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Forex Daily Market Analysis from ForexMart

Discussion in 'Forex Forum' started by Andrea ForexMart, Oct 4, 2016.

  1. KostiaForexMart

    KostiaForexMart Well-Known Member

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    GBP/USD: trading plan for the US session on June 5th (analysis of morning deals). Sellers managed to protect 1.2779, but what's next

    In my morning forecast, I drew attention to the level of 1.2779 and planned to make market entry decisions based on it. Let's look at the 5-minute chart and see what happened. The rise and formation of a false breakout there led to a sell signal, but after moving down by 12 points, the pressure on the pound decreased. As long as trading remains below 1.2779, the signal can be expected to work, but everything will depend on US data. The technical picture for the second half of the day still needs to be revised.

    To open long positions on GBP/USD:

    Only very strong data on the increase in employment from ADP, exceeding economists' forecasts, and an increase in business activity in the US services sector from ISM will lead to a decline in the pound and a return to yesterday's low, which I plan to take advantage of. A decline and formation of a false breakout around the new support at 1.2746 will provide an entry point for long positions, anticipating a return and update of 1.2779, which could not be surpassed in the first half of the day. Only a breakout and a reverse top-down test of this range will provide a suitable entry point for buying the pound, leading to an update of the next resistance at 1.2810, the month's high. The furthest target will be the 1.2853 area, where I plan to take profit. In the scenario of GBP/USD declining and a lack of bullish activity around 1.2746 amid strong US statistics, all buyers' efforts from yesterday will be negated. This will also lead to a decline and an update of the next support at 1.2721, formed at the end of last week. Only a false breakout formation will be suitable for opening long positions. I plan to buy GBP/USD immediately on a rebound from the 1.2695 minimum with the goal of a 30-35 point correction within the day.

    To open short positions on GBP/USD:

    The advantage will stay with the sellers as long as trading remains below 1.2779. This will allow the morning sell signal to materialize, but as mentioned above, much depends on the US statistics. In case of weak data, the bears will have to prove their advantage again around 1.2779. A false breakout formation there, similar to what I discussed above, will confirm the presence of large sellers in the market and provide an entry point for short positions with the goal of further GBP/USD decline towards the support at 1.2746. A breakout and reverse bottom-up test of this range will give the bears an advantage and another entry point for a sale to update 1.2721, where I expect more active buyer presence. The furthest target will be the 1.2695 minimum, which will trap the pair in a wide sideways channel. There, I will take profit. With GBP/USD rising and no bears at 1.2779 in the second half of the day, buyers will regain the initiative, having the opportunity to update 1.2810. I will also sell there only on a false breakout. If there is no activity, I advise opening short positions on GBP/USD from 1.2853, anticipating a 30-35 point downward correction within the day.
     
  2. KostiaForexMart

    KostiaForexMart Well-Known Member

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    EUR/USD. June 6th. Traders calmly await ECB decisions

    On Wednesday, the EUR/USD pair rebounded from the corrective level of 76.4%–1.0892, a slight decline, and today—a new return to this level and a new rebound. Trader activity yesterday was quite low, but it may sharply increase today. The decline in quotes may continue towards the Fibonacci level of 61.8%–1.0837. Consolidating the pair's rate below the ascending trend corridor may end the bulls' dominance.

    The wave situation remains clear. The last completed upward wave did not break the peak of the previous wave, and the last downward wave broke the low from May 23, but only by a few pips. Thus, we got the first sign of a trend change from "bullish" to "bearish," but it soon became clear that we would not see or get any downward reversal. The next upward wave then broke the peaks of the previous two waves. Therefore, for a prolonged decline in the euro, we must now wait for a new sign of a trend change. Such a sign could be close to 1.0785 or below the ascending corridor.

    The information background on Wednesday again did not support bear traders as they would have liked. Currently, the European currency is moderately declining, but soon, the results of the ECB meeting will be known, and ECB President Christine Lagarde will speak in half an hour. The rate cut is already priced into the EUR/USD pair, but it is possible that the regulator will not soften monetary policy today. I do not rule out such an option. If rates are not lowered today, then bull traders will again go on the offensive. If Christine Lagarde adheres to "hawkish" rhetoric today, it will also support the euro. And what could be "hawkish" rhetoric? Lagarde may say that the next rate cut will not happen soon and that ensuring the continuation of the inflation decline is necessary.

    On the 4-hour chart, the pair rebounded from the Fibonacci level of 50.0%–1.0794 and reversed in favor of the European currency. A new "bullish" trend line has formed, so the upward process may continue toward the next corrective level of 23.6%–1.0977. Now, declines in the European currency can be expected after the quotes are consolidated below the trend line. No emerging divergences were observed today for any indicator.
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  3. KostiaForexMart

    KostiaForexMart Well-Known Member

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    Wall Street Sliding: S&P 500, Nasdaq Fall Ahead of Jobs Data

    The S&P 500 and Nasdaq Composite ended Thursday with small losses ahead of a major jobs report, retreating from record highs hit the day before. The Dow, however, edged up slightly.

    The S&P 500 and Nasdaq started the day higher and hit intraday records, but then retreated as tech stocks slid.

    Utilities and industrials also contributed to the S&P 500's decline, with consumer discretionary and energy leading the gains.

    Nvidia shares fell 1.1%, falling to third place in the world's most valuable companies, behind Apple, which regained the second spot.

    Investors are eyeing a key U.S. nonfarm payrolls report on Friday. The latest weekly jobless claims report points to a softening labor market that could allow the Federal Reserve to begin cutting interest rates. The European Central Bank cut its interest rate for the first time since 2019.

    The Dow Jones Industrial Average gained 78.84 points, or 0.20%, to 38,886.17. The S&P 500 lost 1.07 points, or 0.02%, to 5,352.96, while the Nasdaq Composite fell 14.78 points, or 0.09%, to 17,173.12.

    Among the Dow Jones components, Salesforce Inc. was the top gainer, up 6.23 points (2.63%) to close at 242.76. Amazon.com Inc. was up 3.72 points (2.05%) to close at 185.00.

    Nike Inc. was up 1.40 points (1.48%) to close at 95.72.

    Intel Corporation was the top loser, down 0.36 points (1.17%) to 30.42. 3M Company shares added 0.84 points (0.85%) to close at 98.22, while Goldman Sachs Group Inc shares fell 3.58 points (0.78%) to end at 458.10.

    Among the S&P 500 index's top gainers were Illumina Inc shares, which rose 7.42% to close at 114.72. PayPal Holdings Inc shares rose 5.49% to close at 67.02, while MarketAxess Holdings Inc shares increased 4.86% to end at 205.97.

    NRG Energy Inc shares showed the biggest decline, losing 4.56% to close at 77.83. Hubbell Inc shares fell 4.11% to end at 365.94. Eaton Corporation PLC fell 4.02% to 313.46.

    The biggest gainers on the NASDAQ Composite were Virax Biolabs Group Ltd, up 85.85% to 1.97. SilverSun Technologies Inc rose 68.61% to close at 220.00, while Fibrobiologics Inc rose 53.88% to 10.31.

    Cue Health Inc was the worst performer, down 79.95% to 0.01. Plutonian Acquisition Corp fell 58.10% to close at 2.43. Actelis Networks Inc fell 47.04% to 1.97.

    The rise of Nvidia and other AI-related stocks has been a key factor in supporting Wall Street's rally this year. The chipmaker has contributed significantly to the S&P 500's gain of more than 12% for the year.

    Traders are pricing in a 68% chance of a rate cut in September, according to CME's FedWatch tool, and are pricing in two rate cuts this year, according to LSEG data. Forecasters polled by Reuters also expect two rate cuts.

    "We're in a period of uncertainty between now and tomorrow," said Thomas Hayes, chairman of Great Hill Capital in New York. "But overall, we're seeing the beginning of a global, coordinated easing policy from central banks in the West, with the exception of Japan, which is tightening," he added.

    GameStop shares jumped 47% after a popular online influencer known as "Roaring Kitty" announced on YouTube that she would be livestreaming on Friday.

    Lululemon Athletica shares rose 4.8% after the company beat first-quarter earnings and revenue estimates.

    U.S.-listed shares of Chinese electric vehicle maker NIO (9866.HK) fell 6.8% after reporting a quarterly net loss.

    Five Below shares fell 10.6% after the discount store operator lowered its full-year net sales forecast.

    Advancing stocks outnumbered declining stocks on the NYSE by a 1.05-to-1 ratio. On the Nasdaq, 1,729 stocks ended higher and 2,445 ended lower, for a 1.41-to-1 ratio in favor of decliners.

    The S&P 500 posted 25 new 52-week highs and five new lows, while the Nasdaq Composite posted 57 new highs and 110 new lows. Total equity trading volume on U.S. exchanges was about 10.4 billion, below the 20-day average of 12.7 billion.

    August gold futures rose 0.69%, or 16.50, to $2.00 a troy ounce. WTI crude oil futures for July delivery rose 2.01%, or 1.49, to $75.56 a barrel. Brent crude futures for August delivery rose 1.87%, or 1.47, to $79.88 a barrel.
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  4. KostiaForexMart

    KostiaForexMart Well-Known Member

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    Investors disappointed as no U.S. rate cut expected

    Wall Street stocks ended slightly lower on Friday amid turbulence after strong U.S. jobs data confirmed the resilience of the economy but also raised concerns that the Federal Reserve may keep interest rates high longer than many investors had expected.

    The U.S. Labor Department said it added about 272,000 jobs in May, well above analysts' forecasts of 185,000. The unemployment rate rose to 4%.

    The S&P 500 (.SPX) fell sharply after the report, while Treasury yields rose as traders revised down their expectations for a rate cut in September. The index then rebounded and briefly hit a new intraday record as investors viewed the data as confirmation of a healthy economy.

    Utilities (.SPLRCU), materials (.SPLRCM) and communications (.SPLRCL) were the biggest losers. Financials (.SPSY) and technology (.SPLRCT) were the best performers.

    For the week, the S&P 500 rose 1.32%, the Nasdaq gained 2.38% and the Dow Jones gained 0.29%.

    "This shows that a rate cut is not coming anytime soon. Rising bond yields are putting significant pressure on risk assets, including small-caps," said Sandy Villere, a portfolio manager at Villere & Co in New Orleans.

    "It's all about interest rates. They may stay higher longer than expected, and investors will have to adjust to the new environment," he added.

    Markets reacted to the employment data by changing expectations for the timing of the Fed's rate cut. After the data was released, traders speculated that the Fed's rate cut from the current level of 5.25% to 5.5% may not begin until November. According to Fedwatch LSEG, the probability of the Fed cutting rates by 25 basis points in September has fallen to 56% from about 70% the day before.

    The Dow Jones Industrial Average (.DJI) fell 87.18 points, or 0.22%, to 38,798.99, the S&P 500 (.SPX) lost 5.97 points, or 0.11%, to 5,346.99, and the Nasdaq Composite (.IXIC) fell 39.99 points, or 0.23%, to 17,133.13.

    GameStop (GME.N) shares fell 39% in volatile trading that coincided with popular blogger Roaring Kitty's first livestream in three years. The company announced a possible stock offering and a cut in quarterly sales.

    Other names popular with retail investors, such as AMC Entertainment (AMC.N) and Koss Corp (KOSS.O), also suffered significant losses, falling 15.1% and 17.4%, respectively.

    Nvidia (NVDA.O) shares extended their losses from the previous session, pushing their market cap back below the $3 trillion mark.

    Lyft (LYFT.O) shares rose 0.6% after the company forecast 15% growth in total bookings by 2027, announced after the close of trading on Thursday.

    Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by a 2.72-to-1 ratio. On the Nasdaq, 1,177 stocks advanced and 3,064 declined, giving decliners a 2.6-to-1 ratio.

    The S&P 500 posted 17 new 52-week highs and five new lows, while the Nasdaq Composite posted 34 new highs and 149 new lows. Total volume of shares traded on U.S. exchanges was about 10.75 billion, compared with an average of 12.7 billion over the past 20 trading days.

    Lower expectations for quick Fed action weighed on stocks, which ended lower. The MSCI World Share Index (.MIWO00000PUS) was down 0.3% after hitting a record high of 797.48.

    The yield on two-year notes, a proxy for interest rate expectations, rose nearly 17 basis points to 4.8868% after six straight days of declines. The rise in yields comes as bond prices have fallen.

    Rate changes had been expected in September, especially after the European Central Bank cut its deposit rate to 3.75% from a record 4% on Thursday, in line with expectations.

    The Bank of Canada on Wednesday became the first G7 bank to cut its key rate, following Sweden's Riksbank and the Swiss National Bank.

    The employment report also changed the dynamics of eurozone rate expectations, with traders now forecasting a 55 basis point cut this year, up from 58 bps before the data.

    The European Stoxx 600 (.STOXX), which has gained almost 10% since the start of the year, fell 0.2%.

    The euro zone bond market also showed weakness, with German 10-year yields up 8 basis points to 2.618%.

    In currency markets, the U.S. dollar rose 0.8% against a basket of major currencies, reversing a week of losses ahead of the employment data. The euro fell 0.8% to $1.0802 after a small gain the previous day.

    Brent crude futures fell 0.6% to $79.36 a barrel. The stronger dollar weighed on spot gold, which fell 3.6% to $2,290.59 an ounce.
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  5. KostiaForexMart

    KostiaForexMart Well-Known Member

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    S&P 500, Nasdaq hit new highs: What to expect from Fed meeting, CPI data

    The S&P 500 and Nasdaq both hit new record closing highs on Monday, despite investor caution ahead of consumer price data and the Federal Reserve's policy announcement this week.

    Nvidia (NVDA.O) shares provided some support to the Nasdaq and S&P 500, rising 0.7% after a 10-for-one stock split. Some investors now believe the chipmaker could be added to the Dow.

    The May CPI report is due Wednesday, coinciding with the end of the Fed's two-day meeting.

    The central bank is expected to leave interest rates unchanged while issuing updated economic and policy forecasts. Investors will be watching closely for any hints of a possible rate cut down the road.

    "It's a big week for the market in terms of Fed commentary and statements," said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

    "Additionally, the CPI report is due Wednesday morning. Everything related to the economy and inflation is viewed through the prism of the Fed's actions by the market," he added.

    The Dow Jones Industrial Average (.DJI) rose 69.05 points, or 0.18%, to 38,868.04. The S&P 500 (.SPX) rose 13.8 points, or 0.26%, to 5,360.79, and the Nasdaq Composite (.IXIC) added 59.40 points, or 0.35%, to 17,192.53.

    Traders trimmed their expectations for a September rate cut after stronger-than-expected May employment data on Friday, leaving the chance of a cut at 50%.

    Apple (AAPL.O) shares fell 1.9% on the first day of its annual iPhone developer conference, with investors eagerly awaiting news on how the company will integrate artificial intelligence into its products.

    Among the day's best performers were Southwest Airlines (LUV.N), which jumped 7% after activist investor Elliott Investment Management acquired a $1.9 billion stake in the company.

    Diamond Offshore Drilling (DO.N) rose 10.9% after oilfield services company Noble (NE.N) announced it was buying a rival for $1.59 billion. Noble also rose 6.1%.

    Advancing stocks outnumbered declining stocks 1.06-to-1 on the New York Stock Exchange, while gainers were outnumbered 1.01-to-1 on the Nasdaq.

    The S&P 500 posted 19 new 52-week highs and five new lows, while the Nasdaq Composite posted 56 new highs and 177 new lows.

    Trading volume on U.S. exchanges totaled 10.39 billion shares, below the 20-day average of 12.80 billion.

    MSCI's global share index rose on Monday, despite investor expectations for key U.S. inflation data and an upcoming central bank meeting. The euro, however, slipped after French President Emmanuel Macron announced an early election.

    U.S. Treasury yields rose as investors digested Friday's labor market data and looked ahead to consumer price data and a Federal Reserve statement this week. Eyes were also focused on the Bank of Japan's possible decisions.

    Adding to the uncertainty was political instability in the euro zone's second-largest economy. Far-right gains in the European Parliament elections on Sunday prompted Macron to call a national election.

    The euro hit a one-month low against the dollar, while European stocks also suffered.

    "The uncertainty is coming from multiple sources. "The European elections over the weekend added volatility to the markets," said Chad Oviatt, director of investment management at Huntington National Bank.

    The STOXX 600 index, which covers pan-European stocks, closed down 0.27%. France's blue-chip CAC 40 index fell 1.4%, hitting a more than three-month low.

    However, the MSCI Global Equity Index (.MIWD00000PUS) turned from bearish to bullish territory by the end of the day, and Wall Street partially recouped its gains. As a result, the global index rose 0.75 points, or 0.09%, to 794.99.

    Huntington National Bank's Oviatt said investors are eagerly awaiting the release of U.S. consumer price index (CPI) inflation data on Wednesday morning, ahead of the Federal Reserve's policy decision Wednesday afternoon.

    Adding to the uncertainty about the impact of economic data on the Fed's interest rate policy was Friday's jobs report, which showed the U.S. economy added significantly more jobs in May than expected and annual wage growth accelerated again.

    "Everyone seems to be hoping for a rate cut, but so far that hasn't been the case. "So everyone is looking to the CPI data on Wednesday morning, hoping that will give us more information and commentary from the Fed in the afternoon to clarify the situation," said Jim Barnes, director of bonds at Bryn Mawr Trust in Berwyn, Pennsylvania.

    U.S. Treasury yields, which move inversely to prices, rose Monday, reflecting expectations for higher, longer-term U.S. rates.

    The benchmark 10-year Treasury yield rose 4.1 basis points to 4.469%, up from 4.428% late Friday. The 30-year yield also rose, up 4.8 basis points to 4.5958%.

    The 2-year yield, which typically responds to changes in interest rate expectations, rose 1.5 basis points to 4.8846% from 4.87% late Friday.

    In the foreign exchange market, the euro fell to its lowest since May 9 against the U.S. dollar, down 0.37% to $1.076. Earlier, the euro hit a near two-year low against sterling.

    The dollar index, which measures the greenback against a basket of currencies including the euro and the Japanese yen, rose 0.08% to 105.14. Against the Japanese yen, the dollar strengthened 0.21% to 157.03.

    The Bank of Japan (BOJ) is holding a two-day monetary policy meeting this week and may offer new guidance on tapering its massive bond purchases.

    In commodities, oil prices hit a one-week high on hopes for a pickup in fuel demand this summer. However, a stronger dollar and fading expectations for a U.S. rate cut capped gains.

    U.S. crude rose 2.93% to $77.74 a barrel, while Brent crude rose 2.52% to $81.63 a barrel.

    Gold prices pared their losses after their biggest drop in 3.5 years in the previous session, as investors awaited inflation data and a policy statement from the Federal Reserve.

    Spot gold rose 0.72% to $2,309.15 an ounce.
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