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Christian KÄMMERERHead of German Speaking Markets
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Barbara NICODEMOUMarket Analyst
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Research is creating new knowledge.
- Neil Armstrong
Melina DELTASJunior Market Analyst
Monday, 20 February 2017 09:13

Gold Created Douple Top at $1,245

Published in Commodites & Metals

The precious metal remained virtually unchanged over the last two weeks as it rose only 0.12%. On the weekly chart, the 200-SMA provided good resistance obstacle for the bulls as the XAU/USD pair failed for several times to surpass the $1,245 price level.

The gold is moving upwards since December after the pullback from the $1,122 price level. Over the last two weeks, the price created a double top at $1,245, so our expectation is a downward movement if there is a break of the $1,220 support barrier. The next level to watch is the 50-daily SMA which is moving near $1,197 and if the price slips below it, it will challenge the $1,180 support handle. Otherwise, we can see a strong run to the upside, if the yellow metal climbs above the aforementioned double top. Technical indicators are moving lower but are still in the positive path.

XAUUSDDaily200217.png

Monday, 20 February 2017 08:23

Strategic Report, 2017 Newsletter 8

Published in Strategic Report

 

Technical Analysis

1. German DAX30  WEEKLY OUTLOOK

REVIEW

German DAX 30 Index (.DE30Cash) after being in a range between 11,420 and 11,695 for few weeks, it had a failed attempt to surpass the 11,895 strong resistance level. After its try, the German index found support near the 50-SMA, on the daily chart, and now is in the process for the second the second attempt.

OUTLOOK (SCENARIO A / B)

If the bulls manage to push the price above the aforementioned strong resistance level at 11,895, the next target will be the 12,060. Otherwise, if the price slips below the 11,695 barrier, which provided significant support to the pair and the 50-SMA, on the daily, chart, we may see a drop towards the 11,420 support level. The technical indicators are endorsing our bullish scenario, as MACD is rising in the positive territory while RSI is also rising towards the 70 level.

DE30CashDaily20022017m

2. EUR/USD WEEKLY OUTLOOK

REVIEW

Euro ended the week unchanged against the U.S. dollar, as it failed to climb above the 1.0700 strong resistance level, which is a sign of persistent weakness. The EUR/USD pair is trading within the 50 and 100 SMAs on the 4-hour chart, as it awaits a significant event for having a strong rally in either direction..

OUTLOOK (SCENARIO A / B)

The common currency pair is trading near the weekly pivot point near 1.0610, while a break below the 1.0600 psychological level and the 1.0590 support barrier, it will expose the price towards the 1.0540 level which is the first support pivot point. Moreover, the next support zone to hit is at 1.0500 – 1.0520. On the other hand, an aggressive run to the upside above the 1.0680 – 1.0715 resistance zone will the price a push to challenge the 1.0830 resistance obstacle. Despite that, technical indicators seem to be in agreement with the bearish thought, as both entered the negative territory. RSI rebounded on the positive area and now is moving lower while MACD slipped below its trigger and zero lines.

EURUSDH4200217

3. GBP/USD WEEKLY OUTLOOK

REVIEW

Sterling moved lower against all of the major currencies during last week. The GBP/USD pair printed the third consecutive negative week and plunged more than 1%. On a daily timeframe, the pair is trading within a descending triangle since August 28th, 2016 with the strong support level at 1.1985. Also, the price lost its momentum and seems very weak.

OUTLOOK (SCENARIO A / B)

Going to a short-term chart, the cable is developing within a narrow range at 1.2385 – 1.2580 which tested both sides several times but failed to end a day below or above this area. On Friday’s session, the price reached our recommended target at 1.2440 (see technical analysis here: http://bit.ly/2kP48By) and slipped lower at the lower band of the consolidation area. If the price jumps above the 1.2440 resistance level, it will move towards the 50 and 100 SMAs which are near the 1.2500 critical level. If GBP/USD breaks below 1.2350, the door is wide open for a drop to 1.2250. The RSI indicator is sloping upwards and stochastic oscillator rebounded on the oversold area and is trading higher. The MACD oscillator is endorsing the bearish attitude as it is moving below its trigger and zero lines.

GBPUSDH4200217

4. USD/JPY WEEKLY OUTLOOK

REVIEW

The U.S. dollar traded lower, this past week, against the Japanese yen and remained steady versus all of the other major currencies except for sterling. There is no fundamental explanation for the reversal in the greenback while the USD/JPY pair is developing within the 50 and 100 SMAs on the daily chart.

OUTLOOK (SCENARIO A / B)

From the technical point of view, the pair following the bounce off the 50-daily SMA which overlaps with the 114.95 resistance level, recorded three negative days in a row and hit the 112.60 support barrier which is near with the 100-daily SMA. Currently, the price is moving higher but it will find strong obstacles the three SMAs near 113.30, on the 4-hour chart. If the currency pair surpasses the aforementioned levels, it would open the way for a test of the 200-SMA near 114.00 or furthermore for a retest of the 50-daily SMA near 114.60. Technical indicators are biased higher. The RSI indicator is approaching the 50 level whilst the stochastic oscillator is moving towards the overbought area.

USDJPYH4200217

5.  AUD/USD WEEKLY OUTLOOK

REVIEW

The Aussie ended the week marginally lower versus the greenback but is in progress to create the second positive month in a row. The AUD/USD pair surged more than 6% since January and recorded a fresh three-month high at 0.7730 on last Thursday’s session.

OUTLOOK (SCENARIO A / B)

After the slightly lower move, the commodity pair started a green day and is approaching the 0.7730 resistance barrier. In addition, the price can challenge the 0.7780 key level while the moving averages are indicating bullish signal as an upward crossover of the 50 to 100 SMAs has been observed. An alternative scenario is a penetration of the 0.7605 support handle which will drive the pair towards the 0.7510 obstacle. The RSI indicator confirms the upward movement as its moving slightly higher above the 50 level.

AUDUSDDaily200217

6. WTI Crude Oil Weekly Outlook

REVIEW

Oil prices rose early on Monday but the gains were limited. The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, agreed last year to cut output almost 1.8 million barrels per day during the first half of 2017. The West Texas Intermediate crude oil remained unchanged for more than 10 weeks and is developing within a sideways channel with upper band $54.70 and lower band $51.47.

OUTLOOK (SCENARIO A / B)

On a long-term basis, WTI is developing within an ascending move since April 2016 and our expectation is a further upside movement, if the price surpasses the referred upper boundary. The price is trading above the three SMAs on the daily chart while over the last week surpassed the 50-SMA. Technical indicators are following a positive path, however, with no clear directional strength. The RSI indicator is sloping slightly higher and MACD oscillator is holding in a neutral area with weak momentum.

WTICrudeDaily200217

7. XAU/USD WEEKLY OUTLOOK

REVIEW

The precious metal remained virtually unchanged over the last two weeks as it rose only 0.12%. On the weekly chart, the 200-SMA provided good resistance obstacle for the bulls as the XAU/USD pair failed for several times to surpass the $1,245 price level.

OUTLOOK (SCENARIO A / B)

The gold is moving upwards since December after the pullback from the $1,122 price level. Over the last two weeks, the price created a double top at $1,245, so our expectation is a downward movement if there is a break of the $1,220 support barrier. The next level to watch is the 50-daily SMA which is moving near $1,197 and if the price slips below it, it will challenge the $1,180 support handle. Otherwise, we can see a strong run to the upside, if the yellow metal climbs above the aforementioned double top. Technical indicators are moving lower but are still in the positive path.

XAUUSDDaily200217

FX Weekly Market Preview

Weekly Outlook: Feb 20 - 24; FOMC Minutes, E.U. CPI & U.K. GDP Ahead

The highlights of the week ahead are firstly the FOMC minutes that will be published on Wednesday at 19:00 GMT, and second the inflation reports from Eurozone and Canada, as well as the U.K.’s GDP growth, also on Wednesday. Meanwhile, significant attention will be paid on Tuesday, the Markit PMI day for several countries, including U.S., Euro area as a whole and Germany.

Monday is a public holiday in the U.S. due to President’s day, while in Euro area, only few not market-maker data is coming out, thus trading will be thin. Early in the morning, German producer price index for January will be released. In the U.K., the CBI industrial trends survey for the manufacturing orders in February will be released while afternoon, Eurozone’s estimate for consumer confidence in February is expected to slip lower to -4.85 from -4.70 before. Overnight, the Reserve Bank of Australia will release its last meeting’s minutes.

Tuesday is a Markit PMI day. The Markit economics will release February’s first estimates for flash manufacturing and services PMIs for U.S., Eurozone as a whole, Germany and France. In Euro area, the services sector is expected to show a small improvement to 53.8 from 53.7 before, while the manufacturing sector is expected to snap five consecutive increases by falling marginally to 55.0 from 55.2 in January. In the U.S., manufacturing sector is forecasted to rise to 54.8 versus 55.0 before, which was the highest in reading since 22 months. No forecast is available for the U.S. services PMI.

In the U.K., the public sector net borrowing for January is coming out. In Australia, after the release of the CB leading indicator for December, during the European night, RBA’s Governor Philip Lowe will give a speech and will probably affect the Aussie. The Westpac leading index for January is also coming out.

On Wednesday, early in the European morning, U.K.’s index of services for the three months to December is expected, while at the same time in Germany the IFO survey is expected to release its results for February. All of the three IFO indicators, expectations, current assessment and business climate for Germany, will probably show a slight weakness compared with the month before. Half an hour later, attention will be on U.K.’s GDP figure for the fourth quarter. The estimate for the economic growth is expected to be the same as the previous quarter, at 2.2% year-over-year and 0.6% month-over-month.

Eurozone’s final inflation rate, on annual basis, is expected to meet initial estimate of 1.8% in January. However, the consumer prices on a monthly basis, are expected to plunge 0.8% in January from a rise of 0.5% before. ECB will also release the targeted Long-Term Refinancing Operations (LTRO).

In the U.S., the existing home sales for January will be published, however, the main focus will be on the FOMC minutes, coming out at 19:00 GMT. At Fed Chair Yellen’s two-day testimony, the central bank continued to send hawkish signals for the economy. If the meeting minutes agree with the rate hike prospect, we will see the odds of a rate hike in the next months rising sharply.

On Thursday, early in the morning, the German GDP for the last quarter of 2016 is coming out. The market expects the German economy to keep the same pace of growth with the initial estimations (1.2% year-over-year and 0.4% quarter-over-quarter). In the U.S., the weekly jobless claims are coming out as usual while later on, the housing price index for December will be released. Fed’s Dennis P. Lockhart has a speech at 13:35 GMT.

On Friday, the economic calendar is muted of European economic news. The Canadian inflation rate for January will be released and afterwards, the attention turns to U.S. The Michigan consumer sentiment index for February is coming out as well as the new home sales for January.

UKGDP22022017

EUinflation22022017

 

Published in Daily Market Report

Monday was quiet, however, today’s economic calendar promises to keep the traders’ interest undiminished. The highlight event of the day will be the Fed Chairwoman Janet Yellen’s semi-annual testimony on the economy and the monetary policy. Moreover, major economies will release their GDP, CPI and retail sales reports.

Monday, 13 February 2017 09:58

XAU/USD Slipped Below 50.0% Fibo Level

Published in Commodites & Metals

The yellow metal jumped more than 1.1% over last week’s session and found an obstacle on the $1,245 resistance barrier which coincides with the 50.0% Fibonacci retracement level of the downward significant move with high at $1,375 on 6th of July 2016 until the low at $1,122 on 15th of December 2016.

The XAU/USD pair is moving upwards since December and if the price surpasses the aforementioned fibo level, it would open the way for the 200-SMA near the $1,260 on the daily chart. The 50-daily SMA is sloping upwards and is approaching the 100-daily SMA while technical indicators are endorsing the upward movement. The RSI indicator is moving higher and is following a positive path while MACD is moving above zero line near its trigger line.

XAUUSDDaily130217.png

Monday, 13 February 2017 08:41

Strategic Report, 2017 Newsletter 7

Published in Strategic Report

 

Technical Analysis

1. EUR/USD WEEKLY OUTLOOK

REVIEW

The world’s most traded currency – the EUR/USD pair – gave back all of its two-week gains as it was traded sharply lower during last week. The single currency pair dropped more than 1.3% and halted a seven-week rally, as well as, it penetrated the upward sloping channel to the downside.

OUTLOOK (SCENARIO A / B)

The common currency pair managed to challenge the 50-daily SMA and currently is trading below the 200-SMA on the 4-hour chart. Furthermore, on the short-term timeframe, the 50-SMA created a bearish crossover with the 100-SMA, indicating a further downside movement, probably until the 1.0580 support barrier or until the 1.0500 strong psychological level. The pair is expected to remain under pressure this week as it is still holding below the 1.0800 resistance obstacle. On the other hand, if the price surpasses above the 1.0640 level, it would open the door for the 1.0715 handle which coincides with the aforementioned crossover. The MACD oscillator lies below its zero line while the momentum is weakening. The stochastic oscillator is moving lower and its moving averages are signaling for sell positions.

EURUSDH4130217

2. USD/JPY WEEKLY OUTLOOK

REVIEW

The U.S. dollar traded higher against almost all of the major currencies while versus the Japanese yen, it rose more than 0.7% so far this month. The dollar was in pressure for most of the week but recovered strongly after President Trump’s comments on taxes.

OUTLOOK (SCENARIO A / B)

The USD/JPY pair created a pullback on the 111.60 significant support barrier which overlaps with the 100-daily SMA and surged sharply higher above the descending trend line on the 4-hour chart. In addition, currently, the price is retesting the trend line, however, our expectation is an upward move until the 200-SMA on the 4-hour chart near the 114.50 price level. On the other side, a break below the 113.50 support barrier, it will drive the price at 112.60 obstacle. Technical indicators seem to be in contrast. The RSI indicator is sloping to the downside while MACD is moving above its trigger line but both of them are holding within the positive path.

USDJPYH4130217

3. GBP/USD WEEKLY OUTLOOK

REVIEW

The GBP/USD pair is consolidating within a sideways channel in the weekly chart with upper boundary the 1.2705 resistance level and lower boundary the 1.1985 support level. Over the last two weeks, sterling edged lower against the U.S. dollar while during last week, it remained virtually unchanged as it failed to surpass 1.2580.

OUTLOOK (SCENARIO A / B)

On the daily chart, the currency pair is developing above the 50 and 100 SMAs whilst the 200-SMA seems to be far away from the price. Going to a lower timeframe, the price rebounded on the bearish crossover of the 50 and 100 SMAs which it could be strong a obstacle for the bulls. If the price rises above the latter obstacle, it would be exposed towards the 1.2580 resistance level or until the previous high at 1.2705. In the case of a downward move the price will fall until the 1.2350 support barrier. Technical indicators are moving near their neutral areas, however, both are moving slightly higher. MACD surpassed its trigger line while RSI has just entered the positive territory.

GBPUSDH4130217

4. German DAX30 WEEKLY OUTLOOK

REVIEW

The German DAX30 was moving higher until last week’s session which it plunged more than 1.3% and snapped an eight-weekl winning streak . The index printed an aggressive rally to the upside after it exited from the consolidation area 10160 – 10830 and printed almost two-year new high at 11895.

OUTLOOK (SCENARIO A / B)

The moving averages are pointing upwards endorsing the bullish move, as well as the RSI indicator is sloping to the upside after the bounce off the 50 level. The stochastic oscillator has just entered the overbought area indicating further upward price action. The next level to watch is the aforementioned fresh high at 11895 and if the price manages to surpass above it, the bulls will push the DAX30 until the 12414 resistance barrier. An alternative scenario is a penetration of the 11420 support level which will drop the price until the 11132 barrier.

 

DE30CashXEDaily130217

5.  XAU/USD WEEKLY OUTLOOK

REVIEW

The yellow metal jumped more than 1.1% over the last week and found an obstacle on the $1,245 resistance barrier which coincides with the 50.0% Fibonacci retracement level of the downward significant move with high at $1,375 on 6th of July, 2016 until the low at $1,122 on 15th of December, 2016.

OUTLOOK (SCENARIO A / B)

The XAU/USD pair is moving upwards since December and if the price surpasses the aforementioned fibo level, it would open the way for the 200-SMA near the $1,260 on the daily chart. The 50-daily SMA is sloping upwards and is approaching the 100-daily SMA while technical indicators are endorsing the upward movement. The RSI indicator is moving higher and is following a positive path while MACD is moving above zero line near its trigger line.

XAUUSDDaily130217

6. WTI Crude Oil Index Weekly Outlook

REVIEW

During the first half of 2017, the Organization of the Petroleum Exporting Countries and other producers including Russia decided to cut output by almost 1.8 million barrels per day. The West Texas Intermediate (WTI) Crude Oil printed a virtually unchanged week as it ended the session near its opening price.

OUTLOOK (SCENARIO A / B)

The WTI and surged more than 5% since last Wednesday and is approaching the upper boundary at $54.70 of the trading range that is holding over the last eight weeks. The lower boundary is the $51.47 support barrier which tried to hit over last week. However, on a long-term basis, the oil is developing within an ascending move since April 2016 and if the bulls are strong enough to push the oil further up, we would expect an extension towards the $55.70 barrier, a level tested on January 3rd and an 18-month high. A failure to retest the latter level should prompt a drop towards the $51.47 support handle, where a battle is expected by both market forces. The RSI indicator rose above the 50 level after the rebound in the negative area while MACD is flattening in the neutral area.

WTICrudeDaily130217

7. Volkswagen Group WEEKLY OUTLOOK

REVIEW

The Volkswagen Group (XETRA: VOW) is a German multinational automotive manufacturing company. The stock price was trading in a symmetrical triangle over last months, however, during January the price had an aggressive run to the upside and recorded a fresh 16-month high at $157.30.

OUTLOOK (SCENARIO A / B)

The share price, after it met the latter level, created a correction to the downside until the $141.80 support barrier, however, now is moving slightly higher above the 50-SMA on the daily chart. The RSI indicator is approaching the positive path after the rebound in the negative territory. On the other hand, the MACD oscillator moved lower over the last sessions but is still holding above its zero line. There are two possible scenarios. The first is the continuation of the upward movement until the $157.30 resistance level and the other case is a price slip below the $141.80 handle which will give the opportunity for the stock to hit the $135.30 obstacle.

 

VOW.DDaily130217

FX Weekly Market Preview

Weekly Outlook: Feb 13 - 17; Fed Yellen's Testimony in Radar; Super Busy Week Ahead

The week ahead seems to be crowded with significant economic data that will impact the market. Fed’s Yellen first semi-annual testimony after U.S. President Trump’s election will take place. U.S., U.K., China and Germany will release their CPI reports. Moreover, Eurozone’s forecasts and GDP will be released while in the U.K., the employment and the retail sales reports are expected.

Monday begins very quiet in comparison with the following days. The German Buba monthly report will be released in the morning. Later in the night, New Zealand’s food price index for January will be released. Afterwards, traders will eye the National Australia Bank’s business conditions indicator for January and the Chinese CPI figures. The consumer prices in China are expected to pick up by 2.4% yoy in January, a steeper pace than the 2.1% yoy in December. On Tuesday, very early in the European morning, 4:30 GMT, attention turns to Japanese industrial production and capacity utilization in December.

Tomorrow, the day is flooded with very important economic indicators. Fed Chairwoman Janet Yellen has its first half-year testimony after Trump’s election as U.S. President and will be keenly eyed by investors. The U.K. inflation report, the European Commission Forecasts and Eurozone’s GDP are coming out, as well as the ZEW Survey.

The first spotlight event of the day is Germany’s CPI and GDP reports at 7:00 GMT. The CPI is forecasted to meet the first estimate for January of 1.9% yoy, while the first estimate of GDP for the fourth quarter is expected to show that the economy advanced by 1.7% yoy versus a growth of 1.5% yoy, the previous quarter. The second spotlight event, traders will cautiously eye, is the U.K. inflation report. The U.K. consumer prices, in January, are predicted to have risen by 1.9% yoy, versus 1.6% before, a significant increase for the economy after Brexit vote. On the other hand, compared to the month before, the inflation rate is forecasted to come out -0.5% versus 0.5% before.

Afterwards, attention turns to Eurozone. The German ZEW survey will release its results for Euro area and Germany for the month of February. The current conditions in Germany are predicted to edge marginally higher at 77.4 from 77.3 before, while the economic sentiment is expected to slow down to 15.0 from 16.6 before. The ZEW economic sentiment for the Euro area, as a whole, is also expected to slip down to 22.3 from 23.2 before. A while later, the second estimate for Eurozone’s GDP growth is expected to show an expansion of 1.8% yoy the fourth quarter, the same as the first estimate. European Commission will publish the economic growth forecasts report which will be eyed very closely. Eurozone’s industrial production for December is also coming out.

In the second half of the trading session, the focus turns to the U.S. Initially, the producer price index will be released. Later on, the first part of Fed Chairwoman Janet Yellen’s semi-annual testimony, will be scrutinised and impact the greenback. The second part will take place on Wednesday.

On Wednesday, the U.K. employment report, the U.S. inflation and the retail sales reports will hog the limelight. The U.K. ILO unemployment rate for the three months to December is expected to remain stable at 4.8%, as well as the average earnings including bonus at a growth of 2.8%. The Claimant count change is forecasted to raise at 1.0K in January from a decrease of -10.1K before. At 10:00 GMT, Eurozone’s trade balance in December is coming out. In the U.S. session, the retail sales are expected to grow by 0.1% in January from a rise of 0.6% the previous month. The U.S. inflation rate surprised with an increase above Fed’s 2% target and is currently forecasted to rise even higher at 2.4% yoy in January from 2.1% in December. The NAHB housing market index, industrial production and business inventories are also coming out, while Fed’s Yellen will continue her testimony at 15:00 GMT. FOMC Member Patrick Harker is also giving a speech later in the day.

Overnight, Australia will release its consumer inflation expectations for February and the employment report for January, which both of them will affect the Aussie. The unemployment rate will probably remain at 5.8% in January while the economy is forecasted to added 10.0K jobs in January versus 13.5K in December, according to the employment figure indicator.

On Thursday, the economic calendar is quieter than the days before. In the morning, German wholesale price index for January will be released. Later on, the ECB will publish the monetary policy meeting accounts while on the afternoon, at 16:00 GMT, the European Leaders will meet. In the U.S., the building permits and the housing starts for January are coming out, as well as the weekly jobless claims.

On Friday morning, German current account will be released as well as the U.K. retail sales which are expected to have growth 3.4% yoy in January, from 4.3% yoy before. Euro area’s construction output for December is also scheduled for release while later in the afternoon, the U.S. CB leading indicator for January will be released.

UKinflation14022017

USinflationRate15022017

 

Thursday, 09 February 2017 08:53

Gold Continues its Bullish Bias - Rose 7%

Published in Commodites & Metals

The precious metal had an aggressive run to the upside following the strong rebound on the $1,122 support barrier and surged more than 7% since January. The upward correction continues as the XAU/USD pair climbed above the 38.2% Fibonacci retracement level of the downward significant move with high at $1,375 on 6th of July 2016 until the low at $1,122 on 15th of December 2016.

Currently, the yellow metal is approaching the 50.0% fibo level and if there is a successful attempt above it, the price would open the way for the 61.8% strong fibo level near the $1,278 resistance level. However, the price needs to tackle with the 200-SMA on the daily chart, as it is moving below the latter level. The RSI indicator entered the overbought area while after the bounce off the 50 level is rising with strong momentum. The MACD oscillator jumped above its trigger line and is strengthening.

XAUUSDDaily090217.png

Published in Daily Market Report

Yesterday’s trading day was overshadowed by New Zealand dollar’s vigorous fall, after RBNZ policy meeting during the night. On Wednesday afternoon, House of Commons approved Brexit bill and one more approval by House of Lords will shift the decision to U.K. PM May to begin U.K.’s withdrawal from the European Union.

Monday, 06 February 2017 07:58

Strategic Report, 2017 Newsletter 6

Published in Strategic Report

 

Technical Analysis

1. EUR/USD WEEKLY OUTLOOK

REVIEW

Euro traded higher against the greenback in the previous week and struggled to surpass above the 1.0800 psychological level, which has become an extremely significant resistance level for the currency pair. The EUR/USD pair printed a fresh almost two-month high at 1.0830 but failed to test the next resistance level at 1.0850.

OUTLOOK (SCENARIO A / B)

Currently, the 1.0830 – 1.0870 strong area is a critical obstacle for the bulls and if the price surpasses the aforementioned level, it will hit the descending trend line on the daily chart, near the 1.0935 level, that holds since May 2016. The price at the moment is developing within an ascending channel and it is approaching the uptrend line or furthermore the 1.0710 support barrier. Technical indicators are moving lower while the stochastic oscillator created a bearish crossover between its moving averages in the positive area which indicates a downward move in price. RSI is pointing to the downside while MACD holds below its trigger line.

 

EURUSDH4060217

2. USD/JPY WEEKLY OUTLOOK

REVIEW

While the non-farm payrolls report on Friday added 227K, much stronger than the expectation of 175K, the USD/JPY pair jumped to 113.50 but then slipped back to 112.30 price level. The U.S. dollar dropped more than 2% against the Japanese yen over the last week and penetrated the sideways channel 112.50 – 115.40 to the downside.

OUTLOOK (SCENARIO A / B)

Following the rebound on the 113.50 resistance barrier which overlaps with the 50-SMA on the 4-hour chart, the price lost its strong momentum that was holding until the January 3rd and continues its downward movement. If the price fell beneath the 112.10 support handle, it will hit the 111.30 obstacle which is slightly above the 38.2% Fibonacci retracement level of the upward aggressive run from June 24th to December 15th. On the other side, a move to the upside above the 23.6% fibo level will drive the pair until the 115.40 barrier. On the 4-hour chart, the technical indicators hold neutral within the negative territory, whilst now, the RSI indicator is sloping to the upside with weak momentum. The MACD oscillator is moving a bit higher from its trigger line.

 

USDJPYH4060217

3. GBP/USD WEEKLY OUTLOOK

REVIEW

Sterling was the only currency that performed worse than the U.S. dollar the week just past. The GBP/USD pair snapped a two weekly winning streak with weekly performance -0.5%. Also, last Thursday the pair recorded a fresh seven-week high at 1.2705 and then a run to the downside was followed.

OUTLOOK (SCENARIO A / B)

Currently, the cable is establishing within the 1.2450 support level and the 1.2540 resistance level which coincides with the 23.6% Fibonacci retracement level of the last upward move (January 16th low until February 2nd high). The price it seems that is going to meet the latter resistance barrier, despite that is trading with very weak volatility. An alternative scenario is a penetration of the 1.2450 handle which will slip the price towards the 1.2415 support barrier but it needs to go through the 38.2% fibo level and the 100-SMA on the 4-hour chart. The RSI indicator was flattening within the negative path, however, now it starts to slip to the downside.

 

GBPUSDH4060217

4. AUD/USD WEEKLY OUTLOOK

REVIEW

This week the Reserve Bank of Australia has its policy meeting and is expected to leave interest rates unchanged and maintain a neutral monetary policy. The AUD/USD pair created a positive week ahead of the rate statement on Tuesday and traded higher over the last month as it added more than 5% at its performance.

OUTLOOK (SCENARIO A / B)

The commodity currency pair is developing to the upside from December 25th and during Thursday, it printed a new 13-week high five pips below the 0.7700 strong psychological level. After the aggressive rally to the upside, a correction may follow until the 0.7605 support barrier and then back to the previous high. On the other hand, a break above the 0.7695 obstacle, it will open the door for 0.7740. On the daily chart, the RSI indicator rebounded on the overbought area and now is moving lower whilst the MACD oscillator still has its bullish momentum as it crossed its trigger line to the upside. In addition, the moving averages are sloping to the upside endorsing the bullish attitude on price.

 

AUDUSDDaily060217

5. NZD/USD WEEKLY OUTLOOK

REVIEW

The Reserve Bank of New Zealand also has a monetary policy meeting this week and the New Zealand dollar moved higher over the last month against the greenback following the strong rebound on the 0.6860 support barrier. The NZD/USD pair surged more than 5.2% in January and get back all of its losses of the previous three months from October.

OUTLOOK (SCENARIO A / B)

Going to the daily chart, the price is struggling to surpass the 0.7350 resistance barrier, however now is developing within the latter level and the 0.7240 support handle. If the price has a successful attempt above the 0.7350, it would open the way for a retest of the 0.7400 significant psychological obstacle. Technical indicators seem to be in agreement with the bullish thought as both are following a positive path. The RSI indicator is approaching the 70 level whilst the MACD is flattening in the bullish area near its trigger line.

 

NZDUSDDaily060217

6. FTSE100 Index Weekly Outlook

REVIEW

The pressure in the FTSE100 that was holding over the previous periods seems came to an end as the price had a rebound on the 50-daily SMA during the week before. Since February 1st, the index climbed more than 1% and is still trading in an ascending move.

OUTLOOK (SCENARIO A / B)

Now, the price is moving near the 7188 price level and is possible to test the previous all-time high at 7360 strong resistance obstacle. Otherwise, if the price breaks the uptrend line to the downside, it will meet the 6870 barrier. On the daily chart, the moving averages are following an upward potential move as all of them (50, 100 and 200 SMAs) are acting as strong supports. Technically, RSI lies above its mid-level but is moving parallel with 50 level while MACD has just entered the positive path with some weak momentum.

 

UK100CashDaily060217

7. XAG/USD (SILVER) WEEKLY OUTLOOK

REVIEW

Silver had a sharp rally to the upside in January as it surged more than 10% and halted a three-month downward move. The XAG/USD pair is developing in a descending move on the daily chart, however, having a look in the short-term timeframe, it is rising since December 22nd.

OUTLOOK (SCENARIO A / B)

The metal is approaching the $18,00 strong resistance barrier which overlaps with the 200-SMA and the downtrend line. In the case of a penetration to the upside of the aforementioned obstacles, the price will expose until the $19,00 psychological handle. On the daily chart, technical indicators are endorsing the recent bullish attitude on price as both are moving with a bullish bias. The RSI indicator is approaching the 70 level with strong momentum while the MACD oscillator surpassed its trigger line and lies slightly higher. Moreover, the price is developing above the 50 and 100 SMAs while both of them are sloping to the upside.

 

XAGUSDDaily060217

FX Weekly Market Preview

Weekly Outlook: Feb 06 – 10; RBA & RBNZ Policy Meetings Ahead

The economic calendar for the week ahead is quieter than the one just gone with limited market affecting news. Two policy meetings from RBA and RBNZ will be closely watched. U.K. NIESR GDP and production of manufacturing and industrial sectors will be eyed as well. In the U.S., we have a number of speeches from Fed’s members, Michigan consumer sentiment, economic optimism and monthly budget statement to hog the limelight. In the Euro area, the extraordinary economic summit is the main focus.

Monday begins quietly with German factory orders for December coming out early in the morning. Eurozone’s sentix investor confidence is next while later on, attention shifts to U.S. labor market conditions index for January which is expected to slip down to 17.4 from 18.2 before. Afterwards, two speeches from FOMC Member Patrick Harker will take place at 20:00 and 21:30 GMT. Overnight, traders will watch closely the RBNZ inflation expectations for the fourth quarter and the RBA policy meeting. The Reserve Bank of Australia will release its interest rate decision accompanied by a rate statement, however, there is no press conference to move the market significantly. The meeting minutes will be published on Thursday overnight. The central bank is anticipated to keep its cash rate at a record low of 1.5%, where it has been since August.

Tomorrow, German industrial production for December is the first economic data coming out in the European session. The sector is expected to advance by 0.4% as the month before. U.K. Halifax house prices for January are expected to reveal an increase of 6.0% yoy versus 6.5% yoy in December. In the U.S., December’s trade balance may cause some volatility if it misses market expectations. The forecast suggests the trade deficit to drop slightly to $45.00B from $45.20B before. The IBD/TIPP economic optimism for the month of February will be watched as well as the consumer credit change for December. Later in the day, Bank of Japan will publish its Summary of Opinions report and its current account for December. China will release its trade report as well, for January, which includes trade balance, export and import balances.

Wednesday has a smattering low-level data out thus volatility will be thin. The only notable macro update of the day is the RBNZ interest rate decision at 20:00 GMT. The central bank is expected to keep its benchmark interest rate at 1.75% after the rate cut of 25 basis points in November in order to maintain price stability between 1% and 3% over the medium term. The monetary policy statement will accompany the rate decision and will be followed by a press conference at 21:45 GMT from the RBNZ Governor Graeme Wheeler.

Thursday starts with the German trade balance report and continues with a speech from RBA Governor Philip Lowe. U.S. weekly jobless claims will be released as usual as well as wholesale inventories for December. Afterwards, two Fed members, James Bullard and Charles Evans have scheduled speeches. Overnight, the RBA monetary policy statement of the meeting took place on Monday will be published.

On Friday, European Union Prime Ministers and Presidents will meet early in the morning to discuss actions and plans to solve current problems that may affect the Union. Later on, traders will pay attention to U.K.’s final manufacturing and industrial production for December. Both indicators are expected to show an improvement compared to the year before. On a yearly basis, the manufacturing is expected to expand by 1.7% versus 1.2% before and the industrial by 3.2% from 2.0% in November. Traders will also keep a tab for the NIESR GDP, especially now when Britain is one step before exiting the European Union to continue on its own. In the U.S., the preliminary Michigan consumer sentiment for February is expected to slip to 98.0 from 98.2 before. The monthly budget statement is also coming out and will be keenly eyed.

RBA06022017

UKManufIndu10022017

 

Tuesday, 31 January 2017 08:49

Gold Climbed Above $1,200 Key Level

Published in Commodites & Metals

The precious metal seems to be in a correction of the upward move that started on December 15th and ended on January 23rd. The XAU/USD pair rebounded on the $1,220 resistance barrier and slipped until the $1,180 support level. However, over Monday’s period, the gold created the third positive day in a row and edged higher climbing above the $1,195 obstacle. The price met the 50 and 100 SMAs on the 4-hour chart which seem to be strong obstacles for the bulls.

On the same chart, technical indicators have a bullish bias as both rose in the previous days. The MACD oscillator is moving higher with strong momentum and is approaching the positive path while the Relative Strength Index (RSI) is following a positive territory despite that is pointing slightly downwards. In addition, having a look at the daily chart, RSI is holding upwards with strong momentum. The next level to watch to the upside is the 100-daily SMA near $1,209 and the resistance barrier at $1,220.

XAUUSDH4310117.png

Monday, 30 January 2017 08:35

Strategic Report, 2017 Newsletter 5

Published in Strategic Report

 

Technical Analysis

1. USD/JPY WEEKLY OUTLOOK

REVIEW

One of the biggest winners last week was the USD/JPY pair but the gains were modest and during early this morning, the currency pair is trading lower. However, the dollar plunged almost 2% against the Japanese yen, so far this month, and is on the way to record the first negative month after three green sessions in a row.

OUTLOOK (SCENARIO A / B)

For the past two weeks, the price has been trading in a relatively narrow area within 112.50 support level and 115.40 resistance barrier while this week’s event risks are significant enough to trigger a more meaningful breakout in the currency. Technically, the price rebounded on the 50-daily SMA, which overlaps with the 115.40 handle, and failed to test the 115.60 strong obstacle. The pair is moving lower approaching the 114.00 psychological level while it is developing slightly below the 100-SMA on the 4-hour chart. If there is a successful attempt above the latter obstacle, it would open the way for retesting 115.40. Otherwise, a break below 114.00 will slip the price towards 113.00. On the short-term timeframe, the RSI indicator is sloping upwards after the pullback on the 50 level endorsing the bullish thought.

USDJPYH4300117

2. EUR/USD WEEKLY OUTLOOK

REVIEW

Euro is performing fairly well this month as it surged more than 1.9% against the U.S. dollar and printed the sixth consecutive positive week in a row. Also, the EUR/USD pair created a fresh seven-week high at 1.0770 during the last week and failed to test the critical level at 1.0800.

OUTLOOK (SCENARIO A / B)

Over this month, the pair is developing within an upward sloping channel and currently is ready to retest the ascending trend line. Technically, after the single currency pair is struggling to break 1.0800, the recent trend indicates that we have seen a near term top and the price awaits the Fed interest rate decision on Wednesday, as well as the non-farm payrolls report on Friday. Now, if we see a break below the strong line, then the pair will fall until the 100-SMA on the 4-hour chart, near the 1.0650 price level or furthermore until the 1.0625 support barrier. Otherwise, we may see a rebound on the 1.0710 obstacle and then a run until 1.0770. Technical indicators seem to be in contrast as the MACD oscillator created a bullish crossover with its trigger line in the negative territory and the RSI indicator is pointing to the downside but is still moving in the positive path.

EURUSDH4300117

3. GBP/USD WEEKLY OUTLOOK

REVIEW

Even with the pullback on Thursday and Friday, sterling was still one of the best-performing currencies against the greenback and recorded the second green week in a row. The GBP/USD pair recorded a new seven-week high and jumped to 1.2670 resistance level.

OUTLOOK (SCENARIO A / B)

Over the last trading sessions, the pair is trading lower and approached the 1.2515 support barrier, which is ready to retest in the next few hours, while is near with the 23.6% Fibonacci retracement level of the last upward move (January 16 low – January 26 high). The price may slip below the aforementioned obstacle and meet the 50-SMA on the 4-hour chart. Taking a look at the daily chart, the 1.2415 seems to be a very strong support level for the bulls as the level coincides with the 50 and 100 SMAs, as well as with the 38.2% fibo level and there we may see a pullback back to the previous highs. Going to the lower timeframe, the MACD oscillator is moving lower, below its trigger line, but is still in the positive territory. The RSI indicator is pointing to the downside and is approaching the negative path.

GBPUSDH4300117

4. German DAX30 Index WEEKLY OUTLOOK

REVIEW

The German index DAX30, last week, escaped from the sideways trading area - between 11,500 and 11,695 - has been since the beginning of the year, and rose to the upside until the 11,895 resistance level. However, this week opened with a small gap to the downside which is likely to cover it in the next couple of days.

OUTLOOK (SCENARIO A / B)

The index is trading above all of the three SMAs (50, 100 and 200) on the daily chart and our first scenario is further rising to challenge again the 11,895 barrier. If it manages to penetrate it to the upside, we may see some solid gains until the 12,060 resistance barrier. On the other hand, if the index slips below 11,695, the next support level is 11,500 psychological handle, slightly above the 50-SMA on the daily chart. MACD oscillator crossed above its trigger line which is a bullish signal, while the RSI indicator is traded near 70 level.

DE30CashDaily30012017

5. WTI Crude Oil WEEKLY OUTLOOK

REVIEW

The West Texas Intermediate (WTI) is developing within an ascending move since April 2016 however, over the last seven weeks, is consolidating within a trading range with upper boundary the $55.25 resistance level and lower boundary the $51.47 support barrier.

OUTLOOK (SCENARIO A / B)

Currently, the price is testing the 50-daily SMA while it is trading above it since the end of November. For the long-term traders, as it stands, if the bulls are strong enough to push the oil further up, we would expect an extension towards the $55.70 barrier, a level tested on January 3rd and is the 18-month high. A failure to retest the latter level should prompt a move lower towards the $51.47 support handle, where a battle is expected by both market forces. For the short-term traders, now, we expect a further upside movement until the $54.30 resistance level while the 50-weekly SMA crossed the 100-SMA to the upside which indicates a bullish signal. Additionally, on the daily chart, technical indicators are flattening near its mid-levels with some weak momentum.

WTICrudeDaily300117

6. XAU/USD Weekly Outlook

REVIEW

The precious metal seems to be in a correction of the upward move that started on December 15th and ended on January 23rd. The XAU/USD pair rebounded on the $1,220 resistance barrier and slipped until the $1,180 support level.

OUTLOOK (SCENARIO A / B)

From the technical point of view, the gold is developing within the 23.6% and the 38.2% Fibonacci retracement levels and early this morning, it bounced off the $1,195 resistance handle and is moving lower approaching again the $1,182 level. On the 4-hour chart, the 50-SMA is going to have a bearish crossover with the 100-SMA confirming the recent bearish thought. The RSI indicator is sloping downwards and is following a negative path while the moving averages on the stochastic oscillator crossed to the downside.

XAUUSDH4300117

7. Caterpillar Inc. STOCK WEEKLY OUTLOOK

REVIEW

Caterpillar (NYSE: CAT) rose strongly during the last trading session on Friday breaking over the technical level at $97.30. The tendency of the stock is still strong bullish and we expect, in the next days, the upward move of the stock to continue towards the resistance at $101.50. This level most likely will not apply strong selling pressure and our focus is directed around the $104.30 resistance level.

OUTLOOK (SCENARIO A / B)

The price is trading over the 50, 100 and 200 SMAs on the 4-hour chart, which is adding to the odds that this market will continue rising. MACD is above the zero line and gives a signal for possible incline on price. RSI is sloping up supporting the expectation for new possible long positions. In the opposite scenario – if a strong wave of new sales appears and the market moves down below $88.90, then the forecast for bullish movement would be nullified and we may see the price to decline further to $80.90.

CATH430.01.2017

FX Weekly Market Preview

Weekly Outlook: Jan 30 - Feb 03; Fed, BoE, BoJ & NFP Amid Worries for Trump's Actions 

The week is overflowed with market driver news! We have the U.S. jobs report coming out on Friday, three policy meetings from Federal Reserve, Bank of England and Bank of Japan, promising of volatility in the market. The traders worry for U.S. President actions after his recent decision to add travel bans against Muslim-majority countries and shut down refugee entry.

The week began with Chinese celebrations the new year. Early in Monday’s morning, various European indicators figures for optimism in January will be released. Industrial confidence is expected to pick up slightly to 0.2 from 0.1 before while the economic sentiment is forecasted to tick higher at 107.9 from 107.8 before. A very small improvement is also anticipated for the services sentiment, to 13.0 from 12.9. The consumer confidence may improve marginally to -5.0 against -5.1 before, according to forecast, although continues to be negative. Traders are not expected to pay too much attention to these indicators, however, it’s worth to know the level of confidence in the sectors, as they can stimulate significant factors of the economy.

Later on, the preliminary German inflation rate will be released. A while later, traders’ attention will turn to U.S. personal consumption expenditures price index for December. The personal spending and income indicators will be out as well. The pending home sales in U.S. are forecasted to rise 0.6% mom in December, versus a decline of 2.5% before.

Overnight, out of the U.K. Gfk consumer confidence for January which is expected to edge marginally lower to -8 from -7, the Japanese unemployment rate for December is expected to remain at 3.1% as before, while the industrial production is expected to expand just 0.3% in December versus an increase of 1.5% before. During the night, Bank of Japan will publish its interest rate decision along with a policy statement, a policy outlook, followed by a press conference by the BoJ Governor Haruhiko Kuroda at 06:30 GMT on Tuesday. The central bank is broadly anticipated to keep its rate negative at -0.1%. The minutes of this meeting will be released three days later, on Thursday overnight.

On Tuesday morning, the German retail sales for December will be released, as well as the U.K. mortgage approvals, also for December. Eurozone’s GDP estimate for the Q4 2016 will by eyed by traders as euro seeks for a strong number to determine its direction. Though, if the figure meets market expectations – the economy to expand by 1.7% yoy as the year before – the euro pairs will shrug off their shoulders. The unemployment rate for the Euro area is also expected to remain at 9.8% for the month of December. Further to this data, the inflation rate is coming to stir the euro cross pairs. The consumer prices are expected to rise 1.4% in January according to the first CPI estimate year-over-year, from 1.1% the month before.

In the U.S., the employment cost index is coming out as well as the Case-Shiller home prices which are expected to show an increase of 5% in November against 5.1% the previous month. U.S. consumer confidence for January is likely to slip lower to 112.5 versus 113.7 before. Later in the day, New Zealand’s employment report for Q4 will be published.

On Wednesday, the non-monetary policy’s ECB meeting will be published early in the morning. Later on, in Germany, the Markit manufacturing PMI will be released and is forecasted to remain the same as its initial estimate of 56.5 for January. Also, Markit manufacturing PMI will be announced for the Eurozone, which is expected to remain unchanged at 56.0, as well for the U.K., which is anticipated to tick slightly lower to 56.0 from 56.1 for January. One of the market-affecting events of the day is the U.S. ADP employment change which is expected to show that companies added 168K jobs in January versus 153K in December.

Meanwhile, in the U.S. the Markit manufacturing is coming out also for January. A bit later, the ISM manufacturing PMI is forecasted to fell to 54.5 from 54.7 before, while the ISM prices paid will be announced at the same time. The next important market affecting event is Fed’s interest rate decision and the monetary policy statement at 19:00 GMT. Fed is widely expected to keep its interest rates unchanged, following the rise in December from 0.5% to 0.75%. However, investors will be eager to gauge policymakers’ judgment for the next gradual rate hikes in the year, if there are any and how many. It’s worth mentioning that the dot plan released in December predicted for three rate hikes for 2017.

Going to Thursday, the spotlight event of the day is the BoE interest rate decision at 12:00 GMT. Before that, in the morning, the U.K. Construction PMI for January is expected to slip to 53.8 from 54.2 before. Eurozone’s economic bulletin will be published, while PPI also for Euro area in December is coming out.

The Bank of England Monetary policy committee is expected to vote unanimously to leave interest rates on hold at 0.25%, at least until Britain takes the way out of the European Union and policymakers confirm the stability of the economy. At the same time, the BoE quarterly inflation report will be released. The minutes of the policy meeting will be ready by BoE President Mark Carney after the interest rate announcement. Amid decisions taken for Brexit, policymakers opinion of the impact it has on the U.K. economy could create volatility in the market.

In the U.S., the weekly jobless claims will be released, as well as, the preliminary unit labour costs for the fourth quarter. Traders will keep a tab for the IBD/TIPP economic optimism in February. Overnight, the Bank of Japan policy meeting minutes will be released.

Friday promises to keep traders’ interest undiminished. The day starts with the Markit services PMI for a number of countries, competing the Markit composite PMI, continues with Eurozone’s retail sales and ends with the U.S. NFP report and the ISM non-manufacturing PMI. The services sector in Eurozone is expected to advance to 53.6 in January from 53.6 before while a smaller increase is expected for the respect sector in Germany – 53.6 from 53.2 before. The Markit services PMI for U.K. will be released as well – no forecast is available yet. Eurozone’s retail sales are expected to increase by 0.4% in December from a decline of -0.4% before.

The U.S. economy is expected to add 165K jobs in January above last month’s figure of 156K. The unemployment rate is expected to remain unchanged while the average hourly earnings are predicted to expand just by 0.2% in the first month of the year, compared to last month’s 0.4% increase.

At 14:15 Fed’s Evans will give a speech, while later, the Markit services PMI will be released for U.S., as well as the ISM non-manufacturing PMI which is forecasted to slip lower to 57.0 from 57.2. Factory orders for December are also coming out.

FedInterestRates01022017strat

NFP03012017strat

 

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