Daily Market Analysis from ForexMart

The Australian dollar closed higher than the U.S. dollar during Tuesday session. Investors responded to the raising concerns in U.S. with lower U.S. Treasury yields, feeble U.S. housing data and a lesser possibility for a Fed rate hike in June. The overall direction of the pair will depend on the Treasury yields. Traders reacted pessimistically to Westpac Consumer Sentiment dropping up to 1.1.%.

There are no major U.S. economic reports to be released today. Traders continuously keep an eye on problems with Trump regime and they have the chance to react to the most recent weekly inventories data of U.S. Energy Information Administration.

The main trend is directed downward as shown in the daily chart. The pair is trying to move higher from the .7329 low on May 9 although the momentum remains the same. To reverse the trend, traders need to impede the short-retracement zone between .7442 and .7469.
Traders should also look out for the resistance level as a strong resistance region is formed at .7454 with major 50% level. The closest support resides at .7384 key Fibonacci region followed by .7329 down below.

The current price level set at .7419 and stays between the resistance and support levels which means that traders have uncertainty and expected volatility in the market.

If buyers try to oppose the trend, the next psychological would be at .7443 and .7446 region then moves to .7449 and .7454 and will most likely gain momentum at .7454 towards the next target at .7469 level. The .7469 Fibonacci level at .7469 would be the turning point for the next downtrend towards .7501 angle.

Underneath, the initial support target would be at .7389 uptrend angle followed by a major Fibonacci level at .7384 and lastly towards the .7329 as the probable bottom support angle. However, if the market fails to attain this level, there is a high possibility for a breakout at .7359.

Until buyers return in the market and exceed the .7469 level, there will be least resistance and rallies will be fruitful in the market. This will affect the price trend whether it will be reversed or not. Currently, the market gives off a neutral stance.

The Australian currency experienced a volatile session yesterday due to an initial shot higher with gold. But decided to sell off as the market needs for another leg found at the 0.74 handle, the support was found but rebounded.

The market appeared to be slightly mixed-up as of the moment and attempted to estimate the risk of the political uncertainties in Washington DC.

Based on a longer-term perspective, the market needs to maintain a bullish attitude only when the gold markets engage in the rally. It remains to have lots of noise though, a smaller position would be better while the Aussie continued to accelerate.

Meanwhile, charts showed some activity of buying on the dips which could be a good idea in trading in the market.

The level below 0.74 must provide a massive support because a breakdown under this range will generate a negative signal. Consider the potential gap within the upward bias, so it is advisable to hold for small positions on near-term charts generating short-term gains.

In case that we cut through above the mark 0.75, it will favor for a longer-term position. In this point in time, riding the market would let you experience emotional highs and lows.

As indicated in the previous charts and sessions, making money is easy in both directions but the market is currently choppy. It does not offer any signs as of now, causing the participant to endure difficulty in driving the market.

The national currency of Britain climbed higher as the data of retail sales presented stronger figures beating expected result.

The level 1.30 contained some amount of psychological significance. A break out on top of it provides signs of bullishness. With that being said, the market is expected to move higher on a longer-term however the overall place appeared to be complex.

There is a likelihood that the market will trail upwards hitting the region above 1.3450.
The stronger statistics of the retail sales could be linked on some side of inflation because the figures and U.K suddenly gained greater strength.

We could still experience pullbacks occasionally and it should provide buying opportunities intended for longer-term traders.

A huge increase throughout the day indicates a bullish sign while trends could possibly break and when it happen, the market may need to take some time to rest.

The downtrend is over for the GBPUSD however, plenty of noise are needed to beat amidst the current range together with the mark 1.3450 which requires patience and diligence.

The USD/CAD pair continues to exhibit a very steady trading manner during the previous session and seems to be largely unaffected by the currently very high volatility levels in the market. In spite of the recent turmoil affecting the US government and a spike in oil prices, the loonie seems to be unaffected by this and remains trading on both sides of 1.3600 points in a very choppy price action with no indications of a possible change in direction.

The recent surge in oil prices has kept the USD/CAD pair buoyant, and this is why the currency pair has stayed within the reach of 1.3550 points. The pair’s consolidation is expected to continue until the next few days since oil prices have already increased in the short-term. Meanwhile, the greenback could possibly backfoot across the board since the possibility of a June Fed rate hike has dimmed somewhat. If this indeed happens, then the 1.3550 range will become a very critical region to surpass and until the USD/CAD pair goes past this range, then it can be safe to say that the pair’s uptick is most likely to remain in the short-term. Otherwise, the currency pair could possibly revert to its previous range and could resort to a bearish consolidating price action.

For today’s session, the Canadian economy will be releasing its CPI data and retail sales data, both of which are expected to induce volatility in the pair’s price action.

The New Zealand currency experienced a volatile session amid Friday trades as it broke on top of the 0.69 handle. A grasp to the level 0.6950 was highly resistive which is better than all the range for the previous weeks.

A break on top this region is considered significant looking forward through the top of 0.70 mark, this also allows the market to drive higher.

Moreover, the market would likely maintain its volatility and choppiness. The kiwi was highly sensitive against the risk appetite which appeared to be unpredictable at this moment. With that being said, the thought that the NZD will be one of the complicated currencies to trade is possible. The “risk on” sentiment has returned in the market favoring the profits for the buyers.

Moreover, the market will remain choppy and volatile for the next hours and the 0.6880 region below contains a massive support.

The “buy on the dips” will further extend, however, headwinds on top of it are within reach. In this case, the market has to provide lots of trading opportunities intended for the scalpers but the short-term traders will remain to draw attention towards this.

There will be some struggle that longer-term traders will experience, in order to search for a suitable position. Therefore, holding a trade for a lengthy period is difficult as there could probably some real size ongoing.

During the Friday session, the pair GBPUSD remarkably did well since an extreme and rapid price decline occurred on Thursday. While an uptrend is tested, however, a turnaround was carried out promptly.

As the traders calm down, the market eventually break out in the upside hitting the top of the 1.30 region. In the previous trades, a renewed highs were formed and the Britain’s currency would likely look forward through the 1.3450 area that has consolidated in the longer term.

A break on top of the range 1.30 seems significant and the flash crash happened on Thursday still not clear which brought fears to many people. Moreover, the uptrend line amid that sudden drop matters a lot and it appears that the 1.29 mark can be the acting basement of this market.

The choppiness was still expected to continue but the market may indicate a bullish attitude.

The pullback eyes some support within the level 1.30 but a breakout towards a fresh peak would trigger a buying behavior.

The GBP attempted to change its general trend in the upside which could go a long way throughout establishing trend confidence.1

In addition, the uptrend will continue since the moving averages drove to the upside and selling is not an option at all. While a move forward would pave the way for the “buy on the dips”.

The U.S. dollar against the Japanese yen broke in the upper than stabilize the currency pair during the Friday session. This indicates that the market had adjusted with the minimal risk this weekend which is a positive thing.The trading has been strong which is being monitored by traders and they try to bring the price higher than the 112.50 level. Although, as of the moment, the trend is currently in accumulation. If the market could break higher than the 112.50 level would give a bullish tone in the market and would move the price continue to 114 level. This would even go higher when the Federal reserve decided to bring the interest rates higher and this possibility of raising rates caused selling early this week.

The U.S. jobless claims declined which is one of the major directives of Federal reserve that would most likely impede the interest rate hike. Others would want to be dovish or totally forget about it but it is not plausible to do so as the U.S. has eased monetary for the past years and is not exemplifying expected results. On the other hand, the employment is being tight indicating the strengthening of the economy which would bring the interest rates higher as expected.

The USD/CAD pair has been exhibiting a very disappointing price action ever since it was able to test its range highs at 1.3800 points during the start of this month. The currency pair has been suffering from the repercussions brought about by the greenback’s weakness and the strength of the loonie which was mostly due to an oil price surge. This oil price increase was able to cover up the actual occurrences within the Canadian economy and has provided enough leverage for the loonie to advance, and this is why the USD/CAD pair has been consistently dropping value during the last two weeks.

As of the moment, the currency pair is now within a very critical region of 1.3500 points, where it continues to look very weak. The weakness of the greenback has been the dominant market trend as of the moment, with the dollar getting adversely affected by Trump’s political woes, which in turn has affected the US economy as well as its monetary policy. The market had initially priced in a rate hike this coming June, but with the recent slew of dismal events, it looks like the market’s players might have to put off this interest rate hike at least for now. In addition, the rising oil prices has helped the loonie to retain its positive image amidst Canadian banking concerns, wherein the majority of Canadian banks have been given the thumbs-down by ratings agencies. The loonie strength has also helped to offset the concerns surrounding the HCG and the housing sector.

For today’s session, there are no major news releases coming from both the US and the Canadian economy, although some Fed officials will be making statements today with regards to the US monetary policy. All these are expected to add downward pressure on the USD/CAD pair and cause the pair to test its support levels.

The EURUSD attempted to move through the higher region on Tuesday, however, failed to maintain its gain upon reaching the level 1.1268. When the profit taking started the pair was pushed beneath the 1.12 handle.

Meanwhile, the stronger report of GDP and sentiment data buoyed the EUR/USD and the yields turned up in Europe as relating to its American counterparts. Moreover, the PMI readings kept unchanged in the month of May, as the German nation lead the charge that reflects towards a strong growth.

The major pair touched the higher high as it eclipses the prior day high using 5 pips. The resistance is found at 1.1299 level close to November 8 highs and in case the level will be broken, it would lead to testing 1.1365 region near its August highs in 2016.

The support entered the mark 1.1603 around the 10-day moving average. Momentum is slow-moving, seeing the moving average convergence divergence (MACD) print in the black together with a descending trajectory that drives towards the consolidation.

The USDCAD experience volatility during Monday’s session and had an attempt to rally, however, it made a reversal plunging under the region 1.35. The pair is relative to the crude oil markets and received a significant support upon the opening, while the OPEC seems to move nearer the deal regarding production cuts.

Having said that, the greens decline versus its Canadian counterpart which is the proxy of currency traders against the oil markets.

The ability to break down around it will allow the market to reach the 1.34 handle. However, a cut through the top of 1.3550 area will touch above the range of 1.36. This range is significant for the longer-term charts, and a broke within that area enable the market to drive upwards.

The volatile market is expected to continue considering the current condition of the oil coupled with Canada’s housing that brought an impact as well.

Sellers have executed a significant action as well which could give a chance to break 1.3550. But there is no such opportunity to initiate a long move, except that the higher timeframes (daily or weekly charts) could obtain a longer-term signal

According to forecasts, rallies will resume and will be providing opportunities to sell towards a market that experienced a lower grind in the previous sessions. Lastly, a gapped in the upside has to be accompanied by the oil markets that were rolled over.