Yen Still Being Strong

Many macroeconomic reports are being released that could be important for the yen; two things, however, will prevail: Haruhiko Kuroda re-election as the BoJ governor and the demand for the yen as a safe haven.

Safe haven thing is quite clear: when there’s tumult in the markets, investors are always looking for low-risk assets, and the yen is obviously one of those. As for Kuroda’s second term, the outlook is somewhat mixed. Mr Kuroda is likely to stay, as there are no candidates out there that could replace him, while the QE is still working and his political reputation is good. Achieving a stable rate of inflation and better consumer spending also speak for the current BoJ governor.

If Kuroda is re-elected, the QE is very likely to be continued and even extended. However, one cannot stimulate such economy as Japan for ages, you’ve got to end the QE somewhere and then maintain the balance. Keeping the achieved results is actually the most complex thing in the QE. Still, as long as the inflation rate is not growing by itself, without any support, quitting QE is not an option at all.

All these speculations are still neutral for the Japanese yen for the time being but can become negative in the future.

Speaking of the fundamental reports being published in Japan this week, the situation is quite mixed. The January PPI has fallen from 3% to 2.7% YoY, while machinery orders have soared from 48.3% to 48.8%.

Technically speaking, USD/JPY is downtrending, be it a shot, mid, or long term. Currently, the price is close to the short and mid-term support, with the target at around 107.00. Then, most likely, then it may rebound from support and go up to reach the resistance. If this is the case, the immediate target for the upmove will be at 108.30. After that, many things will depend on the price testing the resistance: if a breakout occurs, the yen may slide both into the upper projection channel and towards the midterm channel resistance at 109.00.

USD/JPY 4H Chart
USD/JPY 4H Chart

This Article was written by Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Important AUD Pairs’ Technical Update: 31.01.2018

AUD/USD

Despite AUDUSD’s inability to extend recent north-run beyond 0.8135, the pair is less likely to decline much unless clearing the seven-week old ascending trend-line, at 0.8030 now. As a result, pair’s present up-moves are expected to confront the 0.8125-35 region but overbought RSI might restrict its additional rise. Should buyers refrain to respect RSI and surpass the 0.8135 on a daily closing basis, the mid-2015 high of 0.8165 and the 61.8% FE level of 0.8310, which is also the 2015’s yearly high, could please the Bulls. On the contrary, a D1 close beneath the 0.8030 TL support can trigger the pair’s southward trajectory towards 0.7980 and then to the 0.7900 round-figure, breaking which there are multiple rests between 0.7880 and 0.7870 that can push the prices upwards. If at all the 0.7870 fails to defy the sellers, the 100-day & 50-day SMA confluence area of 0.7780-70 becomes important to watch.

GBP/AUD

Considering GBPAUD’s latest U-turn from 1.7570, chances of the pair’s drop to the 1.7415 are much brighter; however, an upward slanting TL support of 1.7380 might confine the pair’s following downturn. Given the pair’s break of 1.7380, the 1.7260 and the 1.7210–1.7200 may offer intermediate halts prior to fetching it in direction to current month low, around 1.7100. In case if the pair conquers 1.7570 upside barrier, the 1.7630 can become a buffer ahead of reigniting the importance of 1.7670-75 horizontal-line. Assuming the pair’s successful trading beyond 1.7675, the 1.7700, the 1.7750 and the 1.7800 might entertain the optimists.

AUD/JPY

Ever since the AUDJPY surpassed 100-day SMA during late-December, it kept trading between the SMA support and the 89.00–89.10 resistance-zone. At present, the pair is likely coming down to retest the 100-day SMA level of 87.35, which if broken could activate its fresh declines targeting 50-day SMA level of 86.90 and the 86.50 support-mark. If the pair continue trading southwards after 86.50, it becomes vulnerable to visit the 85.90 and the 85.50 rest-points. Alternatively, the 88.30-35 is likely immediate resistance for the pair traders to observe prior to looking at the 89.00–89.10 area, which if broken could escalate the quote’s recovery towards the 89.35, the 89.70 and then to the 90.00 consecutive resistances.

AUD/CHF

While break of 100-day SMA dragged the AUDCHF to more than a month’s low, an ascending trend-line support, stretched since mid-2017, restricted its further downside. Though, lack of strength appeared when the pair failed to extend its follow-on pullback and revisited the 200-day SMA level of 0.7530. Should prices close below 0.7530, aforementioned TL support of 0.7505, adjacent to 0.7500 round-figure, can try disappointing the Bears. Moreover, pair’s sustained break of 0.7500 could further magnify its weakness and flash 0.7490 and the 0.7430 on the chart. Meanwhile, 0.7590 and the 100-day SMA level of 0.7610 are likely nearby resistances for the pair to break if it is to aim for 0.7630 and the 0.7650 north-side numbers. During the pair’s successful trading beyond 0.7650, the 0.7680 and the 0.7715-20 horizontal-line may gain buyers’ attention.

Cheers and Safe Trading,
Anil Panchal

Yen Becoming Consolidated as Traders Wait

While the Yen has gotten stronger this morning, speculators may believe the Yen will still gain against the U.S Dollar.

Yen Maintaining Tight Range Past Week

The Yen continues to maintain a tight trading range. The Japanese currency is trading near 111.00 against the U.S Dollar.

USD/JPY 1H Chart
USD/JPY 1H Chart

The currency has made a steady climb in value in the short term and has tested support levels below as the U.S Dollar has been sold against the Yen.

Bank of Japan Stays on Script

The Nikkei equity Index has put in solid gains again this morning of over 1 percent. And the Bank of Japan has stuck to it rather dovish monetary policy script today.

The Yen has been slightly weaker this morning but has seen consolidation remain intact, and over the mid-term, the Yen has been stronger.

Long-Term Perspective Offers Insights

A long-term perspective of the Yen shows a broader range. Resistance may be resilient around 112.00 if the Yen weakens, while short-term support looks to be around the 110.50 juncture.

The Yen has the potential to move within its known range near term. And traders may be waiting to react to the growth numbers from the U.S this coming Friday. And while the short term may be choppy, traders may attempt to sell the U.S Dollar against the Japanese currency because they think the Yen can be stronger.

USD/JPY Daily Chart
USD/JPY Daily Chart

In the short term, we believe the Yen may be positive. In the mid-term and long-term, we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

September 2017 Support in Play for Yen Soon?

September 2017 support levels may now become the focus for Yen traders.

Yen Proves Capable of Sustaining Gains

The Yen has proven capable of sustaining strong gains against the U.S Dollar. The Japanese currency is near 110.80 after having broken important support levels last week.

USD/JPY 1H Chart
USD/JPY 1H Chart

A look at a short-term and a mid-term chart of the Yen is probably enough to make short-term traders suspicious about the Yen’s strength continuing to prosper.

Deflationary Crisis Coming to an End in Japan

However, recent economic data from Japan has highlighted an improving statistical landscape for the nation. And the Bank of Japan has been quoted as saying, it believes the deflationary crisis which has plagued the country may be approaching its end.

USD/JPY 4H Chart
USD/JPY 4H Chart

The Nikkei equity index has certainly achieved solid gains the past six months, and interestingly the Yen has started to show divergence with the Nikkei Index.

Long-Term Chart Provides Tempting Ratio

The past few years have seen the Yen weaken if the Nikkei has grown stronger, but the past couple of months have begun to produce a different trend line.

Interestingly a long-term chart of the Yen may provide the impetus for traders to remain sellers of the U.S Dollar against the Yen. Critical support ratios were tested this past September and the Japanese currency may again try to test the 109.00 price levels.

USD/JPY Daily Chart
USD/JPY Daily Chart

In the short term, we believe the Yen may be positive. In the mid-term and long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

What is Expected in the Forex Market in 2018?

This trend is likely to continue next year as growth in the rest of world moves lock-step with growth in the U.S.

The global economy is expected to be driven by higher commodity prices which should support commodity currencies such as the Australian, New Zealand and Canadian Dollars. Additionally, an expected outflow of capital from the U.S. is likely to weigh on the U.S. Dollar. In other words, the strengthening of the global economy should limit the U.S. Dollar’s gains and eventually drive it lower.

U.S. interest rates rose faster than those of any other country during 2017 and this should continue in 2018 with the Fed expected to raise rates at least three times by a total of 0.75%.

Normally, money seeks its highest level so rising rates should be attracting inflows of foreign capital into the U.S., however, this is not expected to occur in 2018 since investors believe the Fed may actually be nearing the end of its rising interest rate cycle.

The U.S. Dollar posted strong gains when the Fed started to raise rates in 2015. This was because the global economy was still trending lower. The move by the Fed shocked investors into buying the U.S. Dollar. However, given that the Fed has already raised rates three times in 2017, the moves no longer have shock value, which is probably the main reason the U.S. Dollar weakened this year.

On December 13, the Fed raised its benchmark interest rate 25 basis points to 1.50% and the dollar has declined against a basket of major currencies since then. Some say that this was because it did not increase the number of potential rate hikes in 2018 from the previously forecast of three to four. This may be another sign that the Fed will begin slowing the number of rate hikes after 2018.

Furthermore, Fed officials have been puzzled by the persistence of low inflation even as the unemployment rate fell this year to a 16-year low. Yet wages still aren’t rising as rapidly as conventional economic wisdom would suggest. This may actually convince a few Federal Open Market Committee members to vote against additional rate hikes next year.

In conclusion, foreign currencies should strengthen against the U.S. Dollar in 2018 based on the current path of interest rate hikes in the U.S. Since the Fed is nearing the end of its tightening cycle and other central banks are just beginning to raise rates, the dollar is likely to continue to feel pressure in 2018.

At the start of 2018, the dollar could surge due to the initial optimism over U.S. tax reform, however, this move is not likely to last since the biggest tax overhaul in 30 years is likely to lead to a widening of the Federal deficit and higher government borrowing in the future.


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In 2017, the Bank of Canada and the Bank of England raised their benchmark interest rates. After September, the European Central Bank may start raising rates. It will be followed by the Reserve Banks of Australia and New Zealand perhaps by the end of the year or early 2019.

So while the rest of the central banks will be raising rates, the Fed will start limiting its number of rate hikes and this is the key reason why I’m bearish on the dollar in 2018.

Commodities still the main driver of the Australian dollar

The Australian dollar has rallied in the last 2 weeks from a low of US75c to around US76.60c against the greenback, defying analysts’ predictions that the currency would tumble if the US Federal Reserve stuck to their plan to hike rates further next year and if new tax legislation in the US was passed.

If the news is correct, the Fed is expected to lift interest rates next year a minimum of 3 times with a fourth hike also a distinct possibility which will put the US dollar interest rate and yield higher than the Australian dollar for the first time in almost 2 decades which you would think would generate huge interest in the US dollar at the expense of the Aussie

Also, A new tax legislation that was introduced by US President Donald Trump which envisions cutting the corporate tax rate to 20 percent among other things is sure to be signed into law this week by the US president after his own Republican party passed the tax bill through both the Senate and the house of representatives.

It is seen as the biggest tax change in a generation and if Republicans are to be believed, will put a rocket under the US economy as companies bring back their profits to the US which will generate significant demand for the US dollar.

So why is the Australian dollar remaining so resilient in the face of such pressure? Surely higher rates in the US, as well as a soaring demand for the greenback on the back of corporate tax cuts, should be negative for the Australian dollar?

Tax legislation and interest rates aside, if we look back over the last decade or so the main driver of the Australian dollar has been commodity prices such as copper, and Iron ore, Australia’s biggest export which has rallied over 25 percent in the last 2 months and further gains are expected.

So if you are listening out there, it may be a good strategy to keep an eye on commodity prices and although some external factors may influence the Aussie dollar the Iron ore price is going to be the one to watch out for.

This article was written by FIBO Group analyst Andrew Masters.

Australian Dollar may hit US90c

One of the reasons the Australian dollar may have strengthened is because the Fed gave no surprises, and kept to their earlier plan to lift rates 3 more times next year. The question is still up in the air whether 3 rate rises is possible as it was shown anything could happen, and after Tuesday’s upset election results where the democratic candidate Doug Jones triumphed over Republican candidate Roy Moore which threatens to derail US President Donald Trump’s tax plans.

If Trump’s tax policy does indeed fall by the wayside the US dollar is expected to take a huge hit as most of its recent gains are connected with the smooth passage of tax reform.

So with a maximum of 3 hikes next year from the Fed (or less as many are predicting) the main driver of the Australian dollar now will be the local economy and more importantly economic data.

Job figures released earlier today from Australia came in well above expectations which caps off a stellar year for the jobs market while consumer inflation figures which were also released came in at 3.7 percent which is well within the Reserve Bank of Australia’s target to begin hiking rates.

If the above figures are anything to go by the RBA will need to join other countries such as the US, Canada and the UK who are currently raising rates or on the verge of doing so which according to some is going to see the Aussie dollar rally next year.

“Looking into 2018, we see the Australia dollar climbing, as we expect it to get support from a lift in global growth, which is expected to support commodity prices, and we expect the RBA to lift the cash rate in 2018,” noted HSBC chief economist Australia and New Zealand Paul Bloxham.

Mr boxom is one of the more bullish analysts on the Australian dollar and predicts the Aussie dollar will jump 20 percent from current levels as the RBA begin to lift rates next year.

“We expect the Australian dollar to head towards 90 US cents,” Mr. Bloxham added.

This article was written by FIBO Group analyst Andrew Masters.

Gold opens the way for new lows

Gold made a significant move yesterday which actually triggers a sell signal on this instrument. The price broke the up trendline, lower line of the triangle and the horizontal support on the 1267 USD/oz. That is quite a lot for a few hours of trading. Currently, we do have a small reversal but it is rather a correction movement than the proper comeback or denial.

Dollar index broke the upper line of the flag and defended the horizontal support on the 92.7 points. That is positive but we do not have a proper buy signal yet. For that, we need to break the horizontal resistance at the 93.5 points.

AUDJPY combines the weaker GDP from Australia with the bearish technical situation. The price broke the lower line of the wedge and then the horizontal support on the 85.8. Later we defended that as a resistance with two nice shooting stars. Finally, today, we do have a confirmation with the strong bearish candlestick. According to the Price Action, we do have a sell signal here.

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

Correction on the EURUSD is bigger than expected. AUDJPY with a nice bearish setup

The correction on the EURUSD accelerates. The price did not stop on the 38,2% and 1.1730. We are clearly aiming the 50% Fibonacci along with the upper line of the recent big flag formation. As long as we stay above the neckline (green area) the sentiment is still positive but the situation for the buyers is not so comfortable as it was a few days ago.

Oil is still above the 55.10 USD/oz and the buy signal is still with us. As long as we stay above this area, buyers have bigger chances for a mid-term success.

AUDJPY recently broke two important supports: up trendline and a horizontal one around 85.8. Now it is time to test the 85.5 as a closest resistance. Along with the horizontal area, we do have a mid-term down trendline there and the potential correction equality pattern. Bearish price action in this area can be an excellent selling opportunity.

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

AUD/JPY Bearish Zig Zag Pattern Aiming for 85.35 if 86.25 holds

The AUD/JPY is following a bearish zigzag pattern that could reach D camarilla support levels as I showed during my Real-Time Daily Trading Ideas Live Webinar today. The AUD/JPY could reject from the POC zone 85.90-95 (50.0, W L5, EMA89, D H3) and as long as 85.18-25 holds we might see a drop towards 85.50 and 85.35. Only if we see a 4h or 1h momentum close below 85.35 the pair might target 85.05 and 84.56. Have in mind that the AUD/JPY is a bi slow moving pair so it might take some time to get to its final target. At this point the focus is on the POC zone.

AUD/JPY Bearish Zig Zag Pattern Aiming for 85.35 if 86.25 holds

W H3 – Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 – Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 – Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC – Point Of Confluence (The zone where we expect price to react aka entry zone)

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Yen Churns Within Known Range

The Yen has weakened in early trading against the U.S Dollar this morning, but it is approaching important resistance levels which have proven to be strong since March of this year. Traders with a speculative taste may be tempted to sell the U.S Dollar against the Yen.

Yen Weakening in Early Trading

The Yen has weakened early this morning as the U.S Dollar has been strengthened against the Japanese currency. The Yen is currently unchanged against the greenback.

USD/JPY 1H Chart
USD/JPY 1H Chart

Interestingly, the weakness in the Yen this morning has occurred as the Nikkei Index has gone into a cautious phase and equities have been sold.

Resistance Remains Strong for Yen

The Yen remains under the 114.00 level against the U.S Dollar and traders may view this weak terrain as important resistance. A look at the Yen’s mid-term chart shows it remains within a rather consolidated range.

USD/JPY 4H Chart
USD/JPY 4H Chart

Gross Domestic Product numbers will come from Japan early on Wednesday and this could affect market sentiment.

A Taste for Speculation Among Yen Traders

The Yen’s recent trading has produced a well-practiced territory for traders. Asian investors have shown a great deal of risk appetite in equity Indexes, but the Yen has not sustained values above important resistance levels of 114.30 since March of this year.

Traders with a taste for speculation may see the current weakness being displayed in the Yen and believe it is time for yet another reversal, meaning they might sell the U.S Dollar against the Japanese currency.

USD/JPY Daily Chart
USD/JPY Daily Chart

In the short term, we believe the Yen may be positive. Mid-term and Long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

AUD/JPY Drops on Worse Than Expected CPI

The Australian CPI rose 1.8 percent for the year which was lower than 2 percent expectation. The data hurt the AUD and it made a direct drop to W L4 with an extension to 87.78. At this point shorting on rallies is the option. Short term scalps could come around 88.08 while positional short trades could come at the POC zone 88.25-40 (D L4/L5, W L3, Order block, EMA89, trend line, ATR pivot, 50.0 Fib). There is a lot of confluence at the POC so a rejection should target 88.05, 87.80 and 87.50 that is W L5 camarilla pivot.

AUD/JPY 1H Chart
AUD/JPY 1H Chart
  • W L3 – Weekly Camarilla Pivot (Weekly Interim Support)
  • W H3 – Weekly Camarilla Pivot (Weekly Interim Resistance)
  • W H4 – Weekly Camarilla Pivot (Strong Weekly Resistance)
  • D H4 – Daily Camarilla Pivot (Very Strong Daily Resistance)
  • D L3 – Daily Camarilla Pivot (Daily Support)
  • D L4 – Daily H4 Camarilla (Very Strong Daily Support)
  • POC – Point Of Confluence (The zone where we expect price to react aka entry zone)

Technical Checks For Important AUD Pairs: 25.10.2017

AUD/USD

Having breached the 0.7750-40 horizontal-line, the AUDUSD seems all set to test the 200-day SMA level of 0.7690 prior to visiting the 0.7630 support-mark. However, the pair’s declines beneath 0.7630 may find it hard to clear nearly eleven-month old ascending trend-line, at 0.7560, which if broken could open the door for its plunge towards 0.7515 and the 0.7470 numbers. In case if the oversold RSI triggers the quote’s pullback from 0.7690, the 0.7740-50 area regains its importance, surpassing which it may rise to 0.7815 and the 0.7840 resistances. Should the pair successfully trades beyond 0.7840, the 0.7865 can act as a buffer before fueling prices to the 50-day SMA level of 0.7900.

EUR/AUD

euraud

Even if sluggish AU inflation numbers propelled the EURAUD to post fresh high in sixteen months, the surge is likely to be challenged by resistance-line of three-month-old ascending trend-channel, at 1.5310. As a result, the pair’s profit-booking to 1.5240 and then to 1.5170 become more likely. Given the pair stretches the downturn below 1.5170, the 1.5100, the 1.5070 and the 1.5030 can entertain sellers ahead of making them confront with 50-day SMA level of 1.4980. Alternatively, Bulls’ ability to register a daily close beyond 1.5310 channel-resistance could further strengthen their upward bias to target 61.8% FE level of 1.5420. Moreover, pair’s sustained the rally above 1.5420 might help it conquer the 1.5455-60 multiple resistance-zone, which in-turn could accelerate the upside momentum in a direction to 1.5530-40 region and then to the 1.5600 round-figure.

AUD/JPY

audjpy

With a two-month long ascending trend-line portraying brighter chances of the AUDJPY’s U-turn, the 88.20 and the 88.30-35 reacquire traders’ eye-share. Though, the pair’s consequent upside may only please buyers with 88.70 resistance-mark ahead of meeting the 88.95 trend-line barriers. Should the pair surpasses the 88.95 mark, also conquers the 89.00 – 89.05 zone, it can progress to 89.35 and the 89.70 resistances. Meanwhile, break of 87.75 TL support can result in additional weakness to the pair that may flash 87.60 and the 87.20 rest-points on the chart. Given the pair’s extended south-run beneath 87.20, it becomes vulnerable to test 86.50 support-mark.

AUD/CAD

audcad

While a downward slanting trend-line, stretched since early-May, again confining the AUDCAD’s upside, the pair is expected to re-test the 0.9755 and the 0.9710 supports ahead of resting around September lows of 0.9680. If the market sentiment keeps nurturing bears after 0.9680 breaks on a daily closing basis, the 61.8% FE level of 0.9575 may become a strong level to observe. On the upside, a daily close above 0.9815 can again try to beat the 0.9865 TL and aim for 100-day SMA level of 0.9900. If at all optimists favor the price-run to defeat 0.9900 round-figure, the 0.9960-65 can act as a buffer before shedding lights on 200-day SMA level, also the psychological magnet, of 1.0000.

Cheers and Safe Trading,
Anil Panchal

Important JPY Pairs’ Technical Update: 11.10.2017

USD/JPY

USDJPY’s sustained trading below three week old ascending trend-channel indicates brighter chances of its additional downside with 111.80 and the 111.00 being likely nearby supports for the pair before it could avail the 110.65-70 horizontal-line as rest-point. Given the pair’s dip below 110.65, the 110.30 and the 109.80 may reappear on the chart. On the contrary, the support-turned-resistance line, at 112.70, and the 113.20 could act as adjacent resistances, breaking which 61.8% FE level of 113.45 and the channel-resistance of 114.25 become important to watch. In case of the quote’s upside beyond 114.25, the 100% FE level of 114.65, followed by 115.00 round-figure, may please Bulls.

GBP/JPY

gbpjpy

With a short-term descending trend-channel confining GBPJPY’s up-moves, the pair signals the re-test of 147.40 and the 147.00 supports; however, its further downside might be curbed by 146.70-60 horizontal-area and the lower-line of channel, at 146.00 now. Should Bears refrain to respect 146.00 mark, the 145.30 and the 144.50 may flash in their radar. Meanwhile, the 148.75, comprising channel-resistance, could keep limiting the pair’s immediate upside, breaking which 149.00, the 149.45 and the 150.00 are expected levels to observe. Moreover, pair’s successful trading above 150.00 enables it to aim for 150.50 and the 151.40 resistances.

AUD/JPY

udjpy

While break of four-month old ascending TL already favors the AUDJPY sellers, the pair’s inability to extend latest pullback beyond 50-day SMA provides an extra sign that it is going south. At the moment, 87.20 and the 100-day SMA level of 86.55 are expected supports that prices may avail. Though, 86.00 is the only number that can please sellers before they have to confront the 85.65-70 region. In case if the quote manages to close above the 50-day SMA level of 87.60, it needs to surpass the 88.00 round-figure in order to justify its strength in targeting the 88.70 and the 89.20 north-side numbers. Additionally, pair’s advances beyond 89.20 could well challenge the September high of 90.30.

NZD/JPY

nzdjpy

Even if 79.20 and the 78.70 TL figure might offer immediate stops to the NZDJPY’s downturn, the pair can’t be termed strong for short-term unless clearing the 80.30-40 horizontal-line. In doing so, the quote is likely to find 80.00 and the 50-day SMA level of 80.20 as buffers. Should the pair manage to clear 80.40 on a daily closing basis, the 80.90 and the 81.65 might become buyers’ favorite. Alternatively, pair’s breach of 78.70 TL can stretch its south-run towards 78.15-10 support-line, breaking which 77.50 and the 77.00 could be expected as supports. During the pair’s decline beneath 77.00, the 76.25 and the 75.60 may become crucial for traders.

Cheers and Safe Trading,
Anil Panchal

The Australian Dollar is Ready to Fight off Sellers’ Attacks

It is quite possible that the Australian Dollar may resume falling in the nearest future. This might be true for both short and long-term, on the basis of the fundamental background. At the same time, the mid-term period, from a week to a month, looks very vague.

During the RBA meeting at the beginning of October, the regulator paid special attention to the Australian Dollar rate. It happens sometimes: the RBA authorities think that any strengthening of the national currency frustrates their efforts to boost the country’s economy. In some way, they are right, because the RBA doesn’t believe in an aggressive approach to its monetary policy and most of the time allows the economy to be regulated and controlled by itself. And sometimes the burst of the currency activity may really interfere.

This time, investors’ response to such comments was quite visible – they started selling the AUD/USD pair. The comments once again made investors doubt the Aussie’s stability in the future: when the Federal Reserve starts selling assets on its balance sheet, the US Department of the Treasury will launch the national debt increase program and the US Dollar will get stronger. It means that the Aussie may get under significant fundamental pressure in the middle of autumn regardless what the technical indicators show.

Not only its own statistics counts against the Aussie. The Chinese statistics matters as well, and the worse reports from China are, the more influence they have on the Australian currency. For instance, the latest reading of the Caixin/Markit Services PMI, which showed that the indicator decreased from 52.7 points in August to 50.6 points in September, although it was expected to expand up to 53.1 points.

The Services PMI is growing, but slower than before. The components of the report show that both new orders and employment rose at a slower pace. The statistics aren’t likely to have a great impact on the Chinese GDP in the third quarter but may provide a lot of causes for doubts and further analysis.

AUD/USD 4H Chart
AUD/USD 4H Chart

The technical picture of the AUD/USD pair is looking quite logical and balanced. After reversing, the instrument started falling slowly and reaching new lows. However, at the moment the price is trading close to the support level of the descending channel. One of the possible scenarios implies that the pair may be rebound from this level and start growing towards the resistance one at 0.7875. after breaking it, the instrument may continue rising to reach 0.8040.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

No Action From RBA & the US Fed Until 2018

  • It’s going to be a busy week with key data releases coming from Australia, the U.S., and Canada. Joining me today is James Hyerczyk from FXEmpire to provide his analysis.

Firstly James let’s start with Australia where the RBA meeting minutes will be released. Now if policymakers shift their tone into a more positive outlook, that’s going to provide support for the Aussie Dollar. However, a negative outlook would be bad news for the Australian Dollar.

So James, what outlook are you expecting?

James Hyerczyk:  I believe the RBA is going to remain cautious in this week’s minutes. I believe they still want to see a strong GDP and an improving labor market before they make their next interest rate hike and I don’t think it’s going to come until early 2018.

Quarterly GDP has to improve so we’re not going to get any reading on that until at least January. So I think the rest of this year they’re going to leave rate alone and then revisit the idea sometime in March.

Right now the numbers just don’t back a rate hike. And I don’t think they are going to succumb to the pressure of what the market is saying in terms of the value of the Australian Dollar or any pressure from the European Central Bank or the Fed as they continue to move towards tightening their monetary policy.

I think the RBA is going to stand firm in what they believe in and leave rates unchanged until at least March 2018.

  • And the U.S. Fed will also be announcing their interest rate decision. The market currently expects no change. Do you agree with this?

James Hyerczyk:  As far as the Fed’s concerned I don’t expect them to raise interest rates. That’s been telegraphed for a long time. I think the odds of a rate hike in September are about 1.4% according to the Fed Funds indicator.

Also, I don’t think they are going to raise in December although investors are sitting on the fence on that one at about 50%.

I do think the next rate hike is probably going to come in June 2018. I think the Fed is going to try to calm or markets or tighten a little bit using the trimming process of its balance sheet.

That in effect is a tightening process although it’s not as dramatic as a rate hike, it should help to tighten the policy and pull-out some of that loose, cheap money that has been floating around.

But this time, the numbers just don’t support a rate hike in September or December, or even March next year.

Now if we do get tax reform passed here in the U.S. then I think that is going to help improve the economy and it may move, or speed up the process of raising rates. And I think that maybe that is what the Fed wants to see.

Yellen has been talking about a combination of monetary policy and fiscal policy working together to drive the economy and help with the Fed’s decisions. And so far, it’s been all about monetary policy.

So once we get fiscal policy straightened out here in the United States that’ll probably help improve the inflation rate and move inflation closer to the Fed’s 2.0 percent target.

  • And Canada’s inflation is expected to come in at 1.5 percent, do you think the data will meet this and how do you expect the Loonie to react?

James Hyerczyk:  If inflation comes in as expected then I expect the market to remain neutral or we could see some profit-taking in the USD/CAD because it has dropped so much. And technically, it’s a little bit oversold.

So if we do see a stronger-than-expected inflation rate, then we may see signs of another rate hike coming. And that will put the Dollar/Canadian Dollar lower over the near-term.

But if it comes in steady as expected at 1.5 percent then we’re probably going to see a short-covering rally and that will give investors an opportunity or an excuse to book profits after a steep sell-off.

Thanks for joining us today James.

Australian Dollar Needs RBA’s Help

The Australian dollar finished the previous week off strongly against its US counterpart sitting at a 2 year high US8055c, which is making the RBA sit up and take notice, and if the currency goes much higher they may have no choice but to act.

In their latest interest rate decision on Tuesday, the RBA kept rates on hold at 1.5 percent which had been widely anticipated by the market so all ears were on the following statement from RBA governor Philip Lowe.

“The recent data have been consistent with the bank’s expectation that growth in the Australian economy will gradually pick up over the coming year,” Mr Lowe noted in his following monetary speech.

It seems as if the central bank governor is deluding himself because if we look at the statistics, inflation in Australia is currently running at 1.8 percent which is below the central bank’s target rate and a mile away from the upper level of the target inflation level of 3 percent.

At such levels, the Aussie dollar is beginning to have a detrimental effect on the export industry with further damage likely should the currency push any higher.

“Housing prices have been rising briskly in some markets, although there are signs that conditions are easing, especially in Sydney,” Mr Lowe also noted.

At least there was a bit of honesty here, the housing market in Australia is definitely cooling off which is good for the RBA because instead of lifting interest rates, they may, in fact, be able to cut them since the rise of the property market is not such a concern now.

With the Aussie dollar at such a high level supported by better than average interest rates in Australia compared to the rest of the world, as well as surging commodity prices the RBA needs to act.

Whichever way you look at it the only way the RBA is going to stop the rise of the Australian dollar is by cutting interest rates, which just may help push inflation into their target range and help bring the Australia dollar back down to a comfortable level.

This article was written by FIBO Group analyst Andrew Masters.

Is the Long-Term Buy Signal on the AUDUSD Still Present?

It has been a while when the AUDUSD triggered a major long-term buy signal on the weekly chart so let’s check if we still do have a positive sentiment here.

AUDUSD Weekly Chart
AUDUSD Weekly Chart

First buy signal was created as early as at the beginning of the year (January), when the price broke the black down trend line, connecting lower lows since the April 2013. Although it was a positive sign, the price failed to climb higher straight away. For the major fireworks, we had to wait till July. First of all, we broke the upper line of the symmetric triangle formation (red lines, which was developing on the chart since the beginning of 2015). After that, the price broke the horizontal resisatance around the 0.778 (two years highs) and using the newly created bullish momentum, the 23,6% Fibonacci. Those two are currently the closest supports. 23,6% Fibonacci was already tested few times and all were positive for buyers. Along with those horizontal supports, we do have a dynamic one – a mid-term up trendline (green).

So what is the situation here? Bullish. The price being above all major local supports is a strong buy signal and with this sentiment, we should not have any problems to make new yearly highs in the nearest future.

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

Yen Jolted by North Korea Ramifications

The Yen continues to pick up momentum on safe-haven trading as the North Korea situation escalates. Important support levels may continue to be tested in the coming days if safe haven trading grows among Asian investors.

Yen Attracting Safe-Haven Investors

The Yen has seen a wave of safe-haven strength this morning as the ramification from the growing North Korea tensions scare investors.

The Yen is trading near 109.50 against the U.S Dollar in early trading and may be ready to test important support.

USD/JPY 1H Chart
USD/JPY 1H Chart

If the U.S Dollar continues to be sold against the Yen, the next important support level for the Japanese currency could prove to be 109.00.

Yen Strength Growing

The Yen has come off major weakness since mid-July when it was near 114.00. As investors have begun to perceive the U.S Federal Reserve will be less aggressive, the Yen has been gotten stronger.

USD/JPY 4H Chart
USD/JPY 4H Chart

With the additional ingredient of risk adverse trading entering the trading landscape, selling of the U.S Dollar may continue against the Yen if market sentiment remains fragile.

Yen Could Test Long Term Support

The Yen is also approaching important long-term support levels. If the Japanese currency breaks below support near 109.00 and continues to get stronger it could set up a test of trading ranges not seen since October of 2016.

If North Korea geopolitical tensions continue to develop, trading in the Yen is likely to remain nervous over the next few days.

USD/JPY Daily Chart
USD/JPY Daily Chart

In the short term, we believe the Yen may be positive. Mid-term and Long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

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Technical Overview Of AUD/USD, EUR/AUD, AUD/JPY & AUD/CAD: 22.08.2017

AUD/USD

Having failed to clear 0.7950 horizontal-line, the AUDUSD seems now declining towards an upward slanting TL support of 0.7860. If the pair refrains to respect the trend-line figure, the 0.7840, the 0.7800 and the 0.7780 are likely following rests that it could avail before targeting the 0.7740 and the 0.7710 numbers towards south. In case if the price reverses from current levels, the 0.7930 and the 0.7950 could keep restricting near-term upside momentum, which if broken may accelerate the recovery in direction to 0.7990 and the 0.8000 psychological-mark. Moreover, pair’s successful trading beyond 0.8000 can enable buyers to aim the 0.8040, the 0.8065 and the 61.8% FE level of 0.8115 afterwards.

EUR/AUD

euraud

Unlike AUDUSD, which has been declining since yesterday, the EURAUD just witnessed a pullback from short-term ascending trend-channel resistance. As a result, the pair may further drop to 1.4900 round-figure ahead of looking at the channel-support number of 1.4850. However, a month-long TL, at 1.4795, could offer strong support to the quote if it negates the channel formation by breaking 1.4850. Given the pair’s extended southward trajectory after 1.4795, the 1.4770, the 1.4730 and the 1.4700 can please sellers. Alternatively, the 1.4955-60 and the 1.5000 psychological-magnet may try curbing the pair’s immediate advances, failing to which can fuel its up-moves in direction to 1.5040 and the July high around 1.5075.

AUD/JPY

audjpy

AUDJPY is another AUD pair which indicates further downside but two-month old ascending trend-line, at 85.80, followed by 85.45 horizontal-line, may challenge the Bears to re-think for their stand. Should the pair drops below 85.45, the 84.90-85 and the 84.50 may act as barriers during its plunge towards 84.30, the 84.00 and then to the 83.70 support-levels. Meanwhile, 86.70 and the downward slanting TL, at 87.00, are likely nearby resistances for traders to watch, breaking which the 87.45-50 horizontal-line comes into play. If prices clear 87.50, the 88.00 and the 88.30 can flash their radar.

AUD/CAD

audcad

Following its repeated defeats to surpass 100-day SMA, the AUDCAD dipped to nearly a month’s low on Tuesday; though, it still haven’t provided a closing break of 0.9920 support which holds the gate for quote’s additional downside towards 0.9870 and the ascending TL support of 0.9815. In case of the pair’s daily close below 0.9815, chances of witnessing the 0.9770 and the 0.9715-10 supports can’t be denied. On the upside, 0.9960 and the 1.0000 are expected adjacent resistances for the pair before it could again challenge the 100-day SMA level of 1.0035. Moreover, if the pair clears 1.0035 resistance, the 1.0100 and the 1.0160 are likely to gain attention.

Cheers and Safe Trading,
Anil Panchal