Trade Idea: AUD/USD - Buy at 0.8075
Recent wave: Wave 4 ended at 0.8066 and wave 5 has possibly ended at 1.1081Trend: Down
Original strategy :Buy at 0.8075, Target: 0.8215, Stop: 0.8020
New strategy :Buy at 0.8075, Target: 0.8215, Stop: 0.8020
Aussie's rebound after falling to 0.8033 earlier this week suggests
consolidation above this level would be seen with mild upside bias for
test of 0.8158 resistance, break there would signal low has possibly
been formed, bring a stronger rebound towards resistance at 0.8216, once
this level is penetrated, this would add credence to this view, bring
retracement of recent decline to 0.8250-60 and later towards 0.8300-05
which is likely to hold from here.
In view of this, we are looking to buy aussie on dips. Below said
support would signal recent decline has once again resumed and extend
weakness in wave (5) to psychological support at 0.8000, however,
oversold condition should prevent sharp fall below 0.7940-50 and reckon
0.7895-00 (50% projection of 0.8723-0.8088 measuring from 0.8216) would
contain downside, risk from there has increased for a corrective rebound
to take place later this month.
if actual > forecast (or actual data) = good for currency (for USD in our case)
[USD - Non-Farm Employment Change] = Change in the number of employed people during the previous month, excluding the farming industry. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity
Forex Weekly Outlook January 12-16
Inflation data in the UK and the US, US retail sales, PPI and
employment data, Philly Fed Manufacturing Index and Consumer sentiment
are the main events on Forex calendar. Here is an outlook on the
highlights of this week.
Last week, NFP report was better than expected showing a job gain of
252K in December. The solid increase indicates further strengthening in
the US economy. The Unemployment rate fell 0.2% to a 6-1/2 year low of
5.6%, beating forecasts for a 5.7% reading. However, average hourly
earnings which showed a 6 cents increase in November, dipped 5 cents in
December. Long-term unemployed continued to shrink in December, but
the labor force participation rate fell to 62.7% from 62.9% in
November. Will wage growth in the US labor market continue improve in
the coming months?
AUD/USD Completes a Double Bottom; Watch for Resistance (based on forexminute article)
NFP Report was a bit crummy. Although the headline reading
was slightly above forecast and the unemployment rate fell, labor
participation also dropped to its lowest rate in 33 years, and average
hourly earnings fell in December. This gave way to some correction
against recent USD strength, and the AUD/USD rallied.
The 4H AUD/USD chart shows that a double bottom was formed after today’s
NFP report. Now, we want to see confirmation. If price gets to
0.8215-0.8235, we should expect some resistance. If there is one, we
should monitor the 0.8125 area. A bullish market should hold above this
level. However, a break below 0.81 makes it unclear, and a break below
0.8087 is likely to signal bearish continuation, or at least a sideways
instead of a bullish consolidation. This would put pressure on the
0.8035 low, with risk of breaking towards the 0.80 handle. On the other
hand, a break above 0.8250 would signal a more bullish type of
correction within a medium-term consolidation mode.
USDJPY Fundamentals (based on dailyfx article)
Fundamental Forecast for Japanese Yen: Bullish
The Japanese Yen snapped a multi-week losing streak
for the US Dollar as it rallied noticeably off of recent lows. A
slowdown in global economic event risk may produce smaller moves ahead,
but we’re watching key levels on the USDJPY as the risk of a larger JPY correction grows.
Traders sent the Japanese currency near fresh
multi-year lows into the final trading days of 2014, but an important
bounce in the New Year suggests conviction in the JPY-short trade
(USDJPY-long) has faded. Price action seems remarkably similar to what
happened exactly 12 months ago: the USDJPY topped on the first trading
day of 2014 on its way to a four percent correction. A comparable move
would send the Dollar to ¥115 before a resumption in the overall
A relatively quiet week in both Japan and the US
nonetheless suggests traders may wait until the following week’s
highly-anticipated Bank of Japan policy meeting to force big Yen moves.
Yet traders should keep a close eye on USDJPY price action as it trades at potentially significant price support, and a break below month-to-date lows near ¥118 could force a larger move towards December’s trough at ¥115.60.
A strong correlation between the Japanese Yen and the Nikkei 225/US S&P 500
tells us the next big USDJPY move could coincide with equity market
turmoil. An important drop in the S&P Volatility Index (VIX) shows
that few fear any such tumbles, but market conditions can and do change
Overall outlook for the Dollar and Japanese Yen in 2015 make a USDJPY-long position one of our favorite trades of the year.
Yet a year is a long stretch of time in trading markets, and prices do
not move in straight lines. We are cautious on fresh USDJPY-long
positions given clear risk of a larger short-term
correction—particularly ahead of the Bank of Japan meeting on January
USD/JPY Weekly Fundamental Analysis, January 12-16, 2015 – Forecast (based on fxempire article)
ended the week at 118.47 falling 1.19 on Friday alone as the US dollar
eased after the release of the jobs data. The Japanese Yen snapped a
multi-week losing streak for the US Dollar as it rallied noticeably off
of recent lows. A slowdown in global economic event risk may produce
smaller moves ahead, but we’re watching key levels on the USDJPY as the
risk of a larger JPY correction grows.
Analysts also took that as a possible pointer to the Federal Reserve
taking its time on raising interest rates this year, against some
expectations prior to the report that an initial hike from the zero
level could come as early as April.
In a reversal, the government now expects the economy to shrink
around 0.5 percent in real terms for fiscal 2014, downgrading its July
forecast of 1.2 percent growth, sources said Friday. The global plunge
in oil prices could translate into annual economic gains of ¥7 trillion,
Economic and Fiscal Policy Minister Akira Amari said Friday. “Oil
prices are now less than half what they were at their peak. That stops
USD/JPY weekly outlook: January 12 - 16 (based on investing article)
The dollar fell against the yen on Friday after the latest U.S. jobs
report showed that average earnings fell last month, suggesting that the
Federal Reserve could keep rates on hold for longer.
The U.S. economy added 252,000 jobs in December the Labor Department
said, more than the 240,000 forecast by economists. The unemployment
rate ticked down to a six-and-a-half year low 5.6% from 5.8% in
November. Economists had forecast a decline to 5.7%.
However, the report also showed that average earnings fell by 0.2% in
December, missing expectations for a 0.2% increase and were up by just
1.7% from a year earlier.
The drop in average earnings prompted investors to take profits in
the dollar, as markets pushed back expectations for the first hike in
U.S. interest rates to late-2015 from mid-2015 before the report.
Following an initial move higher the dollar fell against the yen, with USD/JPY down 0.99% to 118.46 late Friday. The pair ended the week down 1.6%.
The U.S. dollar index,
which measures the greenback’s strength against a trade-weighted basket
of six major currencies, was down 0.39% to 92.18 late Friday, off the
12-year peaks of 92.76 reached in the previous session. The index still
notched up a weekly gain, supported by weakness in the euro.
The euro ended the week at more than two-month lows against the yen, with EUR/JPY down 0.57% to 140.32 in late trade, the weakest since October 31.
In the euro zone, data on Friday showed that industrial output fell
in both Germany and France in November, while German exports also fell.
The weak data fuelled speculation that the European Central Bank will
embark on full blown quantitative easing as soon as its next meeting on
Earlier in the week, data showed that consumer prices in the euro
area fell in December for the first time in more than five years, adding
to pressure on the ECB to step up measures to avert the threat of
deflation taking hold in the region.
The single currency was also pressured lower by uncertainty over
Greece’s future in the euro zone if far-left anti-austerity party Syriza
win elections due to be held later this month.
In the week ahead, the economic calendar is light, but markets will
be looking ahead to Wednesday’s report on U.S. retail sales, as well as
Friday’s data on consumer sentiment and factory output.
Monday, January 12
Tuesday, January 13
Wednesday, January 14
Thursday, January 15
Friday, January 16
USD/JPY Near 118 after U.S. Payrolls Disappoint (based on marketpulse article)
The dollar nursed losses early on Monday, having suffered a setback
after an unexpected fall in U.S. wages tainted what was otherwise a
robust report on the labor market.
Investors were quick to cut long dollar positions after wages posted
their biggest decline in at least eight years in December, even as
payrolls increased by a brisk 252,000.
The greenback dipped as far as 118.22 yen first thing on Monday,
reaching a low last seen on Jan. 6. The euro edged up to $1.1857,
pulling away from a nine-year trough of $1.1754 plumbed on Thursday.
USDJPY Threatens Opening Range- Sub 118 Targets In View (based on dailyfx article)