Sample Category Title

The rate rallied aggressively and retested the fifth warning line (wl5) of the ascending pitchfork, but failed to stay near this level and above the 50% retracement level. Another false breakout above the 50% retracement level will send the rate down again. However, it is still expected to retest the upper median line (uml) of the minor descending pitchfork. A larger increase will come only if the rate will make a valid breakout above the WL3.

The currency pair increased in the last hours and erased the morning losses. Price is still in the green and could climb much higher as long as stay above the 0.7835 horizontal support (resistance turned into support). The next upside target will be at the upper median line (uml) of the minor descending pitchfork. It could be attracted by the confluence area formed between the 23.6% retracement level with the upper median line (uml) of the minor descending pitchfork.

The USD/JPY dropped today and retested a broken dynamic support (resistance turned into support). Price increased sharply in the yesterday’s trading session as the Yen was punished by the Nikkei’s further increase. The Japanese stock index has managed to touch fresh new highs in the morning, has climbed as much as 21392 high, but failed to stay there and now is trading below the 21350 yesterday’s high. I’ve said in the last day’s that the JP225 could drop a little after the impressive rally, this situation will send the Yen higher. However, Nikkei’s further increase will force the Yen to depreciate.

The greenback still needs a helping hand from the United States data, the Import Prices may increase by 0.6%, matching the 0.6% growth in the former reading period, the Capacity Utilization Rate could increase from 76.1% to 76.2%, while the Industrial Production is expected to increase by 0.3% in September versus the 0.9% drop in the former reading period.

The USD/JPY has managed to jump above the upper median line (uml) of the minor descending pitchfork after the failure to reach the 38.2% retracement level. A retest of the upper median line (uml) will signal a further increase on the short term. Price is trading near the 112.20 level and it could consolidate on the short term before will recapture enough energy to be able to start a larger increase.

Geopolitcs sparked more interest for risker assets amid investors
Euro under pressure, Catalonians situation became more confusing

The mighty dollar has moved up the ladder once again on the back of the hopes that the next head of the Fed would be a hawkish person. This is not to say that the current Chairperson of the Fed isn’t moving the monetary policy. Janet Yellen, the current chairwomen of the Fed, has sent a clear message in her last statement that the consumer prices would accelerate after the period of softness fades away.

Remember, that the Fed has already increased the interest rate several times this year and another rate hike is still on the table towards the end of this year. Given that President Donald Trump wants to trigger that massive infrastructure plan, it would be more appropriate to keep the borrowing cost low, and for that to happen, the chairperson of the Federal Reserve Bank should be a dovish person not a hawkish one.

The European markets are trading higher despite the fact that North Korea issued another statement commenting that the nuclear war could trigger anytime. These comments sparked more interest for risker assets amid investors.

The euro currency is facing pressure as the situation with Catalonians has become even more confusing. Investors are watching the next move by the Catalonian president closely and more importantly the reaction to that move by Madrid.

As for sterling, bulls are falling short of steam as it appears that the Brexit negotiations are heading towards the deadlock situation. The Brexit negotiations have stalled for some time, the major worry is that both sides are not moving from their stance, and time is the biggest enemy for them.

This is because both sides have limited time to have a deal or just walk away without any deal. The UK Prime Minister attempted to unlock the talks and payed a visit to Brussels. However, that did not yield any positive outcome. After meeting each other, both sides reiterated their previous stance in their comments.

The Kiwi rose slightly against the American peer in a wake of the report showing the better-than-expected CPI growth for New Zealand. The NZD/USD exchange rate fluctuated between the 0.7180 and 0.7220 levels to initially appreciate to the 0.7195 mark further determined as a resistance level.

Statistics New Zealand report showed that the country's consumer inflation grew 0.5% in the September quarter, while the yearly CPI increase was at 1.9% in the reported period, where better growth was driven by food and housing costs. However, the strong figures were unlikely to change the Central Bank's determination to keep its key interest rates unchanged over the years.

The EU trade balance reports caused a little reaction in the EUR/USD trading session on Monday. The Euro stayed against the US Dollar at the 1.1790 mark, though afterwards the pair accelerated gains amid lingering bullish support for the European single currency with several attempts to get through the 1.1810 area again.

The Eurostat revealed that trade balance in the Euro area recorded a non-seasonally adjusted surplus of €16.1B over the course of August. The release showed a 6.8% yearly increase in exports to €171.5B, while imports grew at a stronger annual pace of 8.6% to €155.4B in the same period. Due to the strong Euro, cheaper imports managed to complicate the ECB intention to raise inflation in the Euro zone.

As it was expected, the currency pair failed to pass through the 200-hour SMA from the first attempt. However, a combined pressure of the 55- and 100-hour SMAs in conjunction with the weekly PP was too strong to allow the Euro to make any advances against the Dollar. As a result, the new trading session the rate started near the 1780 mark, facing no support barriers on its way up until the weekly S1 at 1.1735. This fact plus the 57% bearish market sentiment and an aggregate of technical indicators, which sends a clear sell signal, suggest that the currency pair is going to continue to move to the bottom, trying to reach the 100% Fibonacci retracement level at 1.1715. But there is a need to take into account an effect from release of the Euro Zone’s inflation data and German business sentiment.

Although the Pound had all means to continue the surge, but confident appreciation of the Dollar prevented the pair from breaking through the monthly PP at 1.3322. On the other hand, this rebound to certain extent confirmed that the pair is trading simultaneously in three different channels. The fact that market sentiment is neutral and an aggregate of technical indicators sends a mixed signal suggests that traders are preparing for release of the UK inflation data as well Governor Carney’s testimony. If experts’ prognoses will match with reality, the rate most probably is going to fall from the junior ascending channel straight to the 200-hour SMA near 1.32. In the opposite case, bulls will have a good chance to make another attempt bypass the above monthly PP.

The Dollar edged higher against the Yen, as American officials confirmed their willingness to solve North Korean crisis through diplomatic means. The 47-pip surge pushed the pair out of a descending channel but then it stuck near the 112.14 mark that presented disposition of the 100-hour SMA and the weekly PP. A favourable informational background might strengthen the buck even more. Such scenario seems especially probable amid suspicion of existence of a new minor ascending channel. However, there is a need to take into account that the road upstairs is reliably secured by the 200-hour SMA. In the short run, this barrier is expected to force the pair to back down. But in larger perspective, as long as market sentiment will remain predominantly bullish, it has a chance to break to the top.

In result of the previous trading session the price of gold decreased by more than 0.86% amid the better than expected New York Manufacturing Index release and lower interest for safe haven assets. From technical point of view, this plunge matched with a breakout from the rising wedge pattern, which formed at the intersection of two ascending channels. The fact that the exchange rate is now located below the 55- and 100-hour SMAs as well as the weekly PP suggests that appreciation of the buck is going to continue at least until the clash with 200-hour SMA near 1,287.05. The bearish scenario looks more plausible also from daily perspective, as it clearly shows how the pair failed to surge above the monthly PP at 1,304.85.