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EUR/USD: the USD is gaining strength again Current trend The European currency has been declining against the USD for the second consecutive week due to negative fundamental statistics on the key sectors of European economy and favourable data on the US labor market. In addition, expectations of monetary policy tightening, as well as the increase in the core interest rate by the US Fed is also a driver of the growing demand for the USD. Yesterday, the pair continued to move in the downtrend. Additional pressure on Euro was caused by poor data on the consumer confidence index in France. This morning, the pair EUR/USD experienced upward correction and won back some of the losses. At the moment the pair is traded at the level of 1.0940. Special attention today shall be paid to the American labor market statistics. In case of strong data, the pair may go to the new local lows. On the other hand, tomorrow, US GDP will become known, and if this index turns out to be in the red zone, it will have negative impact on the USD. Support and resistance It is expected that the American currency will continue to grow and the pair will reach the lows of March (1.0460) and April (1.0525). However, as alternative scenario of the development of uptrend in the wide range is also possible. In this case, from the current price level the pair will slowly go to 1.1540 and 1.1600. Support levels: 1.0920, 1.0860, 1.0820, 1.0775, 1.0710, 1.0660, 1.0585, 1.0525 and 1.0460. Resistance levels: 1.1020, 1.1075, 1.1135, 1.1215, 1.1280, 1.1385, 1.1450, 1.1540, 1.1600 and 1.1670. Trading tips The pair is at the crossroads and in this situation it is difficult to predict future movement direction. It makes sense to place pending orders to sell below the key support level of 1.0820 and in anticipation of the breakdown of this level and further downward movement in the pair. Take profit is advisable at the level of 1.0460. In addition, it also makes sense to open long positions near the current local lows of 1.0820 with short stop-loss and take profit at the level of 1.1600. These positions will give a chance to catch upward wave with the risk of losing few dozens of points.
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Brent: а week before OPEC meeting Current trend Regardless of anticipations of the OPEC meeting on 5 June, quotes of oil futures continued to grow on Friday. The rise was caused by the reduction of the commercial oil stock in the USA for the fourth consecutive week which in its turn, was triggered by the decline in imports of oil, caused by the reduction of oil drilling rigs in the country. On ICE, July futures for crude oil Brent have recently grown by 0.9% up to 63.17 USD per barrel. Nevertheless, large investors stay away from oil market in advance of OPEC meeting. It is expected that at the meeting quotes of oil production will not be reduced in order to maintain price levels. Based on the above and taking into account that oil production in some new fields in the Gulf of Mexico has grown and export of oil in Saudi Arabia has also increased, it is unlikely that oil price will grow in the medium-term. The rise in price of oil will be also affected by strengthening in the USD, caused by the US Fed policy aiming to raising interest rates before the end of the year. Attention today shall be focused on the annual data on the US GDP as well on the GDP of Canada. Given that today is the last trading day of the week and the month, you should be particularly careful when making trading decisions. Support and resistance On the four-hour chart the price has broken down the lines ЕМА200 (63.90) and ЕМА144 (64.50). The indicators OsMA and Stochastic do not give sell signals yet. On the daily chart the price is near Fibonacci retracement of 23.6% at the bottom lines of the ascending corrective channels on the Moving Average line ЕМА50. The indicators OsMA and Stochastic are in the sell zone. Support levels: 63.90, 64.50, 65.70, 66.40, 67.80 and 69.55. Resistance levels: 61.65, 61.20 and 60.00. Trading tips It is preferable to open short positions. It is also advisable to place sell orders in small lots at the current price level. Cautious strategy of placing “Sell Limit” from the levels of 63.90, 64.50 and 65.70 with the targets of 62.80, 61.65, 61.20, 60.00, 59.00, 55.00 and 53.00. Alternative scenario: In case of breakdown of the level of 66.70, the price will go to 70.50(ЕМА200 on the daily chart) and 72.70(Fibonacci 8.2%).
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EUR/USD: general analysis Current trend Yesterday, the European currency has increased by over 250 points. The rise was caused by the news that International Monetary Fund came to agreement with the Greek authorities with regards to the aid plan. In exchange of the Greece aid funds Greek government will have to implement economic reforms. Preliminary plan of reforms was sent to the lenders on Tuesday. The document will be considered for about a week, and then the final version will be forwarded to the Greek government for the final review and signing. According to the preliminary evaluation, Greek will get some preferences and Europe will be entitled to reduce debt burden of Greece. We cannot predict the reaction of the Greek government, but it is clear that Greece has no much choice being on the verge of bankruptcy. Note also that interest rate decision of ECB became known today. As expected the rate remains unchanged at the level of 0.05%. Support and resistance The nearest resistance level: 1.1169 – 6/8 Murray Support level: 1.1108– 1/8 Murray Trading tips It is recommended to open long positions after breakdown of the level of 1.1169 with protective orders of 1.1120 and the target of 1.1300.
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GBP/USD: overall review Current trend Today’s main news is the US non-farm payroll. At the European trading session the USD fell against the USD, but went up against the other currencies, including the pair GBP/USD. The rise in the cross-pair EUR/GBP also has pressure on the Pound. It became known that on Thursday the Bank of England left interest rate at the previous level of 0.5%, as well as the volume of assets purchase (375 billion pounds).The Pound has been falling over the last three days after the release of the British data on the key economic indices for May, as well as GDP growth and also due to the comments by the head of the Bank of England Mr. Mark Carney that strong Pound is not favourable for the economic growth in the country. Today, despite the increasing expectations of the inflation in consumer price (from 1.9% to 2.2%) the Pound continues to decline in the pair with the USD. Support and resistance On the four-hour chart the Pound has broken down support levels of ЕМА144 and ЕМА200 and is moving in the downward channel. The indicators OsMA and Stochastic demonstrate sell signals. On the daily chart the decline in the Pound will reach support levels of ЕМА50 (1.5290) and Fibonacci 23.6% (1.5230). In order to provoke sale Stochastic shall give clearer signals. Today fundamental data prevails over the technical ones. If the US NFPR will meet or exceed the forecast of 225 000 new jobs, the USD is likely to grow. The pair GBP/USD can decline to the lows of the year at the level of 1.4600. Otherwise, the Pound will grow but it is unlikely to exceed resistance levels of 1.5530 (ЕМА200) on the daily chart and 1.5600 (Fibonacci 38.2%). Support levels: 1.5230, 1.5200, 1.4965 and 1.4880. Resistance levels: 1.5400, 1.5530 and 1.5600. Trading tips It makes sense to open short positions from the levels of 1.5330 and 1.5365 with the stop-loss of 1.5385 and the targets of 1.5230, 1.5200, 1.4965 and 1.4880. As an alternative scenario it is possible to open long positions with the targets of 1.5530 and 1.5600 after breakdown of the level of 1.5400.
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EUR/USD: Following the release of Non-Farm Payroll report Current trend In the past month all major currencies, except Euro, have been weakening against the USD. Volatility in the pair EUR/USD has shifted towards strengthening in Euro. Extensive sale of German bonds helped strengthening in Euro. Euro was sold very actively in the cross-pairs. Nevertheless, the pair EUR/USD is under pressure from the unresolved issue of the Greek debt. This morning, European stock markets fell due to the attempts of Greece to come to financial agreement with international lenders. At the beginning of trades Stoxx Europe 600 has lost 0.2%. Later, the pair EUR/USD strengthened due to the positive foreign trade surplus in Germany for April (22.3 billion euro because of the rise in exports by 1.9% compared to March). Industrial production has also increased more than expected in April (1.4% versus the forecast of 0.2%). Last Friday the USD has considerably grown in the pair and in the market after the release of positive Non-farm Payroll report. On Monday the USD is undergoing correction. Support and resistance From the technical point of view, on the daily chart the pair is moving in the channel of upward correction (green color). Upward movement in the pair is restricted by the resistance levels of 1.1290 (Fibonacci 23.6%), 1.1450 (ЕМА144), 1.1700 (ЕМА200) and 1.1785 (Fibonacci 38.2%). Stochastic gives a sell signal. OsMA histogram is rising, demonstrating long positions. On the four-hour chart the pair is near support levels of ЕМА144 and ЕМА200 (1.1090). Although OsMA histogram and Stochastic are in the sell zone, they demonstrate buy signals Support levels: 1.0900, 1.1000 and 1.1090 Resistance levels: 1.1290, 1.1450 and 1.1700 Trading tips Wait for the completion of the correction and place pending sell order from the level 1.1290, stop-loss from the level of 1.1070 and the target of 1.0720. If the level of 1.1290 is broken down, the targets will be at the levels of 1.1450, 1.1700 and 1.1785.
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USD/JPY: Temporary respite Current trend It is expected that at the next meeting of the Bank of Japan on 18-19 June the regulator will leave interest rate unchanged. Expectations of the interest rate increase by the US Fed will put into perspective the necessity of monetary policy easing and will boost the rise in the pair in the medium-term. A lot will depend of the state of the US economy. Over the last month the Japanese Yen has lost over 500 points, going to the level of 2002 at 125.80. The weakening in the Yen was caused by the aggressive soft policy of the bank of Japan and the intention of the US Fed to raise interest rate. Following the release of the US Non-farm Payroll last Friday, the USD has grown against major currencies. Within one day the pair USD/JPY has lost over 130 points. Nevertheless on Monday and Tuesday the pair rolled back to 124.00. On Tuesday the pair was under pressure from the decline in the Asian stock indices. Indonesian index JSX fell by 2.3%, while Philippine index dropped by 2.1%. The Taiwan index fell by 1.9% and Japanese index of Nikkei Stock Average declined by 1.8%. At 07:30 (GMT+3) on Friday the data on Japanese industrial production will become known. If the data will be positive, as expected, the Yen will grow. Support and resistance Support level is the bottom line of the channel at the level of 124.10, ЕМА50 on the four-hour chart and Fibonacci 23.6%. In general the pair is in the correction stage going to support level of 124.10 (Fibonacci 23.6%). On thr daily and four-hour chart the indicators OsMA and Stochastic show short positions on the pair. If the decline in the pair continues, it will not exceed the level of 123.10 (Fibonacci 38.2%) and the range of 122.00–122.50 (moving average lines ЕМА144 and ЕМА200 on the 4-hour chart and Fibonacci 50.0%). At this level pending buy order can be placed. Support levels: 123.10, 122.50, 122.00 and 121.60. Resistance levels: 125.65 and 126.10. Trading tips It makes sense to place pending orders to buy from the levels of 123.10, 122.50 and 122.00 with the targets of 125.65 and 126.00. Alternative scenario: if the level of 121.60 is broken down, the pair can go to 120.50 and 119.15.
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USD/JPY: Kuroda has recanted his comments Current trend At the Asian session the Yen fell against the USD when the governor of the Bank of Japan Mr. Haruhiko Kuroda has recanted his own statement on the completion of the weakening tendency in the Yen. The stock market also declined: Nikkei Stock Average and Hang Seng Index fell by 0.65 and 0.9% respectively. However, today the market is quiet due to the uncertainty in the situation with the Greek debt and expectations of the US Fed decisions on the interest rate, which will be known on Wednesday 21:00 (GMT+3). Japanese trade balance will be also known on Wednesday. On Thursday at 02:50 (GMT+3), the data on foreign investments to Japanese economy will be made public. On Friday at 08:00 (GMT+3) Japanese economic indicators for April will be released. In the medium-term the Yen will remain weak because of the soft monetary policy of the Bank of Japan. Support and resistance The pair USD/JPY is moving in the upward channel between the levels of 123.15 (Fibonacci 38.2%) и 124.10 (Fibonacci 23.6%). If the price breaks down of the level and reaches the level of 125.65, the pair can go further up to the highs of 2002 at the level of 135.00. OsMA indicator is in the sell zone on the daily chart and in the buy zone on the four-hour chart. Stochastic gives buy signals on the daily chart and is located in the neutral zone on the four-hour chart. Support levels: 122.40, 122.85 and 123.15. Resistance levels: 124.10, 124.50 and 124.80. Trading tips It is recommended to open long positions from the levels of 122.40, 122.85 and 123.15 with the targets of 124.10, 124.80 and 125.65. Short positions with the targets of 121.60, 120.80, 120.20 and 119.15 can be opened after breakdown of the level of 122.40.
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GBP/USD: general review Current trend The price of the GBP/USD pair continues rising. Yesterday’s poor data on the UK consumer price index with a growth of 1% compared with 0.9% for the last year could not put a prolonged pressure on the GBP. Today, the pair continues to grow as rather positive data for April is published in the UK. Average earnings grew by 2.7% while unemployment remained at 5.5%. The Bank of England committee decided to keep rates unchanged, however, 2 out of 9 members hinted for the possible rate hike in the near future. This added to the investors’ confidence and the pair continued growing to the local maximum of 1.5755. Later today, investors are expecting the Fed press conference, which might have an impact on the pair. Support and resistance Resistance levels: 1.5755, 1.5815, 1.5905, 1.5950. Support levels: 1.5625, 1.5580, 1.5540, 1.5485. Trading tips On the four-hour chart, the Bollinger bands are widening confirming the current upward trend. However, the correction towards 1.5607 is possible as the price broke down the upper line. MACD histogram is in the positive zone with rising levels, which signals ‘buy’. Open long positions from the breakout at 1.5755 with targets at 1.5815, 1.5905. Short positions should be opened after the breakdown and consolidation below 1.5580 with targets at 1.5540, 1.5485.
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NZD/USD: the pair declines amid the data on New Zealand’s GDP Current trend Despite overall decline in the USD caused by yesterday’s news on the interest rate in the USA, the pair NZD/USD continued to decline. NZD/USD fell to the new lows of 0.6880 after the release of the disappointing data on New Zealand GDP, which rose by 0.2% in Q1 against the value in the previous month and by 2.6% compared with the same period last year. The forecast was 0.6% and 3.0% respectively. The decline in New Zealand dollar took place also in the cross-pairs. Layer the pair slightly corrected. However, it is expected that NZD/USD will continue to decline to the target level of 0.6800. Support and resistance On the daily and four-hour chart Stochastic is in the oversold zone, while OsMA is in the sell zone. Short positions are still preferable and any correction can be considered as the possibility of entering the market with the short positions. Support levels: 0.6930 and 0.6850. Resistance levels: 0.7050, 0.7090, 0.7100, 0.7185, 0.7200, 0.7220, 0.7275 and 0.7300. Trading tips It makes sense to open short positions from the levels of 0.7000, 0.7020 and 0.7100 with the target of 0.6800. As an alternative scenario long positions with the targets of 0.7300, 0.7450 and 0.7540 can be opened if the price breaks down the level of 0.7220 and the indicators OsMA and Stochastic go to the buy zone.
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GBP/USD: after yesterday’s gap Current trend Yesterday’s movement of the Euro did not have a big effect on the GBP/USD pair. From the beginning of the week, Greek situation has the main influence on the markets. Greece’s possible default and exit from the Eurozone may lead to market instability and force the US Fed and the Bank of England to be more careful with their monetary policy decisions. According to the Bank of England, inflation is going to rise towards the end of the year and thus nobody from the committee voted for interest rate cuts. Average income in the UK for February-April grew by 2.7% (forecasted +2.1%), the unemployment level remained at 5.5%. Important news for today include Consumer Price index and unemployment level for May in Eurozone, due at 12:00 pm (GMT +3). Between 3:55 pm and 5:00 pm (GMT+3) few releases are out in the US: Redbook index, the S&P/Case-Shiller Home Price index for April, Chicago Purchasing Managers’ index for June and Consumer Confidence for June. Should the positive forecasts match the actual figures, the USD strengthens. Support and resistance From July 2014, the pair was falling from 1.7200 to 2015 April’s low of 1.4600 and since then remains in the upward channel (green color). The price remains between psychologically import resistance levels of 1.5600 (38.2% Fibonacci) and 1.5900 (50% Fibonacci). A breakout in any direction will determine the movement of the pair in the medium-term. On the daily chart, support levels are 1.5550 (EMA200) and 1.5460 (EMA144). On the 4-hour and daily charts, OsMA and Stochastic give sell signals. Support levels: 1.5460, 1.5550, 1.5600. Resistance levels: 1.5800, 1.5900. Trading tips According to OsMA and Stochastic signals on 4-hour and daily charts, short positions are recommended from 1.5730 with targets at 1.5600, 1.5550, 1.5460 and stop-loss at 1.5820. The breakout of 1.5800 will allow to open long positions with targets at 1.5900 and 1.6200.
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