fact that we have lower weekly highs. This kind of price action is not bullish as it suggests indecisiveness in this market. We would need to see price starting to build a series of higher lows and breaking above the previous weekly highs in order to get a confirmation for the upside biased long term view. The short term picture (from intraday to next few days) has a bullish element as it has broken out of the downward channel but price is currently trading just below a resistance level. As we should always look for selling opportunities at resistance levels and buying opportunities at supports I am keeping an eye on smaller time frame sell signals at 240 min Bollinger Bands and look for buy signals in the region of 1.9460 support.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

hotforex · April 14, 2015

GBPNZD Ranging Above Support

The pair has just recently moved higher from weekly support level 1.9379 while another one supported price at 1.9244 sent price higher in the beginning of January. For the last three to four weeks price has been bouncing between this support and a resistance created by a weekly low (at 2.000) from December last year. Stochastics is oversold and price action takes place near lower Bollinger Bands suggesting the pair should have more upside than downside potential. On the bearish side however I should mention the fact that the pair creates lower weekly highs suggesting selling pressure coming in at fairly close to the support. This is not a very bullish sign and could lead to further consolidation at support or eventually price breaking lower.

GBPNZD, Daily

Price is reacting lower from a resistance at 1.9700. This resistance is created by a daily pivot candle from April 7th and coincides with a 50% Fibonacci level at 1.9691. Stochastics are pointing higher and the RSI has created a higher low while the latest low at 1.9380 was roughly equal to the low from March this year. This bullish divergence supports the upside bias but the price needs to break above the current resistance in order to create a higher high. Should the pair keep on making lower pivotal highs the pressure against the support would increase and the support could break. It is therefore essential to follow the price action over the coming days.

GBPNZD, 240 min

The four hour picture shows...

Follow the link to read the analysis

GBPNZD Ranging Above Support | HotForex Analysis

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

HFblogNews · April 15, 2015

Date : 15th April 2015

WEEKLY CHART: GOLD’S LIKELY TO MOVE LOWER.

Gold, Weekly

In my latest Gold analysis from March 18th I wrote: These levels are exactly the levels that attracted buyers in Q4 2014 which suggests that there might still be some demand for Gold just below the current price. However, the psychology might have changed since December last year. Strong growth in the US labour market we have seen since then coupled with the rate hike expectations could lead to Gold breaking the support this time around. I am not taking a view that it will happen as support is support as long as it works. A close above yesterday’s high at 1159.30 would be a positive signal while a close above the 1165.70 resistance in would improve it even further. This would warrant buying intraday dips after over the coming few days with a target at 1190.

Now we’ve seen Gold closing moving higher from the support level and hitting my target at 1190. In addition, this market has moved beyond the target and turned lower at 1224.50 resistance. At the same time Gold created a bar with a narrow range between the open and closing prices hinting a move lower. This has since then materialised and Gold has moved lower this week. This is suggesting further moves lower in the coming two weeks or so. The next important weekly support is likely to be found near the lower weekly Bollinger Bands and 1131.50 to 1142 range. Long term picture is still bearish while in the medium term I expect Gold to move sideways between the above mentioned support and resistance levels.

Gold, Daily

In the daily picture Gold is trading close to the 50% Fibonacci level and the Stochastics are getting close to the oversold levels. This suggests that the move lower over the last few days could slow down a bit. Yesterday we saw a rally from the 50% Fibonacci level but there was no follow through. This 50% retracement level coincides with a pivot candle from the end of March and if price keeps moving sideways for a few days the lower Bollinger Bands will catch up with it creating another supportive element. However the weekly picture points to the downside and therefore we should see rallies higher met with selling and eventually see a move lower to 1141 and 1160 range.

Gold, 240 min

While the 50 period moving average is still pointing higher Gold has been creating lower highs and trending lower in a descending channel. Price is reacting from resistance levels, which suggests further moves lower. The fact that the bounce from 1183.70 support was weak and met with selling does increase probabilities that price will eventually work its way through the support. This however does not rule out price bouncing higher and retesting the resistance levels at 1198 and 1208. The latter coincides with upper Bollinger Bands and should price rally there we’d be looking for momentum reversal signals close to it. The same applies to the 1198 resistance. If price stays in the descending channel (minor time frame confirms with momentum reversals close to the channel top) then we obviously should take advantage of them.

Conclusion

Weekly picture points to lower prices and I expect Gold to move to the lower weekly Bollinger Bands and close to the support range at 1131.50 – 1142 where it should attract buyers again. It could very well be that over the coming weeks price moves sideways between the 1224 resistance and the aforementioned support level. Ranging market between these levels could provide opportunities for traders (with different time trade orientations) trading against both the major and minor resistances and support levels. Short term we are close to a support level and therefore I would like to see price rallying a bit before initiating short trades. We could see Gold retesting the resistance levels at 1198 and 1208. The latter coincides with the upper Bollinger Bands and should price rally there we’d be looking for momentum reversal signals close to it. The weekly Bollinger Bands and proximity of daily pivot high at 1160 could very well work as an ultimate swing trade target.

Janne Muta

Chief Market Analyst

HotForex

Disclaimer: 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 purchase or sale of any financial instrument.

Sign In

Welcome Guests

Daily Analysis

Recommended Posts

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Share this post

Link to post

Share on other sites

Join the conversation