Why Euro Is So Strong?

A lot of people are wondering why the Euro is surging in the past few weeks. Coronavirus is spreading heavily across the Old Continent and nobody really have a strong plan how to stop it. What is more, many of the leading European companies will be heavy hit by the situation in China, where for example the demand for the new cars absolutely collapsed. And what is Euro doing here? Climbing to the highest levels since July.

Sometimes movements on the market does not really have an explanation. It is foolish to assume that every market movement needs to have a reason. Sometimes it is a combination of various factors. In the media, the recent strength of the EURUSD is contributed to the few factors.

First one, it is a weakness of the USD itself. FED cut rates and traders are expecting that it will cut those rates even further in the nearest future. On the other hand, ECB is doing nothing, saying that the stimulus to fight the virus should be fiscal, not a monetary one.

What is more, some traders are saying that it comes from the fact that investors from Wall Street are taking profits, selling stocks and in the same time, planning to move part of their capital outside of the US.

In addition to this, some experts say that rising Euro has to do with the reverse of the carry trades. During happy times, traders often engage in the carry trades, so buying currencies with higher rates (usually EM currencies) and selling those with lower rates (Euro in this case). Now, in times of uncertainty, traders want their money back and they are simply closing those trades, so in consequence, buying back the Euro. Good example of this can be seen on the Euro with Mexican Peso.

Furthermore, I would add a technical reason here. This week, EURUSD managed to break two major, long-term down trendlines, which definitely triggered some pending orders, accelerating the original movement.

On the other hand, Euro did not become a safe haven asset overnight. Some part of the movement can be contributed to the escape towards liquidity but Euro did not replace the Swiss Franc or Yen. At least for now and this can be clearly seen on the EURJPY and EURCHF charts, which are still close to the long-term lows.

Show Must Go On. S&P 500, Gold and EUR/JPY

Did you wonder what will be the cause of the next recession? As for now, that will not be a war between Iran and US and it will not be a Coronavirus. Stock traders made that pretty clear – they are no longer interested in this topic. Fair enough, after a short break, time to focus on the central banks again.

Traders on the SP500 are still voracious. If you saw or read our previous analysis, it should not be a surprise for You. New all-time highs are a fact and something tells me that it is still not the last time that buyers are celebrating this achievement.

If traders are so optimistic, gold should be like a hot potato, which nobody wants to hold in his hands. Wrong. Even stronger USD is not killing the bullish vibe here. Yes, the price creating a right shoulder of the head and shoulders pattern but we are still relatively high. As long as we stay above the major up trendline, buyers seem safe.

Last one will be a very handsome setup on the EURJPY. Beginning of February started with a crucial test of the resistances broken at the end of January. Test was positive for the sellers as the price bounced and went lower. Sentiment is definitely negative, just look at this: we are below the horizontal resistance on the 122.7, long-term down trendline and lower line of the wedge and a flag. Very rarely you can see more bearish setup than that.

Three long-term Forex occasions. EURJPY, AUDJPY and CADCHF

Traders are slowly getting bored with the Coronavirus. In financial media, this topic is mentioned less frequently and slowly, the attention of the market participants is being shifted towards the other information. This allowed to perform a bullish correction on the indices and a bearish one on safe heavens. Today, we will show you long-term situation on the three currency pairs, where we could spot interesting trading opportunities.

First one is the EURJPY, where the recent pursuit to safe heavens increased the appetite for Yen and triggered a negative sentiment. It all started with the bounce from the 122.8 and the upper line of the wedge. Wedge is a trend continuation pattern, so it was naturally promoting the breakout to the downside. It happened on the 24th of February and after that, the price created a small rectangle. This rectangle is promoting a further slide and this is our current outlook on this instrument.

Similar setup can be found on the AUDJPY, where the price also bounced from the horizontal resistance and later broke the lower line of the correction pattern. In this case, it was a flag. What is different is the price movement after the breakout. On AUDJPY the price dropped like a rock, without a pause like on the EURJPY. Well, Australian Dollar is simply much weaker right now. Today, the price tries to initiate the correction but we are not convinced about the durability of this movement.

Last week was absolutely crucial for the CADCHF and you need to look on the weekly chart to understand why. After few weeks of a decline, the price eventually broke the lower line of the massive symmetric triangle pattern. In theory, that can start a new long-term down trend on this instrument. As long as we stay below the triangle, the sentiment remains negative.

Will the BoJ and the ECB join the Fed or show strategic prudence?

However, the following week promises to be an eventful one, with decisions by major central banks, including the Bank of Japan, Bank of Canada and the ECB. The troika – Fed, ECB, and Bank of Japan – are the most influential global central banks, capable of significantly affecting trends in global markets as they did four years ago. Hence, it is worth paying more attention to their signals at the beginning of the year.

More and more observers point out that new highs by American indices on an almost daily basis linked with the interbank market liquidity pumping from the Fed. By early September, the Fed stopped letting its balance sheet shrink. It soon began to replenish it with short-term US government bonds to fill the repo market with liquidity, where at some point the rates jumped up to 10%, four times exceeding the target levels of the central bank.

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As soon as it became clear that the Fed’s emergency liquidity pumping measures in September, the US indices switched into a regime of the virtually unstoppable rally. The same can be said about the actions of the ECB, which in August announced the restoration of asset purchases on its balance sheet since November.

Bank of Japan did not stop feeding the markets with liquidity. The total balance sheet of these three central banks is approaching $16 trillion, updating record highs. It can hardly be considered a coincidence the balance sheets growth of the largest central banks and the growth impulse in the markets.

However, the actions of the ECB and Bank of Japan look much more cautious than the Fed. Perhaps, this explains why American markets are much more active in updating their records. This week, the ECB promises a comprehensive monetary policy strategy review. If this revision brings the ECB closer to the Fed in terms of increasing aid to markets, it may refresh the growth of the eurozone stock markets. The same applies to the Bank of Japan, whose meeting will be held tomorrow morning.

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If the ECB and Bank of Japan focus on the negative aspects of the existing movement in the stock markets, it may trigger a correction rollback and even become a defining feature of the full-year trends. The negative sides are widely known and often highlighted in the press.

Buying government bonds on the central bank balance sheet is essentially government financing, which devalues the currency. Also, pumping markets with liquidity contributes to debt accumulation. At some point, they will have to pay for it. However, if central banks intend to soften the policy further, this moment of reckoning may be somewhat distant, but as a result more destructive.

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This article was written by FxPro

EUR/JPY Adam and Adam Pattern in Progress

EUR/JPY has formed a bullish Adam and Adam 1-2-3 pattern and we should see a continuation move to the upside. The pattern looks very similar to W pattern but it is more V-shaped, with two double legged bottoms. (1 and 3). Above 121.45 the price will target 121.54, 121.99 with a  potential towards 122.53.  ATR projection is 122.03 so that could be the intraday target.

The Analysis has been done with the CAMMACD.Core System

Many green pips,
Nenad Kerkez aka Tarantula FX

Strong Breakout To New Trend High For EUR/JPY Points To Further Upside

The 34-week ema has acted as resistance since approximately September 2018. In addition, the internal downtrend line has clearly been broken, another bullish sign. The odds now favor a continuation of the uptrend begun off the September swing low of $115.86.

The EUR/JPY has already exceeded the 38.2% Fibonacci retracement at $122.45, of the full downtrend off the January 2018 high. Higher target zones as seen on the chart include approximately:

  1. 123.69 – 124.90 (38.2% retracement + several other Fibonacci levels, + previous support from 2018)
  2. 126.44 – 126.50 (50.0% Fibonacci retracement + several other Fibonacci levels, + previous support from 2018 swing low)
  3. 129.24 – 129.45 (61.8% Fibonacci retracement + several other Fibonacci levels, + swing low support from first quarter 2018)

Next, watch for intraday retracements and subsequent buy setups for entries to take advantage of the developing larger bullish trend.

EUR/JPY Daily Chart

Bruce Powers, CMT

EUR/JPY Bullish Reversal Candle Will Initiate a New Wave of Buyers

Dear Traders,

The EUR/JPY has dropped during yesterday’s risk off after UK Parliamentary voted yes to Boris Johnson’s WAB motion but no to the timetable.

We see that the price is in retracement mode. Traders should pay attention to H4 bullish close in next couple of hours. Any 4h bullish reversal candle should initiate a new wave of buyers. 120.35-50 is the POC zone. Targets are 121.00, 121.70 amd 122.00. For this scenario to be valid, the price should ideally stay above 119.85 else we might see a trend change.

The analysis has been done with the CAMMACD.MTF template.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

Yen – The Currency of Choice in Volatile October

The Trend is always a Trader’s Friend

USDJPYDollar Yen has been locked in a sideways action for most of the last three weeks between a top capped by the 50.0 Fibonacci and September high at 108.50 and a floor at 107.00. Wednesday’s move down below the 20-day moving average also breached the flat-lining 50-day moving average and was another attempt to test the 107.00 low. A breach of this level would test the 23.6 Fibonacci level and S2 at 106.00, the September low at 105.75 and the August low and key psychological 105.00. A breach and hold of 108.50 could then test the 200-day moving average at 109.00 and the 61.8 Fibonacci level. The Oscillators remain neutral but bias is to the downside in the higher timeframe weekly and monthly charts.

EURJPYThe Euro continues to be buffeted by continued weak economic data, the uncertainty that still swirls around Brexit and now the Trade War comes to Europe as the WTO backs the US and the imposition of tariffs on $7.5bn of goods it imports from the EU. The pair broke under the 20 SMA September 23, stalling at 118.00 and the 50.0 Fibonacci level before moving lower again yesterday to the 61.8 Fibonacci level. 117.00 represents the next support and the 116.00 September low. A significant reversal over 118.50 is required if the pair is to test 120.00 and the September high. The Oscillators remain negative and the bias is to the downside in the higher timeframe weekly and monthly charts.

GBPJPY – Sterling, as I have written many times in the last 40 months, remains firmly locked in the claws of Brexit fear, uncertainty and doubt and if it’s one thing that markets hate above all else it is FUD. GBPJPY the “widow-maker” moved below the 20 SMA and 50-day moving average September 27 stalling at 132.50 and the 38.2 Fibonacci level before moving lower again on Wednesday to test the S1 level at 131.50. Today the pair has recovered 132.50. 131.00 and the 50.0 Fibonacci level is the next support area, with the 61.8 Fibonacci at 130.00. The September low breached 127.00. A reversal over 133.50 is required if the pair is to test over 135.00 and the September high. The Oscillators are negative and the bias in the higher timeframes is mixed with the weekly chart positive and the monthly chart still negative.

AUDJPY – Action recently from the RBA has seen the Aussie depreciate significantly, with the AUDUSD posting a new more than 10-year low this week at 0.6670. AUDJPY, a proxy for China’s economic resilience and wider Asian economic performance, moved under the 20 SMA September 20, spending 6 days supported at 72.75 and the 38.2 Fibonacci level before moving lower on Tuesday under 72.00 to test the 61.8 Fibonacci at 71.67, below that is the floor of the recent consolidation zone at 70.75. The Oscillators remain negative and the bias in the higher timeframes is mixed with the weekly chart positive and the monthly chart still negative.

 

CAD, CHF & NZD Yen crosses also all remain below the key 20 SMA, having broken below on October 2, September 30 and September 19, respectively.

 

As Q419 completes its first week the Japanese Yen remains in demand as economic data continues to underwhelm, the “R” word (Recession) appears in the literature more frequently and the spectre of the inverted yield curve persists.

Stuart Cowell, Head Market Analyst at HotForex

(read our HotForex Review)

Japanese Yen Strengthens on Risk Aversion

Market concerns over the largest economy in the world experiencing a slowdown is sending shockwaves across financial markets, with risk aversion boosting appetite for safe-haven currencies. The Japanese Yen was a trader’s best friend today after appreciating against every single G10 currency. With risk-off the name of the game, the Japanese Yen could take a shot at claiming King Dollar’s throne.

Focusing on the technical picture, the USDJPY is under pressure on the daily charts. An appreciating Yen has sent the USDJPY below 107.50. A solid weekly close below this level is likely to encourage a decline towards 106.90.

EURJPY trades to near 3 week low

A broadly appreciating Yen also sent the EURJPY towards 117.40.

Sustained weakness below the 117.50 level should inspire bears to attack 117.00 and 116.50. Should 118.00 prove to be unreliable resistance, the EURJPY could push back towards 118.60.

GBPJPY eyes 131.00 on rising risk aversion

Sterling has weakened against the Japanese Yen 3 thanks to global growth fears and Brexit related uncertainty.

The GBPJPY is turning bearish on the daily charts and is positioned to drop further if 131.50 gives way. Technical traders will be looking for a solid daily close below 131.50 which could open a path towards 130.70.

Commodity spotlight – Gold

Gold was back in fashion after disappointing US economic data renewed fears over slowing global growth. The precious metal is set to push higher this week if risk aversion remains a dominant market theme.

Looking at the technical picture, an intraday breakout above $1485 should inspire an incline towards the psychological $1500 level.

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EURUSD Holds Despite Germany’s Q2 Economic Contraction

With Germany’s manufacturing and export sectors showing their vulnerabilities to external headwinds, largely due to heightened US-China trade tensions, it highlights the prospects of Europe’s economic engine falling into a recession.

Q2 GDP figures out of France and Italy over the coming days should give investors a better assessment over the broader state of the EU economy. Still, EURUSD is expected to continue its bias towards the downside, as long as the US-China trade conflict continues to take its toll on global demand, while Brexit risks and Italy’s political uncertainties also add to the negativity surrounding the bloc’s currency.

EURJPY set to break below 117 mark on risk aversion

EURJPY has broken past every support level on the way down since April, as the currency pair saw a relatively easy path towards the 117 level. The “flight-to-safety” mantra has resulted in substantial gains for the Japanese Yen against the Euro, with the palpable risk aversion in the markets implying that EURUSD is very likely to further explore its downside over the coming months.

Weakening Australian Dollar offers Euro respectability among G10

Still, the Euro has seen better year-to-date fortunes against the Australian Dollar. EURAUD has gained about 0.9 percent year-to-date, in contrast to EURUSD’s drop of more than three percent and EURJPY’s 6.7 percent decline so far this year. Australia’s economic exposure to China is dampening AUD, allowing the Euro some measure of respectability among its G10 peers.


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.

Three promising Trading setups, while waiting for the Jackson Hole symposium

Traders are waiting for the Jerome Powell to show the direction for the forthcoming months. Further easing? Probably yes but how big? Will he meet the President Trump’s expectations or no. Those questions are yet to be answered. For now, we have to wait but we still can spot three interesting setups on the market.

First one is the DXY, so a Dollar Index, which yesterday bounced from a crucial horizontal resistance. The bounce is shaped like a head and shoulders pattern, which definitely sounds interesting for the potential sellers. Going short now would be a bit premature though as the neckline is still intact. Only the price closing a day below the green line would be a good occasion to go short.

If we are talking about the Dollar, we should mention the USDJPY, which is also drawing a Head and Shoulders pattern. In this case it’s an inverse version of it and interestingly, it is promoting the strength of the USD. The place for a bounce is also promising – it is the long-term horizontal support. Here, we also have to wait for the breakout of the neckline first.

Now a sister currency pair, so EURJPY. In this case, we are dealing with the descending triangle pattern. The price is increasing the pressure on the horizontal support, which is making the breakout to the downside more probable. Price closing a day below the grey area will be a strong sell signal.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

More Reason for The ECB to Cut Interest Rates?

Global economic health fears are once again making the rounds, following confirmation that the German economy contracted in the previous quarter. This follows the UK GDP contraction at the end of last week, meaning we are now looking at increased prospects that two of the largest advanced economies in the world will enter a technical recession over the coming quarter.

It wasn’t just economic data in Germany that disappointed from Europe today. GDP in the Eurozone expanded by only 0.2% in the last quarter, half of the size of growth seen in Q1 2019 and world recession fears have been further compounded by the U.S. 2-year and 10-year treasury yield curve inverting for the first time since 2007.

The alarming data in recent days essentially compliments the view that has been steadily growing in recent months – the world economy is encountering another slowdown.

The EURUSD has fallen as much as 60 pips at time of writing and eyes will be on whether the pair will drop below 1.11, which would be seen as a signal that 1.10 is once again in reach for the Eurodollar.

It is the Japanese Yen that is once again an investor favorite as a safe haven. The USDJPY has dropped as much as 110 pips with eyes now on whether the pair can slip below the 105 psychological support level.

EURJPY has lost 140 pips. If the current selling momentum in the pair pushes below 117.50, the cross will have achieved its lowest level since April 2014.


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.

Yen Set Sights on Dollar’s Throne As Risk Aversion Dominates

Market concerns over a depreciating Yuan pushing US-China trade tensions to dangerous levels are sending shockwaves across financial markets, with risk aversion boosting appetite for safe-haven currencies. The Japanese Yen was a trader’s best friend today after appreciating against every single G10 currency excluding the Swiss Franc, Danish Krone and Euro. With fears rising over intensifying trade tensions negatively impacting global growth, the Japanese Yen could take a shot at claiming King Dollar’s throne.

Focusing on the technical picture, the USDJPY is bearish on the weekly charts as there have been consistently lower lows and lower highs. An appreciating Yen has sent the USDJPY crashing towards levels not seen since January 2019 below 106.00. A solid weekly close below 106.00 is likely to encourage a decline towards 104.70

EURJPY stumbles to 2 year low

An appreciating Yen sent the EURJPY crashing to levels not seen since April 2017 below 118.00 on Monday morning.

Although prices later rebounded towards 118.64, the currency remains heavily bearish on the daily and weekly charts. Sustained weakness below the 119.00 level should inspire bears to attack 118.30 and 117.50. Should 119.00 prove to be unreliable resistance, the EURJPY could push back towards 120.50.

EURJPY stumbles to 2 year low

An appreciating Yen sent the EURJPY crashing to levels not seen since April 2017 below 118.00 on Monday morning.

Although prices later rebounded towards 118.64, the currency remains heavily bearish on the daily and weekly charts. Sustained weakness below the 119.00 level should inspire bears to attack 118.30 and 117.50. Should 119.00 prove to be unreliable resistance, the EURJPY could push back towards 120.50.

Commodity spotlight – Gold

There was no place like Gold today as Yuan weakness fuelled concerns over US-China trade tensions reaching new heights.

The precious metal has blasted to a fresh 6 year high above $1460 and is likely to extend gains as trade uncertainty accelerates the flight to safety. Given how Gold remains technical and fundamentally bullish, the path of least resistance for the precious metal points north. A solid daily close above $1460, may open the doors towards $1485 and $1500, respectively.

Open your FXTM account today


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.

Watch for a Trend Continuation While the Price is Below 121.36

Dear Traders,

The EUR/JPY, popular “Yuppy” has formed a zig-zag downtrend, and we can see a retracement straight towards the POC zone.

Rejections from 121.10-36 could show fresh sellers within the zone. However, we should see a confirmation in the next couple of hours. On a successful rejection, the pair should reach 120.81 followed by 121.47 and 120.15. On a powerful bearish impulse, we could also see 119.92. At this point, the upside is limited to 121.60, but as explained, ideally the pair needs to stay below 121.36 for bears to dominate.

P.S. Check out MYFXbook performance for the last 8 months on a  verified LIVE account. Each trader and “mentor” should disclose his/her trading results publicly from time to time. Transparency is the key for a mutual trust.

The analysis has been done with the CAMMACD.MTF template.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

EUR/JPY Bullish Above 122.00

Dear Traders,

The EUR/JPY has been supported at the POC zone slightly above D L3 and ascending trend line. The ATR pivot additionally supports the pair.

The POC zone at D L3 122.00-122.10 is supportive for the EUR/JPY. However, the price ideally needs to stay above the POC zone for bullish continuation. If momentum persists, next targets ate 122.25 and 122.48, the final intraday ATR projection. Only a strong bullish impulse can get above the ATR high towards 122.65. If the pair drops below 121.95, it might start a down move towards 121.60.

The analysis has been done with the CAMMACD.MTF template.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

EUR/USD Daily Forecast – Euro at 2-Week Lows Ahead of Fed

Market Expectations of the Fed

There will be a lot to digest from today’s Fed meeting but the main focus will be on rate guidance. The markets are pricing in about 50 basis points of cuts by the end of the year. The Fed will have a chance to confirm if they are on the same page.

Policymakers have dropped a few hints here and there, but at no point have they clearly stated they intend to deliver two rate cuts this year. For this reason, the bar is set quite high for today’s event.

I believe the Fed is very well aware of this and the turmoil that can erupt in the markets if they don’t deliver. Since they haven’t tried to reassert expectations ahead of the meeting, I am steering my bias towards an outcome where the Fed validates what the markets are assuming.

Draghi Set the Stage Yesterday

What’s made it even worse for the Fed is the dovish nature of Draghi’s speech yesterday. The euro took a dive, but it was not sustained. I think this is partly reflecting hesitation in positioning ahead of today’s Fed meeting.

Draghi has essentially opened up the downside risk for EUR/USD if the Fed comes out more hawkish than expected. In this context, I don’t think it was a coincidence that he delivered such a dovish speech a day before the Fed meeting.

Nevertheless, the Fed has a track record of trying to avoid excess volatility in the markets. This additional downside risk strengthens my conviction that policymakers are indeed looking to ease policy.

What Will Make the Dollar Drop?

It might take a lot. As mentioned, the markets have set high expectations. Will the Fed over deliver? It’s certainly possible but I have a hard time envisioning such a scenario.

A possible situation I see where the dollar makes a U-turn is if the Fed couples guidance for two rate cuts this year with restarting quantitative easing.

An Interesting Pair to Watch – EUR/JPY

Theoretically speaking, A dovish Fed stands to push up equity markets and put pressure on the dollar. A weaker dollar will support the euro which means EUR/JPY stands to gain the most due to its correlation with equities. Vice versa for a hawkish Fed, EUR/JPY stands to fall the most among the cross rates.

Technical Analysis

In yesterday’s report, I talked about how important resistance at 1.1204 is. This remains the case and it continues to be the first major upside hurdle. However, I’ll add an additional level at 1.1237. Currently, the 100 moving average is near it on a 4-hour chart. I think it will take a sustained break above the latter level to confirm a bullish reaction.

EURUSD Daily Chart

I also see some further resistance at 1.1262. On a daily chart, the 100 MA is near it and this is the same level that held the pair lower on several attempts in May, and a few in early June.

While 1.1262 can be important, the fundamental message delivered by the Fed will tend to trump any technical levels.

EURUSD 4-Hour Chart

On the downside, I see some support at 1.1176. This level held the pair higher in March. If we get below the level on the back of a hawkish take from the Federal Reserve, I would not be surprised if EUR/USD retreated further to test important support at 1.1128.

Bottom Line

  • A less dovish than expected Fed can see the pair fall all the way to 1.1128.
  • If the Fed confirms what the markets are thinking, I see potential to reach 1.1262 resistance.
  • The bar is set high for a more dovish than expected Fed meeting. But, if it happens, I expect EUR/USD will make an attempt to scale 1.1300.

Gold Sinks to Fresh Weekly Lows as Dollar Bites Back

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A stabilizing Dollar compounded to Gold’s woes with prices sinking towards $1320 as of writing. While the precious metal is susceptible to further loses in the near term, the medium to long term remains in favour of bulls. Market expectations over the Fed cutting interest rates this year coupled with global growth fears should shield Gold from downside shocks. Technical traders are likely to closely monitor how prices behave below the $1324 support level. Sustained weakness below this level should encourage a move back towards the psychological $1300 level. For buyers to jump back into the game, prices have to secure a weekly close back above $1324.

EURUSD hovers above 1.1300

The story defining the Euro’s recent appreciation continues to revolve around Dollar weakness and a less ‘dovish’ than expected European Central Bank (ECB).

Regardless of recent gains, the Euro’s outlook remains tilted to the downside given the storm of domestic and external headwinds hitting the Eurozone. With the fundamentals behind the Euro bearish and the longer-term trend on the weekly pointing south, bears remain in the driver’s seat. A breakdown below the 1.13 level is likely to signal a move back towards 1.12 and 1.10, respectively. Should 1.13 prove to be reliable support, the EURUSD has the potential to test 1.1480 and 1.1550, in the medium to longer term.

Pound struggles to conquer 1.2700

It has been a relatively positive trading day for the British Pound which has appreciated against almost every single G10 currency except the Norwegian Krone.

Although Sterling bulls seem to be in the building, investors should be under no illusion that they are here to stay. With Brexit uncertainty and political risk in Westminster denting buying sentiment towards the Pound, the upside remains limited. In regards to the technical picture, the GBPUSD remains under pressure on the daily charts with price trading marginally below 1.2700 as of writing. Sustained weakness below this point may signal a move towards 1.2620 and 1.2500. Alternatively, a breakout above 1.2750 is seen opening the doors towards 1.2840.

Yen weakened by risk-on sentiment

The improving mood across financial markets is set to weaken appetite for safe-haven assets like the Japanese Yen. With the Yen on the backfoot, the USDJPY has scope to push higher towards 109.00 in the near term. However, the currency pair remains in a bearish trend on the daily charts as there have been consistently lower lows and lower highs. Should 109.00 prove to be a reliable resistance, the next key point of interest for the USDJPY is likely to be found around 107.80. A scenario where bulls are injected with enough inspiration to break above 109.00 will open the doors back towards 110.00.

Is the EURJPY experiencing a technical rebound?

The EURJPY may be in the process of a technical rebound on the weekly charts with support around 120.60 acting as a bottom. Bulls are likely to re-enter the scene if prices can push back above the 123.50 resistance level. Should this point proves to be a stubborn resistance, then the EURJPY is likely to sink back towards 120.60 and 119.50, respectively.


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.

Gold Shoots Higher as Dollar Fumbles

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The precious metal marched into June on an incredibly bullish note, blasting through the psychological $1300 level thanks to a broadly weaker Dollar. Market expectations over the Federal Reserve cutting interest rates this year amid persistent trade disputes are likely to dent buying sentiment towards the Dollar – ultimately pushing Gold prices higher. With the precious metal already powering to a nine-week high above $1335 this morning, the next key level of interest may be found around $1347.

In regards to the technical picture, Gold turned bullish on the daily charts following the breakout and daily close above the $1324 resistance level. Previous resistance around the point is likely to transform into dynamic support that encourages a move higher towards $1347 and $1350, respectively.

Dollar crippled by Fed rate cut hopes

The Dollar is extending losses against a basket of major currencies on rising expectations over the Federal Reserve cutting interest rates in response to ongoing US-China trade tensions.

Earlier in the week, St. Louis Fed President James Bullard said that a rate cut “may be warranted soon” which immediately sent the Dollar tumbling. Recent comments from Fed Chair Jerome Powell on how the central bank would act “as appropriate” to address trade war risks simply rubbed salt into the wound with the Dollar Index sinking below 97.00 as of writing. Speculation over the Fed cutting interest rates in 2019 coupled with fresh signs of the US economy hit by trade disputes should cap the Dollar upside potential. Price action suggests that bears are back in town with the Dollar Index on route to test 96.50 if a daily close below 97.00 is achieved.

Pound rallies on shaky foundations 

Investors should keep in mind that the recovery in the GBPUSD has little to do with a change of sentiment towards the British Pound but Dollar weakness.

A vulnerable Dollar seems to be keeping the GBPUSD buoyed this week with prices trading above 1.2700 as of writing. The fact that the Pound remains depressed against every single G10 currency excluding the Dollar highlights how Brexit uncertainty and political risk remains negative for Sterling. Taking a look at the technical picture, the trend still points south on the daily charts with bears in the driver’s seat below 1.2800. A breakdown below 1.2700 is likely to encourage another move back down towards 1.2620.

Currency spotlight – EURJPY 

The EURJPY remains under pressure on the weekly charts as there have been consistently lower lows and lower higher. However, bulls can make an unexpected return if prices can push back above the 123.50 resistance level. If this point proves to be a stubborn resistance, then the EURJPY is likely to sink back towards 120.60 and 119.50, respectively.

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.

PrimeXBT Bridges the Divide Between Crypto and Traditional FX, Indices and Commodities Markets

As the demand for more sophisticated trading features grows within cryptocurrency markets, and as traditional traders continue to explore the unique opportunities present within digital currencies, PrimeXBT is now positioned as a global bridge between these two groups of asset classes.

PrimeXBT already provides unprecedented access to advanced cryptocurrency-based features and functionality such as the ability to short the top crypto-assets, ultra-fast order execution and aggregated liquidity from 12 sources concurrently.

The inclusion of traditional financial instruments signals the expansion of the platform’s offering to include access to opportunities at the cross-section between traditional and crypto-asset markets.

These new listings are now live at PrimeXBT and include:

Forex 

With global trading volumes of over $5 Trillion daily, PrimeXBT has tapped into the largest money markets in the world and now provides crypto-asset traders with access to global forex pairs, all within a single interface.

Forex has a low correlation with crypto-asset markets, providing traders with alternative trading options during downwards digital currency trends.  This allows traders to diversify strategies and holdings and provides a robust risk-balancing mechanism for portfolio selection.

PrimeXBT now lists forex trading pairs for:

  • USD (AUD/USD, EUR/USD, GBP/USD, USD/CAD, USD/JPY, USD/CHF)
  • EUR (EUR/AUD, EUR/CAD, EUR/CHF, EUR/GBP, EUR/JPY, EUR/USD)
  • AUD (AUD/USD, AUD/CHF, AUD/JPY, AUD/USD, EUR/AUD, GBP/AUD)
  • GBP (GBP/AUD, GBP/CAD, GBP/CHF, GBP/JPY, GBP/USD, EUR/GBP)
  • CHF (AUD/CHF, EUR/CHF, GBP/CHF, USD/CHF)
  • JPY (AUD/JPY, EUR/JPY, GBP/JPY, USD/JPY)
  • CAD (CAD/USD, EUR/CAD, GBP/CAD)

Unlike crypto, forex markets are low volatility. So to maximize profit potential PrimeXBT offers up to 1000x leverage to all FX trading pairs.

In addition to this, spot contracts for Spot Gold USD (XAG/USD) and Spot Silver USD (XAU/USD) are also now available on PrimeXBT.

Commodities

Further cementing PrimeXBT’s entry into global traditional markets, commodities trading has now also been incorporated into the platform.

The start of this year has already seen strong growth in oil prices, and the addition of further non-cryptocurrency-correlated financial instruments, such as these, provide traders with additional opportunities to monopolize on divergences between the asset classes.

PrimeXBT has now added CFDs for the following commodities:

  • UK Brent Oil (BRENT/USD)
  • US Crude Oil (CRUDE/USD)
  • US Natural Gas (NAT.GAS/USD)

Indices

Complimenting the integration of forex and commodities, many of the world’s leading stock markets are now also accessible directly via PrimeXBT.

Flexible and agile redistributions of funds between crypto-assets such as Bitcoin and national stock indices allow for the development of investment and trading strategies that expose significant new opportunities.

PrimeXBT now offers access to the world’s leading indices with leveraging of up to 100x:

  • US Tech 100 (NASDAQ)
  • US SPX500 (SP500)
  • Germany 30 (GER30)
  • Hong Kong 50 (HK-HSI)
  • Australia 200 (AUS200)
  • Japan 225 (NIKKEI)
  • UK 100 (UK100)

Despite PrimeXBT’s debut as a crypto trading platform the team’s broad experience originally stems from within traditional financial markets. A Prime XBT spokesperson explains:

“Although we got our start in the cryptocurrency market, we built PrimeXBT on decades of experience from traditional financial markets. Traders are starting to see that experience come through on our platform now through these new financial instruments, allowing traders to try their hand in new markets and further diversify their investment portfolios.”

This experience has lead to PrimeXBT’s value proposition consistently reflecting what traders truly want and need. Traditional traders are gravitating towards lucrative crypto investment opportunities, likewise, crypto-asset traders and markets are maturing to incorporate more advanced techniques and strategies.

PrimeXBT simultaneously provides traders with tight spreads (on average 0.7 pips), with the highest leverage allowance and some of the lowest commission fees (just 0.5% to all trades and assets).

What’s more, there are no KYC verifications or sensitive data required to set up a full-featured trading account.  This is unheard of within traditional financial brokerages and acts to significantly lower the barrier to enter into the world’s most popular and profitable investment opportunities.

To learn more about PrimeXBT and the favorable trading conditions it presents, head to https://PrimeXBT.com.

European Equities: The Majors will be at the Mercy of the Oval Office

Economic Calendar

Tuesday, 14th May

  • German CPI (MoM) (Apr) Final
  • Spanish CPI (YoY) (Apr) Final
  • Spanish HICP (YoY) (Apr) Final
  • German ZEW Current Conditions (May)
  • German ZEW Economic Sentiment (May)
  • Eurozone ZEW Economic Sentiment (May)
  • Eurozone Industrial Production (MoM) (Mar)

Wednesday, 15th May

  • German GDP (QoQ) (Q1)
  • German GDP (YoY) (Q1)
  • French CPI (MoM) (Apr) Final
  • French HICP (MoM) (Apr) Final
  • Eurozone GDP (YoY) (Q1) 2nd Estimate
  • Eurozone GDP (QoQ) (Q1) 2nd Estimate

Thursday, 16th May

  • Italian CPI (MoM) (Apr) Final
  • Eurozone Trade Balance (Mar)

Friday, 17th May

  • Eurozone Core CPI (YoY) (Apr) Final
  • Eurozone CPI (YoY) (Apr) Final
  • Eurozone CPI (MoM) (Apr) Final

The Majors

The majors managed to close out the week on a high, though the Friday gains were not nearly enough to reverse the weekly losses.

The DAX led the way on Friday, gaining 0.72% to reduce the deficit for the week to 2.84%. The CAC and EuroStoxx600 saw more modest gains of 0.27% and 0.32% respectively on Friday, leaving the pair deeper in the red for the week.

The CAC40 ended the week down 3.99%, with the EuroStoxx600 down by 3.39%.

Economic data released through the day was limited to 1st quarter nonfarm payroll numbers out of France and March trade data out of Germany.

While a pickup in hiring was positive for the CAC, the DAX found strong support in the early part of the day. According to Destatis, Germany’s trade surplus widened from €18.7bn to €20bn in March.

Month-on-month, exports rose by 1.5%, while imports rose by just 0.4%. Year-on-year, exports increased by 1.9%, while imports rose by 4.5%.

While the March trade data was on the positive side, sentiment towards the 2nd day of U.S – China trade talks pinned back any material upside.

A tariff hike from 10% to 25% on $200bn worth of Chinese goods also went into effect on Friday.

The Market Movers

On the DAX, ThyssenKrupp led the way, surging by 24.1% on Friday. The rally came off the back of news that the company was looking into a partial listing of its elevator business.

While the majority of the European sectors found support through the day, the auto sector continued to struggle. The role out of tariffs pinned back the auto sector due to its sizeable exposure to China.

Daimler led the way down, sliding by 3.56%, with BMW (-0.6%) and Volkswagen (-0.22%) also seeing red on the DAX. Continental managed to buck the trend on the day, rising by 0.18%. On the CAC, Renault slid by 0.85%

Things were somewhat better for bank stocks. Deutsche Bank and Commerzbank rallied by 1.33% and 1.22% respectively. On the CAC40, BNP Paribas rose by 0.15%, while UniCredit S.p.A notched up a 0.74% gain. The gains were modest relative to the heavy losses from Thursday

Commerzbank ended the week down by 6.31%, with Deutsche Bank down by 4.5%.

The Day Ahead

For the day ahead, it’s a particularly quiet day on the economic calendar. There are no material stats scheduled for release later this morning to provide the European majors with direction.

The lack of progress over the U.S – China trade talks last week may begin to weigh on risk sentiment. Friday’s tariff hike from 10% to 25% is expected to have a far more significant impact on the global economy than the 10% tariffs.

Failure by both sides to find common ground, in spite of the tariff hike, suggests that there is some distance to be covered before both sides can reach an agreement.

Over the weekend, to rub salt in the wound, Trump threatened China with the prospects of a more punitive deal in his 2nd term. Assuming that Trump is successful in his campaign next year, it could scupper Beijing’s plans of holding out for a return of the Democrats.

With work already underway to roll out 25% tariffs on another $300bn worth of Chinese goods, things could get from bad to worse.

At the time of writing, the DAX30 was up by 11.5 points. Things were not so rosy for the U.S futures, however. The Dow Mini was down 234 points, with the NASDAQ and S&P500 also pointing to a bearish open. Trump may try to avoid a panic sell-off later in the day by delivering one of his more optimistic views on progress.