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[HFM]

Date : 6th January 2015

 

EURUSD TRADING BELOW THE 1.19 LEVEL AHEAD OF THE US SESSION. ISM NON-MANUFACTURING PMI FROM THE UNITED STATES DUE TODAY.

 

EURUSD dropped yesterday and closed at 1.1932. The German Preliminary Consumer Price Index remained flat in December against the market expectations of a 0.1 percent rise. On the other hand the Sentix Investor Confidence in the Eurozone rose to a level of 0.9 in January. The number of unemployed people in Spain dropped to a level of 64.4K in December.

 

During his statement the President of the United States Federal Reserve in San Francisco, John Williams opined that the increase of the interest rates should be gradual at the beginning. He also indicated that the policymakers have been discussing the potential rate increase by the middle of 2015.

 

Investors are now looking forward for the ISM Non-Manufacturing PMI due from the United States later today.

 

Support for the EURUSD is seen at 1.1869 and resistance is seen at 1.1978.

 

 

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]

Portfolio Diversification Supports Gold Price: https://blog.hotforex.com/portfolio-diversification-supports-gold-price/

 

I wrote in the beginning of December how the price of gold was supported by many technical factors. I also pointed out that even the negative news that Swiss voted against increasing the country’s gold reserves couldn’t push the price lower. Instead it actually rallied on the next trading day after the results of the vote came out. If negative news can’t push the price down, then the market sentiment is rather positive. This combined with the fact that the price action was showing signs of downtrend running out of steam helped me to conclude that the downside is limited and that the price should move towards the higher end of the long term trend channel. At the same time the analysts focusing only on the fundamentals kept on repeating the same arguments about the improving U.S. economy, the continued better labor picture, the lack of inflation, very strong stocks and the very strong dollar pushing the price of gold lower. By this they justified their views that gold is going to keep on moving lower.

 

Now analysts are focusing on renewed fears over the EU economics and the potential exit of Greece and suggest that the weakness in equities globally will support the gold prices. This is what typically happens with analyst expectations and market moves. The market reacts first and those who know how to read the market will have an advantage over the analysts that are still focused on something the markets as a whole have already dropped from the radar. At the time I wrote my analysis on Gold (5th December) the internet was flooded with analyst views on how the price of Gold will depreciate further due to strong dollar and low inflation and continued economic recovery, of which the strong stock market was a proof. Since the publication of this article the US Dollar index (DXY) has risen over 4% and Gold is up by 2%, so much for the strong dollar sending Gold prices lower. In addition, the so called strong stock market has not been that strong. I pointed out in my analysis on 12th November that there was underlying weakness in the stock market (S&P emini futures traded at 2021 at the time and are now 1.5% lower) and in another piece from 29th October I suggested that there might be sideways markets ahead. The S&P 500 has not been able to maintain the levels it moved to since then and is now trading only roughly 1.7% higher.

 

All this supports the view that the appetite for risk is gone and the market participants are looking for ways to diversify their portfolios by selling equities and adding exposure to Gold.

 

 

Gold, Monthly

Gold is still relatively close to a historical support (provided by a monthly pivot candle high from February 2010), while the monthly candle for November was a narrow range candle with open and close only $4 apart. This indicates that supply and demand were in balance in November. Even though Gold is still inside a long term downtrend channel we now have a monthly pivot candle (one higher monthly low value on both sides) right at the Bollinger Bands, which is a rather significant technical indication of momentum change. If this month’s trading closes above 1167.30 we have yet another higher low which would further indicate that the price of Gold is gaining upside momentum.

 

 

 

Gold, Weekly

 

Price of Gold has now moved above the down sloping regression channel that formed a medium term downtrend. This week price has been moving outside the channel while the last week’s candle created a third higher low since it pivoted at 1131.50 in November. There is a symmetric triangle created with lower weekly highs and higher weekly lows. The fact that the price is relatively close to a historical support and in a process of reacting higher from this support, we might well see that the price will break out to the upside. A weekly close above the last week’s high would be a further bullish sign. Should the breakout happen the Fibonacci Extension Levels of 1.00 and 1.618 (drawn by using the points a, b and c) would indicate potential short to medium term target levels. Their significance is increased by the fact that they coincide with monthly pivot candle high and low from July 2014. The nearest weekly resistance is at 1226.30 (a weekly shooting star candle low from October).

 

 

 

Gold, Daily

 

The trend in the daily chart is sideways but the price making higher lows each time it retraces to the Bollinger Bands and moves inside the 7th November pivot candle range (the green highlight). The weekly resistance and support levels limit the current sideways move with assistance from the daily Bollinger Bands. Look for Momentum Reversal Signals inside the green support area to either go long or exit the short trades. The area to look for short MR Signals would be above the 1226.30 level.

 

Conclusion:

 

Even though Gold is still inside a long term downtrend channel we now have a monthly pivot candle (one higher monthly low value on both sides) right at the Bollinger Bands, which is a rather significant technical indication of momentum change. This week price has been moving outside the medium term downward channel while the last week’s candle created a third higher low since it pivoted at 1131.50 in November. The trend in the daily chart is sideways but the price makes higher lows each time it retraces to the Bollinger Bands and moves inside the 7th November pivot candle range (the green highlight). At the same time the stock market has been sluggish which suggests that the market participants are not that eager to buy stocks but they might instead be diversifying their portfolios and moving money into safe havens such as Gold. All these factors point to the price of Gold moving higher over the coming weeks and months, however the sideways range could provide actionable trade setups at both ends for traders who understand the Momentum Reversal Signals and Multi Time Frame Analysis. Those wanting to learn how to trade professionally open an account with HotForex and gain access to my past and future educational webinars. I will take you through all the aspects of analyzing the markets and trading them the way the professionals do.

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[HFM]

Date : 7th January 2015

 

EURUSD PREPARING TO TEST THE 1.18 LEVEL AFTER NEGATIVE CPI FROM THE EUROZONE AND BETTER THAN EXPECTED ADP NON-FARM EMPLOYMENT CHANGE REPORT FROM THE UNITED STATES.

 

EURUSD dropped yesterday and closed at 1.1889. The Final Services PMI in the Eurozone came out closed to the market expectations at 51.6. The same report from the United States followed and also came close to the market expectations at a reading of 53.3. The ISM Non-Manufacturing PMI failed to meet the market expectations and came out at a reading of 56.2 in December.

 

 

Data released today pushed to EURUSD even lower. The CPI Flash Estimate year over year report from the Eurozone came out at a reading of -0.2 percent. That’s the first time since 2009 where the Eurozones’s CPI declines. A report from the United States pressurized the single European currency after the ADP Non-Farm Employment Change came out better than the market expectations at a reading of 241K.

 

While the EURUSD is looking to potentially break the 1.18 level investors are looking forward for the FOMC Meeting Minutes due later today.

 

Support for the EURUSD is seen at 1.1817 and resistance is seen at 1.1936.

 

 

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 January 2015

 

EURUSD KEEPS PRINTING NEW LOWS IN THE EUROPEAN SESSION. THE US UNEMPLOYMENT CLAIMS REPORT DUE TODAY.

 

EURUSD dropped yesterday and closed at 1.1838. The Consumer Price Index in the Eurozone dropped -0.2 percent on an annual basis in December. The fall of the prices for a 2nd consecutive month might pressurize the European Central Bank to start its stimulus program immediately.

 

 

The FOMC Meeting Minutes showed that most of the Fed officials agreed that the central bank do not consider increasing rates before April 2015. The Trade Balance in the United States came out better than expected at -39.0B in November 2014. The positive tone for the US dollar was also confirmed by the better than expected ADP Non-Farm Employment Change report which came out 241K in December against the expected reading of 227K.

 

Investors are now looking forward for the Unemployment Claims report.

 

Support for the EURUSD is seen at 1.1763 and resistance is seen at 1.1889.

 

 

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]

Low Energy Prices Pressuring Corn - HotForex Blog https://blog.hotforex.com/low-energy-prices-pressuring-corn/

 

 

Weak US exports and falling energy costs have reduced the appeal for renewable fuels which are largely made from grains and oilseeds. According to the U.S. Energy Information Administration, ethanol stockpiles have had risen by 751,000 barrels to 18.85 million barrels by 2nd January. This was the largest weekly rise in nearly two years. Corn prices have been coming down since the beginning of the year as low oil prices mean that demand from ethanol manufacturers is reduced. According to industry analysts, it is unlikely that ethanol manufacturers and blenders will be able to pay close to $4 for corn. This has put a damper on price. Furthermore, the recent rise in the price of corn is likely to encourage farmers to increase the acreage of corn. This would lead to an increase in supply over the year 2015 and put pressure on corn prices.

 

 

 

Corn, Weekly

Price rallied 30% from the September low and has since hit a resistance at around 415’6, which was a weekly support in the Q4 2013. The price has reacted lower from the resistance and sits now at a minor support at 392. The outside reversal bar in the weekly picture took the market lower by almost 6% in one week and suggests that the corn price will be under pressure in the coming weeks. The Stochastics, MFI and RSI are rolling over from overbought levels.

 

 

Corn, Daily

 

The daily chart reveals how there was a rally from the 392 support, but the rally couldn’t penetrate the bottom of the rising regression channel. This created a lower high and confirmed that the uptrend is over. A lower high after the price has had a strong move lower from a resistance level tells about the balance of supply and demand being in favour of the bears. The levels close to the 38.2% Fib level (at around 380) could be significant support as it was a resistance in August 2014 and price pivoted at this level on 18th of August last year. When price moved higher from this level the last time (4th December), a pivot candle was formed and was followed by a gap opening higher. The current daily support at 392 coincides with the Bollinger Bands and the 23.6% Fibonacci level, but in the light of the price moving so strongly down from resistance and creating a lower high, it seems unlikely that the support will hold.

 

Conclusion:

 

The potential increase in the acreage and the low energy prices suggest that Corn will be under pressure. The technical picture is weak with the price reaction lower from a resistance and creating a lower high in the daily chart. The first target level for short trades is at around 380, close to the 38.2% Fibonacci retracement level. This view would be negated by market moving above the latest weekly high 417. I look forward to seeing you in the webinars where I will teach you how to take advantage of trading opportunities that occur daily in Corn and other markets.

 

Those wanting to learn how to trade professionally open an account with HotForex and gain access to my past and future educational webinars. Over the course of the webinars I will take you through all the aspects of analyzing the markets and trading them the way the professionals do. Click HERE to register and be early to secure a seat!

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[HFM]

Date : 9th January 2015

 

EURUSD TRADING FLAT AHEAD OF THE US NON-FARM PAYROLLS REPORT.

 

EURUSD dropped yesterday and closed at 1.1792. The single European currency came under pressure after the German Factory Orders dropped 2.4 percent on a monthly basis in November. On the other hand the Retail Sales data from the Eurozone came out better than expected recording a gain of 0.6 percent in November.

 

Data from the United States indicated that the Unemployment Claims during the last week were 294K which was close to the market expectations of a reading of 291K and less than the previous week’s report of 298K.

 

Investors are now looking forward for the US Non-Farm Employment Change report and the Unemployment rate data. The possibility of high volatility on the market prior and after the releases exists and investors should be fully aware of it.

 

Support for the EURUSD is seen at 1.1763 and resistance is seen at 1.1889.

 

 

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]

Verbal QE has been weighing on Euro - HotForex Blog:https://blog.hotforex.com/verbal-qe-has-been-weighing-on-euro/

 

 

The EURUSD has reached a support area that has been psychologically important in the past. The level acted as a resistance in 1998 and in 2003 and in 2005 the level turned a downtrend in EURUSD to an up move that lasted for more than two years. This could mean that chances for immediate and extensive moves lower are now limited. The last time EURUSD reached a historical weekly pivot it moved sideways for three weeks before breaking lower. The trend is still down and there is no reason in the charts to turn bullish with Euro. In addition, the economic problems in the euro area together with the verbal QE from Mr. Draghi are likely to drag the EURUSD even lower.

 

 

EURUSD, Monthly

 

The EURUSD is at a support area that has been psychologically important in the past. The level acted as a resistance in 1998 and in 2003. In 2005 the level turned a downtrend in EURUSD to an up move that lasted for more than two years. The pair has created lower highs since 2007 and has now moved below an important support area that was able to turn the market higher in three separate occasions.

 

 

EURUSD, Weekly

 

The weekly trend is down but is has extended outside the regression channel. This means that the trend is now more vulnerable for retracements. The 1.1795 level that has provided support is a weekly pivot high from November 2005. With Stochastics and RSI firmly oversold and price at a historical weekly support extensive and immediate downside could be limited.

EURUSD, D

 

 

EURUSD, Daily

 

The daily short term daily trend is down with price inside the regression channel. Price has retraced back to a daily low from 5th January at 1.1868. The oscillators are oversold. The last time Euro was able to move against the prevailing trend it lasted for two days, if the current resistance holds now it is likely that the Euro will at least test the recent lows but there is a likelihood that the problems in the euro area together with the verbal QE from Mr. Draghi will drag the EURUSD even lower.

 

 

EURUSD, 240 min

 

The price has moved out from the descending regression channel to resistance that coincides with the 20 period Bollinger Bands. The resistance is created by pivotal low at 1.1868. Now that price has moved to the level momentum is drying up with Stochastics being ready roll over and 4h bar ranges becoming very narrow. We have a daily resistance at 1.1868, but a weekly support at around 1.1795 is still relatively fairly close. Oscillators are overbought as price moves sideways at the upper Bollinger Bands. There is also a cluster of Fibonacci levels that coincide with the current resistance level and another between 1.1934 and 1.1949. I have left the levels off to increase the readability.

 

 

EURUSD, 60 min

 

A minor uptrend that has reached the 1.1868 and shows signs of weakening. Now the price is about to create a shooting star at the resistance which indicates price will move lower from here.

 

Conclusion:

 

The EURUSD has reached a support area that has been psychologically important in the past. The level acted as a resistance in 1998 and in 2003 and in 2005 the level turned a downtrend in EURUSD to an up move that lasted for more than two years. This could mean that chances for immediate and extensive moves lower are now limited. The last time EURUSD reached a historical weekly pivot it moved sideways for three weeks before breaking lower. The trend is still down and there is no reason in the charts to turn bullish with Euro. In addition, the economic problems in the euro area together with the verbal QE from Mr. Draghi are likely to drag the EURUSD even lower. In the intraday chart (240 min) price has moved out from the descending regression channel to a resistance that coincides with the 20 period Bollinger Bands. The resistance is created by pivotal low at 1.1868. Momentum is drying up with Stochastics being ready roll over and 4h bar ranges becoming very narrow. In a 60 min time frame we can see that as the minor uptrend has reached the resistance it shows signs of weakening (a lower high). In the process price also created a shooting star candle at the resistance. This indicates that price will move lower from here. Traders looking to short against the 1.1868 resistance should monitor the levels around 1.1795 for Momentum Reversal Signals to exit short trades as the weekly support possibly provides temporary support to the market.

 

For those who would like to learn how to trade professionally, please join me at my free trading webinars. Over the course of the series, I will take you through all the aspects of analyzing the markets and trading them the way the professionals do. Click HERE https://www.hotforex.com/en/trading-tools/trading-webinars.html?refid=37217 to register and secure your seat! 

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[HFM]

Date : 12th January 2015

 

EURUSD TRADING NEAR THE LOWS IN THE LATE EUROPEAN SESSION. LIGHT ECONOMIC CALENDAR TODAY.

 

EURUSD rose on Friday and closed at 1.1840. The German Industrial Production dropped on a monthly basis coming at a reading of 0.1 percent in November. The Unemployment Rate in the United States fell to a 15-year low level of 5.6 percent in December. The Non-Farm Payrolls surprised the investors coming better than the market expectations with a gain of 252K in December. The Wholesale Inventories also followed the positive tone registering a rise of 0.8 percent.

 

 

The President of the United States Federal Reserve in Richmond, Jeffrey Lacker expressed his optimism about the US economy and projected a rise of the GDP from 2.5 to 3 percent in 2015.

 

On the other hand the President of the Federal Reserve in Chicago, Charles Evans stated that even as the labor market continues to show considerable progress the current inflation and the inflation outlook remain low and Fed should avoid increasing rates until 2016.

 

Support for the EURUSD is seen at 1.1763 and resistance is seen at 1.1889.

 

 

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 January 2015

 

EURUSD TRADING NEAR THE 1.1800 LEVEL AFTER PUSHING HIGHER IN THE ASIAN SESSION.

 

EURUSD dropped yesterday and closed at 1.1833. The European Central Bank Governing Council Member Ewald Nowotny stated that the central bank should act soon rather than later to boost the economic growth and inflation in the currency union. Nowotny also added that the policymakers are discussing steps including bond buying in order to spur the growth in the region. It is also widely expected that the ECB will announce a launch of the QE program as early as 21st January, as consumer prices in the EU are into deflationary territory according to the preliminary data that was released.

 

During his speech yesterday the President of the United States Federal Reserve in Atlanta Dennis Lockhart indicated that the sees the US economy moving ahead in its recovery. Lockhart added that he sees the potential increase in the interest rates in the middle of 2015.

 

Support for the EURUSD is seen at 1.1763 and resistance is seen at 1.1889.

 

 

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 January 2015

 

EURUSD DROPS BELOW 1.1747 WHILE ECB CONTINUES TO DISCUSS THE QE PROGRAM. US RETAIL SALES DATA DUE TODAY.

 

EURUSD dropped yesterday and closed at 1.1771. Data released yesterday showed that the German Wholesale Price Index dropped 1.0 percent on a monthly basis in December. On the other hand the Industrial Production in Italy rose 0.3 percent on a monthly basis in November beating the market expectations of a 0.1 percent rise.

 

In the United States the NFIB Small Business Index rose to a level of 100.4 in December. Another report revealed that the JOLTS Job Openings advanced to a reading of 4.97M in November.

 

 

The World Bank increased the economic growth forecast for the United States to 3.2 percent from 3.0 percent projected earlier, while downgrading the Eurozone economic growth forecast to 1.1 percent from the 1.8 percent projected earlier.

 

Investors are now looking forward for the Retail Sales data due to be released from the United States later today.

 

Support for the EURUSD is seen at 1.1734 and resistance is seen at 1.1870.

 

 

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]

The Sideways move in S&P 500 Continues

 

It is common that market is soft whenever a higher time frame Doji candle forms after a sizeable move higher. This has happened in several occasions over the last seven years and the investors should pay attention. For traders however, this means usually more opportunities as the lower time frames tend to have more price fluctuation. We have plenty of economic releases today from the US, which should help the traders in that regard and cause more volatility in the market. We have import and export data, business inventories, Fed Beige Book, Crude Oil Stocks Change but the most interesting and the publication of Retail Sales data, an event that has potential to move the markets the most. The analysts are expecting the figure to come in at -0.1%, which is considerably lower than the previous 0.7%. A strong deviation from the expectations should move the market significantly and create more opportunities to trade the market.

 

 

S&P 500, Monthly

 

Trend wise the market is still inside the rising regression channel, even though it has had one move outside of it in October last year. The last completed candle from December is an interesting one. The long term stock market Bulls don’t really want to see something like this developing in the world’s most important stock market, especially not combined with a plunge in the price of copper (down almost 5% today). The December candle is what’s known as a Doji, a candle with open and close near to each other. When such a candle appears after an uptrend we know one thing: the demand and supply were in balance. In other words the bulls were not in control anymore. The last time a similar monthly candle appeared after a long uptrend was in October 2007. Then the candle marked the end of the previous bull market. Is it likely that the Monthly Doji candle will again turn the market lower? The importance lies in the price action over the coming two months. If we get lower lows and lower highs followed with increasing volatility, then the probabilities of uptrend being over are much higher. We don’t yet know if this will be the case, but what we know is that the market usually corrects lower after these kinds of candles after the market has been trending higher.

 

The RSI has been overbought since the beginning of year 2013, which is what often happens in a strong uptrend. Now RSI is breaking below a level of 66.58 that has supported the index in August 2013 and January 2014. The RSI has also diverged from the S&P500 with lower highs while the stock market has been moving higher. This is known as bearish divergence. The nearest monthly S/R levels are at 1961.50 and 2088.75 and a couple of Fibonacci levels cluster at 1845 – 1832. This is not much of a cluster but the fact that they coincide with a monthly low from October makes the level between 1813 and 1845 significant.

 

 

S&P 500, Monthly

 

Trend wise the market is still inside the rising regression channel, even though it has had one move outside of it in October last year. The last completed candle from December is an interesting one. The long term stock market Bulls don’t really want to see something like this developing in the world’s most important stock market, especially not combined with a plunge in the price of copper (down almost 5% today). The December candle is what’s known as a Doji, a candle with open and close near to each other. When such a candle appears after an uptrend we know one thing: the demand and supply were in balance. In other words the bulls were not in control anymore. The last time a similar monthly candle appeared after a long uptrend was in October 2007. Then the candle marked the end of the previous bull market. Is it likely that the Monthly Doji candle will again turn the market lower? The importance lies in the price action over the coming two months. If we get lower lows and lower highs followed with increasing volatility, then the probabilities of uptrend being over are much higher. We don’t yet know if this will be the case, but what we know is that the market usually corrects lower after these kinds of candles after the market has been trending higher.

 

The RSI has been overbought since the beginning of year 2013, which is what often happens in a strong uptrend. Now RSI is breaking below a level of 66.58 that has supported the index in August 2013 and January 2014. The RSI has also diverged from the S&P500 with lower highs while the stock market has been moving higher. This is known as bearish divergence. The nearest monthly S/R levels are at 1961.50 and 2088.75 and a couple of Fibonacci levels cluster at 1845 – 1832. This is not much of a cluster but the fact that they coincide with a monthly low from October makes the level between 1813 and 1845 significant.

 

 

S&P 500, Daily

 

The daily trend is sideways as I suggested some months ago. The price moved briefly to new highs in the end of December but has since formed a lower high and is now possibly forming a bullish hammer candle. The levels below the pivotal high from September last year (2014.50) seem to attract buyers as evidenced by the last rally from the current levels. However, that was followed by a lower high which dampens the bullishness of the current picture. The 38.2% Fibonacci retracement together with Bollinger Bands supported the price in the previous daily pivot low and now the price is fairly close to the same levels and trying to create a higher low. This indicates that the bulls are looking to take this market to test the 2060.75 resistance. If that is cleared and held (a higher low above the level) the picture becomes much more positive. This is negated if the last week’s low is taken out.

 

 

S&P 500, 240 min

 

Stochastics indicate some bullish divergence and the last complete candle is a bullish hammer. This suggests that the current levels could be a new base for a move higher. The price action however over the last hour has not exactly been explosive to the upside. That is due to the fact that the market participants are waiting for the economic releases.

 

Conclusion:

 

The long term picture is getting weaker with a monthly Doji candle appearing. The market now would need a higher high with an ability to main the new highs should the bearish indications in a monthly Doji were to be negated. The weakness indicated by the Doji candle should lead to increased volatility in smaller time frame charts and provide the traders with more opportunities in both directions (long and short). In the daily and 4h charts the price is now close the previous pivot low and we therefore should be looking for short term long trades. The four hour hammer candle confirms the trade idea but there has been no follow through as the market waits for the economic releases. We should be looking for signals to go long at or close to the January 6th pivot low.

 

For those who would like to learn how to trade professionally, please join me at my free trading webinars. Over the course of the series, I will take you through all the aspects of analyzing the markets and trading them the way the professionals do. Click  HERE to register and secure your seat!  https://www.hotforex.com/en/trading-tools/trading-webinars.html?refid=37217

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[HFM]

Date : 15th January 2015

 

A HISTORICAL DAY FOR THE FOREX MARKET – EURUSD DROPPED BELOW 1.1600 AFTER SNB REMOVED THE 1.20 PEG.

 

EURUSD rose yesterday and closed at 1.1789. The European Court of Justice ruled that the ECB bond buying program was legitimate once certain conditions were met. Basically the ruling cleared the obstacle in front of the program and the QE might be launched when ECB decides.

 

Data from the United States revealed that the dropped 0.9 percent in December. The Core Retail Sales recorded a drop of 1.0 percent.

 

The President of the United States Federal Reserve in Philadelphia Charles Plosser urged the central bank to hike the interest rates soon, citing the improvements in the US economic conditions.

 

 

During the European session today the Swiss National Bank decided to remove the peg from the 1.20 level on the EURCHF. The release shocked the markets and caused large moves on a large number of currency pairs sending EURUSD below the 1.1600 level.

 

Reports released from the United States indicated that the Unemployment Claims rose slightly during the last week to 316K. On the other hand the Core PPI and the Empire State Manufacturing Index surprised the markets with better than expected performance.

 

Investors are now looking forward for the Philly Fed Manufacturing Index and the speech of the Deutsche Bundesbank President Jens Weidmann due later today.

 

Support for the EURUSD is seen at 1.1660 and resistance is seen at 1.1825.

 

 

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 : 16th January 2015

 

EURUSD TRADING HIGHER AHEAD OF THE EUROZONE’S FINAL CPI DATA.

 

EURUSD dropped yesterday and closed at 1.1632. The Trade Balance in the Eurozone increased to 20 Billion Euro in November. Data from the United States indicated that the initial jobless claims rose to 316K during the last week. On the other hand the Empire State Manufacturing Index rose to a level of 10 in January.

 

The President of the United States Federal Reserve in Boston Eric Rosengren opined that he is not confident about the US moving towards the 2 percent inflation target and urged the central bank to remain patient about increasing the interest rates.

 

Investors are now looking forward for the Final CPI data from the Eurozone and the CPI data from the United States. Later on the Preliminary University of Michigan Consumer Sentiment is due to be released from the United States.

 

Support for the EURUSD is seen at 1.1583 and resistance is seen at 1.1740.

 

 

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 : 19th January 2015

 

EURUSD REMAINS STABLE IN THE QUIET EUROPEAN SESSION SO FAR. US BANKS CLOSED DUE TO THE OBSERVANCE OF THE MARTIN LUTHER KING DAY.

 

EURUSD dropped on Friday and closed at 1.1563. The CPI in the Eurozone dropped 0.2 percent on an annual basis in December. Inflation remained below the 2 percent target of the European Central Bank for a 22nd consecutive month.

 

Data from the United States revealed that the consumer prices in the US dropped 0.4 percent on a monthly basis in December. The President of the United States Federal Reserve in Minneapolis Narayana Kocherlakota warned the US central bank against risk of raising the interest rate prematurely. He also urged Fed to consider the inflation data before thinking of moving forward with the interest rate increase.

 

On the other hand the President of Fed in St. Louis James Bullard reiterated that Fed should raise the interest rates by the end of the first quarter of 2015. His view was also supported by the San Fracisco Fed President John Williams who expressed confidence in the job market and the inflation outlook.

 

The US banks are closed today due to the observance of the Martin Luther King Day.

 

Support for the EURUSD is seen at 1.1490 and resistance is seen at 1.1646.

 

 

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 January 2015

 

EURUSD STABLE AFTER BETTER THAN EXPECTED GERMAN ZEW ECONOMIC SENTIMENT RELEASE.

 

EURUSD rose yesterday and closed at 1.1606. The Current Account in the Eurozone dropped to 18.1B in November.

 

Early this morning the International Monetary Fund cut the economic growht forecast for the Eurozone to 1.2 percent in 2015 from the previous estimate of 1.3 percent. On the other hand the growth forecast for the United States was revised up to 3.6 percent from the previous forecast of 3.1 percent, due to the robust private domestic demand according to the IMF.

 

 

Investors are now looking forward for the speech of the FOMC member Jerome Powell at the Brookings Institution in Washington DC due later today.

 

Support for the EURUSD is seen at 1.1490 and resistance is seen at 1.1646.

 

 

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]

Markets move sideways before the ECB meeting tomorrow https://blog.hotforex.com/markets-move-sideways-before-the-ecb-meeting-tomorrow/

 

A lot of the European Central Bank (ECB) QE program is already priced in to the EURUSD but the fact remains that the European economies are in mess when compared to the US. Some commentators have suggested that the reason ECB has delayed its QE program is not in fact the Germans, but the fact that they themselves don’t believe the QE would have a significant impact on European economies. It is true that the problems in the euro area are structural, i.e. relating to labour laws and inflexible policies coupled with the aging European population. All of this combined results in degrading competitiveness in the euro area. The Chinese economy (an important export area for EU countries and Germany especially) is slowing down and in addition to this, it is unlikely that bringing lending rates even lower via QE will result in a significant enough increase in lending that would translate into economic growth. The only measurable impact of the QE has already been seen in the value of euro. The lower the value of the euro against the other currencies, the better the chances that European countries, that depend on exporting will benefit.

 

 

 

 

EURUSD

 

In the previous EURUSD analysis I wrote that it is likely that the problems in the euro area together with the verbal QE from Mr. Draghi will drag the EURUSD even lower than the latest lows at the time. I expected some sideways move before that taking place but the removal of EURCHF peg by the Swiss National Bank (SNB) accelerated the decline.

 

The weekly pivot low at 1.1639 from November 2005 has acted as a resistance both on Friday last week and Monday this week. Even though the price has been moving sideways it is forming a descending triangle, a bearish formation. The current sideways move that forms the triangle is a reaction to huge market move caused by the SNB actions last week. It is common that the markets take a breather after fast and furious moves.

 

The nearest daily support and resistance levels are at 1.4600 and 1.1639, with the next resistance levels being at 1.1754 and 1.1870. The 1.1754 level coincides roughly with 23.6% Fibonacci retracement level (measure from November 2014 weekly high to the latest low). The next significant weekly resistance level is the weekly pivot low from July 2013 at 1.2042 which coincides with the 50% Fib retracement level. These levels could come into play should the ECB decide not to move forward with the QE program. At the moment the trend is down and we should keep on selling rallies until we have evidence the trend has changed.

 

 

EURUSD, 240 min

 

Price is moving sideways in a narrow range and is likely to do so until the results of tomorrow’s ECB meeting are published. Today should be pretty much flat as the market participants don’t want to commit to any view before an important meeting.

 

Conclusion:

 

We don’t know what kind of volatility we will have tomorrow but it makes sense to seek for shorting opportunities (momentum reversal signals) at daily and weekly levels identified in this analysis and stay away from the middle of the ranges. Outside of the QE considerations it remains a fact that the US economy will be in a much better shape than Europe. We therefore should have no reason to be bullish on EURUSD. The only reason that could flip this equation on its head would be a new QE program from the US and at the moment there are now signs of it happening.

 

 

For those who would like to learn how to trade professionally, please join me at my free trading webinars. Over the course of the series, I will take you through all the aspects of analyzing the markets and trading them the way the professionals do. Click  HERE to register and secure your seat! https://www.hotforex.com/en/trading-tools/trading-webinars.html?refid=37217

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[hotforex]

Markets move sideways before the ECB meeting tomorrow https://blog.hotforex.com/markets-move-sideways-before-the-ecb-meeting-tomorrow/

 

A lot of the European Central Bank (ECB) QE program is already priced in to the EURUSD but the fact remains that the European economies are in mess when compared to the US. Some commentators have suggested that the reason ECB has delayed its QE program is not in fact the Germans, but the fact that they themselves don’t believe the QE would have a significant impact on European economies. It is true that the problems in the euro area are structural, i.e. relating to labour laws and inflexible policies coupled with the aging European population. All of this combined results in degrading competitiveness in the euro area. The Chinese economy (an important export area for EU countries and Germany especially) is slowing down and in addition to this, it is unlikely that bringing lending rates even lower via QE will result in a significant enough increase in lending that would translate into economic growth. The only measurable impact of the QE has already been seen in the value of euro. The lower the value of the euro against the other currencies, the better the chances that European countries, that depend on exporting will benefit.

 

 

 

 

EURUSD

 

In the previous EURUSD analysis I wrote that it is likely that the problems in the euro area together with the verbal QE from Mr. Draghi will drag the EURUSD even lower than the latest lows at the time. I expected some sideways move before that taking place but the removal of EURCHF peg by the Swiss National Bank (SNB) accelerated the decline.

 

The weekly pivot low at 1.1639 from November 2005 has acted as a resistance both on Friday last week and Monday this week. Even though the price has been moving sideways it is forming a descending triangle, a bearish formation. The current sideways move that forms the triangle is a reaction to huge market move caused by the SNB actions last week. It is common that the markets take a breather after fast and furious moves.

 

The nearest daily support and resistance levels are at 1.4600 and 1.1639, with the next resistance levels being at 1.1754 and 1.1870. The 1.1754 level coincides roughly with 23.6% Fibonacci retracement level (measure from November 2014 weekly high to the latest low). The next significant weekly resistance level is the weekly pivot low from July 2013 at 1.2042 which coincides with the 50% Fib retracement level. These levels could come into play should the ECB decide not to move forward with the QE program. At the moment the trend is down and we should keep on selling rallies until we have evidence the trend has changed.

 

 

EURUSD, 240 min

 

Price is moving sideways in a narrow range and is likely to do so until the results of tomorrow’s ECB meeting are published. Today should be pretty much flat as the market participants don’t want to commit to any view before an important meeting.

 

Conclusion:

 

We don’t know what kind of volatility we will have tomorrow but it makes sense to seek for shorting opportunities (momentum reversal signals) at daily and weekly levels identified in this analysis and stay away from the middle of the ranges. Outside of the QE considerations it remains a fact that the US economy will be in a much better shape than Europe. We therefore should have no reason to be bullish on EURUSD. The only reason that could flip this equation on its head would be a new QE program from the US and at the moment there are now signs of it happening.

 

 

For those who would like to learn how to trade professionally, please join me at my free trading webinars. Over the course of the series, I will take you through all the aspects of analyzing the markets and trading them the way the professionals do. Click  HERE to register and secure your seat! https://www.hotforex.com/en/trading-tools/trading-webinars.html?refid=37217

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[HFM]

Date : 21th January 2015

 

EURUSD TRADING SIDEWAYS IN THE EUROPEAN SESSION. US BUILDING PERMITS DATA DUE TO BE RELEASED TODAY.

 

EURUSD dropped yesterday and closed at 1.1549. The German ZEW Economic Sentiment rose to a reading of 48.4 in January surprising the market participants. The ZEW Economic Sentiment in the Eurozone followed the positive tone and also recorded a rise to a reading of 45.2.

 

Data from the United States indicated that the NAHB Housing Market Index unexpectedly dropped to a reading of 57.0 in January.

 

 

During his speech in Washington DC the FOMC Member Jerome Powell condemned the manipulation of benchmark interest rates like the LIBOR and called for further regulatory measures to prevent such rigging and restore the public confidence in the financial system.

 

Investors are now looking forward for the Building Permits data due from the United States later today.

 

Support for the EURUSD is seen at 1.1490 and resistance is seen at 1.1646.

 

 

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]

Syriza Election Victory Did Not Push Euro Lower

 

Syriza has promised to renegotiate the terms of their debt with the European lenders and is calling for a Europe where tax revenues from northern countries, such as Germany, would be used in Greece to fund the government. This sets Syriza and the new Greek government at a collision course with Germany and other wealthier nations in Europe and could eventually cause Greece exiting the Euro.

The market reactions to news are always interesting and telling. I find it significant that EURUSD, although it is still in a downtrend, has not moved significantly lower on the news Syriza winning the Greek elections. Rather it is ticking higher after the smallish initial drop. This suggests that market participants think that the probabilities of Greece leaving Euro area are now higher. This would be bullish for the currency as it would open the door for other weak economies possibly abandoning the single currency. Euro area would then consist of stronger economies, a reason for the currency to appreciate in value in the long run. Obviously, we have the first ECB QE program just starting and this should mean the pressure on Euro will stay on for quite a while but it does not exclude Euro rallying from time to time and this would give us opportunities against the weaker currencies.

 

Market reactions are important as was proven with my analysis with Gold. A positive reaction to a news item that should have been negative for Gold hinted that it was time to buy the yellow metal, regardless all the negative fundamental analysis available at the time. This proved to be exactly the right time to buy Gold. Now, this same logic when combined with technical analysis could provide us with a trade opportunity in Euro against weaker currencies.

 

 

EURAUD, Weekly

After falling for five weeks the pair found support at a weekly pivot low from September 2014 and reacted higher from the general area close to the pivot. This encourages us to look for buy opportunities in EURAUD. The overall trend is sideways and the pair has moved to the lower Bollinger Bands which most of the time means that the momentum might be reversing. Oscillators confirm the setup by being well into oversold territory. Support and resistance levels: 1.3967 and 1.5022. There is also some resistance 1.4223 which could lead to further sideways move between 1.3967 and 1.4223.

 

 

EURAUD, Daily

The daily trend is down but the price has reached a weekly support area and moved sideways above it for the last week. This resulted in a Doji candle signaling a rejection of the 1.3967 level and indicates an attempt to turn this market higher is at hand. Oscillators point sideways after a period of bullish divergence. Weekly support level is below at 1.3967 and the nearest daily resistance level is at 1.4408.

 

 

EURAUD, 240 min

Although the longer term trend in this time frame is down we’ve seen sideways movement over the last week. The spikey rejection candle at the 3967 support indicates institutional buying at these levels. Oscillators are pointing higher and should there be moves down to the Bollinger Bands (currently at 4082 and 4040) I would be looking to go long at those levels. The first resistance area at 4329 to 4408 coincides with the upper Bollinger Bands and probably slows the upside momentum down.

 

Conclusion:

Judging from the weekly chart this pair is at support and has potential to move quite a lot higher as the next weekly resistance area is at 1.5022 once the 4h and daily resistance levels are cleared out. There is a rejection candle in the daily and 4h charts, which suggest that the reversal of downtrend is taking place. In addition, the fact that Greek election was won by a radical left wing party increases the probabilities for Greek exit from Euro which would be bullish event for Euro. I am looking at 1.4372 as my first target, then 1.4780 as target two and then target three at 1.5020. There is some resistance 1.4223 which could lead to further volatility between 1.3967 and 1.4223 and could therefore provide us with long entry opportunities at the lower end of the range.You are welcome to utilize my analysis in your trading providing it agrees with your own market observations and analysis.

 

I will be presenting a Live Analysis Webinar tomorrow. So if you want to learn how to find, analyse and trade above kind of setups you most warmly welcome to join me! Click  HERE to register and secure your seat! 

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[HFM]

Date : 23rd January 2015

 

EURUSD DROPPED NEAR THE 1.1100 LEVEL AHEAD OF THE US SESSION.

 

EURUSD dropped yesterday and closed at 1.1360. During the ECB Press Conference the President of the European Central Bank Mario Draghi announced the start of the QE program. He stated that ECB will purchase 60 billion EUR per month worth of securities including investment grade sovereign bonds starting from the beginning of March and currently scheduled to September 2016. The European Central Bank decided to keep the interest rate steady at 0.05 percent.

 

Data from the United States revealed that the Unemployment Claims dropped to 307K during the last week. Another report indicated that the House Price Index in the US rose 0.8 percent from the 0.4 percent registered during the previous month.

 

 

During the European session today the single European currency registered another sharp drop registering lows near the 1.1100 level.

 

Investors should be aware that the premature parliamentary elections in Greece on Sunday may bring volatility on the market during the market open.

 

Support for the EURUSD is seen at 1.1114 and resistance is seen at 1.1374.

 

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 : 27th January 2015

 

EURUSD TRADING HIGHER AHEAD OF THE US CORE DURABLE GOODS ORDERS REPORT.

 

EURUSD rose yesterday and closed at 1.1237. Data released yesterday showed that the German Ifo Business Climate rose to a level of 106.7 in January reaching a 6-month high.

 

The afternoon will be dominated by releases from the United States including the Core Durable Goods Orders, The CB Consumer Confidence and the New Home Sales data. The ECOFIN Meetings are also taking place today in Brussels.

 

 

Investors should be fully aware that any potential information regarding the situation in Greece might bring volatility on the market.

 

Support for the EURUSD is seen at 1.1135 and resistance is seen at 1.1344.

 

 

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]

Apple’s Record Breaking Results and Forex Worries

 

Apple posted record breaking results yesterday after US markets closed. The company sold 74.4 million iPhones and 21.4 million iPads in the last quarter. The earnings per share ($3.06 vs. $2.60) were even better than the most optimistic expectations from Wall Street analysts. This lifted the stock by 5% in the aftermarket trading. The rise might have been even higher, but for the worries of investors, who are reported to have started having concerns about the impact of strong dollar in future earnings.

 

Since my last analysis, the financial sector rallied a bit from the rising trend line but then fell back again from resistance. Utilities and healthcare stocks are overbought when compared to the rest of the market, while technology stocks fell back down to the support after rallying since my last report. The energy sector broke out of the wedge formation and the industrials look to me as if they’d be ready to move higher.

 

All this gives slightly mixed signals. As the dividend paying healthcare, utilities and consumer staples are still very much overbought in relation to the S&P500 index (both in one and three month periods), it suggests that market participants are still safety oriented and hesitant about the future trend. No wonder the market has been in a sideways mode. At the same time the small caps (Russell 2000 index) have been stronger than the S&P over the last week, which means that some of the risk appetite is coming back into the market.

 

 

S&P 500

 

In the weekly picture the index is still inside the uptrending regression channel but has moved sideways since I suggested this in November last year. This also the same period of time that the safe have sectors (Utilities, Health Care and Consumer Staples) have been sucking money from other riskier sectors. We now have another higher weekly low from last week, which is technically an encouraging sign and a support level relatively close at 2014.50. This is also a new potential pivot low in the daily time frame.

 

 

S&P 500, 240 min

 

The four hour picture reveals a sideways move with lower highs below the 2060 target area. This target was hit after my latest analysis and the market has since formed a lower high suggesting that we could see another move lower to the 2026.50 and 2014.50 support area. Should the correction be deeper the next support level is at 1997.50.

 

Conclusion:

 

I am still positive on this market eventually moving higher but first we might see some volatility or sideways move accompanied a test (or tests) of the support area between 2026.50 and 2014.50. I would be interested in long entries inside this support range and should we get the signals to go long, then the target levels I am looking at are: Target 1 at 2062 and Target 2 at 2088.

 

For those who would like to learn how to trade professionally, please join me at my free trading webinars. Over the course of the series, I will take you through all the aspects of analyzing the markets and trading them the way the professionals do. Click  HERE to register and secure your seat! 

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[hotforex]

Increased Volatility in Crude Oil

 

The price of oil has collapsed with the strengthening dollar and has reached levels that were last seen in the later stages of the financial crisis in 2008. This suggests that the current levels are deeply oversold both fundamentally and technically. The world economy is certainly slowing down but it is in a better shape than it was in the first quarter of 2009 when the US Crude Oil futures dropped to $33.35.  Therefore, it makes sense to expect Crude Oil to be relatively close to the levels it could find a bottom.

 

 

Crude Oil, Daily 2009

 

Over the last 30 years it has taken in average 2 to 3 months for oil to bottom out after a major downside move. It would therefore be safe to assume that the bottoming process will provide us with plenty of opportunities to join the long side, or to scale into long positions thus lowering the timing related risks. In terms of price velocity the downward move seen over the last few months has been similar to the one seen in 2008. When this downside move finally ended the market moved sideways for a period of time allowing low risk entries at Bollinger Bands.

 

 

XLE, Daily

 

I mentioned some time ago in my S&P 500 analysis that the energy sector etf is forming a bullish wedge and that this would be confirmed by a breakout. Now the breakout has happened and we have a higher low in place. This obviously signals that the market participants are turning bullish on energy related stocks, a clear indication that they believe that the downside in oil is in their view limited.

 

 

Crude Oil, Weekly

 

The price of oil is close to the 2009 lows but is still inside a weekly downward trend channel. The latest reaction from a resistance level that coincided with the channel top was relatively strong. However, this kind of volatility is typical when prices get close to levels where the trend might turn. Last week the price closed inside the lower 1.5 stdv Bollinger Band for the first time since September 2014. The nearest support and resistance levels are at 43.58 and 53.60.

 

 

Crude Oil, Daily

 

Price has broken out of the descending regression channel and created a higher high. If we now get a higher low the bullish indication is rather strong but even a roughly equal low would mean that the buyers are gaining control in this market. Volatility has definitely increased which is not only evidenced by the higher high but also by the Stochastic indicator it has not been in overbought territory since July last year.

 

 

Crude Oil, 240 min

 

Price has retraced to 61.8% Fibonacci level that coincides with a descending trendline. Stochastic is oversold and the price is reacting higher from the lower Bollinger Bands.

 

Conclusion:

The increase in volatility at levels that are close to the bottoming formation from 2009 is a reason to pay attention to the price action in Crude Oil in the near future. This is confirmed by the bullish breakout in the US energy sector shares ETF (XLE). If this turns out to be the range in which the market bottoms then the best levels to be a buyer are those that are close to the bottom of the range. However, the fact that so many technical tools indicate support for Crude Oil in the 4h time frame we could look for intraday buy signals in the general area of current price action.

 

 

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.

 

Janne Muta

Chief Market Analyst

HotForex

[hotforex]

GBPUSD moved past several weekly highs - https://blog.hotforex.com/gbpusd-moved-past-several-weekly-highs/

 

The pair has moved briskly past three weekly highs this week. The move comes after it formed what looks to be a higher weekly low now that the pair has closed above the resistance levels. This is the first time GBPUSD has been able to close above so many weekly highs since the downtrend began in July last year. Even though the weekly candle is still inside the regression channel such strength signals a turnaround in this pair. This is even more likely as the move comes from levels that were able to stop the decline and turn the market into an uptrend in 2013. Stochastics are edging higher and the support and resistance levels are: 1.4954 weekly low and 1.5541 weekly low in proximity of the 23.6% Fibonacci level.

 

 

GBPUSD, Daily

 

The pair has broken out of the descending regression channel. I tweeted yesterday that GBPUSD was at resistance and looking weak. The reasoning behind this was that the candle from day before was a shooting star candle and the hourly chart yesterday showed signs of momentum reversal just below the 1.5269 resistance and the daily Bollinger bands. These indications proved to be wrong and the price shot higher through the resistance. All this put together indicates that the market is pretty firmly in the hands of the bulls. The former resistance levels are now likely to be supports. The current support and resistance levels identified from the daily chart are: 1.4988, 1.5096, 1.5224, 1.5269 and 1.5487 1.5541. The 38.2% and 61.8% Fibonacci levels coincide with 1.5269 support and 1.5487 resistances. Stochastics are getting into the overbought area.

 

 

GBPUSD, 60 min

The hourly trend is higher with price at the upper end of the bull channel. The 1.5269 coincides with the lower end of the channel and with the Bollinger Bands. In addition, the 23.6% Fibonacci level is also in the proximity of the channel bottom. The other potential levels are the Fibonacci retracements and the 1.5096 support level should there be a deeper retracement. It always pays to look for momentum reversal signals once price comes back to the levels.

 

Conclusion:

With such a show of strength the only logical conclusion is to look for buying opportunities until we have price action based evidence to the contrary. Retracements to support levels should be monitored for momentum reversal signals. Levels that have several technical factors supporting the trade idea are always more likely to provide us with good trade entries. In this regard the 1.5260 to 1.5270 region is interesting but should today’s US Non-Farm Payroll figure deviate strongly from the expectations then we could see increased volatility and the lower levels could come into play. For successful swing entries I would be looking the 1.5487 to 1.5541 the target area.

 

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.

[HFM]

Date : 6th February 2015

 

GBPUSD MOVED PAST SEVERAL WEEKLY HIGHS

 

The pair has moved briskly past three weekly highs this week. The move comes after it formed what looks to be a higher weekly low now that the pair has closed above the resistance levels. This is the first time GBPUSD has been able to close above so many weekly highs since the downtrend began in July last year. Even though the weekly candle is still inside the regression channel such strength signals a turnaround in this pair. This is even more likely as the move comes from levels that were able to stop the decline and turn the market into an uptrend in 2013. Stochastics are edging higher and the support and resistance levels are: 1.4954 weekly low and 1.5541 weekly low in proximity of the 23.6% Fibonacci level.

 

 

GBPUSD, Daily

 

The pair has broken out of the descending regression channel. I tweeted yesterday that GBPUSD was at resistance and looking weak. The reasoning behind this was that the candle from day before was a shooting star candle and the hourly chart yesterday showed signs of momentum reversal just below the 1.5269 resistance and the daily Bollinger bands. These indications proved to be wrong and the price shot higher through the resistance. All this put together indicates that the market is pretty firmly in the hands of the bulls. The former resistance levels are now likely to be supports. The current support and resistance levels identified from the daily chart are: 1.4988, 1.5096, 1.5224, 1.5269 and 1.5487 1.5541. The 38.2% and 61.8% Fibonacci levels coincide with 1.5269 support and 1.5487 resistances. Stochastics are getting into the overbought area.

 

 

 

GBPUSD, 60 min

 

The hourly trend is higher with price at the upper end of the bull channel. The 1.5269 coincides with the lower end of the channel and with the Bollinger Bands. In addition, the 23.6% Fibonacci level is also in the proximity of the channel bottom. The other potential levels are the Fibonacci retracements and the 1.5096 support level should there be a deeper retracement. It always pays to look for momentum reversal signals once price comes back to the levels.

 

 

Conclusion:

 

With such a show of strength the only logical conclusion is to look for buying opportunities until we have price action based evidence to the contrary. Retracements to support levels should be monitored for momentum reversal signals. Levels that have several technical factors supporting the trade idea are always more likely to provide us with good trade entries. In this regard the 1.5260 to 1.5270 region is interesting but should today’s US Non-Farm Payroll figure deviate strongly from the expectations then we could see increased volatility and the lower levels could come into play. For successful swing entries I would be looking the 1.5487 to 1.5541 the target area.

 

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.