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COT Currency Speculators raised British Pound Sterling bearish bets for 10th week

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter

Here are the latest charts and statistics for this week’s Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday May 10th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Highlighting the COT currency data this week was the rise in bearish bets for the British pound sterling currency futures contracts. Pound speculators have raised their bearish bets for a tenth consecutive week this week and for the eleventh time out of the past twelve weeks. Over the past ten-week time-frame, pound bets have dropped by a total of -79,261 contracts, going from -337 net positions on March 1st to a total of -79,598 net positions this week. The deterioration in speculator sentiment has now pushed the pound net position to the most bearish standing of the past one hundred and thirty-seven weeks, dating back to September 24th of 2019.

Pound sterling sentiment has been hit by a recent slowing economy as the UK GDP declined by 0.1 percent in March after flat growth in February. Also, weighing on the UK economy is the war in Ukraine that has sharply raised inflation in the country (and elsewhere) and which could see the UK economy with the lowest growth rate among G7 countries in 2023, according to the IMF.

Overall, the currencies with higher speculator bets this week were the Euro (22,907 contracts), US Dollar Index (1,705 contracts), Bitcoin (315 contracts) and the Mexican peso (2,102 contracts).

The currencies with declining bets were the Japanese yen (-9,660 contracts), Australian dollar (-13,198 contracts), Brazil real (-1,010 contracts), Swiss franc (-1,856 contracts), British pound sterling (-5,785 contracts), New Zealand dollar (-6,386 contracts), Canadian dollar (-14,436 contracts), Russian ruble (-263 contracts) and the Mexican peso (2,102 contracts).


Speculator strength standings for each Commodity where strength index is current net position compared to past three years, above 80 is bullish extreme, below 20 is bearish extreme OI Strength = Current Open Interest level compared to last 3 years range Spec Strength = Current Net Speculator level compared to last 3 years range Strength Move = Six week change of Spec Strength


Data Snapshot of Forex Market Traders | Columns Legend
May-10-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index
USD Index 57,556 84 34,776 86 -37,174 13 2,398 43
EUR 705,046 84 16,529 40 -43,026 64 26,497 18
GBP 264,594 80 -79,598 17 95,245 86 -15,647 23
JPY 247,278 87 -110,454 1 124,927 97 -14,473 24
CHF 51,282 37 -15,763 40 29,819 69 -14,056 16
CAD 151,009 31 -5,407 38 2,939 67 2,468 35
AUD 153,209 47 -41,714 46 47,126 54 -5,412 39
NZD 56,235 56 -12,996 49 16,874 56 -3,878 7
MXN 153,858 28 16,725 34 -20,866 64 4,141 61
RUB 20,930 4 7,543 31 -7,150 69 -393 24
BRL 61,450 55 40,778 90 -42,031 10 1,253 79
Bitcoin 10,841 57 703 100 -789 0 86 15

Open Interest is the amount of contracts that were live in the marketplace at time of data.


US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week came in at a net position of 34,776 contracts in the data reported through Tuesday. This was a weekly lift of 1,705 contracts from the previous week which had a total of 33,071 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 85.8 percent. The commercials are Bearish-Extreme with a score of 12.8 percent and the small traders (not shown in chart) are Bearish with a score of 42.8 percent.

US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 86.6 3.2 8.6
– Percent of Open Interest Shorts: 26.2 67.8 4.5
– Net Position: 34,776 -37,174 2,398
– Gross Longs: 49,864 1,837 4,970
– Gross Shorts: 15,088 39,011 2,572
– Long to Short Ratio: 3.3 to 1 0.0 to 1 1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 85.8 12.8 42.8
– Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 6.6 -3.4 -19.3

 


Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week came in at a net position of 16,529 contracts in the data reported through Tuesday. This was a weekly increase of 22,907 contracts from the previous week which had a total of -6,378 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.1 percent. The commercials are Bullish with a score of 63.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.3 percent.

EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 32.4 53.3 12.0
– Percent of Open Interest Shorts: 30.0 59.4 8.3
– Net Position: 16,529 -43,026 26,497
– Gross Longs: 228,230 376,043 84,921
– Gross Shorts: 211,701 419,069 58,424
– Long to Short Ratio: 1.1 to 1 0.9 to 1 1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 40.1 63.8 18.3
– Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -1.5 1.2 0.9

 


British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week came in at a net position of -79,598 contracts in the data reported through Tuesday. This was a weekly fall of -5,785 contracts from the previous week which had a total of -73,813 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.6 percent. The commercials are Bullish-Extreme with a score of 86.0 percent and the small traders (not shown in chart) are Bearish with a score of 23.2 percent.

BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 11.1 79.6 7.6
– Percent of Open Interest Shorts: 41.2 43.6 13.5
– Net Position: -79,598 95,245 -15,647
– Gross Longs: 29,469 210,627 20,157
– Gross Shorts: 109,067 115,382 35,804
– Long to Short Ratio: 0.3 to 1 1.8 to 1 0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 16.6 86.0 23.2
– Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -28.5 25.6 -7.7

 


Japanese Yen Futures:

The Japanese Yen large speculator standing this week came in at a net position of -110,454 contracts in the data reported through Tuesday. This was a weekly decline of -9,660 contracts from the previous week which had a total of -100,794 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.8 percent. The commercials are Bullish-Extreme with a score of 96.6 percent and the small traders (not shown in chart) are Bearish with a score of 24.0 percent.

JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 4.5 86.2 8.0
– Percent of Open Interest Shorts: 49.2 35.7 13.9
– Net Position: -110,454 124,927 -14,473
– Gross Longs: 11,196 213,084 19,811
– Gross Shorts: 121,650 88,157 34,284
– Long to Short Ratio: 0.1 to 1 2.4 to 1 0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 0.8 96.6 24.0
– Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -5.1 0.0 16.7

 


Swiss Franc Futures:

The Swiss Franc large speculator standing this week came in at a net position of -15,763 contracts in the data reported through Tuesday. This was a weekly fall of -1,856 contracts from the previous week which had a total of -13,907 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.8 percent. The commercials are Bullish with a score of 69.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.5 percent.

SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 9.2 74.6 16.1
– Percent of Open Interest Shorts: 40.0 16.5 43.5
– Net Position: -15,763 29,819 -14,056
– Gross Longs: 4,727 38,258 8,271
– Gross Shorts: 20,490 8,439 22,327
– Long to Short Ratio: 0.2 to 1 4.5 to 1 0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 39.8 69.2 15.5
– Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -7.7 8.0 -7.6

 


Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week came in at a net position of -5,407 contracts in the data reported through Tuesday. This was a weekly fall of -14,436 contracts from the previous week which had a total of 9,029 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 38.3 percent. The commercials are Bullish with a score of 66.9 percent and the small traders (not shown in chart) are Bearish with a score of 34.7 percent.

CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 25.6 49.8 21.8
– Percent of Open Interest Shorts: 29.2 47.9 20.1
– Net Position: -5,407 2,939 2,468
– Gross Longs: 38,679 75,215 32,880
– Gross Shorts: 44,086 72,276 30,412
– Long to Short Ratio: 0.9 to 1 1.0 to 1 1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 38.3 66.9 34.7
– Strength Index Reading (3 Year Range): Bearish Bullish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -4.0 14.5 -29.0

 


Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week came in at a net position of -41,714 contracts in the data reported through Tuesday. This was a weekly decrease of -13,198 contracts from the previous week which had a total of -28,516 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.2 percent. The commercials are Bullish with a score of 54.0 percent and the small traders (not shown in chart) are Bearish with a score of 39.2 percent.

AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 24.1 59.9 13.1
– Percent of Open Interest Shorts: 51.3 29.1 16.7
– Net Position: -41,714 47,126 -5,412
– Gross Longs: 36,869 91,731 20,131
– Gross Shorts: 78,583 44,605 25,543
– Long to Short Ratio: 0.5 to 1 2.1 to 1 0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 46.2 54.0 39.2
– Strength Index Reading (3 Year Range): Bearish Bullish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 7.3 4.7 -34.4

 


New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week came in at a net position of -12,996 contracts in the data reported through Tuesday. This was a weekly fall of -6,386 contracts from the previous week which had a total of -6,610 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.5 percent. The commercials are Bullish with a score of 56.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 7.4 percent.

NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 27.0 68.5 3.9
– Percent of Open Interest Shorts: 50.1 38.5 10.8
– Net Position: -12,996 16,874 -3,878
– Gross Longs: 15,203 38,541 2,216
– Gross Shorts: 28,199 21,667 6,094
– Long to Short Ratio: 0.5 to 1 1.8 to 1 0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 49.5 56.4 7.4
– Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -20.4 26.0 -54.4

 


Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week came in at a net position of 16,725 contracts in the data reported through Tuesday. This was a weekly advance of 2,102 contracts from the previous week which had a total of 14,623 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.5 percent. The commercials are Bullish with a score of 64.1 percent and the small traders (not shown in chart) are Bullish with a score of 60.6 percent.

MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 41.5 53.1 4.2
– Percent of Open Interest Shorts: 30.7 66.7 1.5
– Net Position: 16,725 -20,866 4,141
– Gross Longs: 63,921 81,735 6,467
– Gross Shorts: 47,196 102,601 2,326
– Long to Short Ratio: 1.4 to 1 0.8 to 1 2.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 34.5 64.1 60.6
– Strength Index Reading (3 Year Range): Bearish Bullish Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 10.6 -10.1 -3.5

 


Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week came in at a net position of 40,778 contracts in the data reported through Tuesday. This was a weekly lowering of -1,010 contracts from the previous week which had a total of 41,788 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 90.5 percent. The commercials are Bearish-Extreme with a score of 10.3 percent and the small traders (not shown in chart) are Bullish with a score of 79.4 percent.

BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 79.5 15.4 5.0
– Percent of Open Interest Shorts: 13.1 83.8 3.0
– Net Position: 40,778 -42,031 1,253
– Gross Longs: 48,835 9,454 3,070
– Gross Shorts: 8,057 51,485 1,817
– Long to Short Ratio: 6.1 to 1 0.2 to 1 1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 90.5 10.3 79.4
– Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -1.8 3.5 -20.6

 


Russian Ruble Futures:

Russian Ruble Futures COT ChartThe Russian Ruble large speculator standing this week came in at a net position of 7,543 contracts in the data reported through Tuesday. This was a weekly fall of -263 contracts from the previous week which had a total of 7,806 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.2 percent. The commercials are Bullish with a score of 69.1 percent and the small traders (not shown in chart) are Bearish with a score of 23.9 percent.

RUSSIAN RUBLE Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 36.6 60.6 2.8
– Percent of Open Interest Shorts: 0.5 94.7 4.7
– Net Position: 7,543 -7,150 -393
– Gross Longs: 7,658 12,679 593
– Gross Shorts: 115 19,829 986
– Long to Short Ratio: 66.6 to 1 0.6 to 1 0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 31.2 69.1 23.9
– Strength Index Reading (3 Year Range): Bearish Bullish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -15.6 16.7 -18.8

 


Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week came in at a net position of 703 contracts in the data reported through Tuesday. This was a weekly gain of 315 contracts from the previous week which had a total of 388 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.9 percent.

BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 81.1 2.1 9.1
– Percent of Open Interest Shorts: 74.6 9.4 8.3
– Net Position: 703 -789 86
– Gross Longs: 8,789 227 989
– Gross Shorts: 8,086 1,016 903
– Long to Short Ratio: 1.1 to 1 0.2 to 1 1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct): 100.0 0.0 14.9
– Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 19.0 -24.9 -13.6

 


Article By InvestMacroReceive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

Ichimoku Cloud Analysis 13.05.2022 (GBPUSD, XAUUSD, NZDUSD)

Article By RoboForex.com

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD is testing Tenkan-Sen and Kijun-Sen. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 1.2245 and then resume moving downwards to reach 1.2035 Another signal in favour of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.2315. In this case, the pair may continue growing towards 1.2405.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

XAUUSD, “Gold vs US Dollar”

XAUUSD is rebounding from the resistance level. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Kijun-Sen at 1825.00 and then resume moving downwards to reach 1775.00. Another signal in favour of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1855.00. In this case, the pair may continue growing towards 1905.00.

XAUUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD, “New Zealand Dollar vs US Dollar”

NZDUSD has fixed above Kijun-Sen. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 0.6250 and then resume moving downwards to reach 0.6085. Another signal in favour of a further downtrend will be a rebound from the resistance level. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 0.6335. In this case, the pair may continue growing towards 0.6435.

NZDUSD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2022.05.13

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.0514
  • Prev Close: 1.0379
  • % chg. over the last day: -1.30%

The US producer price index also called factory inflation or wholesale inflation, has jumped to 11% year on year. Last month’s increase was 0.5%. According to many analysts, the producer price index is a more accurate indicator of the inflation faced by businesses and retailers who suffer the most from supply chain disruptions. The initial jobless claims increased to 203,000 (+1,000 for the last week). A strong labor market amid rising inflation is the first sign of an impending recession.

Trading recommendations
  • Support levels: 1.0342
  • Resistance levels: 1.0484, 1.0588, 1.0646, 1.0723, 1.0766, 1.0799, 1.0869, 1.0955

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bearish. The MACD indicator became negative, but the sellers’ pressure increased. Under such market conditions, traders can look for sell deals from the resistance level of 1.0484, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0342, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0588 resistance level and fixes above, the uptrend will likely resume.

EUR/USD
News feed for 2022.05.13:
  • – Eurozone French Consumer Price Index (m/m) at 09:45 (GMT+3);
  • – Eurozone Spanish Consumer Price Index (m/m) at 10:00 (GMT+3);
  • – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
  • – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
  • – US FOMC Member Mester Speaks at 19:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2247
  • Prev Close: 1.2194
  • % chg. over the last day: -0.44%

According to analysts, the UK is already showing signs of stagflation (slowing economic growth with rising consumer prices). The Bank of England will likely have to raise interest rates further to curb inflation, warns Bloomberg manager Dave Ramsden.

Trading recommendations
  • Support levels: 1.2127
  • Resistance levels: 1.2265, 1.2265, 1.2450, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The price continues to decline, but the MACD indicator shows signs of divergence. Under such market conditions, sell trades should be looked for from the resistance level of 1.2265 intraday. For buy deals, traders may consider the level of 1.2127, but only with additional confirmation in the form of a buyers’ initiative.

Alternative scenario: if the price breaks down through the 1.2450 resistance level and fixes above, the mid-term uptrend will likely be resumed.

GBP/USD
There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 129.95
  • Prev Close: 128.31
  • % chg. over the last day: -1.27%

The Japanese yen unexpectedly strengthened yesterday. Concerns about continued stagflation amid slow growth and high prices have led many investors to buy safe-haven currencies. With the dollar index at 20-year highs, the Japanese yen is now a better asset to buy than the dollar. But yesterday, the Bank of Japan Governor Kuroda said that Japan has not yet reached the conditions under which inflation will be stable and sustainable at 2%. This means that the strengthening of the JPY might be temporary speculation, as Japan is still pursuing a soft monetary policy.

Trading recommendations
  • Support levels: 128.63, 127.29, 126.91, 126.00, 125.57
  • Resistance levels: 129.66, 130.12, 130.99

The medium-term trend on the USD/JPY currency pair has changed to bearish. The price has confidently broken through the priority change level and has consolidated below the moving averages. Despite the change in the trend on the hour timeframe, it is better to look for buy deals with the expectation of an uptrend continuation since the Japanese yen has no fundamental support. But as long as the price is below the moving averages, it is worth buying with short targets. First of all, it is worth considering the support level of 128.63, but with confirmation. A resistance level of 129.66 or 130.12 may be considered for sell deals, but only with additional confirmation.

Alternative scenario: If the price fixes above 130.99, the uptrend will likely be resumed.

USD/JPY
There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2985
  • Prev Close: 1.3044
  • % chg. over the last day: +0.45%

The Canadian dollar is a commodity currency and is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of the dollar index and oil prices. Oil prices continue to grow despite declining demand. The International Energy Agency (IEA) said yesterday it does not expect sharp shortages amid worsening supply disruptions from Russia. This situation favors the Canadian dollar, which is showing stability against the US dollar.

Trading recommendations
  • Support levels: 1.2954, 1.2838, 1.2908, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
  • Resistance levels: 1.3052

The USD/CAD currency pair is bullish in terms of technical analysis. The price has reached the daily resistance level. The MACD indicator has become inactive, but a divergence appeared. Trade is worth it only with short targets because, fundamentally, both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2954, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.3052, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2838, the downtrend will likely be resumed.

USD/CAD
There is no news feed for today.

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

DXY Triple Zigzag Hints At Major Correction

By Orbex

The structure of the DXY index hints at the development of a large triple zigzag w-x-y-x-z of the cycle degree.

At the time of writing, a cyclic actionary wave z is under construction. The internal structure of the wave z suggests a triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ. The primary wave Ⓩ is still in the process of development. It seems to take the form of a double zigzag (W)-(X)-(Y) of the intermediate degree.

Prices can continue to push to 106.58. At that level, wave z will be at 161.8% of previous actionary wave y.

Now let’s look at an alternative scenario. In the second variant, it is assumed that the cycle actionary wave y was a primary triple zigzag.

If this option is confirmed, then the market will move lower, building a cycle intervening wave x. It will most likely take the form of a primary zigzag Ⓐ-Ⓑ-Ⓒ.

The price could fall to 99.07, as indicated on the chart. At that level, wave x will be at 38.2% of wave y.


Orbex-LogoArticle by Orbex

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Intraday Market Analysis – USD Retains Upper Hand

By Orbex

GBPUSD to reach 2-year lows

The pound remained under pressure after a slowdown in the UK’s GDP growth in Q1. A break below the lower range (1.2260) of a brief consolidation signalled a bearish continuation. Sterling is heading towards its two-year low at 1.2100. Short-covering could be expected and in conjunction with dip-buying could drive the price up momentarily. 1.2400 is the first resistance and the bulls need to lift the recent high at 1.2640 before they could regain control. Otherwise, the psychological level of 1.2000 would be the next stop.

NZDUSD grinds lower

The New Zealand dollar tumbles as traders continue to pile into safe haven assets. The sell-off accelerated after the pair sank below June 2020’s lows near 0.6400. Downbeat sentiment may attract more trend followers after a faded rebound. 0.6100 near a two-year low would be the next target. 0.6370 is a fresh resistance and the bears may sell into strength at the next bounce. The support-turned-resistance at 0.6450 sits next to the 20-day moving average and is a major level to clear before a reversal could materialise.

US 100 may see limited bounce

The Nasdaq 100 struggles to find bottom as investors continue to flee risk assets. The index sees no sign of stabilisation yet as it approaches 11500. The price action has been capped by a falling trend line from last April. An oversold RSI may prompt sellers to take profit and possibly trigger a mean reversion trade to the upper band (13000) of the line. A break above 12400 may attract enough buying interest to make this happen, but the rebound could be limited unless the bulls succeed in pushing higher.

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The Inflation-Yield Connection and Its Impact on Forex Markets

By Orbex

This week we had a bit of a worrying sign in the markets that has gone largely unnoticed in the major financial news outlets. The yield on the ten-year US Treasury blipped above 3.0% and came back down. It might seem a bit arcane or not particularly relevant, but that bond in particular is the “benchmark” for US interest rates. It has only been above 3.0% twice in the last decade, and each time was followed by turmoil in the markets.

Of course, the past doesn’t always repeat itself in the markets. And we kind of already have enough turmoil. The bond yield rose initially because the Fed hiked rates, but then fell back after the CPI data came in hotter than expected. Basically, investors reassessed their expectations of whether the Fed will manage to complete its hiking cycle before the economy faces a major downturn.

What’s going on?

The key here is that inflation and bond yields are intimately connected, because of how the banking system works. Remember, a bond yield basically represents the annual “profit” a bondholder can expect on the asset considering its price and interest rate. So, bond yields go up when people expect interest rates to rise, and go down when people expect interest rates to be lower.

The thing is that the benchmark is used as a reference when determining the price that banks loan money. And this loaning of money is what “creates” the money in circulation. In the current monetary system, banks are the ones who “print” money by loaning it out and backing it up with debt.

How it works

Basically, when you borrow money from the bank, the bank just creates the money in your account. Separately, the bank creates a “security” that represents the value of the loan. Banks can then negotiate those securities on the market for a lower interest rate than what you are paying. That’s how banks make money.

But it also means that as bond yields rise, the interest rate charged by banks also increases. The higher cost of loans means less people can afford to borrow money. And if banks are issuing less loans, then the amount of money in circulation stops increasing and eventually starts to shrink.

Is it 2018 again?

This was the problem about four years ago when the Fed was raising rates the last time. Interest rates rose above 3.0%, and the cost of credit increased enough that loan issuance started to fall off. The Fed had to quickly reverse course to get interest rates down and prevent the economy from sputtering.

Of course, inflation is much higher now, meaning that there is a lot more money in circulation. It might take a significantly higher interest rate to slow down loan creation enough to get inflation back under control. Meaning that the dollar could be set to strengthen quite a bit, as bond yields are key drivers of the value of a currency.

The downside is that if interest rates go too high and too much money is pulled from the economy, well, that’s what we call a recession.

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Japanese Candlesticks Analysis 12.05.2022 (USDCAD, AUDUSD, USDCHF)

Article By RoboForex.com

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the H4 chart, after forming a Hanging Man reversal pattern close to the resistance level, USDCAD is reversing in the form of a new descending impulse. In this case, the downside target may be at 1.2965. However, an alternative scenario implies that the asset may grow to break the resistance level at 1.3120 and continue the ascending tendency without any corrections.

USDCAD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

As we can see in the H4 chart, AUDUSD has formed a Harami reversal pattern near the resistance area. At the moment, the asset is reversing and starting a new descending impulse. In this case, the downside target may be the support level at 0.6810. After testing the level, the price may break it and continue the descending tendency. At the same time, an opposite scenario implies that the price may correct to reach 0.6955 before resuming the downtrend.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

As we can see in the H4 chart, after testing the resistance area, the pair has formed a Doji reversal pattern. At the moment, USDCHF may reverse in the form of a new descending impulse. In this case, the downside target may be at 0.9880. After testing the support level, the price may rebound from it and resume trading upwards. Still, there might be an alternative scenario, according to which the asset may grow to reach 1.0045 without any pullbacks.

USDCHF

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

GBPJPY Bullish Impulse or Double Zigzag?

By Orbex

GBPJPY seems to be forming a large corrective trend, taking the form of a triple zigzag. On the 1H timeframe, the final actionary wave z of the cycle degree is in formation.

It is likely that the wave z takes the form of a simple zigzag Ⓐ-Ⓑ-Ⓒ of the primary degree. After the end of the correction Ⓑ, which took the form of a triple combination, prices began moving higher.

It is possible that the first four parts are completed as part of the potential impulse Ⓒ. Thus, in the next coming trading weeks, growth is likely within the intermediate impulse (5).

The completion of the entire wave Ⓒ is possible near 174.08. At that level, wave z will be equal to wave y.

Alternatively, it is assumed that the formation of an intermediate impulse (3), which is part of the primary wave Ⓒ, has come to an end near 168.43.

In the last section of the chart, we see a corrective decline in the intermediate wave (4). This correction could be a minor double zigzag.

It is possible that prices will fall to 155.15. At that level, correction wave (4) will be at 76.4% of impulse (3).

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Intraday Market Analysis – Gold Strives to Snap Back

By Orbex

AUDUSD saw brief recovery

The Australian dollar struggles as Beijing vows to support its Covid-hit economy. A drop below the psychological level of 0.7000 near this year’s low may have put the Aussie on a bearish trajectory in the medium-term. On the hourly chart, the RSI’s double bottom in the oversold area may cause a limited rebound. Selling interest could be expected at 0.7100 at the origin of the latest sell-off. A drop below the intermediate support at 0.6920 would extend losses towards June 2020’s lows around 0.6820.

XAUUSD tests demand area

Bullion steadied after the US CPI receded in April. The price action has found some support at the base of the February bullish breakout. A bullish RSI divergence indicates a slowdown in the downward momentum, a prerequisite for a reversal. 1868 is a key resistance and a breakout would confirm the demand zone and prompt sellers to cover their bets. Then 1910 is the last hurdle before sentiment would turn around. On the downside, a break below 1831 would send the precious metal to the psychological level of 1800.

USOIL bounces higher

WTI crude rallies as Russia retaliates by sanctioning European gas companies. A fall below the rising trendline near 106.00 has put the bulls on the defensive. The price has met bids at 98.50 and in conjunction with a bullish RSI divergence could attract more buying interest. Optimism may gain traction if buyers succeed in holding above this demand zone. A close above support-turned-resistance at 107.00 would put the bulls back in the game. Then a break above 111.00 could trigger an extended rally above 117.00.

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GBP is falling non-stop. Overview for 12.05.2022

Article By RoboForex.com

GBPUSD remains under bearish pressure; there is no good news.

The Pound sterling continues weakening against the USD on Thursday. the current quote for the instrument is 1.2205.

Today’s flow of statistics didn’t give the Pound a single chance to reach stability.

For example, it turned out that according to the preliminary report, the British economy added only 0.8% q/q in the first quarter of 2022 after gaining 1.3% q/q the quarter before and against the expected reading of 1.0% q/q. As for YoY, the GDP showed 8.7% against the expected reading of 9.0%.

The factors that slow down the British economy are quite common – the pandemic consequences, interruptions in the delivery chains, geopolitical tensions, and the necessity to adjust the country’s foreign policy. However, another thing that surfaces from time to time is Brexit, for example, the Northern Ireland issue. It’s kind of amazing that the status and the borders of such a small territory come with a high price tag. The lack of the Northern Ireland consensus might make trading operations and procedures between London and the European Union much more complicated, hurting the British business and GDP.

Industrial Production dropped 0.2% m/m in March against the expected growth of 0.1% m/m. It means that the negative tendency that started earlier is getting stronger: in February, the indicator lost 0.6% m/m. On YoY, it gained 1.9% against the expected reading of 2.3%. However, it’s not surprising – high inflation, the pandemic consequences, and interruptions in deliveries didn’t go anywhere and will continue to influence the economy in the future. in addition, there are problems with new orders. It’s bad news for the Pound.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.