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

somrat4030

Well-known member
Staff member

Jan-10, 2022 EUR/USD, GBP/JPY, USD/CAD currency trading analysis, By Forex Forum.​


currency trading analysis

On Monday, the British pound plunges against the safe-haven Japanese yen, on a risk-off market mood, spurred by expectations of higher rates in the US and worldwide inflationary pressures.

The GBP/JPY pair is upward biased.​


The daily moving averages (DMAs) reside below the spot price, but the high reached on January 5 at 157.76, short of October 20, 2021, daily high at 158.22, exposed the pair to downward pressure, leaving it at the mercy of the market mood.

To the upside, the first resistance level would be the 200-hour simple moving average (SMA) at 156.20. A decisive break above that level would expose the S2 daily pivot at 156.47, followed by the S1 daily pivot at 156.76.

On the downside, the first support would be the psychological 156.00 figure which almost intersects with the S3 daily pivot at 155.97. A breach of the latter would expose the January 4 daily low at 155.34. and then the January 3 daily low at 154.90.

Source: fxstreet.com

Moreover, The GBP/USD pair plunges at the time of writing as the Dollar Index has managed to rebound and recover after its last sell-off. It remains to see what will happen as the currency pair is almost to reach strong near-term support levels.

The bias is still bullish despite the current sell-off. The price action printed a potential bearish reversal pattern, but the formation is far from being confirmed, that's why I'm still looking for longs.

As you already know, the GBP/USD pair rallied on Friday as the US Non-Farm Employment Change was reported at 199K in December versus 426K expected.

On the other hand, U.S. Dollar Moves Higher Against Canadian Dollar​

USD/CAD is currently trying to settle above the resistance at 1.2680 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently failed to settle above the resistance at 96.25 and pulled back towards the 96 level. In case the U.S. Dollar Index declines below this level, it will move towards the support at 95.75 which will be bearish for USD/CAD.

In case USD to CAD settles above the 50 EMA, it will move towards the next resistance level which is located at the 20 EMA at 1.2730. A successful test of the resistance at the 20 EMA will push USD to CAD towards the next resistance level at 1.2760.

On the support side, the nearest support for USD to CAD is located at 1.2650. If USD to CAD moves back below this level, it will head towards the support at 1.2625. A move below this support level will open the way to the test of the support at 1.2590.

Elsewhere, Euro turns softer in a quiet Asian session together with Swiss Franc, but Yen is even weaker.​
On the other hand, Aussie is ticking up slightly together with Loonie and Dollar. Overall, trading is rather subdued with major Asian stock indexes treading water in tight range, and Japan is on holiday. Focuses will turn to Fed chair Jerome Powell's testimony, and US inflation data later in the week, which should bring the markets back to life.

Technically, we'll keep an eye on Sterling. EUR/GBP is staying bearish, and it looks ready to resume the medium term down trend through 0.8333 temporary low any time. GBP/JPY is also still on track to retest 158.19 resistance, and resume larger up trend. Meanwhile, if GBP/USD could build up more momentum above 1.3570 support turned resistance, that would solidify the case of near term bullish reversal for 1.3833 resistance next.

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somrat4030

Well-known member
Staff member

Jan-11, 2022, EURUSD currency trading technical analysis and forecast, By Forex Forum​


ncy trading analysis

EURUSD is making another attempt to rise; investors are interested in risk attitude.​


The major currency pair is looking up on Tuesday. The current quote for the instrument is 1.1337.

The statistics published yesterday showed that the Sentix Investor Confidence in the Euro Area reached 14.9 points in January after being 13.5 points the month before. It's good news.

The Unemployment Rate in Europe was 7.2% in November against 7.3% in the previous month.

The US Fed Chairman Jerome Powell is scheduled to speak later today. At the same time, the Senate will have a hearing to extend his tenure as the Chairman for the second term. So, what can Powell tell market players they don't know yet? Probably nothing. However, he might talk about the monetary tightening again. First of all, investors are interested in any hints at this year's first rate hike.

Moreover, Eurozone's macro statistics published yesterday failed to give the euro any significant support – the unemployment data here declined by 0.1%, reporting to 7.2% in November, and the Sentix investor confidence indicator in January rose from 13.5 to 14.9. But yesterday's EUR/USD volatility was almost 75 points (in a 4-digit quote) and was about the same as last Friday when the key monthly data from the US labor market was published for the Fed. The US dollar fell sharply at the end of last week, as the NFP did not meet the expectations of the market and was well below the forecast. As already known, the number of new jobs created outside agriculture amounted to 199,000 in December, against the expected increase of +400,000.

Nevertheless, other data from the Ministry of Labor's report turned out to be very positive. The unemployment rate fell to a new pandemic low, namely to 3.9% in December from 4.2% in November. At the same time, the average hourly wage increased by 0.6% with a forecast of +0.4%. The growth of Americans' salaries was +4.7% in annual terms. The data indicate a shortage of employees, and in order to keep them, employers are more willing to increase their salaries, which leads to an acceleration of inflation.

On the other hand, The USD/CAD pair struggled to capitalize on the previous day's goodish rebound from the vicinity of the 1.2600 mark, or a one-month low and met with a fresh supply on Tuesday.​


The pair maintained its offered tone through the first half of the European session and was last seen trading just below mid-1.2600s.

From a technical perspective, the USD/CAD pair, so far, has managed to hold its neck above confluence support comprising of 100-day SMA and the 50% Fibonacci level of the 1.2288-1.2964 move up. This is closely followed by the overnight swing low, which if broken will be seen as a fresh trigger for bearish traders.

Elsewhere, A look at past BoE hiking cycles shows GBP/JPY has had a tendency to grind higher with a hit rate of 83%.​

What's more, with Commitments of Traders (COT) report data highlighting that traders are more bearish on GBP than they have been in over two years, there is fuel for a short squeeze to prompt a reprieve in the Pound. The risk, however, is the rise in political instability with government officials unable to keep themselves out of the limelight for the wrong reasons. To add to this, money market pricing is also a worry for the Pound, given how aggressive markets are priced for BoE tightening.

On the technical front, key support is situated at 148.50-149.00, failure to hold would negate the view of GBP/JPY upside. Topside targets are for 153.00-50.

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somrat4030

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Staff member

Jan-12, 2022, GBP/USD, EUR/USD technical analysis and forecast, By Forex Forum.​


currency trading analysis

The December US inflation report shows that the annual change in goods and services price reached 7% YoY. As a result, the US dollar is sold across the board, as reflected by the GBP/USD breakout.​


December US inflation data shows the third consecutive month with the annual inflation bigger than 6%. The prices of goods and services rose in December by 7% YoY, led by used cars and food.

As a consequence, the US dollar tumbled across the board, as reflected by the GBP/USD breakout. The pair consolidated in a wedge formation that eventually broke higher. Cable rallied close to 500 pips points since the December lows, making it one of the top-performing currency pairs in the last trading month.

For bulls, the 1.35 level acts as a pivotal one. While above, the price action remains bullish. On the flip side, a daily close below 1.35 would bring back the dollar's strength into the discussion.

Moreover, The recent gains of the GBP/USD currency pair moved the price to the ceiling of the upper line of the ascending channel formed by the currency pair starting from the last third of December starting from the support 1.3197. The recent gains moved some technical indicators towards overbought levels according to the performance on the daily chart. Unless the sterling gains additional momentum, it may be considered activating profit-taking selling operations starting from the resistance levels of 1.3675 and 1.3745, respectively. On the other hand, according to the performance over the same time period, a trend reversal will not occur without the currency pair moving towards the 1.3385 support.

The currency pair will be affected today by the risk appetite of investors as well as the reaction from the release of US inflation figures.

On the other hand, The EURUSD parity has been stuck in the 1.1380 – 1.1290 range for a while. Even though it was at record levels, there was an upward trigger in the parity after the US inflation, which did not break with expectations. Quickly jumping above 1.1380, the pair is rising towards the green downtrend line from 1.2260 at the beginning of June 2022 and pinned here on its first contact. In the next period, as long as it stays above 1.1380 for the short term, it can be predicted that the upward trend in the parity will remain stronger and if the trend line tested after the US inflation data is broken, the 1.15xx region may come to the fore.

Later in the week, we will listen to the statements of the FOMC members. Issues related to the first interest rate hike and the start of the balance sheet contraction will have an impact on the parity.

In addition, sub-headings that will affect inflation will also be important.​


Supports: 1.1380 – 1.1290 – 1.1190

Resistances: 1.1445 – 1.1530 – 1.1600

Moreover, Sellers have made several attempts to change the situation but with no success so far.​

The market seems to be waiting for a new driver, the US report on inflation. If the actual data exceeds the forecast, it will give a strong bullish signal for the US dollar and cause a decline in the EUR/USD pair. However, if the pair rises in the course of the New York session, bears will need to do their best to protect the resistance at 1.1385, which is the upper boundary of a wide sideways channel formed at the beginning of this year. A movement above this level will change the direction of the pair and push it out of the flat channel. A false breakout at 1.1385 will create the first entry point for going short, considering the resumption of downward pressure and a decline towards the 1.1353 area. Both bulls and bears will fight for this level since it is of key importance to them. Moreover, moving averages that support the bullish trend are located below this level. A breakout of this range and its test from bottom to top will give an additional signal to open short positions with the prospect of falling to a low of 1.1324. Only if the price leaves this range, the market direction may reverse to the downside, thus canceling a number of stop-loss orders set by the buyers. This will send EUR/USD to the lows of 1.1294 and 1.1273 where I recommend taking profit. In case the euro develops an uptrend and the bears' activity drops at 1.1385, it is better to wait with selling the pair. The best scenario here will be to open short positions on a false breakout at 1.1415. It is possible to sell EUR/USD right after a rebound from the high of 1.1442, or even higher, near the level of 1.1480, considering a downward correction of 15-20 pips as the next target.

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somrat4030

Well-known member
Staff member

Jan-13, 2022, EUR/USD, GBP/USD Trading Analysis and Forecast, By Forex Forum.​


Currency Trading fundamental analysis

For the US currency, which has fallen again after some macroeconomic statistics, it is difficult to balance the EUR / USD pair . On the other hand, the euro has a problem keeping up with the US dollar, so it prefers to move slowly but surely to reach its target.

Currently, the market is evaluating yesterday's inflation data in the US. According to them, consumer prices in the country increased by 0.5% in December 2021 and accelerated to 7% year on year. The key index gained 0.6% during the month and rose to 5.5% year on year. As regards prices excluding energy and food , the indicator increased by more than 1.7% in three months.

Based on the data obtained, economists have come to the conclusion that high inflation is penetrating the very core of the economy . In this situation, the Fed has no choice but to raise interest rates in March 2022 . The regulator fears not only soaring inflation , but also the "overheated" US labor market . Fed officials see high inflation as a major threat to a full economic recovery and are ready to raise interest rates because emergency monetary support is no longer needed.

Moreover, US consumer prices increased 0.5% for December and marginally above consensus forecasts.​


The year-on-year inflation rate increased to 7.0% from 6.8% which was in line with expectations and the highest figure since 1982. Energy prices declined slightly on the month with a 29.3% increase over the year.

Risk appetite posted net gains after the data with some relief that the rate was not even higher.

Markets were more optimistic over the global growth outlook.

The dollar dipped sharply following the data with a retreat to 2-month lows.

EUR/USD strengthened to 8-week highs near 1.1350 despite an unconvincing Euro performance.​


Sterling held firm with fresh 2-month GBP/USD highs as the dollar retreated.

On the other hand, The Bank of England (BoE) started the cycle of tightening monetary policy by hiking the UK Base Rate by 15 basis points to 0.25%, the first-rate hike in over three years, at the last Monetary Policy Committee (MPC) meeting of 2021. And additional rate hikes are already penciled in by economists for 2022 as UK inflation hits extreme levels last seen over 10-years ago.

The BoE hiked interest rates in December by 15 basis points to 0.25%, despite the ongoing surge in new Covid-19 cases. Many in the market had pushed back this rate hike until the next meeting in February 2022 on fears that the UK government may introduce harsh lockdown measures at a time when the UK economy is finally pulling out of the pandemic crisis of the last two years. The announcement of a new, virulent Covid-19 variant, Omicron in late November took the market by surprise and dampened any prevailing rate hike expectations. However, it seems like the BoE has chosen to look through these fears and have chosen to concentrate on official UK labour and inflation data instead.

Source: dailyfx.com/forex

GBP/USD Catapults to 200DMA​

That said, the combination of a softer USD and an unwind of short GBP positions has seen Cable towards its 200DMA, with the pair now its most overbought since February 2021.As such, with Cable essentially moving in a straight line since the turn of the year, I expect we will start to see some consolidation, what's more the close will be important following the 200DMA breach. Should see a close above, this puts 1.38 in focus. However, I lean towards a slight mean reversion with a move back towards sub 1.37. Support at 1.3650. Elsewhere, UK political instability so far having a limited on impact on the Pound, although, a focus will be on Sue Gray's report into the allegations that Boris Johnson broke Covid lockdown rules, which has the propensity to notably heightening political risk premium.

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somrat4030

Well-known member
Staff member

Jan-14, 2022, AUD/USD, USD/ZAR Technical Analysis and Forecast, By Forex Forum.​


AUD/USD currency trading analysis

A broadly risk-off market tone that has seen global equity markets turn lower for a second day on Thursday seems to be taking its toll on the Aussie, as well as potentially some domestic Australian pandemic woes. The under performing AUD has now dropped more than 0.6% on the day versus the US dollar, with AUD/USD recently dipped below 0.7250, as traders mull the economic impact of surging Omicron infections and whether it will have any bearing on upcoming RBA policy decisions.

This week's Australia November Retail Sales report showed a much stronger than expected rebound as the Australian economy continued to open up from its Q3 lock downs, solidifying expectations that, prior to the rapid spread of Omicron, Australia's economy had been growing strongly. However, after reaching record-high levels in December, Westpac said on Friday that card spending in the country had fallen sharply in the first two weeks of January. The RBA views Omicron as unlikely to derail Australia's economic recovery, but recent weakness might encourage them not to abruptly axe their QE buying in February and rather instead opt to taper and continue purchases to May.

Moreover, AUD/USD battles with 50% retracement​


The major fell sharply throughout the whole of November from 0.7555 to a support zone around 0.70, an area which also held prices in Autumn 2020. December was a more positive month for the aussie as the pair advanced back to the halfway point of the October to December fall at 0.7274.

After a small pullback, the pair jumped yesterday, into resistance. Again, the midway point of the move is acting as a barrier to more upside, along with the 100-day SMA at 0.7285. Support is the Fib level (38.2%) at 0.7207 with the 50-day SMA just below here. The September bottom at 0.7170 has also acted as support previously.

Bulls will want to consolidate recent gains with a strong close near to 0.73. They would then look to push towards the 200-day SMA at 0.7423.​


On the other hand, The South African rand has flourished against the U.S. dollar since late November 2021 but this may be coming to an end with the Federal Reserve adding to its already hawkish narrative.With such high expectations of the greenback late last year, markets flooded into dollar longs and unfortunately price action did not follow suit. With the traditional dollar fade over the December/January festive period repeating itself, the rand latched on and enjoyed the ride.

Remaining as the second best performing currency against the U.S. dollar year-to-date (see graphic below), the tide may be changing as the weak South African economic and political backdrop endures.

From a technical analysis point of view, the daily chart reads quite clean with the pullback in USD/ZAR price action approaching the medium-term channel support (black). While there is still room for further downside, I believe this will only be marginal at best. The Relative Strength Index (RSI) currently sits close to oversold territory, bouncing up off the October support reading around 34. While the growing threat of a bearish crossover on the 20 and 50-day EMA respectively, could suggest further rand strength to come (short-term).

Resistance levels:​

16.0000
20 and 50-day EMA's
15.5563 (January swing low)
15.4289 (50% Fibonacci)

Support levels:

15.1525
15.0000

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somrat4030

Well-known member
Staff member

Jan-17, 2022, GBP/EUR/USD/JPY technical analysis and forecast, by Forex Forum.​


currency trading news

The British pound took some impetus from expectations of the future of tightening the Bank of England policy, in addition to the easing of fears of the new Corona variable, despite its widespread. The sterling did not notice much of the criticism of British Prime Minister Johnson and his government. A leading independent economic think tank says British Prime Minister Boris Johnson remaining in office could cause greater economic repercussions than if he were to leave. Capital Economics sees little prospect of a shift in material policy under a new PM which could allow the economy to continue to recover over the coming months.

Chief UK economist at Capital Economics is looking for two potential flashpoints over the coming days: The first is the release of Sue Gray's report on what happened and whether the rules were broken. The implications for Johnson of being accused of breaking the law cannot be underestimated. Another hot spot to watch is the resignation of cabinet members, which is usually a source of pressure on the prime minister.

On the other hand, The Euro (EUR) firmed early last week amid a drop in Eurozone unemployment, a weaker US Dollar (USD) and a risk-off market mood.​


The single currency then wavered through much of the week. A retreating US Dollar buoyed EUR while a dovish European Central Bank (ECB) and an improving market mood offset the upside.

Finally, EUR lost ground to GBP by the end of the week. The Eurozone reported its first trade deficit since January 2014, while German GDP data confirmed that Europe's largest economy remains below pre-pandemic levels.

Meanwhile, the Pound (GBP) spiked on Tuesday amid strong sales data and Bank of England (BoE) rate hike expectations. However, profit-taking saw Sterling shed these gains.​


Moreover, According to the technical analysis of the pair: the price of the GBP/USD currency pair is still moving steadily inside its ascending channel and the bulls are trying to break through the upper line from that channel as the factors of its gains are still valid. The breach of the resistance 1.3775 is important to move towards stronger ascending levels 1.3830 and the psychological top 1.4000, respectively. Bearing in mind that the move towards these areas moves the technical indicators towards strong overbought levels, and unless the sterling gains momentum, profit-taking may start at any time.

On the other hand, confidence in the current upward move may be shaken by returning to the support area 1.3490 and below it.​

Elsewhere, 2022 has been relatively strong for the Japanese Yen against an overextended U.S. dollar. The Yen's safe-haven appeal has also come into play with tensions surrounding Russia and Ukraine. U.S. 10-year Treasury yields popped to yearly highs on Friday supportive of USD strength (USD/JPY is the highest positively correlated G10 pair to 10-year U.S. Treasury yields), and continues this week despite U.S. bond markets being closed. Tomorrows open should bring in more liquidity and volume to what is likely to be a thin trading day. However, volatility may be apparent via the significant option expirations today (see strikes below). In many cases, market participants tend to move prices closer to the respective strike values as expiration looms which could point to maintained upside as the large 115.00-10 expiry materializes.

USD/JPY OPTION EXPIRIES TODAY:

114.05-10 (520M), 114.20 (1.0BLN), 115.00-10 (1.577BLN)

On the other hand, Despite completing a bearish "reversal day" on Friday, EUR/USD maintains a near-term base above 1.1387. Analysts at Credit Suisse continue to look for a deeper recovery to 1.1513/24 and eventually 1.1597/1.1631, which ideally caps.

Source: fxstreet.com/news

Strength stays seen as corrective
Resistance is seen initially at 1.1464, then 1.1483/89, above which should see resistance next at the lows from October and November at 1.1513/24. Although we would expect this to cap at first we see scope for a move above here in due course to see a test of what we view as more important resistance at 1.1597/1.1631 – the 38.2% retracement of the May/November 2021 fall, 38.2% of the entire 2021 fall and November highs. Our bias would be for this to then cap for an eventual resumption of the core downtrend.

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somrat4030

Well-known member
Staff member

Jan-18, 2022, EUR/USD/GBP/CAD technical analysis and forecast, by Forex Forum​


Currency trading analysis

Last week was a big outing for the Euro, but not really because anything to do with the Euro-zone, at least not directly.​


The US dollar broke down to a fresh two-month-low, helping EUR/USD to run up to a fresh two-month-high. This move filled-in the ascending triangle formation that I had looked at last week in the pair. And, also as highlighted, prices moved directly into the next zone of resistance running from 1.1448-1.1500. The latter of those prices is a major psychological level while the former is a longer-term Fibonacci retracement level.

EUR/USD SHORTER-TERM – LEVELS​

The 1.1374 level is key with the daily bar, but if buyers can't hold the low above this level by the end of the day, bearish trend resumption strategies will look considerably more attractive. And – for those looking at Euro-strength scenarios, there may be another avenue that I'll look at a little later.

But – if 1.1374 can't hold the lows, another key level shows around 100 pips lower, at 1.1272, which was the higher-low that printed just ahead of the breakout setup. And below that, from 1.1187-1.1212 is the support zone that started all of this, coming into play in late-November to finally quell that EUR/USD sell-off that was so prominent for the six months prior.

On the other hand, USD/CAD is currently trying to settle back above the resistance at 1.2550 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to settle above the 50 EMA near 95.55 and is currently testing the next resistance level which is located at the 20 EMA near 95.70. In case this test is successful, the U.S. Dollar Index will head towards the 96 level which will be bullish for USD/CAD.

Today, foreign exchange market traders focused on the dynamics of U.S. government debt markets. The yield of 2-year Treasuries made an attempt to settle above the 1.05% level while the yield of 10-year Treasuries tested the 1.85% level.

At the start of this year, currency traders ignored rising yields. However, it looks that the recent move has finally provided enough support to the American currency. Most likely, traders will remain focused on the dynamics of U.S. government bond markets in the upcoming trading sessions. In case yields continue to increase, the safe-haven U.S. dollar may get more support.

Elsewhere, At 1.3574, GBP/USD has fallen some 0.51% on Tuesday from a high of 1.3661 to a fresh low of 1.3573. The surge in US Treasury yields has lifted the US dollar out of the doldrums while UK politics weighs on the tainted British currency as well.

Firstly, benchmark US Treasury yields jumped to two-year highs and major equity market indexes dropped more than 1% on Tuesday as traders braced for the Federal Reserve to be more aggressive in tightening monetary policy to tackle inflation.

UK politics in focus​
The UK's prime minister Boris Johnson is caught up in the ''Partygate'' scandal for which he has denied any wrongdoing and has lied to parliament about a lockdown party. His premiership is under threat. The uncertainty is a negative factor for the pound which is already pressured over European politics in the Brexit saga.

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somrat4030

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Staff member

Jan-20, 2022, Weekly EUR/USD, GBP/USD analysis and forecast, By Forex Forum​


trading-usual-1.jpg


The Pound Euro (GBP/EUR) exchange rate rose further this afternoon despite growing concerns from UK politicians and economists regarding the burgeoning cost-of-living crisis.

Nevertheless, widespread confidence in a February rate hike from the Bank of England (BoE) continued to temper downside.​


Meanwhile, jobs data from the US surprised to the downside, as both initial and overall jobless claims rose over Christmas and into January.

Initial claims increased to 286K in the week to January 15, while the 4-week average of benefit claimants rose to 231K: analysts blame a surge in Covid cases and record quit rates for the disappointing data.

On the other hand, To open long positions on EURUSD, you need: In my morning forecast, I paid attention to the level of 1.1368 and recommended making decisions on entering the market. Let's look at the 5-minute chart and figure out what happened. The data on inflation in the eurozone fully coincided with economists' forecasts, but the report on the growth rate of production prices in Germany surprised - a jump of 5.0% at once compared with the forecast of 0.8%. Against this background, euro buyers attempted to rise above the resistance of 1.1368, but it was unsuccessful.

The formation of a false breakdown at this level formed a sell signal. At the time of writing, the pair has already gone down more than 20 points and the pressure on the euro is only increasing. From a technical point of view, everything remained unchanged. And what were the entry points for the pound this morning?

As for myself, I see much better set ups but if we do break out above the 50 day EMA on a daily close, then I would be more convinced of the idea of this market going higher. It is worth noting that there is a bit of an uptrend line sitting underneath, and therefore the triangle has in theory at least held. If we break down below the 1.1250 level, that could spell trouble for the Euro and send it down to the lows again, possibly even down to as low as the 1.10 level underneath.

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somrat4030

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Staff member

Jan-21, 2022, EUR/USD/JPY Technical Analysis and Forecast, By Forex Forum​


The EUR/USD is rising on Friday, and after the beginning of the American session, it peaked at 1.1361 and then pulled back. The US dollar is posting mixed results across the board, ahead of the weekend.

The upside lost momentum amid risk aversion. Equity prices in Wall Street are falling again, with the Dow Jones losing 0.42% and the Nasdaq 1.52%. The negative tone is boosting Treasuries. The 10-year yield stands at 1.74%, while the 30-year 2.06%, both a one-week lows.

The US dollar benefits from negative sentiment. The upside finds some limit amid lower US yields. The predominant tone is the risk aversion so far.​


The euro is showing strength in the market and with the Swiss franc and the yen is among the top performers. The EUR/GBP pair is rebounding sharply from two-year lows, and it trades at 0.8375, having the best day in months, and offers support to EUR/USD. Recent release data showed the Eurozone Consumer Confidence index declined from -8.4 to -8.5 in January.

Source: fxstreet.com/news

On the other hand, The USDJPY has seen a down, up and back down day.​


The last move to the downside has seen the price retest the earlier low for the day and also a swing low level going back to last Friday's trading (see blue numbered circles. The pair did move below that level a week ago on its way to a cycle low at 113.47, but snapped back higher and used that level as support before moving to the high reached this week on Tuesday.

The last four days has seen a steady decline to the downside as risk off flows have sent the flow of funds into the relative safety of the JPY.

The pair's return to the swing area is providing some support. The price has moved back up to 113.70. Watch the 113.80 and further up at 113.954 to 114.00 as topside targets on further momentum.

Conversely, a break of the 113.60-62 area would have traders looking toward the low from last week at 113.47 followed by a swing area near 113.33 to 113.365. Below that the 100 day moving average at 113.239 would be eyed.

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somrat4030

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Jan-24, 2022, EUR/USD/GBP analysis and market forecast, By Forex Forum​

Jan-24, 20222.jpg


The Euro has continued to consolidate to start the week as markets digest Friday's price action and contemplate the possible outcomes of the Fed's FOMC meeting this week.

The VIX, a measure of equity market volatility, traded at its highest level since early December on Friday.

Overall, the first few weeks of 2022 have seen most global equity indices move lower and government bond yields go higher.

US Treasury yields are the bellwether for global government bonds and by extension, global interest rates. Most of the volume in this market is seen in the North American session, for obvious reasons.

The fact that this market got moving in Asia could be indicative of notable portfolio adjustments going through. When large money managers (real money and hedge funds) need to make a significant shift to the tilt in their portfolios, it can take several days or longer to complete, due to liquidity constraints.

Euro stays on the back foot to start the week. Economists at OCBC Bank think the EUR/USD pair is likely to break below the 1.1300 level.

Geopolitical tensions with Russia to have important implications for the euro
"At this juncture, risk-reward likely favours a downside breach of 1.1300, rather than moving higher towards 1.1500."

"Outright conflict over Ukraine may be a strong directional impetus."​


On the other hand, The British pound fell hard on Friday to break down below the 200-day EMA. One of the things that grabs my attention rather quickly is the fact that we have broken down below the bottom of two shooting stars in a row, so that does suggest that we are perhaps going to see more selling pressure. The 1.3550 level has offered a certain amount of support, but I do think it is probably likely that we will try to test the bottom of this candlestick. If we do break down below the candlestick from the session on Friday, it could open up a move to the 1.35 handle.

The 50 day EMA is an indicator that a lot of people will pay attention to, so if we break down below there it is likely that we could break down quite drastically. At that point, I think we will probably see this market drop all the way down to the 1.32 handle more than anything else.

What do you think?

Elsewhere, US Dollar Index focuses on yields, data, geopolitics​

The index extends the consolidative theme in the upper end of the consolidative phase for yet another session on Monday, always tracking the price action in the US money markets, geopolitics and the broad risk appetite trends.

The greenback remains vigilant, albeit so far apathetic when it comes to reaction in prices, on the developments from the US-Russia-Ukraine conflict, where the latest US-Russia talks yielded no progress on this front.

What to look for around USD​
Despite Friday's pullback, the index managed to close the week in a positive note well north of the 95.00 barrier. In spite of consensus already priced in a probable move on rates by the Fed at the March meeting, the constructive outlook for the greenback is expected to remain unchanged into this week and ahead of the FOMC event on Wednesday.

Source: https://www.fxstreet.com/news/

US Dollar Index relevant levels
Now, the index is losing 0.08% at 95.64 and a break above 95.83 (weekly high Jan.18) would open the door to 96.46 (2022 high Jan.4) and finally 96.93 (2021 high Nov.24). On the flip side, the next down barrier emerges at 94.75 (100-day SMA) followed by 94.62 (2022 low Jan.14) and then 93.27 (monthly low Oct.28 2021).

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somrat4030

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Jan-25, 2022, EUR/USD, EUR/GBP, USD/JPY technical analysis and forecast, By Forex Forum​


Currency trading analysis

EUR/USD keeps testing the two-month channel support line at $1.1292 which may still be slipped through ahead of key policy decisions from the Federal Open Market Committee (FOMC) tomorrow.​


Together with the late December and early January lows at $1.1274 to $1.1272 the channel support line has held since late December. A fall through this support zone would put the mid-December low at $1.1222 as well as the November trough at $1.1186 on the map.

The downtrend remains firmly entrenched while the currency pair stays below the 16 January high at $1.1369 and, more importantly, the late November and December highs at $1.1383 to $1.1387.

Moreover, EUR/GBP has formed a bottom and is likely to rise further still.​

Now that the November low and last week's high at £0.8379 to £0.8381 have been exceeded, EUR/GBP is deemed to have formed a bottom at its year-to-date low at £0.8305. It was made right between the £0.8313 to £0.8277 December 2016, April 2017, December 2019 and February 2020 lows which represent key long-term support.

Source: ig.com/

On the other hand, The dollar edged higher on Tuesday to within striking distance of its two-week peak, as investors bought safe-haven currencies amid tensions between Russia and the West over Ukraine while awaiting the outcome of the Federal Reserve's policy meeting.

The US military put about 8,500 troops on alert to be ready to deploy to Europe if needed, in the latest effort to reassure jittery NATO allies in the face of a Russian military build-up near Ukraine.​

"Much greater exposure of European economies to the crisis does not make the euro a particularly attractive vehicle to ride out the current storm," ING analysts said.

The euro was down 0.2% at 0848 GMT to $1.1300, trading just off its lowest since on 20 December touched on Monday.

The dollar index was 0.1% higher at 96.02, just off its two-week high of 96.135 hit on Monday.

The safe-haven yen gained 0.3% versus the euro and 0.1% against the dollar, remaining within striking distance of its one-month highs.

The Swiss Franc was down 0.1% versus the euro at 1.0366, but not far from its highest since 2015, hit recently at 1.0298.

Elsewhere, The USD/JPY pair climbed back above the 114.00 mark during the first half of the European session and was last seen trading near a two-day high.

A combination of supporting factors assisted the USD/JPY pair to attract some dip-buying near the 113.65 area on Tuesday and turn positive for the second successive day. The US dollar continued drawing support from expectations that the Fed will tighten its monetary policy at a faster pace than expected.

In fact, the markets seem convinced about an eventual Fed lift-off in March and have been pricing in a total of four rate hikes in 2022. Bulls further took cues from a goodish rebound in the US Treasury bond yields, which was seen as another factor that underpinned the buck and extended some support to the USD/JPY pair.

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somrat4030

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Jan-27, 2022, EUR/USD, EUR/JPY, USD/CHF Analysis and Market Forecast, By Forex Forum​


Currency trading analysis

European Central Bank (ECB) policymaker and Slovak central bank Governor Peter Kazimir said on Thursday that inflation in the eurozone is expected to peak in the "nearest months" before starting to decline, as reported by Reuters.​


"We see signs of stabilisation in global supply markets," Kazimir further added.

Market reaction
The shared currency is having a difficult time finding demand following these comments. As of writing, the EUR/USD pair was trading at 1.1191, where it was losing more than 0.4% on a daily basis.

Source: fxstreet.com/news

On the other hand, EUR/JPY: Retail trader data shows 50.00% of traders are net-long with the ratio of traders long to short at 1.00 to 1.​


In fact, traders have remained net-long since Dec 22 when EUR/JPY traded near 129.26, price has moved 0.35% lower since then. The number of traders net-long is unchanged than yesterday and 20.32% higher from last week, while the number of traders net-short is 7.08% lower than yesterday and 25.62% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/JPY prices may continue to fall.

Our data shows traders are now net-long EUR/JPY for the first time since Dec 22, 2021 when EUR/JPY traded near 129.26. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/JPY-bearish contrarian trading bias.

Elsewhere, USDCHF is rallying to a fresh two-week high of 0.9868, creating several bullish sessions.​

The price overcame the short-term simple moving averages (SMAs) with the technical indicators holding in the overbought region. The RSI is ticking up above the 70 level, while the stochastic is pointing upwards with strong momentum.

Immediate resistance is coming from the 0.9275 barrier before touching the 0.9294 high, registered in December 2021. Moving higher, the 0.9373 may halt the bullish movements, achieved in November 2021.

On the other hand, After the Fed meeting on Wednesday, USD/JPY pair continued its bullish trend by increasing for a second straight day on Thursday, marking the third day of positive movement in the previous four days. Furthermore, the Fed reiterated market expectations of possible growth in March, causing the US dollar to fall to its highest level since mid-December. Thus, the USD/JPY pair's strong growth is attributed to this factor.

The overnight rally in US Treasury yields indicates that markets anticipate four rises in 2022. As a result, the benchmark 10-year Treasury yield rose to 1.85% overnight. On the other hand, the yield on the 10-year JGB remained near zero due to the Bank of Japan's policy of controlling the yield curve. In addition to this, the increase in yield differentials between the US and Japan has benefited USD/JPY.

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somrat4030

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Jan-31, 2022, Currency Trading Analysis, By forex forum.​


currency trading analysis

GBP/USD continues its attempts to settle above the resistance level at 1.3420 while the U.S. dollar is moving lower against a broad basket of currencies.​


The U.S. Dollar Index is currently trying to get below the support level at 97. In case this attempt is successful, the U.S. Dollar Index will move towards the next support level at 96.70 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on general market sentiment and the developments in U.S. government bond markets. The yield of 2-year Treasuries stays close to recent highs as bond traders remain worried about inflation and potential Fed's moves.

Moreover, Last week, the U.S. dollar index (DXY) rose by 1.8%, returning to the levels of June 2020.​


However, today DXY is declining. According to the data presented last Friday by the Commerce Department's Bureau of Economic Analysis, the growth in personal income of U.S. households slowed to +0.3% in December (against the forecast and the previous value of +0.5%), and spending decreased by -0.6% against the growth of +0.4% in November. At the same time, the preliminary consumer confidence index from the University of Michigan fell to 67.2 (against the forecast of 68.7 and the value of 68.8 in December).

Australia's Q4 inflation data released last week far exceeded forecasts. Taking into account the fact that the Australian labor market continues to strengthen, creating conditions for accelerating wage growth, this allows many economists to predict the beginning of the tightening of the RBA policy earlier. According to their new forecast, the RBA will raise the key rate in August 2022, and not in the fourth quarter, as previously expected. If the RBA leaders confirm the possibility of such a scenario at the meeting on Tuesday, the AUD may receive good support. Today the AUD is strengthening, including in the AUD/USD pair, having received support from the positive data on Australian producer prices published on Friday and from the positive data on private sector lending published today. Australia's private sector lending rose 0.8% in December, better than the +0.5% forecast, albeit lower than the previous +1.0%.

Today the AUD is strengthening, including in the AUD/USD pair, having received support from the positive data on Australian producer prices published on Friday and from the positive data on private sector lending published today. Australia's private sector lending rose 0.8% in December, better than the +0.5% forecast, albeit lower than the previous +1.0%.

Source: instaforex.com/

On the other hand, EUR/USD stages a decent come back following last week's fresh lows in the 1.1120 region (January 28), an area las visited in the summer of 2020.​

So far, the ongoing strength is deemed as corrective only. That said, further downside appears likely and could extend to the round levels at 1.1100 and 1.1000 once the pair clears the so far 2022 low.

Extra losses in the pair remains well on the cards as long as it remains capped by the 4-month resistance line, today in the 1.1330/25 band.

In the longer run, the negative outlook is seen unchanged below the key 200-day SMA at 1.1690.

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somrat4030

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Feb-01, 2022, EUR/USD/JPY technical analysis and forecast, By forex forum.​


currency trading analysis

The dollar fell for a second consecutive session on Tuesday, knocked off the 19-week peak reached at the end of January, while risk-sensitive currencies such as the Australian dollar and British pound gained.​


After falling nearly 5% in January, world equities started February slightly firmer and currency markets have also changed course.

After hitting a 19-month high last week, the U.S. dollar index fell on Monday. On Tuesday, it was down 0.4% on the day at 96.281 at 1223 GMT.

Euro-dollar strengthened, up 0.3% on the day at $1.12705.

The dollar's downward turn could be due to end-of-month flows that left investors needing to sell dollars in the last week.

The improved risk appetite seen in stock markets may also be playing a role, as the dollar is seen as a safe-haven currency.

Source: yahoo.com/news

On the other hand, The Euro is trading higher on Tuesday, helped by a weaker U.S. Dollar and position-squaring ahead of Thursday's European Central Bank (ECB) meeting.​


The dollar is giving back some of its recent gains on profit-taking and position-squaring ahead of several key U.S. economic reports this week including Tuesday's ISM Manufacturing PMI and JOLTS Job Openings as well as Friday's U.S. Non-Farm Payrolls report.

Last week, the Euro fell against the U.S. Dollar on expectations of a faster pace of rate hikes by the Federal Reserve. On Monday, the single-currency surged as the greenback weakened after Fed policymakers said they'll raise interest rates in March, but spoke cautiously about the timing of future rate hikes.

Elsewhere, The USD/JPY pair continued losing ground through the mid-European session and dropped to a three-day low, around the 114.60 region in the last hour.​

A key factor exerting downward pressure on the USD/JPY pair, on Tuesday, and leading to its third down day in a row, was the ongoing retracement slide in the US Treasury bond yields, which dragged the US dollar further away from the highest level it has reached since July 2020, touched in the aftermath of last week's more hawkish FOMC.

The USD/JPY pair has now retreated over 100 pips from the 115.70 area, or a near three-week high set on Friday, and erased around 50% of last week's strong recovery move from a one-month low. Some follow-through selling will be seen as a fresh trigger for bearish traders and set the stage for a further near-term depreciating move.

Losses may be limited by growing market acceptance that the Fed will tighten its monetary policy at a faster pace. The money markets have fully priced in an eventual Fed liftoff in March and expect five quarter-point rate hikes by the end of 2022.

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somrat4030

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Feb-02, 2022, EUR/USD Technical and Fundamental analysis, by forex forum.​


currency trading analysis

The USD is down across the board as stocks extend the recovery.​

We see a nice bullish impulse on EURUSD pair meaning that the bottom is in place and more upside can seen in sessions ahead. However, markets are waiting on EUR CPI data at 10GMT, followed by US ADP employment report later, so this is something that we have to watch today. Strong EUR CPI will likely indicate that ECB should be more hawkish.

EURUSD is making a sharp rise which is looking impulsive from 1.1121, so we assume that pair is bottoming and that more upside can be seen after wave B/2 pullback. In fact, recovery may be much higher if we consider that on a daily chart pair can be completing wave D of a triangle.

Moreover, EU core and headline inflation prints beat estimates (see economic calendar below) with Italian data following suit.​


The Euro has been appreciating against the greenback this week with strong labour, growth and now inflation statistics. Inflation is likely to remain elevated with rising oil and gas prices plaguing the region.

German and French headline inflation figures earlier this week set the scene for higher EU inflation this morning adding to hawkish pressure on the ECB for tomorrow's interest rate decision. This being said, the ECB is unlikely to change its stance on inflation dissipating later in the year but questions around mounting inflationary pressures are bound to increase.

On the other hand, GBP/USD overall contains a big break at 1.3525 but then comes the day trade. This is where trading life becomes interesting.​

A market price movement is as good as the MA and interest rate allows and its central bank created and determined.

EUR/USD for example in 2015 and 2016 traded anywhere from 75 to 80 daily pips on a 1/2 range and 150 to 160 pips for full ranges.

Presented for EUR/USD and GBP/USD is the present trade condition but situations change as interest rates adjust and adjustments happen every trade day. Today's EUR/USD and GBP/USD may or may not be tomorrow or next week's trade.

Its impossible for the exchange rate not to move on any given day. GBP/USD contains 2 vital numbers: 1 and 4 or 0.0001 and 0.0004. For the week GBP/USD moved 161 pips, 0.0161. Subtract 1 and GBP/USD moved 160 pips. Subtract 4 then GBP/USD moved 158 or 0.0158.

Despite 161 pips, in interest rate terms, market prices actually moved extremely small intervals.

Elsewhere, The Australian Dollar is trading slightly higher early Wednesday as a global stock market rally continued to drive demand for the risk sensitive currency, while traders assessed the impact of the Reserve Bank (RBA) policy statement released on Tuesday.

At 05:29 GMT, the AUD/USD is trading .7136, up 0.0006 or +0.09%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $70.50, up $0.43 or +0.61%.

The RBA is still sounding dovish, but did open the door to a rise in the 0.1% cash rate later this year if the economy continued to surprise with its strength.

RBA Governor Philip Lowe on Tuesday said there were now clearly scenarios where rates could rise, a shift from his previous stance that a move was unlikely in 2022.

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somrat4030

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Feb-03, 2022, Currency trading analysis, By forex forum​


Currency trading analysis.jpg


Whereas the Financial institution of England hiked charges, GBP/USD confirmed a restrained transfer of power. And although the ECB merely opened the door to a potential shift, EUR/USD has put in a concerted topside breakout.

EUR/GBP has put in an aggressive bounce on this outlay, highlighting the ever-important function of expectations in Foreign exchange evaluation.​


The British pound has been aggressively bought off the forex market by investors in anticipation of the Bank of England's rate hike on Thursday, February 3. It will take it to multi-year highs, but the British currency could be challenged by economic disappointment later in the year as Economists say. The strong rebound gains for the GBP/USD currency pair brought it to the 1.3586 resistance level, its highest in two weeks, and is stable around it, ahead of the important and influencing data and events today and tomorrow. In general, gains were recorded by the pound against both the euro and the dollar at the beginning of the new month's trading as investors set a second interest rate for the Bank of England, which is likely to raise the bank rate to 0.50%.

The EURUSD pair rose nearly 150 pips, flying above 1.14 without any complications, as today's ECB meeting has brought a massive hawkish surprise.​


The central bank left monetary policy unchanged, as widely expected. However, the following press conference and updated guidance stunned investors.

According to the report, the Governing Council agreed that "it's sensible not to exclude a rate hike this year" and that "an end of bond-buying under the APP in the third quarter is possible."

This means that the ECB is now open to a rate hike in Q4 - since Lagarde said bond-buying will have to end first before rate hikes begin - which, however, still puts it well behind the curve as the market now prices about two rate hikes by September.

Elsewhere, The AUD/USD pair is little changed for a second consecutive day, trading in the 0.7130/40 price zone, trapped between the poor performance of equities and absent demand for the American currencies. The pair posted a higher high and a lower low on a daily basis, peaking with the upbeat surprise of the European Central Bank at the beginning of the American session. The Bank of England came out with a hawkish monetary policy decision and, alongside the ECB, dented the greenback's demand.

Source: fxstreet.com/analysis

Australian data released at the beginning of the day was mixed, dragging the pair lower. The AIG Performance of Construction Index contracted to 45.9 in December, down from 57 previously. The Commonwealth Ban Services PMI printed at 46.6 in January, slightly better than the 45 anticipated. Also, Q4 NAB's Business Confidence resulted upbeat, surging to 18 from the previous -2.

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somrat4030

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Feb- 05, 2022, US economical news and stock market updates, by forex forum.​


US economical news and updates


Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally started off strong last week, but pared gains considerably amid big earnings moves and soaring Treasury yields.​


Investors need patience and discipline right now, keeping exposure light while waiting to see if the confirmed market rally powers higher or breaks down.

Apple (AAPL), Google parent Alphabet (GOOGL), Qualcomm (QCOM) and Microsoft (MSFT) are tech giants that are holding up well, setting up potential entries. All of these stocks have already reported strong quarterly results, and have relatively modest price-earnings ratios.

Meanwhile, Tesla stock has more work to do to get into position, but is holding up better than most highly valued growth plays. Tesla (TSLA) also has already reported earnings.

On the other hand, Bank of Baroda (BoB) on Saturday reported a 107 per cent year-on-year (YoY) rise its net profit for October-December quarter at Rs 2,197 crore. On a quarter-on-quarter (QoQ) basis, profit rose 5.2 per cent from Rs 2,088 crore in the preceding September quarter.​



The bank's net interest income (NII) rose 14.4 per cent YoY and 13 per cent QoQ to Rs 8,552 crore. Global net interest margin (NIM) expanded to 3.13 per cent as compared with 2.77 per cent a year ago and 2.85 per cent in the preceding quarter.

Domestic deposits grew 5 per cent YoY and 1.4 per cent QoQ to Rs 8.76 lakh crore, while domestic current account and saving account (CASA) deposits rose 12.9 per cent YoY and 3.3 per cent QoQ to Rs 3.88 lakh crore.

Gross domestic advances rose 3.4 per cent YoY and 5 per cent QoQ to Rs 6.54 lakh crore.

Source: businesstoday.in/industry

In terms of asset quality, gross non-performing assets (NPAs) stood at 7.25 per cent at the end of December quarter as against 8.48 per cent a year ago and 8.11 per cent in the preceding September quarter. Net NPAs were at 2.25 per cent as compared with 2.39 per cent in December quarter last year and 2.83 per cent in September 2021 quarter.

Elsewhere, The helter-skelter playing out on U.S. factory floors from labor and supply shortages, transportation bottlenecks and the coronavirus looks likely to persist into the second half of the year.​

That's the message from the heads of lumber producers and makers of air conditioners to homebuilders and apparel manufacturers. Recent corporate earnings calls have been replete with mentions of cascading and inflationary effects that are hampering companies' ability to meet demand.

The lack of sufficient labor, along with job switching and recent omicron-related absences, is wrecking havoc on nearly every U.S. industry. The latest employment report on Friday showed while the labor force participation rate -- the share of Americans that are either working or looking for work -- climbed in January, it's still well below pre-pandemic levels.

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somrat4030

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Staff member

Feb-07, 2022, Currency analysis and forecast, By forex forum​


currency trading analysis

Large institutions and hedge funds (profit-seeking organisations) increased their short Sterling holdings while a decline in longs was also observed. This means that the overall 'mood' of the market has soured somewhat to the Pound as net- short positioning climbs once more. These bigger players in the market are often referred to as the 'smart money' due to their track record of positive returns and sophisticated market knowledge.

On Thursday we have US core and headline CPI data due with 7.3% estimated for headline inflation after the 40 year high of 7% reported for December. Given the current hawkish expectations around Fed monetary policy, a print inline with expectations may not have much of an effect on the pair but a beat could send GBP/USD lower. Then on Friday we see preliminary US Michigan consumer Sentiment.

Also on Friday, preliminary UK GDP is due for Q4 and December. The effects of Omicron, despite being mild, did result in weaker retail sales year on year in December which may carry over into the GDP numbers. Nevertheless, the GDP growth rate is forecast to be 6.5%

Source: dailyfx.com/forex/

On the other hand, The Canadian dollar is struggling to find direction.​


USDCAD Snapshot: Open 1.2733-37, Overnight Range-1.2711-1.2755, previous close 1.2765, WTI open $91.21, Gold open $1810.62

USDCAD bounced in a 1.2650-1.2787 range last week, torn between the risk of sharply higher US interest rates and soaring oil prices. It may see a similar performance this week, albeit with an upward bias to USDCAD.

Traders turned their attention to Europe after ECB President Christine Lagarde's press conference on Thursday. The central bank chief morphed from dovish to hawkish, catching the market off guard and wrong-footed.

Elsewhere, EUR/GBP hit fresh annual highs in the 0.8470s on Friday but has since pulled back to consolidate around the 0.8450 area, where it trades broadly flat on the session.​


The latest remarks from ECB President Christine Lagarde before the EU parliament did not add anything new to her remarks in last week's post-ECB meeting press conference. Recall that, last Thursday, her refusal to reiterate a prior statement that rate hikes in 2022 are unlikely and greater emphasis on upside inflation risks triggered a lurch higher in EUR/GBP from fresh multi-year lows under 0.8300.

The end result was that EUR/GBP enjoyed its best week since April 2021, rallying more than 1.7% to current levels in the mid-0.8400s. As traders reassess their expectations as to the outlook for BoE/ECB policy divergence, some think EUR/GBP could yet be headed higher. In Q2, the UK faces a cost of living crisis with taxes and energy costs set to rise in tandem, factors which likely help keep the BoE's terminal interest rate capped relative to elsewhere in the G10.

Meanwhile, if over the same time period the Eurozone continues to face hotter than expected inflation, the likelihood that the ECB accelerates its QE taper and signals a Q4 rate hike are high. That could continue to support EUR/GBP in the medium-term, perhaps facilitating a test of the next key resistance are around 0.8600.

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somrat4030

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Feb-08, 2022, EUR/USD, GBP/USD, USD/TRY Analysis and forecast, By Forex Forum.​


currency trading analysis

The Euro continued to soften in Asia today after comments from ECB President Christine Lagarde yesterday. She appeared to step back from her remarks of last week that the market read as overtly hawkish that kicked off a bout of volatility.

Most notably, she said yesterday, "a rate hike will not occur before our net asset purchases finish." She also said, "any adjustment to our policy will be gradual."

EUR/USD TECHNICAL ANALYSIS​

The rally in EUR/USD last week stalled at the previous high of 1.14830. It may continue to offer resistance, as well as the pivot points at 1.15133 and 1.15245.

On the downside, support might be at a series of pivot point clusters. The first is at 1.13865 and 1.13830, then 1.12738 and 1.12633, then 1.12347 and 1.12219.

Further below, the pivot point at 1.11861 and the low at 1.11215 could provide support.

Closer by, support may also be at the 10, 34 and 55-day simple moving averages (SMA), currently at 1.13080, 1.13316 and 1.13151 respectively.

Source: dailyfx.com/forex

On the other hand, The GBP/USD pair rallied nearly 50 pips from the early European session low and shot to a fresh daily high, around mid-1.3500s in the last hour.​


The pair attracted some dip-buying in the vicinity of the key 1.3500 psychological mark on Tuesday and is now looking to build on the overnight bounce from a four-day low. The uptick lacked any obvious fundamental catalyst and runs the risk of fizzling out rather quickly amid a goodish pickup in the US dollar demand.

Expectations that the Fed would tighten its policy at a faster pace triggered a fresh leg up in the US Treasury bond yields and underpinned the greenback. In fact, the markets are pricing in a 50 bps rate hike in March, which, in turn, pushed the yield on the benchmark 10-year US government bond closer to the 2.0% threshold.

Moreover, The pound gained versus the euro for a second consecutive day, pulling back from a 1-1/2 month low hit on Monday as investors judged that any monetary tightening by the European Central Bank will significantly lag its British counterpart in the near term.

Versus the euro, the pound edged 0.3% higher at 84.56 pence on Tuesday in early London trading after weakening to 84.74 pence on Monday, its lowest levels since late December. Against the dollar, the pound was steady at $1.3540.

"We're still of the view that in six months' time, UK rates will be in positive territory," said Dean Turner, UK economist at UBS Wealth Management. "We're still happy to see euro/sterling target the 81 level by year-end."

While the Bank of England delivered a quarter-point hike last week as widely expected, a split vote came as a surprise, as four of the nine Monetary Policy Committee members wanted a 50 basis points move. Money markets are now pricing in another 127 basis points of hikes over the remainder of the year.

Elsewhere, The Turkish lira fell slightly on Tuesday, as investors followed a Reuters poll that showed expectations of a rise in the country's current account deficit by about 14.95 billion dollars during the month of December.​

The Turkish government expected to record a trade deficit of $21 billion in 2021, compared to a deficit of $36.72 billion in 2020. Meanwhile, reports said that the Turkish government is preparing to issue sukuk this month for the first time since the lira's strong declines since October of last year.

The price of the Turkish lira fell against the dollar during today's trading where the lira continued to trade in a limited range. The lira is still trading below the resistance levels that are concentrated at 1371 and 13.84. On the other hand, the lira is trading the highest support levels at 13.28 and 13.06. In the meantime, the lira is trading above the falling trend line on the 240-minute time frame. The pair also rose to trade above the moving averages 50, 100 and 200, on the four-hour time frame, as well as the 60-minute time frame. We expect the price of the lira to rise, especially if it reaches the mentioned resistance levels, as it targets the mentioned support levels.

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somrat4030

Well-known member
Staff member

Feb-09, 2022, EUR/USD, GBP/USD Currency Trading Analysis, By Forex Forum.​


currency trading analysis

Economic data from the Eurozone failed to reverse EUR gains early in the day. Market sentiment towards ECB monetary policy continued to deliver support.

EUR/USD still under pressure​

The EUR/USD has retreated from the highs of Monday's session, close to the highs seen in mid-January. The price has yet to begin a full reversal, but a more bearish view would develop with a drop below $1.136.

A rally back above $1.149 would be needed to open the way to further gains, and would bring $1.1524 and then $1.16 into view.

Source: ig.com/en-ch/news

The pair is getting closer to the key level of the smaller timeframes – a weekly long-term trend during the long downward correction. Now, the trend is at 1.1402. A consolidation below it and reversal of the moving average can change the current balance of forces, but as long as the pair stays above the level (1.1402), the advantage remains on the bullish side. Today, the upward targets can be noted at 1.1445 - 1.1473 - 1.1498 (classic Pivot levels). If priorities change, the strengthening of the bearish mood will take place along the supports of the classic pivot levels (1.1392 - 1.1367 - 1.1339).

On the other hand, EUR/JPY extends the upside momentum further north of the 132.00 mark midweek, advancing for the second session in a row at the same time.​


In light of the recent price action, further gains in the cross look likely in the short-term horizon. That said, the surpass of the YTD high at 132.16 (February 7) should open the door to 132.53 (high November 4) seconded by 132.91 (high October 29) and finally the October 2021 peak at 133.48 (October 20).

In the near term, further upside remains on the table while above the 3-month support line, today near 130.80. In the longer run, and while above the 200-day SMA at 130.46, the outlook for the cross is expected to remain constructive.

German Trade Data​
In December, Germany's trade surplus narrowed from €10.8bn to €6.8bn. Economists had forecast a trade surplus of €10.4bn.

According to Destatis,

Month-on-month, exports rose by 0.9% to €117.0bn.
Compared with December 2020, exports increased 15.6%.
Imports increased by 4.7% to €110.0bn.
Imports increased by 27.8% when compared with December 2020.
Trade with EU countries

*. Compared with December 2020, exports to the EU increased 23%, while imports from the EU rose by 23.5%.

*. Goods exported to the euro area increased by 23.5%, while imports from the euro area rose by 27.9%.

*. Exports of goods to non-EU countries increased by 8.0%, while imports from non-EU countries jumped by 32.5%, year-on-year.

Source: fxempire.com/news

On the other hand, The pound keeps trading in the attraction zone of daily levels, while the center of gravity is currently in the weekly medium-term trend (1.3537). As a result of slowdown and pause, the main conclusions and expectations about the development of the movement remain the same. The support and resistance levels of this area also retain their value and location.

GBP/USD recovers some recent losses
After falling last Friday, the GBP/USD price has edged higher, moving off the 100-day simple moving average (SMA) of $.13508. This then puts $1.36 into view once more, and could see the price target $1.366 and then the 200-day SMA at $1.3706.

A reversal back below $1.35 would certainly reverse the bullish view outlined above, and could see the 50-day SMA at $1.3452 and then the January low around $1.337.

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