Will the EURUSD continue to fall?
Technical Analysis (October 6, 2014). The EURUSD tumbled to support
after better than expected Non-Farm Payroll. Will the trend continue in
trading this week?
EUR/USD Technical Analysis: Floor Set at 1.25 Threshold?
The Euro may be readying a rebound against the US Dollar
after prices put in a bullish Piercing Line candlestick pattern. A
daily close above support-turned-resistance at 1.2703, the November 2012
bottom, exposes the March 2013 floor at 1.2777. Alternatively, a drop
below the 23.6% Fib expansion at 1.2500 clears the way for a challenge
of the 38.2% level at 1.2377.
EUR/USD Scope For Recovery May Be Limited In Spite Of A Piercing Line (based on dailyfx article)
EUR/USD’s recent rebound has yielded a Piercing Line formation,
yet some skepticism over a recovery is warranted. The pattern requires a
successive up-day in order to be validated and to suggest a base may
have formed. This may prove a difficult feat given the sustained
presence of a downtrend and the sellers still sitting nearby at the
1.2700 handle. Further, the Euro’s path lower over recent months has
been littered with reversal signals that have failed to catalyze a
EUR/USD’s intraday recovery was preceded by a parade of Doji formations.
The candlesticks suggested hesitation by the bears to lead the pair
lower at the critical 1.2500 barrier. While an absence of reversal
signals leaves some doubt over a correction, the context on the daily
warns that scope for further gains may be limited.
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Something Interesting in Financial Video October 2014
newdigital, 2014.10.08 06:57
EURUSD and USDJPY - One Risks Correction, The Other Reversal
Normally, the media and market participants are hyping the risk of
reversal or volatility. It seems they under-appreciate it today. Both
the US Dollar
and equity indexes are standing on the edge of important technical
levels - a break from the greenbacks three-month trend and the floor of a
channel that stretches back to the beginning of 2013. Symbolic breaks
for either of these two can tip large fundamental imbalances to trigger
deeper trends. What is the potential this pressure represents? Which
faces the larger unwind? Why does the USDJPY appeal through more
scenarios while the medium-term EURUSD outlook is bearish even if the
greenback slips? We discuss these topics in today's Trading Video.
EUR/USD Technical Analysis: Profits Booked on Short Position (based on dailyfx article)
The Euro recovered against US Dollar as expected
after putting in a bullish Piercing Line candlestick pattern. A daily
close above support-turned-resistance at 1.2777, the March 2013 bottom,
exposes the 38.2% Fibonacci retracement at 1.2848. Alternatively, a turn
below the 1.2703-15 area marked by the November 2012 floor and the
23.6% Fib clears the way for a challenge of trend line
resistance-turned-support at 1.2673.
if actual > forecast (or actual data) = good for currency (for EUR in our case)
[EUR - French Trade Balance] = Difference in value between imported and exported goods during the reported month. Export demand and currency demand are directly linked because foreigners
must buy the domestic currency to pay for the nation's exports. Export
demand also impacts production and prices at domestic manufacturers.
Trading the News: Canada Net Change in Employment (based on dailyfx article)
The USD/CAD may face a larger pullback going into the end of the week
should Canada’s Employment report show a meaningful rebound in job
growth and fuel interest rate expectations.
What’s Expected:Why Is This Event Important:
An upbeat employment print may put increased pressure on the Bank of
Canada (BoC) to further normalize monetary policy, but we would need to
see a material shift in the forward-guidance to adopt a bullish outlook
for the Canadian dollar as Governor Stephen Poloz continues to endorse a
period of interest rate stability.Easing input costs along with the pickup in private sector activity may
generate a strong pickup in job growth, and a positive print may
threaten the opening monthly range in the USD/CAD as it boosts interest
However, weakening demand at home and abroad may drag on employment, and
a dismal development may heighten the bullish sentiment surrounding the
USD/CAD as it gives the BoC greater scope to retain its current policy
for an extended period of time.
How To Trade This Event Risk
Bullish CAD Trade: Canada Adds 20.0K or More Jobs
MetaTrader Trading Platform Screenshots
USDCAD, M5, 2014.10.10
MetaQuotes Software Corp., MetaTrader 5, Demo
USDCAD M5 : 59 pips range price movement by CAD - Employment Change news event
USDJPY Fundamentals (based on dailyfx article)
Fundamental Forecast for Pound: Neutral
The Japanese Yen surged versus all major counterparts as the US S&P
500 saw its worst weekly decline in over two years. There’s little
economic event risk out of Japan in the week ahead, but we think big
things stand on the horizon for JPY pairs.
Traders pushed the Japanese Yen to fresh multi-year lows versus the US
Dollar as broader financial markets soared, but a clear flight to
safety warns that the JPY may soon regain favor. Typically we would
favor the traditional safe-haven in the US Dollar through times of
Yet the clear fact is that speculators remain extremely short the Yen
and long the dollar (long USDJPY). This in turn suggests that the
Greenback could actually do poorly if we see further stock market
tumbles and a broader deleveraging across leveraged assets.
A virtually empty Japanese economic calendar in the week ahead suggests
that few expect major JPY moves. Our Senior Technical Strategist
nonetheless warns that the USDJPY may be nearing a significant breakdown.
And indeed we say this: don’t fall asleep on the Yen. It could very
well be that this is a minor S&P 500 correction within a much larger
bull trend. Yet we can’t rule out a larger pullback, and we believe
the JPY could surge if this is indeed the start of a larger market
GBPUSD Fundamentals (based on dailyfx article)
British Pound May Turn Lower as BOE Policy Standstill Continues
The GBP/USD may continue to carve lower-highs & lows in the week
ahead should the fundamental developments coming out of the U.K.
economy further dampen interest rate expectations.
The U.K. Consumer Price Index (CPI) may mark the lowest print since
2009 as the headline reading is expected to slow to an annualized 1.4%,
and the diminishing threat for inflation may heighten the bearish
sentiment surrounding the British Pound as the Bank of England (BoE)
remains in no rush to normalize monetary policy. It seems as though we
will continue to see a 7-2 split within the Monetary Policy Committee
(MPC) amid the limited headlines surrounding the October 9 interest
rate decision, and we may see Martin Weale and Ian McCafferty continue
to serve as the minority throughout 2014 as wage pressures remain
However, the September Jobless Claims report may generate a greater
rift within the BoE as Average Weekly Earnings are projected to uptick
for the first time since March, and a strong rebound in wage growth may
renew bets for higher borrowing costs as the central bank continues to
take note of the stronger-than-expected recovery in the labor market.
With that said, the inflation outlook is likely to heavily impact the
British Pound next week as BoE Governor Mark Carney retains a rather
balanced tone for monetary policy, and the central bank may have little
choice but to pay closer attention to the recent wave of U.S. dollar
strength as the depreciation in the exchange rate raise the risk for
As a result, the GBP/USD remains vulnerable to a further decline,
especially as the Relative Strength Index (RSI) retains the bearish
momentum carried over from back in July, with the next key downside
objective coming in around the 1.5900, the 50.0% Fibonacci expansion
from the 2009 lows.