Forex Daily Market Analysis from ForexMart

USD/JPY Fundamental Analysis: December 20, 2016


The Bank of Japan is expected to maintain its previous monetary policies and give more positive economic expectations, thereby cementing speculations that the central bank could possibly induce an interest rate increase instead of a rate cutback. Because of the lack of policy adjustments, USD/JPY traders will now be shifting their focus on BoJ’s Kuroda’s statement regarding the increase in Japanese yields. There are speculations that Kuroda could either talk about economic expectations for 2017 or the risks involved with a sudden surge in bond yields. However, it is more definite that Kuroda will be treading carefully with regards to increasing market expectations of an interest rate hike.


The Bank of Japan could possibly sustain its present pledge-to-guide short term rates at -0.1% and 10-year Japanese Government bond yields at around 0% in spite of a somewhat positive sentiment for the Japanese economy. However, traders are advised to be careful with regards to holding Japanese bond yields at 0%, since long-term interest rates have now increased due to speculations of a steadier US rate hikes and an inflation surge under the Trump administration. The Bank of Japan is now under pressure due to calls for the central bank to add

up its 10-year yields target.

 

GBP/USD Fundamental Analysis: December 20, 2016


The GBP/USD pair exhibited consolidation and range trading during the past trading session, with the currency pair now trading over 1.2400 points with more consolidation plus a bearish bias for today’s sessions. The currency pair initially exhibited positive movement during the earlier sessions but dropped in value as yesterday’s trading sessions progressed. There were economic releases from the UK during yesterday’s session, but the Scottish Prime Minister has released a statement which inadvertently threatens the UK’s Brexit process after Scotland decided to remain in the European Union, whereas the whole of UK has already decided to relieve themselves from the eurozone. This has already increased the risk of the already very muddled Brexit process since Parliament members are now in the middle of debating the validity of Article 50 which is a vital part of the said process.


For today’s trading session, there are no major economic releases expected from the UK but the recent strength of the USD could dominate the whole market, and the continuing confusion with regards to the Brexit process could increase the downward pressure on the GBP/USD pair for the coming weeks. Any bounce found in the currency pair should be immediately seen as a short opportunity for this particular currency pair.

 

GBP/USD Fundamental Analysis: December 21, 2016


The GBP/USD pair is now struggling to cope with the effects of the markedly low liquidity during this holiday season, much like other currency pairs. However, the GBP/USD managed to fare relatively better in terms of market volatility as compared to other currencies since it had a 100-pip range for the previous trading sessions. In spite of the USD’s current strength becoming the dominant feature of the financial market, the lack of market volatility has managed to offset the USD’s strength and has become advantageous to other currencies such as the sterling pound. The USD is expected to regain market control eventually, but until that happens, then the GBP could still range and consolidate at the lower region of 1.2500 points.


As the Brexit process resumes, the GBP/USD is expected to trade with a bearish bias for the short term and medium term, especially since Scotland is apparently disagreeing with UK’s plans to leave the European Union and the UK will have to exert more effort in order to negotiate with all involved parties and make way for an easier Brexit process. Theresa May will also be needing additional support as the Brexit process begins, which is expected to become a long and arduous process.


For today’s session, there are no major news releases from Britain, and with the holiday season fast approaching, liquidity is expected to drop further which could lead to more ranging and consolidation on most currency pairs.

 

EUR/USD Fundamental Analysis: December 21, 2016


The EUR/USD pair experienced consolidation and ranging during Tuesday’s trading session, with the currency pair becoming limited to a 60-pip range in spite of the dollar’s increasing strength. This particular range for the EUR/USD is expected to become more limited and tighter as the holiday season approaches, mostly due to lowered liquidity during this period, with market players most likely taking advantage of this period to drive certain currency pairs in directions more favorable for their trades. Traders are advised against trading during this time, but if they do so, stop losses should be tight enough to avoid possible mishaps in the short term.


For today’s trading session, there are no major economic events scheduled to be released from either the US or the European Union, and the EUR/USD is expected to exhibit more ranging, albeit with a more pronounced bearish bias. If the pair would be able to reach the 1.0460 region, then this could be seen as an opportunity to trade in the short-term with a more secure stop loss. The recent strength of the value of the US dollar is expected to dominate the overall direction of the market both in the short run and the long run.

 

USD/JPY Technical Analysis: December 21, 2016


The JPY experienced a drop in value following the latest economic news release from Japan, where the Bank of Japan decided to maintain its current monetary policies until such time that inflation rates go beyond 2%. The Japanese economy is also reportedly continuing its recent recovery. The USD/JPY pair rallied during Tuesday’s trading session following this move from the BoJ, and buyers were able to take control of the pair and sent the USD/JPY soaring well beyond its daily highs. The USD went up from 117.00 to 118.00 in the London trading session, and was able to test the 118.00 region prior to the opening of the North American session. The value of the USD/JPY reverted from the 100 EMA in the pair’s hourly chart. Meanwhile, the USD went beyond the 50 EMA while on its way towards the upper region of the chart and veered away from its moving averages. Resistance levels for the currency pair is expected to come in at 118.00 points, while support levels are expected to be at 117.00 points.


The MACD levels for the currency pair stayed within its previous level, indicating the increase in buyer strength. The RSI indicators for the currency pair went upwards as well. If buyers are able to maintain its control over the USD/JPY pair, then the price of the value could possibly move up further to 119.00 points.

 

NZD/USD Technical Analysis: December 21, 2016


The remarks of Yellen about the strengthening of the U.S job market plus the 2017 plan for Fed tightening subsidize the greenbacks, however, weighed heavily on higher-yielding New Zealand dollar. The NZD continued to be bearish and slid down through 0.6900 during the mid-Europe session held yesterday.


Upon successfully breaking the level, sellers had expanded its gain through the 0.6850 region. As indicated in the 4-hour chart, the price traded under the moving averages as the 50-EMA pass over the 100 and 200-EMAs in a lower point. Moreover, the entire moving averages sustained its bearish pattern. Current resistance touched the 0.6900 area, support settled around the 0.6850 level.


MACD grew less which confirmed stronger stance for the sellers. The RSI approached the oversold zone in which supports a renewed downward movement. The NZD/USD will reach the 0.6850 after it broke the 0.6900 region. Should the price advance towards the 0.6800 upon beating its initial target.

 

AUD/USD Technical Analysis: December 23, 2016


The consecutive events regarding the economic growth of US together with the fiscal policy issued by Trump and hawkish outlook of the Fed for 2017 set the minds of the investors to avert from higher-yielding currencies including the Aussie dollar.


The market carried a bearish sentiment on Thursday. The AUD/USD pair further decline after the 2-day narrow consolidation. The sellers pushed the AUD towards 0.7200 from the previous 0.7250 region in the EU hours. Moreover, sellers failed to surpass the 0.7200 mark which caused them to take a pause. After the price touched the aforesaid levels, it made a roll back.


As shown in the 1-hour chart, the Australian dollar bounce back through the 50-EMA and resumed a downward trend. The moving averages maintained a bearish pattern as indicated in the same timeframe. Resistance is at 0.7250, the support holds the 0.7200 handle.


MACD grew less which means further strengthening for the sellers. RSI still was seen in the oversold territory and supported another downtrend.


Technical indicators exhibit a bearish tone. It is highly expected for a downward movement within the 0.7100 and 0.7150 levels.

 

USD/CAD Technical Analysis: December 28, 2016


The stock market of Canada is close due to U.K’s official holiday, Boxing Day. While the release of GDP and CPI last week has changed the supposition of the Canadian regulator for the easing of its monetary policy in the near future. The pair remains in the hands of the buyers within its 6-week high. The greenbacks regain some of its losses because traders pushed the price towards the 1.3540 from the previous 1.3500 level.


The short-lived upward momentum further weakened in the predetermined level where the buyers came across the resistance of the sellers.


According to the 4-hour chart, the USDCAD hovered on top of the moving averages. The 50-EMA cross over the 200 and 100 EMA in an upward direction. While the 100 and 200-day moving averages are neutral and the 50-EMA headed up. Resistance highlighted the 1.3540 region, support sits in the 1.3470.


The MACD histogram grew less which confirmed weak position for the buyers. RSI remained overvalued.


If the 1.3540 region were unable to break, it would cause for a downward correction when the pair plunge below the 1.3470 support level. The next potential target of the sellers is 1.3400. The pair is able to expand its gains towards 1.3589 if the buyers break higher.

 

GBP/USD Fundamental Analysis: December 28, 2016


The GBP/USD pair traded within a tight range of 50 pips during yesterday’s trading session, and is expected to continue this particular trend along with ranging and consolidation for today’s session unless interrupted by a currency flow just before the month ends. The UK market was characterized by a remarkably low level of liquidity yesterday due to a UK holiday. However, some market players are banking on an increase in volatility just before this month draws to a close, as well as currency flows which could possibly occur towards the end of the week. However, the recent market trends are not expected to become completely altered even if the month-end currency flows appear and induce market volatility. This is because the recent dollar weakness is expected to continue up until the end of this week, and since the USD is expected to bounce back immediately after the holiday season, the recent trends might still be sustained even after the holidays.


For today’s trading session, there are no major economic news releases expected from UK, and this means that the GBP/USD would most likely engage in more ranging and consolidation up until the end of today’s series of sessions.

 

EUR/USD Fundamental Analysis: December 28, 2016


The EUR/USD is still experiencing a tight-lipped trading range after trading within 30 pips. The market liquidity is not expected to increase until next year since there are no signs of currency flows as of late. However, the new year is expected to bring back market liquidity since this signals the end of the holiday season. The EUR/USD had high trading ranges during the North American session yesterday, where it attempted to go beyond 1.0470 points in order to reach 1.0530 points. Meanwhile, the USD exhibited a marked weakness during these past few sessions, particularly against the EUR. This trend is expected to remain for the rest of the week as the market attempts to remove some of the bearishness of other currencies against the USD. The USD’s strength is expected to bounce back next week, and it is therefore vital that the euro bulls would be able to take hold of this opportunity and accomplish all moves in order to avoid the adverse effects of the USD regaining its strength.


There are no major economic data releases expected from the international community for today’s sessions, and this means that added consolidation and ranging could possibly be felt as there are no currency flows which could be a catalyst for added market volatility. As such, traders are advised to tread lightly and remain within the sidelines for this particular period.

 

USD/CAD Fundamental Analysis: December 28, 2016


The USD/CAD pair is still trading with a bullish stance after spending almost the whole of the previous session trading above 1.3500 points, and this trend is expected to continue for today’s session. The USD traded on a somewhat much weaker tone in relation to other currencies, but in the loonie’s case the weakness of the US dollar seemed to have little if not completely no effect on this particular currency, with the CAD easily trading over 1.3500 points and could possibly become more positive when the USD regains some of its recent losses next week. Market speculators have long since been saying that the CAD might soon be subject to a very strong uptrend, and traders should be loading up on longs in order to make way for bigger future gains.


The USD/CAD pair seems to be already unaffected by the movement of oil prices unlike a few weeks back, wherein the CAD had significant reactions to the wild careening of oil prices. Now, in spite of the recent increase in oil prices, the CAD continues to trade strongly. However, the next few weeks are expected to hit an adverse effect on the Canadian economy since the recent economic data from the region has done little to appease investor sentiment, and oil prices are expected to continue increasing, and Trump will be assuming office in January. The somewhat weakening of the CAD is evidence of this foreboding string of events next year.


Today’s trading session will most likely be characterized by more consolidation and ranging with a bullish undertone since there are no major news releases from the Canadian economy.

 

EUR/USD Fundamental Analysis: December 29, 2016


The EUR/USD pair became somewhat active during the previous trading session after a lackluster performance during the past few days, and this is especially good news for traders who are waiting for any sign of market activity since the holiday season has caused the market liquidity to diminish. The currency pair was able to go beyond its daily price range of 30-40 pips, and the USD’s recent price surge has caused the EUR/USD pair to plummet below 1.0400 points and even reached 1.0360 points. However, the negative pending home sales data from the US has caused the currency pair to go back above 1.0400 points.


As the new year starts and the holiday season comes to an end, the market’s volatility and liquidity is expected to return, and liquidity levels could possibly go higher. However, the strength of the US dollar is not expected to be stalled anytime soon, and government leaders from both the UK and the European Union are now preparing for the onslaught of the Brexit process next year, which is expected to be very tedious for both regions. On the other hand, Germany will also be holding its elections next year, and the market will be closely monitoring Merkel’s performance before and during the elections. However, until such time that these things happen, market players should first monitor just how long will the USD be able to maintain its recent strong stance. For the EUR/USD pair, the currency pair is expected to consolidate with a bullish undertone as the market adjusts to the very disappointing pending home sales data from the US.

 

GBP/USD Fundamental Analysis: December 29, 2016


The USD was able to regain some of its lost strength during the earlier parts of yesterday’s trading session, which was felt all throughout the market, and has also affected the sentiment of the sterling pound. The GBP then plummeted and the GBP/USD pair went way below 1.2200 points after almost two months as a result of a very disappointing home sales data. However, as the North American session commenced, the GBP/USD pair was able to surface over 1.2200 points and has hovered over this level for the rest of the trading session. But it still remains to be seen whether the currency pair would be able to deflect the effects of the USD’s ever-growing strength.


The effects of the long and winding Brexit process is expected to be seen during the next several months since various government leaders from the UK and the EU is set to debate on how to go through with the process in general. These are expected to create a constant pressure for the sterling pound, and all reversions on the part of the GBP/USD could immediately be sold by bears, therefore making it hard for this currency pair to make any significant advancements in the coming months.


For today’s trading session, since there are no major economic data which is set to be released from the UK region, the GBP/USD pair is more likely to encounter more consolidation with a bullish undertone, especially since the market is currently experiencing low volatility and liquidity due to the holiday season.

 

USD/CAD Fundamental Analysis: December 29, 2016


The USD/CAD pair continued to trade in an upward direction due to substantial support coming from the USD, which was basically the market’s theme during yesterday’s trading session. The currency pair was able to maintain its buoyancy in spite of the recent surge in oil prices. Market speculators are now stating that oil prices could be well on its way towards reaching its optimum price and once oil prices stop going in an upward direction, then this could put more pressure on the Canadian dollar, thereby inducing a strong uptrend on the USD/CAD pair.


The USD experienced a short correction during yesterday’s session after the US home sales data came in at a disappointing reading of -2.5% which fell short of initial market expectations of 0.5%. Luckily, the market is now shifting its focus on the Fed’s rate hikes this 2017, particularly the pricing of these rate hikes. The strength of the USD is very evident as of late, since the lack of trading and relatively low market liquidity was unable to mask the dollar’s strong stance, as well as the CAD’s pointed weakness.


For today’s trading session, there are no major economic data scheduled to be released from Canada, while the US is expected to release its weekly oil inventory data. Since the market is relatively thin due to the holiday season, expect an added consolidation for the USD/CAD with a bullish undertone.

 

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NZD/USD Technical Analysis: January 3, 2017


The trading session of the pair NZD/USD has high volatility on Friday as traders settle their positions in closing for the year end. A slightly supportive candle is seen to form with a strong resistance at 0.70 level while it is supportive on prior trading session. The exhaustive candle pattern encouraged sellers to be active, trying to move the price towards the 0.68 level. The U.S. dollar remains strong while the New Zealand dollar is expected to be lower as greenback dominates the trend.

 

EUR/GBP Technical Analysis: January 3, 2017


The pair EUR/GBP declined last Friday and has been carried on for quite some time. There’s quite a resistance above the psychological level on the direction towards the 0.87 level that signals an opportunity for selling. The market is trying to move the levels further downward on the way to the next target at 0.83 handle, With the strong resistance for this pair, one way to trade this pair is to sell it moving along the surge on its short-term charts that continues to go downward.

 

EUR/JPY Technical Analysis: January 3, 2017


The EUR/JPY had an initial rally on Friday, however, shifted to another direction and formed an exhaustive candle logically. The pair was unable to break out through the upside and continued to consolidate on its current place. Meanwhile support level hovered in a lower position in order to maintain the market out of debt and any other difficulty. The price floor of the market settled near the 120 region. The next potential target is 125 mark, favoring a higher level against longer-term trends. Selling interest seems little no importance as of this writing.

 

GBP/JPY Technical Analysis: January 3, 2017


The British pound paired with the Japanese Yen rallied last Friday as it moved ahead of the hammer pattern on Thursday. This event caused many buyers to return to the market as it moved near the 145 level. A break above the aforesaid level will drove towards the 150 region.

The GBP/JPY continued to have a significant dip by which the market in return would increase buying opportunities. On the other hand, the price floor of the pair is below the 140 handle.

 

GBP/USD Fundamental Analysis: January 3, 2017


The pair GBP/USD has been moving softly and remains resilient despite the appreciation of U.S. dollar since yesterday. This was brought by closing of London market same with the New York market that causing the low liquidity and weak volatility of the pair. Since today is the opening again, it is expected for the pair to gain volatility and waiting for hints on what will happen to the short term trend.


The U.S. dollar surged in the early weeks of December since the announcement of the Fed rate hike but a few correction were seen as the days advanced near the holidays. This pushed the pair to go lower towards the 1.2400 level predominant in thin market but it is expected that this will only occur for a short period of time. Since it is after holidays, then there will be high liquidity that guarantees the next moves compared to how it was 2 weeks ago.


The Manufacturing PMI data from U.K. will be announced today that starts this week rich in data while the market awaits if the trend will continued to be supported by U.K. keep posting positive results in the midst of Brexit preparation. However, the surge of dollar may continue for some time while pound weakens. Hence, any form of rebound for the pair signals an opportunity for short-term position.