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GBPUSD H4 | Bullish Divergence?
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The GBP/USD chart shows bullish momentum, with the possibility of a bullish bounce from the first support at 1.2067, backed by the 127.20% Fibonacci Extension, indicating a reversal point. The second support at 1.2011, aligning with the 161.80% Fibonacci Extension, adds to its importance as a potential support level.
On the resistance side, the first resistance at 1.2124 is noted as an overlap resistance, potentially hindering bullish movements. The second resistance at 1.2273 is labeled as a swing high resistance
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USDJPY H4 | Bearish Continueation Expected?
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The USD/JPY chart currently exhibits bearish momentum due to its position below the Ichimoku cloud. There's a potential bearish scenario with the 1st support at 148.44, a pullback support, and the 2nd support at 147.26, an overlap support. On the resistance side, the 1st resistance at 149.98, a swing high resistance, may limit upward movements.
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USDCAD H4 I Potential bullish reversal?
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USD/CAD chart shows bearish momentum, potential drop to 1st support (1.3693, overlap support, 23.60% Fibonacci retracement) or 2nd support (1.3634, overlap support, 38.20% Fibonacci retracement). 1st resistance (1.3806) and 2nd resistance (1.3854) act as pullback resistances.
Analysis are provided by InstaForex.
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Forecast for EUR/USD on October 9, 2023
EUR/USD
Friday's US labor data for September exceeded expectations. In the non-farm sector, 336,000 new jobs were created compared to a forecast of 170,000, and the August figure was raised by 40,000. Unemployment remained at the previous 3.8%, and a broader measure of unemployment dropped to 7.0% from 7.1% in August. The initial market reaction was quite natural, with the dollar rising and the euro losing 80 pips. However, the dollar was sold off across a wide range of markets, including stock markets and commodities. As a result, the dollar index closed the day down by 0.26%, the S&P 500 rose 1.18%, and oil increased by 0.61% (WTI).
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The market's counteraction to strong data is certainly a compelling argument in favor of further (although not very prolonged) euro growth. From a technical standpoint, we saw a rebound from the point of intersection of the price channel line and support level of 1.0483, afterwards the quote exceeded the Fibonacci retracement level at 1.0578. The Marlin oscillator has moved into bullish territory. Now, after breaking through the nearest resistance level at 1.0613, we are waiting for the price to reach the target level of 1.0687 and maybe even 1.0777.
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On the 4-hour chart, the price has settled above 1.0578. The morning gap that occurred due to the Hamas attack on Israel will soon be closed. The price is growing above the indicator lines. The Marlin oscillator has firmly strengthened in the bullish territory. We expect the euro to rise further.
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Forecast for GBP/USD on October 10, 2023
GBP/USD
Yesterday, the British pound successfully closed the gap from the start of the weekly session and continued to rise. Now the price is trying to break above Friday's high, with the nearest target at 1.2307.
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Since the signal line of the Marlin oscillator only entered the positive territory recently, the momentum should be enough to reach the nearest line of the price channel around the target level of 1.2444. By breaching the resistance level, the price could reach the 1.2547 target.
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On the 4-hour chart, the price is in an uptrend according to all indicators. The pound is rising above the balance and MACD lines, and these indicator lines have turned upwards. The Marlin oscillator is rising within the uptrend territory and is far from overbought. Keep an eye on the price's behavior at the target resistance level of 1.2307.
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NZDUSD H4 I Bearish momentum
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The NZD/USD chart currently exhibits an overall bearish momentum with a potential scenario for price to make a bearish continuation towards the 1st support level.
The 1st resistance level at 0.6050 is identified as an overlap resistance. Additionally, the 2nd resistance level at 0.6095 is marked as a pullback resistance that aligns with the 127.20% Fibonacci extension level.
To the downside, the 1st support level at 0.5989 is identified as an overlap support that aligns with the 50.00% Fibonacci retracement level. Further below, the 2nd support level at 0.5934 is noted as a pullback support.
Analysis are provided by InstaForex.
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GBPUSD H4 I Bullish Momentum?
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GBP/USD bears momentum, possibly falling to 1st support at 1.2259 (overlap support) or 2nd support at 1.2176 (overlap support). On the upside, 1st resistance at 1.2337 (swing high, 127.20% Fibonacci Extension) and 2nd resistance at 1.2418 (swing high, 161.80% Fibonacci Extension) may hinder upward movement.
Analysis are provided by InstaForex.
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Forex Analysis & Reviews: EUR/USD: bullish counterattack failed
The report on American inflation for September brought the "bulls" on EUR/USD back down to earth. In annual terms, the CPI grew at the same pace as in August, at 3.7%. Core inflation, as expected, slowed down to 4.1%. However, the monthly data convinced investors that it's still too early to close the door to a federal funds rate increase to 5.75%. The likelihood of such an outcome in December jumped from 28% to 40%, and the dollar and Treasury bond yields once again rose in unison. Dynamics of U.S. core inflation
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In October, Federal Reserve officials began discussing how the rally in debt rates had tightened financial conditions. In other words, the bond market had done part of the central bank's job. Investors interpreted this rhetoric as a signal that the monetary tightening cycle was coming to an end. CME derivatives implied a 91% probability of maintaining the federal funds rate in November and 72% in December.
Furthermore, discussions about a dovish pivot have resumed in the Forex market. BNP Paribas, in particular, noted that for the federal funds rate to remain at 5.5%, inflation would have to remain flat for a long time. If it slows down as rapidly as it has in the past, the chances of the Fed easing monetary policy in 2024 will increase dramatically.
The U.S. inflation report for September has made significant corrections to this theory. Consumer prices do not necessarily have to slow down; they could accelerate. As a result, the theme of monetary policy divergence, which underpins the downward trend in EUR/USD, has returned to the market.
Indeed, the minutes of the latest European Central Bank meeting expressed concerns about the state of the Eurozone's GDP. It is difficult to bring inflation back to the 2% target without causing significant harm to the economy. The ECB now believes that the risks of overdoing monetary policy tightening outweigh the risks of doing too little and letting the inflation genie out of the bottle again. The regulator noted that inflation expectations are anchored. This is another piece of evidence supporting the end of the monetary tightening cycle.
Indeed, the minutes of the latest European Central Bank meeting expressed concerns about the state of the Eurozone's GDP. It is difficult to bring inflation back to the 2% target without causing significant harm to the economy. The ECB now believes that the risks of overdoing monetary policy tightening outweigh the risks of doing too little and letting the inflation genie out of the bottle again. The regulator noted that inflation expectations are anchored. This is another piece of evidence supporting the end of the monetary tightening cycle.
Dynamics of European inflation expectations
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Therefore, the bears for EUR/USD have played the old but effective card of divergence in monetary policy. Markets do not rule out the possibility of a federal funds rate hike and are practically certain of a deposit rate ceiling of 4% at the ECB. Along with the divergence in economic growth between the U.S. and the Eurozone, this driver could push the main currency pair towards 1.02, if not parity.
From a technical perspective, the EUR/USD daily chart is currently implementing the Holy Grail strategy. Unsuccessful attempts by the bulls to establish themselves above the red EMA and the fair value indicate their weakness. A return to the breakout bar's low near the 1.0575 level is usually used for forming short positions. As long as the pair trades below this level, the focus is on selling.
Analysis are provided by InstaForex.
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USDCHF H4 I Potentail bullish reversal?
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The USD/CHF chart currently displays bullish momentum, suggesting a possible bounce from the first support towards the initial resistance. The first support at 0.8998 aligns with a prior swing low and the second support at 0.8934 coincides with the 161.80% Fibonacci Retracement, providing strong support potential. On the resistance side, the first resistance at 0.9085 represents a multi-swing high resistance, followed by the second resistance at 0.9116, which is an overlap resistance. Additionally, there's an intermediate resistance at 0.9039, also acting as an overlap resistance.
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Forecast for EUR/USD on October 18, 2023
EUR/USD
Yesterday, the euro settled above the target level of 1.0552. The Marlin oscillator is also in the positive territory. Now, the price needs to gather strength to overcome the strong resistance level at 1.0613, as at the anticipated breakout point, the level intersects with the Fibonacci Fan line.
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Breaching this level opens the next target at 1.0687. This level is also strong because the MACD indicator line is approaching it. This will determine the euro's direction in the medium-term - either a breakout with subsequent target realization, as indicated on the daily chart, or a reversal towards 1.02. On the 4-hour chart, the price has settled above the MACD indicator line, but the attempt to break above the balance line was unsuccessful.
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The Marlin oscillator is in the uptrend territory, so we expect the price to try and break above the balance line. Without the price consolidating above the balance line, which requires an impulsive initial rise, overcoming the 1.0613 resistance will be extremely challenging.
Analysis are provided by InstaForex.
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