ThirdBrainFx Market Commentary - page 5
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
The EURUSD pair has been trading higher since the last week after the ECB interest rate decision. The ECB decided not to make any changes in the existing policies, but in fact they upgraded the growth forecast for the Euro zone. This lifted the EURUSD, and the pair traded to a new yearly high above the 1.3900 level.
The pair again blasted higher in the Asian and European session. The bulls simply do not want to give up easily. They eagerly want a test of the 1.40 level in the short term. It would be very interesting to see the reaction around or above the 1.40 level. Can you see the massive trend line on the weekly chart, as shown below? The pair has just hit the same. So, there are tons of resistances on the way up for the pair. However, selling the pair will not be a wise idea, in my opinion, until there are enough reasons to sell the pair. So, I am staying away from the pair in the short to medium term.
Market Commentary – March 13, 2014
The Australian Bureau of Statistics released the employment change figure during the early hour of the day, at GMT 12:30 AM. This economic indicator measures the changes in the number of employed people during the previous month. Since job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity, investors consider this data to be of vital importance. The forecast for the Australian employment change figure was set at 15,300, but the actual figure came out way better than expected, at 47,300.
The Australian Bureau of Statistics also released the unemployment rate which remained at 6.0%, same as last time.
At GMT 1:10 AM, the Chinese year-over-year industrial production change figure was released by the National Bureau of Statistics. This economic indicator measures the changes in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. As the production is the dominant driver of the economy, investors consider this data to be a leading indicator of economic health.
At GMT 12:30 PM, the US Census Bureau will be releasing the core retail sales figure (m/m), which measures the changes in the total value of sales at the retail level. This data is similar to the retail sales data but it excludes the automobile industry due to being too volatile. The forecast for the US core retail sales was set at 0.2% increase, and the actual figure came out better than expected, at 0.3%.
At the same time, the US Department of Labor released the most important fundamental data of the week, the US unemployment claims figure. This economic indicator measures the number of individuals, who filed for unemployment insurance for the first time during the past week. Last week, the US unemployment figure came out at 324,000, and the forecast for this week was set at 334,000. However, the actual figure came out way better, at 315,000.
NZDUSD Outlook
It didn’t take long after our last analysis for NZDUSD to rally above January 14th swing high, closing strong above the resistance for a clean break.
Although there was some bearish price action on the 4H chart late last week, followed by a few days of consolidation above 0.8431, there wasn’t much to it. Once sellers tested the broken resistance level, buyers successfully turned into support (with a little help from 200 Simple Moving Average on the 1H timeframe) and there was no looking back. A huge bullish engulfing bar price action pattern, formed on all timeframes between 1H and Daily, eventually took NZDUSD up to our analysis target of 0.8542, and above.
Towards the upside, the next resistance to come into play is located at 0.8584. This is an old long term trend line based on the highs of 2011 and 2013, marking the resistance of a huge triangle formation. It remains to be seen if the market will react to it in any way. Further up, 0.8675, the 4th November 2013 swing high, can be construed as another target if the rally continues at this pace.
Towards the downside all resistance levels should be watched as potential support levels. Selling is indicated only if price responds negatively after touching known resistance levels, or if a bearish price action pattern appears on the 4H timeframe and higher.
One of our top performing automated strategies, MorningBull, has already opened several long position with the NZDUSD. If the NZDUSD reaches its target price around the 0.9070 level, then the NZDUSD's profits will represent over 200 points of profits altogether. Right now, the MorningBull strategy has over 440 points of unrealized profits on this pair. For further information regarding our automated strategies, please visit our website.
EURCHF Outlook
The demand for the safe havens increased overnight, as there was some risk-off theme, which dominated the market yesterday. The currencies such as CHF and JPY again gained some attraction, and as a result the USDCHF and EURCHF pairs traded lower Intraday. The EURCHF is struggling to hold some ground for the last several weeks now. The pair was again seen under some pressure, and traded as low as 1.2150 level.
The pair has an important channel, as can be seen in the daily chart shown below.The pair once tried to break the same to the downside, but failed and again traded higher. Now, the pair is again heading back towards the channel support area, and more importantly the 1.2120 support level. This is a critical support zone for the pair, and any daily close below this level may result in a test of at least 1.2080/60 support area in the medium term. Any further downside momentum should be very hard, as we still have the SNB’s peg level at 1.20 level.
On the upside, the previous swing level at around the 1.2180/90 is seen as the first hurdle for the pair, which also coincides with the down-move trend line on the daily chart. If the pair manages to break and close above this trend line, then further gains can be seen in the short to medium term. Remember, the channel resistance area is the major swing zone for the pair, and the pair might need a solid reason for it to break.
It didn’t take long after our last analysis for NZDUSD to rally above January 14th swing high, closing strong above the resistance for a clean break.
The rally and break look real. However, there are a lot of uncertainties in the market at present, and buying a risky currency like the NZD at the higher levels may turn risky. However, if turns out well, then the rewards will be great. So, a good risk/reward situation. I was long NZDUSD ahead of the RBNZ interest rate decision. I closed that long just after the release in around 80 pips gain. I was expecting a recovery in the pair, and the pair did recover from the highs, and is currently trading lower. The 0.8510 level is very critical, in my opinion. I am keeping a close eye on that level, and if the price suggests a bounce, then I will consider going long at that level.
Market Commentary – March 14, 2014
At GMT 8:15 AM, the Swiss Federal Statistical Office released the month-over-month Producer Price Index (PPI), which measures the changes in the price of goods and raw materials purchased by manufacturers. When manufacturers pay more for goods, usually the higher cost is passed on the consumers. Hence, investors consider the PPI as a leading indicator of inflation in the economy. Last month, the Swiss PPI (m/m) came out at 0.0%, and this month the forecast was set at 0.3%. However, the actual figure came out at -0.4%, indicating lower price points for manufacturers which may add deflationary pressure on the economy.
At GMT 12:30 PM, the US Department of Labor also released its Producer Price Index (PPI). The forecast for the US PPI (m/m) was set at 0.2%, and the actual figure came out at -0.1%.
During the afternoon, at GMT 1:55 PM, the University of Michigan released its Prelim consumer sentiment, which measures the level of a composite index based on a survey of about 500 consumers. In the survey, respondents are asked to rate the relative level of current and future economic conditions of the US economy. Hence, investors treat this data as a leading indicator of consumer spending, as financial confidence leads to more spending that drives the majority of overall economic activity in the country.
GBPUSD Outlook
Cable has been moving in a relatively small down-trending channel for a month now, with the angle of the channel small enough to consider this move a consolidation. Daily and 4H MACD are showing increasing weakness, so we are getting closer to the moment where GBPUSD will either continue the uptrend or make a deeper bearish correction.
The most recent bearish swings have been held back by the 200 Simple Moving Average on the 4H chart, presently at 1.6586. In this location we also spot the 38.2% Fibonacci retracement between 1.6251 low and 1.6821 high, and of course the channel support is in the vicinity. The last attempt to break towards the downside ended up with a 4H bullish pin bar, followed by a 100 pip rally. A 4H bar close below the 200 Simple Moving average might trigger a larger correction, with a first potential target at 1.6469.
Towards the upside, while the support holds ground, the channel resistance at 1.6770 must be crossed for us to see a bullish continuation towards 1.7000-1.7040.
One of our top performing automated strategies, MorningBull, has already opened several long position with the GBPUSD. If the GBPUSD reaches its target price around the 1.6765 level, then the GBPUSD's profits will represent over 600 points of profits altogether. For further information regarding our automated strategies, please visit our website.
EURCAD Outlook
The horrible run of the Canadian dollar continues, as the currency kept on declining against most of the major currencies.The EURCAD also continues to rise in the medium term. However, after the dovish comments by the ECB President Mario Draghi, the Euro collapsed yesterday. The EURUSD was down more than 100 pips, and EURCAD was also down, but managed to hold the drop at a critical level.
The pair has an important channel, as can be seen in the 4 hour chart shown below.The pair once breached the same to the downside, but we can take it as a false break, as the pair again bounced back inside the channel. Yesterday, the pair after the slide found support right at around the channel support and the 50.0% Fibonacci retracement level of the last leg up from the 1.5123 level to 1.5500 level. This is an important area, as the pair spiked sharply from this zone. A break and close below this support area might call for further losses in the pair, and it might test the previous low of 1.5123 as well in that case.
On the upside, the previous swing level at around the 1.5400 holds the key for the pair. If the buyers manage to take the pair higher above this resistance zone, then one can witness a re-test of the 1.55 swing high in the short term. The RSI is back below 50, and currently struggling to close above it, which is a warning sign, in our opinion.
Cable has been moving in a relatively small down-trending channel for a month now, with the angle of the channel small enough to consider this move a consolidation. Daily and 4H MACD are showing increasing weakness, so we are getting closer to the moment where GBPUSD will either continue the uptrend or make a deeper bearish correction.
There are high chances that the pair might continue to trade higher in the coming days. However, I think the pair is at a very critical juncture. The pair has failed to gain the upside momentum a couple of times, and one says that "what cannot go up must go down". So, the coming days are very important for the pair, and if the pair fails again to go up, then it will go down for sure. My money is on the upside, as the wedge forming on the hourly chart looks for a bullish break, in my opinion. I am keeping a close eye on this wedge in the short term, and will take positions accordingly.
Market Commentary – March 17, 2014
Today, there were plenty of moderately important data releases that moved the market. During the first hour of the day, at GMT 12:30 AM, the Australian Bureau of Statistics released the month-over-month new motor vehicle sales figure, which measures the changes in the number of new cars and trusts sold in the domestic Australian market. Investors consider this data to be a leading economic indicator as rising demand for expensive durable goods shows that consumers are confident in their future financial position. Last month, the new motor vehicle sales in Australia went down by 4.0%, and this month it rebounded just in the positive zone, at 0.1% increase.
GMT 10:00 AM, the Eurostat released the year-over-year core CPI, which measures the changes in the price of goods and services purchased by consumers, excluding food, energy, alcohol, and tobacco. Investors pay more attention to the core CPI data as it represents the less volatile items in the basket. The forecast for this month’s core CPI (y/y) in the Eurozone was set at 1.0%, which is 20% more than last time, and the actual figure came out at 1.0% meeting the forecast.
At 12:30 PM, the Statistics Canada released the foreign securities purchases figure. This economic indicator measures the total value of domestic stocks, bonds, and money-market assets purchased by foreigners during the reported month. Foreigners need to convert foreign currency into Canadian dollars to purchase Canadian securities. Hence, this indicator is an important indicator of the supply/demand dynamics of Canadian dollar in the foreign exchange market. Last month, foreigners decreased their securities purchase by 4.28 billion, and the this month the figure rebounded to 1.09 billion.
Later in the afternoon, German Central Bank’s (Deutsche Bundesbank) President Jens Weidmann is due to speak about external imbalances in the euro area, in Kiel. Expect the market to become volatile during his speech.
EURJPY Outlook
In our last analysis, we were mentioning that EURJPY should become more predictable if it drops below 138.70-138.90 area, where we spotted an important cluster of support. In the end the support held just fine, with EURJPY continuing this recent uptrend. After confirming the resistance in the 141.23 area one more time and dropping back to test the trend line, the pair rallied over 460 pips in one swift move to reach 143.76. This rally extended above 61.8% and 76.4% Fibonacci levels and the numerous previous tops in the 142.90 area, so last week’s drop was not a rejection off of any particular technical levels.
As of right now, EURJPY has found support on the bullish trend line based on the most recent swing lows. It’s also important to underline how the previous tops around 141.23 have not turned into support this time. This means seller could easily overcome this support and continue lower this week. All we need is a break and close below the trend line and 140.42, and 138.70-138.90 area becomes the next support to be targeted.
Towards the upside, above the trend line and preferably above 141.23, the uptrend is favored by a long shot. Without any technical levels that were respected, the current high at 143.78 and the 145.64 are the most notable resistance levels to be watched.
One of our top performing automated strategies, MorningBull, has already opened several long position with the EURJPY. If the EURJPY reaches its target price around the 145.70 level, then the EURJPY's profits will represent over 200 points of profits altogether. Right now, the MorningBull strategy has over 1,860 points of unrealized profits on this pair. For further information regarding our automated strategies, please visit our website.
USDCHF Outlook
The US dollar was again a loser during the previous week, especially against the Swiss Franc. The USDCHF pair declined, and created a new low, as the demand of the safe havens increased during the previous week. The pair has been consistently declining for the past few weeks, and there are no signs as yet for a relief rally. The pair can still continue trading lower in the short term. One need to be very careful in the coming days, as some very important economic events are lined up during this week.
The pair has an important down-move trend line, as can be seen in the 4 hour chart shown below. The pair has to break this trend line in order to gain any upside momentum. There are few resistances at around the 08720 and 0.8740 levels. If the pair manages to close above these levels, then the pair could trade higher in the short term. After a break, the 0.8820/40 level is important, and one can expect sellers to return around this region.
If the pair fails to gain any upside momentum, and trades lower, then the previous low at around the 0.8700 level will be the key. If the buyers fail to defend this level, then the pair might trade lower and create a new low in the medium term. The RSI and MACD are still in the negative territory, and there are no signs of bullishness as yet. A break of 50 level in RSI can put the pair in positive zone in the short term.
Market Commentary – March 18, 2014
Earlier today, at GMT 12:30 PM, the Reserve Bank of Australia released the monetary policy meeting minutes. Since it provides a detailed record of the RBA Reserve Bank Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates, investors carefully watched the event.
At GMT 10:00 AM, the ZEW released its German economic sentiment, which measures the level of a diffusion index based on surveyed German institutional investors and analysts. This month, the German ZEW economic sentiment was forecasted to come out at 52.8, and the actual figure came out much lower, at 46.6.
During the afternoon, at GMT 12:30 PM, the US Census Bureau released the building permits figure, which is an annualized number of new residential building permits issued during the previous month. Since obtaining a permit is among the first steps in constructing a new building, investors consider this economic data to be an excellent gauge of future construction activity. This month, the forecast for the new building permits figure were set at 0.97 million, and the actual figure came out much better, at 1.02 million.
At the same time, the US Bureau of Labor Statistics released the month-over-month core consumer price index (CPI) figure. This economic indicator measures the changes in the price of goods and services purchased by consumers during the previous month. However, the core CPI data exclude food and energy prices as those are volatile in nature. Last month, the US core CPI came out at 0.1%, and this month it remained unchanged.
EURUSD Outlook
The Euro buyers keep on pushing the EURUSD pair higher every time the pair moves lower. Despite the dovish comments from the ECB President Mario Draghi, the Euro has been bid across the board. The EURUSD pair is stuck in a narrow range, and is looking for a substantial fundamental for the next move. There is no denial of the fact that there are chances in the short term for a test of the 1.40 level. If the current consolidation is for a leg higher, then we can see a test of 1.40 in the coming days.
The pair has an important up-move channel, as can be seen in the 4 hour chart below. This is not a classic one, but the wave counts, major highs and major lows are considered while plotting this one. The pair should respect this channel in the short term. The pair has a clear resistance at around the 1.3940 and 1.3960 levels. If the pair manages to break these levels, then it can open the doors for another leg higher. The RSI is getting closer to the 80 level, which is not a perfect sign for a break to the upside. So, one need to be very careful while buying the pair in the short term.
If the pair fails to gain any upside momentum, and trades lower, then there is an important support region at around the 1.3880 and 1.3860 levels, as highlighted in the chart shown. A break of these levels might push the pair towards the channel support area, where one can expect buyers to return after a consolidation.
CADJPY Outlook
CADJPY failed to stay above the support at 92.45, which lead to a test of the daily uptrending channel, where 91.18 was tested both on Friday and on Monday before price rallied back up, showing no intentions to break below the daily channel.
The short term went as high as 92.23, not even touching the previous support or the 200 Simple Moving Average on the 4H timeframe. After a tiny bearish pin bar on the 4H chart, price started coming down again. It’s important to notice how in the last two weeks the pair has been making consistently lower swing highs and swing lows. So even if the price is in a bullish channel on the daily chart, on the 4H timeframe isn’t in a bearish configuration.
Towards the downside CADJPY is likely to visit 91.18 again, followed by 90.78. Any dips below 90.78 can and probably will trigger massive sell-offs, both in the short term and the long term.
Towards the upside, CADJPY can either offer a bullish rejection around 91.18, or it will become bullish again if the current two week bearish trend is broken – which will occur if the pair rises above 92.23 and the current bearish trendline. 92.43-92.50 represent another good resistance, but above that 94.00 should be the ultimate target.
One of our top performing automated strategies, MorningBull, has already opened several short position with the CADJPY. If the CADJPY reaches its target price around the 85.60 level, then the CADJPY's profits will represent over 2400 points of profits altogether. For further information regarding our automated strategies, please visit our website.
The Euro buyers keep on pushing the EURUSD pair higher every time the pair moves lower. Despite the dovish comments from the ECB President Mario Draghi, the Euro has been bid across the board. The EURUSD pair is stuck in a narrow range, and is looking for a substantial fundamental for the next move.
I think the next leg would be down in the pair. The pair is currently testing the 1.3880 support level, which is very critical in the short term. If the pair cracks this support, then it might slide back to around 1.3820 level. On the other hand, if it bounces sharply, then a retest of 1.3950 level is very likely. The pair has annoyed me a lot, and I am staying sideways until some solid trading signs emerge. I might consider going long on dips, but not sure as of writing. I will prefer to wait for some more time before acting. The pair needs to break the range shown in the chart.
Hi, here is our brand new video. I hope you like it and also I'll be happy to have your feedback.
https://www.youtube.com/watch?v=e8iMNemm_74
Hi, this our new video. Hope you enjoy it and we'll be glad to have your feedback. Thanks!
https://www.youtube.com/watch?v=e8iMNemm_74