Monday, July 31, 2017

The Forex Calendar For This Week



Since this week is the first Friday of the month, the US Change in Non-Farm Payrolls (aka NFP) data will be announced. Apart from that, however, there will be quite a few other events that will have a major effect on the market.

While Monday is event free, on Tuesday, on the other hand, will be announced the Reserve Bank of Australia Rate Statement, the British Manifacturing PMI and the US ISM Manifacturing PMI.

On Wednesday will be announced the US ADP Non-Farm Employment Change and the Crude Oil inventories.

On Thursday will be announced the Bank of England Inflation Report, the British Monetary Policy Committee Official Bank Rate Votes, the official Bank of England Rate, and there will be a speech by BoE Gov. Mark Carney. Later that day there will be announced the Reserve Bank of Australia Monetary Policy statement.

And, of course, the main event of the week will be on Friday, when they announced the US Change in Non-Farm Payrolls.

Saturday, July 29, 2017

A GBP/USD Assessment For The Upcoming Week



The GBP/USD pair reached an important resistance level in the zone around 1.3130 – 1.3140 and for the moment the pair continues developing within the upward channel.

This is a key level, however, because the pair has reached the resistance trend line of the upward channel (in red) and the resistance trend line (in blue) of the trend from 6th July 2016 until now.

Also, on the D1 time frame there is RSI divergence compared to the bullish development of the pair.

The scenarios for next week are two:

The pair could drop to the support trend line of the upward channel, considering the RSI divergence and the strong resistance level GBP/USD is at.

If there is a break out above the trend lines and the price remains above them that would invalidate the bearish scenario.


Friday, July 28, 2017

EUR/USD Reached A Key Level


EUR/USD barely broke out above the high from 23rd August 2015, which was at 1.17137>>> 
and is now at a critical level, because if you take a look at the monthly time frame chart you’ll notice this is a strong resistance zone for the EUR.

Today the pair renewed its rally after dropping with about 130 pips yesterday, but for the moment it hasn’t formed a new high.

Right now there are two main scenarios:
If the EUR manages to remain above 1.17767 (the high from 27th July 2017) it is possible for the rally to continue and for the third wave to lengthen.
The second scenario could occur after a period of struggle between the bulls and the bears, which will affect the bars being formed and then there could be a drop to 1.11 or lower.


Wednesday, July 26, 2017

USD/CAD Before The FOMC Interest Rate Statement



After the big drop from 1.37931 to 1.2480 USD/CAD stopped in the strong support zone around 1.2450 – 1.2500.


During the past ten days (from 13th July to 25 July) the pair formed a trend channel which can be observed best on the H4 and H1 time frames. Its height at its base is around 100 pips. I would call it an ending diagonal, but I think it is less important how we’d call it than figuring out what it is a signal for.

If we take into account the support zone the pair is developing at and the ending diagonal it is developing within, as well as the impending announcement of the interest rate by FOMC, I think that we could expect a corrective rally with first target around 1.2620 – 1.2630.

In the alternate scenario there will be a drop to 1.2430 – 1.2400.

And since for the moment there is no expectation that interest rate will be changed from 1.25 I think it is a good idea to pay attention to the technical analysis of the USD.


Tuesday, July 25, 2017

The ActivTrades Economic Calendar



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Monday, July 24, 2017

GBP/USD Reached A Key Resistance Trend Line



If we examine GBP/USD on the weekly time frame we’d notice that it is developing within a relatively wide upward consolidation and it has reached the resistance trend line (in blue) of the drop from 6th July 2014 to 2nd December 2016.

At the same time, the consolidation from 8th January 2017 (1.17914) up until now has been forming an upward trend channel (in red) and it is possible for the pair to continue developing within that channel for quite a while.





On the H1 time frame the pair is also forming a channel (in green) but at the moment it’s difficult to say in which direction the breakout will be.

In case the pair breaks out below the support trend line I think we could expect a drop to 1.2760 – 1.2750.

In the alternate scenario the pair will break out above the resistance trend line and it will rally to 1.3120 and then to 1.3280-1.3300.


Saturday, July 22, 2017

USD/JPY Assessment



On the smaller time frames USD/JPY looks like it is renewing its move to the downside.
The picture on the longer time frames is clearer. On the weekly time frame there is a clear consolidation between the support and resistance trend lines in blue.


On the monthly time frame the picture is even more telling:

One can clearly see that the wide consolidation that is developing at the middle line of the Bollinger Bands indicator, which is essentially a MA20. I have mentioned more than once that line tends to draw the price like a magnet.

I think it is possible for the pair to fall to the support trend line (in blue) but it is also possible to start rallying from the current level.

For me, however, the priority scenario for the moment is this:

At the end of the currently developing wide consolidation there should be a rally of the pair toward 122.00 and above and a development of Wave C of the currently developing A-B-C correction (in red).


Friday, July 21, 2017

There Might Be A Long Term USD/CHF Drop



After developing for six years within a wide consolidation USD/CHF might be forming a pennant and if it breaks out below it the pair could reach 0.65 or even fall below that level.

This is, at least, how the situation looks like from a technical analysis point of view, but we should not forget two things:

The large monthly bar from January 2015 was formed for just one day – on 15th January 2015, when the Swiss Bank suddenly announced it would not hold the Swiss franc at a fixed exchange rate with the Euro and that announcement caused USD/CHF to suddenly fall with almost 3000 pips over the course of mere hours.

Still, there is a distinct pennant on the charts and if the Swiss Bank doesn’t interfere with the market again the perspective is that the CHF will rally, as much as the Swiss financial institutions wouldn’t want that.


Thursday, July 20, 2017

The Market Forced Me To Reassess My Expectations For EUR/USD



I had barely written that I expect a deeper correction and EUR/USD proved me wrong without a doubt. The pair broke out above 1.1600 with ease and has risen with 180 pips today alone, reaching 1.1658 at the beginning of the American session.

This development is forcing me to reassess my expectations.

The pair’s rally is starting to resemble an impulse to the upside, which is very close to reaching 1.17137 (the high from 23rd August 2015).

If the pair breaks out above that level too that supposition – that the development resembles an impulse – could prove true.

In this case this impulse could be Wave A to the upside.

If that supposition is correct, then there should not be a deep correction, because it is possible for Wave 3 (blue) of Wave A to be developing, and Wave A has the structure of an impulse according to the Elliott Wave Theory.

All this means that in the following years we could see a serious rally of the European currency.


I Expect A Deeper EUR/USD Correction



EUR/USD reached 1.15831 and together with that reached a strong resistance zone marked by the upper Bollinger bands on both the monthly and weekly time frame. It is reasonable that the pair could not break out above them and began a correction instead.


I think that correction will be deeper than the ones that formed during the rally from 1.05693 to 1.15831 and on the way down the strongest support will likely be the one marked by the blue support trend lines formed by the upward trend. I expect that the initial drop will reach 1.1450 – 1.1400, but I doubt the correction will end there.

The lower but stronger support levels are at 1.1350 and 1.1200 (which are 23.6% and 38.22% Fibo of the last rally).

Despite all that, in my opinion the current drop is corrective and once it is over we could expect a renewal of the move to the upside.

In the alternate scenario the downward trend will continue to 1.1000 and lower.


Monday, July 17, 2017

EUR/AUD Is Aiming For The Support at 1.4450



EUR/AUD is in the support zone around 1.4650, but in my opinion the pair will break out below that support and the pair will continue falling toward the next strong support zone around 1.4450, which could hold off the move to the downside for a longer period of time.


Still, we should not forget that there is an unrecovered gap of about 180 pips (from 21st – 23rd April 2017) and it is very possible for the pair to recover it during the next drop.

If that happens we could expect the drop to continue for a test of the support around 1.3750 – 1.3800.

In the alternate scenario the pair won’t succeed in breaking below 1.4450 and it will renew its upward trend to 1.5500 - 1.5550.


Saturday, July 15, 2017

USD/JPY In The Medium Term



 The USD/JPY pair could not break out above 114.50 and started falling. For the moment that is a corrective drop, but I think it could continue to around 111.70 – 111.50.


On the H4 time frame one can clearly notice that the waves to the downside have formed in threes and the third wave does not look complete – I think it will continue to 111.90 – 111.70. The drop to 111.50 is also very much possible. My expectation is that at that level the USD will find a strong support and the rally will be renewed.

The first target of that rally would be around 115.30 – 115.50, and after a breakout there could be another rally to 119.00 - 120.00.

In the alternate scenario there will be another drop and then a test of the weekly support around 109.50 – 109.00. I think, however, that scenario is less probable.

Friday, July 14, 2017

EUR/USD Is At A Crossroads



EUR/USD is at a major crossroads today and obviously neither traders nor investors can pick a direction yet.

On the monthly time frame the pair is at a very strong resistance level, but that doesn’t mean that the pair cannot form a new high before it begins a correction. Also, on the W1 and D1 time frames there is clearly still room for a rally.

The H1 chart is interesting, as one can draw several trend lines on it.

Obviously the pair is trying very hard to break out above the resistance trend line of the red trend channel and has formed a pair of false breakouts, after which it has returned within the channel.
Still, if it does succeed in breaking out above that trend line we could see a rally to 1.1500 - 1.1520.
If it fails to break out above the trend line I think we will witness a deeper correction to the downside toward the zone around 1.1370 – 1.1350.


Thursday, July 13, 2017

A Possible Corrective USD/JPY Drop To 112.00


The resistance at 114.50 unequivocally stopped the USD/JPY rally and the pair has moved to the downside with 180 pips for the past three days.

It is possible for the drop to deepen toward 112.00 or even toward 111.50.
Despite that, in my opinion the move to the downside is corrective and it is forming in order for the pair to gather liquidity. After it has ended I think we can expect a renewal of the rally to 118.50 or even to 122.00.

Of course, all those conclusions are based on the W1 time frame, which means that the assessment applies to the medium term.


Regarding my short term expectations, if we look at the H4 time frame we will see that we can expect a rally to 113.50 – 113.70 before there is an attempt to reach the first stronger support level at 112.50.

Tuesday, July 11, 2017

An ActivTrades Webinar: “UK Election Result, a Month Later”



When the UK Prime Minister Theresa May announced that a snap general election will be held in the UK on 8th June 2017 in the hopes of gaining more support from the Parliament for the upcoming BREXIT negotiations she caused quite the shockwaves in the social, finance and political world. It has been a month since those elections were held and the results were not, perhaps, as the Prime Minister had hoped. 

Whatever the results, however, they will have a major effect on the market going forward for a long time to come. In order to better understand that effect you can attend the webinar “UK Election Result, a Month Later” organized by the leading online broker ActivTrades. Proprietary trader and financial markets expert, Stephen Hoad will take a look at market conditions a month on from the UK snap election and assess market sentiment. 

The webinar will be held on 12th July from 7pm to 8pm. Attendance is free of charge.

For more information and to register for this webinar please follow this link.>>>