Broad gains in the pound cause EUR/GBP to fall 0.8%, breaking below 0.85 to hit a two-week low of 0.8496. More falls could see it target the 50-day moving average at 0.8373 and the Aug. 4 low of 0.8344. EUR/GBP currently hovers just above chart support at 0.8488, the 50% retracement of its rise from the July 14 low of 0.8250 to a peak of 0.8726 hit on Aug. 16. The 61.8% retracement of that move is another chart support level, which stands at 0.8431.
Forex and stock traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. All traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new stock traders will try and fight the trend.
Wednesday, August 24, 2016
GBP/USD was flat in the Asian session
•GBP/USD was flat in the Asian session. The pair has posted strong gains in European trade
•There is resistance at 1.3327
•1.3219 remains fluid. This line switched to a support role following gains by GBP/USD
Further levels in both directions:
•Below: 1.3219, 1.3142, 1.3064 and 1.2938
•Above: 1.3327, 1.3480 and 1.3533
•Current range: 1.3327 to 1.3533
GBP/USD ratio is unchanged, consistent with the lack of movement from GBP/USD. Currently, long positions have a slight majority (53%), indicative of trader bias towards GBP/USD continuing to move upwards.The British pound has edged above the 1.32 line on Wednesday, continuing the upward movement which has marked GBP/USD this week. The pair is currently trading at 1.3220. On the release front, British BBA Mortgage Approvals dropped to 37.5 thousand, short of expectations. In the US, today’s highlight is Existing Home Sales, with the indicator expected to dip to 5.52 million. On Thursday, the US releases two key events – Core Durable Goods report and Unemployment Claims.
•There is resistance at 1.3327
•1.3219 remains fluid. This line switched to a support role following gains by GBP/USD
Further levels in both directions:
•Below: 1.3219, 1.3142, 1.3064 and 1.2938
•Above: 1.3327, 1.3480 and 1.3533
•Current range: 1.3327 to 1.3533
GBP/USD ratio is unchanged, consistent with the lack of movement from GBP/USD. Currently, long positions have a slight majority (53%), indicative of trader bias towards GBP/USD continuing to move upwards.The British pound has edged above the 1.32 line on Wednesday, continuing the upward movement which has marked GBP/USD this week. The pair is currently trading at 1.3220. On the release front, British BBA Mortgage Approvals dropped to 37.5 thousand, short of expectations. In the US, today’s highlight is Existing Home Sales, with the indicator expected to dip to 5.52 million. On Thursday, the US releases two key events – Core Durable Goods report and Unemployment Claims.
CAD/NOK
Recent large oil price swings due to speculation over whether the Organization of Petroleum Exporting Countries will agree an output cut or freeze argue against trading oil-linked currencies, except against each other, Morgan Stanley says. "We prefer not to trade oil currencies outright at the moment due to the wild swings created by headlines from OPEC members suggesting they could look for a production freeze," says Morgan Stanley. Its preferred trade in these currencies is to short CAD/NOK. CAD/NOK on Wednesday hit a one-week low of 6.3323. A move below the Aug. 11 low of 6.3028 would mark its lowest level since June 6.
Monday, August 22, 2016
AUD/USD posted slight losses in the Asian session.
•AUD/USD posted slight losses in the Asian session. The pair recovered these losses in the European session and has posted slight gains in North American trade
•There is resistance at 0.7701
•0.7560 is providing support
•Current range: 0.7560 to 0.7701
Further levels in both directions:
•Below: 0.7560, 0.7440 and 0.7339
•Above: 0.7701, 0.7835, 0.7938 and 0.8045
AUD/USD ratio is unchanged on Monday. Currently, short positions have a small majority (53%), indicative of slight trader bias towards the pair continuing to move upwards.
The Australian dollar has edged higher, as the markets search for economic cues at the start of the trading week. In Monday’s North American session, the pair is trading at 0.7630. The only Australian release is the CB Leading Index, which posted a small gain of 0.1%. There are no US events on Monday. On Tuesday, Australia releases Construction Work Done, while the US will release New Home Sales, a key indicator.
There was good news from the Australian labor market last week, as employment numbers sparkled in July. Employment Change jumped 26.2 thousand, crushing the estimate of 10.2 thousand. This marked the sharpest gain since October 2015. However, the rise was made up of part-time jobs, as full-time positions actually dropped. There was also positive news from the unemployment rate, which dipped to 5.7%, down from 5.8% a month earlier. The strong job numbers will be welcome news to the RBA, which cut rates to an all-time low of 1.50% earlier this month and would like to avoid another cut at its next policy meeting in September.
•There is resistance at 0.7701
•0.7560 is providing support
•Current range: 0.7560 to 0.7701
Further levels in both directions:
•Below: 0.7560, 0.7440 and 0.7339
•Above: 0.7701, 0.7835, 0.7938 and 0.8045
AUD/USD ratio is unchanged on Monday. Currently, short positions have a small majority (53%), indicative of slight trader bias towards the pair continuing to move upwards.
The Australian dollar has edged higher, as the markets search for economic cues at the start of the trading week. In Monday’s North American session, the pair is trading at 0.7630. The only Australian release is the CB Leading Index, which posted a small gain of 0.1%. There are no US events on Monday. On Tuesday, Australia releases Construction Work Done, while the US will release New Home Sales, a key indicator.
There was good news from the Australian labor market last week, as employment numbers sparkled in July. Employment Change jumped 26.2 thousand, crushing the estimate of 10.2 thousand. This marked the sharpest gain since October 2015. However, the rise was made up of part-time jobs, as full-time positions actually dropped. There was also positive news from the unemployment rate, which dipped to 5.7%, down from 5.8% a month earlier. The strong job numbers will be welcome news to the RBA, which cut rates to an all-time low of 1.50% earlier this month and would like to avoid another cut at its next policy meeting in September.
USD/JPY drop to 95 is "a serious risk,"
An imminent USD/JPY drop to 95 is "a serious risk," says Societe Generale options strategist Olivier Korber. As protection, he advises buying a 6-week put strike at 97, with a knock-out at 93, where the loss is limited to the premium but the option is cancelled if USD/JPY hits 93. "USD/JPY currently presents a very assymetric profile, with the next move likely to be either a small bounce or a sharp break towards 95." Although Societe Generale is bullish USD/JPY medium-term, a "patient" Federal Reserve could leave the dollar under pressure, while the Bank of Japan may struggle to fight JPY strength, says SocGen. USD/JPY trades at 100.43
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