Technical Analysis by Alpari

[Alpari]

Alpari: Technical Analysis

Euro/Dollar: Euro/Dollar: Euro Back to LB

Yesterday’s Trading:
On the whole I’m happy with how the euro/dollar has slid to the 90th degree. Due to the yen crosses, the maximum on my forecast wasn’t reached and the minimum was below the target.
On Tuesday the market ignored the weak US statistics. Market participants declined to open new positions before the FOMC meeting.
The August retail sales index in the US stood at 0.2% (forecasted: 0.4%, previous: 0.7%).
The August retail sales index for the US which doesn’t take car sales into account stood at 0.1% (forecasted: 0.3%, previous: 0.6%).
The New York Federal reserve’s September business activeness index was -14.7 (forecasted: -2.0 previous: -14.9).

Main news of the day:
• At 11:30 EET, the UK is releasing labor market data for August (changes in the number of unemployment benefit receivers, unemployment level, changes in average wages and July job creation);
• At 12:00 EET, the Eurozone August CPI will see the light of day;
• At 15:30 EET, the US is publishing its August CPI;
• At 17:00 EET, NAHB is publishing its US September index for the housing market;
• At 23:00 EET, the US is releasing a report on securities purchases by foreign investors in July.

Market Expectations:
The Fed’s two-day meeting begins today and in it they will pore over whether to change the base rate for the US. The outcome will be made known on Thursday.
Trader attention in Europe will be focused on data coming out of the UK and in the evening it’s all about what is coming out of the US. Market volatility could boil over after UK labor market data is out.

Technical Analysis:
• Intraday target maximum: 1.1331 (in the States), minimum: 1.1262 (current price in Asia), close: 1.1300;
• Intraday volatility for last 10 weeks: 125 points (4 figures).

Hourly
The euro/dollar has returned to the LB. If the euro grows in Asia, after a renewal of the maximum, I’ll be waiting for a rebound from Europe market opening, then a growth to 1.1331. I’m not writing off a complex troika – a recoil to the LB and a fall to 1.1230.

Daily
On Tuesday the euro/dollar closed down. On the daily the stochastic has switched downwards and formed a euro sales signal. As you know, fundamental news can turn any strong technical signal the opposite way. Without news we can use the signals, only take the release of important news into account. We’ll know whether this signal works or not tomorrow when the Fed announces its interest rate decision. Now to the Weekly.



Weekly
There’s much to say here for the moment.



Vladislav Antonov, Analis Alpari

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar: Sideways Expected ‘Till Evening

Yesterday’s Trading:
On Wednesday, weak US inflation data became the main driver pushing down the USD. Traders were abandoning the dollar before the FOMC convened, expecting that the Fed will leave the base rate unchanged. In light of this, oil and gold went up.
The August base CPI stood at 0.1% MOM and 1.8% YOY against a forecasted 0.1% MOM and 1.9% YOY. The standard CPI was -0.1% MOM and 0.2% YOY against a -0.1% MOM and 0.2% YOY forecast.
The bulls were expecting to see a growth in inflation before the FOMC meeting and this didn’t happen. The euro/dollar renewed to 1.1320.

Main news of the day:
• At 09:35 EET, the Bank of Japan’s governor Kuroda will give a speech;
• At 11:00 EET, the UK is releasing a retail sales report for August;
• At 15:30 EET, the US is publishing August data for construction permits, Q2 balance of trade figures and initial unemployment benefit application figures;
• At 21:00 EET the US Federal Reserve will let us know its decision on the US base rate, its economic forecast with an accompanying announcement.
• At 21:30 EET a press conference with the FOMC will take place.
Market Expectations:
The Fed will publish its base rate decision at 21:00 EET. Before then there are some important reports to come out. I think high volatility will be a key feature of today’s trading. I’m inclined to believe that the EURUSD will be sitting in a sideways trend at 1.1280.

Technical Analysis:
• Intraday target maximum: n/a, minimum: n/a, close: n/a;
• Intraday volatility for last 10 weeks: 125 points (4 figures).

Hourly
The euro/dollar has renewed to 90 degrees and is currently trading around 1.1296 by the LB. I would like to believe that the pair will stick to a sideways trend ‘till this evening. The forecast which I’ve made is for until the Fed lets us know its decision.

Daily
The upturned bar from 14th September has come off and now we see that Wednesday has seen a reverse candle form. It’s worth waiting for a growth to 1.1372 on the candle. Taking into account that today is the day that the Fed will make its decision, the euro could go in any direction. If the rates are left unchanged, the euro will gain against the dollar and vice versa. Now to the Weekly.

Weekly
There’s not much interesting here for the moment.

Vladislav Antonov, Analis Alpari

 

[Alpari]

Alpari: Technical Analysis

“Eurobulls” Strengthening Above 1.14

Yesterday’s Trading:
Before the Fed decision came out, the euro/dollar was in a sideways trend. After trading opened in Europe, the price returned to the balance line (the simple middle line at 55).
The FOMC meeting saw them leave the base rate in a 0.00-0.25% range. The regulator didn’t put up the rate since it could see the risks that such an action would bring about for the global financial system, for low inflation and for high volatility on the financial markets.
Investors were surprised by the fact that all of the members of the committee, bar Jeffrey Lacker, didn’t vote to put up the rate. On this decision and Janet Yellen’s speech, the euro/dollar rose to 1.1440.

Main news of the day:
• At 11:30 EET, the Eurozone will announce their July balance of trade changes;
• At 15:30 EET, Canada is publishing its August CPI and core CPI;
• At 17:00 EET, the USA is releasing its August version of the index of leading indicators.

Market Expectations:
The economic calendar today is pretty much empty. At the very least, there’s no news which could make the pairs fluctuate wildly. On the last day of the week, Europe could see a dollar minimum for the week and start fixing before the weekend.

Hourly

Technical Analysis:
• Intraday target maximum: 1.1455 (in Europe), minimum: 1.1380 (in the States), close: 1.1405/10;
• Intraday volatility for last 10 weeks: 125 points (4 figures).
The euro/dollar has stopped around the U4 and just above the 180th degree. Currently the price has returned to the MA channel. The rebound was 45 degrees. Looking at the AO indicator, there’s not enough divergence. Due to this, I’m expecting a renewal of the maximum and a rebound to 1.1380.

Daily
The euro/dollar has returned to an important resistance level after the FOMC meeting. I reckon that today the eurobulls won’t be able to pass the resistance zone. To move above 1.1466, it’ll be necessary to withstand two days below this level, otherwise people will start buying dollars at the maximum. The CCI is above +100 (bull signal). Whilst it hasn’t retuned back below 100, it’s a bit risky to sell euros. You can scalp, but doing this for over 5 hours is dangerous (you’ll need to use the in and out tactic). Now to the Weekly.

Weekly
The US Fed meeting took place and they left the base rate unchanged. The euro is up to 1.1440 against the dollar. After such a decision, risks of a return to 1.1772 are also up. As soon as 1.1466 is passed, you can forget about any fall for the euro.

Vladislav Antonov, Analis Alpari

 

[Alpari]

Alpari: Technical Analysis

Pound/Dollar: Moving to Trend Line

Hourly
On Thursday following the FOMC meeting, the pound/dollar rose to 1.5627. The Fed left the base rates unchanged. Janet Yellen’s speech was reserved. The GBPUSD growth slowed just above the U3 line.
A 45 degree rebound from the 1.5627 maximum took place. What are we waiting for? A growth to 1.5627 and then back to 1.5525/30. The U3 line will hold the buyers back. In addition, there’s divergence on the AO indicator. The best purchase would be one made from the LB.

Daily
The FOMC convened and as a result the pound/dollar reached an important resistance level. If the pressure on the USD increases next week, the pound will reach the upper limit of the channel (green line) at 1.5765. What the pound is doing on the daily leaves me clueless.

Weekly
The pound/dollar is moving towards the trend line.

Vladislav Antonov, Analis Alpari

 

[Alpari]

Alpari: Market reviews

Dollar Renews Weekly Minimum

On Friday during European trades the dollar’s fall continues. Demand for the American currency started falling on Thursday after the US Fed declined to put the base rate for the country up and the Federal Reserve’s head gave a reserved speech. The euro/dollar has shifted its weekly maximum from 1.1440 to 1.1459. The pound/dollar hit 1.5658 due to dollar sales throughout the market.

The euro/dollar and pound/dollar reached some calculated targets and significant price levels on the hourly. The key currency pairs have slid back 30 points from their maximum. The euro/dollar is trading around 1.1428, with the pound/dollar going for around 1.5621. The economic calendar is empty this evening, so you can expect a correctional movement to take place towards 1.1395 on the euro and 1.5561 on the pound.

Vladislav Antonov, Analis Alpari

 

[Alpari]

Alpari: Trading Ideas

Short-term Trading Idea FX AUD/USD – Bear Speculation as Part of Two Pinbars

Trading opportunities for currency pair:two pinbars have formed. The trend on the daily is a bear one. It may be worth risking playing against the Aussie on the trend. I suggest taking 0.7090 and 0.7060 as price levels. The price could go lower, but because the situation for the key pairs is contradictory, I’m setting the target a little higher at 0.7050.

Background:

The last idea I did on AUD/USD came out on 3rd August. The rate reaching 0.7301 was supposed to leave me waiting for the Australian currency weakening to 0.6829 due to Chinese stock market uncertainty and low iron ore prices. In fact, the price level was not reached. The sellers didn’t get there by 78 points. The AUD/USD fell by 394 points and rebounded from 0.6907

Current Situation

The USD was down last week due to expectations that the US Federal Reserve wouldn’t put up the base rate for the country on 17th September.

On 15th September the AUD had support coming from the minutes of the latest RBA meeting. The minutes showed that no discussion of relaxing monetary policy took place on 1st September. Ignoring the weak state of the Australian economy, the AUD/USD renewed to 0.7279. There was a spike of volatility in the final two trading days of last week.

The US Fed left their base rate in the range of 0.00-0.25%. The regulator didn’t put rates up because it could see the risks that this would present for the global economic system, as well as those that would be created for low inflation and high volatility on the financial markets.

Investors were surprised that no one other than Jeffrey Lacker voted for an increase in the base rate. Due to this decision and J. Yellen’s speech which followed, the AUD/USD shot up to 0.7274.

The decision had a powerful effect on the rate of the USD. The Aussie was up 100 points against its US counterpart. However, in expectance of the RBA’s governor Stevens giving a speech, the rate dropped back down by those very same 100 points to 0.7170.

In the first half of Friday, the dollar’s fall continued throughout the market. The AUD/USD shunted the weekly maximum from 0.7274 to 0.7279. By the day’s end, the bears had won back pretty much all of their day’s losses.

The Aussie followed the euro and pound by dropping down after the ECB’s Benoît Cœuré and the Bank of England’s chief economist, Andrew Haldane, made speeches. Coeure announced that the ECB is ready to extend its quantitative easing measures where necessary and Haldane said that any next move by the BoE with regards to interest rates could see them lowered.

What’s of interest at the moment?

The situation is a confusing one. There’s a contradictory picture between the key pairs. This means that there’s no point in expecting a continued impulse in any direction. A flat with complex figures inside the day is on the cards.

I’ve focused my attention on two pinbars which have formed a double top on the hourly. It will start to come off after a break in 0.7175. There’s the potential of a 100-120 point fall. If the bear setup doesn’t change with any fall of the AUDUSD, movement towards 0.7010 will hasten.

The broken trend line could interfere with the workings of the pinbars. A close below 0.71 will mean a false break. For Monday I’m expecting a 0.7240 rebound. Around here you can look to sell.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Trading Ideas

Short-term Trading Idea FX GBP/USD – Bear Speculation: Rebound From the Resistance
Trading opportunities on currency pair: on Friday the pound/dollar closed down. A pattern on the candle indicating a weakening of the pound has started to form. As I see it, it’s likely that the rate will return to the trend line at 1.5455. A close of the daily candle above 1.5585 will see the see the scenario cancelled out.

Background:

The last time I did an idea on the GBP/USD it was 7th September. Back then the UK pound managed to pass two supports. I expected that the euro/pound cross would break the upper limit of the channel and the pound/dollar would shift to the 1.4646-1.4879 target zone. The cross kept trading under the resistance. The forecasted scenario for the fall was supposed to cancel out with any close of the daily candle above 1.5275.

What’s of interest at the moment?

Over 11 days the pound/dollar has renewed to 1.5658. Friday’s candle closed with a long shade and covered Thursday’s body by 76%. In the second half of the day, the dollar rose after the ECB’s Benoît Cœuré and the Bank of England’s chief economist, Andrew Haldane, made speeches. Coeure announced that the ECB is ready to extend its quantitative easing measures where necessary and Haldane said that any next move by the BoE with regards to interest rates could see them lowered.

In sum, we have a similar picture to that of 7th September, only now the pattern is indicating a weakening of the pound. As I see it, it’s likely that we’ll see a return of the rate to the trend line at 1.5455.

On Monday the market often moves against Friday. If we’re to see any further fall of the pound, the rate shouldn’t move upwards and should close above 1.5585. Ideally, we would like to see a correction that finished at 1.5570.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Trading Ideas

Short-term Trading Idea FX EUR/USD Bear Speculation: Taking Over Thursday’s Candle
Trading opportunities for currency pair: after Friday’s weakening of the euro against the dollar, the risks of a break in the trend and a fall to the 1.1086 minimum from 3rd September are up. A close of the day above 1.1350 will cancel out the scenario.

Background:

The last idea on the EUR/USD came out on 13th April. A renewal of the 1.0461 minimum was supposed to leave me expecting the euro to fall to 1.0200 and to 1.0070 by the end of November.

As soon as the idea was published, the euro/dollar started to form a double bottom price level. US and Eurozone economic indicators came out mixed with some good and some bad. Due to this, the euro/dollar moved into a correctional phase. A 9-figure corridor was formed.

Due to the stock market indices crumbling, on 24th August the euro/dollar got back to 1.1712. When the situation stabilized, the euro returned to 1.1086. The euro then gained against the dollar due to expectations changing with regards to the US Fed putting up its rates. On 17th September, the euro/dollar rose to 1.1459 and on Friday it lost all its gains.

What’s of interest at the moment?

I didn’t want to do a trading idea today on the euro, but after Friday’s close the currency had a reverse candle pattern against all major currencies. On Friday in the second half of the day, the dollar rose after the ECB’s Benoît Cœuré and the Bank of England’s chief economist, Andrew Haldane, made speeches. Coeure announced that the ECB is ready to extend its quantitative easing measures where necessary and Haldane said that any next move by the BoE with regards to interest rates could see them lowered.

With each word, the dollar gained back Friday’s losses on the euro. For the sellers to get the situation under control, it will take them having to strengthen below 1.1213. After a break in the trend line, we could see the rate falling to 1.1086 again.

On Monday the market often moves against Friday. The euro has broken from the resistance zone. If you’re looking to sell euros, wait for the LB at 1.1340/50. If the euro/dollar lifts above 1.1350 then it’d be worth staving off sales since the risks of a depart above 1.1460 will increase. The forecast I’ve made below shows what I’m looking to see.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar Bull Takeover on Daily

Hourly
Yesterday’s Trading:

The euro/dollar’s 5-day growth has ground to a halt. Trading in Europe saw the euro down due to the ECB’s Ewald Nowotny sticking his oar in and then the US stats came out in the evening which added to the fall. Nowotny suggested that the ECB should adopt additional measures to aid inflation growth.

The US’ CPI for September was down slightly on August, but it remained unchanged when expressed annually. The labor market data turned out better than expected.

The number of initial unemployment benefit applications in the US the week ending 10th October stood at 255,000 (forecasted: 270k, previous: 262k).

The September CPI for the country was -0.2% MoM and 0.0% YoY (forecasted: -0.2% MoM and -0.1% YoY, previous: -0.1% MoM and 0.2% YoY). The index without energy and food for the month stood at 0.2% (forecasted: 0.1%, previous: 0.1%).

The New York Federal Reserve October business activity index was -11.4 (forecasted: -7.4, previous: -14.7).

Main news of the day:

• At 09:35 EET, the BoJ’s Kuroda will speak;
• At 12:00 EET, the Eurozone is publishing September CPI data and August balance of trade numbers;
• At 14:30 EET, the ECB’s Benoît Cœuré is set to speak;
• At 17:00 EET, the Reuters/Michigan consumer sentiment index and the NAHB housing market index for October will be out;
• At 23:00, the US will let us know about purchases of long-term securities purchases by foreign investors in August.

Market Expectations:

The daily candle for Thursday has covered Wednesday’s candle. Due to this, the euro’s fall could continue with even more gusto. Look at how the situation developed on the market after 18th September of this year.

Technical Analysis:

• Intraday target maximum: 1.1415, minimum: 1.1330, close: 1.1350;
• Intraday volatility for last 10 weeks: 121 points (4 figures).

The euro/dollar has fallen from a 1.1494 maximum by 112 degrees. The euro has stopped by the trend line. Taking the candle formation on the daily into account, there’s reason to suspect that it will be broken after a rebound and the euro’s demise hastens. We could see the rate back to 1.1280 by 19th October.

Daily
The ECB’s Ewald Nowotny stopped the euro dead in its tracks near the resistance. The upper limit of the resistance zone crosses through 1.1535. Thursday’s candle swallowed up Wednesday’s. I’ve marked out two similar parts on the graph. If the eurobears begin to pull off this pattern, we’ll need to wait for a return of the euro to 1.1280. Now to the Weekly.

Weekly
On Wednesday the euro left the 1.1086-1.1459 range and on Thursday it closed around 1.1370. An upturned pattern has formed on the daily. If the week closes with a pinbar, we’ll be waiting for a fall to 1.1280 and below.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Pound/Dollar: Expected Consolidation in Wide Range

Hourly
Due to the euro, the pound had a volatile day. The pound received support from the euro/pound cross throughout the day when the ECB’s Ewald Nowoty spoke. The pound fell after the US stats came out in the evening. By renewing the minimum, the price returned back to 1.55.

The pound stabilized at 1.5470. With such a movement pattern, we could see either a fall or a rise. I’ve gone for a fall to 1.5420 to 1.5470. The daily trend line hasn’t been broken.

Daily
The bulls have renewed the maximum, but they couldn’t strengthen beyond the trend line. Today the situation will depend on the euro. If the euro/dollar shifts downwards, the pound/dollar will u-turn downwards, following the euro. If the euro starts to recover, the pound bulls will have a foothold to push the price to 1.5630. This is where the overall trend line is.

Weekly
The bulls will hold the rate close to the trend line at 1.5630.

Vladislav Antonov, Alpari

 

[Alpari]

Short-term Trading Idea FX EUR/USD – Bear Speculation: Bear Takeover

Trading opportunities for currency pair: ECB representative Ewald Nowotny pushed the eurobulls into closing long positions. It’s highly likely that before the ECB’s Thursday meeting, we’ll see the downward movement on the euro resuming. I’ve picked out two price levels: 1.1250 and 1.1086 (by middle of November), with 1.0290 over the medium term.

Background

The last idea I made on the EUR/USD came out on 21st September. For you to get an idea of exactly what the situation is, I’ve gone through the events which have affected the euro below.

Due to a crashing of world stock indices, on 24th August the euro/dollar renewed to 1.1712. When the situation stabilised, the euro/dollar returned to 1.1086. Due to expectations that the Fed will refuse to put up the US base rate, the euro again gained ground on the USD. On 17th September the euro/dollar rose to 1.1459 and on 18th September it lost all of its gains.

In the second half of Friday the USD was up after the ECB’s Benoît Cœuré and the BoE’s Andrew Haldane made speeches. Cœuré announced that the ECB needs to be prepared to extend its QE program and Haldane said that the next move for the UK’s interest rate may be for it to be reduced and not for it to be increased.

As a result, the daily saw an up-turned candle formation form. I expected a break in the trend line and a fall of the euro to 1.1086. The line was broken and the fall stopped at 1.1104. The sellers fell 18 points short of the target.

Current situation

The price rebounded from the daily LB on 23rd September. The euro started to be bought due to expectations of the Fed refusing to up their rates this year. The euro/dollar returned to the 1.1439-1.1535 resistance zone for 16 days.

On Thursday, 15th October, ECB representative, Ewald Nowotny stopped the euro in its tracks at 1.1494. The currency was up against the dollar until he announced that the regulator should undertake additional measures to counter the lack of inflation.

What’s interesting at the moment?

On 18th September the euro was turned around by Cœuré and on 15th October it was turned around by Nowotny. Similar upturned candle formations have appeared at the 1.1439-1.1535 resistance zone (bear takeover). To understand the technical picture for the EUR/USD, I’ve put two graphs in the review: a daily and a monthly.

We have a 16-day euro growth and a bear takeover on the daily. Thursday’s minimum has been broken. The ECB meeting on Thursday will be accompanied by the usual speech from Mario Draghi. In the current conditions, I’m expecting a fall of the euro to 1.1250. If the ECB extends QE, more likely than anything we’ll see a new dollar rally against the euro.

Daily EUR/USD​

We can see on the daily that the sellers need to break a few levels: 1.1280, 1.1250 and 1.1085. A break in the last level will renew the euro's fall along the trend which takes its beginnings from a May 2014 1.3992 maximum.

Weekly EUR/USD​

From a 1.0461 minimum, a correction which lasts for seven months is forming on the weekly. A close of the month below 1.1175 will see the forming of an upturned candle.The oscillator stochastic has flipped downwards. A break in 1.1085 will see the euro's fall resume with new gusto. Whether we see a renewal of 1.0461 will depend on the ECB's actions on Thursday.

Vladislav Antonov, Alpari

 

[Alpari]

Short-term Trading Idea FX EUR/CAD – Bear Speculation: Development on 31st August Ideas

Trading opportunities for currency pair: the euro is under pressure since market participants expect the ECB to extend its QE program. Due to these expectations and the stable oil price around 50 USD, expect the euro to fall to 1.4490 and below. A close of the weekly candle above 1.4930 will stop any fall.

Background

In August we could see a pinbar forming, on the weekly graph. I went for a fall of the euro to 1.4490 and then to 1.4220. Between 31st August and 19th October, the EUR/CAD has dropped 109 points. The pair has been stuck in a correctional phase for three weeks so not much has happened. The euro has lost 1.84% against the Canadian over the last three weeks (-275 points). The falling tendency is set to continue for the euro.

Current situation

On Thursday (15th October), the ECB’s Ewald Nowotny pushed the eurobulls into closing long positions. It’s highly likely that, before the ECB’s Thursday meeting, we’ll see euro sales increase across all pairs. A day earlier, on Wednesday, the Bank of Canada is set to convene.

The euro is under pressure, while the Canadian has support from the oil quotes. Brent costs more than 50 USD per barrel and doesn’t want to fall, even with news that OPEC extraction is up and so are reserves. Market participants are focused on the fall of oil rigs and oil extraction in the US.

According to the latest data from Baker Hughes, the total number of rigs in the US for the week ending 16thOctober was down by 8 to 787. This is a 1131 fall for the year. The number of oil rigs was down by 10 to 595. Gas rigs were up by 3 to 192.

What’s interesting at the moment?

The 1.4490 and 1.4220 targets are still on. The pair has now bounced from the 38.2% fibo-level from a growth from 1.3024-1.5559. For the fall to hasten, we need to see a strengthening below 1.4480. A close of the weekly candle above 1.4930 will cancel out the fall. As a long-term target, we can take 1.4000 for April 2016 (along the dotted line from the 1.3024 minimum).

Vladislav Antonov, Alpari

 

[Alpari]

Short-term Trading Idea FX USD/JPY – Bull Speculation: Recoil from Support

Trading opportunities for currency pair: the USD/JPY has broken from the 118.40 support. A strengthening of the dollar to 120.60 and 121.60 can be expected using the pinbar model.

Background

On 2nd February, 2015 the USD/JPY was trading in a 117.20-118.80 range for a few days. I was expecting growth to 118.42. After a fall to 116.87, the bears ended up in a bull trap. By the end of the week, the target was reached.

Current situation

On 24th August the Japanese yen strengthened significantly. Traders were buying the yen as a safe asset due to the fall in the Asian indices, selling the dollar due to expectations that the Fed wouldn’t put up its interest rate in September. After a fall of the rate to 116.13, the pair is stuck in a 36-day sideways.

For the past two days, the yen has been down against the dollar due to expectations that the Bank of Japan is about to relax its monetary policy. On Friday the BoJ’s Kudrova announced that QE will continue until inflation reaches 2%. The next meeting of the regulator will take place on 30th October.

What’s interesting at the moment?

The USD/JPY has broken from the support which was formed from the minimums from March to May. There is a pinbar; its maximum will be broken. Now it’s on the cards. The next targets are 120.60 and 121.60. A close of the day below 118.05 will cancel out the scenario for growth.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Euro Being Sold Before ECB Convenes

Due to the approaching ECB meeting, market participants on Monday have begun to reassess the open positions in their portfolio. After the ECB’s Ewald Nowotny made some remarks last week, traders began shedding euros and Swiss francs. They are temporarily transferring funds into British pounds and commodity currencies. Traders are worried that on Thursday the ECB could undertake additional measures with regards to the current QE program.
After the Asian session closed, the euro/dollar fell to 1.1308. The pound/dollar was up to 1.5460. Demand for the pound was up across almost all pairs. The pound is feeling a little more confident than the euro. The UK currency has received support from labor market and inflation data that was published.
The Australian dollar is up against its US counterpart after Chinese data was published. Q3 GDP for the country was set at 1.8% against Q2’s 1.7%. This is a 6.9% YoY figure, compared with last month’s 7.0%. Both indicators exceeded forecasted values by 0.1%.
News on Monday is scarce, so more attention is being paid to technical signals. The targets for the pound/dollar and the euro/dollar are at 1.5383 and 1.1287 respectively.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar: Expected Test of 1.13

Hourly

Yesterday’s Trading:

Monday saw the euro down to 1.1305 against the US dollar. Traders are selling euros as they expect the ECB to undertake additional measures on Thursday to combat low inflation.

Main news of the day:

• At 09:00 EET, Germany is publishing its manufacturing price index for September;
• At 11:00 EET, the Eurozone is releasing balance of payments data;
• At 13:00 the BoE’s Mark Carney will speak;
• At 15:30 EET, the US will show us construction permits and planning for new housing for September;
• At 16:00, the US Fed’s New York president, William Dudley, will speak;
• At 16:15 EET, the US Fed’s Jerome Powell will speak;
• At 18:00 EET, the US Fed’s Janet Yellen will speak.

Market Expectations:

The euro/dollar has been stuck in a sideways for 14 days. The euro is still under pressure due to the ECB meeting. The AO and stochastic indicators are overloaded, so on my forecast I’ve gone for a further fall of the EUR/USD rate to 1.1290-1.13.

Technical Analysis:

• Intraday target maximum: 1.1345, minimum: 1.1290, close: 1.1315;
• Intraday volatility for last 10 weeks: 121 points (4 figures).

The euro is vying for its position with the dollar. EUR/USD is trading around 1.1335 against yesterday’s 1.1305 minimum. I wouldn’t count out a rebound to the balance line at 1.1345/50. From there I’m waiting for sales to resume and a fall in the rate to the lower limit of the channel (dotted line).

Daily

The euro/dollar was down to 1.1305 on Monday. I’m waiting for the euro to fall further to 1.1250. If the ECB extends QE, we’ll see another dollar rally to 1.1086 and below. Now to the weekly.

Weekly

The euro/dollar has broken from the upper limit of the horizontal 1.1086-1.1494 channel. The pair will now shift to the lower limit. I’m still waiting for a test of 1.13 and movement towards 1.1250.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Pound/Dollar: Pound Could Leave Equilibria at 13:00 EET

Hourly

Monday’s euro/pound cross is lending support to the UK pound, so instead of falling, the rate has headed north to 1.5496. The price is now by the LB. I don’t have a forecast for today because the BoE’s Mark Carney is set to mix things up. His speech is due to be given at 13:00 EET. If he mentions monetary policy, the pound will swing.

Daily

The pound/dollar is consolidating at 1.5460. The bulls are mobilizing towards 1.5580. Mark Carney’s speech means no one knows where the pound will close.

Weekly

The euro is weakening before the ECB meeting and the pound is receiving support via the crosses. The bulls are having the rate to the trend line at 1.5630.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar Back to Friday’s Maximum

European trades have seen the euro/dollar return to Friday’s maximum. I don’t have a clue what event has sparked demand for the euro as the ECB meeting approaches. The news is weak and we’re all still expecting the ECB to take those additional economic slackening measures.

Germany’s manufacturing index came out worse than expected, with the Eurozone trade balance surplus down.

The current balance of payments surplus in the Eurozone fell in August to 17.7 billion euros against July’s 25.6 billion.

Germany’s manufacturing index was down by 0.4% MoM against an expected -0.1% and a previous -0.5%. The price index is down for the year by 2.1% against a forecasted -1.8% and -1.7% last month.

The head of the Spanish central bank, Luis Linde, announced that the ECB could extend and correct its asset purchasing program where necessary. There’s nothing positive for the strengthening of the euro against the dollar to 1.1386.

There is one factor which could change the mood for euro pairs. But this is just a guess. If the ECB extends its QE program on Thursday, the Swiss National Bank could make a currency intervention so that the franc doesn’t strengthen.

The euro/pound is up 34 points to 0.7353 in spite of the BoE’s McCafferty speaking of the necessity to raise interest rates.

Market participants are waiting patiently for the US Fed’s Yellen, Dudley and Powell to speak. I believe that a fair level for the euro/dollar this evening is 1.1325, with 1.5425 for the pound/dollar. I do have to say though: my expectations don’t always meet those of the market.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar: Rate Stabilised at 1.1350

Hourly

Yesterday’s Trading:

On Tuesday the euro/dollar was up to 1.1386 during European trades. This growth wasn’t strengthened, so the price returned to 1.1331 by the close of the European session. Janet Yellen didn’t mention monetary policy, so there was no reaction to her speech.

Main news of the day:

• At 17:00 EET, the BoC’s interest rate decision will be out and the Bank will make an announcement;
• At 17:30 EET, US oil reserve stats from the US department of energy will be out;
• At 18:15 EET, the BoC’s will hold a press conference;
• At 20:00 EET, the BoE’s Mark Carney will speak.

Market Expectations:

The market is patiently awaiting the ECB meeting. No one knows whether the ECB will extend their stimulative program. I think that more important here is what Mario Draghi has to say at the end of the meeting. His words at the press conference will affect how the euro/dollar closes on Thursday.

Technical Analysis:

• Intraday target maximum: 1.1367, minimum: 1.1312, close: 1.1355;
• Intraday volatility for last 10 weeks: 121 points (4 figures).

The euro/dollar is currently trading near the LB. The last two days have seen a 1.1300 and 1.1390 trading range form. Taking into account that tomorrow the ECB meeting will take place and Europe’s economic calendar is bare, I think the euro/dollar will drop to the trend line and close the day near the LB.

Daily

On Tuesday the euro unexpectedly slowed in its fall. It’s useless to make a forecast before the ECB convenes. If we look at the technical picture: the stochastic is trying to turn around in the zone around 20%. If the ECB extends QE, a new dollar rally against the euro will begin and the rate will head to 1.1086 and below. If the ECB sticks to the same policy and Draghi doesn’t come out with any surprises, the euro/dollar will shift upwards. Here we need to see how the euro passes 1.15. Some difficulties could arise before the FOMC meeting. Now to the weekly.

Weekly

The euro/dollar is still trading in a 1.1086-1.1494 horizontal corridor. I’m still waiting for a test of 1.13 with a subsequent fall to 1.1250. The stochastic is moving upwards and isn’t supporting my idea of a weakening euro against the dollar. The ECB and its chief will dot the “i”s and cross the “t”s tomorrow. Draghi could cancel out all of the technical signals tomorrow.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Pound/Dollar: Expected Movement in Sideways Channel

Hourly

In the review on the European session I expected a fall of the GBP/USD to 1.5325. It fell to 1.5434 and only today reached 1.5326. A sideways channel has formed. Taking into account that the ECB is to convene tomorrow and Mark Carney will speak today, I’ve gone for a fall of the pound to the lower limit of the channel at 1.5414 and then a return to 1.5475. Be prepared for the GBPUSD going lower than 1.5414.

Daily

The pound/dollar has been forming a long-shaded candle for four days now. It’s worth paying attention to the candle combination since the GBPUSD could shift itself very quickly to 1.5350/60.

Weekly

No comment.

Vladislav Antonov, Alpari

 

[Alpari]

Alpari: Technical Analysis

Euro/Dollar Trading in 40 Point Range

Trades in Europe are being conducted relatively calmly. As tomorrow’s ECB meeting draws nearer, the euro/dollar is trading in yesterday’s price range between 1.1323 and 1.1386. The euro is doing alright on the back of the euro/franc, euro/yen and euro/Australian dollar crosses.

The pound/dollar is down to the lower limit of the sideways channel from trade opening in Europe. By rebounding from the 1.5414 minimum, the pound returned to 1.5461. The rate is at equilibrium on the hourly. The pound has ignored the macro economic data.

September saw UK public sector net borrowing fall to 8.63 billion pounds against a forecasted 9.40 billion and August’s 10.79 billion (previous: reassessed from 11.31 billion pounds). The UK’s budget deficit is up from 0.717 billion pounds (reassessed from -0.221 billion pounds) to 17.9 billion pounds.

There are some important events planned for this evening: the Bank of Canada’s interest rate decision and press conference, in addition to Mark Carney (Bank of England) speaking at 20:00 EET.

It would be great to see dollar pairs staying at their current price levels until Thursday when the ECB will let us know its decision on interest rates and QE. I’m not making any forecasts for this evening.

Vladislav Antonov, Alpari