Forex and Currency News :: Page 114

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The Analytical Overview of the Main Currency Pairs on 2022.08.22

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0089
Prev Close: 1.0038
% chg. over the last day: -0.51%

Europe’s economy is at risk of recession due to threats of energy rationing, record inflation, and tighter monetary policy. Germany, Europe’s largest economy, has become the region’s weak spot as its huge industrial base suffers from rising energy prices and persistent supply shortages. Supply managers’ indices, due out Tuesday, will tell traders whether the region’s economy is heading for a recession or not. The July ECB meeting minutes may indicate whether investors should prepare for another 50 basis point rate hike in September. But given widespread inflationary pressures, analysts are confident of such a hike, with about a third of analysts leaning toward a 75 basis point increase.

Trading recommendations

Support levels: 1.0033, 1.0000
Resistance levels: 1.0112, 1.0146, 1.0230, 1.0286, 1.0365, 1.0415, 1.050.

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The euro continues to lose ground. The MACD indicator is in the negative zone, but there are the first signs of divergence. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 1.0033, but with a confirmation in the form of reverse initiative. Sell trades can be considered from resistance levels of 1.0112, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0230 resistance level and fixes above, the uptrend will likely resume.

News feed for 2022.08.22:

There is no news feed for today.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1927
Prev Close: 1.1829
% chg. over the last day: -0.82%

According to analysts, the UK’s bleak economic outlook overshadows any gains that the British pound could get from a rapid rise in interest rates. Another record inflation figure last week prompted traders to bet that the Bank of England will more than double its key rate to 3.75%. Options traders remain decidedly bearish on the British currency. In theory, a rate hike should act as a tailwind for currencies and a headwind for bonds. But the UK has poor growth prospects, price pressures, and policy rate uncertainty.

Trading recommendations

Support levels: 1.1811
Resistance levels: 1.1903, 1.2000, 1.2035, 1.2167, 1.2215, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is now trading below the moving averages, indicating selling pressure. The MACD indicator has become negative, but there are no signs of divergence. At the moment, it is better to look for sell trades from the resistance level of 1.1903, but only after the additional confirmation. Buy trades can be considered on intraday time frames from the support level of 1.1811, but only with confirmation.

Alternative scenario: if the price breaks out through the 1.2034 resistance level and fixes above, the uptrend will likely resume.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 135.86
Prev Close: 136.89
% chg. over the last day: +0.76%

The US Federal Reserve’s policy meeting in late July sent the dollar index sharply higher, even though the Central Bank raised its interest rate by 75 basis points. Over the past three weeks, the Japanese yen has fallen against the dollar again as interest rate differentials and opposed monetary policy put upward pressure on the USD/JPY quotes. And no change is expected soon.

Trading recommendations

Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
Resistance levels: 137.10, 138.25

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The USD/JPY quotes continue to grow steadily, breaking through all the resistance levels. Under such market conditions, buy trades can be sought from the support level of 135.89, but with additional confirmation. For sell deals, it is possible to consider the resistance level of 137.10, but only with additional confirmation in the form of a reverse initiative, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 134.23, the downtrend will likely resume.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2944
Prev Close: 1.2991
% chg. over the last day: +0.36%

Last week, the Canadian dollar suffered the same fate as the other currencies: the US dollar took the lead after markets reacted positively to the July Fed meeting minutes. Oil prices also declined over the week, which had a negative impact on the Canadian currency. But retail sales data helped the Canadian offset some of Friday’s losses, signaling a gradual and consistent improvement in the retail sector.

Trading recommendations

Support levels: 1.2900, 1.2858, 1.2809, 1.2761
Resistance levels: 1.3006

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator is in the positive zone. The buyers’ pressure is still there, but the price is traded before the resistance level, plus the divergence is getting stronger. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.2900, but only with confirmation. For sell deals, it is better to consider the resistance level of 1.3006, but also with confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.2858 support level, the downtrend will likely resume.

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.

Financial News Forex and Currency News

22 Aug

Trade of the Week: USD Index back above 1.20?

By ForexTime

– Shame on those who doubted the Dollar (at least of late).

The greenback has staged a recovery and is on a quest to revisit recent highs, as markets restore their bets for an ultra-hawkish Fed.

As a result, major G10 currencies are wilting under the weight of the resurgent buck:

EURUSD is flirting with parity again, having last done so in mid-July.
GBPUSD also hit a one-month low, trading around levels not seen since the onset of the pandemic.

Such moves are captured within the equally-weighted US Dollar index, which measures the greenback’s performance against these six G10 currencies:

As a result, this USD Index is retesting the mid-1.19 resistance levels which had previously repelled dollar bulls in mid-May and mid-June, also around where the 61.8% Fibonacci retracement level currently sits from its July-august descent.

Whether or not the US dollar can punch higher and break above the psychologically-important 1.20 level could well depend on what’s conveyed out of the Jackson Hole Economic Symposium later this week.

What is the Jackson Hole Symposium and why it matters?

Organized by the Kansas City Fed, this year’s gathering will be held from August 25th – 27th in Jackson Hole, Wyoming (though recent symposiums have been held virtually as well due to the pandemic).

This annual conference features the top central bankers, economists, academics, and even government representatives, where they discuss the most important issues facing the global economy, as well as how policymakers could and should respond.

In other words, what is said during this closely-watched symposium has the potential to prompt market participants to move trillions of dollars across asset classes including stocks, bonds, and currencies.

And Fed Chair Jerome Powell’s speech that’s scheduled for this Friday, August 26th, at 2:00 PM GMT, is set to dominate the market’s collective attention this week.

What Powell says (or doesn’t say) could dictate how global markets perform in the weeks ahead.

What markets want to know out of Jackson Hole?

Markets want to know how much the Fed intends to raise US interest rates for its September meeting, and beyond.

1) As things stand, markets are forecasting a 63.7% chance of yet another 75-basis point (bps) hike by the Fed at its September policy meeting.

Those odds have been increased substantially from 46.8% just from this time last week. Hence, the US dollar rising over the past week in tandem with such restored bets.

If the Fed does proceed with yet another 75bps hike, that would be its third successive supersized hike, following similar 75bps hikes at each of the Fed’s policy meetings back in June and July.

2) Markets also presently believe that that US benchmark rates could go up as high as 3.7% by May 2023, as the Fed continues aggressively raising interest rates to combat multi-decade high inflation.

Major deviations from the above (the existing narrative that markets are holding on to at present) should result in major moves for the US dollar.

Potential scenarios for USD Index:

Should Powell signal that the Fed has to stay aggressive to bring down US inflation (think more 75bps hikes in Q4), that could mean more immediate gains for the US dollar.
If the 1.20536 Fibonacci level can be conquered, then this equally-weighted USD Index could be on the path to revisit the mid-July peak above 1.21.

However, if Powell officially signals that the Fed can start to ease up on its rate hikes on signs that US inflation has peaked, that could prompt the unwinding of last week’s gains for the US dollar.
Support may arrive at the:
– previous cycle high of 1.19102, followed by …
– the next Fib line below at 1.18769
– 50-day simple moving average around 1.183

Despite the Fed’s suggestions to pay less attention to what it says it will do (forward guidance is less meaningful over the immediate term), but instead pay greater heed to the incoming US economic data (such as nonfarm payrolls and CPI), that likely won’t be enough to dissuade forward-looking investors and traders worldwide from reacting to Powell’s policy clues.

In short, don’t be surprised if we see heightened volatility for the US Dollar and the rest of the FX universe as the Jackson Hole symposium looms.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

20 Aug

Forex Speculators boost Canadian Dollar bets to 58-week high while Euro bets drop to 128-week low

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

The latest COT data is updated through Tuesday August 16th 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.

Weekly Speculator Changes Week 33: CAD bets up, Euro bets down

The COT currency market speculator bets were overall higher this week as seven out of the eleven currency markets we cover had higher positioning while the other four markets had lower speculator positions.

Leading the gains for the currency markets was the Mexican peso (6,250 contracts) with the Canadian dollar (5,644 contracts), Brazilian real (4,790 contracts), Swiss franc (4,686 contracts), New Zealand dollar (2,045 contracts), British pound sterling (1,359 contracts) and Bitcoin (137 contracts) also having positive weeks.

The currencies leading the declines in speculator bets this week were the Euro (-8,248 contracts) with the Japanese yen (-3,859 contracts), Australian dollar (-1,660 contracts) and the US Dollar Index (-676 contracts) also registering lower bets on the week.

Highlighting the COT currency changes this week is the Canadian dollar‘s recent gains in the speculator positions. The CAD positions rose this week and have now gained for five straight weeks and in ten out of the past thirteen weeks for a total 13-week gain of +41,363 contracts. The speculative position had fallen into bearish territory from April 26th to June 7th before getting a large sentiment boost by +24,264 contracts on June 14th that flipped the position from bearish to bullish. Since then, the bullish position has steadily increased and this week, reached the most bullish level since July 6th of 2021, a span of fifty-eight weeks.

Euro speculative bets this week, meanwhile, fell for the first time in the past four weeks but made a new low for this recent bearish cycle. Euro bets dropped by over -8,000 contracts this week and have now been in an overall bearish position for the past ten weeks. The decline of bets this week brought the current speculator standing to the most bearish level since March 3rd of 2020, a span of one hundred and twenty-eight weeks. The EURUSD currency pair fell rather sharply to end the week (weekly decline by over -2.00 percent) and closed just a hair above parity at the 1.0041 exchange rate. The EURUSD dropped below parity for a quick time on July 14th with a low of 0.9952 (20-year lows) before staging a rally back over 1.0350 in the following weeks but with deteriorating speculator sentiment, it seems possible the pair will be testing below parity again.

Data Snapshot of Forex Market Traders | Columns Legend

Aug-16-2022	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
USD Index	58,909	86	37,961	88	-40,673	11	2,712	46
EUR	698,570	81	-42,784	22	20,916	82	21,868	11
GBP	227,752	62	-33,109	46	47,217	59	-14,108	26
JPY	228,697	74	-28,891	51	41,979	56	-13,088	27
CHF	39,407	20	-5,096	44	13,616	65	-8,520	29
CAD	147,596	29	26,867	70	-32,129	42	5,262	41
AUD	160,045	52	-59,248	30	63,470	66	-4,222	42
NZD	41,729	28	1,769	74	195	31	-1,964	29
MXN	201,618	50	-21,371	18	17,803	80	3,568	58
RUB	20,930	4	7,543	31	-7,150	69	-393	24
BRL	38,079	24	6,523	57	-8,659	43	2,136	90
Bitcoin	12,423	69	-93	79	-260	0	353	21

Strength Scores

Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the US Dollar Index (88.2 percent) remains at the highest levels for the currency markets and continues in a bullish extreme position (above 80 percent). Bitcoin (78.6 percent), the New Zealand Dollar (74.2 percent) and the Canadian Dollar (69.5 percent) round out the next highest strength scores in the currency markets. On the downside, the Mexican Peso (18.2 percent) comes in at the lowest strength level and is in a bearish extreme level (below 20 percent). The next currencies at the lower range of strength scores are the EuroFX at 21.9 percent and the Australian Dollar at 29.9 percent.

Strength Statistics:
US Dollar Index (88.2 percent) vs US Dollar Index previous week (89.4 percent)
EuroFX (21.9 percent) vs EuroFX previous week (24.4 percent)
British Pound Sterling (46.1 percent) vs British Pound Sterling previous week (45.0 percent)
Japanese Yen (51.1 percent) vs Japanese Yen previous week (53.5 percent)
Swiss Franc (43.6 percent) vs Swiss Franc previous week (31.7 percent)
Canadian Dollar (69.5 percent) vs Canadian Dollar previous week (63.2 percent)
Australian Dollar (29.9 percent) vs Australian Dollar previous week (31.4 percent)
New Zealand Dollar (74.2 percent) vs New Zealand Dollar previous week (70.8 percent)
Mexican Peso (18.2 percent) vs Mexican Peso previous week (15.6 percent)
Brazil Real (56.8 percent) vs Brazil Real previous week (52.1 percent)
Bitcoin (78.6 percent) vs Bitcoin previous week (76.1 percent)

Strength Trends

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that the Canadian Dollar (25.3 percent) leads the past six weeks trends for the currency markets this week. The British Pound Sterling (18.0 percent), the Japanese Yen (15.7 percent) and the New Zealand Dollar (14.8 percent) fill out the other highest movers in the latest trends data. The Australian Dollar (-10.8 percent) leads the downside trend scores currently while the next market with lower trend scores were the Brazilian Real (-9.6 percent) followed by Bitcoin (-9.3 percent) and the EuroFX (-8.0 percent).

Strength Trend Statistics:
US Dollar Index (-2.2 percent) vs US Dollar Index previous week (-7.7 percent)
EuroFX (-8.0 percent) vs EuroFX previous week (-7.3 percent)
British Pound Sterling (18.0 percent) vs British Pound Sterling previous week (14.5 percent)
Japanese Yen (15.7 percent) vs Japanese Yen previous week (17.0 percent)
Swiss Franc (12.8 percent) vs Swiss Franc previous week (-3.0 percent)
Canadian Dollar (25.3 percent) vs Canadian Dollar previous week (13.6 percent)
Australian Dollar (-10.8 percent) vs Australian Dollar previous week (-13.5 percent)
New Zealand Dollar (14.8 percent) vs New Zealand Dollar previous week (8.4 percent)
Mexican Peso (-3.0 percent) vs Mexican Peso previous week (-5.8 percent)
Brazil Real (-9.6 percent) vs Brazil Real previous week (-34.7 percent)
Bitcoin (-9.3 percent) vs Bitcoin previous week (-23.9 percent)

Individual Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week was a net position of 37,961 contracts in the data reported through Tuesday. This was a weekly fall of -676 contracts from the previous week which had a total of 38,637 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 88.2 percent. The commercials are Bearish-Extreme with a score of 11.2 percent and the small traders (not shown in chart) are Bearish with a score of 46.2 percent.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	86.2	3.5	8.2
– Percent of Open Interest Shorts:	21.8	72.6	3.6
– Net Position:	37,961	-40,673	2,712
– Gross Longs:	50,782	2,078	4,843
– Gross Shorts:	12,821	42,751	2,131
– Long to Short Ratio:	4.0 to 1	0.0 to 1	2.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	88.2	11.2	46.2
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.2	1.3	5.0

Euro Currency Futures:

The Euro Currency large speculator standing this week was a net position of -42,784 contracts in the data reported through Tuesday. This was a weekly reduction of -8,248 contracts from the previous week which had a total of -34,536 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 21.9 percent. The commercials are Bullish-Extreme with a score of 82.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.6 percent.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.5	57.3	11.4
– Percent of Open Interest Shorts:	34.6	54.3	8.3
– Net Position:	-42,784	20,916	21,868
– Gross Longs:	199,226	400,458	79,589
– Gross Shorts:	242,010	379,542	57,721
– Long to Short Ratio:	0.8 to 1	1.1 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	21.9	82.0	10.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.0	8.4	-6.0

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week was a net position of -33,109 contracts in the data reported through Tuesday. This was a weekly gain of 1,359 contracts from the previous week which had a total of -34,468 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 46.1 percent. The commercials are Bullish with a score of 58.7 percent and the small traders (not shown in chart) are Bearish with a score of 26.4 percent.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.4	68.6	8.7
– Percent of Open Interest Shorts:	33.9	47.8	14.9
– Net Position:	-33,109	47,217	-14,108
– Gross Longs:	44,084	156,167	19,890
– Gross Shorts:	77,193	108,950	33,998
– Long to Short Ratio:	0.6 to 1	1.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	46.1	58.7	26.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	18.0	-17.9	13.9

Japanese Yen Futures:

The Japanese Yen large speculator standing this week was a net position of -28,891 contracts in the data reported through Tuesday. This was a weekly lowering of -3,859 contracts from the previous week which had a total of -25,032 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 with a score of 51.1 percent. The commercials are Bullish with a score of 56.1 percent and the small traders (not shown in chart) are Bearish with a score of 26.9 percent.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	22.4	66.6	9.4
– Percent of Open Interest Shorts:	35.1	48.2	15.1
– Net Position:	-28,891	41,979	-13,088
– Gross Longs:	51,308	152,209	21,465
– Gross Shorts:	80,199	110,230	34,553
– Long to Short Ratio:	0.6 to 1	1.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	51.1	56.1	26.9
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	15.7	-10.8	-7.0

Swiss Franc Futures:

The Swiss Franc large speculator standing this week was a net position of -5,096 contracts in the data reported through Tuesday. This was a weekly increase of 4,686 contracts from the previous week which had a total of -9,782 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 43.6 percent. The commercials are Bullish with a score of 65.2 percent and the small traders (not shown in chart) are Bearish with a score of 28.7 percent.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.7	55.2	24.9
– Percent of Open Interest Shorts:	32.7	20.7	46.5
– Net Position:	-5,096	13,616	-8,520
– Gross Longs:	7,773	21,767	9,809
– Gross Shorts:	12,869	8,151	18,329
– Long to Short Ratio:	0.6 to 1	2.7 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	43.6	65.2	28.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	12.8	-10.3	4.8

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week was a net position of 26,867 contracts in the data reported through Tuesday. This was a weekly increase of 5,644 contracts from the previous week which had a total of 21,223 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 with a score of 69.5 percent. The commercials are Bearish with a score of 42.0 percent and the small traders (not shown in chart) are Bearish with a score of 40.7 percent.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	35.1	39.6	22.4
– Percent of Open Interest Shorts:	16.9	61.4	18.9
– Net Position:	26,867	-32,129	5,262
– Gross Longs:	51,843	58,476	33,129
– Gross Shorts:	24,976	90,605	27,867
– Long to Short Ratio:	2.1 to 1	0.6 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	69.5	42.0	40.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	25.3	-23.0	10.1

Australian Dollar Futures:

The Australian Dollar large speculator standing this week was a net position of -59,248 contracts in the data reported through Tuesday. This was a weekly fall of -1,660 contracts from the previous week which had a total of -57,588 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 29.9 percent. The commercials are Bullish with a score of 66.2 percent and the small traders (not shown in chart) are Bearish with a score of 42.1 percent.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.0	69.3	10.4
– Percent of Open Interest Shorts:	55.0	29.6	13.0
– Net Position:	-59,248	63,470	-4,222
– Gross Longs:	28,835	110,918	16,660
– Gross Shorts:	88,083	47,448	20,882
– Long to Short Ratio:	0.3 to 1	2.3 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	29.9	66.2	42.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-10.8	5.8	9.4

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week was a net position of 1,769 contracts in the data reported through Tuesday. This was a weekly lift of 2,045 contracts from the previous week which had a total of -276 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 with a score of 74.2 percent. The commercials are Bearish with a score of 30.7 percent and the small traders (not shown in chart) are Bearish with a score of 29.1 percent.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	44.1	49.6	5.9
– Percent of Open Interest Shorts:	39.9	49.1	10.6
– Net Position:	1,769	195	-1,964
– Gross Longs:	18,412	20,688	2,458
– Gross Shorts:	16,643	20,493	4,422
– Long to Short Ratio:	1.1 to 1	1.0 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	74.2	30.7	29.1
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	14.8	-15.9	17.3

Mexican Peso Futures:

The Mexican Peso large speculator standing this week was a net position of -21,371 contracts in the data reported through Tuesday. This was a weekly gain of 6,250 contracts from the previous week which had a total of -27,621 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 18.2 percent. The commercials are Bullish-Extreme with a score of 80.2 percent and the small traders (not shown in chart) are Bullish with a score of 58.1 percent.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	53.9	42.7	3.4
– Percent of Open Interest Shorts:	64.5	33.8	1.6
– Net Position:	-21,371	17,803	3,568
– Gross Longs:	108,642	85,997	6,782
– Gross Shorts:	130,013	68,194	3,214
– Long to Short Ratio:	0.8 to 1	1.3 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	18.2	80.2	58.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-3.0	3.2	-3.2

Brazilian Real Futures:

The Brazilian Real large speculator standing this week was a net position of 6,523 contracts in the data reported through Tuesday. This was a weekly rise of 4,790 contracts from the previous week which had a total of 1,733 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 with a score of 56.8 percent. The commercials are Bearish with a score of 42.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 89.8 percent.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	67.7	22.7	9.7
– Percent of Open Interest Shorts:	50.5	45.4	4.1
– Net Position:	6,523	-8,659	2,136
– Gross Longs:	25,762	8,637	3,679
– Gross Shorts:	19,239	17,296	1,543
– Long to Short Ratio:	1.3 to 1	0.5 to 1	2.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	56.8	42.8	89.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-9.6	8.5	12.5

Bitcoin Futures:

The Bitcoin large speculator standing this week was a net position of -93 contracts in the data reported through Tuesday. This was a weekly lift of 137 contracts from the previous week which had a total of -230 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 with a score of 78.6 percent. The commercials are Bearish with a score of 42.6 percent and the small traders (not shown in chart) are Bearish with a score of 21.0 percent.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	74.7	2.0	9.7
– Percent of Open Interest Shorts:	75.5	4.1	6.8
– Net Position:	-93	-260	353
– Gross Longs:	9,284	250	1,202
– Gross Shorts:	9,377	510	849
– Long to Short Ratio:	1.0 to 1	0.5 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	78.6	42.6	21.0
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-9.3	11.7	7.1

Article By InvestMacro – Receive 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.

CountingPips Forex Blog Forex and Currency News investing Opinions

19 Aug

Ichimoku Cloud Analysis 19.08.2022 (EURUSD, NZDUSD, USDCHF)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD has fixed below the support level. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen at 1.0140 and then resume moving downwards to reach 0.9805. 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 1.0325. In this case, the pair may continue growing towards 1.0415.

NZDUSD, “New Zealand Dollar vs US Dollar”

NZDUSD is about to test the bullish channel’s broken border. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen at 0.6275 and then resume moving downwards to reach 0.6095. Another signal in favour of a further downtrend will be a rebound from the rising channel’s downside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 0.63750. In this case, the pair may continue growing towards 0.6465. To confirm a further downtrend, the price must break the bullish channel’s upside and fix below 0.6160.

USDCHF, “US Dollar vs Swiss Franc”

USDCHF is rebounding from the support level. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 0.9505 and then resume moving upwards to reach 0.9740. Another signal in favour of a further uptrend will be a rebound from the descending channel’s upside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 0.9405. In this case, the pair may continue falling towards 0.9305.

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.

Financial News Forex and Currency News

19 Aug

Forex Technical Analysis & Forecast 19.08.2022

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD has finished the descending wave at 1.0080; right now, it is consolidating around this level. If later the price breaks the range to the downside, the market may resume falling towards 1.0020; if to the upside – start another correction with the target at 1.0140.

GBPUSD, “Great Britain Pound vs US Dollar”

After completing the descending wave at 1.1906, GBPUSD is forming a new consolidation range around this level. If later the price breaks the range to the downside, the market may resume trading downwards to reach 1.1877; if to the upside – start a new correction with the target at 1.1955.

USDJPY, “US Dollar vs Japanese Yen”

USDJPY has finished the ascending wave at 136.36; right now, it is consolidating around this level. If later the price breaks the range to the upside, the market may resume growing towards 137.47; if to the downside – start another correction with the target at 134.00.

USDCHF, “US Dollar vs Swiss Franc”

After completing the ascending wave at 0.9555 and forming a new consolidation range around this level, USDCHF has broken it upwards and may soon continue growing towards 0.9610. Later, the market may fall to return to 0.9555 and then form one more ascending structure with the target at 0.9625.

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD has completed the descending wave at 0.6885; right now, it is consolidating there. Today, the pair may break the range to the downside and start a new decline with the target at 0.6834, or even extend this structure down to 0.6814.

BRENT

Having formed a new consolidation range around 95.95 and breaking it upwards, Brent continues growing to reach 100.20. After that, the instrument may start another correction down to 96.00 and then resume trading upwards with the target at 101.11.

XAUUSD, “Gold vs US Dollar”

Gold has completed the descending wave at 1757.33; right now, it is consolidating there. If later the price breaks the range to the downside, the market may resume falling towards 1743.83; if to the upside – form one more ascending structure with the target at 1777.00.

S&P 500

The S&P index is falling towards 4248.4. After that, the instrument may start a new correction up to 4288.0 and then resume falling with the short-term target at 4161.0.

Article By RoboForex.com

Financial News Forex and Currency News

19 Aug

The Analytical Overview of the Main Currency Pairs on 2022.08.19

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0175
Prev Close: 1.0086
% chg. over the last day: -0.88%

The Eurozone Consumer Price Index (CPI) reached 8.9% in annual terms, compared to June’s value of 8.6%. A year earlier, the figure was 2.5%. The lowest annual rates were recorded in France, Malta (both 6.8%), and Finland (8.0%). The highest annual rates were recorded in Estonia (23.2%), Latvia (21.3%), and Lithuania (20.9%). Compared to June, annual inflation declined in six members, remained stable in three, and rose in eighteen. In July, energy (+4.02%) made the largest contribution to the annual inflation rate in the Eurozone, followed by food (+2.08%). Thus, there are no signs of an inflation slowdown in the region. Analysts predict that the ECB may raise the rate by 0.75% at the next meeting.

Trading recommendations

Support levels: 1.0035, 1.0000
Resistance levels: 1.0146, 1.0230, 1.0286, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday prices started a new downward wave. The MACD indicator is in the negative zone, but there are the first signs of divergence. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 1.0036, but with a confirmation in the form of reverse initiative. Sell trades can be considered from resistance levels of 1.0146, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0230 resistance level and fixes above, the uptrend will likely resume.

News feed for 2022.08.19:

– Germany Producer Price Index (m/m) at 09:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2045
Prev Close: 1.1929
% chg. over the last day: -0.98%

The British pound is under pressure because of the stronger dollar index, and the negative investor sentiment about the UK economy as the country enters recession. The GfK consumer confidence index fell by three points to -44 in August, the lowest-ever reading. Today the UK is expected to report a decline in July retail sales. The swap market predicts an 80% chance of a 50 basis point hike at the Bank of England meeting in mid-September and a 75 bps hike of a 20% chance.

Trading recommendations

Support levels: 1.1871
Resistance levels: 1.2000, 1.2035, 1.2167, 1.2215, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is now trading below the moving averages, indicating selling pressure. The MACD indicator has become negative, and there are no signs of divergence. At the moment, it is better to look for sell trades from the resistance level of 1.2000, but only after the additional confirmation. Buy trades can be considered on intraday time frames from the support level of 1.1871, but only with confirmation.

Alternative scenario: if the price breaks out through the 1.2167 resistance level and fixes above, the uptrend will likely resume.

News feed for 2022.08.19:

– UK Retail Sales (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 134.98
Prev Close: 135.87
% chg. over the last day: +0.66%

Japan’s National Core CPI reached 2.4% annually (the previous 2.2%). After decades of deflation, inflationary pressures are a new world for Japanese policymakers, and the Bank of Japan has to keep an eye on inflation that is slightly above the central bank’s 2% target. Unlike the US Fed and the Bank of England, the Bank of Japan is focused on stimulating the weak economy with soft, adaptive policies. Traders should not expect the yen to strengthen until the BoJ is confident that inflation is steady.

Trading recommendations

Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
Resistance levels: 137.10, 138.25

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. USD/JPY quotes continue to grow steadily, breaking through all the resistance levels. Under such market conditions, buy trades can be sought from the support level of 135.89, but with additional confirmation. For sell deals, it is possible to consider the resistance level of 137.10. Still, only with additional confirmation in the form of a reverse initiative, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 134.23, the downtrend will likely resume.

News feed for 2022.08.19:

– Japan National Consumer Price Index (m/m) at 02:30 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2907
Prev Close: 1.2945
% chg. over the last day: +0.30%

The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Central Bank of Canada but also on the dollar index and oil prices. Oil prices rose yesterday, but the strengthening of the dollar index was more weighty. But do not expect the USD/CAD quotes will show a long-term trend in one direction since the interest rates of the Bank of Canada and the US Federal Reserve are at the same level. And if to look at the USD/CAD chart on the daily range, you can clearly see the balance, which reflects a certain parity between the currencies.

Trading recommendations

Support levels: 1.2900, 1.2858, 1.2809, 1.2761
Resistance levels: 1.2965, 1.3006

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator is in the positive zone. The buyer’s pressure remains, but the price is traded before the resistance level, and the divergence is increasing. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.2900, but only with confirmation. For sell deals, it is better to consider the resistance level of 1.2965 or 1.3006, but also with confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.2809 support level, the downtrend will likely resume.

News feed for 2022.08.19:

– Canada Retail Sales (m/m) at 15:30 (GMT+3).

By JustForex

Financial News Forex and Currency News

18 Aug

Ichimoku Cloud Analysis 18.08.2022 (GBPUSD, AUDUSD, USDCAD)

Article By RoboForex.com

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD is testing the support area. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen at 1.2090 and then resume moving downwards to reach 1.1835. Another signal in favour of a further downtrend will be a rebound from the rising channel’s downside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.2205. In this case, the pair may continue growing towards 1.2305. To confirm a further downtrend, the price must break the downside border of a Double Top reversal pattern and fix below 1.1955.

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is rebounding from the bullish channel’s downside border. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen at 0.6965 and then resume moving downwards to reach 0.6755. Another signal in favour of a further downtrend will be a rebound from the rising channel’s downside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 0.7095. In this case, the pair may continue growing towards 0.7190. To confirm a further downtrend, the price must break the bullish channel’s downside border and fix below 0.6820.

USDCAD, “US Dollar vs Canadian Dollar”

USDCAD is testing the upside border of the reversal pattern. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 1.2855 and then resume moving upwards to reach 1.3135. Another signal in favour of a further uptrend will be a rebound from the descending channel’s upside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 1.2745. In this case, the pair may continue falling towards 1.2655. To confirm a further uptrend, the price must break the upside border of the Double Top reversal pattern and fix above 1.2995.

Article By RoboForex.com

Financial News Forex and Currency News

18 Aug

Japanese Candlesticks Analysis 18.08.2022 (XAUUSD, NZDUSD, GBPUSD)

Article By RoboForex.com

XAUUSD, “Gold vs US Dollar”

As we can see in the H4 chart, XAUUSD has formed an Inverted Hammer reversal pattern not far from the support area. At the moment, the asset may reverse in the form of a new rising impulse. In this case, the upside target may be at 1792.00. At the same time, the opposite scenario implies that the price may correct to reach 1750.50 first and then resume trading upwards.

NZDUSD, “New Zealand vs US Dollar”

As we can see in the H4 chart, NZDUSD has formed a Hammer reversal pattern close to the support area. At the moment, the asset is reversing in the form of another ascending impulse. In this case, the upside target may be at 0.6335. After that, the asset may break the resistance level and continue moving upwards. However, an alternative scenario implies that the price may correct to reach 0.6235 before resuming the uptrend.

GBPUSD, “Great Britain Pound vs US Dollar”

As we can see in the H4 chart, GBPUSD has formed a Hammer reversal pattern near the support level. At the moment, the pair may reverse in the form of a new ascending impulse. In this case, the upside target may be the resistance area at 1.2150. Later, the market may break this level and continue growing. Still, there might be an alternative scenario, in which the asset may correct to reach the support level at 1.2000 first and then resume the ascending tendency.

Article By RoboForex.com

Financial News Forex and Currency News

18 Aug

The Analytical Overview of the Main Currency Pairs on 2022.08.18

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0165
Prev Close: 1.0177
% chg. over the last day: +0.12%

The FOMC meeting for July showed that Fed officials are concerned the US Central Bank may raise rates too much as part of its commitment to control inflation. Some Fed participants noted that interest-rate-sensitive sectors were starting to show signs of slowing and that some felt there was a risk of over-tightening. The dollar index fell slightly after the FOMC protocol was released, giving temporary confidence to the European currency. Eurozone GDP grew by 0.6% in the second quarter of 2022 on a seasonally adjusted basis as forecasted, but analysts believe this is the last quarterly growth this year as the Eurozone economy slides into recession.

Trading recommendations

Support levels: 1.0136, 1.0112, 1.0035, 1.0000
Resistance levels: 1.0185, 1.0230, 1.0286, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is now trading in a narrow range. At the same time, resistance level 1.0185 has been tested more than four times, but the price failed to consolidate higher. Under such market conditions, it is best to look for buy trades on the intraday time frames from the support level of 1.0136, but with a confirmation in the form of a reverse initiative. Sell trades can be considered from resistance levels of 1.0230, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0286 resistance level and fixes above, the uptrend will likely resume.

News feed for 2022.08.18:

– Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
– US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
– US Existing Home Sales (m/m) at 17:00 (GMT+3);
– US FOMC Member George Speaks (m/m) at 20:20 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2079
Prev Close: 1.2048
% chg. over the last day: -0.26%

The UK Consumer Price Index rose to 10.1% in annual terms (forecast at 9.8%) in July, the highest level in 40 years. The largest upward contributions to the annual inflation rate in July 2022 came from household services (mainly due to higher prices for electricity, gas, and other fuels) and food. The Core Consumer Price Index (excluding energy and food) rose to an annualized 6.2%, up from 5.8% in June. The Bank of England warned that inflation would increase through October, with a projected peak near 13%.

Trading recommendations

Support levels: 1.2028, 1.2000
Resistance levels: 1.2167, 1.2215, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is now trading below the moving averages, indicating some selling pressure. The MACD indicator becomes negative. It is best to look for sell trades from the resistance level of 1.2167, but only after the additional confirmation. Buy trades can be considered on intraday time frames from the support level of 1.2028, but only with confirmation.

Alternative scenario: if the price breaks out through the 1.2215 resistance level and fixes above, the uptrend will likely resume.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 134.17
Prev Close: 135.07
% chg. over the last day: +0.67%

Several Fed policymakers have discussed the need for further rate hikes in the last few days, so the USD/JPY quotes are rising again. Fundamentally, there are no changes in monetary policy in either country at the moment. The US Fed continues the cycle of interest rate hikes, while the Bank of Japan has a soft monetary policy, which negatively affects the national exchange rate. Japan’s trade deficit reached an all-time high in July as a surge in commodity prices and a 24-year low in the yen exacerbated obstacles to the country’s economic recovery.

Trading recommendations

Support levels: 134.23, 133.47, 132.27, 131.08, 130.85
Resistance levels: 135.29, 136.02, 137.12

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. USD/JPY quotes continue to grow steadily, breaking through all the resistance levels. Under such market conditions, buy trades can be sought from the support level of 134.23, but with additional confirmation. For sell deals, it is possible to consider the resistance level of 135.29, but only with additional confirmation in the form of a reverse initiative, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 132.29, the downtrend will likely resume.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2848
Prev Close: 1.2914
% chg. over the last day: +0.51%

The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Central Bank of Canada but also on the dollar index and oil prices. Oil prices were trading flat yesterday, and the dollar index was getting stronger before the FOMC minutes publication. As a result, before the FOMC news, the USD/CAD quotes grew due to the strengthening of the US dollar. It should be noted that the interest rates of the US and Canadian central banks are now at the same level, and the next step up is also planned at 50 bps for both banks. As a result, there is a certain parity between the currencies, and only the oil prices will introduce some imbalance.

Trading recommendations

Support levels: 1.2858, 1.2809, 1.2761
Resistance levels: 1.2926, 1.2965

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator has become positive, and the buyer’s pressure is still present, but the price is trading in front of the resistance level. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.2858, but only with confirmation. For sell deals, it is better to consider the resistance level 1.2965, but also with confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.2809 support level, the downtrend will likely resume.

There is no news feed for today.

By JustForex

Financial News Forex and Currency News

18 Aug

Thursday Special: My Trading Week

By ForexTime

Hi folks,

Lukman is in the building!

It’s been another eventful week for financial markets with action across currency, commodity and stock markets.

Before we proceed, I know some of you are wondering what is going on here. Well, I have hijacked the Thursday 101 slot to share my thoughts and personal experiences with markets this week!

While this may not follow the normal style of our market reports, we still aim to provide key insight and information on market themes complemented with some trading setups to watch out for.

Game plan #1 – USD hunting gone wrong

I marched into the trading week heavily equipped with the fundamental knowledge and technical weapons to hunt dollar bulls. With signs of easing inflationary pressures in the United States fuelling speculation around the Fed adopting a less aggressive approach towards rates, the dollar looked like an easy tasty meal. However, the greenback drew ample strength from weak Chinese economic data on Monday – eventually trampling all obstacles and G10 currencies in its path.

The bearish dollar setup I had in mind was blown out of the water. Instead of the Dollar Index (DXY) respecting the daily bearish channel, prices pushed above 106.00, signalling an incline back towards 107.30.

The same could be said for the equally-weighted dollar index which blasted back above 1.1700. Prices seem to be finding resistance around the 50-day SMA. It will be interesting to see whether this level limits further upside gains.

Game plan # 2 – If you can’t beat them…join them

After witnessing the dollar’s rebound on Monday, I decided to hitch a ride with bulls on Tuesday.

The EURUSD snatched my attention as prices tumbled back below 1.0200. Even though the currency pair remains in a range, the path of least resistance points south with 1.0100 acting as the first level of interest. Looking at the current price action, we are not expecting any fireworks for the rest of the week. But bears seem to be creating a foundation for a steeper decline in the week ahead.

Game plan #3 – Inflation heartache boost BoE hike bets

On Wednesday morning I felt nauseous and uneasy after official data revealed that UK inflation rose 10.1% in July. As the inflation menace causes havoc across the UK economy, households are feeling the squeeze. Everything from the price of food, energy, and services is increasing dangerously. Yesterday evening I witnessed a man argue with a shop owner over the price of bread and this morning I found myself in a heated conversation with my energy provider.

Rising inflation will most likely force the BoE to aggressively raise interest rates but will also fuel uncertainty over the UK’s economic outlook. Looking at the GBPUSD, it remains in a range on the daily chart with support at 1.2000. Best to revisit this next week when more life returns to the FX space.

Game plan #4 – Riding the volatile Yen wave

Hats off to my intraday traders that were able to tame the Yen beast this week.

The EURJPY and GBPJPY were untamed and ready to dish out punishment to any trader unprepared. Both tumbled on Monday, only to experience a sharp rebound on Tuesday and Wednesday! We can see some resistance around 138.00 for the EURJPY and 164.00 for the GBPJPY. Should these levels hold, the currency pairs could resume their descent in the new trading week.

Game plan #5 – Classic breakdown on gold

The last time gold secured a daily close below $1770 was at the start of the month. After flirting within a range for almost three weeks, it looks like the precious metal is ready to move lower. Interestingly, the precious metal somewhat ignored the minutes from the Fed’s July meeting. Policymakers saw inflation as a significant risk to the economy and indicated they would not pull back on rates until inflation came down. With inflation in the United States cooling to 8.5% in July, traders have cut bets over how aggressive the Fed will be on rates. In fact, markets are currently pricing in a 47% probability of a 75bp rate hike in September.

Talking technicals sustained weakness below $1770 could open the doors towards $1752 and $1724, respectfully.

EURUSD GBPUSD eurjpy GBPJPY Gold

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

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All information and opinions on this website are for general informational purposes only and do not constitute investment advice.