USD/JPY awaiting Fed's decision to set direction

The USD/JPY pair closed the week at 111.50, after had marked highest level for April at 111.77 and posted gains for second consecutive week. 

The continuation of the upside move seems now to be limited due to the falling yield on 10-year Treasury along with the neutral BOJ stance, that noted positive growth, but downgraded the inflation forecast for the current year.  

On the daily chart the 20-day SMA has turned to north. RSI and stochastic are placed within extreme overbought area and are keeping the bullish tone. The pair has crossed to above the 200-day SMA, whilst the 100-day SMA has slightly turned to south and is currently acting as dynamic resistance at 112.65.

How the pair will develop its direction will depend on how the market respond on Fed's monetary policy outcome next Wednesday. A bullish breakout will be more likely expected in the case of confirmation on the rate hike for next June. 

Super Mario and weak US macro data frigiled the EUR/USD pair

The initial reaction on Mario Draghi’s speech today pushed the EUR/USD pair towards 1.0933, which was influenced by the growing enthusiasm about the state of the euro-area economy.Ahead of the Wall street opening the pair dropped from the above mentioned high to 1.0850 and the current market price is 1.0879. Probably the freshly released US macro data on jobless claims and trade deficit, showing worse than expected numbers, saved the pair from further decline. 

The four-hour time frame is showing that technical indicators are entering negative territory. RSI is located at mid-lines, but has  slightly turning to north, while stochastic has moved sharply to oversold area with current location at 25. Meanwhile the pair crossed to below the 20-day SMA for first time this week.  

In case of moving below today’s low at 1.0850, next support is seen at 1.0820 (Monday’s low). Looking to the upside, recovery of the bullish trend will be possible only above 1.0920 (Monday’s opening gap) with further development towards 1.0950. 

100 days of trumpery tweets

We are quickly approaching April 29, the day that marks Donald Trump’s first 100 days in the White House. 

Despite he is constantly referring to the important 100-day landmark throughout the pre-election campaign, he said in an interview that it was an “artificial barrier” that people shouldn’t pay much attention to. 

But I think it worths, because these 100 days will be labelled as worst on record.

And here is my reading on how unsuccessful his agenda has been so far:

No considerable improvement on any major legislation. 24 executive orders, 13 signed Congressional Review Act resolutions, a failed health care bill and a stalled wall. 

Even the executive order on immigration is still stuck in the courts.  

Worst administration management ever. More than 50 nominations were made in order to fill 553 positions of the executive sector and until Friday last week yet 90% are not nominated. But the rest 10% provoked scandals with major consequences. 

Last but not least – the weak foreign policy. Is Trump acting as a globalist as he appeared when backing off his criticism of China or a protectionist, as he appeared to be when starting a trade spat with Canada?  Interventionist, isolationist or alternative?

Undeniable fact is that Donald Trump does not fail to share his thoughts on Twitter. The library of his moods, opinions, personal thrills and even diplomacy. He uses Twitter to break news, share his views and feud with critics and celebrities at all times of day or night. Lots of outbursts were read, but the masterpiece for me remains the criticism on China for its exchange rate policy and its operations in the South China Sea. And few days after „I don't regret anything”. 

As Seth Meyers said in his Late Night Show - “Trump is so ignorant that he’s ignorant of his own ignorance.” I found this quite meaningful.

*The idea of a president’s first 100 days comes from Franklin D. Roosevelt, who was actually referring to the first 100 days of a special Congressional session to fight the Great Depression.

* Trumpery has been in use in English since the late 15th century, and has been used, at one time or another, to refer to weeds, people, religious matters and generally worthless things in a broad sense. 

Loonie skyrocketed and marked 14-month high

The weak oil market and US threat to impose 20% tariffs on Canada’s soft-wood lumber exports set USD/CAD under huge pressure, but bulls seem to had found enough courage and the pair skyrocketed towards 1.3614, having posted an impressive rallied and marked a 14-month high.
The four-hour time frame is showing mixed signs for short term development. RSI is located within overbought territory at 73, stochastic has reached extreme levels, but has started to turn south, while the 20-day SMA is keeping bullish, which is suggesting slight decline during the day.

Therefor we must take into consideration the very important 1.3600 level (December 28th’s high) and in case of closing above it, the bullish tend is about to continue in longer term with next target seen at 1.3670.

EUR/USD Attempting to break out of the bearish trend carried over from 2016

EUR/USD started the new week week in good shape after yesterday’s historic win by centrist and pro-European Emmanuel Macron at the French presidential elections. 

The pair opened with a bullish gap and marked fresh new yearly high at 1.0919 because of the increased buying orders for single currency. The situation now suggest that market participants are withdrawing their bearish outlook as the pair is making significant attempts to escape from the downward trend carried over from 2016.

On the daily chart the 20-day SMA has turned to north, while RSI and stochastic are located withing extreme overbought area and seem that has lost directional strength.

Currently the pair is trading at 1.0852 and major resistances are seen at 1.0905 and higher at 1.0920. Looking to downwards first support is placed at 1.0840 and second at 1.0821.

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USD/JPY in consolidation mode

The USD/JPY pair has shifted to consolidation mode and is currently stuck between 109.30 and 108.30. In the early Asian session, the pair turned to  downside and declined to 108.63, which was about to reinforce the bearish tune. A possible break of 108.30 will drag the pair towards Monday’s low and will lead to retesting of the 108.00 level. If case the slide continues, next target is seen at 107.70. Bulls might come back along only with a recovery above 109.30 in order to gain support for further upward extension towards 109.70. Currently the trend favours the yen and only a break above 110.10 might shift the bias. 

EUR/USD Getting ready to retest the resistance at 1.0740

EUR/USD marked a modest pullback today and reached lowest level at 1.06969. Given the fact that the US Dollar Index moved below 100.00 and the greenback trimmed some of its recent losses, and meanwhile the Euro area posted inflation data as expected, fundamentally the pair’s move sounds reasonable. 

Technically speaking, the short-term bias continues to point to the upside. The single currency failed to break the 1.0740 handle, before correcting lower. A possible break higher would fuel the bulls. 

The four-hour time frame is showing bullish 20-day SMA. RSI and Stochastic are located within overbought area, but had lost directional strength. The picture now is saying that consolidation could continue. A possible break below 1.0700 would lead to further decline towards 1.0670. Below this level the single currency is going to lose momentum significantly. Looking to above, in case bulls succeed to conquer the 1.0740 zone, next target i seen at 1.0780. 

Highway to hell or Spinning around

Market spirits stayed mute while the dovish RBA minutes spread insignificant information hinting about weaker conditions in the labour area. The Australian dollar was slightly weakened during the Asian session, but found some support during European hours. 

AUD/USD dropped to 0.7530 but bulls found enough strength to push higher and the current market price is 0.7557. It’s fundamentally unreasonable to take more benefits from the current slide of the greenback along with the decline in Iron on futures that contributes to the weak Aussie. 

Technically speaking, the four-hour time frame is showing mixed signs. The pair has crossed to below the 20-day SMA. RSI has turned to north having slightly moved above the mid-lines. Stochastic is yet located within extreme oversold area and has lost directional strength.

In case the pair succeed to move above the 20-day SMA, a test of the key level at 0.7600 seems to be very possible. Looking to downwards, the bearish bias still persists if closing below 0.7530.

The decline of the Aussie should be considered as technically significant. So I may not skip to share my lyrical deviation assumptions – Highway to hell or Spinning around. First one is the former AC/DC song to chart in the US and meanwhile it’s a literal explanation of their American tour and a nickname of the Canning highway in Australia, meaning „No stops signs….speed limits…nobody gonna slow me down”. The second one gives so much meaning with „Traded in some sorrow”. Is Kylie’s „Spinning around” better that „Highway to hell”? I see the stop sign to be spinning around the 200-day SMA, which is currently staying at 0.7546.

Shakermaker

Easter usually comes to remind us for renewal of life, hope, happiness and unwavering faith. What we felt so bright and joyful during the holidays seems that didn’t brought enough excitement, comparing to the announcement of UK PM Theresa May earlier during the day, calling for a snap election on June 8th. 

A perceived risk of strengthening her position during Brexit negotiations or this decision is a kind of reversal on her previous stance, as she said she'd made it “reluctantly.”

However, today Mrs May turned to be a genuine shakermaker on forex markets, triggering a sharp short-covering rally across GBP crosses, lifting the major to 1.2840.

It was interesting to observe especially the Cable, that has recovered from initial bearish positions and surged through the quite important 200-day SMA for the first time since the historic Brexit vote in June 2016.

As seen on the daily chart, GBP/USD has pushed above the recent downward trendline with technical indicators confirming bullishness. 

To confirm a sure bullish breakout, any pull-back most likely will be limited and currently is going to find some fresh buying interest around 1.2670-75 resistance break, which has now turned to be immediate strong support. Any further slide below this point should now be confined by the very important 200-day SMA at around 1.2630 area. 

Less known fact is that the opening lines of the song „Shakermarker” by Oasis, well known English rock band, were „I’d like to teach the world to sing in perfect harmony”, but exactly this made them sued for unlicensed use of the song, which was written and performed by New Seekers in 1971 and it was made famous in a Coke commercial. It’s strange how nowadays this match to world’s harmony, unfair politics and perfection. „Irony”, was the defence of Noel Gallaagher and after the loosing he joked „Now we all drink Pepsi”. I wonder what drink would prefer Theresa May. Anyway, Sterling sang perfectly today.

      

XAU/USD higher

The implementation of Trump's politics is leaving lumpy tracks and is providing uncertainty on markets, which should be considered as an important upside risk for gold. The confidence in the U.S. economy is seen boosted but with no clear and real actions and stronger hard data. The market sentiment might shift and lead the risky assets lower, while supporting the ultimate safe haven.

Last week Gold moved up significantly higher, closed at $1286.65 but has entered in consolidation mood ahead of Easter Holidays. 

Technical indicators on the four-hour time frame are showing extreme overbought conditions. RSI is located at 70 level and is indicating bullish momentum. Stochastic has retreated from the extreme overbought area, but yet is above 80 mark. 

Gold has stopped its upward way below $1300, but it is very likely bulls to continue their march after the holidays. 

Strong resistance is located at $1307 and this level should be considered as a possible short term exhaustion point. 

USD/JPY lower

USD/JPY lost more than 200 pips during past week and had marked the worst performance in months. Most supportive for the bearishness occurred to be the rally in US treasuries, latest economic numbers in US and Trupm’s actions. So on the back of risk aversion amid geopolitical concerns, the Japanese outperformed during the last week. 

Since the pair surpassed to below the key support at 110.00, acceleration took place and led to closure at 108.589.

Technical readings on the four-hour time frame are showing very bearish 20-day SMA. RSI is located at around 30 level and has lost momentum. Stochastic is within extreme oversold conditions and is displaying strong bearish trend. 

Strong support is seen at 107.00 and for the days ahead, any run below 108.60 could be seen as corrective.

AUD/USD The trend points higher

The Australian macro data served better than expected numbers on jobs report, as 61K jobs were added in March, which is three times above expectations. Another positive point is the unemployment rate that remains at 5.9%, despite the increase in the participation rate. 

Technically speaking, the weekly chart is showing that the pair is located above the 20-day SMA, which is acting as a dynamic support at around 0.7500 mark. RSI is standing at mid-lines, but has started to turn to north. Momentum is marking higher highs and lower lows and is indicating bullishness.

Closing below the important level at 0.7500, will drag the pair to further losses. Strong resistance is located at 0.7600 and in case that bulls succeed to conquer it, next target is seen at 0.7700.

Next week is offering main reports with RBA minutes on Tuesday and Business Confidence on Thursday, but from fundamental viewpoint the AUD/USD is vulnerable due to the risk aversion amid the geopolitical concerns. But it will be interesting to observe the pair’s direction.

   

Trumpicious uncertainties, hilarious models and the golden rally

After eight years of being the First Lady of the United States, Senator of New York for eight years, and Secretary of State for four, Hillary Clinton added „fashion muse” and „footwear model” to her highly important titles list, thanks to Katy Perry, who designed a pair of pumps in her honor. The pop star posted a genuine image of Mrs Clinton to her social media’s time line, captioned „POWER PUMP”.
While the ex First Lady models, the ex model and the current First Lady will be pumped up with somewhere about  $2.9 million by Daily Mail, but it’s not that thing that will pump up the power of her authority. The British media has apologized to Melania Trump and agreed to pay damages to settle a lawsuit filed by the First Lady after having published some false claims about her work as a professional model.

Apart from these models’ excitements Mr Trump is shuffling on the geopolitical scene, having revealed five different policies in two weeks and his administration is struggling to articulate a clear plan for Syria. The last released on 10th of April left the markets with no other choice except turning to safe havens, during this time of uncertainty. 

And basically the uncertainty is a very good thing for Gold, the best performer for the week, having shined more with $19.60 up yesterday. In my humble opinion we have three reasons to explain the golden rally - geopolitical tensions, uncertainty, matching up with where it should have been trading long ago.

Ahead of Ester, be calm, live happily in this complicated world, be good to yourselves and be careful with above mentioned uncertainty, because Gold is approaching critical resistance at $1278.

EUR/USD Risk towards downside remains in tact

EUR/USD has turned to bearish mode and the uptrend for now seems to be limited.

Since March 27the when the pair marked a five-months high at 1.0905, bears had occupied the field and currently are aiming at the 61.8% Fibonacci level at 1.0555, well supported by the breaking to downwards of the 50-day moving average last week.

1.0500 is a crucial level, due to the fact that it has been tested several times last month and in case of dropping below it, we will witness further weakness around January’s low at 1.0340. 

The technical indicators on the daily graphic are displaying extreme overbought conditions. RSI is currently being at 38 and has lost directional strength. Stochastic is located at just 4 level and is not showing any vital signs.

The bearish case might be compromised only above the resistance at the 38.2% Fibonacci level at 1.0685.

On the whole, the short-term sentiment remains bearish.

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USD/JPY at wait and see mode

The USD/JPY pair has finally settled close to the daily high at 111.427  after had pared most of its weekly losses supported by Japanese yen’s mood improvement. Asian shares are slightly up, following the Wall Street’s surge and the excellent macro data from Japan that mirrored in Nikkei PMI highest numbers in almost two years. 

Technically speaking the upwards potential is not showing strong structural indications. On the four-hour time frame the 100-day SMA is very bearish and pair yet is not able to advance above it. RSI has turned sharply to south and is surpassing the mid-lines, while stochastic is pointing north.

Strong resistance is seen at 111.60 and higher at 112.00. Support levels are located at 110.50 (the daily low) and 110.10 (March’s lows). 

All eyes now are on Friday's NFP release with expetations of 112.00 handle to cap advances.  

EUR/USD looking for reason not to stay still

The release of a better-than-expected ADP survey today is showing some vital signs in the greenback, which was seen higher across the board. EUR/USD dropped to 1.0633, but closed few pips above this level, supported mainly by the bad numbers on Markit Services PMIs for the EU.

MC Minutes released in the US afternoon exposed Fed’s intentions to shrink its balance sheet during the current year, which additionally fuelled the US dollar, although markets were quite careful in movements. It seems that investors need stronger reason to buy the greenback, at least against the single currency.

Lately the EUR/USD pair is caught in tight range but according to the technical readings on the four-hour time frame the risk remains towards downwards.The pair is experiencing difficulties to push higher above the the 20-day SMA, which is tending to south currently. RSI has switched to bullish mode, but yet is below mid-lines, while stochastic is caught in the middle  and is trending to lows. 

Whereas the pair is standing still we should consider the key support level at 1.0620, as in case of breaking it, bears would be poised to chase 1.0565.

Among the complicated macro economic development on both shores, the speculative interest needs something stronger to stir the markets. 

Elegantly Wasted

During the recent years the Aussie has become a favoured vehicle for traders. The attractiveness is written by the interest rate differential in the pairing, which enrolled security due to the opportunity to earn rollover for being long on AUD/USD. Well the massive bull run is not seen lately, as the pair is strongly correlated with economic difficulties in China along with the bearishness in commodities and metals market. Currently the Aussie is elegantly wasted in the lustreless frame of Autralia’s financial development. 
The recent tides on the forex market brought ebb. The pair marked three-weeks low at 0.7545, mainly influenced by the dovish RBA this morning.  

AUD/USD took steeper move to downwards and surpassed the significant support at 0.7588 (61.8% FIbonacci retracement of 0.7489 to 0.7747). This figure increases the risk of longer term decline, which finds confirmation with technical indicators, as it’s clearly seen on the four-hour time frame. Both RSI and stochastic are located within extreme oversold territory, but have lost directional strength, while the 20-day SMA has turned sharply to south.Fresh bears will attempt to test 0.7540, but more important is to be aware of 0.7380.

As INXS sing, this ain’tthe good life. Don’t look at all that shines, the spirit is not running with this pair. 

London calling

The GBP/USD pair slipped to a fresh weekly low at 1.2418, shattered by the growing risk sentiment and more weighed by a quite Markit construction PMI, which introduced 52.2 for March, lower than February's 52.5 and not matching with market's expectations of 52.4. After Monday's weak data, today’s macro agenda printed lower construction activity in the United Kingdom in March, setting the Sterling under additional pressure. Meanwhile the trade deficit numbers from the United States are down according to the expectations, because exports has increased more than the imports did. 

On the four-hour time frame the 20-day SMA has started to turn to downwards. RSI has switched to bearish mode, as since Monday is marking lower lows and currently is situated at 41. Stochastic is displaying sharp southern slope and is located withing extreme oversold area.

It seems that the sun will not be zooming in the short-term, the Brexit error mirrors in an expected economy embarrassment.

The trend index is bearish, volatility is shrinking and the forecast bias as well points bearishness. 

Quit holding out, draw another breath and stay long at 1.245. 

Gold: Flirting with 200-day SMA

Gold was caught in a tight range during the last four weeks and tried to make decisive move.The final push occurred in the last day of March, when XAU/USD rised to $1250.57, slightly above the important 200-day SMA. Bulls couldn’t find enough strength to hold this level and the price retreated to close the week at $1248.45.

On the daily chart the 20-day SMA is starting to turn north and the technical indicators are showing overbought conditions. RSI is currently being at 58 and is displaying bullish momentum. Stochastic is still within extreme area, although has retreated to 80.A sustained weakness is seen below $1240 level, where gold is provoked to accelerate its slide towards $1235 - $1225 area. Looking to the upside, if the hesitation around the weekly close at $1248-49 zone could get flighted, next bulls target is seen at $1255. Above this point, XAU/USD is likely to aim back towards and clear the very important 200-day SMA handle at $1261.