ThirdBrainFx Market Commentary

[ThirdBrainFx]

Market Commentary - February 19, 2014

Earlier today, the UK's claimant count change figure came out at -27,600 against previously forecasted -18,300. The Office for National Statistics in the UK release this figure as a change in the number of people claiming unemployment-related benefits during the previous month. It also released the unemployment rate in the UK, which unexpectedly rose to 7.2% against previously forecasted 7.1%.

The US Census Bureau released the new building permits figure, which came out at 0.94m. Industry analysts were predicting this figure to be around 0.98m. Hence, it appears that the US housing market will likely to slow down in near future, based on this monthly data as this economic indicator is an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building.

AUDNZD Outlook

Few days back we shared an analysis on the AUDNZD pair in which we highlighted the importance of the 1.0900/10 level.The same level has acted as a resistance several times during the last several days. The 38.2% retracement level of the last major down-move from the 1.1580 level sits around the same region. There are a couple of spikes around the same area. However, the pair has failed to overtake the same.

There is also a down-move trend line, as plotted in the daily chart shown below. This trend line also coincides with the 38.2% fib level. So, in short to medium term the pair may find it hard to overtake this region. However, a break above the mentioned levels may be a bullish call, as the pair might rise towards the 50.0% Fibonacci retracement at around 1.1035 level. I think there is also a possibility of an inverse head and shoulders formation with a clear hurdle at around the 1.0880 level. The MACD is under a small divergence, which is an early warning sign.

On the downside, as mentioned earlier, the 1.0740 level is very critical.This particular level has supported the pair several times. A break below this level, may interrupt the possibility of an inverse head and shoulders formation. After a breach of this level the pair might eye the precious low at around the 1.0500 level. So, I think we need to be very careful trading this pair in the short term, and should wait for a break before jumping into a trade.

AUDJPY Outlook

AUD/JPY seems to have hit a roadblock ahead of 93.00. This area offered strong support during the first weeks of January. This time around it is acting as similarly strong resistance. A perfect double top formation with identical highs at 92.97, coupled with a weaker MACD on the second top, takes some steam out of AUD/JPY’s bullish moves and increases the chances of a retracement.

Towards the downside we can observe another strong pivot zone around 91.03 – 91.16. This price pivot area has acted as support and resistance multiple times in the last few weeks. All trades aiming towards the downside should first account for this level, since price may bounce up once again. If AUD/JPY successfully crosses below 91.00, it opens up the way towards 88.00

Since price is currently squeezed between two very strong pivot zones, AUD/JPY might also take on a range behavior – erratic and choppy - until such a time when a break will occur above 93.00 or below 91.00. If that will be the case, it will be best to wait for the breakouts instead of trading within these boundaries.

 

[ThirdBrainFx]

Thanks for sharing your views man. It was very useful for me. Especially the chart which you have shared saved me and stopped me from doing a blunder. I was planning on buying the EURUSD yesterday at the current level. However, I stopped after I look into the chart you shared.

I have also plotted the same trend line on my chart as well, as shown below. Now, I am also monitoring this trend line very closely. BTW do you think that the pair can manage to break higher above this trend line? Or do you think the pair might continue to trade lower from the current levels? Please share your views. Thanks a lot.

Glad to know our daily analysis was helpful to your trading. Please do share your views on our analysis. Looking forward to having a meaningful discussion with everyone here.

 

[ThirdBrainFx]

Market Commentary - February 20, 2014

It was an eventful day as there were more than a handful of important data releases. One of the major one was the US Core CPI figure which measures change in the price of goods and services purchased by consumers, excluding food and energy. Since the volatility of food and energy price is pretty high, investors prefer to pay more attention to the core CPI data.

The US Department of Labor will publish this week's unemployment claims figure during the afternoon. Last week, the figure came out at 339K, and this week the forecast is 335K. Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health. Also, the Federal Reserve often look to keep the employment rate at full with its monetary policy. Hence, this is considered to be an important data.

EURNZD Outlook

In an analysis for the EURNZD pair shared few days back, we highlighted the importance of an up-move trend line. The same trend line again acted as a barrier for the pair, and the pair bounced sharply from the same.The recent pullback in the risk has caused a slide in the New Zealand dollar. However, the Euro has managed to hold on the gains. This has resulted in a rally for the EURNZD pair.

An important thing to note here is that the pair is coming off from the 61.8% Fibonacci retracement level of the last major up-move from the 1.5912 to 1.6995 levels. So, this can be seen as an important rally in the pair. The RSI has breached the 50 level, and looks set for a test of 70 or even 80 level. There is a divergence on the MACD as well, which suggest that the rally has legs and can take the pair higher from the current levels. On the upside, the 1.6740/50 is still a major hurdle for the pair. If the buyers manage to break this level, then we can expect more strength in the pair in the coming days.

On the downside, as mentioned earlier, the 1.6480/60 region may act as initial support.A break below this area may again call for a test of the key swing level of 1.6325. This level is now coinciding with the up-move trend line. If the sellers take control, then we can also witness a break of this area, and a test of the previous low.

EURAUD Outlook

Since the beginning of the year, EURAUD has failed again and again to break and close below the support level at 1.5020. More recently, the pair has swung back and forth between this support and 1.5307. The latter is a recent pivot zone, formed on 38.2% retracement of the last major bearish move and, to top it all off, the 200 Simple Moving Average on 4H caught up with this level on Wednesday. A confluence of resistance signals of this magnitude, when broken, more often then not leads to fast rallies.

In recent hours EURAUD finally broke above the major resistance cluster at 1.5307. This bullish swing appears as if it going to target the next resistance area between 1.5480-1.5507, where 61.8% retracement on the last major bearish move and a smaller pivot zone are likely to take some steam out of the bullish rally. Further up, in the 1.5590 area, there is yet another resistance formed by previous highs. With MACD on Daily timeframe still negative, reversals – or at least partial corrections – are to be expected around the previously mentioned resistance levels.

Towards the downside, EURAUD can always come back to re-test the 1.5307 pivot zone before attacking the main resistance areas. The pair should not be considered bearish unless it closes and stabilises below 1.5307.

 

[ajpipsmaker]

Thanks for sharing your views man. It was very useful for me. Especially the chart which you have shared saved me and stopped me from doing a blunder.

Anytime sanjusharmaDHP. I am glad that the analysis was useful. Most important thing is that it saved some bucks. However, we need to be careful here in the short term. As I shared earlier, there is a channel forming. The upper resistance zone proved vital, and now the pair is coming close to the channel support area.

There is also a critical swing support at around the 1.3680/60 levels. The sellers might find it hard to break this support area in one go. So, we may witness some consolidation. I am not sure here. And, one of my rules is that when I am not sure, I stay away for some time. So, I will wait for some time and monitor price action carefully. Thanks.

 

[ThirdBrainFx]

Market Commentary - February 21, 2014

Today, there are several important data releases are scheduled. Early in the morning, the UK's monthly retail sales figure will be released by the Office for National Statistics. This particular indicator measures the changes in the total value of inflation adjusted sales at the retail level in the United Kingdom. As it is considered to be a primary gauge of consumer spending, which accounts for the majority of overall economic activity, investors pay keen attention to the changes in the retail sales figure on a month over month basis. The UK's retails figure will be released at 9:30 AM, and the forecast is set at -0.9% against last month's 2.6%, indicating a slowdown in the retail sector.

During the afternoon, at GMT 1:30 PM, the Statistics Canada will release the core CPI (m/m) and the Core Retail Sales (m/m) figure. While the core CPI is an important measure of the nation's inflation situation, the retail sales measures the sales at the retail level. The core retail sales is forecasted to come out at 0.2% against last month's 0.4%, and the core CPI is forecasted to come out at 0.1% against last month's -0.4%.

After an hour and half, at GMT 3:00 PM, the US National Association of Realtors will be releasing the annualized number of residential buildings that were sold during the previous month, better known as the existing home sales figure. However, this data exclude any new construction in the United States. This month, the existing home sales is expected to come down to 4.73 million from last month's 4.87 million.

USDJPY Outlook

Since last week’s analysis, USD/JPY has been struggling to find a clear direction. The major bearish trend has not been invalidated at all, with all attemps at stopping a higher high stopping dead in the tracks ahead of 102.70. This is where the last lower high stands in the current downtrend. While price stays below this level the bearish trend should not be ruled out.

However, on a more recent note, following the first two rejections from 102.64-102.70 resistance area and the subsequent drop to 101.38, USD/JPY has been gradually forming an ascending triangle chart pattern. On the 4H timeframe MACD shows indecision more then anything else, while the 200 Exponential Moving Average has caught up with the resistance and presently adds to its strength.

For upside potential above 102.70, the resistance lines can be found at 103.37, followed by 103.85. The latter will soon match the bearish trendline based on the swing highs in January.

Towards the downside, If the triangle support is broken the bearish trend will resume. This will open the way towards 100.75 and if that fails to hold, towards the big round number 100.00.

EURGBP Outlook

The strength in the pound has driven the Euro down for some time.However, it looks like that the pound is stabilizing at the current levels, and the EURGBP buyers are trying to get an advantage of the same. The pair after declining towards the 0.8156support level has bounced sharply. However, there are still no signs of strength in the pair.

The pair tested the 50.0% Fibonacci retracement level of the last down move from the 0.8349 to 0.8156 level. The pair failed to overtake the same, and sellers reappeared around the 0.8250 level. As of writing, the EURGBP is flirting with the 38.2% fib level. There is also a trend line, as can be seen in the 4 hour chart below, which is coinciding with the critical resistance zone at around the 0.8260/80 levels. I think that the buyers might struggle to take the pair above this resistance zone. A breach of this area may call for a test of full 100% extension in the near future.

On the downside, initial support lies at around the key physiological support at around the 0.8200 level. The 23.6% Fib level may now act as a support around the same level. A breach of this level might take the pair towards the previous low. The MACD is under strong divergence, which suggest a pullback may be on the cards. The RSI is above 50 level, which is a positive sign in the short term.

 

[sanjusharmaDHP]

Since last week’s analysis, USD/JPY has been struggling to find a clear direction. The major bearish trend has not been invalidated at all, with all attemps at stopping a higher high stopping dead in the tracks ahead of 102.70.

I agree I also see in my charts the importance of the 102.80 resistance zone. There is a trend line around the same level, which has acted as a resistance more than a couple of times for the pair. This trend line is coinciding with the precious swing level around the same level. So, one can say that there are plenty of reasons for the sellers to be active around the 102.80 level.

A break and close above this zone may be a bullish call for the pair. If this happens, then I might even consider buying the pair. I am not sure, but I will have a close look at the price action, and act accordingly.

 

[KennyMill]

Is it just me, or is USD/JPY getting more complicated today? 102.70 line was crossed, 102.80 reached, now it's back down to test 102.70. Maybe I'm following a timeframe that's too small.

Which one is better, a 1h or a 4h bar closing? I mean for a breakout trade above 102.80.

I am watching the 1H tf right now, yet with several minutes to go until the US Existing Home Sales release, I feel this close might end up being irrelevant in the next hour.

 

[ThirdBrainFx]

Update - Feb 21

Hi Guys,

Sorry about the mistake, the correct chart for Feb 21 EURGBP is:

 

[ajpipsmaker]

There is a trend line around the same level, which has acted as a resistance more than a couple of times for the pair.

It is a very interesting chart. However, you are following a down-move trend line, and I am following an up-move trend line. You can have a look at the chart I have attached below. This up-move trend line has acted as a support for more than four times. This is a critical trend line, in my opinion.

I will look to buy dips and around the same trend line. There is also a support at around the 102.00 figure. This confluence area is key, in my opinion. A break and close below will trigger further losses for sure in the pair.

 

[ThirdBrainFx]

Market Commentary – February 24, 2014

Today, there was only a handful of important economic data release. During the early morning, the Ifo Institute for Economic Research published its German Business Climate index, which measures the level of a composite index based on surveyed manufacturers, builders, wholesalers, and retailers. The forecast for this month’s German Ifo business climate was set at 110.7. However, the actual value came out at 111.3.

At 10:00 AM, the Eurostat released the year-over-year CPI figure which measures the changes in the price of goods and services purchased by the European consumers. The CPI effectively measures inflation rate in the economy. This month, the CPI (y/y) was expected to come out at 0.7% amid concern over deflation in the Eurozone by the European Central Bank. The monetary policy to reduce interest rate few months ago seems to be working as the CPI actually came out better than expected, at 0.8%.

USDCAD Outlook

In the last analysis posted for the USDCAD, we highlighted the importance of a wedge created on the 4 hour chart. During the last week, the pair broke the same wedge to the upside, and traded higher. The follow through after the break was very strong as expected. The bulls gave no chance to the bears to take control of the situation after the break.

After the break, the pair was initially capped by the confluence zone of the 50.0% and 61.8% Fibonacci retracement level of the last major down-move from the 1.1223 to 1.0907 levels. The pair has now managed to clear the 61.8% retracement level, and now may be eyeing the next key swing level at around the 1.1170/80 levels. A breach of this level may take the pair higher towards the last high. There are chances that the pair might set a new high after the break. The RSI is at the extreme levels, and there are chances of a consolidation or a pullback from the current levels in the short term.

On the downside, initial support lies at around the 50.0% retracement level, and previous support region at around the 1.1050/60 levels. A break of this level may take the pair below the 38.2% fib level at around the 1.1010/00 levels. We need to be very careful from here on as the bears might be setting up for a trap in the short to medium term.

AUDUSD Outlook

As per last week’s AUD/USD analysis, the 0.9070 resistance proved to be the crucial. All in all, the market made three attempts towards this level. The pair failed to breach the resistance on all occasions. On the daily timeframe, the double top reversal pattern correctly hinted to what was about to happen: yet another 140 pips correction.

If we observe closely, the correction was neat, with all lower swing highs being bound by a bearish trendline off of which anyone could pick the swing highs and go short. The corrective swing stopped on the 200 Exponential Moving Average on the 4H timeframe, priced at 0.8936. This location was also crucial, allowing AUD/USD to retain some bullish potential in the future. 10-20 pips lower, and the most recent swing low in February’s uptrend would have been broken, leaving no doubt that a deeper correction is in play.

In the early hours of trading the pair has once again dipped to 0.8936, creating a double bottom and, as a direct result, a descending triangle chart pattern. As a direct result the direction will be neutral while price remains inside this triangle formation.

Immediately below 0.8936, AUD/USD will be bearish again, with potential to reach the pivot zone around 0.8830.

Towards the upside, the trendline resistance – or the last swing high that actually touched the resistance, 0.8986 - must be broken in order to have any chances at reaching 0.9070 again.

 

[KennyMill]

EURGBP Outlook

The strength in the pound has driven the Euro down for some time.However, it looks like that the pound is stabilizing at the current levels, and the EURGBP buyers are trying to get an advantage of the same. The pair after declining towards the 0.8156support level has bounced sharply. However, there are still no signs of strength in the pair.

Isn't the double bottom on the daily chart enough strength to justify a long position? I have done just that, admitting with a really late entry, to test the idea of a longer term trend reversal. MACD is also showing strong divergence on the daily chart time and time again.

I justify my stop loss based on the daily range. 0.8150 is below the support, so if that's reached, then there's not going to be reversal anytime soon based on the facts I see.

 

[ThirdBrainFx]

Market Commentary – February 25, 2014

Earlier today, at GMT 9:30 AM, the British Bankers' Association released the mortgage approvals figure, which measures the number of new mortgages approved for home purchase by BBA-represented banks during the previous month. The BBA mortgage approval figure came way better at 50,000 against previously forecasted 47,900. As a result the GBPUSD has been trading with certain bullish momentum today.

Later in the afternoon, the Conference Board Inc will release their CB consumer confidence index, which measures the level of a composite index based on surveyed households. Last month, the CB consumer confidence figure came at out at 80.7, and this month the forecast is set at 80.2.

GBPUSD Outlook

The GBPUSD is trading around critical levels.The pair after setting a high at around the 1.6820 area has declined towards the key swing level of 1.6600.The 1.6600 level hasd acted as a resistance numerous times, and now the sellers are finding it very hard to break the same. The 38.2% retracement level of the last leg up from the 1.6250 to 1.6825 levels also sits around the same zone. There was a false spike lower yesterday, but the pair managed to bounce sharply from the mentioned zone.

The pair has also formed a down-move channel, as can be seen in the 4 hour chart shown below.This channel is very critical, as a break above or below may call for a swing move for the pair. There was also a false break to the upside, but the pair was unable to close above the channel, and fell back inside the channel again. There are many fundamental events lined up for the UK in the coming days, and we can expect a break of this channel. A break up might call for a test of the previous high in the short to medium term.

On the downside, initial support lies at around the 50.0% retracement area at around the 1.6530/40 levels. A break of this zone may take the pair below towards the 61.8% fib level at around the 1.6470/80 levels.

One of our top performing automated strategies, MorningBull, has already opened several long positions with the GBPUSD, since last week. Earlier this morning, those four positions represented almost 200 points in profit with the GBPUSD pair. If the channel is broken within next few days, the GBPUSD will gain enough bullish momentum to reach towards the 100% retracement level of the previous downward move, around 1.6820, as illustrated in the chart above. This will represent almost 600 points of profits altogether. For further information, please visit our website.

GBPJPY Outlook

After a decently sized 1100 pip bearish correction in January, down to 163.84 (38.2% fibonacci on the 147.08-174.81 swing), the first week of February started off with a double bottom reversal pattern and a bullish Pin bar price action pattern on the weekly chart. GBP/JPY remained bullish until the moment it reached 171.84. The only resistance in this area appears to be that of the bearish trendline from January’s major highs.

The resistance is sitting at 171.71, confirmed by two highs and the bearish trendline from January. Both times price went up to this resistance, +150pips sell-offs quickly followed. The support, marked at 169.20, has also been confirmed on more then two times. Based on this we can deduce GBP/JPY’s current direction is neutral.

Towards the downside, a range break below 169.20 can lead to a large bearish potential. The bearish correction might resume it’s course towards 164 and later towards 161 (50% fibonacci).

All bearish scenarios will be invalidated if the resistance of the range at 171.71 is crossed and price stabilizes above it. If this happens, the bulls are unlikely to stop before reaching January 2nd high at 174.81.

 

[sanjusharmaDHP]

The resistance is sitting at 171.71, confirmed by two highs and the bearish trendline from January.

Nice analysis man. I am rather watching a very simple chart for the GBPJPY pair. The only think I am keeping an eye on is an up-move trend line, as can be noted from the attached 4 hour chart. The pair has bounced a time and again from this trend line. However, I feel that the pair is on a verge of breaking this trend line in the short term. And, once the pair breaks this trend line, then we might see a pressure selling in the pair. Let's see how the pair goes from these levels.

 

[ThirdBrainFx]

Isn't the double bottom on the daily chart enough strength to justify a long position? I have done just that, admitting with a really late entry, to test the idea of a longer term trend reversal. MACD is also showing strong divergence on the daily chart time and time again.

I justify my stop loss based on the daily range. 0.8150 is below the support, so if that's reached, then there's not going to be reversal anytime soon based on the facts I see.

Hi KennyMill,

We see there is a bearish pin bar on the EURGBP which sure is not a favorable sign to go long at this stage. Yes, you are right about the double bottom formation. That would have been a very good long entry when price was rejected from the previous support level.

 

[ThirdBrainFx]

Market Commentary - February 26, 2014

Bank of England (BOE), Monetary Policy Committee (MPC) member, Ben Broadbent is due to deliver a speech titled "Prospects for the UK Economy: Achieving Balanced and Sustainable Growth" at the Institute of Directors, in London. Expect the market to become volatile as investors may try to guess the direction of the MPC as MPC members vote on where to set the nation's key interest rates.

When Mr. Broadbent will be speaking, the UK's Office for National Statistics will be releasing the second estimate of the quarter over quarter GDP. This economic indicator measures the changes in the inflation-adjusted value of all goods and services produced by the economy. This quarter, the forecast for the second estimate of the GDP (q/q) is set at 0.7%, same as last quarter.

During the afternoon, the US Census Bureau is set to publish the new home sales figure. This figure is an annualized number of new single-family homes that were sold during the previous month. Since sale of a new home triggers a wide-reaching ripple effect in the economy, investors keep an eye on this figure to predict future direction of the future economic growth patterns.

NZDUSD Outlook

In an analysis earlier, we highlighted the importance of an up-move channel for the NZDUSD pair on the 4 hour chart. The pair traded in an up-trend for quite for some time to test a critical resistance area at around the 0.8390 level.However, the pair failed around the same level, and traded lower. The pair also broke the same up-move channel, as can be seen in the 4 hour chart shown below.

The pair fell around 100 pips after the break. However, the pair found support at around the 0.8240/50 levels. Since then, the pair is trading sideways for some time. The pair is flirting with the 61.8% Fibonacci retracement level of the last down-move from the 0.8391 peak to 0.8241 low. A 4 hour close above this level may take the pair higher, and then it might even test the previous high.The RSI is above the 50 level, which is a positive sign in the short term.

On the downside, initial support lies at around the 50.0% retracement area at around the 0.8315/10 levels. A break of this area may take the pair below towards the 0.8280/60 support zone. Remember, the 0.8200/10 is a major hurdle for the pair towards the downside, as the pair has held the same support numerous times. The MACD has started diverging, which is another positive sign, in our opinion. One can expect some more sideways action before a move up or down.

One of our top performing automated strategies, MorningBull, has already opened several long positions with the NZDUSD, since last week. Earlier this morning, those four positions represented over 250 points in profit with the NZDUSD pair. If the NZDUSD close above the 1.8343 resistance, it will find additional bullish momentum which may take the pair towards 0.8390, where total profit for the NZDUSD alone will reach around 500 points. For further information regarding our automated strategies, please visit our website.

NZDJPY Outlook

After a strong bullish trend that has been going on since August 2013, in late January NZD/JPY corrected 50% of the bullish move, or 600 pips worth, and immediately bounced back up after touching 200 Simple Moving Average offered by the daily chart.

More recently, similarly with the rest of the yen pairs, it has been stuck in neutral. Fortunately for us, what NZD/JPY lacks when it usually ignores fibonacci levels, it makes up by respecting pivot zones all too well.

Towards the upside, if we pick a thin line then we get a clear resistance at 85.73, but if we widen the area to 15 pips then we can observe just how massive of a pivot zone this area is. At least seven times in the last three months 85.58-85.73 has worked out well as resistance or support. The 4h 200 Simple Moving Average underlined the pivot area as well since mid-January. A bullish break and close above 85.73 will put a big target on 87.36 and above, as the main daily trend should gain back some strength.

This series of lower highs, between 85.58 and 85.73, hint to general weakness in the uptrend. If the resistance holds, towards the downside we have another pivot zone at 83.93 which can be considered the support in this range-like period. A break and close below the support opens the way towards 82.80, 81.40 respectively.

 

[ajpipsmaker]

More recently, similarly with the rest of the yen pairs, it has been stuck in neutral.

I agree with you on this one. I was also looking at the NZDJOY pair chart, and noted few things, which I would like to share with you guys. I clearly see a 100 pips range for the pair between the 84.70 to 85.70 zone. The 84.70 is acting as a support for quite some time now, and on the other hand, 85.70 is acting as a resistance. However, I see more bearish pressure, than bullish, the resistance zone is critical, and there is a down-move trend line around the same zone. I will definitely look to play a breakout.

 

[ThirdBrainFx]

Market Commentary – February 27, 2014

At GMT 12:30 AM, the Australian Bureau of Statistics released the national private capital expenditure figure for the quarter, which came out way worse, at -5.2%, against previously forecasted -1.0%. This data measures the changes in the total inflation-adjusted value of new capital expenditures made by private businesses.

The US Department of Labor is going to publish the unemployment claims figure for the week during the afternoon, at GMT 1:30 PM. This figure represents the number of people who filed for unemployment insurance for the first time over the past week. Since employment is a key concern for the US Federal Reserve, and its interest rates are often guided to keep the economy at full employment, investors are keen to follow this figure. This week, the forecast for the unemployment claims figure is set at 333K against last week’s 336K.

Shortly after the unemployment claims figure data hits the market, the US Federal Reserve chair Janet Yellen is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC. As head of the central bank, which controls short term interest rates, she has more influence over the nation's currency value than any other person. Hence, the market may become extremely volatile during her speech.

USDCHF Outlook

The recent strength in the CHF is noticeable across the board. The two pairs which are trading lower for the last couple of weeks are USDCHF and EURCHF. The strength in the CHF can be clearly seen in the EURCHF pair, as the pair is trading lower, and near critical support levels. The USDCHF is also trading around critical support levels, and there are chances that the pair might consolidate for some time in a range.

We have been following a down-move trend line, which can be clearly seen in the daily chart shown below. The pair has failed several times around the same trend line. Yesterday, the pair gained some momentum to the upside, but failed just below the trend line. The pair is currently flirting between the 61.8% and 76.4% Fibonacci retracement level of the last leg higher from the 0.8798 low to 0.9155 peak. There is no denial that the pair can trade lower from the current levels, and test the previous low.

On the upside, the 0.8930/40 region is the immediate resistance zone for the pair. The pair has struggled time and again around the same resistance area. After this, the major resistance lies around the trend line confluence area at around the 0.8950/60 levels. A break and close above the trend line might ignite a bullish move in the pair. So, we need to watch this trend line in the short to medium term for a break.

One of our top performing automated strategies, MorningBull, has already opened several long positions with the USDCHF, since last week. Earlier this morning, those four positions represented over 90 points in profit with the USDCHF pair. If the USDCHF close above the 0.8928 resistance, it will find additional bullish momentum which may take the pair towards 0.9032, where total profit for the USDCHF alone will reach around 650 points. For further information regarding our automated strategies, please visit our website.

Gold Outlook

Since the start of the new year, Gold has put on quite a bullish show, gaining close to 14% in two months. Up until now there have been little to no bumps along the way to slow the appetite for gains. Up until now…

On the daily chart, Gold has reached 61.8% on the last bearish swing that lasted between August ($1433) and January ($1182). This week’s current high of $1.345,38 also matched a price pivot zone that goes back to the first half of 2013. To further confirm how strong this resistance area is, Gold reacted strongly yesterday, eventually forming a bearish engulfing bar on the daily chart, which can be construed as a reversal signal. On the 4H chart MACD also shows negative divergence, pointing out some weakness in the current uptrend.

Towards the downside, to match the resistance around $1345, it should be noted that $1325 is the resistance from the last few weeks which is now turning into support. Furthermore, the 1hour chart 200 Simple Moving Average has caught up with the price, adding additional support around this pivot zone. And lastly, $1322 is approximately 61.8% between $1307 and $1345.

As long as gold doesn’t drop heavily below $1321 the uptrend might continue in spite of weakness warnings in the uptrend. $1360 and $1375 are the first two resistance levels that come up, with $1433 a distant third.

Towards the downside, $1307 is the close support level. If broken as well, the slide will continue on to target $1278.

 

[sanjusharmaDHP]

Towards the upside, the trendline resistance – or the last swing high that actually touched the resistance, 0.8986 - must be broken in order to have any chances at reaching 0.9070 again.

Well, I think the plan of getting long at higher levels might be wrong mate. Better search for possibilities to buy dips. I was waiting for a down move in the AUDUSD to around 0.810/20 level. I finally got one. I have a very small long running with a trailing stop. I think the pair might struggle to overtake the 0.8960 resistance zone. This level also coincides with the broken trend line, as can be seen in the chart below. That's why I have a trailing stop with an order again at 0.8912.

 

[ajpipsmaker]

Well, I think the plan of getting long at higher levels might be wrong mate. Better search for possibilities to buy dips. I was waiting for a down move in the AUDUSD to around 0.810/20 level. I finally got one. I have a very small long running with a trailing stop. I think the pair might struggle to overtake the 0.8960 resistance zone.

I have a slight different view on the AUDUSD pair. You have plotted an up-move trend line, and I am following a down-move trend line. There is a down-move trend line, which has held the AUDUSD pair a number of times. The recent failure at around the 0.8990 level also came around the same trend. I think as long as the pair is trading below this trend line, then it remains in the bearish tone. The sellers will not give up easily in the short term, in my opinion. However, I somehow agree to an extent with you that buying dips should be favored.

 

[ThirdBrainFx]

Market Commentary – February 28, 2014

Earlier in the morning, the Eurostat released the changes in the price of goods and services purchased by the European consumers on a over year over basis, known as the CPI flash estimate. Eurostat bases this estimate on energy prices and EU member states that report early CPI data, and investors pay keen attention to this change in order to predict the inflation in the economy. Last month, the CPI flash estimate (y/y) came out 0.8%. This month, the forecast was set at 0.7%. However, the actual figure came out same last month, 0.8%.

More bad economic news came out for Canada during the afternoon. The Statistic Canada reported that Canadian month over month GDP went down by 0.5% last month, while the forecast was set at a decline of only 0.2%. The GDP measures changes in the inflation-adjusted value of all goods and services produced by the economy and investors are keen to keep an eye on the growth of the economy.

At GMT 3:00 PM, the US National Association of Realtors will be publishing the month over month pending home sales figure. This economic indicator measures the changes in the number of homes under contract to be sold, but still awaiting the closing transaction. However, this figure excludes new constructions. Last month, the pending home sales went down by 8.7%, and this month it is expected to bounce back with a 2.9% increase.

EURJPY Outlook

After finally breaching 140.00 big round number on Wednesday, yesterday morning EUR/JPY has dropped just a little over 140 pips, only to recover those losses in the second half of the day. This resulted in a bullish price action pattern on the daily chart, a bullish pin bar.

This bullish price action signal on the daily chart was never activated thought, as EUR/JPY reached 140.18 where the 200 Exponential Moving Averages on both 1H and 4H offered some type of resistance. The pair is in a downtrend on the smaller time-frames, making lower swing highs one after another. There is no easily identifiable channel, this previous swing highs are among the only chart indicators that will point out where and when this downtrend will be over.

The most recent swing high of 140.18 is the current resistance. If EUR/JPY gains enough momentum to rise above this level then 141.25 will be the next immediate target.
Towards the downside, EUR/JPY should become more predictable if it drops below 138.70-138.90. This area coincides with 50% fibonacci retracement on February’s upswing and a multitude of lows confirm the strength of this support level.

One of our top performing automated strategies, MorningBull, has already opened several long positions with the EURJPY, since last week. Earlier this morning, those four positions represented over 190 points in profit with the EURJPY pair. If the EURJPY close above the 141.00 resistance, it will find additional bullish momentum which may take the pair towards 142.40, where total profit for the EURJPY alone will reach around 750 points. For further information regarding our automated strategies, please visit our website.

EURNZD Outlook

In an analysis for the EURNZD pair shared some time back, we highlighted the importance of an up-move trend line on the daily chart. The same trend line is again coming into play, as the pair is testing the trend line and support area. The EURNZD pair has been declining for the past few days, as the demand for the New Zealand dollar has increased in the recent times. The New Zealand dollar was also seen gaining ground against the currencies such as AUD and GBP.

The pair as of writing is flirting with the up-move trend line, as can be seen in the daily chart below. The pair is also finding bids around the 61.8% Fibonacci retracement level of the last leg higher from the 1.5912 low to 1.6995 high. A break of the trend line and fib support level might take the pair lower towards the swing area at around the 1.6220/30 levels. A breach of this level might call for a full test of 100 extension in the short to medium term.

On the upside, initial resistance lies at around the 50.0% retracement level, followed by the key swing area at around the 1.6500 level. The RSI has breached the 50 level, and bending its back towards the 30 level, which is a negative sign in the short term. The MACD has also started diverging towards the bearish slope, which points bearish pressure for the pair. So, we need to monitor the trend line very closely, and act accordingly.