Daily Market Analysis from ForexMart

The EUR/USD pair increased up to 1.1068, its highest level reached in 3 weeks after the dollar traded significantly lower after the results of the US Presidential poll showed that Trump went one point higher than Clinton with regards to voters’ intentions. Meanwhile, US macroeconomic releases came out on a positive note after the Markit PMI data for October came out at 53.4, its highest data release for 2016.


In spite of positive US data which strengthens the possibility of an interest rate hike in December, the USD is still in danger of dropping in value during the Tokyo session due to the negative market sentiment with regards to the US dollar. The 4-hour chart for the currency pair exhibits high overbought rates for the technical indicators even though the EUR/USD had a bare minimum of additional 100 pips on a daily basis, which is also an indicator that there is a possibility that the EUR/USD could gain more profit.


The EUR/USD will have to go above its daily highs in order to incur more gains since this is the 50% retracements of its most recent drop in value. The movement of the EUR/USD is expected to slow down during the Tokyo session prior to the FOMC meeting which will determine whether the USD will be able to sustain its current bearish stance.

The GBP/USD pair increased up to 1.2280 points but immediately reverted back to 1.2200 points before closing the previous trading session at 1.2230 points. The momentum of the GBP slowed down after the release of the UK Markit manufacturing PMI data for October which plummeted to 54.3 points from its previous reading of 55.5 points. Market speculators are waiting for the results of the Bank of England’s Thursday meeting even though the BoE is not expected to make adjustments to its monetary policies as of the moment.


However, BoE governor Mark Carney relieved the market on Monday after announcing that the governor will be serving another term in order to help the bank’s economic policies adjust to the effects of Brexit. The technical indicators for the pair have maintained their neutral bearings with the 20 SMA now at 1.2200 and other indicators seen at the positive territory but lacking decisive directional strength.


Market players are advised to monitor the 1.2335 region on the upward territory and its support levels at 1.2170 points since the pair will have to break through any of these levels in order to gain significant directional momentum.

The USD continues to be subject to downward pressure during Wednesday’s trading session due to uncertainties brought about by the upcoming US Presidential elections next week. The USD/JPY pair was unable to maintain its previous levels of 105.00 after a heavy seller resistance within this particular region, causing the currency pair to lose some of its value. Wednesday’s trading session saw the pair remain in the negative territory as the downward momentum for the currency pair continued. Seller pressure also pushed the USD/JPY further below 104.00 and is now approaching the 103.00 trading range.


The USD/JPY pair broke through 103.50 and is well on its way to 103.00. The pricing of the currency pair went over the 100-EMA and is testing the 200-EMA for the pair’s 4-hour chart. Meanwhile, moving averages for the USD/JPY is currently on the downward direction. Resistance levels for the pair are expected to be at 103.50, while support levels for the pair are expected to be at 103.00. MACD indicators for the pair declined, showing seller strength. RSI indicators are now a few pips away from the oversold level which signals a possible downward move for the pair.


If the USD/JPY continues to be subject to downward pressure, then the pair could possible reach its previous low of 102.50. However, there is still a probability that the pair would be able to reach its resistance levels at 103.50-103.80 points.

The AUD/JPY was able to remain in the positive side of the chart as the USD incurred more losses against the JPY and increased pressure on the cross currency pair. The AUD/JPY pair hit session highs at 79.42 points but eventually reverted back to its previous range of 79.10 points.


While the AUD/JPY lost some of its previous gains, the AUD/USD pair increased further and was able to reach its highest range in November after the Australian retail sales data showed a 0.6% increase as compared to September’s data of 0.4%. However, the increase in this currency pair was not enough to outweigh the decrease in the value of USD/JPY.


If the AUD/JPY manages to go over 79.42 could possible lead to a strong resistance level at the 80.00 trading range. If the pair closes the trading session over the zero figure then this could induce more bulls and could possibly cause the pair to go further at 81.52 points. The pair’s support levels is expected to be at 79.00 and could cause a sell-off at the 78.48 and 78.00

The EUR/USD is expected to incur significant gains due to risks that Donald Trump could possibly win the upcoming presidential elections, something that the international market did not anticipate. However, some market players are also saying that the USD would be able to regain some of its strength over a few days and a relief rally would occur should Clinton come out as the winning candidate in the elections. Prior to the opening of the Monday session, Clinton was already cleared by the FBI with regards to her e-mails and this is expected to be good for her campaign and has already caused some currency pairs to open up certain gaps.


The EUR/USD pair has already dropped by up to 70 pips and this is just a sneak peek of what could possibly happen if ever Clinton wins the presidential elections, especially since the market is now anticipating a Clinton victory with Trump’s chances becoming invariably slim.


Market players are expecting that this particular gap in the currency pair will be temporarily covered, while the USD is set to regain some of its lost value during the next trading sessions, especially with the impending presidential elections.

The USD/JPY pair was able to make a small recovery during last Friday’s session after a series of risk-offs which hit the European and American stock market. However, the pair continues to stay in the negative territory and traded within Thursday’s low levels on Friday’s session. The currency pair had a fairly bearish stance after the pair experienced selling pressure above the 103.00 region. Resistance was encountered by USD bulls along the 103.20 trading range where the 200 EMA is also located. The 200 EMA maintained the pressure on the USD/JPY by resisting all possible recovery moves.


The 50 and 100 EMAs for the currency pair decreased quickly, while the 200 EMA maintained its bearish outlook for the session. Resistance levels for the currency pair is expected to be around the 103.50 range, while support levels are expected to come up at the 103.00 region. The technical indicators for the USD/JPY pair are seen to be slightly bearish, with an increase in the MACD indicator showing a weakness in seller positions. Meanwhile, the RSI indicators for the pair is still consolidating within its undervalued regions.


The USD/JPY pair is expected to have its resistance levels at 103.50 if the currency pair would be able to consolidate over the 103.00 region. However, the USD/JPY might again experience a decline if the pair closes the session with a lower value than this particular level.

The USD is expected to increase significantly against the yen during Monday’s trading session as a result of investor reaction to reports that the FBI will be dropping its investigation of US Presidential candidate Hillary Clinton’s e-mails and will not be filing any charges against the Democratic candidate.


This then means that the Monday session is most likely to be a risky day as investors are expected to go on an aggressive USD and stock-buying spree especially after last week’s sell-offs. Investors are also expected to sell their safe haven assets which were bought as hedge against the probability of a Trump victory, which includes the JPY, EUR, and gold stocks. The USD/JPY dropped to its support region located at the 102.799-102.155 range, going down at 102.533. The pair is expected to rally back to at least 104.03 to 104. 383 if the short-term rally for today’s session proves to be strong enough for the currency pair.


Market players are expected to mainly focus on the upcoming elections even with new economic events taking place, after which, the market is expected to shift its focus on the expected Fed rate hike this coming December. These events are expected to induce an upward shift in the value of the US dollar. The Bank of Japan is expected to release the minutes of its latest Monetary Policy Meeting, while the Average Cash Earnings is expected to be released at 0.2%. Minor reports from the US to be released this Monday are the Loan Officer Survey, Labor Market Conditions, 10-Year Bond Auctions and Consumer Credit data.

The stronger U.S. dollar overpowers Australian dollar. Last week, the greenback declined as the polls showed a lead of the Republican candidate Donald Trump against the Democratic candidate Hilary Clinton. Now, it has been reversed. Greenback is anticipated to rise up again as the news regarding Hilary Clinton’s issue with the private email server, while she was still in the position as the secretary of the state, has been cleared. This sudden boost in prices is a great opportunity especially for audacious investors and gain profit to low prices and buy stocks to avail funds. Investors are expected to hedge funds to narrow risks in this situation.


Aussie is considerably a risky asset hence, a bullish trend may not create a big change in the Australian dollar. Yet, the next move of this pair cannot be clearly known compared to other major currency such as Yen and dollar. Traders have to be careful on their next move and there are other pairs that are more stable.


The main concern in U.S. is the presidential election while the price activity of Aussie depends on the AIG Construction Index and the ANZ Job Advertisements report. There are other minor news in Australia namely: the Labor Market Conditions Index, Loan Officer Survey and Consumer Credit. However, these are expected not to have a major influence in trading.


Aussie is in a neutral state today and investors should be mindful that the price activity may change drastically as it might go a sudden dive in response with the news. As the U.S. presidential election gets near, the financial market is still shaky with investors being unsure to take a position prior to the election.

It is expected for the pair USD/CAD to have less volatility for this week compared to other currencies with global financial market shaken because of the much awaited U.S. Presidential election. The results will be accounted shortly after the election. Volatility is highly affected by this election depending on who will the elected winner although loonies remains steady. It sways around 1.3400 and its pricing ranges from 1.3500 to 1.3300 physiological level.


If the Democratic candidate Hilary Clinton wins the election, greenback will most likely as most of the financial market is on her side and responses are positive including the stock market. This could also boost the oil prices which will be advantageous since loonies is cinched with the oil market. This means that this would even out the appreciation of U.S. dollars. Thereby, the pair would remain in a consolidated state and keep within the range.


There is no any major news to be publicized from Canada while the U.S. presidential election remains in the spotlight. For traders who positioned long for this pair could continue to do so while those who opted for the sidelines could still wait until all the risks associated with the election diminishes which is even safer.

The GBP/USD is currently one of the most active currency pairs as of yesterday’s trading session after it plummeted from 1.2500 and settled below 1.2400 points after the most recent news regarding the FBI probe of presidential candidate Hillary Clinton’s e-mails. The GBP/USD is expected to further increase its volatility during today’s session up until the following days especially in the light of the upcoming US presidential elections.


If Clinton manages to win the elections, then could push the USD farther up the positive range and cause the pair to go lower, possibly even crossing below the 1.2300 range. This is highly possible since the sterling pound is not only the most volatile currency as of this writing, but it is currently among the weakest due to complications in the Brexit strategies of the UK government. The ongoing discussions regarding Article 50 might induce more risks and could make the sterling weaker as the discussions progress.


The UK Manufacturing Data is expected to be released during the European trading session, and this is expected to give traders a clearer notion of how the UK manages its Brexit complications. However, the entirety of the market is now monitoring the results of the US elections, and the USD is expected to become more volatile in the coming hours.