Daily Market Analysis from ForexMart

GBP/USD Technical Analysis: May 28, 2018

The British pound against the U.S. dollar is moving higher towards the area of 1.3350 in a calm manner during the Monday session. Hence, we can expect a muted Monday session since the Memorial Day and the U.K. has also extended their Spring Bank holiday. Since most major pairs are not active at the beginning of the week, there is very low volatility for the week and less economic calendar for most of the week. The first data to be released will be on Wednesday, followed by Non-Farm Payrolls on Friday. Investors will monitor carefully for any signs that could induce volatility for the week.

The British major pair is trading close to the cyclical lows of 1.3305 at the last week of May after scheduled data for the week failed to support against the greenback. The macroeconomic of U.K. is influenced by two significant headlines including sluggish economic growth and decelerating inflation. The inflation target of 2 percent by the central bank is moving at a faster rate in line with the bank rate. This is due to the inflation-adjusted real wage amid the stale growth in the first quarter of the year. Both actions support the argument of the Bank of England following the bank rate with the forecast of Bank rate hike by 0.25% in February next year referring to the efficiency of money market rates.

Sluggish inflation of the Sterling is not so good as it gives them more time for the BoE before acting on the interest rates. The Bank of England Governor, Mark Carney, and the Monetary Policy Committee (MPC) external member, Gertjan Vlieghe, have the same sentiment when it comes to the monetary policy where they deem the interest rates to go up gradually in the next few years. The bearish trend resumed as exhibited on the daily chart after a period of consolidation at the beginning of the month, but has not yet found a bottom following the previous decline where the indicators showed moderate easing. We should anticipate the support level at 1.3280 / 1.3245 and resistance level at 1.3365 / 1.3400.

USD/JPY Technical Analysis: June 5, 2018

Yesterday, the U.S. dollar swayed sideways and reached the level of 109.50. The next target will probably be the 110 handle given a large whole number. It has shown some amount of resistance recently.

The greenback moved sideways against the Japanese yen during the Monday session, which was highly bullish in the past few days. As expected, the pair formed a hammer pattern on the weekly chart and the pair is likely to rise higher when it breaks the level above. It would probably reach the level of 110 and until it does, I would be cautious before placing a lot of money on it. If the pair declines from here, it would not be easy to short this pair since there is a lot of support found below.

The market will probably be sensitive in regards to trading the pair, given the rising concern on the trade war with the United States. If the market becomes anxious on the trade war, this is likely to affect the market with the greenback have a hard time in general. I think short-term pullbacks would offer a lot of opportunities, which can be seen in the present time. Thus, I would think twice before placing trades at least until a successful breakout on the said level of 110. We should bear in mind that the pair movements will be relative to the risk appetite that is why we should give attention to the stock market especially the S&P 500. Thus, it won’t be easy to work on this pair. If it rallies on the market, then this pair will probably rise higher as well.

GBP/USD Fundamental Analysis: June 6, 2018

The British pound is being traded above the 1.3400 level prior to the upcoming London market session driven by better risk sentiment. The currency has reached new highs this month after reaching as low as 1.3204 on 29th of May. It reached the levels higher than 1.3400. The dollar has further weakened amid better market sentiment which has a big impact on the Sterling Pound. The news on amenability to discuss the possibility of tapering the QE by the central bank could support the currency, yet this still remains on the hopeful list. Nonetheless, traders will probably opt to buy across the Eurozone that could push the pound higher as a consequence. There is a positive action in the previous two trading session in major macro data releases and the U.S. greenback could be on advantage today if the pound falls behind or the macro data from the U.K. turns out bearish.

Traders are looking out for Brexit related news, yet, Prime Minister may delays the publication of the government’s plan until the leader’s summit this month. Let along the upcoming GBP data on London is insufficient to induce momentum, except for a correction to the lower boundary of the channel.

There are speeches expected from the BOE Monetary Policy Committee member Silvana Tenreyro at 10:40 GMT and MPC member Ian McCafferty speaking at 16:00 GMT. Meanwhile, traders will center their attention to the US Trade Balance figures alongside Nonfarm Productivity and Unit Labor Costs for the first quarter to be released at 12.30 GMT. On a technical note, the pair will rise higher and a major breakout is yet to happen. Readings for short-term will give more gains in the future. We can expect the resistance level to be at 1.3420 / 1.3460 and support level at 1.3370 / 1.3335.

GBP/USD Technical Analysis: June 7, 2018

Yesterday, the British pound rose significantly after breaking the level of 1.34. It seems that there are signs of continuing the current trend. There is a massive support found at 1.33, at least in the short-term, which has been an important level more than once.

The British currency shows signs of strength a bit of a relief given the uptrend. The initial target would be above the level of 1.35 but if it can break higher then there is a chance for the price to reach 1.3650. Short-term pullbacks would offer a lot buying opportunities below and it seems that the market is trying to turn around for short-term. There are speculation of dollar shortage because of global liquidity that makes it unstable to be considered for long-term. Yet for short-term, it seems that buyers are leading the trend.

If it successfully turns around then we could break the level below 1.33 to test the level of 1.3250 and potentially reach 1.30. Choppiness would still be a problem that makes it ideal to trade in small positions. Then, once the market adjusted to how we want it to be, we can increase our trades. If the price break above 1.3650, this would be highly bullish and allows the price to further move. In the given rate, I am looking for a “buy-and-hold” strategy. For now, we can expect volatility at the very least in the next few days. The market will probably continue to give emphasis on short-term trades.

GBP/USD Fundamental Analysis: June 11, 2018

The pound/dollar pair continued to trade around the 1.3430 region on the back of the failure to create bullish momentum in the previous week, as it was beaten by the major handle and the markets are waiting for further progress in Brexit this week. Due to the scheduled FOMC rate hike in the upcoming week, the interest rate differential of the GBP and the USD is predicted to move in different directions which could hold the Pound on its starting position and push the British currency into the recent lows. Following the recently rejected Irish border solution, market participants await for further news within this week while the United Kingdom continue to negotiate in looking for the middle ground for the hard-line Brexiteers and the EU leadership in Brussels. Nevertheless, Prime Minister Theresa May was caught in between and trying to find fair solutions for both sides.

The upcoming week is projected to be really busy for the Sterling pound since 4 out of 5 trading session this week brought extreme impact to the UK calendar that could support a high level of volatility for market players. Today has plenty of data for Britain which will be all published at 08:30 GMT, however, the focus will be on the Manufacturing Industrial Production data which is expected to remain unchanged at 2.9%. The US session today appears to be in smooth sailing according to the economic calendar, but traders might deal with the G7 summit blowout, wherein US President Donald Trump leave the summit earlier and depart the US’ support of the G7 communiqué, following a Tweet from POTUS aboard Air Force One heads to Singapore for the Trump-Kim summit.

At the same time, the figures for Average Earnings Index +Bonus (Apr), Claimant Count Change (May), Core CPI & PPI input and Core retail sales in the next three consecutive trading sessions. Moreover, the daily chart indicates that the GBP/USD currency pair corrected higher from the lows of 1.3205 alongside the diverging technical oscillators. On the other hand, the Relative Strength Index (RSI) had an unexpected move towards the oversold area and bounced back to the GBP, which descends to the levels of the beginning of last week. The Slow Stochastic resumed moving in an upward trajectory. The daily chart of the 50-day and 100-day moving average formed a death star crossover, this means that there is an initial downside potential of the Cable pair to break the 1.3300 region prior attacking the area of 1.3200. The upside of the pair is necessary to break back above the 1.3380 to the 1.3450 target, which is the last week’s high.

GBP/USD Technical Analysis: June 18, 2018

The British pound was able to dodge the immediate impact of the rise of the dollar while the euro dropped by two significant points that dominate the market in the previous week. The dollar gained from the rate hike which started by the Fed and the positive outlook of the Fed in the economy.

The hawkish sentiments gave t chance to the dollar to rise and the dollar bulls to plan ahead with two more rate hikes to look forward to. The Fed gives similar signals which still yet to be seen if they would continue the process and they would implement this in a specific period of time later on. We have witnessed that the rate hike would have minimal impact on the market, especially on the pound.

It seems that everything is going smoothly in the UK as the Brexit negotiation starts to advance and there are no signs of risks yet. Hence, the pound maintained its position in the support area despite the strengthening of the dollar and activities in the eurozone. The European Central Bank decided to extend the easing program which in turn, weakened the euro. Although, these things did not really affect the pound as it continues to trade close to the area of 1.32.

There are some strong purchasing in this area, as well as at the level of 1.30. Once this is achieved, the lead will be in the hands of the bulls which is likely to be maintained in short term. It seems that there is also no major event to affect the movements and we can say that the price is in consolidation and persists to be within the range for the day.

USD/JPY Technical Analysis: June 21, 2018

The USD/JPY pair closed higher inside day during the Wednesday session, reflecting uncertainty and expected volatility with a tendency to move up.

The Forex pair also underwent a transition period after the momentum changed to a downturn at the beginning of the week. However, even if the momentum changed, the main uptrend remains solid.

On the other side, there was a short-rally to cover after sellers moved below after a sharp sell-off on Tuesday.

The Japanese yen major pair moved higher on early Thursday with a strong compulsion in purchases from the Wednesday and Thursday highs. Hence, this northward sentiment induces the market to move their positions in the attempt to test the psychological level of 110.859 and the main top at 110.905.

Higher demand for risky assets drove the price action of the pair and losing the Japanese Yen as a safe-haven. On a deeper perspective, the tension on trade war between the U.S. and China is the main impetus of the trend.

The pair is being traded 110.559 and increased by +0.19% or 0.215 at 2.04GMT. It is likely to uphold its positions taking into account rising of stocks and unsettled trade war between the two big nations continues to advance peacefully.

EUR/USD Technical Analysis: June 26, 2018

The euro has slightly rebounded during the Monday session. However, breaking higher than the resistance level gives a strong indication. If the quotation rises much higher and even more if it breaks above the level of 1.17, the market will proceed to move towards 1.18. Short-term pullbacks could open opportunities that we should remember that as well.

There is a massive support found below, around the level of 1.1625 which could continue to attract buyers at the current price value. Considering also that there is also a turnaround in the overall momentum. The market has probably overreacted to the ECB announcement and correction is likely to be behind schedule. Other than that, we should keep in mind that the greenback is having a difficulty because of the potential escalating trade war, which in turn, favors the euro considering that it opposes the dollar.

If the price breaks above the level of 1.18, the market will probably continue towards 1.20 level. Nonetheless, I anticipated a lot of noise in the pair which is already expected. Hence, I would seek for longer-term trades at the moment and consider “buying the dips” in short-term basis to be the ideal strategy.

EUR/USD Technical Analysis: July 2, 2018

The euro major pair began the day at a muted note to slower decline across the Asian session. Yet the downtrend seems to be above the 1.16 as it lacks headlines to drive the price change in the background of political conflicts in Germany. There is an issue on the disagreement between Horst Seehofer and German Chancellor Angela Merkel concerning migration related deal secured in the EU summit. Although the government is steadfast on Horst Seehofer’s offer to resign from office, CSU hardliners are deemed to have attempted to talk with the assertive interior minister to stay.

Traders wait for the official result of a press conference scheduled later this day to find out if both parties will proceed and in case the Horst Seehofer resigns, the CSU would offer a replacement to the support the coalition government. Investors will also wait for Eurozone Manufacturing PMI & Unemployment rate data, at the same time, the ISM Manufacturing employment and ISM Manufacturing PMI data from the U.S. are expected to be published. Meanwhile, the EUR/USD is anticipated to trade within the range between 1.16 and 1.17 during the European session as traders wait for the news on updates from the official press conference and the end result to support Merkel and coalition government that could induce the euro major pair to go back to the level of 1.18. The resistance of the pair would be at 1.1690 / 1.1720 and the support will be on the area of 1.1620 / 1.1600.

GBP/JPY Technical Analysis: July 17, 2018

The British pound rallied a little during the Monday session and reaches the level of 149.50 before apparent signs of exhaustion. Higher than 150 signifies exhaustion in the market with expected resistance. Thus, we could strike on the opportunity to short this pair. It looks like the market has overexpanded and faces strong psychological level above 150.

Although it is still suggested to short this pair in a smaller move, the long-term selling will bring the rates back to 150. A break higher would give the green light to traders in applying the “buy and hold” strategy yet, the strong political tension around Britain could strengthen the Sterling pound for long-term. The pair will continue to chop around and eventually make way for some clarity that the trend lacks as of the moment. For the short term, sellers are anticipated to be present while more sellers will join in the long-term above the trend. Nevertheless, we should keep the possibilities open as it may change anytime. Noise will still be present because of the political tension in the U.K. and global risk appetite. Hence, small trades will be the ideal approach for this market since noise will be the main impulse in overall trading while headlines will likely cause sudden movements in short-term.