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USD/JPY to start 2018 on the back foot

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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.
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USD/JPY surged more than 1800 pips in Q4 2016 during so-called Trump trade, topping out near the middle of the 2015 range. A correction that followe…
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al_dcdemo 30 Дек.

UPDATE 9: U.S. dollar ended the year on a weaker note. The dollar index posted its lowest monthly close since 2014. Expectations of other major central banks following Fed into hawkish direction are beginning to outweigh the still present monetary policy divergence.

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al_dcdemo 9 Янв.

UPDATE 10: USD/JPY dropped like a rock as Bank of Japan bought slightly less JGBs than in previous open market operation. Selling already began yesterday though as the pair rejected prices above 113.30. 112 - 112.25 is the support area to watch.

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al_dcdemo 21 Янв.

UPDATE 11: U.S. government failed to pass funding bill and went into shutdown. This will probably last a couple of weeks, the question is what it means for the U.S. dollar. A small gap lower is possible, but with ECB and BOJ meetings next week, a correction rather than continuation of the dollar weakness may be in the cards.

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al_dcdemo 23 Янв.

UPDATE 12: BOJ kept the monetary policy unchanged at this meeting. The bank admitted that inflation is (slowly) rising towards the target of 2.0% and bumped up inflation expectations outlook in quarterly report. USD/JPY dropped about 30 pips but has since recovered. 110 - 110.25 is the area to watch on the downside and 111.50 on the upside.

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al_dcdemo 1 Февр.

UPDATE 13: FOMC left federal funds rate in 1.25% - 1.50% range, as expected. The statement was seen as slightly more hawkish than expected. March hike appears to be a done deal with some quarters now expecting as many as four rate hikes this year. U.S. dollar looks supported but will it last?

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Yen to move closer to 110

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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
USD/JPY surged more than 1800 pips in Q4 2016 during so-called Trump trade, topping out near the middle of the 2015 range. A correction that followe…
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al_dcdemo 19 Дек.

UPDATE 5: After a 50-pip range yesterday, USD/JPY mustered only 15 pips so far today. Maybe U.S. traders can provide some volatility for this pair. The BOJ meets on Thursday and is expected to keep the policy steady. Traders will be on a lookout for any hawkish hints.

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al_dcdemo 23 Дек.

UPDATE 6: U.S. dollar ended up higher against yen, marginally lower against franc and lower against other major currencies this week. Even though monetary policy divergence is still in force, some of the recent trades have most certainly been made with convergence, which had already started this year, in mind.

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al_dcdemo 24 Дек.

UPDATE 7: Next week could easily end up being the least active week of the year. But otherwise subdued periods have often turned out quite volatile in recent years. "Expect the unexpected" is one saying that is useful to always keep in mind in trading business.

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al_dcdemo 27 Дек.

UPDATE 8: The dollar started this holiday-shortened week on the back foot. Falling U.S. treasury bond yields and recovery in commodities have been two drivers. Year-end position squaring could result to some messy price action into the end of the week.

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al_dcdemo 30 Дек.

UPDATE 9: U.S. dollar ended the year on a weaker note. The dollar index posted its lowest monthly close since 2014. Expectations of other major central banks following Fed into hawkish direction are beginning to outweigh the still present monetary policy divergence.

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USD/JPY to test 115 in November

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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
USD/JPY surged more than 1800 pips in Q4 2016 during so-called Trump trade, topping out near the middle of the 2015 range. A correction, that follow…
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al_dcdemo 7 Нояб.

UPDATE 5: The pair rallied about 50 pips in the opening hours, on the back of dovish comments by BOJ governor Kuroda, but then gave back twice as much by the end of the day.

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al_dcdemo 11 Нояб.

UPDATE 6: U.S. dollar recorded a losing week as recent gains on tax reform hopes have been pared. U.S. Senate said to propose delaying corporate tax cut until 2019. U.S. dollar index is closing in on the trendline, drawn off of September and October lows.

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al_dcdemo 17 Нояб.

UPDATE 7: U.S. dollar ended the week lower against European currencies and yen, and higher against the commodity bloc. If we look at these currencies from the yield perspective, it was actually a typical risk-off week, albeit on reduced volatility.

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al_dcdemo 23 Нояб.

UPDATE 8: FOMC Minutes highlighted the division among officials on inflation outlook, though majority still think it will ultimately pick up. December hike is virtually a done deal but what comes after that will increasingly depend on inflation progress. U.S. dollar was sold ahead of and after the release.

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al_dcdemo 29 Нояб.

UPDATE 9: Progress on U.S. tax reform, better than expected GDP revision and Janet Yellen with some hawkish comments have all been welcomed by the dollar bulls. Yet the currency struggled to make any significant headway today. Markets have been continuously underestimating Fed's resolve to normalize rates in this cycle.

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USD/JPY to stay supported 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
The pair rallied more than 1800 pips in Q4 2016 during so-called Trump trade. It effectively recouped most of that year's losses and briefly returne…
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al_dcdemo 20 Окт.

UPDATE 6: During a bout of risk-off yesterday, USD/JPY fell on news that Spain's cabinet will suspend Catalan autonomy on Saturday, but there was no follow through. The pair recouped all losses and surged to a new weekly high overnight as U.S. senate approved budget plan that moves them closer to tax reform. The pair is currently trading just above 113. The initial resistance is at 113.40 where the declining 2017 trendline coincides with last week's high. If that gives way, 114 will come into focus. 112.75 - 113 should hold while bulls are in control.

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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 being 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 24 Окт.

UPDATE 8: Japanese voters supported current PM Abe on the weekend. That means at least a couple more years of Abenomics, even though BOJ governor Kuroda may not be selected for the second term next year. Stocks liked this and yen was sold. At least initially. USD/JPY gapped 30 pips at the open and extended that by about 25 pips but it was backing a filling from there. A late round of risk aversion took the pair down to the 113.25 support, from where it bounced. 114 is the the first stronger resistance.

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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 Japanese yen.

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al_dcdemo 1 Нояб.

UPDATE 10: USD/JPY remains fundamentally supported on both sides of equation. Progress on U.S. tax reform means prospects for more Fed hikes and wider interest rate spread. Japanese PM Abe's recent election victory means more Abenomics. After seven consecutive green weeks, Nikkei is trading at 20-year highs. The pair started the week by falling below the 2017 resistance line, but is already back above the level. 114 is the immediate resistance before last week's high near 114.5. After that, 115 - 116 is the major resistance area to watch. 113.25 - 113.5 looks like a strong support.

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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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USD/JPY to break lower in September

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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
The pair rallied more than 1800 pips in Q4 2016 during so called Trump trade. It effectively recouped most of that year's losses and briefly returne…
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al_dcdemo 9 Сент.

UPDATE 5: 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 week, 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 6: It was a positive week for the 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 7: 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 26 Сент.

UPDATE 8: Yesterday, North Korean foreign minister said that they understood Trump's comments over the weekend as a declaration of war. White House later said that they have not declared war on North Korea. Yen was bought on the news and USD/JPY fell some 50 pips. The pair stalled ahead of 111.50 level, which is the immediate support. Pre-FOMC low near 111 and the big figure itself is the next area to watch. 112.30 - 112.70 is the initial resistance.

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al_dcdemo 1 Окт.

UPDATE 9: It seems that U.S. dollar finally found some traction. A rise in treasury 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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USD/JPY to visit 110 in August

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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
The pair rallied more than 1800 pips in Q4 2016 during so called Trump trade. It effectively recouped most of that year's losses and briefly returne…
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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 will 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 this 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 the 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 figure. 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. USD/JPY is ending the day and the week near highs and above 110. USD/JPY was also my best prediction for September, ending up about half a percent off the target.

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USD/JPY to grind up slowly in July

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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
The pair rallied more than 1800 pips in Q4 2016 during so called Trump trade. It effectively recouped most of that year's losses and briefly returne…
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al_dcdemo 15 Июль

UPDATE 5: It was a worst week for the U.S. dollar in a while. It started with the BOC decision on Wednesday after which Canadian dollar surged about 200 pips. The next day, Aussie and Kiwi played catch-up and rose about 100 pips respectively. Eagerly anticipated U.S. inflation and retail sales reports came in weaker than expected yesterday and exacerbated dollar losses across the board. Cable sliced through 1.30 to 1.3115, the highest in ten months. Euro had tough time holding above 1.14 but ended the week near the high, poised for a break higher. Interesting week ahead.

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al_dcdemo 23 Июль

UPDATE 6: The U.S. dollar ended another week of underperformance, falling against all major currencies bar the British pound. Euro confirmed break above 1.145 to trade to the highest since mid 2015. Mirroring its cousin, Swiss franc closed the week below 0.95. Yen was bought down to 111. Canadian dollar extended its rally to approach 1.25. Australian dollar broke above 38.2% retracement of the 2014 - 2016 downswing. New Zealand dollar closed the week near 0.745, just below the 50.0% retracement of the 2014 - 2015 decline. Momentum suggests further losses for the dollar in the week ahead.

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al_dcdemo 24 Июль

UPDATE 7: A mixed start of the week saw yen, pound, Canadian dollar and Australian dollar extend gains while euro, franc and New Zealand dollar are lagging. Data-wise, it's a quiet one until Wednesday when Australia publishes inflation data, U.K. releases preliminary GDP and FOMC concludes its meeting. U.S. reports durable goods orders on Thursday and GDP on Friday. Unless FOMC pulls a surprise, neither of these events has the potential change the current macroeconomic landscape. U.S. politics seems a more likely source from where some kind of a twist could come.

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al_dcdemo 27 Июль

UPDATE 8: Reaction to the latest FOMC statement was quite strong for a meeting without press conference. The statement didn't reveal anything new but clearly the market was expecting something more hawkish. The committee indicated that it will begin with balance sheet adjustment "relatively soon". The language on inflation, however, has deteriorated a bit and that was probably the main reason the market sold the dollar. While balance sheet adjustment is now virtually a done deal, we may see further hikes in federal funds rate only if inflation picks up.

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al_dcdemo 31 Июль

UPDATE 9: Last week was an interesting one. Major currencies traded to fresh highs against the U.S. dollar. The exception was Swiss franc which sold off strongly against all those currencies, including the dollar. Two cent and a half surge from sub 0.95 to above 0.97 might well have had SNB backing. There's nothing on the calendar for the week ahead that has the potential to reverse the current U.S. dollar weakness. Perhaps a concerted dovish effort from RBA and BOE could put a dent into this trend but probably not for too long.

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