InvestMacro

By Admiral Markets

The world’s reserve currency maintained its consolidative mood last week and moved around 12-month highs, although it briefly broke higher on Wednesday, when it reached its highest point since late September 2020. Overall, the US dollar continues to buck the general trend of high risk appetite in financial markets.

USD

US economic data was good. The country’s September retail sales were 14.0% higher than in the same period a year earlier. There is a lot of discussion in the market about disruptions in supply chains, which are partially reducing the availability of goods. One example of this, the car manufacturer Toyota reported an expected -15% drop in November production volumes due to a shortage of components. Another important data point was the September headline inflation rate, which stood at 5.4% year-on-year and has remained stable above the 5% level for the 4th month in a row. Contrary to what the central bank has been communicating, inflation is not retreating and remains high, and the shelter component is a significant contributor to this trend, which has shown a consistent recovery since the beginning of the year and accounts for as much as a third of the overall inflation index. The producer price index was also published, which rose by 8.6% year-on-year and recorded another new cycle high, suggesting that inflationary pressures from this sector are persisting and will continue to spill over to the rest of the economy. In the labour market, the shortage of workers remains severe, with the number of open positions at 10.44 million, only marginally retreating from historical highs. The number of new jobless claims fell further from 0.326 million to 0.293 million during the week.

The pandemic trend showed positive signs and the weekly average of global new cases fell from 408 to 402 thousand per day. Continental trends remained unchanged, with North America showing a -14% weekly decrease, Asia -8% and South America -19%, but Europe continued to grow and increased by +12% during the week. In the US, the data showed further improvement and the average dropped from 87 to 85 thousand per day. The number of vaccinations administered increased from 402 to 405 million, a change of 3 million. Overall in the US, the number of people vaccinated with at least one dose rose from 65.3% to 65.6% of the population, with a weekly increase of 0.3%. In Lithuania, the number of people vaccinated with at least one dose rose from 63.2% to 63.5%, a difference of 0.3%.

Euro

The main currency pair EUR/USD reflected the sentiment of the US dollar and depreciated to the level of 1.153 at the beginning of the week. Later, it recovered its losses and rose to the level of 1.160. Among the economic data in the Old Continent was the industrial production in August, which was 5.1% higher than at the same time a year ago. The ZEW economic sentiment index stood at 21.0 in Europe and 22.3 in Germany, both continuing their steady decline. The EUR/USD pair ended the week trading up 0.2%.

JPY

The most important Asian pair, USD/JPY, continued to show a strong appreciation sentiment, with the pair rising to the 114.2 level, the highest since October 2018. Economic data included the producer price index, which rose by 6.3% year-over-year, and the change in August industrial volumes, which reached 8.8% year-over-year. USD/JPY ended the week’s trading up 1.8%.

GBP

The British pound and US dollar pair showed positive sentiment and appreciated consistently throughout the week, ending trading at 1.375. Important economic data included labour market indicators with the unemployment rate at 4.5% and average earnings rising by 7.2% year-over-year. Industrial production in August was 3.7% higher than a year earlier. GBP/USD ended the week trading up 1.0%.

Economic Events

This week will start with important economic data from China, where economic growth, industrial production and retail sales will be published. This will be followed by US industrial production data on Monday. There are no major releases scheduled for Tuesday, while inflation figures for England and Europe are due on Wednesday. On Thursday, investors will be watching US existing home sales and on Friday Japanese inflation, English retail sales and the preliminary results of the purchasing managers’ index.

According to Admiral Markets market sentiment data, 59% of investors have long positions in EUR/USD (down -8 percentage points compared to last week). In the main Asian pair USD/JPY, 10% of investors have long positions (down -1 percentage point). In GBP/USD, 24% of participants expect a rise (down -22 percentage points). Such market data is interpreted as a contrarian indicator, so that EUR/USD is likely to fall and USD/JPY and GBP/USD to rise. The analysis of positioning data should be combined with fundamental projections and technical analysis.

Sources: bloomberg.com, reuters.com, Admiral Markets MT4 Supreme Edition, investing.com

 

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By Orbex

AUDUSD tests major supply zone

The Australian dollar rallied after the RBA expected a return to growth in October’s meeting minutes.

The pair has met stiff selling pressure in the supply zone (0.7460) from the September sell-off. And the RSI is once again in the overbought area. Short-term buyers would be eager to take profit, driving the price lower in the process.

0.7380 is the first support and will test the bulls’ resolve. A bounce above the said resistance would trigger an extended rally. On the downside, a bearish breakout may cause a correction to 0.7320.

USDCHF sees limited rebound

The US dollar recoups some losses supported by recovering Treasury yields.

The drop below the demand zone around 0.9230 has put the bulls under pressure. An oversold RSI has triggered the buy-the-dips mentality at the fresh support at 0.9200.

The buy-side will need to clear the hurdle at 0.9310 to reclaim control of the direction. Otherwise, the latest rebound may be an opportunity for the bears to sell into strength.

A new round of sell-off would send the pair towards the daily support at 0.9100.

NAS 100 tests resistance

The Nasdaq 100 rallies as investors seem to be feeling confident about the upcoming earnings.

A rebound above the psychological level of 15000 suggests strong buying interest in keeping the rally intact in the medium-term. The RSI’s overbought situation has temporarily held the impetus back. A retracement is likely to attract bids in the vicinity of 15050.

15400 is a major resistance from the daily timeframe and its breach may resume the uptrend above 15700. Failing that, 14800 is a key floor on the downside.

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

EURUSD, “Euro vs US Dollar”

EURUSD is trading at 1.1571; the instrument is moving inside Ichimoku Cloud, thus indicating a sideways tendency. The markets could indicate that the price may test the cloud’s downside border at 1.1555 and then resume moving upwards to reach 1.1675. 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 1.1520. In this case, the pair may continue falling towards 1.1430. To confirm further growth, the asset must break the cloud’s upside border and fix above 1.1625.

BRENT

Brent is trading at 85.48; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 84.05 and then resume moving upwards to reach 91.55. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 79.45. In this case, the pair may continue falling towards 76.55.

USDJPY, “US Dollar vs Japanese Yen”

USDJPY is trading at 114.30; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 113.95 and then resume moving upwards to reach 115.35. Another signal in favour of a further uptrend will be a rebound from the support level. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 113.35. In this case, the pair may continue falling towards 111.65.

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

EURUSD, “Euro vs US Dollar”

As we can see in the H4 chart, the asset has completed the correction by forming several reversal patterns, including Harami, close to the resistance level. At the moment, EURUSD may reverse and start a new decline. In this case, the downside target may be at 1.1500. Later, the market may break the support area and continue trading downwards. However, an alternative scenario implies that the price may correct to reach 1.1650 first and then resume trading downwards.

USDJPY, “US Dollar vs Japanese Yen”

As we can see in the H4 chart, USDJPY has formed several reversal patterns, for example, Hanging Man, while testing another resistance area. At the moment, USDJPY is reversing and may start a new correctional impulse towards the support level. In this case, the correctional target may be at 113.60. At the same time, an opposite scenario implies that the price may continue growing towards 114.95 without any corrections.

EURGBP, “Euro vs Great Britain Pound”

As we can see in the H4 chart, after forming several reversal patterns, such as Inverted Hammer, near the support level, EURGBP may reverse and start a new pullback. In this case, the correctional target may be at 0.8484. Later, the market may test the resistance area, rebound from it, and resume the descending tendency. Still, there might be an alternative scenario, according to which the asset may continue falling to reach 0.8400 without testing the resistance area.

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: 1.1596
• Prev Close: 1.1599
• % chg. over the last day: +0.03%

Germany’s inflation expectations continue to rise as markets no longer view inflation as a temporary phenomenon but as something more permanent. The German inflation expectation index increased up to 1.80%, the highest level since April 2013.

Trading recommendations

• Support levels: 1.1548, 1.1502, 1.1453
• Resistance levels: 1.1615, 1.1671, 1.1717, 1.1772, 1.1802, 1.1835

From the technical point of view, the EUR/USD trend is bearish. The price failed to break through the priority change level. The MACD indicator has become inactive. Under such market conditions, traders should consider selling deals from the priority change level, given there is a sellers’ initiative. Buy trades should be considered only on lower time frames from the support levels or from the buyers’ initiative areas.

Alternative scenario: if the price breaks through the 1.1615 resistance level and fixes above, the mid-term uptrend will likely resume.

News feed for 2021.10.18:

• – US Industrial Production (m/m) at 16:15 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.3671
• Prev Close: 1.3744
• % chg. over the last day: +0.53%

The UK reports on inflation this week. Analysts expect consumer prices to rise and fear that the inflation rate will increase above 3.2%. Investors and funds will be watching the report closely in anticipation that the Bank of England will raise interest rates before the end of the year to combat rising inflation.

Trading recommendations

• Support levels: 1.3685, 1.3617, 1.3584, 1.3532, 1.3457, 1.3360, 1.3282
• Resistance levels: 1.3759, 1.3812, 1.3886

On the hourly time frame, the GBP/USD trend has changed to bullish. The British pound is strengthening due to its direct correlation with oil prices. The MACD has become inactive. Buy trades should be considered only within the day and only from the initiative zone of the buyers. It is better to look for sell deals from the resistance levels, but only after an additional confirmation in the form of a sellers’ initiative because the buyers’ pressure is higher now.

Alternative scenario: if the price breaks down through the 1.3532 support level and consolidates below, the bullish scenario is likely to be broken.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 113.66
• Prev Close: 114.25
• % chg. over the last day: +0.52%

Japan will launch a 100 billion yen ($875 million) fund in 2022 to promote modern technology and economic security. The fund’s investments will go to universities and companies for research and development in technological areas that the Japanese government considers a priority. It also became known that Prime Minister Kishida intends to call on producers of oil to increase production.

Trading recommendations

• Support levels: 113.66, 113.25, 112.19, 111.53, 110.99, 110.65, 109.95, 109.63
• Resistance levels: 114.40

The main trend of the USD/JPY currency pair is bullish. The Japanese yen is rapidly declining against the US dollar. The MACD indicator is in the positive zone. However, there is a divergence on higher time frames, which means that growth is limited, and correction is expected soon. Under such market conditions, it’s better to look for buy positions from the support levels near the moving average since the price has significantly deviated from the average line. Sell positions should be considered only throughout the day from the resistance levels, given there is sellers’ initiative.

Alternative scenario: if the price falls below 112.19, the uptrend is likely to be broken.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.2366
• Prev Close: 1.2358
• % chg. over the last day: -0.06%

The Canadian dollar is a commodity currency, so USD/CAD is highly dependent on the dynamics of the dollar index and oil prices. The dollar index was trading flat on Friday while oil prices were slowly growing. As a result, the USD/CAD currency pair is decreasing due to the growth in oil prices and the Canadian dollar strengthening.

Trading recommendations

• Support levels: 1.2340
• Resistance levels: 1.2425 1.2518, 1.2565, 1.2628, 1.2729, 1.2774

From the technical point of view, the trend of the USD/CAD currency pair is bearish. But the price has reached the daily support level, which will at least give a bounce. The MACD indicator has become inactive, but there are still signs of divergence on higher time frames. Under such market conditions, it is better to look for sell deals from the resistance levels near the moving average. Buy trades should be considered only on smaller time frames from the support levels if there is the buyer’s initiative.

Alternative scenario: if the price breaks out through the 1.2565 resistance level and fixes above, the uptrend will likely resume.

News feed for 2021.10.18:

• – Canada BoC Business Outlook Survey (m/m) at 17:30 (GMT+3).

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 current structure of the USDCHF pair suggests the development of a cycle wave y, which hints at a double zigzag Ⓦ-Ⓧ-Ⓨ of the primary degree. Let’s pay attention to the last primary wave Ⓨ, which is under development.

Wave Ⓨ has a complex internal structure and is likely to take the form of a triple combination (W)-(X)-(Y)-(X)-(Z). It is possible that the actionary waves (W) and (Y) and the intervening waves (X) and (X) have already ended.

We can expect the end of wave y near 0.947. At that level, the primary wave Ⓨ will be at 161.8% of wave Ⓦ.

Let’s consider an alternative scenario, according to which the formation of the cycle wave y has come to an end. It took the form of a primary double zigzag.

If this assumption is correct, then at the moment we are in the initial part of a new bearish wave.

We can assume that in the upcoming trading weeks, the market will move in a downward direction within the intermediate impulse, or rather in the intermediate wave (3). This is indicated on the chart below the minimum of 0.901 and it was marked by the primary intervening wave Ⓧ.

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

EURUSD attempts a bullish breakout

The US dollar retreated after retail sales fell below 1% in September. The euro’s rally above 1.1570 has led some short interests to close their positions.

The pair is testing the key resistance at 1.1640, which coincides with the 20-day moving average and the first resistance on the daily chart. A bullish breakout could pave the way for recovery to 1.1750.

However, buyers could be hesitant to commit after an overbought RSI caused profit-taking. In case of a pullback, 1.1540 is fresh support to keep the current rebound relevant.

NZDUSD tests key resistance

The New Zealand dollar rallies as Q3 inflation beats estimates.

After a few days of sideways action, the indecision ended with a break above 0.7020, the origin of the last sell-off. In turn, this set the kiwi on a bullish course.

Sellers would scramble to get out after their failed attempts to push lower. An overbought RSI may cause a temporary pullback.

0.7040 is the immediate support, then 0.6980 is the second line of defense in case of a deeper correction. A close above 0.7110 would lift the pair towards the previous peak at 0.7170.

GER 40 heads towards major hurdle

The Dax 40 bounces higher as the market bets on a prolonged low-interest environment.

The major floor at 14800 has seen strong buying interest as traders bought the dip. A bullish close above 15200 has put the short side under pressure. Then a rally above the 30-day moving average indicates further commitment from the buy-side.

The momentum could slow down momentarily as the RSI shows an overbought situation. 15300 would be the first support. A break above the daily resistance at 15700 may resume the uptrend.

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

GBPUSD rises back as recovery gains traction

The pound bounces higher as the UK’s recovery may have gained a foothold.

Britain’s economy grew 0.4% month-on-month in August, following a 0.1% contraction in the previous period. Rising wages and a low unemployment rate would compound the bullish outlook.

If this week’s inflation reading goes beyond expectations, traders could be aggressively betting on the odds of the Bank of England starting the monetary tightening cycle soon.

The US dollar’s technical retreat would give the sterling an extra boost. The pair has found support at 1.3580. A break above 1.3900 may resume the upward movement.

USDCAD tumbles as BOC may increase tapering

The Canadian dollar surged as markets expect more tightening from the Bank of Canada. Strong job gains suggest that the labor market has returned to its pre-pandemic level.

Upbeat CPI would be a boon to the loonie bulls, as it may prompt the BOC to further trim its bond purchase program at the interest rate meeting next week. In addition, rallies in commodity markets offer support to the loonie.

As oil climbs to a seven-year high, the US dollar has an extra reason to struggle against its northern peer. The pair is pushing towards 1.2300 and a breakout would send it to 1.2020. 1.2600 is a fresh resistance in case of a rebound.

XAUUSD recovers as US yields soften

Gold rallied as a pullback in US bond yields weighed on the greenback. The buck retreated from a one-year high in what looks like a ‘buy the rumor, sell the news’ move after it surged in recent months on the tapering bet.

Solid US inflation in September may advance the agenda for the Federal Reserve’s tightening. Nonetheless, the fact that it has already been priced in leaves no more catalysts yield-wise. Instead, the non-yielding metal can shine once again while the dollar bulls bag their profits.

A rally above 1830 would open the door to the psychological level of 1900. 1750 is the first support on the downside.

US 500 rises with expected solid earnings

The S&P 500 recoups losses as the third-quarter earnings season kicks off.

US central bankers have signaled that they would start to roll back the stimulus in November. However, they remained divided over the timing of the first rate hike.

Now that the market rests assured that the low-rate environment may still last, they have turned their attention to Corporate America’s performance.

Swift rebounds across markets reflect investors’ hopes that companies will report strong bottom lines. The index has found support at 4290. A break above 4480 may attract enough momentum to rally above the peak at 4550.

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