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[HFM]

Date : 19th September 2014

 

EURUSD TRADING LOWER IN THE EUROPEAN SESSION. LIGHT ECONOMIC CALENDAR IN THE SESSION AHEAD.

 

EURUSD rose yesterday and closed at 1.2922. The European Central Bank started its Targeted LTRO program with 86.2 billion Euro. Data released from the United States revealed that the Unemployment Claims in the largest economy in the world dropped to 280K during the last week. The Building Permits and Housing Starts in the US fell more than the market expectation in August. The Philly Fed Manufacturing Index also recorded a drop to a reading of 22.5 in September. Market had expected a drop to 22.8 from the previous high of 28.0 reached in August.

 

Data released earlier today indicated that the results on the Scottish Independence Referendum showed a NO vote easing the worries of a potential split between England and Scotland.

 

Support for the EURUSD is seen at 1.2836 and resistance is seen at 1.2924.

 

 

 

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.

[HFM]

Date : 22nd September 2014

 

QUIET START OF THE EUROPEAN SESSION. ECB PRESIDENT MARIO DRAGHI SPEAKS TODAY.

 

EURUSD dropped on Friday and closed at 1.2828. The Producer Price Index in Germany dropped 0.1 percent month over month in August. Data from the United States indicated that the CB Leading Index rose 0.2 percent month over month in August. Market had expected a 0.4 percent rise. The credit ratings agency Fitch Ratings affirmed the AAA rating of the United States and maintained its “stable” outlook for the US economy.

 

Investors are looking ahead for the speech of the President of the European Central Bank Mario Draghi on monetary policy before the European Parliament’s Economic and Monetary Policy Committee in Brussels.

 

Support for the EURUSD is seen at 1.2826 and resistance is seen at 1.2924.

 

 

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.

[HFM]

Date : 23rd September 2014

 

EURUSD TARGETING THE 1.2900 LEVEL IN THE EUROPEAN SESSION. GERMAN MANUFACTURING SLOWS DOWN IN SEPTEMBER.

 

EURUSD rose yesterday and closed at 1.2848. The Consumer Confidence in the Eurozone fell to a reading of -11 in September marking its lowest reading since February. During his speech the President of the European Central Bank Mario Draghi stated that the economic recovery in the Eurozone is lacking and added that the ECB is ready to take any unconventional measures to improve the inflation and the economic situation in the currency union. The chief economist of the European Central Bank Peter Praet, stated that the ECB is not trying to push the Euro lower to support the fragile economic recovery. Data from the United States indicated that the Existing Home Sales in the largest economy in the world reached 5.05M in August. Market had expected a rise to 5.21M.

 

Support for the EURUSD is seen at 1.2820 and resistance is seen at 1.2922.

 

 

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.

[HFM]

Date : 24th September 2014

 

EURUSD TRADING LOWER IN THE LATE EUROPEAN SESSION. GERMAN IFO BUSINESS CLIMATE SLIPS IN SEPTEMBER.

 

EURUSD rose yesterday and closed at 1.2846. The Manufacturing PMI in the largest economy in the Eurozone dropped to a reading of 50.3 in September. On the other hand the Flash Services PMI in Germany rose to a level of 55.4 in September. The Eurozone Manufacturing and Services PMI continued to drop in September. Data from the United States revealed that the Flash Manufacturing PMI remained stable at 57.9 in September. Another report indicated that the Richmond Manufacturing Index increased to a level of 14 in September against the market expectation of a drop to 10.

 

Data released today indicated that the German Ifo Business Climate slipped to a reading of 104.7 in September.

 

Investors are now looking forward for the New Home Sales report due from the United States.

 

Support for the EURUSD is seen at 1.2820 and resistance is seen at 1.2922.

 

 

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.

[HFM]

Date : 25th September 2014

 

EURUSD TARGETING THE 1.2700 LEVEL AT THE START OF THE EUROPEAN SESSION.

 

EURUSD dropped yesterday and closed at 1.2779. The German Ifo Business Climate continued to fall for a 5th month in a row coming at a reading of 104.7 in September. Data from the United States showed that the New Home Sales rose sharply in August reaching 504K units. The President of the United States Federal Reserve in Chicago Charles Evans stated that the US economy has made a significant progress, but still needs the help of an extended period of time of low interest rates to help the recovery.

 

At the start of the European session the pair printed new low levels and it’s currently targeting the 1.2700 level.

 

Investors are now looking forward for the Unemployment Claims and Durable Goods Orders releases due from the United States.

 

Support for the EURUSD is seen at 1.2728 and resistance is seen at 1.2819.

 

 

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.

[HFM]

Date : 26th September 2014

 

LOW VOLATILITY ON THE MARKET AHEAD OF THE US FINAL GDP REPORT. GERMAN GFK CONSUMER CLIMATE FALLS IN SEPTEMBER.

 

URUSD dropped yesterday and closed at 1.2749. The President of the European Central Bank Mario Draghi stated in his speech that the central bank is ready to use any unconventional measures to prevent a prolonged period of low inflation in the currency union. Data from the United States revealed that the Durable Goods Orders dropped -18.2 percent in August. On the other hand the Core Durable Goods Orders came in line with the market expectations rising 0.7 percent in the same period. The Unemployment Claims report came better, but still closer to the market expectations at a reading of 293K.

 

 

Investors are now looking forward for the key event of the day – the Final GDP report from the United States for the 2nd quarter of 2014. Depending on the outcome of the release we may witness high volatility on the market and investors should be fully aware of it.

 

Investors are now looking forward for the Unemployment Claims and Durable Goods Orders releases due from the United States.

 

Support for the EURUSD is seen at 1.2714 and resistance is seen at 1.2819.

 

 

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.

 

[HFM]

Date : 29th September 2014

 

EURUSD PRINTED NEW LOWS AT THE START OF THE WEEK. LIGHT ECONOMIC CALENDAR FOR THE SESSION AHEAD.

 

EURUSD dropped on Friday and closed at 1.2682. The Gfk Consumer Confidence in Germany dropped for a fifth consecutive month to a reading of 8.3 in October. Data from the United States showed that the Final GDP rose 4.6 percent in the second quarter of 2014. The University of Michigan revised Consumer Sentiment rose to a level of 84.6 in September, market had expected a rise to 85.1.

 

The top fundamental releases of the week will be the Minimum Bid Rate and the ECB Press Conference due from Europe and the US Non-farm Payrolls report.

 

Support for the EURUSD is seen at 1.2667 and resistance is seen at 1.2783.

 

 

 

 

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.

[HFM]

Date : 30th September 2014

 

EURUSD BROKE THE 1.2600 LEVEL AFTER THE CONSUMER PRICE INDEX IN THE EUROZONE DROPPED TO 0.3 PERCENT IN SEPTEMBER.

 

EURUSD rose yesterday and closed at 1.2684. The German Consumer Price Index remained flat in September coming at a reading of 0.0 percent. In Spain the CPI dropped to a reading of -0.2 percent during the same period. Data from the United States revealed that the Pending Home Sales in the largest economy of the world recorded drop of -1.0 percent in August. On the other hand the Personal Spending and the Personal Income in the US rose in line with the market expectations with 0.5 and 0.3 percent accordingly in August.

 

 

Data released today indicated that the Consumer Price Index in the Eurozone dropped to a level of 0.3 percent on an annual basis in September. The release caused a major sell off on the EURUSD and the pair fell below the 1.2600 level. Another report indicated that the Unemployment Rate in the currency union remained stable in August at 11.5 percent.

 

Investors are now looking forward for the CB Consumer Confidence data due from the United States later today.

 

Support for the EURUSD is seen at 1.2589 and resistance is seen at 1.2713.

 

 

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.

[HFM]

Date : 1st October 2014

 

EURUSD TRADING NEAR THE 1.2600 LEVEL IN THE EUROPEAN SESSION. US ADP NON-FARM EMPLOYMENT CHANGE ON FOCUS.

 

EURUSD dropped yesterday and closed at 1.2630. The CPI Flash Estimate in the Eurozone dropped to a level of 0.3 percent on an annual basis in September. The Unemployment Rate in the currency union remained stable at 11.5 percent. Data from the United States showed that the CB Consumer Confidence dropped to a reading of 86.0 in September. The Chicago PMI also failed to meet the market expectations coming at a reading of 60.5 in September.

 

Data released today indicated that the Final Manufacturing PMI in the Eurozone dropped to a level of 50.3 in September.

 

Investors are now looking forward for the ADP Non-Farm Employment Change and the ISM Manufacturing PMI releases due from the United States.

 

Support for the EURUSD is seen at 1.2586 and resistance is seen at 1.2716.

 

 

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.

[HFM]

Date : 2nd October 2014

 

EURUSD TRADING HIGHER DURING THE ECB PRESS CONFERENCE. ECB LEFT THE MINIMUM BID RATE AT 0.05 PERCENT.

 

EURUSD dropped yesterday and closed at 1.2621. Data released from the Eurozone revealed that the Final Manufacturing PMI in the currency union remained stable in September coming at a reading of 50.3. The ADP Non-Farm Employment Change came out better than expected showing an increase of 213K jobs in September. On the other hand the ISM Manufacturing PMI was a little bit disappointing coming worse than expected at a reading of 56.6 in September.

 

Data released today indicated that the Unemployment Claims in the largest economy in the world were less than expected during the last week coming at a reading of 287K. Market had expected a rise to 299K.

 

The ECB Press Conference is taking place at the moment and the pair is trading higher following the comments from the ECB President Mario Draghi.

 

Support for the EURUSD is seen at 1.2587 and resistance is seen at 1.2668.

 

 

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.

[HFM]

Date : 7th October 2014

 

EURUSD TRADING LOWER AFTER THE SHARP DROP OF THE GERMAN INDUSTRIAL PRODUCTION IN AUGUST.

 

EURUSD rose yesterday and closed at 1.2654. The Sentix Investor Confidence in the Eurozone dropped to a new low of -13.7 in September. The German Factory Orders dropped sharply to -5.7 percent in August. In the United States the President of the Federal Reserve in Kansas City Esther George opined that the central bank should raise the short-term interest rates. According to her there is a noticeable improvement of the US economy.

 

Data released earlier today indicated that the German Industrial Production dropped sharply in August. The release showed a reading of -4.0 percent against the market expectations of a -1.4 percent drop. Following the negative release the single European currency lost ground against its US counterpart and its currently trading below the 1.2600 level.

 

Investors are looking forward for the FOMC Meeting Minutes due tomorrow.

 

Support for the EURUSD is seen at 1.2508 and resistance is seen at 1.2654.

 

 

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.

[HFM]

Date : 8th October 2014

 

EURUSD TRADING HIGHER IN THE LATE EUROPEAN SESSION. INVESTORS ARE AWAITING THE FOMC MEETING MINUTES.

 

EURUSD rose yesterday and closed at 1.2668. The German Industrial Production came out at a reading of -4.0 percent on a monthly basis in August. The European Central Bank Governing Council Member Klaas Knot stated that the central bank will continue with its current accommodative policy, because the inflation in the Eurozone is still very low. Data from the United States showed that the JOLTS Job Openings rose to a level of 4.84M in August.

 

During his speech yesterday the President of the United States Federal Reserve in New York William Dudley expressed his upbeat view of the US economy and added that Fed might raise the interest rates in the middle of 2015.

 

Investors are now looking forward for the FOMC Meeting Minutes due later today.

 

Support for the EURUSD is seen at 1.2584 and resistance is seen at 1.2680.

 

 

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.

[HFM]

Date : 9th October 2014

 

EURUSD PRINTED NEW HIGHS IN THE EUROPEAN SESSION. ECB PRESIDENT MARIO DRAGHI SPEAKS TODAY.

 

EURUSD rose yesterday and closed at 1.2732. The German Bundesbank President Jens Weidmann criticized the plans of ECB to buy private sector bonds. On the other hand the ECB Vice President Vitor Constancio spoke in favor of the recent measures taken by the central bank in order to battle with the low inflation in the Euro area. The FOMC Meeting Minutes revealed that the Fed is planning to end its QE program after the end of this month and keep the interest rates low for a considerable period of time. Furthermore some policy members added their concerns about the strong dollar which may hurt the US exports if it continues to strengthen further.

 

Investors are looking forward for the speech of the President of the European Central Bank Mario Draghi at the Brookings Institution in Washington DC and the Unemployment Claims data due earlier.

 

Support for the EURUSD is seen at 1.2624 and resistance is seen at 1.2785.

 

 

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.

[HFM]

Date : 10th October 2014

 

EURUSD TRADING LOWER IN THE EUROPEAN SESSION. DAY 1 OF THE IMF MEETINGS ON FOCUS.

 

EURUSD dropped yesterday and closed at 1.2689. The German Trade Balance dropped to a level of 17.5B in August. During his speech at the Brookings Institution in Washington DC the President of the European Central Bank Mario Draghi stated that he expects the bank lending in the Eurozone to pick up in the early 2015 and also assured that ECB will boost the inflation from its current low levels. He also mentioned that ECB is ready to take any additional measures if needed. The IMF Managing Director Christine Lagarde raised her concerns over the Eurozone possibly falling back into recession unless the central bank and all countries in the Euro area don’t step up and take measures to prevent it.

 

 

Data from the United States indicated that the Unemployment Claims during the last week dropped to a level of 287K. The President of the United States Federal Reserve in San Francisco John Williams indicated that the Fed would likely raise its interest rates in the middle of 2015.

 

Support for the EURUSD is seen at 1.2624 and resistance is seen at 1.2785..

 

 

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.

 

[HFM]

Date : 13th October 2014

 

EURUSD PUSHED HIGHER IN THE ASIAN SESSION. US BANKS WILL BE CLOSED TODAY DUE TO THE OBSERVANCE OF COLUMBUS DAY.

 

EURUSD dropped on Friday and closed at 1.2628. The ECB Governing Council member Peter Praet stated that the economy in the Eurozone would post a modest recovery in the 3rd quarter of 2014. Data from the United States indicated that the export prices dropped 0.2 percent on a monthly basis in September. The President of the United States Federal 

Reserve in Kansas Esther George indicated that Fed would most likely raise its interest rates next year.

 

 

During the weekend the President of the European Central Bank Mario Draghi stated that he sees no risk for the government bond markets in the Eurozone. Draghi also stated that ECB is ready to take further steps if needed in order to bring the annual inflation closer to the 2 percent target.

 

The banks in the United States will be closed today due to the observance of Columbus Day.

 

Support for the EURUSD is seen at 1.2610 and resistance is seen at 1.2785.

 

 

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.

[HFM]

Date : 14th October 2014

 

EURUSD TRADING LOWER AFTER THE WORSE THAN EXPECTED GERMAN ZEW ECONOMIC SENTIMENT REPORT.

 

EURUSD rose yesterday and closed at 1.2749. Data from Germany indicated that the Wholesale Price Index rose 0.1 percent in September. The ECB Executive Board Member Peter Praet opined that there is no deflation risk in the Eurozone at present, but any shock to the economy could move the currency union towards deflation.

 

Data from Germany released today indicated that the German ZEW Economic Sentiment dropped sharply in October to a reading of -3.6 from a reading of 6.9 during the previous month. The Industrial Production in the Eurozone also recorded a drop on a monthly basis to a reading of -1.8 percent in August.

 

Investors are now focused on the outcome of the ECOFIN Meetings taking place today in Brussels.

 

Support for the EURUSD is seen at 1.2610 and resistance is seen at 1.2785.

 

 

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.

[HFM]

Date : 15th October 2014

 

EURUSD IS TRADING NEAR THE LOWS IN THE EUROPEAN SESSION. US RETAIL SALES AND PPI DATA ON TAP.

 

EURUSD dropped yesterday and closed at 1.2657. The German ZEW Economic Sentiment dropped for a 10th consecutive month to a reading of -3.6 in October. The ZEW Economic Sentiment of the Eurozone also registered a drop to a level of 4.1 in October. The European Union finance ministers finished a two day meeting in Brussels yesterday and urged for more investments to improve the struggling economies of the EU. They also agreed to crack down the tax evasion in the Eurozone by 2017 (2018 for Austria).

 

Data released from the United States revealed that the NFIB Small Business Index dropped to a level of 95.3 in September.

 

A report released today showed that the German Final CPI remained at 0.0 percent in September.

 

Investors are now looking forward for the Core Retail Sales month over month, the Retail Sales month over month and the Producer Price Index month over month releases due from the United States. Later on the President of the European Central Bank Mario Draghi speaks at the grand opening of the European Cultural Days 2014 organized by the European Central Bank in Frankfurt.

 

Support for the EURUSD is seen at 1.2624 and resistance is seen at 1.2749.

 

 

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.

[HFM]

Date : 20th October 2014

 

EURUSD ROSE SHARPLY AFTER POOR ECONOMIC DATA FROM THE UNITED STATES.

 

EURUSD dropped on Friday and closed at 1.2757. The Governing Council Member of the European Central Bank Ewald Nowotny that the economic growth outlook of the Eurozone may be slashed for 2015 from its 1.6 percent level. The ECB Vice President Vitor Constancio warned that any further drop in the inflation in the Euro area could be extremely harmful.

 

Data from the United States supported the US dollar at the end of the week. The University of Michigan reported that the consumer sentiment in the states rose to a reading of 86.4. The Housing Starts in the US also rose to 6.3 percent on a monthly basis in September. The Fed Chair Janet Yellen cautioned that the growing economic inequality in the US, posed a risk to the nation’s economic growth.

 

Data released today indicated that the German Producer Price Index remained at 0.0 percent on a monthly basis in September. Another report revealed that the Current Account in the Eurozone dropped to 18.9B in August.

 

Support for the EURUSD is seen at 1.2726 and resistance is seen at 1.2841.

 

 

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.

[HFM]

Date : 22nd October 2014

 

EURUSD PUSHING LOWER IN THE EUROPEAN SESSION. CPI DATA FROM THE UNITED STATES ON FOCUS.

 

EURUSD dropped yesterday and closed at 1.2715. Reports from different sources emerged that the European Central Bank is planning to expand its asset purchase program by doing corporate debt purchases. Data from the United States indicated that the Existing Home Sales from the United States in the largest economy of the world rose 2.4 percent on a monthly basis in September.

 

Investors are now looking forward for the Consumer Price Index and the Core Consumer Prices index month over month reports due from the United States later today.

 

Support for the EURUSD is seen at 1.2624 and resistance is seen at 1.2785.

 

 

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]

Need for safe haven increases demand for gold

 

Since the International Monetary Fund (IMF) lowered its estimation for global growth for 2015, the equity markets have seen a sizeable correction. Last week, before the correction in stock indices was reversed, over $3.2 trillion was momentarily wiped out from the value of the global stock market. In addition to this, various worries ranging from the spread of the Ebola virus to the Federal Reserve (Fed) tightening its monetary policy, added to the general feel of the investment world as we’ve known it over the last four to five years, coming, if not to and end, at least close to it. This translated into strength in Gold which is often viewed as a safe haven when global threats arise or when the Fed expands its balance sheet. It is clear from the charts that when things got jittery, money flowed out of the other markets, but not from gold. Instead, gold gained after it touched a long term support level. According to the Financial Times, flows into gold investment funds hit an eight week high in the week to October 15^th. At the same time the comments from the St. Louis Fed president Mr. Bullard have left the door open for further expansion of the Fed’s balance sheet. Based on all of the above, it is safe to assume that gold prices will be either sustained above the latest weekly low (support level at 1183) or trend higher over the coming months.

For recent and upcoming economic reports see: HotForex Economic Calendar

 

 

Gold, weekly

Over the last two and a half weeks gold has been moving higher from an important support level (blue horizontal line). While the most important weekly resistance levels (red horizontal lines) are far away from the current market price, we should pay attention to the Fibonacci cluster levels on the above chart (black horizontal lines). Based on several major highs in the recent sideways move in 2013 and 2014, as well as the latest market low, it is possible to draw several Fibonacci retracement levels. Because there is no single right way of choosing the low/high points for the analysis, different people draw the Fibonacci levels from different price points. Fibonacci cluster analysis provides us the areas important to the majority of analysts by eliminating all the other levels and focusing on those that cluster together. This analysis provides us with the following areas of importance in Gold. Support (area below current price) 1215 – 1220 and Resistance (area above price): 1260 – 1268. The third area of importance for Fibonacci analysts is where the price currently fluctuates. This area coincided with the weekly low from June this year. Price action below this weekly low is likely to be range bound and the range best visible (and tradeable) in the smaller time frames (4h and 1h). I base this view on what happened the last time gold was moving up from the same support level and prices reached the previous weekly pivot low (in January this year). Then, Gold moved sideways for three weeks before breaking above the resistance area created by the mentioned weekly pivot low.

 

Gold, 4h

In the above chart we have the same levels in a 4h chart. Price has been moving fairly steadily without strong extensions outside the Bollinger Bands, but some weariness in momentum is visible as the latest directional move hasn’t been strong enough to take gold to the upper end of the channel. This indicates that even though buyers have been able to work their way through the Fibonacci cluster at the weekly low, they are confronted with further supply at these levels.

If price breaks lower from here, potential supporting areas are the 4h Bollinger Bands that coincide with the daily low from Friday 17^th and the penetrated resistance (see above chart) which has already proven itself as an area where buyers are willing to step in. It is worth noting that this level (a supporting Fibonacci cluster at 1215 to 1220) is roughly the area of former resistance from September this year and should the price move back there this would be a potential support and worth keeping an eye on.

 

 

Gold, 1h

Price is currently hovering at the lower 1h Bollinger bands while it moves sideways just above one of the Fibonacci cluster levels drawn earlier, but seems to be slipping lower. If gold can’t close above the descending red trend line but keeps on drifting lower, I would look at the 4h (240 min.) Bollinger Bands as potential support or first target for short trades. If momentum analysis (e.g. in 15 and 5 min. charts) confirms that this area of potential support is likely to hold, then long entries could be considered at or around the level.

 

Conclusion: Keeping in mind that we are at price levels where psychology has changed substantially in June (the market turned from bearish to bullish right at current levels). This might mean that immediate upside is limited and that the market needs to dip lower to gather strength for another attempt to break through the above resistance. This is not very clearly visible in price action yet, but as I pointed out earlier the latest move higher in the 4h chart isn’t as strong as those before it. Therefore, it makes sense to prepare for the possibility of gold breaking lower and be ready to take long trades at potential support levels. However, if current minor support at Bollinger Bands and close to the level of rising trend line holds, it would be advisable for traders to act accordingly and follow the direction of the rising trendline in their trading.

 

Read the article at HotForex Blog - charts are also available 

 

[hotforex]

BoE concerned about Euro area slow down impacting UK

 

The Bank of England’s MPC meeting yesterday (Oct. 22^nd) voted 7:2 against rate hikes. This was expected by the analysts and the same members, Weale and McCafferty, voted for a 0.25% hike as the last time. The rate stayed the same at 0.5%. Members voting against the rate hike were concerned about weak wage growth and couldn’t justify a rate hike in the current low inflationary environment. The UK Consumer Price Index (CPI) has been trending lower since October 2011 and is currently at 1.2, well below the BoE’s Q3 inflation expectations of 1.8%. This allows the Central Bank to have an ultra loose monetary policy without worrying excessively about price stability. Members of the committee were also concerned about a rate hike exposing UK to economical shocks and the slow down in the euro area being contagious. In light of recent weak data (low CPI and jobless claims for September falling less than expected), it may well be that those voting against rate hikes in the November meeting will have even stronger majority.

Today and tomorrow the focus will be on Friday’s Preliminary Gross Domestic Product (GDP) figure for the UK. This is the first release of the 3 versions of UK GDP. They are released a month apart – Preliminary, Second Estimate, and Final. The Preliminary release is the earliest and tends therefore to have the biggest impact on Pound Sterling.

The UK economy grew by 0.9% in the second quarter. Slightly beating expectations (0.8%) and was in line with Q1′s GDP reading of 0.8%. At that time, the IMF also upgraded its annual GDP forecasts for the U.K., which was then one of the better performers among the major economies. A weaker growth rate pace is projected for Q3, as manufacturing and services activity has slowed during the period. The analysts’ expectation for the Q3 GDP reading is 0.7%. A strong deviation (in either direction) from this figure is likely to translate into a stronger than average move in Pound Sterling pairs.

For recent and upcoming economic reports see: HotForex Economic Calendar

GBPUSD, weekly: has been trending lower, now hovering at 50% Fibonacci retracement level (measured from July 2013 low to July 2014 high). Has bounced from proximity of weekly support at 1.5855. Weekly support: 1.5855 – 1.5875 and weekly resistance 1.6252 coincides with 38.2% Fibonacci level. Stochastic oscillator is oversold but showing some bullish divergence (Stochastics has moved higher while price has moved lower). This suggests to me that the downside is limited as the market is turning and probabilities are on the long side once the intra-day charts signal the timing for longs is correct. Weekly and daily pictures give us the frame work and an understanding of what kind of process the price is going through. Intra-day charts provide us with timing tools.

GBPUSD, daily: This weeks high (1.6185) coincided with a Fibonacci cluster 1.6170 – 1.6197. These clustering levels are measured from the highs in the down move to the latest low. The fact that several Fibonacci levels and a weekly high coincide at same levels emphasizes the importance of, not only Fibonacci cluster analysis but also the level as a resistance. Another cluster above this one is at 1.6250 – 1.6274, a level where the Bollinger Bands are at the moment as well. Supporting Fibonacci cluster (blue lines) is roughly at the same level with the always so important 50% retracement (measured from July 2013 low to July 2014 high). In addition, the pair has just broken out of bullish wedge formation three days ago and has now retraced to the trendline that used to limit its move higher. This too is a sign to look for long opportunities in shorter time frame charts.

GBPUSD, 1h: The most interesting area to consider long trades is the potential support area (1.5940 – 1.5965) provided by the daily Bollinger Bands and the October 16^th low. At the time of writing, price is still creating lower lows and highs and seems to be edging lower. This might well be due to the uncertainty caused by the coming GDP update on Friday. If there will be no major negative surprise (the UK GDP figure is close to expectations) the above mentioned support levels could provide day trading opportunities with the 21^st October low being the first target. Above that potential target levels would be 1.6180 and 1.6220.

Conclusion: Based on the above analysis GBPUSD is currently at levels that favour long trades. We have a market that is close to a support after long move lower, and it is showing signs of momentum change: bullish wedge and breakout with a divergence in Stochastics. The downside seems to be limited as downside momentum is waning and probabilities are therefore on the long side. We should keep in mind though that intra-day signals should be closely monitored in order to increase chances to get the timing for longs right. In addition, it is unlikely that this market will make major moves before the preliminary GDP publication tomorrow. If there is no intra day momentum reversal signal and the price keeps on moving lower, this setup is negated and traders should act accordingly.

 

HotForex Blog

[HFM]

Date : 23rd October 2014

 

EURUSD IS TRYING TO RESUME THE DOWNTREND. US UNEMPLOYMENT CLAIMS ON FOCUS TODAY.

 

EURUSD dropped yesterday and closed at 1.2644. The United States dollar gained ground against its European counterpart after data released from the US revealed that the Consumer Price Index in the largest economy of the world unexpectedly rose 0.1 percent in September. The Crude Oil Inventories in the US remained at 0.1 percent. The Crude Oil Inventories in the US came out at 7.1M during the last week.

 

Data released today showed that the German Flash Manufacturing PMI rose to 51.8 in October.

 

Investors are now looking forward for the Unemployment Claims report due from the United States later today.

 

Support for the EURUSD is seen at 1.2624 and resistance is seen at 1.2785.

 

 

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.

[HFM]

Date : 24th October 2014

 

EURUSD TRADING IN TIGHT RANGE IN THE EUROPEAN SESSION. US NEW HOME SALES ON FOCUS IN THE AFTERNOON.

 

EURUSD traded sideways yesterday and closed at 1.2646. Data released from the Eurozone revealed that the Flash Manufacturing Purchasing Managers Index rose to 50.7 in October. The Flash Services PMI also registered a rise coming at a reading of 52.4 in October. Data from the Germany revealed that the manufacturing activity in the largest economy of the Eurozone returned to expansion with the Flash Manufacturing PMI coming at a reading of 51.8 in October.

 

Data from the United States indicated that the Unemployment Claims rose to a reading of 283K during the last week. The Flash Manufacturing PMI in the largest economy in the world dropped slightly in October coming at a reading of 56.2. On the other hand the House Price Index rose 0.5 percent on a monthly basis in August.

 

Investors are now looking forward for the New Home Sales report due later today from United States.

 

Support for the EURUSD is seen at 1.2624 and resistance is seen at 1.2733.

 

 

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]

Why to trade with multiple time frame charts? | Part 1

 

As the traders who read my articles are aware by now I do not favour an idea of basing one’s analysis and trades on price action in a single time frame chart. New traders are often fascinated by the constant action visible in the 1 minute or 5 minute time frames. This is the same crowd that loves trading platforms with flashing lights, blinking windows and buzzing buzzers. The more eye candy and action, the better. I’ve been there and done that, so I can’t blame them. But, believe me, after watching price action for over 16 years, I’ve got no need for such hyper activity any longer. I am only interested in knowledge and information that has quality, validity, and hopefully, also some predictive value.

The main problem with the lowest time frame charts is the thing called noise. Noise can be defined as unwanted signals that obscure the real signals and therefore harm the quality of your analysis. In other words, 1 minute charts for instance, have so many spikes, ranges, mini trends, hammers, shooting stars, breakouts and false breakouts that these “setups” are only going to wear you out – and drain your trading account. You are free to try out, but unless you are extraordinarily lucky it’s likely that you will, sooner or later, become physically, mentally and financially exhausted. If you recognise some (or all) of these symptoms, take a step back and start again with (multiple) higher time frame charts and do some analysis that adds value to your trading career.

Another major problem with single time frame analysis is the fact that you are constantly out of touch with what is really happening in the market that you are trying to trade. How can that be true? Let’s give it some thought. First, what logical reason would there be to assume that the price action in, for example, a 5 minute chart would give us any relevant clues on what the big market operators, such as banks or hedge funds are focusing on. Their operations generally last longer than the time period a newbie trader typically focusses on (when watching his small time frame charts). These market participants are those that have the power to really move the markets and I have not yet heard of any central bank action or other major currency operation that would be completed intra day.

For instance, when a big company buys another from abroad for billions of dollars, this deal needs a currency transaction in order to be completed. The buyer needs to exchange the local currency to the currency of the target country. The FX market is the biggest market in the world, but selling or buying billions does mean that the position has be accumulated over a few days. Obviously the traders try to complete the buy operation in such a way that they don’t push the prices higher. If we do our analysis properly, we can find the levels that are meaningful for the big operators as well. These levels are likely to be important daily and weekly highs and lows, not minor one or five minute levels.

In addition, if one limits his or her view into a single time frame chart, the understanding of the current process and context at which this price action is taking place is kind of difficult (if not impossible) to grasp. With a process I mean for instance a situation where price is bouncing off from a higher time frame support level or it has reached a major resistance level and the momentum is waning. Should a trader focus only on a 5 minute chart or 1h chart for that matter, he or she would be likely to keep on shorting the bounces next to a major support. In other words, shorting even though price has reached a level that is likely to attract institutional buying. These shorts have much fewer probabilities on their side than those opened close to a major resistance level after there is confirmation that prices are indeed likely to turn lower. The old adage goes: buy low and sell high, but we need the bigger time frame to understand what the low and high actually mean.

 

HotForex Blog

[HFM]

Date : 27th October 2014

 

EURUSD PUSHED BELOW THE 1.2700 LEVEL IN THE EARLY EUROPEAN SESSION.

 

EURUSD rose on Friday and closed at 1.2670. The German Gfk Consumer Confidence Index rose to a level of 8.5 in November. The President of the European Central Bank urged the nations in the Eurozone to do more structural economic reforms. Data from the United States showed that the New Home Sales in the largest economy in the world rose unexpectedly to a 6-year high level of 0.2 percent in September against the market expectations of a 6.8 percent drop.

 

 

Over the weekend the ECB reported that most of the biggest banks in the Eurozone passed the stress test and have enough capital to stand another slowdown in the financial system. However 25 from 150 banks failed to pass the stress test showing cumulative shortfall of 24.6 billion Euro.

 

Investors are now looking forward for the German Ifo Business Climate report due from the Eurozone and the Pending Home Sales data due from the United States.

 

Support for the EURUSD 1.2624 and resistance is seen at 1.2713.

 

 

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.