Say Bye-Bye to Major Supports. We May Not See Those Levels for a While

And it happened! The bears were talking about this for a long time and it finally happened; a bearish correction. The price broke the long-term up trendline on the SP500 and is aiming lower. The target for the drop is still far away, so it might be nice to buckle up.

The DAX also dropped like a rock after the breakout of the long-term up trendline and the neckline of the triple top formation. The next target: 14100 points.

Although indices are sliding, gold is not climbing higher. A stronger dollar is definitely not helping.

The GBPUSD came back inside the falling wedge pattern. That’s definitely negative.

The CADJPY is aiming for the 38,2% Fibonacci to test it as a crucial support.

The EURNZD is inside a small sideways trend. A breakout from it, will show us a direction.

The EURJPY has failed to create the inverse head and shoulders pattern and dropped lower.

The USDJPY bounced from the upper line of the triangle and brought us a sell signal with the target being on the lower line of this pattern.

For a look at all of today’s economic events, check out our economic calendar.

Situation on Major Instruments Before the Inflation Data

The SP500 tries a reversal with an inverse head and shoulders pattern bouncing off a major up trendline.

The DAX is very close to breaking two major horizontal resistances.

Gold is on the way to test an important horizontal support at 1782 USD/oz.

Oil continues its upswing after escaping from the flag pattern.

The EURCHF needs to close the day above the down trendline in order to get a proper buy signal.

The EURJPY is in the process of creating a right shoulder of a very promising inverted Head and Shoulder pattern.

The EURNZD continues the drop after broken supports were tested as resistance.

The AUDCAD is going to test a major support level on the 38,2% Fibonacci.

The USDJPY is getting closer and closer to end the long-term symmetric triangle pattern.

For a look at all of today’s economic events, check out our economic calendar.

The New Week Starts With the Risk ON Mode

Indices are trying to start the new week off on the front foot.

SP500 bounces from the long-term up trendline in the same way it did many times before.

Gold escapes from the wedge to the downside. The negative sentiment is back.

Oil breaks the upper line of the flag and aims higher.

EURUSD goes down after the breakout of the neckline.

GBPUSD with a third Head and Shoulders pattern in a row. The previous two worked flawlessly.

AUDCAD, after a flat correction, is ready for another upswing.

USDJPY gets close to the end of the symmetric triangle, we’re waiting for a bigger move here.

EURJPY has a chance of creating a nice right shoulder, which would help to end the bearish correction.

EURNZD is ready to continue the downswing after the price tested broken supports as the closest resistances.

For a look at all of today’s economic events, check out our economic calendar.

Reversal on USD and JPY

Stocks are rising higher, again. DAX broke an important dynamic resistance and is ready for the new all-time highs.

Gold is slowly climbing up the stairs supported by the weaker USD.

The EURUSD recently broke the upper line of the wedge and is back above the neckline of the H&S formation. That’s very positive and the buy signal is ON.

The GBPNZD broke a combination of three dynamic resistances. That could mean only a sell signal.

The EURJPY is out from the falling wedge pattern. Sentiment is back to positive.

The NZDJPY on the other hand is out from the flag pattern but also to the upside with a proper buy signal.

The GBPJPY is still waiting for its turn. We are in the middle of the symmetric triangle, still waiting for the breakout.

For a look at all of today’s economic events, check out our economic calendar.

Key Events This Week: Cooling US Jobs Market May Give USD Bears Room to Breathe

Here are the events that could move global financial markets this week:

Monday, August 30

  • JPY: Japan July retail sales
  • EUR: Eurozone August economic/consumer confidence

Tuesday, August 31

  • JPY: Japan July industrial production and unemployment
  • CNH: China August manufacturing and composite PMIs
  • NZD: ANZ August business confidence
  • EUR: Eurozone August CPI
  • CAD: Canada GDP (June, 2Q)
  • USD: US August consumer confidence

Wednesday, September 1

  • CNH: China August Caixin manufacturing PMI
  • Japan, Eurozone, UK, US manufacturing August PMIs
  • EUR: Eurozone unemployment
  • Brent Oil: OPEC+ decision on production
  • US Crude: EIA crude oil inventory report

Thursday, September 2

  • EUR: Eurozone July PPI
  • USD: US weekly jobless claims

Friday, September 3

  • CNH: China Caixin August services and composite PMIs
  • JPY: Japan August services and composite PMIs
  • GBP: UK August services and composite PMIs
  • EUR: Eurozone July retail sales, August services and composite PMIs
  • USD: August US nonfarm payrolls, services and composite PMIs, ISM services index

Tapering now less-feared?

Despite saying he is open to pulling back on the central bank’s asset purchases this year, Powell sought to divorce the idea of tapering as an immediate precursor to a US interest rate hike.

In other words, although the Fed’s tapering may indeed start this year, the rate hike may not follow soon after the tapering ends.

This is because the Fed Chair once again said he wants to see sustained above-target inflation and a broad-based recovery in the jobs market. At Jackson Hole, he sent out a reminder about the 6 million jobs that are still lost since the pandemic, as well as reiterating his belief that the inflation surges may be “transitory”.

That message was heeded by the markets. After Powell’s speech, markets lowered their expectations for a November 2022 US rate hike from 53% to 40.5%. However, they still are forecasting a greater-than-even chance (76.5%) of a pre-Christmas rate hike in December 2022.

And this is where Friday’s jobs report comes in.

Markets are currently expected a figure of 750,000 jobs added last month, which is lower than the June and July figures that were above 900k.

USD bears could breathe a sigh of relief on signs of moderating jobs growth and a stagnant unemployment rate, as those should mean a longer runway before the US interest rate hike. And given the persistent threat of the Delta variant’s spread through the world’s largest economy, that could delay workers’ return to jobs. If this Friday’s jobs data indeed prove to be subdued, that might lower the chances of a sooner-than-later Fed rate hike, while preventing the greenback from surging higher in the interim.

usd_indexdaily_15

Oil markets await OPEC+ decision

Recall that back in July, OPEC+ agreed to raise output by 400k barrels per day (bpd) starting in August, accompanied by subsequent 400k bpd hikes each ensuing month.

However, since that July decision, the Delta variant’s resurgence in major economies has forced lockdowns once more in countries such as China, Australia, and New Zealand. Hence, it remains to be seen how OPEC+ takes into account these demand-side risks, while ensuring members can claim enough market share to keep them satisfied.

Although oil markets are still expected to tighten through year-end, one doesn’t need to be reminded about how swiftly the Delta variant can alter that outlook.

Should OPEC+ press ahead with its intended supply hikes, that could signal confidence that global demand is robust enough to absorb that incoming supply. Still, if traders and investors don’t share that same optimism, should OPEC+ leave its supply hike plans unchanged, that could prompt Brent oil to unwind recent gains and falter back into the sub-$70/bbl region once more.

Oil markets will also be closely monitoring the impact of Hurricane Ida on US oil supply infrastructure. Signs of tightening supplies, depending on the duration, could spur oil prices higher despite Brent being resisted at its 50-day simple moving average at the time of writing.

brentdaily_74

For a look at all of today’s economic events, check out our economic calendar.

Written by Han Tan, Market Analyst at FXTM

For more information, please visit: FXTM

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

New Zealand Dollar end The Bearish Correction

The NZDUSD is in a false bearish breakout from the falling wedge pattern. That is possibly a very nice buying opportunity.

The GBPNZD is testing the combination of three important dynamic supports. A breakout can be an amazing sell signal.

The EURJPY broke the upper line of the wedge and is aiming higher with a buy signal.

The GBPCAD is in a giant symmetric triangle on the weekly chart. We will probably have to wait a long time till until the breakout but it will most probably be worth it.

The NZDJPY is in a flag formation. A breakout of its upper line will bring the positive sentiment back.

The GBPJPY is forming a head and shoulders pattern inside of the symmetric triangle pattern. A breakout of the lower line (and the neckline at the same time) can be a good bearish signal and a breakout to the upside can be a signal to go long.

For a look at all of today’s economic events, check out our economic calendar.

EUR/JPY Bearish Hints at Resistance

EUR/JPY is trying to push higher but 1-2-3 is holding it. the 130.45 zone could move the price lower towards 130.27 and 130.05. However if the price moves above 130.55, a bullish breakout might occur going towards 130.80 and 131.00. Watch the price action at the POC zone for further cues.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

EUR/JPY Surges as Yen Weakens

The POC is a bouncing zone. 129.65-75 where buyers are. Look for a trend line break and continuation of the move. Targets are 130.42, 130.58 and potentially 131.05. Only if the price breaks below 129.65 we could see a move down which will be a sign of Yen strength.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

Exclusive: BOJ Seen Cutting This Year’s Growth Forecast as COVID-19 Curbs Hurt Outlook

But the central bank is likely to maintain its view the world’s third-largest economy is headed for a moderate recovery as robust exports and output offset some of the weakness in consumer demand, said four sources familiar with its thinking.

The expected downgrade highlights Japan’s struggle to contain the COVID-19 pandemic, as slow vaccine rollouts and a resurgence in infections force authorities to declare a state of emergency for Tokyo just 16 days before the Olympic Games begin.

“The foundations of a recovery are in place, but the timing may be delayed somewhat,” as the curbs weigh on the economy’s expected rebound in the current quarter, one of the sources said, a view echoed by three other sources.

In most recent forecasts made in April, the BOJ expected the economy to expand 4.0% in the current fiscal year ending in March 2022, higher than a 3.6% growth projected in a Reuters poll.

At its July 15-16 policy meeting, the BOJ will likely cut the current year’s growth forecast in fresh quarterly and inflation projections, the sources said. It is also widely expected to keep monetary settings unchanged.

In the new estimates, the BOJ will likely revise up this fiscal year’s consumer inflation forecast mainly reflecting the boost from recent rises in energy costs, the sources said.

The growth projections for next fiscal year ending in March 2023 will depend much on when households begin to feel safe enough to boost spending on leisure and travel, analysts say.

The central bank currently expects the economy to expand 2.4% next fiscal year and 1.3% the following year.

The BOJ estimates that households have 20 trillion yen ($182 billion) in “forced” savings accumulated last year due to stay-at-home policies, which could be tapped when vaccines are rolled out widely.

Japan’s economy shrank an annualised 3.9% in January-March and likely barely grew in the second quarter, as the pandemic took a toll on service spending.

Analysts and policymakers had expected the economy to enjoy a solid rebound in the latter half of this fiscal year, in part hoping that steady vaccinations and removal of curbs would spur pent-up demand for leisure and travel.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 110.0400 yen)

(Reporting by Leika Kihara and Takahiko Wada; Editing by Shri Navaratnam)

 

BOJ to Launch New Scheme for Fighting Climate Change, Keeps Policy Steady

The BOJ also maintained its massive monetary stimulus to support the country’s economic recovery and extended a deadline for asset-buying and loan programmes introduced last year to channel funds to pandemic-hit firms.

Japan’s central bank said it expects to launch the climate change scheme by the end of this year, and will release a preliminary outline of its plan at its next policy-setting meeting in July.

“Climate change issues could exert an extremely large impact on economic activity, prices and financial conditions from a medium- to long-term perspective,” the BOJ said in a statement.

“Supporting private sector efforts from a central bank’s standpoint will contribute to stabilising the economy in the long run,” it said.

Under the scheme, the central bank said it will provide funds to financial institutions that increase loans and investment for activities aimed at combatting climate change.

While details of the new scheme have yet to be announced, the BOJ said it will be modelled after a similar programme that offers cheap loans to financial institutions that boost lending in areas considered to be growth industries.

After the two-day meeting, the BOJ also kept its target for short-term interest rates at -0.1% and for long-term yields around 0%, as widely expected, and extended by six months the September deadline for its asset-buying and loan programmes.

Japan’s economy shrank an annualised 3.9% in the first quarter and is seen making only a modest rebound, if any, in the current quarter as anti-virus measures weigh on consumption.

Core consumer prices in May rose 0.1% from a year earlier, marking the first year-on-year increase since March 2020 but remaining far distant from the BOJ’s 2% goal.

BOJ officials have recently signalled their readiness to put more emphasis on addressing economic and financial challenges posed by climate change.

“The BOJ probably wanted to move in tandem with the government, which recently flagged steps to promote green in its policy blueprint,” said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.

“The BOJ is also jumping on the band-wagon of the rising tide among central banks towards linking monetary policy to climate change,” she said.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Leika Kihara and Tetsushi Kajimoto; Additional reporting by Daniel Leussink; Editing by Kim Coghill, Jacqueline Wong and Ana Nicolaci da Costa)

 

Few FX Pairs Where We Are Still Waiting for a Breakout

First one is the GBPUSD pair, where the price is inside the flag formation, just below crucial long-term highs. Breakout to the upside, will give us a signal to buy.

The USDJPY pair is testing the lower line of the flag. Breakout should activate more sellers.

The EURGBP pair with a descending triangle pattern. Currently aiming its horizontal support.

The EURJPY pair testing the neckline of a big H&S pattern. That can result with a breakout.

The CHFJPY pair with a H&S pattern on a long-term resistance. Possibly an interesting trade for the sellers.

The AUDJPY pair is trying to break the upper line of the triangle but the first attempt looks bad. It is possible that a false breakout is happening right this moment.

The GBPJPY pair showing the beauty of price action. First two pennants and now very clean flag. Breakout to the upside can be a great buy signal.

For a look at all of today’s economic events, check out our economic calendar.

Dollar Slides to Multi-Month Lows as Fed Rate Hike Fears Fade

By Stephen Culp

U.S. Treasury yields stalled as market participants grew increasingly confident that the Federal Reserve will hold off on hiking interest rates for the time being, despite worrisome near-term inflation spikes.

“We’re seeing this dollar weakness against numerous pairs and the market is starting to believe the Fed that we’re going to have low interest rates a lot longer,” said Edward Moya, senior market analyst at OANDA in New York.

“That’s going to be bearish for the dollar. You’ll eventually see commodity-based currencies outperforming,” Moya added.

A spate of Fed policymakers are expected to speak this week and the U.S. central bank is due to release the minutes from its April policy meeting on Wednesday, which will be parsed for any signs of a shift in its economic outlook and monetary policy.

“Normally everyone gets excited for the Fed minutes, but these minutes are old,” Moya said. “We had a disappointing payrolls report and very hot CPI and PPI that happened after the meeting, most are focused on the raft of (Fed) speakers.”

The dollar index was last down 0.41% at 89.799.

The progress of COVID-19 vaccine deployment and easing of measures to contain the pandemic has lifted higher-risk currencies that stand to benefit most from economic revival.

For an interactive graphic on worldwide vaccine rollout and access, click here https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and-access.

The euro gained 0.51% to $1.2214, passing its highest level since Feb. 25, and the dollar fell 0.24% to 108.935 Japanese yen.

The British pound, buoyed by the lifting of COVID-19 restrictions, rose past the $1.42 level for the first time since Feb. 24. [GBP/]

“What really has helped the pound is reopening momentum and willingness to become vaccinated,” Moya said. “It’s suggesting (the UK) recovery is going to stick. They’re finally getting on the other side of Brexit.”

Rising oil prices supported the Norwegian crown and helped boost the Canadian dollar to a six-year high. [O/R]

Bitcoin edged higher but remained near the three-month low it hit after Tesla Inc boss Elon Musk dampened enthusiasm for the cryptocurrency over the weekend.

Rival digital currency ether jumped 3.62% to $3,404.

========================================================

Currency bid prices at 9:47AM (1347 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index

89.7990 90.1840 -0.41% -0.202% +90.2040 +89.6890

Euro/Dollar

$1.2214 $1.2152 +0.51% -0.03% +$1.2234 +$1.2153

Dollar/Yen

108.9350 109.1750 -0.24% +5.44% +109.2750 +108.8550

Euro/Yen

133.04 132.73 +0.23% +4.83% +133.1600 +132.7000

Dollar/Swiss

0.8969 0.9033 -0.70% +1.38% +0.9035 +0.8961

Sterling/Dollar

$1.4199 $1.4139 +0.43% +3.94% +$1.4220 +$1.4135

Dollar/Canadian

1.2043 1.2068 -0.19% -5.41% +1.2071 +1.2014

Aussie/Dollar

$0.7795 $0.7770 +0.31% +1.31% +$0.7813 +$0.7765

Euro/Swiss

1.0952 1.0974 -0.20% +1.34% +1.0982 +1.0954

Euro/Sterling

0.8600 0.8593 +0.08% -3.77% +0.8609 +0.8582

NZ

Dollar/Dollar $0.7253 $0.7216 +0.51% +1.00% +$0.7271 +$0.7211

Dollar/Norway

8.1985 8.2570 -0.73% -4.55% +8.2580 +8.1795

Euro/Norway

10.0120 10.0345 -0.22% -4.35% +10.0530 +10.0019

Dollar/Sweden

8.2855 8.3285 -0.01% +1.09% +8.3434 +8.2750

Euro/Sweden

10.1219 10.1225 -0.01% +0.45% +10.1486 +10.1170

(Reporting by Stephen Culp; Additional reporting by Ritvik Carvalho; Editing by Paul Simao)

EUR/JPY Structural Breakout Will Determing the Next TP

The EUR/JPY has formed a structure which look like a bullish wedge, but we need to pay attention to the direction of the breakout.

131.35 breakout should be targeting 131.65 as the first target. Further continuation up, with a positive momentum should target 132.02-132.20 zone. However if something happens and the bullish wedge fails to provide the breakout to the upside watch 130.87 level. Below, a bearish breakout will happen towards the 130.63 and 130.50 zone.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

EUR/JPY Downtrend is Strong but Watch for a Pullback

The EURJPY is strongly bearish. We could see a pullback which could get the price towards the POC zone.

The POC in the EJ comes within 129.70-80. 1-2-3 could form just there and if that happens new sellers will join. Selling pressure should continue towards 129.35, 129.92 and possibly 128.55. We can also see the W H4 camarilla pivot and the trend line which constitute a confluence for fresh selling. Watch for a move up then new selling.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

Weekly Forex Commentary March 14, 2021

EUR/USD ranges this week severely diminish due to problems within the EUR universe. EUR/JPY remains light years overbought while EUR/NZD and EUR/CAD maintain oversold conditions. EUR/CAD broke its 5 year average at 1.4955 and trades ranges from 1.4955 to 1.4547 then 1.4427. EUR/GBP is oversold however it trades between 0.8740 to 0.8414 to the 5 and 10 year average. EUR/USD cross pairs will determine EUR fate this week to direction. 

GBP/NZD from this week’s close at 1.9374  sits on supports at 1.9330 and 1.9246. Last week vitals from 1.9318 to 1.9188 and the week prior 1.9318 to 1.9176. GBP/AUD from its close at 1.7927 contains resistance at 1.7934 then 1.8134 and last week 1.8130 to 1.7905 then 1.7885 to 1.8130. Both are problem pairs entering into the new week.

Week 7 to massively overbought JPY cross pairs. For the month, NZD/JPY rose 100 pips, barely 200 for AUD/JPY and EUR/JPY, 400 for GBP/JPY and a rare day for 400 pips to CAD/JPY. CAD/JPY beat USD/CAD by 100 pips as USD/CAD traded 300 pips. traditionally, USD/CAD always trades wider ranges than CAD/JPY as CAD/JPY is the follow pair to USD/CAD.

USD/CHF and USD/JPY begin the week deeply overbought while USD/CAD is severely oversold. The strategy this week is long USD/CAD, short CAD/JPY and refrain from trading laggard currencies, USD/CHF and USD/JPY. For problem pair USD/JPY lower must break the 5 year average at 108.98 then 106.43. Above at 109.00’s and 110 is maximum to USD/JPY averages dating to 1999. 

While GBP/JPY and GBP/CHF are overbought, GBP/CAD matches EUR/CAD to oversold and GBP/NZD and GBP/AUD as problem pairs. GBP/USD like EUR/USD is hostage to its cross pairs for direction. 

AUD/CAD and NZD/CAD both broke below vital points at 0.9737 and 0.9073. With NZD/CAD’s break lower, NZD/USD’s close at 0.7173 sits 53 pips above its vital break at 0.7120. Overbought NZD/JPY and NZD/CHF will assist NZD/USD’s eventual break at 0.7120. Then AUD, GBP and EUR slide further. 

AUD/USD big break lower is located at 0.7641. AUD achieves this challenge by breaks lower at 0.7716 and 0.7679. 

Gold remain inside 1815 to 1642. DXY 91.43 Vs 92.78 and 89.95 below. The 2 year yield broke above reported 0.1511 to trade 2 points higher to 0.1711. The 10 year yield at its 1.625 close, trades inside its wide ranges from 1.3305 to 1.8448. 

Respectfully readers, I work extraordinarily hard consistently over 17 years to write the most accurate levels, entries and targets, to bring the most accurate data and market concepts. Don’t believe my words as all is documented here.

GBP/JPY Vs GBP/USD and USD/JPY – March 6th, 2021

GBP/USD last week fell 236 pips from 1.4015 to 1.3776 while overbought GBP/JPY rose 257 pips from 148.14 to 150.71.

Known since the 1930’s, the Japanese pegged GBP/JPY to UK Gold for not only economic viability but the first incursion to the western world of finance. The standard to hold GBP/JPY to the UK held throughout Bretton Woods. Upon the 1972 free float, GBP/JPY became attached permanently with high +90% correlations to GBP/USD.

All JPY cross pairs followed with high and positive correlations as AUD/USD and AUD/JPY, NZD/USD and NZD/JPY, EUR/USD and EUR/JPY while USD/CAD and CAD/JPY became polar opposites as both permanently correlate negatively. USD/CHF and CHF/JPY traditionally also hold opposite correlations.

The Japanese offered not only a double trade but GBP/JPY and GBP/USD as the same exact currency pairs. The same principle holds true for EUR/JPY and EUR/USD, AUD/USD and AUD/JPY and NZD/USD and NZD/JPY. The double trade is permanent for USD/CAD and CAD/JPY.

Why JPY cross pairs remain overbought into week 6 amd not falling with counterpart currencies is the USD/JPY problem to correlations. While GBP/USD correctly correlates to GBP/JPY at +94%, GBP/JPY also not correctly correlates to USD/JPY at +83%. A further problem exists as GBP/USD correlates to USD/JPY at +46 %. All correlations are not only running positive but this situation is the exact same for AUD/JPY, NZD/JPY, EUR/JPY, CAD/JPY and explains why prices remain high and overbought.

Positive correlations are the result of exchange rate prices and relationships to moving averages since correlations are found within the context of averages. USD/JPY trades above vital 105.70,  GBP/USD above 1.3697 and GBP/JPY above 144.80. Correlations are positive because prices trade above respective high / low averages.

Required to assist GBP/JPY to drop is GBP/USD breaks 1.3697 or USD/JPY trades below 105.70. GBP/JPY then decides to fully correlate to USD/JPY or GBP/USD. GBP/JPY in every instant follows GBP/USD as the 91 year correlation and order of currency markets.

Current GBP/JPY trades 1156 pips above GBP/USD and 2506 pips below GBP/CAD. GBP/JPY larger range from GBP/USD becomes 144.08 and 1.5564. GBP/JPY above is located the 14 year average at 155.38 and the 10 year at 148.36.

Prior to the 2016 interest rate changes by the central banks, the market order to currency pair arrangement existed as GBP/USD, GBP/JPY, GBP/CHF then GBP/CAD.

The new order is arranged as GBP/CHF, GBP/USD, GBP/JPY then GBP/CAD and seen as GBP/CHF 1.2855, GBP/USD 1.3820, GBP/JPY 149.86 or 1.4986 then GBP/CAD 1.7292. Much daylight exists for GBP/JPY to trade freely between GBP/USD and GBP/CAD yet 250 pips traded last week from a distance of 1100 and 2500 pips between exchange rates.

Why GBP/CHF and all currency  pairs arranged as Other Currency / CHF dropped from contention as support is due to the uniqueness to the SNB’s interest rate system. Libor is miles from actual interest rates as first comes Saron, Call Money rates and the most vital Debt Register Claims.

JPY cross pairs overall contain downside moves from GBP/JPY at 300 pips and 200 for AUD/JPY and NZD/JPY.

USD/JPY for the week is not only light years overbought but the 5 year average is located at 109.01. A good target is found at 106.65.

GBP/JPY big break lower is located at the 10 year average at 148.38. A break then GBP/JPY trades 146.00’s easily.

GBP/USD this week opens between 1.3768 and 1.3840. Below 1.3768 challenges most vital 1.3697, above 1.3840 then GBP/USD travels much higher.

GBP/CHF and GBP/CAD run good and positive correlations at +93% and +96 % for GBP/CAD. For GBP/NZD and GBP/AUD remain problems as correlations run negative at -43% and -64% for GBP/AUD.

GBP/JPY

Included are GBP/JPY moving averages from 5 day to 253 days. The averages are perfect and derived from the ECB. The first number is the day average followed by trading days then the average.

A 20 day average is actually 15 days, a 50 day average is actually 36 days. Trading day averages to factor perfectly start at the beginning of every year then the numbers increase as days trade. A 50 day average is most stable as it only trades 36 to 50 days.

A 5 day average begins Monday at 2 days, then 3 for Tuesday and Wednesday and 4 for Thursday. A full 5 day average only trades on Fridays.

5 Day     5             149.2391

10 Day  9             149.1325

20 Day  15           148.3808

50 Day  36           145.2691

100 Day               71           142.5398

200 Day               143       139.9417

253 Day               180       139.1231

As GBP/JPY trades lower then the averages drop.

Targets

Targets are not only known miles ahead but targets stack to watch trades unfold.

Current targets: 149.7549, 149.8496, 149.5086, 148.1852, 146.0887, 143.7901, 143.0356.

The ECB and most central banks factor exchange rates to 6 decimal places and 4 for USD/JPY and JPY cross pairs and I follow the ECB exactly.

Did Elon Musk Tweet Anything About the Euro?

Experts say, that fundamentally, many traders are anticipating rates to increases soon. Furthermore, investors are pricing in the swift recovery in the Euro Block nations.

The first instrument is the main currency pair, the EURUSD. Here, we have a beautiful inverse head and shoulders pattern. At the beginning of the week, the price broke the neckline of this pattern and later used that neckline as a support. The upswing from today’s morning, gave the ultimate confirmation and left no doubts about the long-term direction for the pair. In the short-term, we can expect a small bearish correction but in the long-term, the sentiment is definitely positive.

Now the EURCHF, where the pair is so far having one of the best weeks on record. It all started with a breakout from the symmetric triangle pattern and a breakout from the horizontal resistance at 1.087. What happened next is just pure momentum, and stop losses-activation, spiced up by the general weakness of the Swiss Franc. In the short-term some form of a correction can happen but in the long-term, the sentiment is very bullish.

I will finish this with the weekly chart of the EURJPY, where the price is above two major supports. The first one is the broken downtrend line, which was connecting lower highs from 2014 and the second one is at 127, which was respected many times as a support and resistance since 2015. As long as the price stays above those two supports, the long-term sentiment remains positive.

For a look at all of today’s economic events, check out our economic calendar.

Weekly Round Up – February 21st, 2021

AUD/USD broke its long standing and much written line at 0.7821 and traded 57 pips to 0.7877. Above 0.7821, AUD/USD ranges between 0.7821 to the 10 year average at 0.8305 or 484 pips. Below 0.7821, AUD/USD trades 0.7821 to 0.7308 or 513 pips. Below 0.7821 exists 0.7605.

DXY last week maintained its 148 pip range between 89.95 to 91.43. Above 91.43 next targets 92.78 in a 135 pip range.

GBP as written in the last post maintains deep overbought status across all GBP pairs except GBP/NZD. Watch 1.9136 this week for best moves.

EUR/USD opens in fairly perfect neutrality however ranges continue to compress. Problem pair EUR/JPY and all JPY cross pairs maintain deeply overbought status for week 4. EUR/CAD, EUR/NZD and EUR/AUD open the week massive oversold. EUR/CAD and EUR/AUD will provide the best moves.

Stand clear EUR/CHF as AUD/CHF and NZD/CHF will provide better movements.

NZD/USD 0.7267 then 0.7356 Vs 0.7267 and 0.7990. NZD/CAD is overbought while NZD/JPY heading into week 4 maintains richter scale overbought status.

Overall, NZD/USD traded 200 pips from 0.7100’s to 0.7300’s for the past 2 months and provided support to GBP and AUD to allow both to move higher. Explains the divergence seen in EUR/NZD Vs GBP/NZD this week.

USD/JPY watch 104.97 and USD/CAD 1.2587 Vs 1.2826.

 

 

EUR/USD Vs USD/JPY, Close Prices and Next Week

EUR/USD most significant high/ low point is located at 1.2026. A break however at 1.2020 represent a wholesale trend change for a lower EUR/USD. Current EUR/USD trades above 1.2026.

USD/JPY on the other side trades above its significant high/ low point at 104.72. Both EUR/USD and USD/JPY are mis aligned. Either USD/JPY remains above 104.72 and trades higher or EUR/USD must break below 1.2026 and 1.2020 to trade much lower to 1.1700’s. In the interim, both pairs are in a standoff.

Noted from USD/JPY constituents, USD/CAD trades below its high / low point at 1.2867 and USD/CHF below 0.8980. USD/JPY remains the outlier USD pair for the past two weeks.

From the January 3rd long term forecasts, the next major USD/JPY inflection point is located at 106.00 exactly and USD/JPY traded to 105.75 then dropped. While 106.00 above represents the next break, below is located the 10 year average at 103.33 and a 267 pip range.

EUR/USD however must break below its 10 year average at 1.2107 to target the vital breaks at 1.2026 and 1.2020. Above is located the 14 year average at 1.2625. As EUR/USD trades above 1.2107 then the wide range becomes 1.2625 to 1.2107 and a 518 pip range. EUR/USD overall hasn’t changed its 518 pip range since January 8 as important MA’s are dropping simultaneously.

Most important point at 1.2625 however is dropping ever so slowly week to week as is 1.2107. A much lower EUR/USD is ahead in weeks to come.

Between 1.2107 and 1.2624 exists minor daily and weekly trade points.

USD/JPY however above 106.00 exists a vital average every 100 pips until the 5 year average at 109.09. USD/JPY’s counterpart due to the exact same pair is CHF/JPY and it trades above 116.20.

For USD/JPY today, best shorts are located at 105.37 and 105.30 to target 104.90. Longs are located at 104.31 and 104.37 to target 104.64. The break at 104.72 however represents a lower USD/JPY next week.

EUR/USD close price today is forecast at 1.2109 and below 1.2137. This places EUR/USD next week between 1.2082 to 1.2137 for next week.

USD/JPY above 104.72 represents a problem for AUD/JPY as it trades above its 5 year average at 79.70 and NZD/JPY trades above its 10 year average at 75.42. Both are mandatory breaks for AUD/USD to trade lower and break its vital MA at its rising line at 0.7557 and NZD/USD 0.7070.

Any price today for AUD/JPY ar 81.57 is a good short to target 81.17 and today’s close price is forecast at 80.96.

Not only are all JPY cross pairs richter scale overbought but most trade near vital inflection points. EUR/JPY 128.24 is next above Vs below at 125.93 or a 231 pip range. Close price forecast today for EUR/JPY at 126.83 places EUR/JPY at perfect neutral to begin next week.

GBP/JPY trades deeply overbought between vital 5 and 10 year averages at 142.47 and 148.27. Good short today is found at 145.26 to target the close price forecast at 144.08. Quite a distance for a Friday. Above 144.08 then GBP/JPY remains deeply overbought heading into next week.

Overbought GBP/USD forecast close price is located at 1.3741. Shorts today are located at 1,.3866 and 1.3857 to target 1.3772 then 1.3741.

For oversold EUR/CAD, next week 1.5471 high/ low point we’re watching closely.

For high flyer and wide ranger GBP/AUD net week 1.7900 represents the big break. 1.7900 broke this week and traded to 1.7785. EUR/AUD and GBP/AUD’s counterpart must break 1.5923 to trade higher. GBP/AUD break at 1.7900 represents an alignment to EUR/AUD as both now trade below respective MA’s.

For oversold USD/CAD, close price today is forecast 1.2753. Shorts today are located at 1.2787 and 1.2773 to target 1.2731 then 1.2696.

Oversold EUR/GBP trades just above its 5 year average at 0.8725.

S&P bottom and long entry is located at 3896.71 and just ahead of 3861.36. Long target is located at 3906.58 for a quick 10 point trade today.

DAX today must trade back to at least 13970.70. Note most vital today at 13926.28 then 14029.00, 14084.78 then 14156.47. Above 13970.70 targets 14029.00.

 

Nikkei 225 Trade Feb 10 to 11 2021

Consistent to trade and achieve targets for stock indices, the DAX and S&P’s over two and three days completed targets and today is offered the Nikkei 225 from its close at 29562.93.

The Nikkei 225 is the big mover in relation to the DAX an at average of 70 and 140 point moves, the S&P’s at 30 point ranges, Canada’s TSX Composite at 91 points per day, Australia’s ASX 200 at 34 points per day, Nasdaq at 68 points per day, Euro Stoxx 50 at 18 points per day and FTSE 100 at 40 points per day.

Responsible for the Nikkei to move in wide ranges is the factor of Japanese Interest rates to begin with Call Rates, Yen Tibor for onshore and yields. Yen Tibor is the rate to factor Japanese financial instruments in Japan and Euroyen is employed to factor EUR/JPY and financial instruments outside Japan such as Libor.

The bottom at 29415.11 factors as bottoms for Japanese and USD rates however its imperative to trade the Nikkei 225 by Japanese interest rates only as USD rates fails to account correctly for day and 24 hour trades to levels, targets and support and resistance points.

Ranges over last 5 trade days: 219, 228, 581, 224 and 278. A fairly average daily move for the Nikkei is 147 points beginning at 73 points.

Most significant: 29397.23, 29581.40, 29729.55

Bottom. 29415.11. Up target 29733.52

Long 29415.11 to target 29489.02.

Follow by: 29424.34, 29433.58, 29452.06, 29470.53 and 29489.02

Short 29733.52 to target 29648.23

Follow by: 29724.29, 29715.05, 29696.58, 29687.35, 29678.12, 29668.89, 29659.67 and 29650.43.

For a look at all of today’s economic events, check out our economic calendar.