Friday, 30 December 2016

2016 In Glitters And Jitters

2016 turned to be full of surprises. It was fascinating with ambitious, adventurous, sometimes irritable and sizzling characteristics. Stocks recovery from the worst-ever starts, Brexit, Trump, oil, central bankers intervention. I may say it was an extremely interesting year all along the way and here are the events that labelled 2016 and shaped the financial markets.
The brutal year start ever. During the first ten days of January Chinese stocks plummeted and caused deterioration on markets. The world was somehow hammered by fears about China’s economy turmoil and the weakening of Chinese Yuan. What actually happened with Shanghai Composite Index:

Of course stock markets tumbled world-wide, many companies suffered and experienced their worst start to a year. A kind of huge anxiety on markets. The shares of some companies marked huгe declines. Here they are:

What shivered the markets at the end of January was the slump of oil prices. Crude oil prices hit a remarkable low at $27.88 a barrel and provoked sell off in energy sector shares and bonds, high-yield debt and all considered as risky assets. 

The next jitter was served by the Bank of Japan, when at the end of January announced that will keep the negative interest rate policy. This mirrored in investors withdrawals and facing higher-yielding euro zone, UK and US dept.

The next and genuine shock for the markets was Brexit. The UK’s vote rocked global markets and something very bad happened. The Sterling dropped with 11% during the referendum day and $3 trillion was wiped out from the global stocks the next two days. The GBP/USD pair suffered most and marked a very very murky year. What actually happened with the Cable is clearly seen on this chart:

In the middle of the year some glitters shines over the markets. Throughout July and August S&P 500 set all time highs. The US economy growth is improving and is stable and boosted Wall Street. The uncertain political climate was fading away, the sun started to shine over the  global stocks and led their way to finish the year in the green.

In September the shares of Germany’s biggest bank dropped to lowest levels for decades after the US Justice Department proposed that the bank must pay $14 billion to settle mortgage-securities probes coming from the financial crisis. The domino effect was inevitable. Another European banks grasped the weak economy.
In November the focus was set on the US presidential elections. The most contentious race was about to be won by the Democratic candidate Hillary Clinton. Well it didn’t happen and markets hardly digested this shock, because what was expected speaks much: 

Well the shock was short lived and market participants welcomed the game changer and cheered the implementation of fiscal stimulus, taxes cuts and the rolling back on regulations for the US business.
Wall Street equities have moved to higher levels. Selling of bonds motored further after the Federal Reserve announced that will act more aggressive and will take actions for rate hike next year.

Further on markets faced the non-Opec producers agreement in late November.The global supply glut was an enormous pain, but finally we witnessed a solution. And in fact the cut in December contributed to the return of Opec and even boosted the oil prices.  

Well it seems that we're living in interesting time and I'm curious what next year is going to bring. 

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Thursday, 29 December 2016

Gold Skyrocketed And Marked A Fresh Two Week High

Since the early trading hours today Gold was seen flirting with 1150 handle. Later on retreated to lower levels and reached intraday low at 1144.33.The thin trading volumes due to the holidays, the lack of significant economic releases this week and the US dollar’s strength uncertainty are ruling the yellow metal’s direction. It seems now that the greenback is feeling weak and gold took immediate advantage with the beginning of US session.
The precious metal skyrocketed and hit intraday high at 1159.50. This level has not been visited since 14th December – when was held the latest FOMC meeting. With marking a two week high and gaining something around $22 for the past week, Gold is posting excellent weekly achievement even the best for the last quarter. 
Currently the price slightly stepped back and is trading now at 1154.90. 
The hourly chart is showing that XAU/USD surpassed the 20-day EMA and is moving to the upside. 
RSI has modestly recovered from extreme overbought conditions. Stochastic is also placed within overbought area, but loosing strength.
1150.00 remains key area and if closing above, might provoke bulls to fight for 1160.00 handle, where is lying important resistance. 1150.00 turned from resistance to support now, and looking to the downside next support is seen at 1140.00

Wednesday, 28 December 2016

The Slump Of The Cable

Amid the holidays conditions with a quite trading along with thin volatility at the end of the year, the GBP/USD pair collapsed today and reached 1.2200. It’s a remarkable slump as the pair has not been visiting such levels since 1994, having in mind the October 25th low at 1.2080.The macro data coming from the UK today showed strong figures as the consumer credit growth is stable. But what is dragging the Pound down is the fear of uncertainty elicited by the Brexit implementation. The attempts for any recovery remains sluggish and in a depressed mood and overall outlook for the Pound does not inspire much optimism.
Technical readings are showing that the power is now with the bears. The Cable is now places well below the 100-day and 200-day SMA. Currently the price is keeping together with the very bearish 20-day SMA. RSI is trying to recover from the extreme oversold conditions. Stochastic is confirmng the strong downward slope and is also placed withing ultimate north area. 
Today’s intraday low is an important support now. If the pair crosses below, bears might try to conquer lower levels. Resistance is see at 1.2245 and at 1.2300. 

Tuesday, 27 December 2016

EUR/USD at neutral stance

During the past week the EUR/USD pair was hesitating amid thin trading sessions. The pair was mostly caught within tight range between 1.0430 – 1.0500, but meanwhile attempted to fall down to 1.0351, but closed higher at 1.0448.
The economic calender this week is not offering any significant events that could stir the markets. Also along with the Holidays Season we usually witness uninspired trading. 
Looking at the hourly chart, the short-term development is seen neutral. The price is currently moving together with the 20-day SMA and between the 100-day and 200-day averages. Indicators are showing mixed signs. RSI is around mid-lines, while stochastic heads north.
The trading bias remains neutral, but as long as the pair holds below 1.0500, the bears rule the trend. Support is located at 1.0400 and lower at 1.0350. Looking upwards resistance is placed now at 1.0460 and higher at 1.0500.

Friday, 23 December 2016

Gold: Spellbound By Quiet Holidays Consolidation

So quite and less shining Gold is performing ahead of Holidays. A slight elevation was seen in the afternoon towards $1135 level, but shortly afterwards followed a delicate withdrawal back to $1130 area and current market price is $1131.99.
For the past week we may only conclude that the precious metal was stuck into a humble consolidation. Since US presidential elections Gold has tumbled down and set yearly low at $1123.00.
The economic calender is not loaded with enough significance that could trigger sure direction for the precious metal today and ahead of the holidays it its unlikely to witness something catching eyes. 
On the daily chart it is seen that gold prices continue to hold above $1100.00 level. The sentiment yet remains in downward development and well below the sloping trend line. Technical readings are showing oversold condition and both indications are displaying lack of momentum. As long they are caught in the negative territory, the situation is ruled by the bears. 
Along with the upcoming holidays Gold is feeling to trills to move outside the established range. 

EUR/USD Holiday Mode Set The Pair In Limited Range

Ahead of the holidays and along with decreasing liquidity the EUR/USD pair settled in narrow range today. The pair was seen very weak at the beginning of the week and on Tuesday reached lowest point for the last 14 years at 1.0351. Next days the pair recovered to higher levels and even tested the psychological mark 1.0500.
RSI moved from negative territory and currently is placed around mid-line. Stochastic crossed below the overbought area and is displaying strong bearish momentum. 
The short-term resistance is seen at 1.0520 (100-day moving average) and higher at  1.0665 (late November and 14th December highs). Looking to downwards support is now located at 1.0365 (15th December low) and lower at 1.0320.

Wednesday, 21 December 2016

USD/JPY Back Below 118 Mark

Japanese yen slightly dropped on Tuesday after the Bank of Japan as expected kept the negative interest rate level of 0.1%. Supported by a rise in the US interest rates earlier and keeping this in Japan, the USD/JPY pair continued to move upwards. 
In early Asian session the pair hit a daily high at 118.23, but closed the session at 117.85. Looking at the daily chart it is seen that the pair is consolidating and the the strong bullish momentum is loosing strength, but is still holding above the key level at 100. 
Today the pair failed to stay above the 118 mark and dropped to 117 area. An intraday low was pinned at 117.05 and the current market price is 117.36.
Still the long-term outlook remains bullish. 
Support is seen at 117.00 and 116.52. Resistance is located at 118.00 and 118.64.

Today’s economic calendar

Today the macroeconomic agenda is not offering significant events, but the more interesting will be released in the afternoon. And here is what is going to stir the markets today:
Euro-Zone Consumer Confidence for December, 17:00. It was -6 points and is expected to remain unchanged.
Existing Homes Sales for November, US 17:00. Previous figure is 5.60 million and the forecast is for a decrease to 5.50 million.
Gross Domestic Product (QoQ) for Q3, New Zealand 23.45. It was 0.9% and the expectations for lower number - 0.8%.Current Account Balance for the third quarter, New Zealand 23.45. The previous quarter it was -0.95 billion and the forecast to be changed to -4.89 billion.

Monday, 19 December 2016

EUR/USD Still Remains Within The Sound Of Silence

The new week started with muted sound for the EUR/USD pair. No significant macro news were released today that could trigger the US dollar to marginal change to the upside.
The pair is still holding below the 2015 low and also is staying well below the 20-day, 100-day and 200-day moving averages. Considering this, the pair is poised to accelerate the downward slope. 
Technical indicators are showing overbought conditions. RSI is now reaching 30 level and stochastic is displaying strong bearish momentum. Both readings are not giving signs for additional gains.
In case of breaking 1.0480 level, we might witness bulls fighting for 1.0500 area. But key support is located at 1.0400 and the around this point the EUR/USD pair is poised to continue its decline towards deeper lows. Next support is seen at 1.0365 (yearly low) and 1.0320.

Friday, 16 December 2016

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Thursday, 15 December 2016

GBP/USD Vulnerable To Decline Lower

Cable is seen sharply lower falling in line with the powerful US bulls. The GBP/USD marked a 3-week low during the European session at 1.2374. 
The pair is highly pressured and has lost ground during the last three sessions. The price has crossed the 50-day moving average to downwards and is moving to deeper lows. Indicators are well placed within negative territory. RSI is line with 30 area. Stochastic is showing extreme oversold conditions and is displaying strong bearish momentum.
Fist support is located at 1.2360 (23th November’s low) and next one is 1.2300 (round number and 18th November’s low). Looking to the upside resistance is seen at 1.2569 (today’s high) and higher at 1.2620 (5th December’s high). The short-term outlook remains bearish. 

Wednesday, 14 December 2016

EUR/USD Fed's Dot-plot Triggered Bearish Reaction

Finally it became clear that the Federal Open Market Committee is raising the benchmark interest rate by 25bp to range of 0.50% to 0.75%. Furthermore the central bank is going to extend the dot-plot to three rate hikes in the upcoming year.
The EUR/USD pair was failed to hold above 1.0600 mark ahead of the conference. After the press release the pair tumbled to 1.0530 and marked an inraday low even lower at 1.0495.
As seen on the H4 chart the price has moved well below the moving averages. RSI has turned sharply to south and is currently close to 30 level. Stochastic is currently placed within mid-lines but displaying strong bearish momentum. 
First support is seen at 1.0500  and lower at 1.0450. Resistance now is located at 1.0560 and higher at 1.0600.

Tuesday, 13 December 2016

Bullion Rolling in the deep, but the fever pitch will be set by Fed

Yesterday the precious metal touched a level, that has not been visited since February 2016 and marked a 10-month low at $1151. A fresh breath was taken today with a slight elevation towards $1164 -65 area, but it couldn’t last long. Currently Gold is trading at $1158.
The demand for safe-heavens seems now to be fading away, undermined by the  European equity markets that are tending to positive mood. Meanwhile the prospects of the upcoming Fed’s decision on rate hike actions will set additional pressure on Gold. The technical outlook shows price well below the moving averages. RSI is around 37 level and displaying lack of momentum. Stochastic has recovered form the negative territory but sill is supporting the bearish sentiment.
Immediate support is seen at $1151.30 (yesterday’s low). Resistance is located at $1165 and higher at $1180. 

Monday, 12 December 2016

USD/JPY Bears Just Seemed To Melt Away

A fresh multi-month high was pinned today at 116.12, which is a level that has not been visited since February. Market participants were overwhelmed by  the OPEC matters and optimism for shortly shined over the USD/JPY pair. The greenback was set under pressure during the European session and the pair is currently trading at 115.08.
Looking into the hourly chart it is seen that the price is still holding above the 200-day moving average. RSI has moved downwards and is situated at around 40%. Stochastic also sloped and is showing extreme oversold conditions. Both indicators and displaying strong bearish momentum. 
Strong support remains the 114.75 level( 1st and 5th December highs). Resistance is seen at 115.61 and 116.00 area. 

Saturday, 10 December 2016

EUR/USD Ahead Of Fed's Meeting

The latest ECB’s decision on economic policy sent the EUR/USD pair back to the camp of bears and very close to the yearly low marked on 4th of December at 1.0504. The pair is currently situated at 1.0560 mark and is finding difficulties to move above 1.0600 area. 
The 20-day EMA on the H4 chart is indicating strong bearish momentum. RSI is close to 30 level and confirm the bearish trend. Stochastic is showing extreme oversold conditions but still displaying lack of momentum.
By the end of the week the pair has gone under 38.2% (1.0808) and 23.6%  (1.0690) Fibonacci retracement of October’s high and December’s low, both key levels for the bears. 
From technical viewpoint the sentiment remains in favor of the ongoing bearish trend. But the next week will be very significant for the forex market as Fed’s economy policy meeting will be held on Wednesday. What will be Yellen’s decision and will the dollar’s rally be halted or will be seen in new highs, will be known very soon.

Thursday, 8 December 2016

Silver: The Force Awakens

Since the beginning of July Silver prices are sliding downwards within a bearish channel. It is seen on the daily chart that Silver is quite avoiding to get close with the down side of the channel and during the last week is behaving rather bullish.

Meanwhile the 20-day, 50-day and 100-day EMAs are indicating sure bearish bias. But RSI is slowly turning from bearish to bullish mode and now is placed around the mid-lines. Stochastic surged from extreme oversold conditions and is aiming north now. Both indicators support the silver bulls and are fuelling up the rally.
The strong support at 17,00 (June and October lows) has turned into resistance, which since yesterday is conquered by the bulls. Observing the short-term bullishness is clearly seen and Silver most probably will test the top of the channel.
The combination of the indications of the technicals is significant and worth attention. The force awakens and bulls are heading towards 17.20. Whether will continue to the upside of the channel is quite early to say. One thing is sure – strong fundamentals are needed to stir the market and set clear direction.

Wednesday, 7 December 2016

Gold Might Bounce Upon FOMC Meeting

US presidential election has been crucial for Gold, but a month later markets digested the event and now the focus is set on FOMC meeting next week. The rising expectations for rates hike might support the golden resilience and elevate prices as most traders will prefer profit-taking.
Gold prices so far remain weak and stuck within a narrow range. But technical indicators suggest upcoming bounce. RSI is around mid-line but showing positive divergence. Stochastic is showing overbought market but still is displaying strong bullish momentum. 
Short-term resistance is located at 1180 (50-day EMA) and higher at 1199 (23.6% Fibonacci retracement). Looking to the downside nearest support is seen at 1160 and 1134.
In the near-term Gold remains weak, but in the long-term technicals confirm rising upside momentum.

Tuesday, 6 December 2016

GBP/USD At Shor-term Bullish Outlook

The risk-on environment and the positive domestic data kept the Sterling confident and during the last five sessions was seen slightly elevated. Today the GBP/USD pair marked fresh two-month high at 1.2773 but later on retreated and now is holding around 1.2700 area, which remains strong support level. The 100-day SMA was acting as immediate resistance but was crossed to the upside while the 20-day SMA is trending to north.
What is important to point out now is that Cable is developing within the ascending channel and nears the top side of the channel. RSI is modestly above mid-lines but showing strong bullish momentum. Stochastic is located at overbought territory but indicating rising expectations for larger recovery for the pair. 

Monday, 5 December 2016

EUR/USD: No Vote Turned Into Bullish Mode

The NO vote on the Constitutional reform referendum in Italy led to quick sell-offs in EUR/USD and during the Asian session the pair plummeted to 1.0504. This level has not been visited since March 2015 and the pair marked a fresh yearly low. The pair recovered back to 1.06 levels during the European trading as the released positive EU macro data encouraged the bulls. Upon US opening the price skyrocketed, surpassed the 1.07 level and marked an intraday high at 1.0739, which is a two week high.As seen on the H4 chart the pair grew strong enough to cross the 100-day EMA and currently is placed well above it. Technical indicators have turned from south to north. RSI is at around 60%. Stochastic nears extreme overbought conditions, but still displaying strong bullish momentum.
The intraday support is placed at 1.0505 and the resistance – at 1.0745. As clearly seen on the chart, the pair visited both levels today.
Next resistance levels are located at 1.0800 and higher at 1.0850. Looking downwards support levels could be seen at 1.0625 and lower at 1.0550.

Friday, 2 December 2016

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Thursday, 1 December 2016

Gold Is Losing Its Shine

Since the beginning of November the Gold prices are down with 8%. The intraday  high marked on the US Presidential elections day at 1337 faded away and currently the precious metal is trading at 1172. The impressive downward slide continued today and provoked bears to test 1160 level.  
The latest strengthening of the greenback supported the decline in gold prices together with the tightening of capital flows out of China.
Technical indicator are showing strong oversold conditions. RSI is placed now at 21 level and is turning to south. Stochastic is currently displaying extreme values and is showing lack of momentum.
Meanwhile the price is staying well below the 20-day, 100-day and 200-day exponential moving averages.
XAU/USD has crossed the key and psychological level at 1170 (61.80% Fibonacci retracement) and in case of maintaining the downward direction next target is seen at 1140 (March 2015’a low) and 1120.
Given above technicals the gold prices are poised to extend slide.

USD/JPY Climbs Higher

During Wednesday trading the US dollar experienced a remarkable increase against the Japanese Yen. After a steady upward movement, the dollar added 207 pips to close at 114.44. 
In the early trading hours today the USD/JPY pair marked a high at 114.80, a level that has not been visited since late February. Shortly afterwards the pair dropped to 113.78, but quickly resumed to upwards and is currently trading at 114.43. 
RSI is currently placed at 56 level and retreating from overbought levels. Stochastic is displaying lack of momentum but still pointing north. 
The pair is staying well above the 20-day, 100-day and 200-day exponential moving averages which indicates bullish potential while bears seems to be limited in the long-term. 
Support is seen at 114.00, next one at 111.00 and lower at 109.20. Resistance is now located at 116.45 and 118.30.