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USDJPY Intraday Analysis
USDJPY (113.48): The USDJPY continued to post declines following the doji reversal formed above the 114.00 handle. The downside breakout below 114.00 suggests a near term retracement. Price action is expected to test the lower support level at 113.00. However, if price fails to find support at this level, we can expect further declines to push USDJPY towards the 112.00 region. In the near term,however, USDJPY could be seen maintaining the range within 114.00 and 113.00.
Trade Idea : GBP/USD – Stand aside
GBP/USD - 1.3241
Most recent candlesticks pattern : N/A
Trend : Near term down
Tenkan-Sen level : 1.3257
Kijun-Sen level : 1.3195
Ichimoku cloud top : 1.3171
Ichimoku cloud bottom : 1.3149
New strategy :
Stand aside
Position : -
Target : -
Stop : -
Although cable found good support at 1.3110 and staged a strong rebound, break of previous resistance at 1.3287 is needed to add credence to our view that the fall from 1.3338 has ended at 1.3088, then further gain to 1.3300-05 would follow, however ,a broad outlook remains consolidative, reckon upside would be limited to said resistance at 1.3338 and bring retreat later.
In view of this, would not chase this rise here and would be prudent to stand aside for now. Below the Kijun-Sen (now at 1.3195) would suggest an intra-day top is formed, bring weakness to the lower Kumo (now at 1.3149) but price should stay well above yesterday’s low at 1.3110.
GBPUSD Intraday Analysis
GBPUSD (1.3270): The British pound closed with strong gains yesterday on a better than expected GDP print. Price action has managed to breakout to the upside from the long term triangle consolidation pattern. This could see the pound sterling extend the gains towards 1.3360 - 1.3361 levels in the near term. With the minor inverse head and shoulders pattern that emerged, GBPUSD is on track to complete the minimum upside move towards 1.3282 level, followed by an extension towards 1.3360. We also notice that there is an ascending triangle pattern being formed that adds to the upside bias.
EURUSD Intraday Analysis
EURUSD (1.1827): EURUSD posted strong gains yesterday as investors were seen bidding up the common currency. The euro closed at a three day high and was seen extending the gains in the early trading session today. Price action was seen retesting the resistance level of 1.1822 which also marks the test of the falling trend line level. A breakout above this level is required for EURUSD to post further gains. However, it is unlikely for the euro to post further gains in the near term. The sideways range could be maintained within 1.1822 and 1.1710 levels of resistance and support.
Trade Idea : EUR/USD – Buy at 1.1785
EUR/USD - 1.1827
Most recent candlesticks pattern : N/A
Trend : Sideways
Tenkan-Sen level : 1.1826
Kijun-Sen level : 1.1796
Ichimoku cloud top : 1.1765
Ichimoku cloud bottom : 1.1759
Original strategy :
Buy at 1.1785, Target: 1.1885, Stop: 1.1750
Position : -
Target : -
Stop : -
New strategy :
Buy at 1.1785, Target: 1.1885, Stop: 1.1750
Position : -
Target : -
Stop : -
Yesterday’s rally after finding renewed buying interest at 1.1753 signals low has been formed at 1.1725 earlier this week, hence consolidation with upside bias is seen for this rebound to extend further gain to resistance at 1.1858, break there would indicate the fall from 1.1880 has ended and another leg of corrective rise from 1.1669 low is underway for retest of this level, then towards 1.1900 but reckon 1.1930-35 (61.8% Fibonacci retracement of 1.2093-1.1669) would hold, bring retreat later.
In view of this, we are looking to buy euro on pullback as 1.1780-85 should limit downside. Below 1.1750 would risk another test of said support at 1.1725 but only break there would revive bearishness for weakness to 1.1700, however, still reckon said recent low at 1.1669 would hold from here.
Trade Idea : USD/JPY – Stand aside
USD/JPY - 113.66
Most recent candlesticks pattern : N/A
Trend : Near term up
Tenkan-Sen level : 113.53
Kijun-Sen level : 113.79
Ichimoku cloud top : 113.76
Ichimoku cloud bottom : 113.63
Original strategy :
Bought at 113.80, stopped at 113.50
Position : - Long at 113.80
Target : -
Stop : - 113.50
New strategy :
Stand aside
Position : -
Target : -
Stop : -
Despite yesterday’s rise to 114.24, the subsequent stronger-than-expected retreat suggests a temporary top has possibly been formed there and consolidation with mild downside bias is seen for test of 113.24-25 (previous support and 38.2% Fibonacci retracement of 111.65-114.24), break there would add credence to this view, bring further fall to 112.95-00 (50% Fibonacci retracement) but reckon downside would be limited to 112.60-65 (61.8% Fibonacci retracement) and support at 112.30 should remain intact.
On the upside, whilst recovery to 113.90-95 cannot be ruled out, said yesterday’s high at 114.24 should hold and bring another retreat later. Above this level would revive bullishness and extend recent rise from 107.32 low to 114.45-50 (50% projection of 111.65-114.10 measuring from 113.24), then towards 114.75-80 (61.8% projection). As near term outlook is mixed, would be prudent to stand aside in the meantime.
British Pound Rises On Better Than Expected GDP
The British pound was seen posting strong gains yesterday as the third quarter preliminary GDP data showed that the economy expanded at a pace of 0.4% on the quarter. This was better than the forecasts of a 0.3% increase. The data is likely to cement expectations of a BoE rate hike in November.
The Bank of Canada held its monetary policy meeting yesterday, and as widely expected, the BoC's statement was cautious. The overnight rate was held steady at 1.0%.
Looking ahead, thefocus turns to the European Central bank which is expected to announce its policy decision today. The markets are expecting to see the ECB announce the second tapering to its QE program, by as much as 30 billion euro. The central bank will also give its forward guidance. The euro was seen strengthening ahead of today's ECB event.
GBPUSD Increasingly Bullish Above 1.3228
The British pound continues to push higher against the U.S dollar, hitting 1.3279, as investors price-in an upcoming rate hike from the Bank of England, following better than expected third quarter GDP figures from the UK. The GBPUSD pair currently trades around the highs of the day, as sterling traders await the upcoming European Central Bank monetary policy meeting later today.
The GBPUSD pair is increasingly bullish while trading above the key 1.3228 level, further bullish advancement can be expected towards the 1.3307 and 1.3338 levels.
Should intraday GBPUSD sellers push price-action back below the 1.3228 level, further declines towards 1.3201 and 1.3157 remain likely.
USDJPY Intraday Bearish Below 113.72
The U.S dollar has moved lower against the Japanese Yen, hitting 113.37, as global stocks come under selling pressure, following weaker than expected company earnings figures from the United States. The USDJPY pair currently trades around the 113.50 level, as the Japanese Nikkie225 starts to correct lower during the Asian trading session.
The USDJPY pair remains intraday bearish while trading below the 113.90 level, further losses can be expected towards the 113.40 and 113.23 levels. Extended intraday support is found at 112.90 and 112.57.
Should buyers push price-action back above the 112.72 level, further bullish advancement towards the 113.89 and 114.13 levels can be expected.
ECB Rate Decision Looms Large For Investors
Monetary policy is back in focus on Thursday as the European Central Bank (ECB) gets set to unveil its latest rate decision. The ECB is widely expected to stand pat on monetary policy, but could drop hints about its plan to begin unwinding record stimulus.
The ECB decision will come our way at 11:45 GMT. Policymakers are no doubt considering an appropriate course of action for eliminating quantitative easing amid strong signs the Eurozone economy is returning to health. Eurozone growth has been one of this year's most pleasant surprises. This trend is expected to continue for the foreseeable future, with economic health extending beyond Germany and toward the periphery.
On the data front, Italy's consumer and business confidence indicators will break the ice at 08:00 GMT. Two hours later, the Confederation of British Industry (CBI) will release its October trades survey.
In North America, a weekly jobless claims report from the US Department of Labor will make headlines at 12:30 GMT. Jobless claims are expected to rise by 31,000 after falling to 44-year lows during the previous week. US jobless have quickly returned to health after a pair of hurricanes ravaged the states of Texas and Florida during the summer.
The Commerce Department is also expected to report on the goods trade balance at 12:30 GMT. Washington's goods trade deficit is forecast to rise to $63.8 billion from $62.94 billion.
A report on pending home sales courtesy of the National Association of Realtors (NAR) is scheduled to come at 14:00 GMT.
In policy news, Federal Open Market Committee (FOMC) member Neel Kashkari will deliver a speech at 14:30 GMT. Kashkari is one of the FOMC's most dovish members.
Earlier in the day, New Zealand said its trade deficit narrowed less than forecast last month, as both imports and exports rose. Wellington's trade deficit stood at $1.14 billion for September, down slightly from $1.17 billion the month before.
EUR/USD
The euro took advantage of a weaker US dollar on Wednesday by overtaking the 1.1800 handle for the first time in almost a week. Th pair added to its gains overnight, reaching a high near 1.1830. Immediate support is located at 1.1775. On the opposite side of the spectrum, resistance is located at 1.1835.
USD/CAD
The Canadian dollar took a beating Wednesday after the Bank of Canada kept interest rates on hold in an extremely dovish policy statement. The USD/CAD is riding three-month highs as it approaches the 1.2800 handle. The pair has gained more than 300 pips over the past week in a clear sign that the bulls favour the greenback.
GBP/USD
Cable spiked on Wednesday, as capital flowed back into sterling after previous declines. The GBP/USD reached 1.3271 for its highest exchange rate in over a week. The pair is currently trading in the 1.3260 area, with immediate support at 1.3220.
