Daily Forex Report

US DOLLAR TECHNICAL ANALYSIS – Prices rose as expected after putting in a bullish Piercing Line candlestick pattern. A break above range resistance at 10706 targets 10727, the December 19 high, followed by a rising channel top at 10750. Alternatively, a move below range support at 10646 exposes the channel bottom at 10631.

S&P 500 TECHNICAL ANALYSIS – Prices are testing support at 1828.14, the 23.6% Fibonacci retracement. A break downward initially exposes 1815.18, the 38.2% level. Near-term resistance is at 1849.10, the December 30 swing high.

US DOLLAR TECHNICAL ANALYSIS – Prices rose as expected after putting in a bullish Piercing Line candlestick pattern. A break above resistance at 10719, the 23.6% Fibonacci expansion, targets the December 19 high at 10727 and a rising channel top at 10746. Near-term support is in the 10636-46 area, marked by the a horizontal pivot and the channel bottom.

Dollar Ready to Break, If the NFPs Can Live Up to the Hype
The stage is set. The US dollar has worked itself into a position where it is easily susceptible to volatility just in time for the December Non-Farm Payrolls (NFPs). Yet, forcing a breakout – much less generating a meaningful trend – may be more difficult than our contrarian readings would insinuate. Looking to volatility measures for the benchmark currency, we find the medium-term FX Volatility Index is hovering at its lowest level since November 20. More specific to the benchmark dollar, the rolling 20-day (one trading month) Average True Range (ATR) on the Dow Jones FXCM Dollar Index (ticker = USDollar) is a sparse 36.3 points. That is the lowest activity level for the currency since May 2002.

Extremes are severe but temporary states. Just as extraordinary periods of volatility settle as they revert back to a historical mean, extreme levels of inactivity beget breakouts and larger price swings. Pairing the current backdrop to one of the most recognizable, market-moving pieces of event risk seems the equivalent of dropping a lit match into dry tinder. Yet, over the past months we have witnessed just how resistant the markets are to returning to ‘normal’. For the December employment data, the watershed moment has already been realized. TheFederal Reserve has already taken the remarkable first step to decelerate its immense QE3 stimulus program at the December 18 FOMC policy meeting. That was the objective that many fundamental traders were trying to ascertain from the labor trends.

Though it is a very early first step, the change in tack by the US central bank is still critical to capital markets and the dollar. If the jobs statistics support expectations of a steady path of belt QE belt-tightening moving forward, it can bolster market rates and thereby raise the dollar’s profile. The more severe impact though would come alongside a tremor of general fear throughout the financial markets. If investors begin to worry about record levels of leverage, exposure to risky assets, low rates of return and tepid participation; liquidity can seize quickly.

Bullish candlestick formation and release from the correctional level of 76.4% -0.8231 allowed the pair to perform a U-turn in favor of the New Zealand dollar and start the growth of quotations in the direction of correction level 100.0% -0.8470. Education bearish formation allows traders to expect a reversal in favor of the U.S. dollar and a fall in the direction of the pair Fib 76.4% level. Securing quotations under correction level 76.4% increase a couple's chances for continued depreciation towards the next correction level 61.8% -0.8082.

Without education bullish candlestick formation quotes performed reversal in favor of the New Zealand currency and began to rise, performing over consolidation correctional level of 61.8% - 0.8295 . As a result, growth continues in the direction of the next correction level 76.4% -0.8440. Education bearish reversal formation will allow couples to expect in favor of the U.S. dollar and a fall in the direction of 61.8% Fib level. Securing of the pair below the 61.8% correction allows traders expect further fall in the direction of the correctional level of 50.0 % -0.8178.

The Japanese Yen took the forex world by storm as it rallied against all major currency counterparts, finishing the week at monthly highs versus the US Dollar and Euro. A busy economic calendar ahead and a build in FX volatility prices points to another big week for the Japanese currency and broader markets.
Price action reminded us that nothing can go up (or down) in a straight line as the USDJPY moved virtually tick-for-tick with the S&P in retracing some of their recent gains. The critical question becomes whether this is merely a correction within a much larger USDJPY and equity market bull market or the start of a larger Japanese Yen and ‘risk’ reversal.
We see several key factors that suggest the JPY may yet rally to fresh highs versus the Euro and US Dollar. Yet the coming week’s US Federal Open Market Committee (FOMC) interest rate decision and Japanese Consumer Price Index (CPI) Inflation data may set the tone for Japanese Yen moves through the foreseeable future.

US DOLLAR TECHNICAL ANALYSIS – Prices put in a bullish Piercing Line candlestick pattern above support in the 10656-61 area, marked by the bottom of a rising channel set from November and the 23.6% Fibonacci retracement. A break above initial resistance at 10718 – a horizontal pivot – targets the January high at 10756 and the channel top at 10779. Alternatively, reversing below support exposes the 38.2% Fib at 10602.

Important Points:
US Dollar Setup Hints at Upcoming Recovery
S&P 500 Testing Pivotal Chart Support Cluster
Gold Prices Signal a Reversal Lower is Ahead

Browse by EUR / JPY and the forecast for January 30.
Intraday mood this pair generates stub downward wave of January 23, part of a larger trend in the medium wave from 27.12 last year.
Yesterday exceeded expectations. The outbreak of the resistance zone downward wave still selling far calculated support area turned into a resistance zone.
Since the end of the day yesterday, as part of the newly formed downward intersessional waves upward correction is formed, the fact that closure will mean a continued fall within the trend.
During the day, expect upward movement spirit at least in the first half of the day . Swipe lifting a pair of quotes expect not far above the resistance zone.
Formation of the rising structure over time can last as no more than one trading session, and take several.
After completion of the correction forward change of direction and a pair of continuation of the main trend.
At the time of analysis, quotes are trying to push the nearest cross resistance zone
Support area:
- 139.25/05
- 138.60/40
Resistance zone:
- 139.75/90
- 140.30/50
Above in the day did not expect .
Trading recommendations : Dominates bearish upward correction . Transaction to purchase with caution , capacity is limited, do not recommend for beginners.
Price reaches the resistance zones suggest the formation of track signals used by your trading systems for sale motocross.

The Japanese Yen made a big lurch forward on compounding fears of slowing growth and emerging market crisis.
- A further deterioration in investor sentiment will help the Yen breakout of its recent triangles.
- Have a bearish (or bullish) bias on the Yen, but don’t know which pair to use? Use a Yen currency basket.
The Japanese Yen finished the week as the second best performer as evidence mounted that market participants have started to engage a more negative outlook into the near horizon. Emerging market troubles mounted for a second week, although after several desperate measures by central banks across the frontline developing world (Central and Southeast Asia, parts of Africa and Latin America), the Yen’s gains were focused elsewhere.
Throughout January, emerging market currencies like the Argentinian Peso, Russian Ruble, and South African Rand were getting punished by investors as the process of the Federal Reserve winding down QE3 started to provoke a more concerted reversal of “hot money” flows. With no major Japanese data on the calendar this week, our main focus will be on the continued unwind of these hot money flows. Capital flight bodes well for the Yen as the month of January proved.

Crude oil has extended its recent declines following a disappointing set of US ISM manufacturing data,which helped trigger another bout of broad-based risk aversion. The print of 51.3 was the lowest in six months and well below economists’ expectations for a reading of 56. Newswires suggested the figures may have added to investors’ concerns about the pace of the US economic recovery, which was spurred by some weak economic data for December.
Investor sentiment remains highly vulnerable to negative news-flow due to fears over emerging markets and the potential effects of Fed ‘tapering’. Dovish rhetoric from Fed officials, Lacker and Evans, who are set to speak over the next 24 hours may help ameliorate risk appetite, which in turn could help support growth-sensitive commodities like copper and oil.
The ramifications of such a scenario for precious metals is somewhat clouded. On one hand, a dovish Fed may fuel recovering anti-fiat demand, boosting gold and silver. On the other, if a delay in stimulus reduction boosts risk sentiment, that may drive US Treasury yields higher, thereby increasing the opportunity cost for owning metals and sending prices lower.

The U.S. dollar fell slightly against the euro at auction on Wednesday , February 5 , as conflicting economic data prompted investors to pause before an important employment report this Friday , and before the decision of the ECB 's interest rate , which will be announced today.
Ended trading in favor of the euro, which strengthened against the U.S. dollar by 15 points, the volatility was 56 points.
Fundamental analysis:
According to the company Markit, composite Purchasing Managers Index PMI for the euro area in January of this year rose to 52.9 points from 52.1 points in December.
Activity in the U.S. non-manufacturing sector in January and continued growth. According to the Institute for Supply Management ISM, PMI PMI for unproductive U.S. in January rose to 54.0 points against 53.0 points in December. Economists expected the index to rise to 53.5.
According to Automatic Data Processing Inc., The number of jobs in the private sector in the U.S. in January increased by 175,000. Economists predicted that in January the number of jobs will increase by 189,000 .
Technical analysis:
The pair continues its lateral movement in a narrow price range. Thanks to a new high yesterday , short-term upward price channel remained . The lower boundary of the channel is located at a minimum of 3 February 1.3476 and 1.3498 low yesterday . The upper boundary of the channel extends from the yesterday's high 1.3554.
1.3542 area is still inaccessible to customers. Yesterday's test it led only to an increase in short positions and return to the pair's trading range. Break of 1.3542 may severely impact on short positions , which will increase the EUR / USD at 1.3576 area , and then test the base of the 36th figure- 1.3607.

On Tuesday, the currency pair USD/CAD traded with a positive character, bulls slowly gaining momentum, restoring the upward movement. On the daily chart we can see an upward trend, with the previously formed a bearish correction that appeared after the price reached the four-year high (1.1223). Now we are seeing the market recovery process, the bulls returned after a short stay in the trades, increasing their positions. Development of the plot for the next trading days may be so- it's possible we will see the potential on the side of the bulls, which will show us the insatiable interest with the gradual formation of pulses up to the level of 1.1223. Today the economic calendar traders should expect a number of important economic news from the U.S. to give a speech, Fed Chairman Janet Yellen.

Key levels
Resistance Zone : 1.1120, 1.1223, 1.1300
Support Zone : 1.0980, 1.0900, 1.0810

Buying a pair of recommended at a price above 1.1100 with the prospect of running to around 1.1223.
Sales for the pair recommends clear after fixation under level 1.0980 with the prospect of running to around 0.0900.

In late January, the International Monetary Fund improved its estimate of global economic growth in 2014. The main growth, according to officials of the IMF, had to demonstrate the developed economies, primarily the United States, Japan, the leading countries of the Eurozone. These expectations have played a significant role in the recent increase in rumors about the cooling of the Chinese economy and the related risk management in developing countries. Investors aggressively pushed to reassess risks and opportunities in favor of developed economies. These expectations are realized including that against the background of improving macroeconomic indicators in developed countries will begin a gradual tightening of monetary policy, which generally increase the attractiveness of their investment and capital inflows in general. But is it really? How does the IMF forecast? And here begin strangeness. Industrial production in the euro area, according to published data on 12 February, falling below expectations, falling to 0.5% in annual terms, trade balance unexpectedly reduced. Sentiment index in German business confidence falls to the level of 55.7 points, ZEW business expectations index for the euro area as a whole falls to a value of 68.5 points. Bundesbank voiced a possibility of return to the program LTRO, the ECB official Courier-about the possibility of negative rates, and the Eurozone as a whole is under threat of deflation. The situation clearly indicates that the Eurozone economy is in need of measures to stimulate. As will be realized economic growth forecast ? Maybe growth begins in Japan? Neither. Change of GDP in annual terms, the main indicator of the economy, was only 1%, GDP growth in the 4th quarter of 0.3%, well below the forecast of 0.7%, the index of business activity in all industries went into negative territory and was -0.1%. Orders in mechanical engineering and business activity index in the services sector have gone into negative territory. Lending decline in annual revenue per employee for 2 years Abenomiki decreased by 20%. Only increases the monetary base. In such circumstances to achieve the projected growth? A similar situation in the UK. Published this week as data economy Albion clearly indicate that economic growth under serious threat - an unexpected rise in unemployment to 7.2% value growth slowdown the number of employees, and most importantly - reduction of the Consumer Price Index, which jeopardizes the growth of inflation and moves prospects of rising interest rates later this year.

AUD/JPY retraced from the resistance level of 92.00 as the investors are eager to buy the safe-heaven JPY and sell risky AUD early on Monday; the cross set the intraday low at 91.57, but managed to reverse to 91.66.

Dull week ahead for AUD/JPY
AUD/JPY finished Friday and the whole week nearly unchanged as AUD weakness was compensated by JPY weakness. Typically, JPY is rising when AUD is weakening if the movement is caused by risk sentiments. This time it’s different and it means that some other forces were at work. From the fundamental point of view we have a quiet and even dull week both for Aussie and Yen (the only interesting report - Japanese CPI - is published on Friday). So it looks like boring consolidation and technical play is all we can count on. The closest resistance comes at 92.00. The support is seen at 91.50 and followed at 91.20.

Key Levels For AUD/JPY

Today's central pivot point can be found at 92.07, with support below at 91.72, 91.47 and 91.12, with resistance above at 92.32, 92.67 and 92.92. Hourly Moving Averages are bearish, with the 200SMA at 92.10 and the daily 20EMA at 91.71. Hourly RSI is neutral at 40.

Crude oil is exhibiting signs of a downtrend as prices have moved below their 20 SMA. This follows on from a Dark Cloud Cover formation on the daily that warned of declines ahead. Additionally, the rate of change indicator has shifted into negative territory, signaling building downside momentum. Following the daily close back below the $102.00 level a bearish bias is offered with an initial downside target of the psychologically significant $100.00 mark.

On the other side in bullions We remain on the lookout for a shift to a downtrend for gold on the daily. With resistance at 1351 keeping the bulls in their pens for the time-being, further near-term gains look like a bit of a stretch. The emergence of a Dark Cloud Cover formation is a warning signal, however it would be too soon to suggest a bearish reversal given prices remain within their upward trend channel and above the 20 SMA.

In white metal a downtrend has emerged for silver signaled by the 20 SMA and ROC indicator. Shorts are preferred on a break below former resistance-turned-support at $20.50, which would open up the prior range-low at $19.00.

Get More Information for other Commodities here- MarketLive365.com

The March FOMC minutes highlighted a noticeably more cautious tone among policymakers, who pushed back against the recent interest rate elevation in the United States, hurting the US Dollar. Citing the market's interpretation of the economic forecasts as too optimistic for the purported interest rate hike path, the minutes released yesterday were not the hawkish panacea the US Dollar was looking for.
The forex economic calendar is heavier today, and I'll be kicking off coverage of the GBP Bank of England Rate Decision at 06:45 EDT/10:45 GMT in the DailyFX Live Trading Room. Join for a discussion of trading setups in GBP-based pairs.

Shared by Marketlive365.com

USD/CHF is trading with a neutral character. On the daily chart we can see a long downward trend of gradually increasing interest prevails. As previously predicted, the bulls have formed another correction, sliding the bears up to the level of 0.8861, where the price groped resistance and restore the original motion. Now, after a series of impulsive movements, bears reduced fervor, forming double-digit market battle. Development of the plot for the next trading days may be so- it's possible we'll see the ambiguity before passing mark 0.8800, where the market from time to time will join the bulls. If the price still be able to cross this mark with a growing interest in short positions , then we can assume further downward movement until preformed minimum 0.8698. Key resistance levels Zone is at 0.8900, 0.9000 and 0.9130 while support level are at 0.8800, 0.8700 and 0.8567 downside.

Trading Signals - Buy USD/CHF of recommended at a price above 0.8835 with the prospect of progress to the level of 0.8900.
Sale pair is recommended for less than 0.8800 with the prospect of running around to 0.8700.
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