Ichimoku Cloud Analysis 25.08.2022 (EURUSD, USDJPY, NZDUSD)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD is rebounding from Kijun-Sen. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the bullish channel’s upside border at 1.0040 and then resume moving downwards to reach 0.9780. 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 1.0165. In this case, the pair may continue growing towards 1.0250. To confirm a further downtrend, the price must break the bullish channel’s downside border and fix below 0.9985.

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

USDJPY, “US Dollar vs Japanese Yen”

USDJPY is testing Tenkan-Sen and Kijun-Sen. 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 133.25 and then resume moving upwards to reach 140.35. 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 133.45. In this case, the pair may continue falling towards 132.55. To confirm a further uptrend, the price must break the bearish channel’s upside border and fix above 137.45.

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

NZDUSD, “New Zealand Dollar vs US Dollar”

NZDUSD has fixed below 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 the cloud’s downside border at 0.6235 and then resume moving downwards to reach 0.6035. Another signal in favour of a further downtrend will be a rebound from the upside border of the Triangle pattern. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 0.6355. In this case, the pair may continue growing towards 0.6445. To confirm a further downtrend, the price must break the pattern’s downside border and fix below 0.6135.

NZDUSD

Article By RoboForex.com

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

The Analytical Overview of the Main Currency Pairs on 2022.08.25

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 0.9966
  • Prev Close: 0.9967
  • % chg. over the last day: +0.01%

Dutch gas prices, the European benchmark, rose again on Wednesday as the prospect of a Nord Stream 1 supply cut kept investors on edge. Russia’s state energy company Gazprom said on Friday that Russia would suspend natural gas supplies to Europe via Nord Stream 1 for three days due to unscheduled maintenance. The spike in gas prices continues to pressure the region’s economy and the European currency in particular. Also, the difference in interest rates between the US Federal Reserve (2.5%) and the ECB (0.5%) affects the decrease in the quotes.

Trading recommendations
  • Support levels: 0.9932
  • Resistance levels: 0.9996, 1.0112, 1.0146, 1.0230, 1.0286, 1.0365

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 forming a wide balance. The MACD indicator has become positive, and buying pressure prevails. Under such market conditions, buy trades are best to be sought on intraday time frames from the support level of 0.9932, but with confirmation. Sell trades can be considered from resistance levels of 0.9996, but only after additional confirmation, as the level has already been tested twice.

Alternative scenario: if the price breaks out of the 1.0146 resistance level and fixes above, the uptrend will likely resume.

EUR/USD
News feed for 2022.08.25:
  • – Eurozone Germany GDP (q/q) at 09:00 (GMT+3);
  • – Eurozone Germany Ifo Business Climate (m/m) at 11:00 (GMT+3);
  • – Eurozone ECB Monetary Policy Meeting at 14:30 (GMT+3);
  • – US GDP (q/q) at 15:30 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – Jackson Hole Symposium at 16:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.1825
  • Prev Close: 1.1791
  • % chg. over the last day: +0.29%

Traders are betting that the ECB and Bank of England will be forced to take bolder action to rein in rising prices. Markets have increased bets on a rate hike for the Bank of England, betting that interest rates will rise to 3.5% by the end of the year. The option model shows a 60% chance that the pound will fall to $1.14 by the end of the year, the lowest level since 1985. The economy is approaching recession, energy prices continue to skyrocket, and uncertainty about who will be the next prime minister are all factors creating a bearish mood for the British currency.

Trading recommendations
  • Support levels: 1.1786, 1.1659
  • 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 forming an accumulation zone. The MACD indicator has become positive, and sellers’ pressure has slightly decreased, but the main priority is still downward. At the moment, it is better to look for sell deals 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 1.1786, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2000 resistance level and fixes above, the uptrend will likely resume.

GBP/USD
There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 136.76
  • Prev Close: 137.12
  • % chg. over the last day: +0.26%

Bank of Japan board member Toyoaki Nakamura said on Thursday that a new surge in pandemic cases clouds Japan’s economic outlook, continued supply constraints, and a steady rise in global commodity prices. So the Bank of Japan should maintain a large-scale stimulus to support the economy. Nakamura said that market worries about aggressive interest rate hikes by major central banks to curb inflation could also trigger capital outflows from emerging economies and hurt global growth.

Trading recommendations
  • Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
  • Resistance levels: 137.01, 137.43, 138.25

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The USD/JPY quotes have corrected to the levels of the moving averages and are forming a balance. Under such market conditions, buy trades can be sought from the support level of 135.89 or 135.35, but with additional confirmation. For sell deals, traders can consider the resistance level of 137.01, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 135.35, the downtrend will likely resume.

USD/JPY
There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2955
  • Prev Close: 1.2971
  • % chg. over the last day: +0.12%

The US Energy Information Administration reported a 3.3 million barrel drop in crude oil inventories last week. The Canadian dollar is a commodity currency that highly depends on oil prices. Also, yesterday it became known that the OPEC countries will fight the low oil prices, and if Iranian oil comes back to the world market, OPEC is ready to cut its production not to let the oil prices fall drastically. Therefore, the Canadian dollar, in addition to monetary tightening by the Bank of Canada, also has fundamental support in keeping oil prices from falling.

Trading recommendations
  • Support levels: 1.2900, 1.2858, 1.2809, 1.2761
  • Resistance levels: 1.2998, 1.3016, 1.3090, 1.3105

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is now trading at the levels of the moving averages, with the sellers’ pressure temporarily prevailing. 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 1.2998.

Alternative scenario: if the price breaks down and consolidates below the 1.2900 support level, the downtrend will likely resume.

USD/CAD
There is no news feed for today.

By JustForex

 

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

China announced a massive economic stimulus. Gas prices in Europe hit another high

By JustForex

At the stock market close yesterday, the Dow Jones Index (US30) added 0.18%, while the S&P 500 (US500) decreased by 0.29%. The NASDAQ Technology Index (US100) gained 0.41%.

The US durable goods orders were unchanged month-over-month in July. Unfinished US home sales fell in July for the sixth time this year to the lowest level since the pandemic began, extending a sharp decline in the housing market. The number of signed contracts was down 22.5% from a year ago. Rising interest rates always negatively affect the housing market, so things will only worsen in the near future.

Today, traders of Fed funds futures contracts estimate a 61% probability that the Fed will raise rates by 75 basis points at its September meeting. The probability of a 50 basis point hike is 39%.

Equity markets in Europe traded yesterday without a single dynamic. German DAX (DE30) gained 0.20%, French CAC 40 (FR 40) increased by 0.39%, Spanish IBEX 35 (ES35) lost 0.33%, British FTSE 100 (UK100) closed on Wednesday down by 0.22%.

The German government is concerned about possible problems with coal supplies for power plants in the fall and winter due to low water levels in the Rhine River and oil supplies in the eastern parts of the country. The price of gas in Europe has exceeded $3100 per 1,000 cubic meters for the first time since early March. Dutch gas prices, the European benchmark, rose again Wednesday as the prospect of an end to supplies through the Nord Stream 1 pipeline kept investors on edge. Russia’s state energy company Gazprom said Friday that Russia would suspend natural gas supplies to Europe via Nord Stream 1 for three days because of unscheduled maintenance.

The Energy Information Administration reported a 3.3 million barrel drop in crude oil inventories for the week through August 19. Also, yesterday it became known that OPEC countries are going to fight with low oil prices, and in case Iranian oil returns to the world market, OPEC countries (in particular Saudi Arabia and Iraq) are ready to cut their production in order not to allow the oil prices to fall significantly.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.49%, Hong Kong’s Hang Seng (HK50) ended the day down by 1.20%, while Australia’s S&P/ASX 200 (AU200) was up by 0.52%.

On Wednesday, Japan’s prime minister said that his country would restart several idle nuclear power plants and study the possibility of developing next-generation reactors. It indicates that Japan (a major energy importer) is looking to bolster its capabilities amid continued uncertainty in global energy markets. Japan is aiming for carbon neutrality by 2050. According to the “ambitious outlook,” the country’s 6th Strategic Energy Plan calls for renewables to account for 36% to 38% of its electricity generation mix in 2030, with nuclear power accounting for 20% to 22%.

Stats NZ data showed a 2.3% drop in seasonally adjusted retail sales in the last quarter in New Zealand. Economists had forecast a 1.7% increase as consumer spending was expected to rebound after the initial Omicron hit, which reduced retail spending by 1% in the year’s first quarter. Analysts believe the drop in retail spending points to a potential recession.

China announced an additional 1 trillion yuan ($146 billion) in stimulus to save the economy from recession. The stimulus measures will include an additional 300 billion yuan, which state banks can invest in infrastructure projects.

S&P 500 (F) (US500) 4,140.77 +12.04 (+0.29%)

Dow Jones (US30) 32,969.23 +59.64 (+0.18%)

DAX (DE40) 13,220.06 +25.83 (+0.20%)

FTSE 100 (UK100) 7,471.51 −16.60 (−0.22%)

USD Index 108.61 −0.02 (−0.01%)

Important events for today:
  • – New Zealand Retail Sales (q/q) at 01:45 (GMT+3);
  • – Eurozone Germany GDP (q/q) at 09:00 (GMT+3);
  • – Eurozone Germany Ifo Business Climate (m/m) at 11:00 (GMT+3);
  • – Eurozone ECB Monetary Policy Meeting at 14:30 (GMT+3);
  • – US GDP (q/q) at 15:30 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – Jackson Hole Symposium at 16:00 (GMT+3);
  • – US Natural Gas Storage (w/w) 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.

What’s the dispute between Imran Khan and the Pakistan government about?

By Samina Yasmeen, The University of Western Australia 

Tensions between former Pakistan prime minister Imran Khan and the current coalition government are coming to a head.

Khan made a speech in the northern city of Rawalpindi near Islamabad on Sunday, August 21, seeking a return to office after losing a no-confidence vote in April and being ousted as prime minister. Just hours beforehand, Pakistan’s electronic media regulator prohibited Khan’s rallies from being broadcast live on all satellite TV channels.

As he started his address, which was being broadcast on social media, YouTube experienced “disruptions”. This prompted Khan to accuse the government of attempting to silence him.

Following this, Pakistani police laid charges of terrorism against Khan for comments he had made in a speech about the judiciary a day earlier in Islamabad.

Previously, the government had been quite permissive of Khan’s rallies, but this approach appears to have changed.

So how did we get here?

Khan’s narrative

Since March this year, even before he was ousted, Khan has held numerous rallies, gatherings and social media activities to present his narrative to the Pakistani people locally and overseas.

He has accused, without evidence, the coalition government of working at the behest of the United States. He has labelled the government an “imported government” and popularised the hashtag “imported government na Manzoor” (the imported government is unacceptable).

Khan has also levelled varying degrees of criticism against the judiciary, bureaucracy and media for enabling the coalition government’s return to power in April.

In contrast, he portrays himself as a good Muslim, someone who is following in the footsteps of the founder of the country, Mohammad Ali Jinnah, and as being knowledgeable about the West, honest and incorruptible.

He believes he’s different from the government, which he denounces as corrupt “thieves”, and that he can lead the people of Pakistan in their struggle for true independence. He has urged young people and others to wage the struggle for “haqiqi azadi” (real independence).

The often well-choreographed rallies feature music by renowned musicians and singers, and appearances by popular actors. The appeal of this narrative is obvious in the thousands of Pakistanis of all ages and backgrounds attending these rallies.

Khan’s speeches are broadcast on social media, including YouTube and Twitter, with the Pakistani diaspora following these developments.

The government’s changing stance

Since coming to power in April, the coalition government has allowed almost all of these rallies to take place.

One exception was Khan’s May 25 “independence march”, when his supporters marched to Islamabad to call for new elections. The government had attempted to shut down the march, but the Supreme Court overturned the ban. Media reported some clashes between police and Khan’s supporters, with police firing teargas and detaining some protesters.

There are two possible explanations for the government’s mostly permissive approach to Khan’s rallies. The first is that it’s keen to demonstrate its democratic credentials.

The second is that the military – which was instrumental in removing Khan from power – thought Khan’s popularity would run its course and decline over time, so there was no need to intervene especially given the support for Khan’s party apparent among some retired military officials. But that didn’t happen.

Khan’s criticism of the regime became more strident. His references to the “neutrals”, a euphemism for the military establishment, became increasingly pronounced. Calling upon the “neutrals” to see the light and return power to the rightful representatives, Khan implied the military had supported his ouster and needed to mend its ways. Coupled with his increasing popularity despite his own government’s poor performance, such references fuelled anti-military sentiment that has swept across social media.

A Pakistan Army helicopter crash on August 1 in the province of Balochistan killed six military officials. This unfortunately led to anti-military groups stoking speculation online that the military itself had orchestrated the crash, and that military hardware was more precious than the military officials lost.

The leadership of Khan’s party denied any connection to the widely circulating anti-military tweets. But within days of this denial, Khan’s chief of staff read a controversial statement on the ARY television network that authorities claim was seditious and amounted to an incitement of mutiny within the armed forces.

The terrorism charges, along with Pakistan’s electronic media regulator banning live broadcast of his rallies, show Pakistani authorities are coming down firmly on Khan. They are now attempting to deny Khan the ability to mobilise masses against the judiciary, law enforcement agencies and the military. Time will tell whether this will be successful. But there are ominous signs of impending instability.The Conversation

About the Author:

Samina Yasmeen, Director of Centre for Muslim States and Societies, The University of Western Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

What’s “Jackson Hole” and why it matters for the Nasdaq 100?

By ForexTime

Organised by the Kansas City Fed, this year’s Jackson Hole Economic Policy Symposium will kick off today (August 25th) through August 27th.

This annual event is held in Jackson Hole, Wyoming (hence, the name widely used by market participants to refer to such a pivotal event),which features some of the top officials from major central banks (e.g. US Federal Reserve, European Central Bank, Bank of England, etc.), as they discuss pressing issues that face the global economy.

And there’s no issue more pressing now than the red-hot inflation around the world, which has forced central bankers worldwide into aggressively raising their respective interest rates.

 

Why “Jackson Hole” matters?

What’s said (or sometimes, not said) by these central bankers, especially the Fed Chair, has the potential to move markets.

For example, at the 2021 symposium, Fed Chair Jerome Powell stuck with his “transitory” view on inflation and adopted a relatively “dovish” tone. In other words, he and most of his colleagues at the US central bank thought then that consumer prices won’t keep soaring for long, and didn’t expect to trigger its first hike until 2023.

After last year’s symposium concluded (and on the back of Powell’s dovish and transitory stance), US stocks continued marching higher and notched fresh record highs.

The Nasdaq 100 went on to post an all-time peak above 16,500 back in November.

 

12 months on, and we’re in an entirely different world.

US inflation is at its highest since the 1980s, and the Fed has hiked by 125 basis points since March, and counting.

The Nasdaq 100 has since plummeted to sub-13,000 levels, and the tech-heavy index is still more than 20% lower so far this year despite its recent summer rally. The drop in stock markets have been predicated on the Fed’s aggressive battle against inflation.

 

 

What to look out for tomorrow?

The spotlight will shine greatest on Fed Chair Powell’s speech, scheduled for 2:00 PM GMT tomorrow (Friday, August 26th).

And here’s the biggest question on everyone’s minds: how much higher will the Fed hike US interest rates?

  • Markets are forecasting a 69% chance that the Fed will press ahead with yet another 75 basis point hike at its September meeting. Those 69% odds are a far cry from the 26% chance priced in at the start of August, hence the drop by as much as 6.3% since mid-August for the Nasdaq 100.
  • Also, markets expect the Fed Funds Rate to peak out at 3.75% by March 2023, from the current 2.50%. That implies a 75bps hike in September, followed by another 50bps hike, before the Fed then has to start lowering its benchmark rates to start cushioning US economic growth.

With the above narrative in mind, should any of Powell’s comments force markets to rejig such expectations, be it for the size of the September hike or the peak for this ongoing rate hike cycle, that could prompt major moves across a multitude of asset classes.

 

why focus on the Nasdaq 100?

Notice how the tech-heavy Nasdaq 100 is sensitive to where US interest rates go.

The Nasdaq 100 began diving since the latter parts of 2021, as market began to increasingly expect that the Fed will be forced into hiking interest rates sooner than policymakers had expected.

And sure enough, the Fed triggered its first hike in March 2022, with the Nasdaq 100 falling into a bear market (20% drop from its recent peak) thereafter.

 

Potential scenarios:

  1. The Nasdaq 100 may be coerced into unwinding more of its summer gains should Powell pave the way for a September 75bps hike and force markets to move their forecasted rate hike cycle peak higher than 3.75%.

    Key support levels:

  • 12,605 (100-day simple moving average)
  • 12,395 (23.6% Fibonacci retracement level from its November through June descent)

 

 

  1. However, the Nasdaq 100 may be emboldened to extend its summer rally if Powell in his Friday speech pays greater heed to the cracks that are starting to show in the US economy.

    After all, US GDP has already met the criteria for a “technical recession”, while the August services PMI showed a larger-than-expected contraction. Such a cautious tone may result in less-hawkish-than-feared commentary tomorrow, potentially translating into gains for riskier assets, including tech stocks.

    Key resistance levels:

  • 13,231 – 13,405 (38.2% Fib level and early-August cycle peak)
  • Around 13,500 (resistance from upper downtrend line from ATH and early-May peaks)
  • 13,730 (mid-August peak)
  • 13,900 (200-day SMA and 50% Fib line)

 

Judging by how the Nasdaq 100 is attempting to claw its way back above the psychologically-important 13,000 line at the time of writing, it appears that fears over the most-hawkish scenario have been overdone.

Equity bulls will be hoping that Powell will strike a tone that’s less-hawkish-than-feared, which could result in more relief for the Nasdaq 100 and other riskier assets.

Still, it remains to be seen (or rather, heard) what Powell’s policy clues will be, if any.

And any newfound resolution after such heightened uncertainty may lead to a massive move for the Nasdaq 100 in the aftermath.


Forex-Time-LogoArticle by ForexTime

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

Japanese Candlesticks Analysis 24.08.2022 (USDCAD, AUDUSD, USDCHF)

Article By RoboForex.com

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the H4 chart, after forming several reversal patterns close to the support level, such as Inverted Hammer, USDCAD may reverse in the form of a new ascending impulse. In this case, the upside target may be at 1.3045. Later, the market may break this level and continue growing. However, an alternative scenario implies that the asset may correct to reach 1.2935 first and then resume the uptrend.

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

AUDUSD, “Australian Dollar vs US Dollar”

As we can see in the H4 chart, AUDUSD has formed several reversal patterns near the support area, for example, Hammer. At the moment, the asset is reversing in the form of a new rising impulse. In this case, the upside target may be the resistance level at 0.6975. After testing the level, the price may break it and continue the ascending tendency. At the same time, the opposite scenario implies that the price may correct to reach 0.6865 and continue the uptrend only after the pullback.

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

USDCHF, “US Dollar vs Swiss Franc”

As we can see in the H4 chart, after testing the resistance area, the pair has formed an Engulfing reversal pattern. At the moment, USDCHF may reverse in the form of a new descending impulse. In this case, the downside target may be at 0.9625. After testing the support level, the price may rebound from it and resume trading upwards. Still, there might be an alternative scenario, in which the asset may grow to reach 0.9745 and continue the ascending tendency only after the pullback.

USDCHF

Article By RoboForex.com

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

The cryptocurrency market digest (BTC, ETH). Overview for 24.08.2022

Article By RoboForex.com

Activity in the BTC dropped again. On Wednesday, the major cryptocurrency is trading at $21,340; investors are waiting.

The digital asset is moving within a clear sideways channel. Market players are relaxing and saving strengths in anticipation of US Fed Chairman Jerome Powell’s speech, to be delivered on Friday in Jackson Hole. During the Economic Symposium, the most powerful monetary policymakers share their ideas and opinions on the present and the future. Investors believe Powell will confirm the regulator’s intentions to continue its aggressive policy.

Since the BTC failed to fix above $25,000 after all, there are chances of a decline to $17,500.

To have any even slightest chances to rise, the BTC must secure above $22,000.

The capitalisation of the crypto market remains at $1,024 trillion, and the share of the BTC dropped to 39.9%, while the ETH takes up no more than 19.3%. The fear index has decreased to 25 points.

Nike earned on NFTs

Nike earned good money on selling NFTs; the revenue was $185 million. Perhaps, it’s the most successful example of earning on selling digital assets by a company from the real sector of economy.

Investors accumulated a record-breaking number of ETHs

In anticipation of an important Ethereum upgrade and switching to Proof-of-Stake, miners accumulated on their accounts the biggest number of coins in the last three years – 254,846 ETHs.

Bitfinex launched a derivative on ETHW

Crypto exchange Bitfinex launched trading derivatives on PoW-fork ETH. It is believed such an asset will be interesting for miners, because it keeps an opportunity to mine tokens open.

Article By RoboForex.com

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

The Analytical Overview of the Main Currency Pairs on 2022.08.24

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 0.9939
  • Prev Close: 0.9967
  • % chg. over the last day: +0.28%

The US manufacturing PMI fell to 51.3 from 52.2 in August, while the services sector declined to 44.1 from 47.3, the lowest level since February 2021. Eurozone data is slightly better but also showed a downward trend. Thus, the index of business activity in the manufacturing sector of the Eurozone decreased from 49.8 to 49.7, and the services sector decreased from 51.2 to 50.2. Falling below the 50 bps level is the first sign that the economy is on the recession threshold.

Trading recommendations
  • Support levels: 0.9949
  • Resistance levels: 0.9996, 1.0112, 1.0146, 1.0230, 1.0286, 1.0365

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. But yesterday, the price showed a bullish impulse, forming an accumulation zone below. The MACD indicator has become inactive, and the sellers’ pressure is still high, but the divergence is observed. In such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 0.9996, but with confirmation. Sell trades can be considered from resistance levels of 0.9956, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0146 resistance level and fixes above, the uptrend will likely resume.

EUR/USD
News feed for 2022.08.24:
  • – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
  • – US Pending Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.1761
  • Prev Close: 1.1830
  • % chg. over the last day: +0.59%

The UK manufacturing PMI fell sharply from 52.1 to 46. The decline was less painful in the service sector, from 52.6 to 52.5. The sharp slowdown in manufacturing is a direct consequence of the energy crisis in the country. According to JPMorgan Private Bank, the pound risks falling to 1.14 against the dollar if the winter gas supply crisis pushes the UK into recession.

Trading recommendations
  • Support levels: 1.1786, 1.1659
  • 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. Now the price has formed an accumulation zone with a bullish impulse, where traders can look for buy deals. The MACD indicator has become positive, and sellers’ pressure has decreased slightly, though the main priority is still downward. At the moment, it is better to look for sell deals 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 1.1786, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2006 resistance level and fixes above, the uptrend will likely resume.

GBP/USD
There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 137.43
  • Prev Close: 136.74
  • % chg. over the last day: -0.50%

The Japanese yen gained some strength yesterday due to the dollar decline. But investors shouldn’t consider this movement as a full trend reversal, as fundamentally, the Japanese yen is getting cheaper due to the soft, adaptive policy of the Bank of Japan, while the US Federal Reserve conducts an aggressive tightening policy.

Trading recommendations
  • Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
  • Resistance levels: 137.03, 137.43, 138.25

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Yesterday, USD/JPY quotes were corrected to the moving averages’ levels. Under such market conditions, buy trades can be sought from the support level of 135.35, but with additional confirmation. For sell deals, traders can consider the resistance level of 137.03, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 135.35, the downtrend will likely resume.

USD/JPY
There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3045
  • Prev Close: 1.2957
  • % chg. over the last day: -0.67%

The Canadian dollar strengthened considerably yesterday due to a decline in the dollar index and an increase in oil prices. Oil prices jumped more than $3 a barrel on Tuesday after Saudi Arabia floated the idea of OPEC+ production cuts to support prices in case Iranian oil returns to the world market and the prospect of US inventories declining.

Trading recommendations
  • Support levels: 1.2967, 1.2900, 1.2858, 1.2809, 1.2761
  • Resistance levels: 1.3006, 1.3090, 1.3105

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. Yesterday the price formed a false-breakout zone above the resistance level of 1.3006, which can be used as a selling point now. Buy trades should be considered on the lower time frames from the support level of 1.2967, but only with a confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.2903 support level, the downtrend will likely resume.

USD/CAD
News feed for 2022.08.24:
  • – US Crude Oil Reserves (w/w) 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.

Business activity in the US and Europe continues to decline. Oil prices rise again amid OPEC+ head’s statements

By JustForex

Yesterday, the US stock indices fell sharply after PMI data showed that US private sector activity was weaker than expected in August. On the one hand, this is a sign that the US Federal Reserve might become less aggressive in tightening monetary policy. On the other hand, Fed spokesman Kashkari indicated yesterday that the Fed must continue aggressively tightening monetary policy. Analysts and investors are now waiting for US Federal Reserve Chairman Jerome Powell to speak at the annual economic symposium in Jackson Hole.

At yesterday’s stock market close, the Dow Jones Index (US30) decreased by 0.47%, and the S&P 500 Index (US500) lost 0.22%. The Technology Index NASDAQ (US100) closed at the opening level.

Equity markets in Europe were mostly down yesterday. German DAX (DE30) decreased by 0.27%, French CAC 40 (FR40) was 0.26% lower, Spanish IBEX 35 (ES35) lost 0.71%, British FTSE 100 (UK100) was 0.61% lower on Tuesday. Eurozone manufacturing PMI declined from 49.8 to 49.7, and the services sector PMI decreased from 51.2 to 50.2. France’s manufacturing PMI declined from 53.2 to 51, and its services sector PMI decreased from 49.5 to 49. Data in Germany was a bit better. Manufacturing PMI suddenly rose in July from 49.4 to 49.8, while the services sector dropped from 49.7 to 48.2. Rising living costs are hurting households and businesses in the Eurozone, while energy shortage threatens to cut production even more. Consumer confidence in the Eurozone unexpectedly improved in July, but the indicator is still at an all-time low.

Electricity prices soared again to record highs across Europe, putting added pressure on governments to accelerate plans to protect households from expensive bills and rising inflation. Rates rose to record levels in Britain, France, Germany, Italy, and the Scandinavian region. According to Bloomberg, electricity exchange prices in Europe today are about 13 times higher than the usual seasonal rate.

Germany’s gas storage capacity is more than 80% full, and Germany’s energy security for this winter is assured, but “the situation cannot be ruled out worsening,” the regulator said.

Turkish President Erdogan said yesterday that Turkey does not recognize the annexation of Crimea and considers this step illegal.

Oil prices jumped more than $3 a barrel on Tuesday after Saudi Arabia floated the idea of OPEC+ production cuts to support prices if Iranian oil returns and the prospect of lower US inventories.

As the dollar index fell yesterday, the US government bond yields also fell, boosting gold and silver. But it should be noted that while there is a tightening of the US monetary policy, precious metals have no fundamental drivers for growth, and one should consider gold as a protective instrument against high inflation only for short-term and speculative purposes.

Asian markets were also declining yesterday. Japan’s Nikkei 225 (JP225) decreased by 1.16%, Hong Kong’s Hang Seng (HK50) ended the day down 0.78%, and Australia’s S&P/ASX 200 (AU200) was 1.21% lower. Concerns over power shortages in China are putting pressure on most Asian stocks, given the country’s position as the region’s trading hub. China is facing a severe heat wave that has dried up several river channels and caused power shortages in regions that depend on hydropower. The power shortage has also affected industrial activity in some parts of the country, as investors fear it could spread to other major transportation hubs.

S&P 500 (F) (US500) 4,128.73 −9.26 (−0.22%)

Dow Jones (US30) 32,909.59 −154.02 (−0.47%)

DAX (DE40) 13,194.23 −36.34 (−0.27%)

FTSE 100 (UK100) 7,488.11 −45.68 (−0.61%)

USD Index 108.55 −0.50 (−0.46%)

Important events for today:
  • – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
  • – US Pending Home Sales (m/m) at 17:00 (GMT+3);
  • – US Crude Oil Reserves (w/w) 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.

Mid-Week Technical Outlook: Majors & Minors

By ForexTime 

– There was an uneasy calm across financial markets on Wednesday as investors exercised caution ahead of the Jackson Hole Symposium this week.

European stocks were mixed, the dollar stabilised while gold prices wobbled above $1740 ahead of Federal Reserve Powell’s speech on Friday. The central bank head is expected to strike a hawkish note which may reinforce aggressive rate hike bets – ultimately boosting the dollar. In the event of an unexpected ‘dovish’ Fed pivot, the dollar could be dealt a heavy blow.

Given how this major event could inject markets with fresh volatility, this may present some opportunities across the FX space. If heavy technicals are what you seek, then check out the setups below covering major and minor currencies.

Dollar bulls back in action

Despite yesterday’s selloff, the dollar continues to flex its safe-haven muscles ahead of this week’s potential market shaker. Prices are heavily bullish on the daily charts as there have been consistently higher highs and higher lows. A strong move above 109.14 may encourage an incline towards 109.70 and 110.00, respectively. Should prices slip back under 108.00, bears may target 107.30.

Equally weighted USD Index on standby…

Prices are likely to hover around the 1.1950 regions until a fresh directional catalyst is brought into the picture. Should this level prove to be reliable support, a move towards 1.2080 and 1.2184 could be expected. Below 1.1950, bears are likely to target the 50-day SMA and 1.1700, respectively.

EURUSD kisses 0.9900

After securing a solid daily close below parity, euro bears have marked their territory. The currency pair is heavily bearish on the daily timeframe with 0.9900 still a key level of interest. A breakdown below this level could encourage a selloff towards 0.9650 which acted as strong support back in the autumn of 2002. Should 0.9900 prove to be reliable support, prices could experience a bounce back to parity before resuming the selloff.

GBPUSD bears in control for now

Bears remain in the driving seat with prices wobbling above 1.1760 as of writing. The GBPUSD is under pressure on the daily charts with a break below 1.1760 opening the doors to 1.1700 and 1.1600. A move back above 1.1900 is seen triggering a move higher towards 1.2000.

AUDUSD back within range

An appreciating dollar could drag the AUDUSD out of its current range with a breakdown below the 0.6850 support opening a path back towards 0.6700. Should 0.6850 prove to be a tough nut to crack, prices may rebound back towards 0.7000.

USDJPY to resume uptrend?

The USDJPY is bullish on the daily charts. Prices are trading above the 50, 100, and 200-day Simple Moving Average while the MACD trades above zero. A solid break above 137.50 could trigger a move towards 139.38. Under 135.00, prices are seen testing 131.34.

EURGBP dips below 200-day SMA

As the subtitle says, the EURGBP is trading below the 200-day Simple Moving Average. This is a bearish sign and could result in further downside if 0.8440 proves to be reliable resistance. A EURGBP selloff may take prices back towards 0.8340.

GBPJPY respects bearish channel

Expect the GBPJPY to drift lower if prices fail to push above 162.00. A strong breakdown under 160.00 may signal a selloff towards the 200-day SMA at 159.00 and 157.50, respectively.

CADJPY supported above 104.80

We could see the CADJPY push higher if 104.80 proves to be reliable support. If prices use this level to push higher, the next key level of interest can be found at 107.50. A selloff below 104.800 could open the doors back towards the 100-day SMA and 102.00, respectively.

 

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