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KeyToMarketsUK

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FX market this week: CPI data and jobs data among top-tier data/events to keep forex traders busy.
CPI for NZ, UK and Canada, UK and Aussie jobs data, China Q1 GDP and EZ PMI surveys are likely to be the big focus point for the forex traders in this week (April 15-18) along with other top-tier macro data points across the globe. On top of these, the latest developments of Brexit are likely to keep investors busy.
The following are the top-tier data releases and events that will keep forex traders busy:
  • AUD: RBA Monetary Policy meeting minutes (Tue) and March Labour Force data (Thu)
  • CAD: March Inflation number month-on-month (Wed)
  • EUR: ZEW Sentiment (Tue), EA CPI (Wed) and EA PMI surveys (Thu)
  • GBP: Jobs report (Tue) and CPI (Wed)
  • USD: March Retail sales and several FOMC members speech
Risk-on is the theme been running since opening in Monday session on the back of better China trade data which reported over the weekend.
We found JPY crosses breakouts for you, now see them for yourself. AUDJPY is the first JPY cross breaches the critical resistance and closed above 200MA among the block. Rest is trading on the verge of a breakout (CADJPY, CHFJPY, EURJPY, USDJPY, and NZDJPY). Last Friday we forecast bullish targets on EURJPY, the cross ran through the first target which we set, but we failed to diagnose the AUDJPY bullish trade.
JPY crosses technical insights:
  • ABove 200 MA: AUDJPY, USDJPY, and NZDJPY
  • Inverse H&S pattern: CADJPY and USDJPY
  • Ascending Triangle: CHFJPY
  • Symmetrical Triangle: EURJPY

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KeyToMarketsUK

Well-known member
416 0
KTM FX Weekly: Waiting to print C wave down-update

  • We retain a EURUSD mild bearish stance despite a weaker dollar. Daily indicators are still supportive while they haven’t contributed much to the price since May 2018.
  • As the Fed and ECB became dovish, the price action should respond more to upcoming EA data surprises.
Recent euro area macro-economic data continue to be mixed. Last week’s EA GDP growth rebounded more than expected whereas EZ Manufacturing sector continues to contract at the start of the 2Q.
Danske Bank said in a note “Overall, sentiment data continued to be mixed in April, with the German Ifo also stalling its upward trend, indicating that the economy is not yet out of the woods.”

Data review:
  • Euro area Q1 GDP up by 0.4% compared to the previous quarter, according to a preliminary flash estimate published by Eurostat.
  • Final Eurozone Manufacturing PMI at 47.9 in April, up only marginally on March’s near six-year low of 47.5, according to IHS Markit.
  • Commenting on the PMI data, Chris Williamson said: “Although the PMI rose for the first time in nine months, the April reading was the second-lowest seen over the past six years, signaling a deterioration of overall business conditions for a third successive month.”
  • Euro area annual inflation is expected to be 1.7% in April 2019, up from 1.4% in March according to a flash estimate from Eurostat.
The IHS Markit, Eurozone PMI Services Business Activity Index, remained above the 50.0 no-change mark level during April, though by falling to 52.8 from 53.3 in the previous month, signalled a slightly slower rate of expansion, according to IHS Markit.

Data preview:
After last week’s better GDP data all eye on this week’s Germany industrial production for March (Wed).
Danske bank said, “After tanking in H2 18, industrial production has rebounded slightly over the last months, and we see scope for further stabilization in the March print.”
Traders also focus on the EU spring economic forecast (Tue).

TECHNICAL OVERVIEW
Markets seem to have spent the last 24 hours rebounding from the Asia lows, after a gap down opening on Trump’s tweet over US-China Trade tariffs.
In EURUSD, the price still consolidating between 1.1100-1.1270 levels, the lowest level since May 2017. The price has reaffirmed support since mid-April. The major has been well supported at 1.1100 parallel support at May 2017 (Weekly chart). On the upside, the trend is supportive in the near term, but the market needs to take out the recent high at 1.1270-1.1300 to confirm the trend once again.
We are waiting for a break below the level 1.1100 pay pave the way for lower prices back to 1.1050 its C point of the A-B-C corrective structure initially followed by 1.0880 and 1.0800. However, the RSI and the oscillator has been recovering since last week.
We now focus on the upper channel resistance between 1.1270-1.1300 above here 1.1330 comes into picture.

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KeyToMarketsUK

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KTM FX Daily: Trade talks preview; AUDJPY and USDJPY in focus

Markets see to have spent the last three days waiting for the US-China Trade talks scheduled for two days Thursday-Friday. Trump tweeted that he would impose new tariffs on Friday.

On Monday Trump tweeted “For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday.”.

CNBC: China’s chief trade negotiator, Vice Premier Liu He, is due in Washington later this week for a critical round of discussions with Robert Lighthizer, Trump’s top trade envoy and Treasury Secretary Steven Mnuchin.

Nomura published five alternative scenarios for US-China trade negotiations.

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Danske Bank forecast two outcomes on Thursday-Friday meeting

"The talks on Thursday will be crucial. If the two sides can meet each other sufficiently for Trump to cancel, or at least postpone, the tariff increase, then it is probably a sign that a deal is still believed to be within reach by the two sides.

However, if Trump decides to move on with the tariff increase, then there is a very high risk we get a breakdown of the talks and the Chinese delegation pack their bags and go home on Friday without continuing the talks. It will be hard for a Chinese Vice Premier to continue negotiations in what could be seen as a humiliation domestically in China. It could leave a period without new scheduled talks and, worst case, that Trump quickly starts the process of imposing 25% tariffs on USD325bn as he has threatened to do."

Ahead of the two-day shorter meeting, we remain cautious on USDJPY and AUDJPY among JPY crosses, AUDUSD in G10 block and Gold and Copper on the commodity side.

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Markets overnight closed with gains with S&P 0.30%. In Asia today NZD little up by 0.15% among G10 block. Turning to commodities Gold traced out a double top pattern between 1289-1291.50$. Overnight the yellow metal rejected at 50MA and lost 4$. Support finds at 1277$, 1272$ and 1266$.

The cross USDCNH has been facing resistance at 200MA coincides with the 50.0 fib reaction.
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Looking at the day ahead, it’s a reasonable busy Asia session with April China CPI and PPI in the US.

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KeyToMarketsUK

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416 0
KTM FX Daily: Wednesday morning wrap; Chart of the day: GBPUSD

FX Wrap:
  • After a massive rally in Asian session yesterday, cryptocurrencies shed some of the gains in U.S session.
  • European indices had initially opened on a mute note; later benchmark indices finished a percent higher on May 14th. KTM symbols: EU50 and FRA40 held 200EA, DE30 and GER30 held 50MA, ITA40 held 20MA (Weekly) whereas SPA35 is the weakest among, lost all the MAs.
  • Among JPY crosses, AUDJPY, CADJPY, CHFJPY, and EURJPY retraced to 50.0% fib reaction (Flash crash low-March high) on top of these NZDJPY retraced to 61.8 fib. Whereas USDJPY tested only 38.2 fib reaction, and its 50.0 fib finds at 108.00. All of these daily RSI indicators remaining oversold and the oscillator has been bullish.
  • Turning to G10 currencies, EURUSD traced out a double top pattern, cable lost all the moving averages on all time frames (Daily, Weekly, and Monthly) and focus on 1.2860 below here focus shifts to 1.2800/1.2770 (61.8 fib reaction of1.2390-1.3380 rally). The current pattern on the daily chart reminds us of the GBPJPY which was retraced to the C wave on Monday. Coming back to the GBPUSD, the C wave sits at 1.2660 coincides with mid-August low.
  • USDCHF manages to hold the 50MA, so far but the trend remains bearish. Wait for 1.0000-0.9950 levels.
  • AUDUSD remaining weak, mid-week support zone finds between 0.6920-0.6900 it’s 50.0 fib reaction and the 100.fe. The kiwi dollar is facing stiff resistance at two-month descending trendline. Moreover, it has been consolidating between 0.6520-0.6620. A move above 0.6620 could open to 0.6680 and 0.6700 in the near term.
  • USDCAD has been consolidating between 1.3520-1.3375.
News: US President Trump: (Fed) A little quantitative easing can make US GDP growth reach 5%-Wallstreetcn.

What’s on today?
Asia: Australia March Wage Price Index and China Retail sales and Industrial Production
Europe: EZ 1Q GDP
US: April Retail sales and April Industrial Production.

Chart of the day:
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KeyToMarketsUK

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416 0
KTM FX: Friday morning wrap; CHFJPY trade idea

The risk-off mood continues for the third straight session; global equity benchmark indices rallied. European benchmark indices up between 0.80%-1.70% overnight. Besides Nasdaq up by a percent, S&P and Dow Jones up by 0.85% each.

FX update: US 10year Treasury yield up 3bps closed at 2.40, and the dollar rose to a week high. We believe robust US data brings risk appetite. The US-China trade war has cooled down a bit compared to last week.
Danske Bank said, “We expect markets to look for signs of negotiations restarting.”

AUDUSD, EURUSD, GBPUSD, and NZDUSD were among G10 currencies closed near the day’s low. At close, the cable closed below the 1.2860 its parallel support. We are waiting for the 100.fe target.

In commodities, Gold lost 10$ whereas Brent crude oil up by a percent and settled above 20MA again. Turning to cryptocurrency

Bitcoin down nearly 4.5 %, currently trading at 7900$ up by 3.00% this morning.

Data review:

Australia April unemployment rate lifts sharply and full-time employment modestly. On the higher unemployment and underutilization rate, AUD remains underperformed in among G10.

Turning to the other macro data, Philly Fed surprisingly increased from 8.5 to 16.6 this month, according to the official data.

Looking at the day ahead, it’s a quiet day in terms of data releases except for EZ April CPI.

Chart of the day: CHFJPY
As long as 108.30 is supported, we expect a break out with a target at 109.70
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KeyToMarketsUK

Well-known member
416 0
KTM FX Daily: Morning wrap; Trade setup for AUDJPY

EU elections, Bank of Canada Policy statement, US 2Q GDP, and China official manufacturing PMI data among top-tier data points to keep forex traders busy.
After a sharp run the past weeks gone by, the JPY crosses are expected to be rangebound in the week ahead, amid renewed hope of US-China trade deal. The recent escalation of the US-China trade war drag the JPY crosses lower of the range, especially AUDJPY and USDJPY.

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Last week the Dollar index failed to hold the gains above April 2019 high at 98.00, traced out a double top pattern. Besides AUD, EUR, GBP, and NZD maintain the key support levels against the USD.

Looking at the week ahead, quiet start to the week with US and UK holidays. In terms of data, it will be relatively slow in the US, whereas it will be busy in Europe with politics grab attention. European parliamentary elections outcome and UK Prime Minister, May’s resignation, will steer the EUR and GBP.

The pound was rallied late Friday last week after Theresa May announced that she would resign on June 07th. Besides, Euro remains neutral this morning on the first reaction to European parliamentary elections.

We have spotted a double and triple bottom patterns on G10 currencies. As we forecast the cable’s corrective rally on Friday, the price responded inline to our forecast and closed above 1.2700 level.

G10 FX:
AUDSUD: Triple bottom
EURUSD: Double bottom
GBPUSD: Pivotal between 1.2600-1.2580
USDCAD: Focus on 1.3520 above this, could extend the rally towards 1.3600. The flip side, As long as 1.3520 is resistance wait for 1.3360.
USDCHF: Traced out another triple top pattern at 1.0120 and closed below 100MA and 20MA (Weekly). The trend remains bearish and watch out for 0.9950.


In crypto space, Bitcoin is currently trading at 12-month high at 8700$. This morning cryptocurrency opened higher with Litecoin is leading with 12%, followed by Bitcoin 9%. Wonderful technical breakout triggers another massive rally.

Chart of the week: AUDJPY

As long as 75.30 is supported, watch out for 76.30 and 77.40. A daily close above 76.30 could strengthen the bulls further. The flip side, a move below 75.20 needed to retrace further to 74.50.

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KeyToMarketsUK

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416 0
KTM FX Weekly: Has the EU election cost anything to EUR?

The euro loses altitude, was little down against the dollar on Monday and no significant moves recorded on EU election outcome. With the US holiday, liquidity conditions are lighter than usual, comforted the euro in a small range against the USD.

In what one major investment bank described as “Election fever is not that hot.” UBS analyst Paul Donovan said “The European election results are not likely to interest markets too much. The Greek government called a general election.”.

In terms of macro data from last week, the German Final GDP remain neutral and the latest PMI releases and Ifo data printed on the weak side.

Commenting on the latest data releases Jan Von Gerich at Nordea said, “Latest Euro-area confidence data (PMIs, Ifo) were no huge disappointment this time but illustrate the outlook remains murky, and downside risks remain. Signs of weaker services are worrying. Easy monetary policy will be needed for a long time.”

Data Review:
Eurozone Manufacturing PMI disappointed at 47.7, 2-month low vs. 47.9 in April. Also, the Services PMI Activity Index fell to 52.5 4-month low vs. 52.8 in April.
On top of these, the ifo business climate index continues to decline, according to the official data. The ifo Business Climate Index fell from 99.2 to 97.9 points in May.

Data preview:
Looking at the week ahead, it will be relatively slow in terms of EA and the US data. We will see June German Gfk consumer confidence index reading.
The euro traders are waiting for the next week’s ECB meeting on June 06. We expect the ECB to maintain its easing bias, with no new additional stimulus measures announced.

TECHNICAL VIEW
The euro loses altitude, was little down against the dollar on Monday and no significant moves recorded on EU election outcome.
At close, the EURUSD was down by 0.15% at 1.1190 tad below 1.1200 mark. EURSEK and EURGBP were the top gainers among euro cross, while EURCAD was down by 0.20%.

Back to the subject of EURUSD technical levels, the price contains between 1.1265-1.1100. In yesterday’s thin session, the price was rejected at the first resistance level at 1.1220 above here 1.1265 exists.

Caution will be order; if the pair does not rebound on these double top patterns, that will point to a new downward wave towards the support around 1.1140 and 1.1100 levels.

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R1: 1.1225 R2: 1.1265 R3: 1.1325

As long 1.1325 is resistance, we wait for 1.1100 and a break below here pave the way for lower prices back to 1.1050 its C point of the A-B-C corrective structure.

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KeyToMarketsUK

Well-known member
416 0
KTM FX Weekly: EURUSD is crafting its innings

EURUSD has spiked nearly 200 pips since the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent and indicate it would cut interest rates. As a result, the dollar shed 2.00% since the Fed meeting.

Do you think the single currency has peaked out? EURUSD stands out as an outperformer among euro crosses; gaining momentum since Fed turned dovish. Markets are now pricing the 2019’s first rate cut of 25bps in the next Fed meeting on July 31st.

UBS said, “Historically when markets have priced in rate changes going into an FOMC meeting, the Fed has moved in line with such expectations. Given current market pricing, the Fed is likely to lower rates in July unless there is a big move in markets before the meeting. We have changed our base case to call for a 50 basis point cut.”.

The basket of G10 currencies rose after the Federal Reserve, whereas we expect emerging currencies which attract high-yielding outperform the basket of G10 currencies (lower-yielding) in the coming days.

Data review:


In terms of last week’s EA economic releases, EZ Flash PMI hits a seven-month high, but growth and sentiment remain subdued according to IHS Markit. Overall EA June PMIs disappointed.
Flash Eurozone Manufacturing PMI at 47.8 vs. 47.7 in May. 2-month high and Flash Eurozone Services PMI Activity Index at 53.4 vs52.9 in May. 7-month high.

Data preview:

This week’s highlights are German CPI (Thu) and EA CPI (Fri). Besides worth to focus on US GDP. On top of these forex traders watch closely on Trump-Xi meeting at the G20 meeting on Friday-Saturday. The significant portion of the market participants is expecting a ceasefire in the trade war, which is negative to USD and would positive for EUR.

TECHNICAL OVERVIEW

The Fed-ECB policy divergence, a trade deal, and July Fed rate cut are the factors that would be positive for the single currency in the coming days/weeks.

Turning to the technical picture, as we expected last week, the price managed to hold the support zone available between 1.1200-1.1175 and back above the falling wedge, which is a bullish technical factor. Last Friday the price closed above the 200MA for the first time since early May 2018 another bullish factor.

The near- and medium-term picture shows that the price action has been developing higher low and higher high. The recent bounce will face stiff resistance between 1.1420 and 1.1450. The daily indicators are in agreement with the bullish price forecast. A break above 1.1450 needed to forecast another impulsive wave higher towards 1.1570 early January 2019 high.
On the downside, 1.1340 and 1.1280 are the key support levels to watch out; once the 1.280 breaks, the price can tumble towards back to the last week’s support zone finds between 1.1215-1.1175.

The daily RSI is approaching overbought levels, based on this, we remain sidelines and waiting for a decisive break above 1.1450 for the next directional move.


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It is important to always keep in mind the risks involved in trading with leveraged instruments.

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KeyToMarketsUK

Well-known member
416 0
KTM Commodity Weekly: New technical profiles are testifying bearish

Brent crude oil price lost momentum into the close on Monday as traders waiting for a catalyst. The price of Brent lost 20cents and closed below the support 63.85$, which is the first sign of reversal of the trend.

According to the candlesticks chart, the key support levels are placed at 63.10 its 20MA, followed by 62.75$.

“63.10-62.75$ levels are going to be a crucial support zone for the week ahead, further weakness from here is likely to retrace fully back to 62.00$ levels."

The new technical profiles are testifying that the Brent crude oil may test again to May lows. The daily oscillator back to sell mode and the RSI lacks conviction.

The daily A-B-C corrective structure is pointing 2018 lows. A clear break down below 59.00$ will strengthen this view.
If the price starts moving upward, the key resistance levels to watch out are 65.00$ and 65.40$. The resistance levels have come down from 66.00$ to 65.40$.

The recent corrective rally capped by oil demand concerns and Iran’s nuclear program.

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It is important to always keep in mind the risks involved in trading with leveraged instruments.

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KeyToMarketsUK

Well-known member
416 0
KTM FX Daily: Market wrap; Gold insights

The price of Gold rallied this week on continued signals that Fed July rate cut is highly likely. Yesterday night Powell waves a rate cut and the same has confirmed by FOMC June minutes. Post the Powel testimony the consensus expectations have reached nearly 100.0%.

Nordea markets said, “we found that the FOMC minutes took a material dovish shift compared to May. This is also the conclusion from our new minutes-reading algorithm, which gave the most dovish sentiment score since 200”.

We expect the dollar index (KTM: USDX) to stay in the current range between 98.00-95.00$.

In commodities the price of Gold strengthened this week, so far as protracted buying triggered a break above of resistance at 1400$ confirming upside sentiment. Buying pressure has waned at the 80.0 fibs this morning in Asia session. In the near-term the trend is supportive, but the price needs to take out the double top level located at 1440$ to confirm trend once again.

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Looking back to end of June and early July price action the price has struggled to hold above 1440$ and prompted a retracement back to its 20MA located around 1380$. The bears must take out key support at 1380$ to set the scene for a retracement.
Looking the day ahead, the ECB minutes and US CPI figures will release today.

Danske bank said “Markets will look out for clues in the minutes on how ready the GC stands in announcing immediate steps already at the 25 July meeting. We still lean towards an announcement of an easing package coming in September”.
At the time of preparing this, the dollar index holds the 20MA whereas the EURUSD facing resistance at 20MA.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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KeyToMarketsUK

Well-known member
416 0
KTM FX Weekly: Consolidation continues amid bearish layers


We are two weeks away for the Fed meeting. A growing number of analysts and market percipients are pricing nearly a 100% chance of Fed rate cut in July meeting. What happens when the Fed cuts interest rates in July is the key concern for the forex traders.

We are expecting July’s meeting is going to be the most significant event for the financial markets across the globe. In a Fed rate cut forecast situation, we tilt towards taking a long position on EURUSD.
Moody’s Analytics said, “We are raising our subjective odds of a 25-basis point rate cut in July from 75% to 90%. Beyond July, we expect an extended pause by the Fed.”.

In terms of macro data from last week, the euro area industrial production up by 0.9%. Looking ahead, it will be again reasonably a quiet week.

According to the euro stat official report, the euro area May industrial production up by 0.9% from April 0.8%.
Looking at the week ahead, it’s a reasonably quiet week in terms of data, but we will see the German ZEW economic sentiment index and the latest EA CPI figure. We expect the June inflation figure to up by 1.1% from 0.9%.

TECHNICAL VIEW

The single currency has been consolidating between 1.1180-1.1290 for four weeks. Ahead of the July Fed meeting, we favor taking long EURUSD position with a stop loss at 1.1090 with targets at 1.1350 and 1.1400. A decisive break out through June 25th high 1.1415 could rally further to the wave C 1.1500$. It is too early to make a call 1.1500, but we expect 1.1400 by the end of July.
Among the G10 bullish counters, NZD already breaches the previous swing high at 0.6725 on Monday, AUD is trading on the verge of the last swing high at 0.7050.
Whereas GBP has its concerns to follow the antipodeans trend, but a breakout above 1.2580 could allow GBP to outperform in the near term.

Turning to the single currency as long as 1.1200-1.1180 is supported (near-term) we expect a breakthrough 1.1300 (rounded).
The daily RSI is stabilizing whereas the oscillator has turned bullish and pointing the North.


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It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below