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EUR/USD closes the week on a strong note

al_dcdemo Posted 1 July  in #Trader's blog #Support #Resistance #EUR/USD #Momentum #D1 Chart #U S Dollar Index #E U Summit #Immigration Deal
EUR/USD jumped half a cent in early Friday morning, as E.U. and Italy reached a deal on immigration. That led to broader U.S. dollar selling, with USD index repeatedly rejecting prices above 95 (also 200 WMA). The displayed momentum suggests continuation. That being said, EUR/USD is likely to encounter some resistance near 1.175, if not earlier.
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USD/CAD preparing for the next leg

al_dcdemo Posted 6 May  in #Trader's blog #Support #Resistance #USD/CAD #Breakout #Momentum #Range Trading #D1 Chart
USD/CAD has been trading in a relatively tight range during the past two weeks. 1.28 - 1.2810 is the range support and 1.29 - 1.2910 the resistance. A case could be made for continuation in either direction but largely depends on whether U.S. dollar can sustain its momentum. The longer the range lasts, the more orders accumulate on both sides and the stronger the breakout move, or so the theory goes.
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A volatile turn of the month in FX markets

al_dcdemo Posted 1 Mar.  in #Trader's blog #GBP/JPY #Volatility #Momentum #Month End #50 Dma #200 Dma #Stock Markets #D1 Chart
Quite some action in FX markets at the turn of the month. Several pairs (EUR/JPY, GBP/JPY, USD/CAD, AUD/USD) broke their respective 200 DMA, and few other ones (EUR/USD, GBP/USD, NZD/USD) their 50 DMA, which sparked some momentum. Stock markets turning lower has also contributed to the volatility.
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Kiwi dollar testing 2016/2017 support area

al_dcdemo Posted 14 Nov.  in #Trader's blog #NZD/USD #Momentum #Support Area #Dip Buyers #D1 Chart #Stop Loss Selling
NZD/USD slipped 50 pips overnight on no particular news. Higher timeframe momentum resumed, sending the pair down to test 2016/2017 support in 0.68 - 0.685 area. If the area gives way, we could see some stop-loss selling but I'd expect dip buyers to start emerging near 0.675.
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USD/CHF stabilizes near parity level

al_dcdemo Posted 9 Nov.  in #Trader's blog #USD/CHF #Snb #Momentum #Parity Level #Thomas Jordan #H4 Chart #Volatility Contraction
Volatility in USD/CHF has been dwindling during the past two weeks with the pair coiling around the parity level. Which way will it expand remains to be seen. Momentum favors the upside. SNB's Jordan speaks later today.
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USD/JPY to remain range-bound

al_dcdemo Posted 24 May as Analysis on USD/JPY, Target: 110.75, Date: 3rd of July, 12:00 GMT  in #Technical analysis #USD/JPY #Carry Trade #Daily Chart #Momentum #Range Trading #Weekly Chart #Technical Tools #Net Short Positioning
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
The pair rallied more than 1800 pips in Q4 2016. It effectively recouped most of that year's losses and briefly returned to the 2015 range between 1…
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al_dcdemo 10 June

UPDATE 5: It was a mixed week for the U.S. dollar. The No.1 reserve currency finally got some traction against European currencies. Dovish ECB and U.K. voters, going against PM May's and indeed market expectations, contributed fundamental background for the technical weakness to play out. The dollar was flat against the yen and the Canadian dollar but it fell short compared to the Antipodean currencies. Next week brings four major central bank meetings, namely Fed, SNB, BOE and BOJ. The Fed is widely expected to hike interest rate corridor by another 25 basis point.

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al_dcdemo 15 June

UPDATE 6: Fed's FOMC was surprisingly hawkish yesterday. They hiked federal funds rate by 25 basis points, as expected, and outlined strategy for reducing their balance sheet. FOMC chair Yellen told reporters that the balance sheet adjustment could begin "relatively soon". Just a couple of hours before the FOMC decision, both inflation and retail sales reports came in weak and markets sold U.S. dollar on speculation that the FOMC will postpone hiking until data improves. The dollar recovered and followed through today.

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al_dcdemo 19 June

UPDATE 7: After a rally from the lows near 108.80 post FOMC, USD/JPY took a breather on Friday. Whether the rally will continue also depends on Fed speakers and whether they will side more with Kashkari/Kaplan (cautious) or with Yellen (hawkish). 100 DMA near 111.80 is the initial hurdle ahead of the 2017 trendline resistance near 112.50. 200 DMA (110.70) is the immediate support . 110 - 110.50 area should now hold if bulls are to remain in control. Otherwise, we'll probably see a retest of the year's low near 108.15.

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al_dcdemo 24 June

UPDATE 8: Currency markets were relatively sedate this week. Major pairs traded in 100-pip ranges with the exception of Cable whose range exceeded 200 pips. With no big events on the agenda until September, it's possible that we'll be seeing somewhat slower activity throughout the summer. That said, there's always opportunity in at least some pairs and timeframes, and we must always expect the unexpected. Central bank speakers will continue to dominate in the week ahead and markets will be positioning for their next moves in the coming weeks.

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al_dcdemo 26 June

UPDATE 9: Since post-FOMC move from 108.80 to 111.80, Yen's been trading in an 80-pip range. BOJ released Summary of Opinions from their most recent meeting which confirmed that the bank is not planning any tightening in monetary policy just yet, at least not publicly. USD/JPY has been sandwiched between 200 and 100 DMA, and whichever will give way first will suggest direction for the next leg. An upside break appears more likely at the moment with 112 and 112.50 the targets. Conversely, a break below 111 could see a retest of 110.

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USD/JPY has yet to prove a return to uptrend

al_dcdemo Posted 26 Apr. as Analysis on USD/JPY, Target: 112.25, Date: 1st of June, 12:00 GMT  in #Technical analysis #USD/JPY #Carry Trade #Daily Chart #Correction #Momentum #Weekly Chart #Technical Tools #Net Short Positioning
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
The pair rallied more than 1800 pips in Q4 2016. It effectively recouped most of that year's losses and briefly returned to the 2015 range between 1…
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al_dcdemo 14 May

UPDATE 5: Widely expected result of the French election spurred a pullback in euro and franc and, to a lesser extent, yen. U.S. dollar indisputably won the week, rising against all G10 currencies. Weaker than expected inflation and retail sales reports on Friday led to some profit taking but June rate hike expectations hardly budged. Some further reaction to the reports is possible in the days ahead. Following a neutral BOE QIR, U.K. data will be closely watched next week. Australian labour force report and Canadian inflation and retail sales are also at the top of the list.

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al_dcdemo 16 May

UPDATE 6: Yen has been the weakest performer so far this month but it's still up 3.25% on the year. USD/JPY continues to be driven by U.S./Japan bond yield spreads and risk sentiment, both of which have been supportive in recent weeks. The pair broke out of a declining channel formation last week but the rally faltered ahead of 114.5. It looks headed for a retest of the channel trendline and perhaps 112 pivot. On the upside, multiple resistance levels are stacked from 114.5 to 116.

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al_dcdemo 21 May

UPDATE 7: In what was its worst week of the year, the dollar lost ground against all G10 currencies. Already soft start to the week after last Friday's inflation and retail sales reports was exacerbated by the political drama in the U.S. that has further shaken traders' confidence that the Administration will be able to deliver on its stimulus promises in due time. The biggest winners were euro and franc with Canadian dollar and pound not far behind. U.S. dollar index fell to the levels not seen since the U.S. election and closed the week near the low.

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al_dcdemo 25 May

UPDATE 8: As expected, FOMC meeting minutes didn't reveal anything particularly new. Weak Q1 GDP was dismissed in favour of strong employment growth. There was some caution regarding inflation by some members but was not a baseline view. The committee also discussed balance sheet reduction which can be seen as a hawkish development. Minutes are basically data two weeks old and the market responded with U.S. dollar selling. It's Fed speakers and how they will shape expectations for a June hike that the market is focused on.

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al_dcdemo 29 May

UPDATE 9: Last week was better for the U.S. dollar as it managed to rise, albeit marginally, against euro, franc, yen, and Australian dollar. Pound sold off after election polls showed PM May lost some support. Canadian dollar capitalized on oil strength, even though OPEC didn't go out on a limb this time around. New Zealand dollar continued its snap-back after bottoming near 0.685. European flash CPI and U.S. NFP report will be two events that the market will closely watch this week. Both have the potential to shape upcoming ECB and Fed decisions.

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Yen to consolidate near 110

al_dcdemo Posted 27 Mar. as Analysis on USD/JPY, Target: 110.25, Date: 1st of May, 12:00 GMT  in #Technical analysis #USD/JPY #Carry Trade #Daily Chart #Correction #Momentum #Weekly Chart #Technical Tools #Net Short Positioning
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
The pair rallied more than 1800 pips in Q4 2016. It effectively recouped most of the last year's losses and briefly returned to 2015 range between 1…
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al_dcdemo 15 Apr.

UPDATE 6: U.S. dollar ended the week lower against all major currencies. What we are seeing could be a beginning of a complete reversal of the Trump trade. Expectations of a big fiscal stimulus have been greatly dampened in recent weeks. Inflation and retail sales reports both came weak on Friday. That said, the Fed is likely to continue to normalize monetary policy, and it may pay to buy any dollar dip at some later point. Price action in the week ahead could well be dominated by flows ahead of the first round of the French presidental election.

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al_dcdemo 17 Apr.

UPDATE 7: Better than expected data from China, released overnight, hasn't had a great impact but it did contribute to a slightly better risk sentiment. Australian and New Zealand dollars remain in a near-term uptrend while yen put in at least a temporary top. A quiet European session is the most likely scenario with main financial centers closed for Easter Monday. Some more activity is possible in N.A. session but many participants will prefer not to involve until tomorrow. That does not rule out a surprise move though.

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al_dcdemo 23 Apr.

UPDATE 8: U.S. dollar recorded a mixed last week. It rose against yen, Canadian dollar and Australian dollar but fell against euro, franc, sterling and New Zealand dollar. The moves didn't have a lot to do with the U.S. itself but happened against a backdrop of unwinding of the Trump trade. Focus will be on Europe in the week ahead with French election 1st round results to start with and then the ECB meeting on Thursday. Advance version of the U.S. GDP on Friday will be an important data point to watch while BOJ is not likely to stray from its course.

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al_dcdemo 28 Apr.

UPDATE 9: The BOJ kept policy unchanged at this week's meeting. They bumped up growth forecasts but slightly downgraded inflation. Japanese data overnight confirmed continued weakness in household spending while unemployment rate fell to the lowest on record. U.S. Advance GDP is the event to watch later today. USD/JPY gapped up at the start of the week on better risk sentiment after the first round of the French election. Buyers stepped in before the gap was filled and sent the pair up to 50 DMA. 111.80 - 112 is the initial resistance on the way to 113 (channel top). 110 is a support.

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al_dcdemo 30 Apr.

UPDATE 10: Story from the last week continued this week. The dollar declined against European currencies and appreciated against yen and commodity currencies. Market-friendly result of the first round of the French election didn't impact this dynamic, even though better risk sentiment usually means weaker euro and franc, and stronger Aussie and Kiwi. Looking ahead, FOMC meeting may not leave us any wiser next week. After weak U.S. Q1 GDP, NFP report seems more important. Of course, all eyes will be on French election polls to see whether Le Pen could gain any ground.

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Yen may visit 110 in March

al_dcdemo Posted 20 Feb. as Analysis on USD/JPY, Target: 111.25, Date: 3rd of April, 12:00 GMT  in #Technical analysis #USD/JPY #Carry Trade #Daily Chart #Correction #Momentum #Weekly Chart #Technical Tools #Net Short Positioning
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
The pair rallied more than 1800 pips in Q4 2016. It effectively recouped most of the last year's losses and briefly returned to 2015 range between 1…
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al_dcdemo 18 Mar.

UPDATE 6: As widely expected, the FOMC hiked federal funds rate corridor by 0.25%. It was a "dovish hike", accompanied by caution on the part of the committee and the governor Janet Yellen. Despite that, the tightening cycle will continue at a gradual pace and market currently expects two more hikes this year. U.S. dollar sold off in response but I don't think the weakness will last. Lower-yielding currencies in particular seem vulnerable as the U.S. dollar bulls will inevitable return. However, the period of exceptionally low global interest rates may be drawing to an end.

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al_dcdemo 25 Mar.

UPDATE 7: The dollar recorded another mixed week. Its losses were the most pronounced against lower-yielding currencies while it ended the week higher against the commodity block. In other markets, oil fell as gold rose which may be indicative of traders adjusting for a somewhat weaker recovery and a shallower tightening path. U.S. Administration pulled back from its attempt to repeal Obamacare on Friday and said they will instead focus on tax reform. That adds some uncertainty and, likely, volatility to the quarter-end flow driven week ahead.

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al_dcdemo 28 Mar.

UPDATE 8: Major currencies started the week on a firm footing, particularly against the U.S. dollar. The reserve currency fell in response to Obamacare vote failure which means that the Administration will have more difficulties implementing its reforms. Euro trade above 200 DMA yesterday for a couple of hours before pulling back. Yen tested 110 around the same time but it too recovered to be back above 110.5. Pound rose to the highest (1.2615) since early February. More short-covering is expected as Article 50 gets triggered tomorrow. Commodity currencies look soggy.

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al_dcdemo 2 Apr.

UPDATE 9: Correction in the dollar that gained pace after the dovish hike by Fed appears to have stalled, despite signs that U.S. Administration will have tough time enacting some of its promised reforms. U.S. dollar rose the most against euro and franc but recorded only modest gains compared to yen and antipodean dollars. Pound and Canadian dollar were holding its own, both finishing a tad higher. In the week ahead, FOMC Meeting Minutes may reveal some detail behind the March's decision. Most Fed officials have continued to be hawkish though.

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al_dcdemo 3 Apr.

UPDATE 10: After falling more than 500 pips in March, USD/JPY appears to have put in at least a short term bottom above 110. As new fiscal year begins in Japan, yen appreciation pressure is expected to abate and, coupled with demand from carry traders, the currency may find itself offered in April. The pair is likely to encounter some resistance near 50 DMA, 100 DMA and could top out near December - March trendline. The pair didn't quite conformed to the expected price path in the first part of March but it did better in the second one and is about to end the forecast period near the target.

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Yen may trade towards 110 in the month ahead

al_dcdemo Posted 24 Jan. as Analysis on USD/JPY, Target: 112.25, Date: 1st of March, 12:00 GMT  in #Technical analysis #USD/JPY #Carry Trade #Daily Chart #Correction #Momentum #Weekly Chart #Technical Tools #Net Short Positioning
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
The pair added more than 1800 pips in Q4 2016. It effectively recouped most of the last year's losses and briefly returned to 2015 range between 11…
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al_dcdemo 10 Feb.

UPDATE 6: U.S. stocks rallied to new record highs yesterday after Trump said he is releasing "something phenomenal in terms of tax" in the next 2 to 3 weeks. Bonds and the dollar followed suit. USD/JPY rose more than 100 pips in the N.A. session. Bulls gained the upper hand in the big battle near 38.2% retracement of the election rally. 114 is the initial resistance and then stronger one between 50 DMA and 115.50. Staying above 113 would maintain bullish picture.

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al_dcdemo 11 Feb.

UPDATE 7: U.S dollar rose against most of the major currencies last week. It snapped the multi-week decline against euro, franc and New Zealand dollar. Gains were more modest against yen, Canadian dollar and pound. Australian dollar was the only major currency to record a narrow win. Unless Trump starts pushing in the direction of a weak dollar policy, and perhaps even, the dollar should strengthen against low-yielders over the medium term. That said, it will be difficult to meet many market participants' expectations of at least two Fed rate hikes this year.

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al_dcdemo 18 Feb.

UPDATE 8: It was another week of relatively tight ranges. With exceptions of yen and maybe pound, major currencies ended the week pretty much where they started. There's still a lot of uncertainty regarding tax cuts and fiscal stimulus in the U.S. but inflation is rising and Fed rate hikes are on the way. One thing that keeps bulls cautious is Administration's remarks about too strong a dollar and Trump's comments regarding a "level playing field for currencies". The other one is simply expectations of reflation with flows into riskier assets and currencies.

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al_dcdemo 25 Feb.

UPDATE 9: Indecision in the markets continues. Major currencies mostly closed in the middle of their tight ranges. A mild risk-off has been notable with the yen buying gaining traction, in part due to French election hedging. Speculators are building longs in commodity currencies and covering shorts in low-yielders bar the euro. The main event in the week ahead is U.S. president Trump's speech to Congress, in which he is expected to announce his "phenomenal tax plan". Failure to meet market's expectations could see the dollar sell-off hard.

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al_dcdemo 28 Feb.

UPDATE 10: Major currencies opened the week on a similar note that they ended the last one. The U.S. dollar started on the back foot but stormed back later in the day. Month-end flows and some position-squaring ahead of the important Trump speech tomorrow could be in part responsible for this. Euro, yen, cable and Canadian dollar have seen the most activity while franc and antipodean dollars have traded in tighter ranges. USD/JPY once again bounced off of 38.2% retracement of the Trump rally. The pair continues to be driven mostly by U.S./Japan yield differentials.

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