Daily News & Market Analysis from FXTimes

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NZDUSD and Chinese CPI Aftermath

Key Points
• New Zealand Dollar climbed higher against the US dollar, and it would be interesting to see how traders react during the coming session post Chinese CPI.
• Chinese Consumer Price Index released by the National Bureau of Statistics of China managed to rise by 0.3% in July 2015 as expected.
• Chinese Producer Price Index declined by 5.4% in July 2015, which was more than the expectation of -5%.
• NZDUSD trading above key resistance areas, suggesting more upsides are possible.

Technical Analysis
The NZDUSD pair enjoyed a decent run towards the upside recently, as the pair moved above the 200 hourly simple moving average. The pair also climbed above the triangle pattern formed on the hourly chart to set the tone for more gains. Currently, the pair is correcting lower and might find support around the 50% Fib retracement level of the last wave from 0.6533 to 0.6637. The mentioned fib level is also coinciding with the 200 hourly SMA and the broken trend line. So, buyers may appear around 0.6585 to prevent downsides.

NZDUSDH1.png


On the upside, the last swing high of 0.6637 could act as a resistance and, and if there is a break above it, the pair could head towards 0.6660.

On the downside, the 200 SMA is a key support area.

Chinese CPI and PPI
Earlier during the Asian session, the Chinese Consumer Price Index, measuring the retail price variations within a representative basket of goods and services was released by the National Bureau of Statistics of China. The forecast was of a 0.3% rise in July 2015, compared with the preceding month. The outcome was as expected, and the yearly rate was above the forecast with a 1.6% increase in July 2015.

Trade Idea
Buying dips around the 200 hourly MA might be a nice option in the near term.

- The FXTimes Team
 

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Dollar Rally Against Yen, Aussie Dollar On US Growth Optimism

The dollar set a fresh 2-month high of 125.06 against the Japanese yen, but strong selling interest defended the critical level, triggering a strong reversal in the pair that fell down to 124.09 before finally stalling.

The failure around the critical figure of 125.00 increases now the risk of a bearish continuation in the pair, particularly if the 124.00 level gives up this Monday. On Friday, the Bank of Japan had its monthly economic meeting, where they decided to leave its policy unchanged.

Also, Governor Kuroda continues to see economic improvement in time, saying that the recent slowdown is temporary. The Governor is still confident inflation will pick up early 2016.

Technically, the 4 hours chart supports some bearish continuation, as the Momentum indicator heads south below the 100 level, whilst the RSI indicator has lost its downward strength, but holds around 44.

uj-10.png


A strong resistance level comes now at 124.45, which means a recovery above it will deny the downside, and favor another test of the 125.00 figure.
Meanwhile the AUD/USD pair closed above the 0.7400 for the first time in three weeks, as the Aussie got help from the RBA and local employment readings this past week.

audusd-10.png


The Central Bank Governor, Glenn Stevens, unexpectedly changed his wording on the currency’s strength, saying that the AUD depreciation has done enough to help economy, whilst the country economy created over the triple of new jobs than what the market was expecting.

The pair however, may open the week with a soft tone, and even gap lower as Chinese exports declined more than expected in July, down 8.3%, whilst imports dropped 8.1%, leaving a trade surplus of $43 billion.

Technically, the 4 hours chart shows that the 200 EMA stands at 0.7440, providing a key dynamic resistance for the upcoming hours, as an extension beyond it, should lead to additional gains.

In the same chart the technical indicators maintain their bullish tone above their mid-lines, whilst the 20 SMA stands at 0.7360, which means that only below this last level the pair can turn intraday bearish, and decline towards the 0.7330 region.
 

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AUDJPY – 91.80-92.00 is Significant Resistance

Key Points
• Aussie Dollar after correcting higher facing an important resistance around 91.80-92.00.
• Japanese Yen continues to weaken and might head lower in the near term.
• The Japanese Gross Domestic Product released by the Cabinet Office registered a decline of 0.4% in the second quarter of 2015, which was a better compared with the forecast of a 0.5% fall.

Technical Analysis
The AUDJPY pair after a decline towards 90.40 support area against the Japanese Yen found support and traded higher. There is a bearish trend line formed on the 4-hours chart, which is acting as a short-term resistance for the pair. Only if buyers manage to clear it, more gains are possible.

AUDJPYH4.png


One encouraging sign for buyers is the fact that the pair is above the 100 and 200 simple moving average on the 4-hours chart.

On the downside, the 100 SMA (H4) could act as a support, followed by the 100 SMA. There is also a support trend line formed on the 4-hours chart.

Japanese GDP
Earlier during the Asian session, the Japanese Gross Domestic Product, representing the monetary value of all the goods, services and structures produced in Japan within a given period of time was published by the Cabinet Office. The market was expecting a decline of 0.5% in the GDP in the second quarter of 2015, compared with the preceding quarter. However, the result was above the forecast, as the Japanese GDP posted a decline of 0.4%. This was disappointing, and cannot be considered on the positive side.

Furthermore, when we look at the yearly change, then there was a fall of 1.6% in GDP in the second quarter of 2015, compared with the same quarter a year ago. Overall, the data was mixed, but weighed on the Japanese Yen in the short term.

Trade Idea
We can attempt a buy trade if the AUDJPY breaks and settles above the highlighted trend line.

- The FXTimes Team
 

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Commodity Currencies Under Pressure Ahead Of Key Macro-Economic Events

The American dollar ended the week mixed against its majors rivals, with investors cached off-guard by the PBoC decision to devalue the Renminbi.
The EUR and the GBP closed the week with gains, but within its latest range, whilst commodity currencies are still under pressure due to record low prices in metals and oil.
During the upcoming days, the US and the UK, the only two economies in route to tighten their economic policies, will release inflation macroeconomic data, which will likely determinate the trends for the week.
Technically the EUR/USD pair closed at its highest in four weeks last Friday, just above the 1.1100 level. Earlier in the week, the pair traded as high as 1.1213, but the longer term technical picture maintains a neutral stance, with the pair trading within a clear range ever since mid June.

eur17.png


The latest rally has been limited by a bearish 200 DMA, around 1.1170 for this Monday, which should continue to attract selling interest in the case of a bullish move. Shorter term, the 4 hours chart shows that the price has broken below a bullish 20 SMA, while the Momentum indicator heads sharply lower below its 100 level, and the RSI indicator also turned lower around 53, all of which supports a test of the 38.2% retracement of the latest bullish run around 1.1075. This financial trading course may be very useful if you are not sure how the RSI indicator works in forex trading.
A break below this last level should signal further declines towards the 50% retracement of the same rally, around 1.1030.
 

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Gold Rises Slowly Ahead Of FOMC Minutes

Spot gold added $2.00 yesterday, holding to its recent gains, but unable to extend its rally as the market entered wait-and-see mode ahead of critical US data next Wednesday.
The commodity advanced on tepid US manufacturing figures, but traded within Friday’s range, settling around $ 1,117.50 a troy ounce by the end of the day.
The latest rebound from multi-years low seems to be losing pace, as the daily chart shows that the Momentum indicator is turning south, but still above its 100 level, whilst the RSI indicator hovers around 53.
In the same chart, the 20 SMA heads slightly higher around 1,098.60, providing a strong intraday support in the case of a retracement.
gold.png
Shorter term, the 4 hours chart shows that the price is unable to overcome its 20 SMA that now turns lower, whilst the technical indicators lack directional strength around their mid-lines.
At this point, the bright metal needs to extend beyond last week high of 1,126.70 to be able to resume its advance towards the 1,140 region.
 

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EUR/USD: Trading The FOMC Minutes

The Euro (EUR) rose against the US Dollar (USD) on Wednesday, increasing the price of EURUSD to more than 1.1040 ahead of the some key economic events that are scheduled later in the New York session. The technical bias remains bullish because of a Higher High and Higher Low in the recent wave on daily chart.
Technical Analysis
As of this writing, the pair is being traded around 1.1047. A hurdle may be noted near 1.1053, the 61.8% fib level ahead of 1.1126, the 50% fib level and then 1.1213, the swing high of the last major upside rally as demonstrated in the following daily chart.
eurusdm-d1-exness-ltd.png

On the downside, the pair is likely to find a support near 1.1000, the psychological number ahead of 1.0955, the 76.4% fib level and then 1.0807, the swing low of the last major downside dip. The technical biar will remain bullish as long as the 1.0807 support area is intact.
FOMC Minutes
The Federal Reserve is due to release the minutes from the recent Federal Open Market Committee (FOMC) meeting today during the New York evening session. Investors will be eyeing the FOMC minutes very closely for clues about the increase in Fed’s benchmark interest rate. A hawkish stance regarding interest rate hike would incite strong selling pressure in the price of gold and vice versa. Not to mention, the release of FOMC minutes will follow the US Inflation News.
Trade Idea
Considering the overall technical and fundamental outlook, selling the EURUSD around current levels appears to be a good strategy if we get a bearish pin bar or bearish engulfing candle on four-hour timeframe following the release of FOMC minutes.
 

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EUR/USD Rallies As Fed Officials Look Reluctant About Rate Hike

US news were far from supporting a September rate hike, with July CPI missing expectations and a concerned FED. Inflation in the country rose 0.1% against previous 0.3%, whilst the annual rate edged steady at 0.2%.
Later on in the day, the Minutes from the latest FED meeting showed that policymakers are still concerned about lagging inflation, and a stronger dollar.
Additionally, most of the FOMC members agreed that “the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point.” All in one, chances for a September rate hike have reduced, and the USD is paying the price, sharply lower across the board.
In Europe, and following a teleconference call, the European Stability Mechanism board agreed the program for the €86bn bailout package to Greece. Eurogroup president Jeroen Dijsselbloem said that “The program for the coming three years goes with strict conditions aiming at setting right public finances and administration and dealing with the economy and problems in the financial sector”.
The EUR/USD pair posted a daily low of 1.1017 right after the release of the US inflation readings, from where the bounce began, and accelerated with the release of the US Central Bank Minutes. The pair soared up to 1.1127, finding short term selling interest around a key Fibonacci resistance, the 23.6% retracement of the bullish August run between 1.0847 and 1.1213, at 1.1130.
eur20.png
The 1 hour chart shows that the technical indicators are losing their upward strength near overbought levels, but that the price stands above its moving averages, with the 100 SMA acting as immediate support around 1.1080.
In the 4 hours chart, the price has accelerated above its 20 SMA whilst the technical indicators head higher after crossing their mid-lines towards the upside, supporting some additional gains, in the case the pair breaks above the 1.1130 resistance.
 

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EURCAD - Euro Poised for Continued Strength

Key Points
• Euro managed to gain bids against the Canadian Dollar and might continue to trade higher moving ahead
• German Producer Price Index released by the Statistisches Bundesamt Deutschland registered no change in July 2015, whereas the market was expecting it to decrease by 0.1%.
• In terms of the yearly change, the German PPI decreased by 1.3%, less than the market expected.
• EURCAD cleared a major bearish trend line recently, opening the doors for more upsides.

Technical Analysis
The Euro climbed higher recently against the Canadian Dollar, and managed to clear a major bearish trend line on the hourly chart. There were a few retest attempts for the highlighted trend line and buyers successfully managed to hold the downside. The pair is currently trading near 1.4618 where it is facing resistance.

EURCADH1.png


However, the chances of it breaking higher is more, as the pair is above the 100 and 200 hourly simple moving averages. The hourly RSI is around is the overbought levels, which is a signal of a short-term correction.

On the upside, a break above the last high of 1.4618 might call for more gains moving ahead.

German PPI
Earlier during the London session, the Producer Price Index, which measures the average changes in prices in the German primary markets was released by the Statistisches Bundesamt Deutschland. The forecast was lined up for a decrease of 0.1% in July 2015, compared to the preceding month. However, the outcome was better than the forecast, as the German PPI posted no change in July.
In terms of the yearly change, the German PPI fell 1.3% in July 2015, compared to the same month a year ago, which was lower compared to what the market expected.

Overall, the outcome was better, and helped the Euro to gain bids. The EURCAD pair might get some help and could trade above the previous high of 1.4618.

Trade Idea
We can attempt a buy trade if the EURCAD corrects lower in three waves towards the broken trend line support area.


- The FXTimes Team
 

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CADJPY Trend Overwhelmingly Negative

Key Points
• Canadian Dollar remained under pressure against most majors including the Japanese Yen.
• In Japan, the Nomura/JMMA Manufacturing PMI posted a disappointing reading and came in at 51.9.
• Nomura/JMMA Manufacturing PMI missed the forecast, but it was higher compared with the last reading.
• CADJPY cleared an important support trend line and remained under the bearish pressure.

Technical Analysis
The CADJPY pair faced a lot of selling pressure lately, which ignited a downside move. There was a major bullish trend line on the 4-hours chart, which was breached to open the doors for more gains in the near term. The pair is now way below the 100 and 200 simple moving averages (SMA), which means more losses are possible.

CADJPYH4.png


If the pair corrects higher from the current levels, then it might face resistance around the 23.6% Fib retracement level of the last drop from 95.39-93.72.

A break below the last low of 93.72 might be take the pair towards the next swing area of 93.50.

Japanese Nomura/JMMA Manufacturing PMI
Earlier during the Asian session, the Japanese Nomura/JMMA Manufacturing PMI, which gives an early snapshot of the health of manufacturing sector and considered as a significant indicator of business conditions and the overall economic condition in Japan was published. The forecast was lined up for a rise from 51.2 to 52.1 in August 2015. However, the outcome missed the mark, as it came in at 51.9, but we cannot deny the fact that it was still on the higher side.

Commenting on the report, an economist at Markit, Amy Brownbill, stated “Latest survey data indicated a further improvement in operating conditions in the Japanese manufacturing sector. New order growth accelerated to the second fastest this year so far, while production increased at a similar pace to July’s five-month record”.

Trade Idea
We can attempt a sell trade if the CADJPY corrects higher in three waves towards the 94.00 resistance area.

- The FXTimes Team
 

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EUR/USD Hits The Seven-Week High Level

The EUR/USD pair reached a fresh 7-week high of 1.1242 late Thursday, as the greenback continued its recent downtrend following Wednesday’s dovish FOMC Minutes.
The pair ended the day well above the 1.1200 figure, maintaining a clear short term bullish bias.
Technically, the 1 hour chart shows that the 20 SMA has extended sharply above the 100 and 200 SMAs, and continues heading north below the current price, whilst the technical indicators are now consolidating near overbought levels.
eur21.png

In the 4 hours chart, the technical indicators are heading strongly higher above their mid-lines as the pair continues to advance, with the pair about to challenge 1.1243, June 30th daily high. A steady advance beyond it should see the pair continue advancing on Friday, eyeing the 1.1400/10 price zone for the next week.
 

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CHFJPY - Next Leg Lower Underway

Key Points
• Swiss Franc traded lower against the Japanese Yen, as the latter one got weakened recently.
• Japanese Leading Economic Index released by the Cabinet Office increased from the last revised reading of 106 to 160.5 in June 2015.
• Japanese Coincident Index was also released, which posted a rise from the last revised reading of 111.3 to 112.3 in June 2015.

Technical Analysis
The Swiss Franc after completing a consolidation pattern moved lower and traded towards the 127.40-20 support area against the Japanese Yen. There was an expanding triangle pattern formed on the hourly chart of the CHFJPY pair, which was cleared by sellers to take the pair lower.

CHFJPYH1.png


The pair traded as low as 127.34 where it found buyers. It is currently correcting higher and facing a resistance around the 38.2% Fib retracement level of the last drop from the 129.03 high to 127.34 low. Moreover, the 100 hourly simple moving average is also around the mentioned Fib level, waiting to act as a hurdle. Any additional gains could take the pair towards the broken triangle area, which can be seen as the next barrier.

If the CHFJPY pair moves lower from the current levels, then the last low of 127.34 might be tested. A break below it might call for more losses in the near term.

Japanese Leading Economic Index
Earlier during the Asian session, there were a couple of releases in Japan. The first one was the Leading Economic Index, which is an economic indicator that consists of 12 indexes such as account inventory ratios, machinery orders, stock prices and other leading economic indicators released by the Cabinet Office. The outcome was above the expectation, as it rose to 106.5 from the last revised reading of 106 in June 2015.
Similarly, the Coincident Index rose to 112.3 from the last revised reading of 111.3.

Trade Idea
We can attempt a sell trade if the CHFJPY trades closer to the 100 SMA (4H).

- The FXTimes Team
 

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EURJPY – Euro Eyeing New High Vs Japanese Yen

Key Points
• The Euro traded higher against the Japanese yen, and looks set for more gains moving ahead.
• There is a bullish trend line formed on the hourly chart of the EURJPY pair, which is acting as a support area.
• The Euro Zone CPI released by the Eurostat posted an increase of 0.2% in June 2016, which was in line with the forecast.
• The Euro Area Trade Balance released by the Eurostat posted a trade surplus of €24.5B, less than the forecast of €25.2B.

Technical Analysis
The Euro recently gained traction against the Japanese yen and traded above the 118.00 level, but later found offers. However, it remains in an uptrend, as there is a bullish trend line formed on the hourly chart of the EURJPY pair, which is providing support to the pair.

EURJPYH1.png


The pair is currently finding bids near the trend line support and the 50% Fib retracement level of the last wave from the 116.68 low to 118.41 high.

If the EURJPY pair bounces from the current levels, then there are chances of more gains in the near term.

Euro Zone CPI
Earlier today, the Euro Zone CPI, which captures the changes in the price of goods and services was released by the Eurostat. The market was expecting a rise of 0.2% in June 2016, compared with the previous month, and the result was in line with the forecast.

The report stated that “In June 2016, negative annual rates were observed in thirteen Member States. The lowest annual rates were registered in Cyprus (-2.0%), Bulgaria (-1.9%) and Croatia (-1.2%). The highest annual rates were recorded in Belgium (1.8%), Sweden (1.2%) and Malta (1.0%). Compared with May 2016, annual inflation fell in two Member States, remained stable in eight and rose in seventeen“.

Overall, the Euro may continue to gain bids against the Japanese yen, and could break the 118.00 resistance area.

- The FXTimes Team
 

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GBPJPY – Can British Pound Sustain Gains Versus Yen?

Key Points
• The British Pound after a decline towards the 137.75 level against the Japanese yen found support and recovered.
• There was a contracting triangle pattern formed on the hourly chart of GBPJPY, which was broken recently by the bulls.
• Today in the UK, the Rightmove House Price Index was released for the month of July 2016.
• The result was disappointing, as there was a decline of 0.9% in the index compared with the previous month.

Technical Analysis
The British Pound after a slide against the Japanese yen towards the 137.75 level found support to trade higher once again. The GBPJPY pair traded higher and during the upside move broke a contracting triangle pattern formed on the hourly chart.

GBPJPYH1.png


However, the pair is currently struggling to clear the 21 hourly simple moving average, which is acting as a resistance.

On the downside, the 139.80 level can be considered as a support area for the buyers.

Rightmove House Price Index
Today in the UK, the Rightmove House Price Index, which provides a sample of residential property prices was released. The market was not expecting any decline in July 2016, compared with the last increase of 0.8%.
However, the result was different, as there was a decrease of 0.9% in July 2016, compared with the previous month.
 

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EURUSD – Euro Setting Up For More Losses

Key Points
• The Euro remained in a downtrend against the US Dollar, and looks set for more losses.
• There is a bearish trend line formed on the hourly chart of the EURUSD pair, which is acting as a hurdle for the bulls.
• Today in the Euro Zone, the Current Account was released by European Central Bank.
• The result was above the forecast, as there was a surplus of €30.8B, more than the forecast of €24.9B in May 2016.

Technical Analysis
The Euro traded lower against the US Dollar recently, and tested the 1.0980 support level. The EURUSD pair remains in a downtrend and currently following a bearish trend line formed on the hourly chart.

EURUSDH1.png


The pair is also below the 21 hourly simple moving average, which is a bearish sign. In short, there are many negative signs for the pair and may push it further down.

A break and close below the recent low of 1.0978 may call for a move towards the 1.0950 level.
 

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USDCHF To Extend Its Upside Move?

Key Points
• The US Dollar slowly and steadily moved higher against the Swiss Franc after trading as low as 0.9765.
• There are a couple of bullish trend lines formed on the hourly chart of the USDCHF pair, providing support to the USD buyers.
• In the US today, the Initial Jobless Claims was released by the US Department of Labor.
• The result was above the forecast, as there was a decrease from 254K to 253K, compared with the forecast of 265K.

Technical Analysis
The US Dollar looks like is in an uptrend against the Swiss Franc, as after trading as low as 0.9765 it found bids and traded higher. There are a couple of bullish trend lines formed on the hourly chart of the USDCHF pair, acting as a support area.

USDCHFH1.png


The pair is also trading around the 21 hourly simple moving average. A successful close above it could ignite more gains in USDCHF.

Buying dips can be considered as long as the pair is above the highlighted trend lines and support area.
 
 
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