Forex Forum EUR, USD, JPY, GBP, CAD, AUD, CHF, XAU Market Analysis and Daily Forecast

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Forex Forum Latest Forex Market News and Updates, Nov-25, 2021​

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GBP/USD is defending minor bids while wavering around 1.3350 so far this Thursday, as it lacks a trading impetus amid a Thanksgiving Day holiday in the US.

The US dollar remains sluggish across its major peers, correcting some of its previous gains and lending support to the cable. Meanwhile, ongoing Brexit concerns, with France's pledge to continue its row over fishing rights with the UK, cap the upside attempts in the major.

The Pound to Dollar (GBP/USD) exchange rate dipped to fresh 2021 lows around 1.3320 before a tentative recovery.

The Pound to Euro (GBP/EUR) exchange rate was held in relatively narrow ranges

Strong Cost pressures in UK Manufacturing​

The UK CBI industrial trends index strengthened to 26 for November from 9 the previous month, comfortably above consensus forecasts of 18 and the strongest reading since 1977. Exports posted their strongest reading since March 2019 and stock levels were very low while prices increased at the fastest rate since 1977 which will maintain underlying concerns over inflation pressures.

On the Other Hand, The US dollar rallied once again overnight after a more hawkish tone to the FOMC minutes and higher than expected PCE data. Some pre-holiday risk-hedging buying may also have flowed through currency markets with the US dollar being the market's favourite way to play the inflation/Fed-taper trade at the moment, especially with the euro languishing under a virus cloud. The dollar index rose by 0.35% t0 96.86 but has eased back to 96.75 in Asia as US stock index futures continue to rally. With volumes sure to be muted for the rest of the week, the US dollar remains vulnerable to a downside correction, with the dollar index's relative strength index (RSI) remaining in very overbought territory. Nevertheless, the index remains a buy-on-dips and could well move through 97.00 into next week.

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USD/CAD Forecast​

Elsewhere, The US dollar was mostly flat yesterday ahead of the US Thanksgiving holiday. A risk-off market sentiment stimulated demand for the greenback because it keeps posting new year-to-date highs against most G8 currencies. On Wednesday, the Federal Reserve revealed the last FOMC meeting minutes, which showed that some participants would like to adjust the Quantitative Easing's taper pace and raise rates sooner than anticipated if inflation runs hot. The pair can correct to the 1.2625 level due to the local US holidays, but after that, the price will probably continue its upward movement towards 1.2700.

Euro (EUR) Dips as German Business Morale Drops​

On the other hand, The Euro (EUR) weakened yesterday after the German Ifo business climate indicator for November fell for a fifth consecutive month, indicating business morale in the Eurozone's powerhouse economy is at a seven-month low.

The strong US Dollar also dented the single currency due to the negative correlation in the pairing, offsetting any support from a coalition agreeing to form a German government with Olaf Scholz as chancellor.

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The Financial Market Forecast Today

US stocks are set to open sharply lower after the discovery of a new covid strain, which could prove to be resistant to the already developed covid vaccines. The new variant found in South Africa has prompted the British government to ban flights to six southern African nations . There are still a lot unknowns here. The big question is whether it is able to evade vaccines or not? Even so, given the thin market volumes due to Thanksgiving big swings on bad news is to be expected. The sell off does feel a little over done - this wouldn't be the first time that a strain has appeared disastrous on paper but then failed to really spread.

On the other hand, Turkish President Tayyip Erdogan has ordered an investigation into possible currency manipulation after the lira fell sharply to record lows against the dollar this week, the Anadolu news agency reported on Saturday.

On the other hand, USD/JPY edged higher to 115.51 last week but subsequent sharp fall indicates that a short term top is at least formed. Initial bias is now on the downside this week for 112.71 support first. Sustained break there will argue that it's already correcting whole rise from 102.58. Deeper fall would be seen to 38.2% retracement of 102.58 to 115.51 at 110.57. For now, risk will stay on the downside as long as 115.51 resistance holds, in case of recovery.

Elsewhere, At 20:25 GMT, the AUD/USD is trading .7116, down 0.0073 or -1.02%.

One fear is that another coronavirus wave would encourage some countries to shut down parts of their economies. Certainly air travel, hotels and any other travel-related industry will take a hit. The 13% loss in crude oil is a sign that traders are taking this new development seriously.

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Forex Forum, currency trading analysis today​

Little changed day compared to the previous close, the Euro / US Dollar cross is positioned at 1.1326. Operationally, expectations are for a continuation of the day marked by caution with first resistance seen at 1.1357 and with more immediate support approaching 1.1298.

On the other hand, During the New York session, the EUR/USD moderately falls, down some 0.20%, trading at 1.1320 at the time of writing. The market sentiment is upbeat, as portrayed by US equity indices rising between 1.06% and 1.50%. At press time, the Federal Reserve Chairman Jerome Powell testifies on the US Congress.​

Summarizing some of Powell's remarks, he said that don't see wages moving up at a troubling rate that would spark inflation.". He reiterated that it is time to move from the word transitory from inflation and expects that the abovementioned will moderate in 2022, despite not being sure of the forecast.

Elsewhere, AUD/USD just the other day flushed through the yearly low, very nearly tagging the big 7000 level. The flush and reverse has the outlook neutralized at worst for now. If the low in September and channel on the 4-hr time-frame can be broken, then look for the neutral outlook to firm up towards bullish.

For those short from higher levels, they may want to use a confirmed break higher to button up trailing stops, while would-be longs could use a break above resistance to key in on entries that take advantage of further strength off the recent lows.

If the buyers are to take back more control, they now need to get back above the 100 hour moving average. Failure to do that, and a move back toward the lows from last week at 0.71057, and the lows from yesterday at 0.70919 and 0.7062 respectively (and the 38.2% retracement off the daily chart at 0.7052), would become the next downside targets (and the path of least resistance).

Get back above the 100 hour moving average, and the focus returns back to the falling 200 hour moving average. That moving average remains a key target to get to and through if the buyers are to take more control.

On the other hand, The Pound (GBP) started this week's session mixed in spite of consumer credit exceeding expectations of £0.4bn by printing at £0.7bn as households' borrowing increased post-lockdown.​

However, this positive data was undermined by the ongoing Brexit negotiations and the uncertainty surrounding the UK's future relationship with the EU.

GBP dropped throughout Tuesday's session as an absence of data left the Pound susceptible to losses with Brexit continuing to weaken Sterling.

Moreover, Bank of England (BoE) policymaker, Catherine Mann's, dovish comments further dampened the Pound's potential.​

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Forex Forum, Currency Market Analysis Dec-2, 2021​

A Bank of England rate hike in December will provide GBP with limited support​

"But the OIS market currently has an additional 100bps on top of a December hike priced for 2022 and we view this as excessive and see those expectations coming down over the coming months – that will keep GBP/USD under downward pressure initially. Beyond Q1 2022, we then see scope for modest GBP gains as UK GDP growth picks up and cost of living concerns ease as inflation begins to adjust lower."

"A BoE rate hike in December will provide GBP with limited support, and higher yields in the US with the BoE refraining from tightening again in February will keep GBP/USD under downward pressure initially. Later in 2022, the reality of a more dovish Fed coupled with further BoE rate hikes will prompt GBP/USD to move higher."

On the other hand, Turning to positioning, the latest IG client sentiment figures show that a large majority of retail traders remain long the pair. The data show 74.22% of traders are net-long, with the ratio of traders long to short at 2.88 to 1. The number of traders net-long is 3.80% higher than yesterday though 9.62% lower than last week, while the number of traders net-short is 2.84% higher than yesterday but 9.52% lower than last week.​

Here at forum.forex, we typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD may continue to fall.However, positioning is more net-long than yesterday but less net-long than last week, and the combination of current sentiment and recent changes gives us no clear GBP/USD trading bias either way.

On the other hand, The GBP EUR exchange rate was higher by 0.13% on Wednesday but the recent trend has been euro strength and that could continue. Traders are winding back bets that the Bank of England will hike interest rates at the December meeting. The OECD still sees the UK outperforming the G7 next year. Europe's inflation came in at a 24-yr high and traders will also be considering the ECB's plans.

The GBP EUR was trading at 1.1741 with support at the 1.1650 level.​

Elsewhere, USDCHF pushed sharply below its November high to meet support at the 200-day simple moving average (SMA). However, the long-term outlook for the pair remains positive amid successive higher lows.

Nevertheless, the short-term momentum indicators are mostly supporting a negative bias for the pair, as the RSI is found below its 50 neutral mark. Also, despite being above zero, the MACD is located below its red signal line, indicating that the bears might be gaining ground.

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Forex Forum, EUR/USD fundamental analysis Dec-05, 2021​

The EUR/USD is moving sideways as the market reflect on the latest US non-farm payrolls (NFP) data and the hawkish statement by Jerome Powell. The pair is trading at 1.1310, which is above last month's low at 1.1180.

US nonfarm payrolls​

The Bureau of Labor Statistics (BLS) published the latest US jobs numbers on Friday. These numbers were relatively bad but there were some bright spots. The American economy added just 210k jobs in November. This was a sharp decline from the previous month's 546k. It was also lower than the median estimate of 550k and the ADP figure of more than 500k.

On the other hand, Euro Price Weakness Likely To Resume​

Even though EUR/USD has now been falling for more than six months, there are few signs yet that its trend lower is about to reverse. Admittedly it was relatively stable last week, either side of its spike lower Tuesday when US Federal Reserve Chair Jay Powell said the Fed was considering ending its asset buying earlier than previously planned, but an extended rally is not on the cards unless the European Central Bank has a rethink too (FXE).

To date the ECB, and particularly its President Christine Lagarde, have been adamant that Eurozone inflation will be transitory and that there is therefore no need for tighter monetary policy. It would therefore take a remarkable course change – and loss of credibility – for it to switch from dovish to hawkish; and that means further losses for EUR/USD, particularly now Powell no longer sees US inflation as transitory.

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Forex Forum, Currency Trading analysis and latest updates Dec-10, 2021​

Analysts at MUFG Bank, favor a scenario with further weakens for the pound relative to the US dollar. They see GBP/USD could fall below 1.3000 for the first time in a year. They warn a surprise decision to hike rates from the Bank of England should trigger a bigger (bullish) GBP reaction especially as shorts have
been built up recently.

"One note of caution is that GBP shorts have already become a popular trade reaching their highest level in over 2 years amongst Asset Manager/Institutional and Leveraged Funds combined. As a result, a surprise decision by the BoE to raise rates would likely trigger a bigger GBP (bullish) reaction."

"Omicron to make BoE more cautious over raising rates in near-term. A decision to leave rates on hold next week is better priced now which should help dampen negative GBP reaction. Dropping guidance for rate hikes in coming months would be bigger bearish surprise for GBP."

Source: fxstreet.com

MONEY MARKETS SEE A 42% CHANCE OF A BOE RATE RISE NEXT WEEK​

Another week, another fresh 2021 low for GBP/USD. A stark contrast to the once-popular vaccine trade that propelled the Pound to multi-year highs. However, in light of an unwind in BoE tightening bets, stemming from renewed social distancing measures and a rise in political instability risks amid this weeks headlines surrounding the UK Government, the Pound finds itself languishing around the 1.32 handle.

While market pricing for a rate rise next week has slipped, OIS markets do still price in a 42% chance of a 15bps rate rise, as well as near four hikes for next, which will be hard for the BoE to match. Therefore, risks remain tilted to the downside for the Pound and eyes will be firmly fixed on the 200WMA at 1.3155. That being said, with the FOMC also scheduled to announce its monetary policy decision, it will be important for traders to remain agile and not get married to a trade. I remain bearish on the Pound, however, I do think we are getting close to peak bearishness, given the lack of appetite for markets to keep Cable on a 1.31 handle and with net shorts in the currency at multi-year highs, there is fuel for a reversal.

On the other hand, The EURGBP movedto it's week's low during Tuesday's trade, and in the process tested the 200 hour moving average. Support buyers leaned against the level (it was also a swing low from last week), and sellers turned to buyers.​

The price rise off the low on Tuesday saw the 100 day and 100 hour moving averages rebroken at 0.8512.

The 200 day moving average was the next key technical level to be broken on that same day. That break led to increase momentum to the upside.

The high price for the week reached 0.85985 which took out the high from November at 0.85944 - but only by 4 pips. That failed break, led to buyer turning back to sellers.

The price yesterday move back below the 200 day moving average at 0.85552, and in trading today, the rising 100 hour moving average at 0.05353 was also rebroken.

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Forex Forum, Currency trading analysis and market forecast Dec-13, 2021​

The GBP/USD pair remained depressed through the early part of the European session and was last seen hovering near the daily low, around the 1.3225 region.​

The pair struggled to capitalize on last week's goodish recovery move from a one-year low, around the 1.3060 area and opened with a modest bearish gap on Monday. The British pound was undermined by news that the UK Prime Minister Boris Johnson could impose additional COVID-19 restrictions. Last week, Johnson advised people to work from home and mandated the use of vaccine passports in large venues.

Separately, the UK health secretary, Sajid Javid, reaffirmed this Monday that the Omicron coronavirus is spreading at a phenomenal rate and around 40% of infections in London involve the new variant. The latest developments surrounding the coronavirus saga forced investors to push back their expectations about an imminent interest rate hike by the Bank of England in December and undermined the sterling.

Source: fxstreet.com

On the other hand, In the futures, the S&P 500 rose 0.3%, the Nasdaq inclined 0.4% and the Dow Jones was up 0.2% before the start of trading.​

Asian exchanges traded choppily higher overnight but with property issues undercutting Hong Kong, while European bourses edged tracked midday on the continent.

The economic calendar is vacant.

In pre-market action, bitcoin traded at $48,740, West Texas Intermediate crude oil traded marginally lower at $71.63, and 10-year US Treasuries offered 1.47%. Gold traded for $1,787 an ounce. For more updates join a forex forum.

On the other hand, EUR/GBP got rejected from the 0.8580 – 0.8600 resistance area. The pair traded lower and closed near the broken trendline. At the current time, the pair stick near the trendline and will attempt to bounce from it. If the pair could bounce from the trendline then another retest on 0.8580 – 0.8600 will happen. On the other hand, breakout and close below 0.8500 will cancel the bullish outlook.

Elsewhere, The outlook for the US dollar was boosted last Friday when official figures confirmed US inflation had risen to a new multi-decade high last month, which is likely to keep the Federal Reserve (Fed) on course to accelerate its monetary policy normalization. The price of the USD/JPY currency pair moved towards the level of 113.80 after the data and settled around the level of 113.46 as of this writing. The US dollar's exchange rates fluctuated briefly before the weekend as figures from the Bureau of Labor Statistics revealed that a 0.8% US inflation increase in November lifted the annual pace of price growth in the US to 6.8% last month.

Meanwhile, inflation rose from 4.6% to 4.9% for November, the highest level since the year ending June 1991, even after excluding changes in volatile food and energy prices from the figures after a 0.5% increase in November in core inflation. Gasoline, housing, food, used cars and trucks and new vehicles were among the biggest contributors to the price increases in November, all goods whose supplies were recently disrupted by efforts to contain the Corona virus, which has led to prices rising sharply over the past year.

Technical Analysis​

How the USD/JPY will close out this year will depend on what will be issued by the US Federal Reserve this week. So far, the currency pair is in a neutral position with a bearish bias, and stability below the 113.00 support will increase the bears' control to move further downwards. According to the performance on the daily chart, the next bearish targets will be 112.50, 111.75 and 110.60.

On the upside, and according to the performance over the same time period, the 114.20 resistance will be important for the bulls to launch further and change the current situation. In addition to the raising of interest rates, it is necessary to take into account the extent of risk appetite.

Sorece: dailyforex.com

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Dec-17, 2021 Currency Trading Analysis, By Forex Forum​

For over two months USD/JPY has struggled to rally above a major area of resistance extending back to May 2017. The area around 11450 has been a very difficult one with only daily closes developing above it, but always failing on the weekly chart to sustain.

Given the duration of the level (4.5 years and counting), a weekly close is needed to prove that resistance has been truly broken. The rejection on the week of November 22 firmly cemented the importance of resistance, and also formed the head of a would-be head-and-shoulders formation.

The left developed during October into November, the head in November, and now the right shoulder could be in the process of developing. In the instance of almost all head-and-shoulders it is best to wait for the neckline to break, as this is the true confirmation with these patterns.

And while that is true in this case as well, there is another set up that can give traders a lead on the pattern. The right shoulder took the shape of an ascending wedge and triggered as of yesterday, best seen on the 4-hr chart. Wedge entries could morph into a larger trade.

The target for the wedge is the neckline of the formation, with the most recent swing-low at 11253 as the first meaningful level of support. There is a minor near-term level at 113.22, but not seen as anything but a potential bump in the road.

Source: dailyfx.com

On the other hand, Analysts at Danske Bank forecast the EUR/USD pair at 1.13 in a one-month period, at 1.12 in 3M and at 1.10 in 12M. They see downside risks to these forecasts.​

We keep our EUR/USD forecast at 1.10 in 12M and see downside risks to this. This reflects our view that market themes are increasingly pro dollar. The manufacturing cycle is clearly slowing but central banks need to tighten to catch-up with inflation pressures and this is quite negative for EUR/USD, especially at current levels."

"The key risk to see EUR/USD above 1.20 is seeing global inflation pressures to fade. However, 'transitory' has substantially lost credibility and we are likely to see a further EUR-negative environment as manufacturing growth slows down. The risk to take EUR/USD below 1.10 is a scenario where central banks tighten further amid a cyclical slowdown, akin a scenario like seen in early 80's."

Elsewhere, USD/CAD is currently trying to settle above the resistance at 1.2825 while U.S. dollar is moving higher against a broad basket of currencies.​

The U.S. Dollar Index managed to settle back above the resistance at 96.25 and is trying to get to the test of the next resistance level which is located at 96.50. A move above 96.50 will open the way to the test of the resistance at 96.70 which will be bullish for USD/CAD.

There are no important economic reports scheduled to be released in the U.S. and Canada today so foreign exchange market traders will focus on general market sentiment and dynamics of commodity markets.​

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Dec-21, 2021 EUR/USD/GBP Analysis and forecast, By forex forum​

The US Dollar has held its strength in the face of rising risks from the spread of the Omicron variant and the uncertainty to the US economy of stimulus measures not being passed by lawmakers.

Wall Street went lower overnight as the US digested news that President Joe Biden's economic stimulus package has hit some hurdles. This comes at a time that the spread of the Omicron variant is accelerating, and the threat of economic shutdowns become more apparent.

APAC stocks had already gone lower in the Monday session and spent Tuesday recovering, as risk aversion took a breather. Japan's Nikkei 225 index led Asian bourses higher, trading over 2% higher at one stage.​

US equity futures are pointing toward a positive start. The VIX is a futures contract that measures the expected volatility of the S&P 500 over the next 30 days. Not surprisingly, it ticked up overnight as markets sold off. It has since pulled back due to the more positive Asian session today.

On the other hand, USD/TRY is on a roller-coaster ride for the second consecutive day on Tuesday, as the beleaguered lira remains at the mercy of Turkish President Tayyip Erdogan's whims and fancies.​

At the time of writing, USD/TRY is losing about 6% on the day, trading around the 12.50 level, having rebounded firmly from monthly lows of 11.10 reached earlier today. Despite the sharp recovery, the pair is up nearly 50% from the levels seen in September this year.

On Monday, the lira tumbled to fresh record lows of 18.37 against the greenback, although staged a historic recovery of 25% and jumped to 13.37 after President Erdogan announced a rescue plan to protect citizens against the lira's downfall.

Elsewhere, EUR/USD ticks higher​

Some small gains for EUR/USD over the past 24 hours have lifted the pair off recent lows, but now the $1.134 area comes into view as a potential source of resistance.

This is where gains have stalled over the last month. If this remains unbroken then the range continues to hold, frustrating both sides.

However, investors remain concerned about the potential economic impact of the rapid spread of the Omicron variant of Coronavirus. Moreover, a fatal blow to the $1.75 trillion in social spending and US President Joe Biden's climate protection law should dampen further market optimism. This could further enhance the dollar's reputation as a relatively safe haven compared to its European counterparts.

The relative lack of liquidity may discourage investors from betting aggressively ahead of the New Year holidays. As a result, there needs to be some caution with bullish traders or positioning against a solid short-term rate due to the lack of relevant economic news influencing the market from either the Eurozone or the US.

And, GBP/USD clings to $1.32​

GBP/USD continues to bounce along near $1.32, but with rising stochastics a more bullish view might yet prevail. In any case, the continued defence of $1.32 does at least hold the bearish view relatively in check.

However, buyers need to be careful since, as we saw last week, there is plenty of selling pressure should a bounce develop.

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Dec-22, 2021, Currency trading analysis, by forex forum.​

AUD is the strongest currency on the day in a risk-on environment with US Consumer Confidence coming in higher than forecasted for December as third-quarter economic growth was revised higher. The US stock market has rallied and high beta plays are aligned positively, benefitting from the renewed enthusiasm.

The Nasdaq Composite jumped 0.9% to 15,486.29 intraday, with S&P 500 up 0.8% and the Dow Jones Industrial Average 0.4% higher. All sectors were in the green, with consumer discretionary and technology leading the charge.​

On the other hand, The Bank of England surprised market participants yet again by raising interest rates by 15bps to 0.25%.​

I say surprised given that ahead of the December meeting, notorious MPC hawk, such as Saunders cast doubts over a rate rise, having mentioned the potential advantages of delaying a hike in order to assess the impact of Omicron. That said, with the latest inflation reading making the MPC's November forecast already outdated and the labour market remaining robust post furlough expiration, there was little excuse to not raise rates. Although, while it is a step in the right direction, I would say it is a rather tentative step, given that a 15bps rate hike is not exactly a move that shows a determination to curb inflationary pressures. Although, what it allows now is for the next hike to move in 25bps increments going forward. Yet again, this shows the BoE's communication leaves very little to be desired when trying to gauge the timing of a BoE rate hike.

Source: dailyfx.com

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Currency trading analysis and stock news, by Forex Forum​

The Euro found support near the 1.1260 level against the US Dollar. The EUR/USD pair started a steady recovery wave above the 1.1280 and 1.1300 levels.​

It is now moving higher above 1.1320 and the 50 hourly simple moving average. An immediate resistance near the 1.1325 level. There is also a key bearish trend line with resistance near 1.1335 on the hourly chart.

The pair gained some positive traction on the last day of the week and is now looking to build on this week's goodish bounce from the 1.1235 region touched on Monday. The prevalent risk-on environment continued acting as a headwind for the safe-haven US dollar, which, in turn, was seen as a key factor that provided a modest lift to the EUR/USD pair.

The latest optimism was fed by reports that the Omicron variant might be less severe than previously feared and it supported the underlying bullish sentiment in financial markets. Adding to this, various studies indicated that Omicron infections are less likely to lead to hospitalization and severe disease, which further boosted investors' confidence.

FRIDAY'S ASIA-PACIFIC FORECAST​

Asia-Pacific markets may move higher to end the week after a bullish US session. The S&P 500 closed at a record high. Investors' concerns over the Omicron variant are now firmly on the back burner as new data confirms the variant is less deadly than prior strains. The US Dollar peeled back despite a hotter-than-expected US inflation report. The risk-sensitive Australian Dollar rose to its highest level since mid-November.

Japanese inflation data crossed the wires this morning, with the November core consumer price index (CPI) crossing the wires at 0.5% on a year-over-year basis. That was above what analysts were expecting at 0.4%, according to a Bloomberg survey. Japan will report housing starts and construction orders (Nov) later today. Singapore is also set to release industrial production data for November, and the Philippines will report October retail sales numbers.

AUD/USD TECHNICAL FORECAST​

AUD/USD broke into a fresh monthly high overnight, marking the currency pair's third consecutive daily gain. Prices are pulling back slightly in the early Asia-AM hours. The prior December swing high at 0.7223 may provide a level of support for bulls to remain in control. The MACD oscillator is nearing a cross above its centerline, a bullish sign. A further move higher will likely target the falling 50- and 100-day Simple Moving Averages that sit shortly above the fresh monthly high.

Source: dailyfx.com

On the other hand, Tesla (TSLA) was a big winner last week, rebounding powerfully from the top of a prior base to clear its 50-day line. But Tesla stock isn't in buy range yet. Meanwhile Tradeweb Markets (TW), ArcBest (ARCB), Advanced Micro Devices (AMD), West Pharmaceutical Services (WST) and Google stock all are actionable now.

Tesla, Google, AMD and TW stock are on IBD Leaderboard. Google stock is on SwingTrader. Google and WST stock are on IBD Long-Term Leaders. Google, West Pharma, Tradeweb and AMD stock are on the IBD 50. Tradeweb also is IBD Stock Of The Day.

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[somrat4030]

DEC-27, 2021 Currency Trading Analysis By forex forum​

​

The AUD/USD pair extended its steady intraday descent and dropped to a two-day low, around the 0.7200 round-figure mark during the mid-European session.​

The pair struggled to capitalize on its early uptick, instead met with a fresh supply near the 0.7240 region and turned lower for the second successive day on Monday. Uncertainty over the economic impact of the continuous rise in new COVID-19 cases overshadowed the recent optimism led by reports that the Omicron variant might be less severe than previously feared. This was evident from the cautious market mood, which, in turn, drove flows away from the perceived riskier aussie.

Meanwhile, worries that the fast-spreading variant and fresh restrictive measures could result in disrupted supply chains across industries provided a modest lift to the safe-haven US dollar. Apart from this, the Fed's hawkish outlook, indicating at least three rate hikes next year, underpinned the greenback. This was seen as another factor that exerted pressure on the AUD/USD pair and dragged spot prices away from a near one-month high, around mid-0.7200s touched last Thursday.

Source: fxstreet.com

Elsewhere, The EUR/JPY cross pair is one of the most actively traded pairs in the FX market. It started the year consolidating below the 127 area, only to break higher shortly after the trading year began.​

From that moment on, it did not look back all the way until it reached the 133 are. It should be noted here that the EUR/USD pair opened the trading year above 1.23 and corrected ever since. In other words, the USD/JPY alone is responsible for the bullish run seen in the EUR/JPY cross.

But the 133 area proved to be too strong to hold above. As such, the pair formed a double top pattern which threatens with more weakness in 2022. However, the key support level held on the first attempt and thus offers bulls a reason to expect more strength in the year ahead.

On the other hand, Like last week, the USD/JPY is stable around the 114.47 resistance level, near its highest in more than a month. This comes amid a wave of risk appetite and abandonment of the Japanese yen as a safe haven due to optimism in the markets about omicron, in addition to increasing expectations that the date of the US interest rate hike will be sooner than previously thought. Most recently, we noted stagnant US consumer spending, adjusted for inflation, in November as the fastest price gains in nearly four decades eroded purchasing power. Commerce Department figures last week showed that purchases of goods and services, adjusted for higher prices, were little changed after rising 0.7 percent in October. So-called nominal spending, unadjusted for inflation, rose 0.6 percent, matching the average estimate of economists.

Technical Analysis​

As I mentioned before, stability above the 114.20 resistance will continue to support a bullish performance and a move to higher resistance levels, namely 114.75, 115.20 and 116.00. These support the indicators' movement towards strong overbought levels. On the other hand, the bears have hope if the bears return to the support area 113.50.

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DEC-28, 2021, GBP/JPY, USD/JPY, AUD/USD technical analysis by Forex Forum.​

GBP/JPY is posting small losses, retracing from six-week highs of 154.47, although bulls manage to defend the 154.00 level so far this Tuesday.​

The cross turned south after facing rejection once again at 154.50, shrugging off the improvement in the market sentiment.

The pound draws support from the UK government's dismissal of any lockdown restrictions likely to be imposed during the year-end holiday season to curb the growing risks from the Omicron covid variant contagion. The UK recorded 98,515 COVID cases and 143 deaths in the past 24 hours.

Meanwhile, a minor pullback in the USD/JPY pair, courtesy of the falling Treasury yields, exerts downward pressure on the cross.

From a short-term technical perspective, GBP/JPY's 14-day Relative Strength Index (RSI) holds well above the midline, suggesting that the upside potential remains intact in the near term.

On the other hand, The Pound (GBP) fell early on Monday following reports over the weekend that the UK could introduce new lockdown restrictions. In the afternoon, Boris Johnson said he would not implement new measure before Christmas, but this only gave Sterling a temporary boost.​

GBP then managed to strengthen as the week went on, with an improving market mood boosting the perceived riskier Pound over the safe-haven Euro (EUR). Additionally, the Chancellor Rishi Sunak announced a further £1bn in support for hospitality businesses that are struggling amid the current wave of Covid.

Further gains came mid-week as the market mood continued to improve. Sterling also seemed to benefit from some GDP data, although the gains may have been capped. The latest figures showed that the UK economy is 1.5% below pre-pandemic levels, rather than 2.1%. However, the Office for National Statistics (ONS) revised down third-quarter growth from 1.3% to 1.1%.

On Wednesday night, two new UK studies were published which show that Omicron is far less likely to cause hospitalisation than the Delta variant. One study found that Omicron patients are 66% less likely to go into hospital, while it also found that a booster jab lowered the risk of Omicron infection by 56%.

Source: exchangerates.org.uk

AUD/USD Analysis​

AUD/USD pair has been a centre of focus for the Forex market in recent days as risk sentiment has risen, with the Australian Dollar the primary beneficiary as a key risk barometer currency, while the US Dollar has been selling off along with the Japanese Yen, although the Japanese Yen is weaker than the Dollar.

Yesterday's risk rally therefore pushed up the price, which seems to be peaking quite close to the key resistance level I have identified at 0.7271. The technical picture is bullish, but unfortunately, there are no obvious support levels above 0.7123 which is very unlikely to be reached today, and I only want to take a long trade today so I think it may be best to stand aside from trading this currency pair today.

If we see a consolidation continue below 0.7271 and risk sentiment begin to sour on bad news, there may be scope to take a short trade from a bearish reversal at 0.7271 tomorrow or later this week.

What do you think about it?

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Dec-29, 2021 GBP/USD Technecal Analysis By Forex Forum​

Last Thursday's GBP/USD signal was not triggered as there was no bearish price action when the price first reached $1.3414.Today's GBP/USD Signals​

Risk 0.75%.

Trades must be taken between 8am and 5pm London time

Trading tips today:​

Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.3376, $1.3340, $1.3304, or $1.3273.
Put the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.

Short Trade Idea​

Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.3523.
Put the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
The best method to identify a classic"price action reversal" is for an hourly candle to close, such as a pin bar , a doji , an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

Technical Analysis​

The British pound rallies trading the New York session, trading at 1.3452 at press time. Investors' mood is mixed, as depicted by Europan stock indices fluctuating between gainers and losers, while US equity futures point towards higher open. Factors like assessments of the Omicron variant and month, quarter, and year-end flow cause market participants to book profits as 2022 looms.

US Treasury yields rise, the DXY falls
In the US money markets, the US 10-year benchmark note advances four basis points, punches through the 1.50% threshold, sits at 1.522%, while the US 2-year Treasury yield stays flat. In the meantime, the US Dollar Index, which tracks the US dollar value against a basket of six rivals, slides some 0.09% down to 96.11, weighing on the buck vs. the risk-sensitive GBP.


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EUR/USD, GBP/USD Analysis and Forecast Dec-30, 2021, By Forex Forum​

After hitting its highest levels of the month on Wednesday just under 1.1370 on Wednesday, EUR/USD has pulled back to within recent ranges.​

Earlier in the session, the pair tested its 21-day moving average at the 1.1300 level, but has since rebounded to around the 1.1330, where it trades lower by about 0.1% on the session. The pair's failure to break above December's 1.1240-1.1360ish ranges is not overly surprising given that markets have been very much on holiday mode this week. Indeed, for many European nations, Thursday is the final trading session of the year, whilst for most European nations that do see markets open on Friday, it is a half-day.

Moreover, Weekly price action on EUR/USD shows the continuation of the long-term symmetrical triangle (black) with bias to the downside despite an oversold Relative Strength Index (RSI) reading. Further upside is on the cards but should prices reach the 1.1500 psychological level, sellers could re-enter the market extending the overall downtrend.

Source: dailyfx.com/forex

On the other hand, Amid continued attempts to rebound upwards, the GBP/USD currency pair moved towards the 1.3500 resistance level that supports the bulls.​

The British pound was one of the best performing major currencies of the week on Wednesday. This month the Bank of England (BoE) really started the process of normalizing its policy in December when it raised the bank rate from 0.10% to 0.25% in what was already a supportive development for the British pound. But fears of the rapid spread of the new Corona variant may hamper sterling's endeavors.

After the sudden decisions of the Bank of England, the market is taking a hawkish stance as possible, given that the UK economy will be hit hard by the energy crisis this winter and will be more limited on the supply side than the US and Canadian economies. Finally, if a hawkish US Federal Reserve ends up causing a crisis in the financial markets, the US dollar will tend to outperform the safe-haven pound sterling.

Expectations are that the US dollar will turn lower, both due to the US economy slowing sharply, which means that the Fed's expectations have peaked and the market will start the next easing.

On the daily chart, the GBP/USD is still moving at a cautious pace within an opposite bullish channel that was formed recently, and it will need more momentum to confirm the strength of the rebound upwards.​

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EUR/USD, GBP/USD, USD/JPY trading analysis and forecast by Forex Forum, Jan-04, 2022​

The current trading condition of the GBP / USD trade shows that its price is reaching resistance below 1.3600. The price of the currency pair opens around 1.3476 to now trade around 1.3473 at a lower negative percentage rate of 0.02 at the time of writing.

GBP / USD market​

Key levels:
Resistance levels: 1.3600, 1.3700, 1.3800
Assistance levels: 1.3400, 1.3300, 1.3200

GBP / USD – Daily chart​

The GBP / USD daily chart shows that the price of the currency pair is reaching resistance below 1.3600. Bullish recovery channels have crossed SMA trendlines. The 50-day SMA trendline is above the 14-day SMA trendline. During yesterday's session, a bearish candlestick emerged to indicate the possibility of the market going down in another way. Stochastic oscillators crossed the southbound lines near above the 80 range.

The pair is currently oscillating between gains and losses, creating doubts about whether it could stage a breakout above the upper boundary of the bearish channel, last tested back in October.

Both the RSI and the Stochastics are endorsing the negative momentum in the price as the indicators drift southwards. That said, the positive slope in the red Tenkan-sen line and the fact that the MACD is some distance above its zero and signal lines keep feeding some optimism that selling pressures may not last for long.

USD/JPY Analysis​

On the other hand, A new year, however, some trends seen at the back of last year remain. Equity markets have been off to a flyer with fresh record highs in the US, in which the tech giant, Apple, became the first company to reach the $3tln market cap milestone.

Across the FX space, Japanese Yen selling showed little signs of abating, having come off the back from its worst performance against the USD since 2014. USD/JPY is now at its highest level since January 2017 after tripping stops through 115.50 overnight amid the surge higher in US yields (US 10yr rose 11bps in yesterday's session). That said, while higher yields and equities have weighed on JPY, the view of market participants favouring those currencies where central banks are looking to raise rates over low yielders are also at work with cross-yen notably firmer.

Elsewhere, The US dollar rallied sharply against the major currencies overnight as US 10-year bond yields surged back above 1.60%. The dollar index of major currencies rose sharply by 0.58% to 96.22 overnight, more than offsetting the previous day's falls and leaving major technical support at 95.50 intact once again.

EUR/USD has fallen 0.70% to 1.1300 and has traced out a number of failures ahead of 1.1400 resistance. Failure of support at 1.1270 heralds a retest of 1.1200.

GBP/USD has fallen 0.40% to 1.3470, with resistance at 1.3550, last week's high and the 100-day moving average (DMA). Failure of support at 1.3400 signals the next leg lower. The widening US/Japan rate differential has pushed USD/JPY 40 points higher to 115.75 today, Asia's biggest FX mover. Assuming that US yields remain elevated, there is nothing on the charts to stop a rally to 118.00 in the coming weeks.

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Currency Trading analysis and forecast Jan-05, 2022, By Forex Forum.​

​

The Pound Euro (GBP/EUR) exchange rate has continued its downward trajectory through today's session as Covid worries weigh on GBP sentiment.​

Although the UK has avoided further restrictions so far, pressure is mounting on the NHS. Covid-related staff absences have led to multiple NHS trusts declaring critical incidents, with hospitals and ambulance services asking retired workers and staff on annual leave to help keep vital services running.

On the other hand, It seems like EURUSD is "under zero gravity"; investors are waiting for signals.​

The major currency pair is consolidating on Wednesday. The current quote for the instrument is 1.1317.

The price range of EURUSD is not very wide – the "greenback" was rising yesterday in the afternoon but lost its "profit" by nightfall. Market players are saving their strengths in anticipation of the US labour market data, for example, the ADP Non-Farm Employment Change, as well as the FOMC Meeting Minutes to be published later today.

Also, the Euro Area, the US, and Germany are scheduled to report on the PMIs – the data may revive the financial market a bit.

Not to say that investors are in favour of the risk – they are more of trying to escape it. This fact helps the USD to reach stability.

At the end of the week, other labour market data from the US will "hit the bell". There is no direct correlation between today's ADP Non-Farm Employment Change and the Non-Farm Payroll to be published on Friday, but the former definitely helps to form an impression of what is happening in the sector.

Elsewhere, The US dollar is falling across the board, unable to benefit from better-than-expected economic data. US yields remained below Tuesday's top, still near monthly highs.

The AUD/USD is back near the 0.7275/80 resistance area that capped the upside last week. A break higher should clear the way for 0.7300. On the flip side, support emerges at 0.7240 and then 0.7220. A daily close under the 20-day moving average at 0.7190 would weaken Aussie's outlook.​

On the other hand, USD/CAD money markets are pricing in a 65% chance of a 25bps rate rise at the January meeting. However, keep in mind, that the BoC stuck pat on its rate hike guidance at the December meeting, stating that they remain committed to holding rates at the effective lower bound until economic slack is absorbed, which is likely seen in the middle quarters of this year. Now while the concerns over Omicron have eased, the key focus will be on economic data starting with Friday's labour market report, the BoC Business Outlook Survey (Jan 17th) and the inflation data (Jan 18th) ahead of the meeting. In turn, data will have a sizeable impact on the Loonie, given, not only the near term policy implications but also the rate outlook for the rest of 2022, where money markets are ludicrously pricing in 130bps worth of tightening (20% chance of 6 hikes). To me, even 5 rate hikes seems like a tall order for the BoC to surprise on the hawkish side.

What do you this think about it?

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EUR/USD/JPY currency trading analysis by Forex Forum, Jan-06, 2022​

Hawkish FED is causing a sharp reversal in the markets, with stocks coming down as US yields rise which makes USD very strong across the board. So we think that volatility is likely going to stay here because of Central banks policy divergences.

So one pair that we track closely is EURUSD for more weakness as ECB seems to be on the different side compared to FED. In fact, we see nice five wave drop from 1.1380 followed by only three-wave rally into 61.8% Fib so we assume that trend will stay bearish.

EUR/USD​

Current level – 1.1308​

The situation with the single European currency remained unchanged at the beginning of today's session as the range move currently stays locked between 1.1278 and 1.1359. The forecast remains neutral, but today's announcement of the initial jobless claims data for the U.S. at 13:30 GMT could affect the volatility of the currency pair. Only a successful breach of one of the mentioned boundaries of the narrow range, however, could determine the future mood of investors. Of course, the non-farm payrolls change data for the U.S. (Friday; 13:30 GMT) will also be followed just as attentively.

On the other hand, INFLATION AND THE FED REMAIN THE FOCUS IN Q1 2022​

For USD/JPY, the road ahead in the first quarter of 2022 will likely remain heavily glued to market expectations of how hawkish the Federal Reserve will be. In December, the central bank doubled the pace of tapering asset purchases, which will now see it end in early 2022. This will likely give the central bank maneuverability should it need to raise rates sooner than expected.

This will of course depend on how inflation evolves. Headline price growth is at its fastest pace in almost 40 years in the United States. Expectations are that price growth will remain above the central bank's target next year, with Core PCE running around 2.7% in 2022. However, a key risk could come if inflation expectations become "de-anchored."

USD/JPY​

Current level – 115.86​

At the time of writing, the currency pair is consolidating in the range between 115.51 – 116.32 as the inertia of the bulls was thwarted at the beginning of this year's trading. The current depreciation of the greenback against the yen could be seen as a corrective move unless the bears fail to overcome the support at 115.51. In the event of such a pessimistic scenario, we could witness a further deepening of the sell-off towards the support area at 115.18.

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GBP/USD/TRY/EUR technical analysis and forecast Jan-07, 2022, By Forex Forum.​

The release of the US monthly employment data at 13:30 GMT on Friday increased volatility on all pairs and assets that involve the US Dollar. During the volatility, the currency pair pierced the resistance of the 1.3550/1.3560 zone.

If the GBP/USD clearly passes above the 1.3560 mark, the rate might find resistance in the weekly R1 simple pivot point at 1.3585 and the 1.3600 mark. Higher above, the weekly R2 simple pivot point is located at 1.3647.

On the other hand, USD/TRY remains poised for extra gains​

USD/TRY seems to have met quite a decent barrier near 14.00 the figure on Friday, although it managed to record new highs for the year, nonetheless.

In the meantime, the lira remains under scrutiny amidst the current feeble outlook, which has been exacerbated after inflation figures recorded a 19-year peak beyond 36% in the year to December (Monday).

From the Turkish cash markets, yields of the 5y and 10y bonds reverse the recent multi-session weakness and resume the upside to past the 24% mark and just above 23%, respectively. The recent decline in yields have been promoted by purchases of government debt by the Turkish central bank (CBRT) according to latest news.

Elsewhere, Today, foreign exchange market traders will focus on economic data from EU.​

Analysts expect that Euro Area Inflation Rate increased by 4.7% year-over-year in December. Euro Area Core Inflation Rate is expected to grow by 2.5% year-over-year.

Euro Area Retail Sales report is projected to show that Euro Area Retail Sales declined by 0.5% month-over-month in November. On a year-over-year basis, Retail Sales are expected to grow by 5.6%.

Analysts expect that the final reading of Euro Area Consumer Confidence report will show that Euro Area Consumer Confidence declined from -6.8 in November to -8.3 in December. Euro Area Industrial Sentiment is expected to decrease from 14.1 in November to 13.9 in December, while Euro Area Services Sentiment is projected to decline from 18.4 to 16.

In the U.S., Non Farm Payrolls report is expected to show that economy added 400,000 jobs in December. Analysts expect that U.S. Unemployment Rate decreased from 4.2% in November to 4.1% in December.

On the other hand, CAD Risks Are Lower​

Unlike its high beta counterparts, the Canadian Dollar has been slightly shielded from the risk aversion stemming from the Fed's hawkish minutes amid the impressive resilience in the oil market with Brent crude futures above $82/bbl.

Actually, I expect the Canadian Dollar to be extremely sensitive to the upcoming key data releases, given the aggressive hawkish pricing for the BoC. As well as the fact that money markets are pricing a 65% probability for a hike at the January meeting, which I would say is tough to see at present, given recently announced lockdown measures in Ontario and Quebec. Meanwhile, the BoC also maintained their guidance at the December meeting, by reiterating that they will not raise rates until the middle quarters.

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USD/CAD/AUD Weekly Technical Analysis By Forex Forum, Jan-08, 2022​

Helping to drive the pair through this week's price action was USD flow.​

The U.S. currency remains in what's becoming a longer-term range, but after a bullish flare to start the week prices began to turn-around in the aftermath of the Friday NFP report. That's what helped USD/CAD to pull back towards this very key area of support.

At this point, that support remains in-play and while it may give way to breakdowns should CAD-strength continue to show, the question remains as to whether USD/CAD would be the most attractive venue for such a scenario. Or, perhaps, could traders focus that CAD-strength expectation against another currency, such as the Japanese Yen which we'll look at a little lower in this article.

In USD/CAD, that key zone of support is near-term support until it's broken, and this can keep the door open for bullish USD and/or bearish CAD scenarios. Above current price action, the psychological level of 1.2750 looms large as this was the spot that helped to hold the resistance through this week. Beyond that, a spot around 1.2850 remains key, as this was a prior spot of resistance that bulls haven't been able to hold above for very long just yet. And beyond that, the same 1.2950 that came in as the high for 2021 functions as an 'r3.'

Underneath current price action – should this key zone of support give way, the next big spot on the chart is around the 1.2500 psychological level. Below that, 1.2390, and then 1.2255 function as s2 and s3 levels.

On the other hand, The Australian Dollar has kicked off 2022 on the defensive with the US Dollar roaring higher on the back of a more hawkish than expected Fed.​

The market returned from the holiday season and immediately saw Treasury rates move higher. Some of these initial moves were viewed as positions being re-stablished.

Going into the break, there was some concern that the spread of Omicron might force the Fed to re-assess their tightening stance from the December FOMC meeting

Shorts in Treasury futures, among other positions, had been scaled back. Come 2022, it appears that many of these positions were re-entered. AUD/USD is close to the level that it was prior to the holidays.

After the positions were put back on, the market digested the minutes from the December FOMC meeting. The document showed the tightening timeline had been broughtforward.​

As a result, Treasury yields have continued to rise and the interest rate differentials between Australia and the US contract. This scenario appears likely to continue until the RBA meets again in early February.

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