Sample Category Title

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13146
Open: 1.14058
% chg. over the last day: -0.80
Day's range: 1.13530 – 1.14430
52 wk range: 1.1299 – 1.2557

Yesterday, the EUR/USD currency pair was defined by the aggressive purchases. The quotes have grown by almost 150 points. The USD weakened against the EUR after the publication of the weak economic stats. At the moment, the local support and resistance levels are 1.14100 and 1.14450 respectively. Positions should be opened from these levels. The trading instrument has a potential for further growth. The US Labour Market reports are in the spotlight.

The Economic News Feed for 02.11.2018:

The Purchasing Managers’ Index (GER) – 10:55 (GMT+2:00);

The various US Labour Market reports – 14:30 (GMT+2:00).

The price has fixed above 50 MA and 200 MA, which indicates the power of the buyers.

The MACD histogram is in the positive zone, but above the signal line, which gives a strong signal towards the purchase of EUR/USD.

The Stochastic Oscillator is in the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.14100, 1.13800, 1.13400
Resistance levels: 1.14450, 1.14700

If the price fixes above the resistance line 1.14450, we can expect further growth of the EUR/USD quotes. The movement tends towards the 1.15000.

Alternatively, the price will fix below 1.14100, which means you should look for the market entry points to open short positions. The movement will tend toward 1.13800-1.13500.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.27669
Open: 1.29981
% chg. over the last day: +1.86
Day's range: 1.30222 – 1.30286
52 wk range: 1.2662 – 1.4378

The GBP/USD currency pair is also showing aggressive purchasing. During the yesterday’s and today’s trading, the quotes have grown by 250 points. The British pound strengthened against the USD after the news that Great Britain and the EU might reach an agreement on Brexit soon. At the moment, the key support and resistance levels are 1.29900 and 1.30450 respectively. The pound has the potential for further recovery.

The Economic News Feed for 02.11.2018:

Construction Purchasing Managers’ Index (GB) – 11:30 (GMT+2:00).

The indicators show the power of the buyers: the price fixes above 50 MA and 200 MA.

The MACD histogram is in the positive zone, but below the signal line, which provides a weak signal towards the purchase of the GBP/USD.

The Stochastic Oscillator is in the overbought zone, the %K line is above the %D line, which indicates a bullish sentiment.

Trading recommendations

Support levels: 1.29900, 1.29400, 1.29000
Resistance levels: 1.30450, 1.30800

If the price fixes above the resistance line 1.30450, we can expect further growth of the GBP/USD currency pair. The movement will tend toward 1.30800-1.31000.

Alternatively, the GBP/USD quotes can fall toward 1.29500-1.29300.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31565
Open: 1.30847
% chg. over the last day: -0.49
Day's range: 1.31090 – 1.31256
52 wk range: 1.2248 – 1.3387

The USD/CAD currency pair is showing an active sell-off. During the yesterday’s and today’s trading, the quotes have fallen by more than 100 points. At the moment, the local support and resistance lines are 1.30500 and 1.30750 respectively. Positions should be opened from these levels. The trading instrument has a potential for further decline.

At 14:30 (GMT+2:00) we expect the Labour Market stats from Canada.

The indicators show the power of the sellers: the price is below 50 МА and 200 МА.

The MACD histogram is in the negative zone and below the signal line, which indicates a bearish mood.

The Stochastic Oscillator is in the overbought zone, the %K line started to cross the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.30500, 1.30200, 1.30000
Resistance levels: 1.30750, 1.31000, 1.31300

If the price fixes above the support level of 1.30500, we can expect further growth of the USD/CAD quotes. The movement will potentially tend toward 1.30200-1.30000.

Alternatively, the currency pair can grow toward 1.31000-1.31300.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 112.855
Open: 112.648
% chg. over the last day: -0.19
Day's range: 112.947 – 113.102
52 wk range: 104.56 – 114.74

The USD/JPY currency pair keeps showing an ambiguous technical picture. The trading instrument is consolidating while the investors are waiting for the additional drivers. At the moment, the local support and resistance levels are 112.800 and 113.100 respectively. Positions should be opened from these levels.

Today we expect no important news from Japan.

The indicators do not provide precise signals, the price went over 50 MA.

The MACD histogram is around 0. There are no signals.

The Stochastic Oscillator is in the neutral zone, the %K line went over the %D line. There are no precise signals.

Trading recommendations

Support levels: 112.800, 112.500, 112.200
Resistance levels: 113.100, 113.350

If the price fixes below the already mirror support of 112.750, the USD/JPY quotes are expected to decline. The movement is tending to 112.500-112.200.

An alternative may be the USD/JPY currency pair growth to 113.350-113.500.

USD weakened against a number of its counterparts yesterday as risk sentiment improved after positive comments made about the US-Sino relationships. US President Trump stated that he and his Chinese counterpart Xi, had a good conversation about trade and that talks are “moving along nicely”. The two of them are to meet in Argentina at the sidelines of the G20 meeting, however analysts point out that the two parts are still a long way from an agreement. Risk sentiment was improved and as a result, stock markets marked some gains while the USD lost ground in its role as a safe haven. Volatility for USD is expected to continue today, as the US employment report for October is due out.

AUD/USD rallied yesterday breaking all resistance lines (now turned to support) and tested the 0.7240 (R1) resistance line. It should be noted that despite the steep rise of the pair, the current bull’s market may be put to the test today, as US Employment report for October is due out later. Also please note that the RSI indicator in the four hour chart has surpassed the reading of 70, implying a rather overcrowded long position. Should the bulls continue to dictate the pair’s direction, we could see the pair breaking the 0.7240 (R1) resistance line and aim if not break the 0.7280 (R2) resistance hurdle. Should the bears take over we could see the pair, breaking the 0.7200 (S1) support line and move lower.

Pound rises on Brexit hopes

Cable had one of its highest rallies in 2018 yesterday, as Brexit hopes increased, while the BoE also provided support for the pound. BoE remained on hold as expected yesterday at +0.75% unanimously and hinted slightly faster future rate hikes in case of a soft Brexit. BoE governor Carney, stated that a no deal, no transition scenario may be remote but the bank must prepare for it. Analysts point out, that the BoE appears more hawkish than the market, as other central banks seem to be heading on the same direction. Volatility for GBP pairs could continue either way today, depending on further Brexit news.

Cable rallied yesterday, breaking the 1.2850 (S2) and 1.2920 (S1) resistance lines (now turned to support) and tested the 1.3015 (R1) resistance level. We could see the pair continuing to trade in a bulls market, however the pair could prove sensitive to any further headlines regarding Brexit, as well as the US employment report for October due out later today. Please be advised that the RSI indicator in the 4 hour chart, remains still above the reading of 70, underscoring the overcrowded long position for the pair. Should the pair find fresh buying orders along its path, we could see cable, breaking the 1.3015 (R1) resistance line and aim if not break the 1.3075 (R2) resistance level. Should the market favour the pair’s short positions we could see it breaking the 1.2920 (S1) support line aiming lower.

In today’s other economic highlights:

In the European session today, we get from the Germany the final release of the Manufacturing PMI for October and from the UK the Construction PMI for October. During the American session, the US employment report with its NFP figure is due out, as well as the US factory orders growth rate for September. From Canada we get the employment data for October and the trade balance figure for September.

AUD/USD H4

Support: 0.7200(S1), 0.7160 (S2), 0.7115 (S3)

Resistance: 0.7240 (R1), 0.7280 (R2), 0.7315 (R3)

GBP/USD 4H

Support: 1.2920 (S1), 1.2850 (S2), 1.2780 (S3)

Resistance: 1.3015 (R1), 1.3075 (R2), 1.3160 (R3)

GBPJPY has reversed back up again after finding support at the 143.20 support level, achieved on Tuesday. Today, the pair reached a new 10-day high, continuing the sharp buying interest that started yesterday. Technical indicators seem to be strongly positive. The RSI stands in the overbought zone, while the MACD is strengthening its momentum above the trigger and zero lines.

The next resistance would come from the 147.60 – 147.80 zone if the price creates a closing candle above the 61.8% Fibonacci retracement level of the downleg from 149.70 to 142.75, near 147.00. A successful leg above the aforementioned region would open the way towards the 148.40 resistance, taken from the highs on October 16.

If there’s a failure of upside movements the market would return lower and hit the 50.0% Fibonacci of 146.20. If the bears take charge and pull the pair below it, the 38.2.0% Fibonacci of 145.40 would be next level for investors to have in mind.

Overall, GBPJPY holds above the 20- and 40-simple moving averages (SMAs) in the 4-hour chart confirming the scenario for short term upside tendency.

EUR/USD is higher in the Friday session, after posting sharp gains on Thursday. Currently, the pair is trading at 1.1441, up 0.29% on the day. On the release front, German and eurozone manufacturing PMIs softened in October, but were within expectations. In the U.S, the focus is on employment data for October. Nonfarm payrolls are expected to climb sharply to 194 thousand, but wage growth is forecast to ease to 0.2%. The unemployment rate is expected to remain pegged at 3.7%.

The German manufacturing sector slowed for a third straight month in October, as the slowdown has now entered the fourth quarter. The October Manufacturing PMI dipped to 52.2, down from 53.7 points in September. The reading, which points to limited expansion, is the lowest since May 2016. The weak data can be directly attributed to global trade tensions, which have dampened the German export sector. China is Germany’s third largest export market, and a slowdown in China due to U.S trade tariffs could have a chilling effect on the German economy. The German central bank is forecasting zero growth in the third quarter, and growth in the eurozone also softened in the third quarter. Eurozone GDP posted a weak gain of 0.2% in the third quarter, down from the 0.4% gain in the second quarter. On an annualized basis, eurozone growth slipped to 1.7% in Q3, down from 2.1% in Q2.

Eurozone inflation is expected to rise in October. CPI Flash Estimate ticked higher from 2.1% to 2.2% and Core CPI Flash Estimate rose to 1.1%, up from 0.9%. Both of these readings matched the forecasts. The stronger inflation numbers back up ECB President Mario Draghi’s stance that inflation is showing a “relatively vigorous pick-up”. Higher oil prices are one reason behind stronger inflation numbers. Germany, the bellwether for the rest of the eurozone, is also experiencing higher inflation, which climbed 2.4% in October.

U.S Futures and European markets are trading higher ahead of the key economic data. It is the U.S.-Non-Farm-Payroll data. Investors will be looking at the numbers very closely to figure out the strength of the economy. A strong number is going to push the sentiment for the dollar rally because this would simply imply that the Fed is likely to hike the interest rate.

Remember there are only two important things which matter the most for the U.S. markets; the strength of the economic data and the mid-term election. It appears that Trump is now ready to make a deal with China as there are some strong signs emerging for such a scenario. If Trump strikes a deal with China and Republicans wins the mid-term election and the U.S economic data continue to show its economic strength, the odds are really high that the global stock market is going to move higher. The strength of the U.S dollar would be irrelevant under those circumstances.

But let’s focus back on today’s event and what to look for in this data. Looking at the last month’s data, hurricane created major disruption and only 134K jobs were created in September. Hence, a snap back action is expected this month under which we could see the number jumping to 200K. Despite this, we do not expect any change in the unemployment rate or average hourly number. If these numbers do not change, we think traders would continue to take the profit off the table.

The arguments for strong payroll numbers are strength in the consumer confidence index & ADP data has set a positive tone for the U.S. NFP. The other side of the coin is that the employment component of ISM was weak and this sets the stage for the bearish dollar sentiment.

The USD is weakened against the basked of other currencies due to the release of the weak economic data. For example, the number of the primary application for unemployment benefits reached 214K instead of the 213K. The Purchasing Managers' Index by ISM lowered to 57.7 in October, while the experts were expecting 59.0. The USD index (#DX) retreated from the monthly minimums and closed in the negative zone (-0.84%).

The British pound strengthened against the USD after the news that the GB and the EU might finally reach an agreement on Brexit. The new treaty allows the British financial companies to keep working on the European markets after the Brexit is over. The GBP is also supported by the fact that the Bank of England decided to retain the key interest rate at 0.75% and hinted that it might raise further.

A Retail Sales report from Australia was published today, during the Asian trading session. The indicator reached 0.2% in September and turned out to be worse than the expected value of 0.3%. Today we also expect important economic stats from the EU, Great Britain, USA and Canada.

The prices on oil are consolidating. At the moment, the WTI futures are at 63.70 USD/barrel.

Market Indicators

Yesterday, the major US stock indices closed in the green: #SPY (+1,06%), #DIA (+1,01%), #QQQ (+1,32%).

The 10-year US government bonds yield is 3.15-3.16%.

The Economic News Feed for 02.11.2018:

• Purchasing Managers' Index (GER) – 10:55 (GMT+2:00);
• Construction Purchasing Managers' Index (GB) – 11:30 (GMT+2:00);
• Various Reports on the Labour Market (US) – 14:30 (GMT+2:00);
• Employment Change (CA) – 14:30 (GMT+2:00).

Chinese equities are developing a rebound on Friday, supported by the hopes for progress in China and the US trade negotiations. The telephone conversation between the leaders of two major world economies has shown that there is still an opportunity to settle trade disputes. Asian indices have added more than 4% since the beginning of the week, which is the strongest rally in almost two and a half years.

But it is hardly worth the hope for easy progress, as earlier this year there have been many negotiations at different levels, and the situation has only grown worse. The growth of markets in this context is rather a weakness of the Asian market in recent years than a cause for optimism. Despite the rebound, the blue-chip index of the Shanghai Stock Exchange China A50 remains within the range of the last 4 months.

Futures on S&P500 are adding 0.8% this morning and more than 4% from the beginning of the week. The fourth day of growth returned the index to the reach of 200-day average, reflecting the restoration of faith in the prospects of the American economy, despite a number of weak reports from IT companies.

In the foreign exchange market, the British pound was the focus of attention on Thursday. The increase of Pound within a day exceeded 1.7%, which is the sharpest growth of more than a year. As a result, the GBPUSD couple returned to the key level 1.30. Sterling’s support was provided by the news around Brexit, and by the hints of the Bank of England that if Britain’s withdrawal from the EU runs smoothly, it will accelerate the rate hike.

Today, the focus of the markets will be the labour market indicators in the U.S., where a strong employment report is expected. The month before, the markets were surprised and discouraged by the growth of new jobs only for 134K, which caused doubts about the sustainability of the economic growth. Additionally, the Fed’s hawkish tone exacerbated the situation. However, over the past month we have seen many other positive signals that have dispelled fears that FOMC excessively aggressively raises the rates.

The yield of strong data on the employment growth can reduce the demand for the dollar as a defensive asset, depriving it of a part of the October growth. In this case, the shares can get additional impetus for the development of the rebound.

At the same time, the signs of the accelerating wage growth can support the growth of the U.S. currency on speculation that the Fed will be forced to conduct more aggressive increases than plans to keep inflation under control. In this scenario, the stock markets may return to caution, dashing the recent rebound.

Asian stock markets jumped in early trading Friday, reflecting investor relief about upcoming trade talks between China and the U.S., as well as the dollar‘s gains against a basket of major currencies including the yen. President Donald Trump on Thursday said he had a good talk with Chinese President Xi Jinping, and that trade talks were “moving along nicely.” The two will meet formally later this month, with investors hoping a deal will be reached to ease trade tensions.

Japan’s Nikkei NIK, +2.56% recovered after yesterday’s losses, and was last up 1%. Earnings season cast a pall on some stocks though. Suzuki Motor Corp. 7269, -2.52% was down 4% following its earnings report after the closing bell yesterday. Its second-quarter operating profit slid 6.6% amid weaker sales in Europe, China and India — its biggest market. Chinese benchmarks were sharply higher amid hopes of easing the trade conflict, with the Shanghai Composite SHCOMP, +2.70% up 1% and the smaller-cap Shenzhen Composite 399106, +3.43% advancing 1.7%. Insurers and brokerage firms led the gains while oil stocks were muted as oil prices slumped.

Hong Kong stocks surged, with the Hang Seng Index HSI, +4.11% up 2.3%. Sunny Optical 2382, +9.86% jumped 7% with index heavyweight Tencent 0700, +9.00% adding 6%. Auto stocks saw renewed buying with Great Wall 2333, +7.04% and Geely Auto 0175, +12.24% up 4.7% and 5% respectively. The attitudes of both Chinese and U.S. leaders have been productive, bringing more positivity to the meeting at the end of the month,” said UOB Kay Hian stock strategist Ivan Ip. Apple Inc. AAPL, +1.54% component manufacturers were mostly unaffected by the tech giant’s after-hours slump following record quarterly earnings but a warning of slower holiday sales.

Encouraging rebound for stock markets

The prospect of a trade deal between the US and China is providing a major boost to the markets on the final trading day of the week.

The week got off to a shaky start following a dreadful October which very much lived up to its reputation. What's come since is exactly what the doctor ordered though, with markets not only stabilising and avoiding further plunges but actually eating significantly in to the losses that cause so much distress.

I think investors will be feeling much more at ease now, although it's still too early to call the end of the sell-off. The first test has been passed, there's a good chance more will follow. Naturally though, all this talk of a trade deal between the world's two largest economies that are currently engaging in a tariff tit-for-tat, is a supportive factor that could prevent another slump.

Trump's China trade announcement timing very convenient

The timing of the announcement is very curious though, coming less than a week before the midterm elections. Trump has been a cheerleader of the markets since his election victory and the timing of the sell-off will have really frustrated him, even if the declines we've seen pale in comparison to the post-election rally.

It would seem this call comes at a very opportunistic time as it stops the rot in the markets and gives the impression that after months of tariffs and fiery rhetoric, progress is being made on improved trade terms with China. It's a win win for Trump. I just hope the cynic in me is wrong and this is an important first step towards better trade relations between the two.

Will US jobs report be the catalyst for another sell-off?

With investors once again in a cheery mood, it seems the perfect time for a report on the health of the US labour market. The jobs report is widely regarded as the most important economic release each month and coming just before the midterms, it could be even more so than normal. The question is, would a stellar report prove to be a timely reminder of the health of the economy ahead of the election or be the next catalyst for a sell-off as investors fret about interest rates.

The unemployment rate and NFP will write the headlines but it's the average hourly earnings that traders will be most focused on as this is more likely to directly influence interest rates. Earnings are expected to have risen by 3.1% last month, the first time they've exceeded 3% since 2009, in a further sign that the labour market is tight. Given what this could do to inflation and interest rate expectations, it will be interesting to see how traders respond if this number is hit, or even exceeded.

Return of risk appetite may not be bad news for Gold

Gold rallied strongly on Thursday on the back of weakness in the US dollar. The rally has quickly run out of steam though, as traders perch themselves back on the fence ahead of the NFP report. The return of risk appetite could be a bearish sign for Gold, given how it's benefited from its safe haven status as of late. That said, if this is accompanied by real progress on Brexit and Italy and improved sentiment towards those currencies on the back of it, then a weaker dollar could give Gold another lift and keep it elevated.

Is the oil decline nearly over?

Oil is continuing to amble lower, taking its losses to more than 15% since peaking at the start of October. A combination of factors continues to weigh on Brent and WTI from slower global growth expectations to rising inventories. The story of only a month ago of a tight oil market driven by Iranian sanctions and a reluctant OPEC+ filling the void has been lost altogether and with it the bullish fever that got people talking about $100 a barrel. As was the case before, I think the latest move is a little overblown given how little has changed and Brent approaches $70 and WTI $62.

The pair jumped to 113.10 high in late Asian trading on Friday, in recovery attempt after two-day pullback and today's action were contained by rising 10SMA (112.55) which also created a bull-cross with 20SMA.

But gains were so far short-lived, as the price returned below 113 handle, awaiting US jobs data which could provide fresh direction signal.

Safe-haven yen slipped after signals of easing US/China trade tensions, keeping pair's overall bullish bias, but looking for a catalyst, which could be provided by US data.

Strong bullish momentum on daily chart supports, however, mixed signals from daily MA's and slow stochastic lack clearer signal.

Positive US jobs data could spark acceleration through pivotal 113.33 barrier (cracked Fibo 61.8% of 114.54/111.37) and open way for further advance.

On the other side, negative signal could be expected on weekly close below 10/20SMA, which would expose initial target at 112.17 (rising 55SMA) and would risk extension towards 100SMA (111.67) on stronger bearish acceleration.

Res: 112.96, 113.10, 113.33, 113.80
Sup: 112.55, 112.30, 112.17, 111.67