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GBP/USD breaks 1.40, appears not done yet

GBP/USD broke above 1.40 yesterday. The big figure level coincides with the topside of the 2017 - 2018 trading channel. That probably means some selling, but a (sharp) spike above the channel top is not off the table. U.S. jobs & wages report later or tomorrow's ECB decision could be a catalyst.
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EURo to move above 1.20 in October

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Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
After trading to the lowest level in fourteen years, EUR/USD consolidated below the long term trendline, drawn off of 1985 and 2000 lows, for five m…
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al_dcdemo 12 Окт.

UPDATE 5: As expected, there was nothing shocking in the Minutes of the latest FOMC meeting. Division between those who believe that inflation is low due to transitory factors and those who think it's just a new normal, is nothing new but the market seemed to take this as a mildly dovish sign. U.S. dollar has already been weakening this week and, after a minor whipsaw, prices just continued on the path of least resistance. December hike from the Fed is pretty much priced in at this point. The focus is on inflation and tax reform, for clues as to what comes beyond that.

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al_dcdemo 13 Окт.

UPDATE 6: Earlier today a combo of U.S. inflation and retail sales reports for September was published. Inflation indicators came in somewhat weaker than expected but mostly higher than in August while retail sales were better than expected. Market focus was on inflation and initial reaction was to sell the U.S. dollar. Moves stalled after 50 - 70 pips and later reversed to various extents across dollar pairs as traders digested otherwise solid reports. The dollar is closing the week lower against all major currencies.

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al_dcdemo 21 Окт.

UPDATE 7: U.S. dollar was the winner of the week. Solid inflation report last week and renewed prospects for a successful tax reform have been the fundamental drivers. Technically, 91 appears to have been more than just a short-term lower in the U.S. dollar index, with 95 the next target. 10-year U.S. treasury yield closed the week on its highs, just below the important 2.4% level, of which Bill Gross says is a trend-changing point. Apart from ECB and BOE next week, one of the most important events to watch out for is nomination of the, probably new, Fed Chair.

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al_dcdemo 23 Окт.

UPDATE 8: Euro opened marginally lower today with Catalan crisis still simmering. ECB meet this week and are expected to scale down asset purchase program while extending it through the next six or nine months. A dovish surprise seems more likely than a hawkish one. 50 DMA is acting as a resistance since late September. Potential head and shoulders top with the neckline near 1.17 projects towards 1.13. The neckline is reinforced by 100 DMA ahead of the next stronger support at 1.1615.

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al_dcdemo 27 Окт.

UPDATE 9: Cautious tones from ECB and BOC, weak Australian inflation one side and progress in U.S. politics and much better than expected Advance GDP reading on the other one were among the drivers of major currency pairs this week. BOE is expected to hike next week but it will be a one-off for now. The U.S. dollar was mostly bought up until around the time Europe started heading for the pub. Rumor of Trump leaning toward Powell as the next Fed chair sparked a bout of profit-taking. The dollar ended the week higher against every major currency bar the yen.

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EURo posts a new cycle-high after ECB meeting

ECB seem to be in no hurry to continue scaling back its asset purchase program, though Draghi said they'll likely do so in October. Growth forecasts were revised higher and inflation forecasts lower, which may keep euro appreciation pace contained.
Unwinding of so called Trump trade is what is also driving EUR/USD gains. The pair posted another cycle-high this night, continuing its slow but steady grind higher. It's possible that there will be no significant retracement until some kind of a capi…
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EURo to break 1.20 in September

Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
After trading to the lowest level in fourteen years, Euro consolidated below the long term trendline, drawn off of 1985 and 2000 lows, for five mont…
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al_dcdemo 9 Сент.

UPDATE 6: Three major central banks met this week. On Tuesday, RBA kept interest rates unchanged but they were upbeat on the economy. On Wednesday, BOC delivered second hawkish hike in the row. Markets expect one more hike from them this year. ECB stood pat on Thursday but will likely announce further tapering of asset purchases in October. Next Thursday, SNB and BOE meet. No change is likely to be expected from SNB while the franc is trading below 1.20 against the euro. BOE will hike rates at some point in the future but that won't be this year.

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al_dcdemo 16 Сент.

UPDATE 7: It was a positive week for the U.S. dollar, which closed higher against most major currencies. By far the best performer was British pound, which rallied on a hawkish shift from the BOE. New Zealand dollar closed marginally higher after some election polls indicated continuation of the status quo. Following weekly close below strong support at 108.10, yen reversed sharply and ended the week above 110.50. Next week's main event is FOMC meeting at which the committee is widely expected to announce balance sheet adjustment plan. Forward guidance on rates will be watched closely too.

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al_dcdemo 20 Сент.

UPDATE 8: Fed remains on track with monetary policy. Balance sheet adjustment will start in October. Most members are expecting another hike this year. Three more hikes are projected for 2018. Neutral rate was downgraded to 2.8% from 3.0%. Market clearly expected something less hawkish from them. The dollar rallied across the board but the rally run out of steam after 100 - 150 pips of gains. Any further gains may not last because, fundamentally, nothing really changed today.

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al_dcdemo 25 Сент.

UPDATE 9: German election concluded largely as expected. Angela Merkel will serve her fourth term as Chancellor, however, her party (CDU) will have to seek coalition partners. In addition, a far-right party (AfD) will be represented in parliament for the first time since WW2. EUR/USD didn't like it and opened with about 50-pip gap lower. The gap was closed by the end of the Asian session but the pair headed back towards the lows as Europe opened for business. 1.18 - 1.185 is the current range support and 1.205 - 1.21 the resistance.

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al_dcdemo 1 Окт.

UPDATE 10: It seems that U.S. dollar finally found some traction. A rise in bond yields after more hawkish than expected Fed last week is one part of the story. The other is that despite all difficulties in passing new healthcare bill, U.S. tax reform may prove to be a success for Administration. In any case, market got ahead of itself on the convergence trade and what we are seeing now is probably just a healthy retracement and not an outright reversal. Another supportive factor for the dollar is that any weakness in September data will be dismissed due to hurricane impact.

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EURo to extend gains in August

Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
After trading to the lowest level in fourteen years, Euro consolidated below the long term trendline, drawn off of 1985 and 2000 lows, for five mont…
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al_dcdemo 19 Авг.

UPDATE 6: This week was to some extent a reversal of last week's risk-off moves. Canadian and Australian dollars were beneficiaries with yen and franc recording just marginal losses. It was not a good week for European currencies. Pound was the loser of the week while euro remains to be buoyed by dip buyers. Next week will be a quiet one data-wise. All eyes will be on Jackson Hole Symposium at the end of the week, which will feature speeches by Yellen and Draghi. Rumours go that the ECB president will avoid talking monetary policy. That should increase volatility if he does say something.

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al_dcdemo 24 Авг.

UPDATE 7: Price action has been pretty sedate so far this week with most major currencies sitting near the middle of their weekly ranges. Euro and Canadian dollar are the only two that are marginally better than the U.S. dollar. There's been a little bit more action in the New Zealand dollar but selling stalled ahead of the strong support at 0.72. Tomorrow could prove to be the most lively day of the week with German Ifo Business Climate, U.S. (Core) Durable Goods Orders and Day 2 of the Jackson Hole Symposium which will bring Fed Chair Yellen and ECB President Draghi speeches.

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al_dcdemo 26 Авг.

UPDATE 8: Speeches by Yellen and Draghi at Jackson Hole Symposium met expectations. Yellen didn't even talk about monetary policy while Draghi avoided giving any new information on what ECB may do in autumn. Lack of hawkish clues from Yellen were enough to send the U.S. dollar lower across the board and then later some upbeat comments from Draghi (even though he warned about inflation not yet being self-sustained) propelled the euro to a new two-year high. Yen, pound and Australian dollar were flat on the week while New Zealand dollar was the laggard.

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al_dcdemo 31 Авг.

UPDATE 9: U.S. dollar index broke to the lowest level since 2015 on Monday before staging a sharp pullback. That coincided with euro breaking above 1.20 and 2012 low (1.2040) and franc below 0.95. Yen was once again contained by the strong support at 108. Kiwi is out of favour ahead of N.Z. general election. Canadian dollar sold off hard yesterday but already recouped all losses and some after exceptional Q2 GDP figures. Australian dollar has been the least volatile of the bunch but with some impressive reversals. NFP report tomorrow will be a nice finale to this exciting week.

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al_dcdemo 1 Сент.

UPDATE 10: U.S. jobs & wages report for August fell short of expectations on most metrics. August is historically weak with regard to NFP figure but Wednesday's strong ADP figure gave U.S. dollar bulls some hope that this time was different. It wasn't and the immediate reaction was to sell the dollar. The report itself was not great but was solid enough and subsequent price action seemed to agree. The dollar ended the week higher against euro, franc, yen and New Zealand dollar, and lower against pound, Canadian dollar and Australian dollar.

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