USD/JPY nears its 61.8% Fibo

It was an interesting day for the USD/JPY today, as the Japanese yen gained momentum, boosted by the consolidation in equity prices in negative territory in Wall Street amid the treasuries recovery.

The pair is currently trading at 110.78 and is about to close the day below the key level at 111.00, that has not been visited for the past two weeks. 

On the four-hour time frame the 20-day SMA has turned sharply to south, while the price is standing well below the 100-day and 200-day SMAs that are staying flat and are loosing directional strength.

RSI and stochastic are located far form their mid-lines and are displaying bearish momentum.

Immediate support is seen at the 61.8% Fibonacci retracement of latest up leg (110.50) and in case of breaking it to below, next bears’ target is seen at 110.20 (May 18th’s low) and this would confirm short term downwards movement. 

It’s a long way to the top (if you wanna rock 'n'roll)

Over the past few days the Aussie is struggling to deliver clear direction and closed flat today, keeping away from further decline due to the lack of volume as markets were closed for holidays.

The four-hour time frame is showing that the AUD/USD pair bounced from the 50% Fibonacci retracement of latest up leg in May at 0.7420,which is acting as immediate support. The 20-day SMA has turned to downside, while the 200-day SMA is staying flat and is acting as resistance with current level at 0.7470.

RSI is located slightly below its mid-lines and has lost directional strength. Stochastic is retreating from the negative territory and is displaying bullish momentum. 

The pair failed to surpass the 0.75 handle last week, but it will be interesting to observe the moves this week. Tomorrow will be released the April Building Permits figures with expectations significantly above after March's sharp decline.

As the famous Australian band AC/CD sing, it’s a long way to the top. In fact this song describes their struggle to make themselves big by delivering a top notch. They were nonexistent in short dates, but never gave up and finally were paid off. 

Will Aussie succeed to struggle if ECB and Fed turn to more hawkish measures with the odds about the cut of rates by RBA and with the markets growing increasingly concerned about demand for Iron Ore? 

„Stop in all the byways, playing rock’n’roll, gettin’ robbed, gettin’ stoned,gettin’ bet up”.
I'd rather prefer rock and roll, but in medium term the pair is seen neutral, so take your time as it's a long time to the top.

Gold may shine brighter

On Thursday Gold regained some of its losses that had the previous day, but on Friday broke out of its weekly range and marked 3-week high at $1267. This move clearly speaks that markets have already priced-in the upcoming rate hike next month. The latest release of macro data in USA also supported the precious metal and bulls are back on the stage after being behind the scene near two months.

Bulls would be eyeing to conquer higher levels are here five reasons that will build on their strategy for up-surge:

Failure in index growth

US indices may be close to new record values, but the risk of correction is greater than ever. Trump's election victory was the last factor to accelerate the rise in the indexes. It is Trump, however, that will be the basis of the next bigger correction or bearish market.

The dollar may continue to become cheaper

The Fed’s  Minutes pointed out that the reserve might not hurry with aggressive action on interest rates. This is very likely to initiate a further decline in the dollar, which is good for the price of gold.

Negative interest rates in an environment of rising inflation

A slower rise in interest rates in the United States, in the midst of seeing the first signs of inflation, could result in negative real interest rates. Such an environment is extremely beneficial for assets that do not bear interest, such as gold.

Geopolitical risks

Geopolitical risks are serious. From the UK election next month to the potential escalation of North Korea's tensions. Gold has always been well-prone to risks.

Growing stocks of India

India is one of the largest users of gold. The jewellers add to the gold stocks before the new sales tax comes in on July 1st.

Keep calm and get your popcorn ready. Trump is overseas!

Putin knows what to do and has already prepared.

Besides multiple chances to embarrass the USA now President Trump is performing on the worldwide scene and is acting deeply and truly as himself, providing the audience sovereign cringeworthy moments.

And here are several highlights on what I found awkward, interesting and not be missed:

As the current First Lady is always in the spotlight, I can not point out that she appeared to refuse her husband's attempt at holding hands when climbed the stairs on Air Force One and, which also happened in Israel when brushed away Tump’s hand. And there was no holding hands as they stepped off Air Force One in Rome. The body language says a lot.

Being in Israel the Republican seems to had forgotten that this country is a part of the Middle East.
“We just got back from the Middle East,” Trump told the room.

And the note he left at Yad Vashem sounds to be written by a rock & roll star, just compare it to Obama’s one!

Look at this shot at Vatican! Do you find Pope Francis enthusiastic about this photo opportunity?

The Handwriting Handbook was impressive on the meeting of world leaders in Belgium. Once Trump called Brussels a „hellhole”, but thanked for the warm welcome. Below photo is showing Trump and France’s newly elected President Emmanuel Macron awkward power handshake at their first face-to-face meeting.

At a NATO summit in Brussels Trump showed his muscles and pushed aside the leader of soon-to-be member Montenegro.

This one is my favourite. He just has not been the same since touched the glowing orb. 

Do you know how the orcs first came into being? They were elves once, taken by the dark powers, tortured and mutilated, a ruined and terrible form of life.. (Saruman)

USD/JPY at neutral stance

During the past week the USD/JPY pair has been caught in tight range and today was seen hovering below the 112.00 mark. 

The absence of significant macro data releases reflects and the pair can’t find enough strength to set clear direction.

On the four-hour time frame the price is moving below the 20-day SMA and it’s between it and the 100-day SMA, both horizontally positioned. Technical indicators are not showing much. RSI is located around its mid-lines, while stochastic is slight above its and is heading to north.  

Immediate resistance is the 38.2% Fibonacci retracement of latest April to May up leg at 112.00 and next is seen at 23.6% (112.90). Looking to downside, the important level to consider is 111.00 as is a good turning point and might switch the trend into bearish in case of crossing it to below. 

Aussie meets strong resistance at 0.7500

Commodities currencies are best performers this Monday along with Aussie extending up to 0.7488, highest level seen since May 3rd.  It’s an important level to consider as staying slightly below 0.7500 and it’s an area defined by 38.2% Fibonacci retracement of latest March to May decline together with the upper line of descending trend line. 

The immediate upside momentum is seized by the this threshold. Temporary support  is lying at  the overnight lows having in mind possible close below 0.7385, that would put back the downtrend on the table.

Aussie is approaching key resistance confluence and we should focus on the 0.7429 – 0.7490 range, but upside is capped by the  61.8% Fibonacci retracement at 0.7589 of above mentioned decline. 

The economic calendar has nothing to offer during the upcoming session, but the positive momentum in equities and commodities will possibly drive Aussie gains. 

However, the we should focus  on the structural resistance that is heading towards  0.7500 mark  ans in case of breach, there would be more meaningful breakout in the pair.

GBP/USD Range Bounded

Having Brexit drama in play the Cable succeeded to regain the 1.3000 handle, due to greenback’s weakness. The GBP/USD opened lower undermined by Minister Davis, who pointed out that UK may leave the negotiation's table should the EU insist  on the payment of a Brexit bill of around €100 billion, which lead the pair downwards to 1.2965. 

Well the US session brought US dollar's selling and the pair moved higher.

Technically speaking the pair is currently range bounded and is keeping neutral stance. The price is slightly above the 20-day SMA. RSI is consolidating around 55 level while stochastic has retreated form overbought conditions and has lost directional strength.

Ahead of UK election the most likely scenario is neutral with a limited downward scope on standing greenback's weakness.

Forex Calendar For The Week Ahead

The week ahead looks to be interesting having Bank of Canada meeting, OPEC and non-OPEC gathering, FOMC minutes  and key data in focus. 

This  Monday there will be no major events or indicators due to be released.

On Tuesday , Eurozone’s preliminary manufacturing and services PMIs for May will be in focus, though no forecast is available for any index yet.

From Germany, the Ifo survey for May will be released.  No forecast is available, but the ZEW survey for the month shows that the prospects for the Eurozone as a whole are improving, a factor that strengthens the economic environment for German exports. The Ifo survey is expected to indicate a similarly upbeat message coming from German businesses, especially considering that Eurozone’s political risks are now out of the way.

On Wednesday, all eyes will be on the Bank of Canada rate decision. The forecast is for the Bank to remain on hold once again.

In the US, the main event will be the release of the minutes from the FOMC’s May policy gathering, where the Committee kept its policy unchanged and offered very few hints with regards to the timing of the next rate hike.

On Thursday, the highly anticipated meeting between major OPEC and non-OPEC oil producers will take place in Vienna.

With regards to the economic data, from the UK we get the 2nd estimate of GDP for Q1.

On Friday, Japan will release its CPI data for April and later in the day in the US, durable goods orders for April are due to be released. 

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Trumpspotting

Choose Putin. Choose tyranny. Choose racism. Choose narcissism. Choose stupid hair.

Choose American dream. 

“I’m a people-pleaser,” said Donald Trump in the latest Jimmy Fallon’s Tonight Show. 

But I wonder whether Americans are pleased  with the revelations that the President has given Russian officials highly classified intelligence during a recent Oval Office visit and that he allegedly encouraged former FBI Director James Comey to drop an investigation into his campaign's ties to Russia.

The Trump-Comey turmoil triggered a heart attack on financial markets. S&P sharply dropped, volatility surged, safe heavens advanced, big bank shares declined, gold futures climbed and the single currency also caught a bid. Now the pre-election propaganda for strengthening the US economy is fading away, together with latest bad numbers from macro data on US economy. 

Apart from economy spots, which definitely can not be neglected, the agenda is whether Mr Trump’s decision to discuss highly classified intelligence with Russian officials appears to be within the law.

Trump’s decision to disclose this information might theoretically put American lives at risk or seriously risk intelligence sharing relationships worldwide. 

A simple act of carelessness which is proved by the giving up from the oath to “preserve, protect and defend the Constitution of the United States” and “faithfully execute the Office of the President of the United States.”

Choose future. Choose life. Choose impeachment.

EUR/JPY skyrocketed and pinned fresh yearly high

The good macro data from the euro area released today fuelled the euro bulls and the EUR/JPY pair skyrocketed and marked its highest level for more than a year at 125.80.

After the first lap of the French elections the pair made sharp U turn and since then we are witnessing strong rally, which is clearly seen on the daily graphic. Technical indicators are showing extreme overbought conditions, but yet are aiming higher, so the pair is poised to extend the rally before correcting.

The short term outlook also remains bullish. The four-hour time frame is showing that the price is strongly moving above the100-day SMA and today has crossed to above and the 20-day SMA. RSI and stochastic had retreated slightly but yet are located within extreme overbought area. 

The pair is facing strong resistance at 126.25 – April’s 2016 high and in case bulls succeed to conquer it, next target is seen at 126.90.

Aussie at 2-week high, but in the long term remains bearish

Today the Aussie marked fresh two-week high at 0.7445, but during the US session pulled back to currently trade at 0.7414, as the greenback trimmed losses. 

Technical readings in the four-hour time frame are showing that bulls are retreating from the intraday high. The price is moving above the 20-day SMA, which is pointing to upwards. RSI and stochastic has corrected from overbought territory, but both are yet well above their mid-lines.

In the short term the pair is trending higher, but in the long term bears rule the situation until price is holding below the descendant trend line that has started from late March’s high at 0.7749. 

USD/CHF tested the support at 200-day SMA

The USD/CHF pair slipped below the parity line having lost around 80 pips. The US Dollar is seen weaker today against its major rivals following the release of weak economic data in the United Stated and FOMC’s dovish tone. The pair tested the levels around the 200-day SMA, which is located at 1.0000 – 0.9995, but later corrected and the current market price is 1.0019.

On the four-hour time frame the price has crossed to below the 20-day SMA, which is currently staying flat at around 1.0068 and has lost directional strength. RSI and stochastic are showing strong bearish momentum and had moved below their mid-lines. 

In case of closing below the 200-day SMA (1.0000 – 0.9995), the pair will poised to extend its downward slope towards 0.9960. Looking to the upside first resistance is seen at 1.0085 (today’s high) and second at 1.0100 (weekly’s high). 

Dovish RBNZ slid the Kiwi to yearly lows

The decision of RBNZ to keep key interest rates at 1.75% led to depreciation of the New Zealand Dollar against its major rivals today. This was widely expected, but recently some positive economic numbers  were released, which supported the anticipation of rate hike. The unemployment rate dropped to 4.9% Q1 and CPI has marked 2,2% on year-on-year base for the 2016’s. In fact these hopes didn’t match the opinion of  Governor Wheeler, who thinks that no inflationary pressure is seen and salaries didn’t rise significantly. 

The dovish RBNZ smashed the NZD/USD pair and sent it to yearly low at 0.6718. 

The technical readings on the four-hour time frame are confirming the downtrend. The price crossed to below the 20-day SMA, which has turned to bearish mode. RSI and stochastic retreated from the extreme overbought area, but yet are well below their mid-lines and had lost directional strength. 

Meanwhile the pair surpassed the December 2016’s low at 0.6862 with current market price 0.6854. Apart of the posted yearly low this suggests further decline and bears are aiming to test the 0.6800 level. 

The "Super Thursday" failed to be super for the Cable

The "Super Thursday" brought fresh new weekly low for the Cable. Following the Bank of England Governor Carney's comments, the GBP/USD pair slipped to 1.2848.

The Central Bank left the rate and the amount of QE unchanged at 0.25% and £435B respectively, as it was expected. But this decision actually affected immediately the price as investors anticipated more hawkish measures after the weak inflation numbers and triggered Sterling’s sell offs. 

Regardless of today’s decline the GBP/USD remains within the well know range from the last two weeks.

Technical indicators on the four-hour time frame are more likely to confirm the short-term bearish trend. The price has crossed to below the 20-day SMA, while RSI and stochastic switched from neutral to negative mode and both are showing extreme oversold conditions. 

The pair could face first support at 1.2830 (last week’s low) and second at 1.2800. Looking to the upside resistance is seen at 1.2965 (28th of April’s  high)  and next one could be seen at 1.2900 (psychological level).

USD/JPY Back above 114.00, but capped by 61.8 % Fibo

Yesterday the USD/JPY posted a multi-month high at 114.32. During today’s European session the pair retreated slightly and marked daily low at 113.63, but currently is back above the 114.00 handle.

The Japanese Yen is quite vulnerable on yields' behaviour and is looking for stronger direction and currently is boosted by the rising US bond yields and the Wall Street’s recovery on equity prices.  

Technically speaking USD/JPY is keeping bullish stance on the four-hour time-frame. The 100-day and 200-day SMAa are moving to the upside with 20-day SMA sharply facing north. 

RSI is located above the 70 level, but has lost directional strength. Stochastic has corrected from the oversold territory and is aiming to the upside with current level at 87. 

Yet the pair is capped by 114.50 (61.8 % Fibonacci retracement of latest December to April down leg). To confirm the actually bullish tone, this level must be conquered. 

AUD/USD posted a fresh 4-month low

Following the weak Retail Sales report , the Aussie declined and posted a fresh 4-month low at 0.7328. Meanwhile the stronger US dollar additionally fuelled the bearish sentiment.  

Technical readings on the four-hour time frame are confirming the downward trend. The 20-day SMA keeps focusing on the south. RSI has marked lower lows and is currently situated at 30 level, while stochastic has slightly corrected form the extreme overbought area, but yet is staying within the negative territory. 

The AUD/USD pair is exposed to further decline in case of closing below the daily low, so first support is seen at 0.7330 and second at 0.7290. Looking to the upside intermediate resistance is located at 0.7365 (the daily high) and higher at 0.7420 (Monday’s high).  

Having in mind some important fundamental drivers, facing a couple of Federal Reserve's speakers ahead, the short term outlook remains in favor of the bears. 

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USD/JPY Bears run the trend

It was quite interesting day for the USD/JPY pair, which marked an impressive high at 113.054, a level not seen since mid March. But bulls gave up during the US session and led the pair towards 112.38. 

Nothing certain could be said about the greenback, having in mind that DYX moved below the 99.00 level and the catalyst should be looked around elsewhere. US stocks are lower, but succeed to trim some of their losses. US Treasury yields pushed higher and marked fresh weekly highs, which somehow limited the Japanese Yen's gains. 

Technically speaking, the pair is situated well above the 100-day and 200-day SMAs, while the 20-day SMA is keeping its bulish stance. The four-hour time-frame is showing that RSI and stochastic had moved sharply lower and are heading towards oversold area, with string bearish momentum. 

Currently the pair is unable to break the strong dynamic resistance, that is standing at 112.50. Bears are dominating now with next target seen at 112.00. 

Aussie rejected at the upper line of the short-term downtrend

The Aussie plummeted today and marked lowest level since January, having hit intraday low at 0.7418. It seems quite reasonable on the back of falling commodities, as base metals closed sharply down and gold posted lowest level for the last month and it’s all in common with the weakened Chinese demand. 

Technically speaking the AUD/USD pair was rejected at the upper line of the short-term downtrend. On the daily chart the 20-day SMA has started to turn to south. RSI and stochastic are displaying sharp bearish slopes and both are currently being below their mid-lines. 

The rally might extend to downwards, as price is well below 0.7490 (strong support that turned to be resistance now). Staying flat on this pair seems to be most reasonable now.

The Glowing Dawn Went Down

In the middle of April Gold run above the $1295 level due to the fact that the post-March rate hike rally extended further. But since then the price started to move to downwards along with the upcoming FOMC rate decision on Wednesday. The relevance of Fed’s rate hike is quite meaningful, considering that during the the past six months we witnessed the two rate hikes which fuelled markets and set the bullish tone in the wake of the policy’s tightening.

Today XAU/USD came under huge selling pressure and fell to lowest level since mid-April at $1254 and the current market price is $1255. 

The four-hour time frame is showing that price has moved below the 38.2% Fibonacci retracement of latest March to April upleg at $1257, which was acting as a strong support line. Technical indicators are located within extreme overbought territory. RSI has lost directional strength, while stochastic is displaying strong bearish momentum. 

Major resistance is seen at $1271 (23.6% of above mentioned Fibonacci retracement), which is a very important level to consider, as being former support and April 26th’s  high. A decisive break below $1249 would drag Gold price towards  $1239 (March 5th’s low).  

EUR/USD Awaiting news to breakout the recent consolidation mode

The EUR/USD pair is trading slightly higher today with current market price 1.0905. The macro agenda is not offering much, having in mind that European markets are closed because of the Labor Day, but US released the Personal Consumption Expenditure Core (YoY)(Mar) numbers and ISM Manufacturing (APR) data, which do not seem likely to change the negative sentiment towards the greenback. Yet traders are looking for events of higher importance to potentially breakout the pair.

Technically, the pair remains in short term uptrend, despite the recent consolidation mode from the last six sessions of 1.0820 and 1.0950. On the four-hour time frame indicators has moved higher.RSI and stochastic are located slightly above their mid-lines and meanwhile the price is gravitating around the flat 20-day SMA, currently being at 1.0895.

Key resistance is seen at 1.0930 – 1.0950 area and in case bulls succeed to conquer it, next target is the psychological barrier at 1.1000. Looking to downwards, major support stands at 1.0855 and next one is located at 1.0820.