This is a discussion on Technical Analysis within the Forex Trading forums, part of the Trading Forum category; GBPUSD breaks above 1.5605 resistance, suggesting that the uptrend from 1.4831 has resumed. Further rise could be expected in a ...
GBPUSD breaks above 1.5605 resistance, suggesting that the uptrend from 1.4831 has resumed. Further rise could be expected in a couple weeks, and next target would be at 1.5900 area.Support is at 1.5400, only break below this level could signal completion of the uptrend from 1.5008.For long term analysis, GBPUSD is in uptrend from 1.4831. Further rise towards 1.6000 could be expected over the next several weeks.
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GOLD: Bearish, Pressure Builds On The 1,321.71 Level.
GOLD - With GOLD remaining weak and vulnerable, it now looks to recapture the 1,321.71 level. A turn below here will pave the way for a run at the 1,300.00 level where a breach will set the stage for a run at the 1,270.00 level. Its weekly RSI is bearish and pointing lower supporting this view. On the upside, resistance comes in at the 1,400.00 level, its psycho level. Above here will aim at the 1,444.00 level followed by the 1,488.00 level. Further out, resistance is seen at the 1,500.40 level. All in all, GOLD remains vulnerable to the downside in the medium term.
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European shares: Eurostoxx 600
European stocks plummeted during the last week with the Eurostoxx 600 Index dropping 1%. Eight out of ten industry groups in the benchmark gauge plunged at least 0.2% with basic materials slumping nearly 5% amid decreasing commodity prices. The shares swung between gains and losses on Monday amid growing Japanese economy and declining exports in China. Among best performers on Monday was Balfour Beatty that advanced 5.2% to 2.66 euros to lift industrials after the company said it would close three of its sites in the U.K. U.K. stocks fluctuated between gains and losses during the last week with the FTSE 100 Index decreasing 1.8% to 6,412.00 points. On Monday, the benchmark index continued the trend from the previous week with a slid of 0.3% to trade at 6,392.52, despite the positive data on U.S. jobs and rally in Asian markets. The best performing sector was industrial transportation, which added 2.4% on Monday. The trading volume remained almost unchanged with about 780 million shares per day. German DAX added 0.5% on week to finish at 8,254.68 on Friday.
U.S. Stocks: S&P 500 Index
U.S. shares ended last week on a positive note, capping two consecutive declines, as better than expected employment data came out fading away concerns over the Fed slowing down the stimulus in the nearest future. Americans added 175,000 jobs in May, whereas jobless data was slightly worse at 7.6% compared with the rate of 7.5% in April. The market volatility indicates investors are becoming cautious about the Fed eventually ending the stimulus amid rising concerns over the stock market without the steam. The Dow Jones Industrial Average finished the week with a 0.88% gain at 15,248.12, S&P 500 rallied 01.28%, or 20.82 points to 1,643.38, and the NASDAQ surged 0.38% to 3,469.22 during the previous week’s trading sessions. In the benchmark S&P 500 Index nine out of ten industry groups edged higher with telephone stocks adding 1.94% throughout the last week and consumer staples rising 1.03%. Basic materials was the only group posting a 0.3% weekly loss, as Iron Mountain Inc. fell as much as 15.8% to &28.95, 22% down from its 50-day moving average.
Japanese stocks: Nikkei 225 Index
Japanese shares surged following bullish trade in U.S. stock markets with the Japanese TOPIX Index posting the biggest rally in more than two years. The investor sentiment was bolstered by reports showing that the nation’s economy grew more than forecast and weakening Yen. Japanese first-quarter GDP rose 4.1% on annual basis, beating the 3.5% estimate, while the Yen was at 98.24 per dollar and traded 0.5% down to 129.65 per euro. The broader TOPIX benchmark Index surged 1.4% last week. All 33 groups in the TOPIX index edged higher, while volatility is at the highest level since the earthquake in 2011. The Nikkei 225 Index was 1.9% up on week. The index continued its growing trend on Monday by adding 4.9% to close at 13,514.20 points. Only three out of 225 blue chip companies traded down, while Sharp Corporation jumped as much as 15.2% to 462 yen as Qualcomm agreed to buy one more stake in the company. Meanwhile, Mitsubishi Heavy Industries plunged nearly 6% to 549 yen as Edison intends to press the supplier of steam generators to provide it with additional insurance funds, since one of the generators developed a leak.
Asia Pacific Shares: S&P/ASX 200
Australian shares declined during the last week with the S&P/ASX 200 Index losing 3.8% to 4,781.20 points. The turnover decreased from the week before, reaching AUD 4 billion per day on average. The trading volume was stable at about 750 million shares a day. On Monday, the main Australian index lost 0.9% to 4,737.70 points, as commodity prices declined and the Aussie fell 1.1% versus the dollar. New Zealand stocks traded firmly in red during the week from June 4 to June 7 with the New Zealand Exchange 50 Gross Index closing down 1.6% to 4,439.86 points. During Monday the benchmark index added 0.8% to 4,473.38, erasing the losses from the last week. Hong Kong equities retreated during the previous week with the Hang Seng index dropping 3.7% to close at 21,575.26 points on Friday, while the daily trading volume reached 1.8 billion shares on average. On the first trading day this week, the main Chinese index advanced 0.2% to finish at 21,615.09 points.
EXPLANATIONS
Indexes
- Standard & Poor's 500 Index (S&P 500) or (SPX) - U.S. stock market index consisting of the 500 large-cap shares widely traded on the New York Stock Exchange and the NASDAQ.
- Dow Jones Industrial Average Index (INDU) - U.S. stock market index consisting of the 30 large publicly owned U.S. companies , primarily industrials
- Hang Seng Index (HI) - Hong Kong’s stock market index consisting of 48 largest companies listed on the Hong Kong Exchange
- Japan’s Nikkei Stock Average (Nikkei 225 Index) or (NKY) - Japanese stock market index consisting of the 225 largest companies listed on Tokyo Stock Exchange
- FTSE 100 Index (UKX) - U.K. stock market index consisting of the 100 most capitalized U.K. companies trading on the London Stock Exchange
- DAX Index (DAX) - German stock market index consisting of the 30 largest and most liquid German companies trading on the Frankfurt Stock Exchange Chart
- SMA (20) - Simple Moving Average of 20 periods;
- SMA (60) - Simple Moving Average of 60 periods.
- Correlation - a statistical measure of the linear relationship of two random variables. It is defined as the covariance divided by the standard deviation of two variables.
Indicators
- Industry performance - daily performance of industries within the particular stock market index
- Top performers - companies within the particular stock market index that showed best or worst daily performance
- Performance - relative historical change of stock market index value
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Did I say normal yesterday? Well maybe it’s the new normal with AUD/JPY falling by 4% at one stage during the day and general volatility remaining quite high. The focus remains on the crosses with the AUD and the JPY headed in opposing directions but flows across all pairs are at extreme levels.
The previously strong correlation between US yields and USD/JPY seems to have completely broken down and this is making market predictions even trickier than usual.
Chinese markets are closed today and the only economic data of note is the Japanese machinery orders which normally wouldn’t get a mention but with present volatility so high, it doesn’t take much to get this skittish market moving.
USD/JPY was capped yesterday by fairly solid resistance near 99.00 and the subsequent collapse will have taken a lot of people by surprise. Last week’s lows at 95.00 are the main downside target and I’d expect resistance levels to move a bit lower, perhaps near 98.00 now.
AUD/JPY stalled finally at 90.00 after a 4% intraday fall and the technical target there is a 61.8% retracement level at 89.35. I prefer to buy dips in line with the medium term up-trend.
EUR/JPY is trying to form a topping formation in my view and I prefer to sell rallies back towards 130.00 now with a target at 125.00.
EUR/USD is expected to run into heavy Sovereign offers between 1.3325/50 and further gains might be difficult in the short-term.
Cable remains well bid but buying dips remains the preferred play here whilst EUR/GBP remains fairly well glued to .8500 levels.
AUD/USD broke below important support at .8390 which should increase bearish momentum overall but the sharp rebound from overnight lows brings this into question. I remain of the view that this sell-off is vastly over stretched and I’m still hoping for an exhaustive sell-off towards .9250 to initiate medium-term longs.
Good luck today.
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Summary:*The USD index lost additional ground, and what is worse, it did so by selling-off from early Asia until the end of the NY trade. The prospects of recovery for the USD are still far from being upgraded, with the index still looking vulnerable to further downside until next demand is faced at 80.50. In general, though, the market continues to lack a decisive direction until the FOMC next meeting on June 18.*Simplified Supply Demand Table*
The table below includes updated supply/demand levels as well as commentaries on the current outlook of the pair. The table is updated on a daily basis after the NY close. The levels will help trading decisions for intraday, swing and positions traders.
**RBR = Rally-base-rally*
**RBD = Rally-base-drop
**DBD= Drop-base-drop
**DBR= Drop-base-rally
** Refer to footnote for further information on supply/demand analysis
Supply Demand Charts and Analysis
Below readers can graphically*identify supply and demand areas registered in our daily supply/demand table above. *
1 - USD index
2 - EUR/USD
3 - GBP/USD
4 - USD/JPY
5 - AUD/USD
Good luck everyone!
Note to all readers
1 - Note every timeframe has an area of supply and demand, however, in order to keep levels reliable and active for most of the trading day, we have decided to only take levels from the 30m/H1 charts and above in order. Bear in mind, the higher the timeframe, the higher its reliability, thus also the reason why anything above 30m/H1 offers good value for the reader. Besides, the smart money aka large institutions tend to use these larger timeframes to enter sizeable positions.
2 - Once price reaches a demand/supply area, an imbalance between buyers and sellers occur, and one side takes temporary control with price reacting, initially, in favor of the dominant side. If the zone in the table states "fresh" that implies price is likely to respect the area and move away from it quite fast. If the zone, on the contrary, has been tested in the past and absorbed partially, chances are that subsequent tests will probably show weaker pullbacks as the imbalance between buyers/sellers (bids/offers) is reduced.
3 - If previous fresh supply/demand is not penetrated in its entirety, meaning unless the table states "100% absorbed", the levels is still valid. Only when the "100% absortion" occurs, you will expect price to seek the next area of supply/demand.
4 - RBD (supply) or DBR (demand) are the ideal combinations to look for as it implies one is buying cheap/selling expensive at wholesale price at the extreme of the curve. It is not suggested to risk entries in the middle of choppy markets.
5 - Trade with the trend for higher probability. We are helping you by giving the uderlying bias of the market, which should be taken in due consideration. While supply/demand levels are likely to work in both directions, with and against the trend, one increases its odds by sticking to the dominant trend. What one should avoid by all means is entries against dominant trends in the middle of choppy markets.
6 - The column "data to watch" provides traders with a more accurate timing as to when these supply/demand zone may come into play, barring other unexpected catalysts.
7 - All supply/demand areas from 30m time-frame up are taken into account, pre-analyzing other critical components such as strong take off from origin, little time spent at the level, fresh area, trade bias. However, readers should still treat the information at their own discretion, previously validating whether or not enough profit margin exists to achieve desired risk reward, always noting where next supply/demand areas are.
8 - The analysis intends to dissect for the reader at FXstreet.com where large banking institutions have been recently buying and/or selling a particular pair and what is the likelihood of these activity continuing to show up at that particular level. Note no conventional technical analysis derived from the prices was conducted.
9 - No entry/stops/profit target levels are given, as the intention of this report is to purely suggest where large institutions aka the smart money - insiders and better informed speculators - are most likely to be actively selling or buying. To learn more about supply and demand*visit Sam Seiden's articles and webinars.
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EUR/USD - Euro / US Dollar
Resistances: 1.3335 - 1.33 - 1.3285
Supports: 1.3185 - 1.323 - 1.326
Resistances: 1.025 - 1.0215 - 1.0185
Supports: 1.014 - 1.015 - 1.0165
GBP/USD - British Pound / US Dollar
Entry: 1.566
Stop: 1.563
Resistances: 1.58 - 1.57 - 1.5685
Supports: 1.5535 - 1.557 - 1.5635
Resistances: 0.852 - 0.8505 - 0.849
Supports: 0.843 - 0.844 - 0.847
Resistances: 0.94 - 0.935 - 0.9305
Supports: 0.92 - 0.923 - 0.9255
Resistances: 0.9655 - 0.962 - 0.9575
Supports: 0.933 - 0.9415 - 0.9515
Resistances: 1.239 - 1.2355 - 1.2335
Supports: 1.224 - 1.2285 - 1.2305
Resistances: 1.364 - 1.3595 - 1.354
Supports: 1.3435 - 1.3455 - 1.3505
Resistances: 1.4125 - 1.4045 - 1.396
Supports: 1.376 - 1.3845 - 1.39
Resistances: 97.75 - 97.3 - 96.95
Supports: 94.9 - 95.7 - 96.2
Resistances: 129.9 - 129.35 - 129.05
Supports: 126.2 - 127.3 - 127.95
Resistances: 153.4 - 152.4 - 151.8
Supports: 149.4 - 150.1 - 150.85
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Several words about the EUR/USD future.
Resistance (daily close) : 1.3182, 1.3364, 1.3590 and 1.3778. After that 1.3958, 1.4186 and 1.4400. Break of the latter will give 1.4490, 1.4692
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Current level - 1.3357
The uptrend here is absolutely stable and intact and my outlook is bullish, for a rise towards 1.3430 and 1.3510. Initial intraday support is projected at 1.3320 and crucial on the lower frames is 1.3264.
__________
1.3430 1.3510 1.3510 1.3710 1.3320 1.3264 1.3174 1.2950
Current level - 94.73
The consolidation pattern above 95.00 lows is already over and the outlook here is bearish, for a slide towards 93.68, en route to 92.70. Intraday resistance is projected at 95.10, followed by the crucial 96.15.
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95.10 96.16 99.00 102.50 93.68 92.70 92.50 90.00
Current level - 1.5680
Intraday static support is projected at 1.5620 and trading takes place above that level, the outlook here will remain bullish for 1.5760, en route to 1.5850. Crucial on the downside is 1.5519 low.
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1.5702 1.5760 1.5850 1.6000 1.5620 1.5519 1.5519 1.5270
June 13 BUY MKT @1.3360 1.3260 1.3500 --- June 13 SELL MKT @94.70 96.20 93.00 --- June 13 BUY MKT @1.5680 1.5520 1.5850 ---
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Several words about the EUR/USD future.
Resistance (daily close) : 1.3182, 1.3364, 1.3590 and 1.3778. After that 1.3958, 1.4186 and 1.4400. Break of the latter will give 1.4490, 1.4692
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NZD/USD: Daily
Long-term trend traders, huddle up! NZD/USD seems to be presenting a good short play as it is starting to retrace to a very significant broken support level. Remember, whenever price passes through a strong support level, that level normally becomes resistance. In addition to this, the level also lines up with the 50% Fibonacci retracement level and the .8200 major psychological level!
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