InvestMacro

By Orbex

– Yesterday, iron ore prices topped another 6-month high, harkening back to when there was broad speculation of a commodities supercycle.

This came a little ahead of the latest monthly traffic report from Hedland Port, the largest iron ore export port in Australia. It showed that there was a slight drop in exports during January to 48Mt from 50Mt in the prior month. Despite being lower, it is still at the top of the normal range.

The suggestion is that Chinese demand for raw materials, and in particular Australia’s largest export, remains robust. We should remember that last year there was concern that China would be cutting back on its iron ore imports after it cut down on electric smelting in a bid to phase out more polluting energy production.

Export figures show that fear hasn’t been borne out. And prices have been creeping higher as China’s regulators look to support the economy with easier monetary policy.

But that doesn’t mean everyone is happy

Following the news, China’s NDRC – which controls the economy and has plenary power over imports – announced it would enhance inspection tours of the iron ore market. This isn’t entirely surprising, as China has taken similar measures the last time iron ore broke above the $150/ton level.

A slight drop in Australian mining stocks and in the currency followed this move. However, the regulator’s move has not stopped commodity prices from moving significantly higher. And this is supporting the Aussie economy.

What about the Australian dollar?

At current rates, iron ore represents over half the total value of Australia’s exports, and therefore a major contributor to the country’s current account.

The well-known global logistics problems have been primarily affecting container ships. Booking shipping, of the type used to carry iron ore and coal from Australia, has not had similar difficulties.

The domestic situation for Australia relating to omicron continues to improve. But, by comparison, China has been struggling to contain the much more transmissible variant. Their policy of rolling lockdowns could have sudden impacts on the price of commodities and by extension the AUDUSD.

Where things can happen

For example, a few days ago a lockdown in the southern city of Baise sent aluminum prices to a multi-year high because certain processing facilities are concentrated in specific areas. Hubei province – the capital of which is Wuhan – is the largest steel production area. Panzhihua is another major steel-producing city that could affect markets if it were subject to a rolling lockdown. The third-largest steel-producing city in China is Anshan, the capital of the Liaoning province, which had rising cases over the last few days.

In general, the global economic recovery and high inflation could support commodity prices in the medium term. But the potential shocks from omicron aren’t completely gone yet. So the trajectory of the Aussie could still be shaky as it continues to respond to commodity prices.

Article by Orbex

Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com

By Orbex

USDJPY to test major resistance

The US dollar surged after consumer prices hit a 40-year high. Higher lows and then a close above the recent peak at 115.65 is an indication of strong bullish pressure.

This breakout has propelled the greenback to January’s high at 116.35. Its breach could trigger a runaway rally and resume the uptrend in the medium term.

An overbought RSI on the hourly chart may briefly restrain the bullish fever. 115.30 is the closest support and the bulls may see a pullback as an opportunity to stake in.

XAGUSD seeks support

Bullions fell back after US Treasury yields soared over hot US inflation data. The psychological level of 22.00 has proven to be a solid demand area.

A break above 23.00 has forced sellers to cover, paving the way for an upward extension. 24.00 from a previous rectangle consolidation is the next resistance.

A bullish breakout would bring silver back to this year’s high at 24.70. On the downside, the resistance-turned-support at 22.80 could see buying interest in case of a retracement.

US 100 hits resistance

The Nasdaq 100 struggles as record-high US inflation exacerbates rate hike concerns.

The previous rebound has eased selling pressure but hit resistance under 15350. The subsequent pullback bounced off the 61.8% Fibonacci retracement level (14400), which suggests buyers’ strong interest in keeping the index afloat.

Sentiment is still a tad cautious unless the bulls clear the said hurdle. Then the psychological level of 16000 could be within reach. 14500 is a key support in case of an extended consolidation.

Article by Orbex

Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com

Article By RoboForex.com

AUDUSD, “Australian Dollar vs US Dollar”

As we can see in the H4 chart, AUDUSD has completed the first correctional wave to the upside after testing 23.6% fibo. The current decline may be heading to break the low at 0.6967 and then continue down to 50.0% fibo at 0.6758. However, as long as the price is moving above the low, the pair may yet resume trading upwards to reach 38.2% and 50.0% fibo at 0.7364 and 0.7487 respectively.

The H1 chart shows a more detailed structure of the current decline after divergence on MACD. The asset is approaching 50.0% fibo at 0.7108 and may later continue moving towards 61.8% and 76.0% fibo at 0.7075 and 0.7035 respectively. If the price breaks the local resistance at 0.7249, it may continue the ascending tendency.

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the H4 chart, the asset is correcting within the rising wave and has already tested 61.8% fibo twice. The current impulse may finally break this level and continue growing towards 76.0% fibo and the high at 1.2839 and 1.2963 respectively. A breakout of the high will result in a further uptrend towards the long-term 38.2% fibo at 1.3023. The support is the low at 1.2450.

The H1 chart shows a more detailed structure of the current short-term correction. After testing 38.2% fibo several times, the descending wave has failed to break it and reach 50.0% fibo at 1.2623. At the moment, the asset is trading upwards to reach the local high at 1.2796.

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.

by JustForex

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.

by JustForex

On Thursday, US stock indices fell sharply after a Federal Reserve spokesman stoked fears of an aggressive interest rate hike. St. Louis Fed President James Bullard supported a 1% Fed rate hike by July after consumer price inflation jumped to 7.5% in annual terms, the fastest pace since 1982. The probability of a 50 basis point interest rate hike from the Fed next month increased to 89.9% from 24% the day before. High volatility in the stock market is likely to continue until the Fed meeting in March.

Goldman Sachs Group expects the Federal Reserve to raise interest rates seven times this year, rather than five as previously expected, to curb rising inflation in the US. “Most Fed officials who have commented have opposed a 50 basis points hike in March,” Goldman analysts wrote in a note. “We therefore think that the more likely path is a longer series of 25 basis points hikes instead,” the bank’s strategists wrote.

Yields on 10-year Treasuries jumped to 2% for the first time in more than two years, prompting investor risk aversion on stocks. The technology sector has been the hardest hit. At the close of the stock market, the Dow Jones Index (US30) decreased by 1.47%, the S&P 500 Index (US500) fell by 1.81%, and the NASDAQ Technology Index (US100) lost 2.1%. The stock market is currently trying to find a balance between concerns about inflation and the tightening of the Fed’s policy on the one hand and stronger than expected quarterly company reports on the other hand.

Leading European politicians have said the bloc would “do very well without Facebook” if the Meta-owned social network left the EU. Meta warned this week that it could leave the EU bloc if Europe does not allow it to conduct “transatlantic data transfers.”

European stock markets traded without a single dynamic yesterday. German DAX (DE30) gained 0.05%, French CAC 40 (FR40) decreased by 0.41%, Spanish IBEX 35 (ES35) gained 0.45%, British FTSE 100 (UK100) added 0.38%. In the Eurozone, March inflation forecasts will be key to determining the future policy of the European Central Bank (ECB). Yesterday, ECB President Christine Lagarde said that tightening monetary policy too quickly could hurt the Eurozone’s economic recovery. US stock indices show a “roller-coaster ride” amid the Fed’s plans to tighten monetary policy aggressively. However, European indices are now more attractive to investors, as the ECB is known for its conservatism. Analysts do not expect decisive actions from ECB until the end of the year. Germany’s consumer price index (inflation rate) remained at 4.9%. Switzerland’s inflation rate increased by 0.2% over the last month. UK GDP increased by 1% over the past three months to 6.5% in annual terms. France is making a huge bet on nuclear power. President Macron said the government plans to build six new nuclear reactors across the country.

Yesterday, oil prices fell after the release of US inflation data. When inflation is growing, the dollar index rises, which increases the cost of buying oil through other currencies. In the mid-term, the growth of the dollar index and the possible entry of Iranian oil into the world market puts pressure on oil quotes. On the other hand, geopolitical tensions in the Middle East and Eastern Europe and declining crude oil reserves are holding oil prices down. As a result, oil is in some balance between two opposite scenarios.

Asian stock markets are mostly down today after the US market decline yesterday. Australia’s S&P/ASX 200 (AU200) fell by 0.98%, and Hong Kong’s Hang Seng (HK50) lost 0.29%. Today is a bank holiday in Japan. Reserve Bank of Australia Governor Philip Lowe said the country’s central bank would patiently pursue the monetary policy as long as inflation is stable within the target range.

Main market quotes:

S&P 500 (F) (US500) 4,504.08 −83.10 (−1.81%)

Dow Jones (US30) 35,241.59 −526.47 (−1.47%)

DAX (DE40) 15,490.44 +8.43 (+0.054%)

FTSE 100 (UK100) 7,672.40 +28.98 (+0.38%)

USD Index 95.69 +0.19 (+0.20%)

• – Australia RBA Lowe’s Speech at 00:30 (GMT+2);
• – UK GDP (q/q) at 09:00 (GMT+2);
• – UK Industrial Production (m/m) at 09:00 (GMT+2);
• – UK Manufacturing Production (m/m) at 09:00 (GMT+2);
• – German Consumer Price Index (m/m) at 09:00 (GMT+2);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

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.

By Orbex

The GBPJPY currency pair is moving within a cycle impulse. Right now, the third part of this impulse is under development.

The second half of the powerful impulse wave III is visible on the 1H timeframe. At the end of December, the correction wave ④ of the primary degree ended. This correction took the form of an intermediate triple zigzag.

Since then, there was a rise in the price in the primary wave ⑤, which takes the form of an intermediate 5-wave impulse (1)-(2)-(3)-(4)-(5).

The entire primary wave ⑤ can complete its pattern near 163.55. At that level, it will be at 61.8% of wave ③.

Let’s consider an alternative scenario, where the primary wave ⑤ is not an impulse, but an ending diagonal consisting of intermediate sub-waves (1)-(2)-(3)-(4)-(5).

There is a high probability that the price will rise in the sub-wave (5) to the price level of 158.32, which marked the primary impulse ③ (this is not visible on the current chart).

After the completion of cycle impulse III, prices could drop in the development of a cycle correction IV. It is possible that wave IV will be at 38.2% of impulse III.

The correction could complete its pattern near 147.32.

Article by Orbex

Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com

By Orbex

AUDUSD breaks higher

The Australian dollar climbs as traders wager on a hawkish shift from the Reserve Bank of Australia.

On the daily chart, a break above the 30-day moving average suggests improved sentiment in the short term. The pair extended its gains after it broke the supply area around 0.7170.

As sellers scramble to cover their bets, driving up bids, the rally is heading to the next resistance at 0.7210. The RSI’s overbought situation may cause a temporary pullback with 0.7110 as the first support.

EURGBP seeks support

The euro consolidates gains amid mixed messages from the ECB.

The pair found support at February 2020’s low at 0.8290, and a bullish MA cross on the daily chart suggests a potential turnaround. A break above the daily resistance at 0.8405 has put the single currency back on track.

An overbought RSI led momentum traders to take profit. The current pullback is testing the 38.2% Fibonacci retracement level (0.8405) which used to be a resistance. 0.8475 is the main hurdle for the reversal to gain traction.

USOIL tests support

WTI crude bounces higher after the EIA reported a sharp drop in US inventories.

Price action is looking to consolidate its gains above the psychological level of 90.00. Sentiment remains upbeat though the bulls need to take a breather after the latest vertical ascent.

88.00 on the 20-day moving average is the immediate support. An oversold RSI may attract buying interest. A deeper retracement would test 85.00. A recovery above 92.30 could trigger momentum buying once again and resume the rally towards 95.00.

Article by Orbex

Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com

Article By RoboForex.com

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the H4 chart, after forming an Inverted Hammer reversal pattern close to the support level, USDCAD is reversing and may form a new ascending impulse. In this case, the upside target may be the resistance area at 1.2740. However, an alternative scenario implies that the asset may correct to reach 1.2625 first and then resume trading upwards.

AUDUSD, “Australian Dollar vs US Dollar”

As we can see in the H4 chart, AUDUSD has formed a Shooting Star reversal pattern near the resistance area. At the moment, the asset is reversing and starting a new decline. In this case, the downside target may be the support level at 0.7090. After testing the level, the price may break it and continue the descending impulse. At the same time, an opposite scenario implies that the price may grow to reach 0.7100 before resuming the downtrend.

USDCHF, “US Dollar vs Swiss Franc”

As we can see in the H4 chart, after testing the support area, the pair has formed several reversal patterns, for example, Hammer and Harami. At the moment, USDCHF is reversing and correcting within the sideways channel. After the pullback is over, the asset may resume growing. In this case, the upside target may be at 0.9300. Still, there might be an alternative scenario, according to which the asset may correct to reach 0.9205 before resuming its ascending tendency.

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.

Article By RoboForex.com

USDCHF, “US Dollar vs Swiss Franc”

In the H4 chart, after rebounding from the 200-day Moving Average, USDCHF is trading above it, thus indicating a possible ascending tendency. In this case, the price is expected to test 8/8, break it, and continue growing to reach the resistance at +1/8. However, this scenario may be cancelled if the price breaks the support at 7/8 to the downside. After that, the instrument may fall towards 5/8.

In the M15 chart, the pair may break the upside line of the VoltyChannel indicator and, as a result, continue growing.

XAUUSD, “Gold vs US Dollar”

As we can see in the H4 chart, after breaking the 200-day Moving Average, XAUUSD is trading above it to indicate an ascending tendency. In this case, the price is expected to break 7/8 and move upwards to reach the resistance at +1/8. However, this scenario may no longer be valid if the price breaks 6/8 to the downside. After that, the instrument may reverse and resume falling towards the support at 4/8.

As we can see in the M15 chart, the pair has broken the upside line of the VoltyChannel indicator and, as a result, may continue trading upwards.

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.

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.1414
• Prev Close: 1.1425
• % chg. over the last day: +0.09%

ECB representatives indicated that they do not trust inflation forecasts and rely more on actual data. Meanwhile, EU DRAFT forecasts inflation in the Eurozone at 3.5% in 2022 and 1.7% in 2023. The GDP growth forecast is 4% in 2022 and 2.7% in 2023.

Trading recommendations

• Support levels: 1.1414, 1.1362, 1.1329, 1.1275
• Resistance levels: 1.1481, 1.1534, 1.1617

From the technical point of view, the EUR/USD on the hourly time frame is bullish. The EUR/USD currency pair is trading in the wide corridor of 1.1414-1.1481. The MACD indicator is inactive for the second day. The market froze in anticipation of US inflation data. Under such market conditions, buy trades should be looked at from the support level 1.1414, with the targets to the upper border of the corridor. Sell trades are better to look for on intraday time frames from the upper boundary of the corridor, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1275 support level and fixes below, the mid-term uptrend will likely be broken.

News feed for 2022.02.10:

• – Eurozone Economic Forecasts (m/m) at 12:00 (GMT+2);
• – US Consumer Price Index (m/m) at 15:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.3531
• Prev Close: 1.3534
• % chg. over the last day: +0.02%

A mixed medium-term background is forming on the GBP/USD currency pair. The British pound now has fundamental support from the Bank of England because when interest rates rise, the national rate strengthens in the medium term. However, it should not be forgotten that the Fed is also preparing to raise interest rates since March and may do so more aggressively if US inflation data today turns out to be worse than expected. Bank of England Governor Andrew Bailey will give a speech today. Traders should be on the lookout for clues regarding monetary policy.

Trading recommendations

• Support levels: 1.3475, 1.3457, 1.3434
• Resistance levels: 1.3583, 1.3619, 1.3639, 1.3662

On the hourly time frame, the trend on GBP/USD is bullish. The volatility on the currency pair has now decreased, while the MACD indicator has become inactive. The market is waiting for the US consumer price data. Under such market conditions, buy trades should be looked at from the support level 1.3475. The resistance level of 1.3583 may be considered for opening sell deals, but only with additional confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks out through the 1.3475 support level and consolidates below, the bullish scenario will be broken.

News feed for 2022.02.10:

• – UK BoE Gov Bailey’s Speech at 11:05 (GMT+2);
• – US Consumer Price Index (m/m) at 15:30 (GMT+2).

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 115.53
• Prev Close: 115.53
• % chg. over the last day: 0.00%

The USD/JPY quotes are showing a medium-term uptrend as the monetary policy of the Bank of Japan is now aimed at making the JPY cheaper due to the maximum stimulus, while the Fed is tightening the monetary policy and might do it more aggressively if today’s inflation data turns out to be worse than the forecast of 7.3%. Japan’s producer inflation rate fell to 8.6% from 8.7%. Analysts had expected a decline to 8.2%.

Trading recommendations

• Support levels: 115.15, 114.96, 114.76
• Resistance levels: 115.73, 116.08

The global trend on the USD/JPY currency pair is bullish. The Japanese yen slowly keeps getting cheaper amid the rising dollar index and due to the ultra-soft monetary policy of the Bank of Japan. The MACD indicator indicates a divergence. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 115.15. Sell positions can be looked at from the resistance level 115.73, but only with short targets and additional confirmation.

Alternative scenario: if the price fixes below 114.76, the uptrend will likely be broken.

News feed for 2022.02.10:

• – Japan Producer Price Index (m/m) at 01:50 (GMT+2);
• – US Consumer Price Index (m/m) at 15:30 (GMT+2).

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.2702
• Prev Close: 1.2672
• % chg. over the last day: -0.23%

The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Bank of Canada but also on the oil prices and the dollar index. Crude oil inventories in the US showed a decline of 4.8 million barrels last week. The inventory decline indicates a supply shortage, which positively affects the growth of oil prices. The increase in oil prices contributes to the strengthening of the Canadian dollar (decrease in USD/CAD quotes).

Trading recommendations

• Support levels: 1.2649, 1.2600, 1.2506
• Resistance levels: 1.2729, 1.2792

From a technical point of view, the USD/CAD currency pair is bullish. But the price is trading in a wide flat, making it difficult to find good entry points. Under such market conditions, it is better to look for buy trades on the lower time frames from the support levels of 1.2649. There are no optimal entry points to sell deals now, as the price is trading near the lower border of the corridor.

Alternative scenario: if the price breaks through the 1.2649 support level and fixes below, the downtrend will likely resume.

News feed for 2022.02.10:

• – US Consumer Price Index (m/m) at 15:30 (GMT+2).

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.