Daily Market Analysis from ForexMart

The U.S. dollar against the Japanese yen rallied as it broke at 114 handle. This would most likely move higher towards the 115 level which has been the peak of the last consolidation region and it would not take that long before the market reaches it. It is anticipated for a reversal to occur from now and then which will serve as buying opportunities in the market, most especially that there is a tone of bullishness seen in the trend. Volatility fluctuations is also expected that determines the weakness of the yen.

Price reversals could turn into an opportunity for this pair especially since the Japanese yen performs well in the market. Although, It may not be favorable to go short in this pair. The 113.30 region is being strongly supportive but there is a lesser possibility to go low to this level. It wouldn’t take long for buyers to return.

If the price breaks higher than the 115 level, this could move towards 118 handle. Although, it needs more momentum from the traders to reach this level. Hence, it may not be good to sell this pair for now.

The U.S. dollar paired against the Canadian dollar started flat during the Tuesday session as the oil market being calm but not too long. It was reversed and directed downwards. Another factor is the Canadian building permits that brought movement following its negative reports.

On the other hand, the U.S. dollar surged against the Canadian dollar as it breaks over the 1.37 level. The Resistance level was retested at 1.37 region and the 1.3750 level is being strongly resistive that prevents the pair to climb higher. The market has been very bullish for a long term and it won’t take long before the market reaches the 1.38 handle. A few days ago, there has been a selloff of this pair and if this occurs again, the pair could further go up.

The pair will continue its downtrend from 1.3793 and the uptrend from 1.3641 is a form of consolidation in the downtrend. This could be followed by consolidation towards the next target of 1.3550 level. A break over the 1.3793 region could trigger the price to go up towards 1.3900.

Reversals could attract buyers in the lower channel especially towards the 1.37 handle which has been a resistance before. It is possible for this level to turn into support region for the pair. The long-term trend becomes bullish although the oil market has uncertainty.

The crude oil inventories are about to be released to say which would most likely affect the trend. Reversals could serve as buying opportunities for this pair although the greenback is more favored over the Canadian dollar. Concerns in Canadian housing would add more hesitancy to the interest of the market to Loonie.

The EUR/USD pair continues to exhibit an intermittent trading action, which has been the pair’s dominant price trend ever since the beginning of this week. The market had initially expected the currency pair to start off this week with a bang and consistently exhibit a positive trading stance throughout the week due to Macron’s recent victory in the French polls, but as of now the currency pair is on the backfoot as its bulls have decided to retreat and take out profits in order for them to purchase the EUR/USD pair lower as it continues its correction.

In addition to the EUR/USD pair’s weakness, the greenback has also been strengthening across the board as traders are now about to conclude their June rate hike pricing. All of these factors has caused the EUR/USD pair to exhibit corrections at under 1.0900 points. However, during the past two days, the currency pair has been either ranging and consolidating or exhibiting a choppy price action, which is an indication that the market is attempting to create its own base. The currency pair is expected to create a base for another bullish attempt as the after-effects of the most recent rate hike is now losing its relevance and the improvements in the EU economy is now starting to become more evident in the market.

For today’s session, there are no major news releases from the EU although the US economy will be releasing its unemployment claims and PPI data, although these are not expected to make a significant dent in the current status of the currency pair. The EUR/USD pair can be safely expected to remain its choppy action at the 1.0850 trading range throughout the day.

AUD/USD Technical Analysis: May 12, 2017

The Australian currency showed some interesting trading session and had an initial downturn corresponding with the actions of the New Zealand dollar. A bit of rally had started as we look forward to found further resistance within the 0.7380 handle.

The Aussie appeared to be caught off guard as of the moment because of the rally occurred in the gold markets along with the partial decline of the US dollar.

In case that the precious metal would reverse and drop, the AUD will continue to weaken as well.

The commodity currencies may not be so attractive at this time since some of them are quite falling considering the CAD and NZD to have a softer stance while the Norwegian Krona also appeared to be dull. Not to mention the Mexican peso which starts to be weak again.

In order to initiate the selling, exhaustion and near-term rallies are to be found that may allow for a successful break above the region 0.7425.

Moreover, the volatility would extend that will offer value for the greens in which seems favorable for us. In case that we create a gap under the lows once again, the market is projected to move near the 0.72 handle, en route 0.70.

The USD/CAD moves like from pillar to post last Friday and continuously grinding above 1.37 handle. Meanwhile, the oil markets appeared to be disorganized as of the moment. We are directly standing above the channel while a pullback is inessential, however, when this price movement occurred then a move to the lower area would likely follow. Possibly down to the region 1.35 and moving through the mark 1.3250. Contrarily, a break over the channel, particularly in the 1.38 handle, will cause the market to trail atop of the level 1.40. Mainly, the oil markets should be given much consideration as it extensively weighs to the Canadian dollar.

Moreover, the commodity-linked pair is expected to be choppy but it looks like that the oil is in action at this time. The housing market in Canada shows some uncertainties while concerns may arise since the history of the US housing bubble were still remembered clearly by many traders.

The markets should consider sustaining a volatile session, however, the general uptrend will continue to drive through the upside in the longer-term. It further allows the longer-term and steady traders to acquire gains on top of the 1.40 range.

It is recommended to seek for pullbacks which provide value upon getting the chance as the greenbacks continued to be favored by the North American currency.

The Cable decline within the week as it tested the bottom of the hammer in the past week. The range 1.2950 appeared to be resistive, moving near the 1.3 region. A break over the mentioned level will push the market around 1.3450, wherein a previous resistance was seen.
A cut through in that area would likely be bullish, however, there is a significant level of support found at 1.2750 range.

To be honest, it will be a tedious job to grind below just like breaking upwards. The short-term trading could possibly the simplest thing to accomplish since the market has high possibility to consolidate amid the two regions.

A move in the long-term is anticipated and a needs to break out within area to execute the trade. Meanwhile, a range bound short term is predicted as it will remain to take notice.
Moreover, a breakdown underneath 1.2750 will cause the market to continue to slide.

A significant amount of support can be found below, however, it would appear like the longer term downtrend resumption.

The British currency is currently surrounded by lots of dynamic strains, hence expect for a complex trend over here. In light of this, we decided to allow the market to take an action deliberately.

The EURUSD edged upwards amid Friday sessions as it cleared up the top of Wednesday and Thursday candles followed by the release of the less than stellar figures of United States. In light of this, the market would likely touch above the 1.10 region which the resistance.

A gap over the mentioned area indicates a bullish tone, probably moving towards the 1.13 range trailing to 1.15 eventually.

The market consolidated in the midst of 1.05 and 1.15 levels in the past years. We are currently located in middle of the trading range which is close to the “fair value” which results for a complex trading setting in the near future.

The back and forth trading in the near-term is highly anticipated for the next few sessions. While short-term charts will also lead forward since consolidation is required in the overall region.

A gap overhead the 1.10 area will trigger further purchasing interest. However, a break below the 1.0750 mark will drove to 1.05 handle.

The market is projected to be very volatile and uneasy to trade, mainly because of the concerns that the European Union are currently involved with the United Kingdom together with other nations.

Despite the results, it is vital to maintain your stop loss take, and take note that the market is somewhat aimless in the long-term.

The USD/JPY pair experienced a turnaround during yesterday’s trading session after a sudden high demand for high-risk assets manifested during the earlier parts of the Monday session. The JPY was initially boosted by flight-to-safety buys but immediately disappeared as market investors chose to shift their focus to the surge in US equity markets. The USD/JPY pair closed down yesterday’s session at 113.787 points after increasing by +0.41% or 0.464 points.

Investors were generally worried with regards to Trump’s unexpected firing of FBI Director James Comey, the cyber-attack which made headlines last Friday, and the ballistic missile launch from the DPRK. The currency pair then began to hit rock-bottom after traders were practically unresponsive to these recent developments. This price action from the USD/JPY shows that investors might have become somewhat oblivious to these said developments. In fact, the cyber-attack was able to benefit the market after tech giants such as Cisco posted gains following the said online attacks.

For today’s trading session, investors will be waiting for the release of industrial production data, mortgage delinquencies data, building permits, capacity utilization data, and housing starts data from the US economy. If this specific set of data comes out as a market disappointment, then the chance of the Fed implementing more rate hikes in the future might be lessened, although the June rate hike has been pretty much priced in by the market already. In any case, this could also cause the US dollar to drop further in value.

The EURUSD raise higher because of the support of a strong growth and below-than-expected data in the housing number of the United States which brought an impact towards the U.S Treasury yields, hence placing a downward pressure to the American dollar. The sales of US chain stores keep worsening that caused for the greens to move lower.

The Europe started to gain more confidence with hopes that the European Central Bank is going to remove the quantitative easing.

The pair climbed upwards reaching 0.9% near the mark 1.1080. The price was cut into the downtrend sloping line moving close to the support region 1.0990.

Further support is found alongside the 10-day moving average approaching the 1.0940 level. The target resistance can be spotted at 1.1299 touching its November peaks. Moreover, the momentum was positive since the moving average convergence divergence (MACD) histogram formed a crossover signal to buy. This is the result of the spread that crossed over the 9-day EMA of the spread.

The histogram shifted from negative to positive area indicating a buy signal. It also printed in the black along with an upward sloping trajectory and turns to a higher rate.

The sterling pound’s bulls experienced a very harrowing trading day yesterday after the GBP/USD pair was unable to make any significant progress even after all the other major currency pairs were able to take advantage of the greenback going on backfoot. The cable pair remained within a very limited trading range and was unable to even advance towards its range highs, much less surpass this particular range. Several geopolitical issues has caused the dollar to drop, however, the GBP/USD pair did not have enough fuel for it to actually gain from the dollar losses.

The US housing data fell short of initial market expectations, and this proved to be somewhat damaging for the interest rate bulls who had already priced in the possibility of a June rate hike from the Fed. However, the market was more affected by news that Trump had apparently leaked top-secret information to the Russian government straight from the Oval Office, in addition to reports that Trump has apparently been caught dipping his fingers into a certain continuing investigation. These series of events triggered a massive dollar selloff, and while other major currencies such as the EUR were able to make use of this particular development, the sterling pound barely moved from its original position. The GBP/USD pair only slightly advanced from 1.2900 points and is now placed at just under 1.2950 points and does not look like it could induce a rally anytime soon. This is an indicator of just how weak the currency pair as of the moment and it could only be a matter of time before things take a turn for the worse.

For today’s trading session, there are no expected releases coming from the UK economy although international geopolitical events could possibly dominate the market for today. However, the GBP/USD pair is not expected to exhibit that much volatility given its recent weakness, and the pair should start a rally soon in order to placate any risk of the pair’s current standing taking a turn for the worse.