Daily Market Analysis by ForexMart

GBP/USD Fundamental Analysis: January 25, 2017

The international market has been awaiting with bated breath the results of the Supreme Court ruling of UK’s eurozone membership. The SC eventually ruled that Theresa May and the UK government will have to pursue the approval of the Parliament before Article 50 can be invoked, but then the ruling did not seek for the approval of Ireland, Wales, and Scotland for Article 50. This bit of news was already expected by the market since the SC merely reiterated the previous ruling of the lower court.

While the ruling from the SC was generally good news for the market as well as for the sterling pound, a sell the fact, buy the rumor move was seen in the market yesterday and the GBP/USD pair plummeted through 1.2500 and even hit 1.2420 points after the SC ruling was released into the market. But the currency pair was able to recover from its losses and is now situated just below 1.2550 points, with the GBP/USD pair possibly moving further to 1.2700 and possibly even up to 1.2800 points. While this move might be good news for the sterling pound in the short term, its long term effects could induce additional pressure on the GBP in the medium term.

There are no major economic data scheduled to be released from the UK for today’s session, but the US will be releasing its oil inventory data which could possibly increase the overall risk surrounding the markets as of present. The GBP/USD pair is expected to experience more consolidation for today with bullish undertones.
 
EUR/USD Fundamental Analysis: January 25, 2017

The EUR/USD pair encountered a hard-pressed resistance region during the previous trading session, with the pair merely consolidating just below this region instead of being able to break past through this barrier. However, the USD was able to get some rest as President Trump chose to keep quiet yesterday and this has caused the dollar to maintain its stance against other major currencies and has also contributed to the consolidating movement of the EUR/USD pair.

Since the market is obviously very jittery and kept on its toes as a lot of players are waiting for President Trump’s next move, this just shows how the market is concerned about the Trump administration’s next move, as majority of traders and investors do not know what to expect from Trump. The international stock market seems to have temporarily put aside the possible risks which come with the movements of the Trump administration, but the USD is now carrying the burden of these uncertainties. This is also the reason why the US dollar is still unable to make a significant leap in spite of the US economy looking generally positive and with the Fed hinting at possibly another interest rate hike in the next few months.

The German IFO business climate data is due to be released during today’s session, with this particular piece of data expected to add up to the generally positive German economy. The oil inventory data from the US will be released today, and any decrease in this particular data should lend upward support for oil prices and increase market-related risks.
 
NZD/USD Technical Analysis: January 25, 2017
As the Asian session emerged, the bullish momentum appeared to be short-lived yesterday. The price failed to hold its gains and reversed down from the 0.7250 level. Sellers expanded their profits breaking the price through 0.7200 region amid the EU trades. The selling interest was unable to maintain its position upon reaching the region and endured price rejection upwards.
The NZD/USD is confined on top of the moving averages based on the 4-hour chart. The 100 and 50-EMA kept its bullish stance while 200-EMA was flat. Resistance touched 0.7250 mark, support entered 0.7200 handle.
The MACD tool still presented the same position as buyer’s strength continued to grow. The RSI settled close to the oversold readings, confirming another lower trend.
Meanwhile, the 0.7250 barrier is the next bullish target. In case, a return occurred towards 0.7150 there is a probable decline against the 0.7100 support.
 
USD/CAD Fundamental Analysis: January 26, 2017

The USD/CAD pair is currently bearing the majority of the downward pressure coming from the dollar weakness which was caused by the Trump administration’s movement. The currency pair has already plummeted by 300 pips during the course of 2-3 days and is now trading dangerously close to 1.3000 points, a very critical region for the pair if the uptick for the USD/CAD continues to occur. The market is now closely monitoring the next move of the Trump administration, especially since President Trump is expected to scrap NAFTA next after recently making alterations to the TPP arrangement as well as to Obamacare.

Although any adjustments made to NAFTA might not have a significant impact on the Canadian economy, this is expected to largely affect the US economy, and could possibly cause global unrest as this could impact trade relations between a lot of countries and the market is expressing concerns on what might happen to other trade agreements as well. The CAD received support from the stability of oil prices which has incurred a bullish undertone. These occurrences have caused the crash of the USD/CAD pair during the past few days, but the market is expecting the USD to regain its strength in the coming sessions which could then help in putting upward pressure on the currency pair.

There are no major economic data coming from Canada today but the US will be releasing its unemployment claims data for today and if this comes out as positive, then this could help in supporting the USD and the USD/CAD pair could be prevented from hitting rock-bottom at 1.3000 points. Traders are advised to closely watch the pair’s movement since any break beyond 1.3000 could possibly be a sign of changing trends in the pair.
 
GBP/USD Fundamental Analysis: January 26, 2017

The sterling pound has been consistently increasing in value after a period of constant downward pressure ever since the conclusion of the Brexit vote. From trading to just below 1.2000 points, the GBP/USD pair has now recovered and has reached just below 1.2700 points without any significant corrections during the past few weeks. This was partly due to the clearing up of the Brexit process, as the market does not like any kind of uncertainty, whether on a positive note or a negative note.

The initial confusion surrounding the Brexit process had previously put downward pressure on the movement of the sterling pound, but as Theresa May finally laid out her plans for the hard Brexit process last week including a wholly different kind of negotiations on the free tradezone, this has lended some much-needed support for the sterling pound. In addition, the UK Supreme Court has also made it clear that the Parliament must approve first before the invocation of Article 50, thereby ensuring stability during the entirety of the Brexit process. All these have erased any uncertainty on the Brexit process and has caused the GBP/USD to jump upwards and steadily go towards the 1.2700-1.2800 region.

UK will be releasing its Preliminary GDP data today and this particular bit of data is expected to carry out the recent string of positive economic readings for the region in spite of the pressure from the Brexit process. The GBP/USD pair could then propel its way towards 1.2700 and could possibly exceed this level which could then become a crucial point for the bears and bulls of this currency pair.
 
EUR/USD Fundamental Analysis: January 26, 2017

The EUR/USD pair exhibited ranging and consolidation movements within the range of its trading highs during the previous trading session, with the market already coming to terms with the fact that the Trump administration is indeed here to stay for the next four years and is already preparing for whatever Trump might be implementing in the days and months to come. This has helped the market make sense of Trump’s movement in some way, and if it becomes evident that Trump might not be completely altering things, then the dollar could be in for some eventual increase in value.

The EUR’s movement has been largely dominated by the dollar’s waxing and waning, with the market now shifting its focus to the President and his next move instead of the Fed’s movements. This is why in spite of repeated comments from Fed officials that the central bank will be implementing 2-3 rate hikes this year, this has done nothing to lift up the value of the USD. In addition, the EUR/USD pair is also steadily moving towards the resistance-heavy area of 1.0800 points, and with the dollar strength coming back anytime soon, the currency pair might be subject to corrections and could possibly revert back to its previous lows of 1.0400 points.

The Eurogroup meetings will be held during today’s sessions, with the meeting centering on geopolitical and economic concerns, but there are no major announcements that are expected to stem from this particular assembly. US will also be releasing its unemployment claims data for today, however the EUR/USD is expected to continue ranging and consolidating and will most likely spend the rest of the trading session at 1.0700-1.0800 points.
 
EUR/USD Technical Analysis: January 26, 2017

The European currency got afflicted by the selling interest during the early trades yesterday as the release of German Business Climate came in negative. The demand for the EUR surge amid EU hours, this supported the pair to regain as it rack up through its recent highs

Bears attempted to dominate the overall market on Wednesday. Upon the onset of the EU session followed by a night of consolidation, the sellers tried to break the price lower.

On one side, the price ploy towards the 1.0700 level but the selling pressure seems short-lived. The EURUSD met some fresh bid on top of 1.0700 region and continued to expand its corrective moves with a risk appetite.

The euro rallied and and erase its losses during noon trades on Tuesday. The 4-hour chart represented the price stays on top of the moving averages. The 100 and 50-EMA keep its bullish signals while 200-EMA was trending neutral shown in the same timeframe. Resistance highlighted 1.0750 mark, support holds 1.0700 handle.

The MACD indicator increase which favored buyer’s strength.RSI hovered around the overvalued territory.

The bullish sentiment is expected to prevail according to the 4-hour chart. Should the pair established a breakout around the 1.0750 resistance region will allow for the placing of buy orders. The major is able to extend its profits up to 1.0800 eventually. However, failure to surpass 1.0750 will cause for a decline to 1.0700.
 
USD/CAD Technical Analysis: January 26, 2017

US President Trump plans to restore the two major oil pipelines, Keystone XL and Dakota Access, weighed on the Canadian currency but the loonie was able to recover in spite of the drop in oil prices.

The US dollar preserved its stance against the CAD. The sellers paused to consolidate their gains subsequent to the sharp sell-off. The price is confined on top of the 1.3120 level during the morning trades followed by a rejection in the Asian trades. The greens were pushed upwards by a renewed buying interests in the middle trading session of Europe.

Moreover, rate hike got failed and the downward pressure returned to the 1.3120 mark. The loonie lead the 50 and 100-EMAs downwards as stated in the 4-hour chart.

The USDCAD kept intact under the moving averages as the 100-EMA pointed downwards, 200 and 50-EMAs are neutral. Resistance is found at 1.3190, support settled around 1.3120.

The MACD pierced through the negative zone and if it kept its position, sellers will get the favor for further strengthening. RSI consolidated in the oversold territory.

The general outlook appeared to be bearish after the fall to the support area 1.3050 but the pair seems oversold. The possible 1.32 minor correction still have the tendency to emerge.
 
AUD/USD Technical Analysis: January 26, 2017


The AUD/USD declined on Wednesday’s trading session. The price stayed giving enough support at 0.75 and below. Although, it was able to reverse forming a bullish candle and it seems that the uptrend will persist towards the 0.7750 level. Yet, signs of breakdown would not be good but it needs to align with the downtrend of the gold market. With a lot of noise present in the lower channel, traders should expect high volatility in the market.


The market continues to be actively traded during the London Trading session. The Short-Term Interest Rate Trading (STIRT) market seems to be surprised with all the speculations intervening the market. The near-term trading may be favorable for equities and commodity markets with chances for higher returns but not active for the currencies. Moreover, the outcome of trading in Dow index overnight with the retreat of copper from a 19-month high that capped the near-term drop and its oversupply. Relying on the surged of the price, the Aussie will continue to attract investor for the near-term trading while the downtrend of the greenback continues.
 
NZD/USD Technical Analysis: January 26, 2017
The NZD/USD pair slumped on Wednesday’s trading session but recovered placed as a support. The Resistive level at 0.7350 is also coming strong that makes it an opportunity for short-term buyers. However, it may take some time to reach those levels while levels lower than the 0.72 mark also stands as supportive levels. This could affect the trading and become choppy but the bullish tone could persist in the short-term. For now, trading long term cannot be clearly imagined.
The inflation in New Zealand hike more than what was expected reaching the .7300 figure bringing tighter correlation between New Zealand and Australian CPI. Traders are cautious with the possibility of lower inflation for New Zealand as the results of yesterday’s CPI was lower than expected. Although the pair rallied higher than the .7300 mark and placed steadily with 30 pips difference. The Reserve Bank of New Zealand moves in a dovish tone to control the strength of the currency which has obstructed the impetus of the pair.
 
GBP/USD Fundamental Analysis: January 30, 2017

The GBP/USD pair was able to regain its footing and erase all the losses it had incurred during the latter part of last week. Although the increase in the value of the sterling pound was mainly because of the actual pound strength and not because of any drop in the value of the USD, the movement of the GBP was largely influenced by the stance of the US dollar. The US dollar has been relatively weak today and this has caused the GBP to increase in value and trade just below 1.2600, where it could possibly increase further in value.

The drop in the dollar’s value was mostly due to Trump’s policies, which did not sit well with majority of citizens as well as some members of the financial market. In addition, Trump’s attempts to alter trade agreements has already concerned quite a number of government leaders and it has already been clear that Trump’s recent movements are not to the best of interest of everyone involved in these issues. This has then prompted a drop in the USD’s value, and has set out the ground for the recovery of the sterling pound.

There are no major news releases scheduled for today, although the US will be releasing a string of highly important economic data for this week. The GBP/USD pair is most likely to trade with a bullish tone for today’s sessions.
 
USD/CAD Fundamental Analysis: January 30, 2017

The USD/CAD pair closed down the week on a much lower note as compared to the previous trading week after the Canadian dollar exhibited strength across the board and the USD weakened in value yet again even though it was able to recover during the latter part of the week. This particular recovery of the US dollar looks like it will be here for the long run, and this is why dollar bulls are putting added confidence to the performance of the US dollar in the next trading sessions. In addition, the Trump administration has already went about making changes and fulfilling its campaign promises, such as the shifts in Obamacare and the Mexican border wall, and the pulling out of US from trading agreements with Canada and other neighboring countries. This has created unrest in the market, and could open the doors for a possible trade war which is very bad news even for the US economy.

This has then prompted the USD/CAD pair to drop significantly in value from 1.3450 to 1.3000 points, but was saved by the sudden surge in the USD’s value as the previous week came to a close. The Canadian dollar also received support from the resiliency of oil prices, which managed to stay put in spite of the recent increase in the value of the US dollar. Market players are expecting this uptick in the USD/CAD to continue and could possibly extend up to 1.4000if it manages to stay just above 1.3000 points.

The Canadian GDP will be released this week, and governor Poloz from the Bank of Canada will also be releasing a statement this week. On the other hand, US will be releasing a string of important economic data including the NFP, wage earnings, as well as the statement from the FOMC. These are all expected to induce volatility in the market, and traders should either exercise caution or wait for things to settle before trading with this currency pair.
 
USD/JPY Fundamental Analysis: January 30, 2017

The USD/JPY pair was subject to high volatility last week, but the price action of the currency pair was practically the same since the currency pair merely reflected the range during the past week. However, in spite of this marked stagnancy, the market was still able to post gains during the past week. The USD/JPY pair closed down the previous trading week at 115.047 points after increasing by 0.514 points or +0.45%.

For this week, the Bank of Japan is set to release its Monetary Policy statement, the BoJ, Policy Rate, and the BoJ Outlook Report. Investors are expecting that the Japanese central bank will be maintaining its current monetary policy and will be doing the same for its interest rates, which presently stands at -0.10%. In addition, the central bank would also likely say that its current outlook for the Japanese economy is positive and that it expects its national economy to continue its steady improvement.

Meanwhile, the Federal Reserve is also expected to maintain its current benchmark interest rate but could also leave out hints with regards to the timing of its interest rate hikes in the future. Market traders are anticipating that the Fed would release its opinions on President Trump’s recent slew of executive decisions during his first week in office and what these executive orders mean for the central bank’s decisions in the future.

The US will also be releasing its Non-Farm Payrolls report this week and is expected to show that the US economy increased jobs by 170,000 for January, although unemployment rates remain stagnant at 4.7%. Average Hourly Earnings for US will also be released this week and is expected to have a reading of 0.3%.
 
EUR/USD Technical Analysis: January 30, 2017

The European currency slowed down followed by the improvement on the dollar’s stance. The euro were left flat-out due to the absence of the market-moving news in the calendar. The EUR resumed to move down smoothly overnight and break away from the near-term rising channel. The euro had traded mixed as the Asian trades opened and hovered in the tight ranges of 1.0650-1.0690.

The EURUSD is confined in the neutral position in the morning EU session and met renewed bids within 1.0700 level. It further rallied around the level, en route 1.0750 prior to the outset of NY hours.

According to the 4-hour chart, the price leads the 50-EMA lower and headed northwards together with the 100-EMa. The spot hovered on top of the 100 and 200-EMAs eventually. Resistance is seen at 1.0750, support hit 1.0700.

The MACD proceeded to the negative zone and if the histogram stayed in this area, the position of the sellers will improve. The RSI lies in the oversold territory near the neutral ground.

A close on top of the 1.0700 mark will produce renewed bullish indicator which is possible to advance towards 1.0750.
 
GBP/USD Technical Analysis: January 30, 2017

The sterling softened on the back of the demand growth for the greenbacks. The GBPUSD was able to recover few of its losses subsequent to the meeting between Trump and May. The US data showed some pessimism which further hit the pair higher.

The British currency lose its value against its U.S peer during the night trades on Thursday. The spot were removed from 1.2600 level and placed in 1.2500 region amid Asian session. The pound extend its losses during EU hours, en route 1.2500. However, the level stalled the seller’s progress and kicked the spot higher. The price resumed its development on top of the moving averages as shown in the 4-hour chart while the 100 and 50-EMAs stirred upwards and the 200-EMA sits in the neutral position. Resistance touched 1.2600, support jump in the 1.2500 mark. The MACD histogram weakened which further slowed down buyer’s position. The RSI escaped from the overvalued territory and came in through the neutral zone.

The bullish outlook generally exist in the market while the pair got an opportunity to make recovery in case it surpassed 1.2600. A breakout within the 1.2600 handle would direct to 1.2700. Furthermore, the prevailing selling pressure could impact the spot and pushed below the mark 1.2500.
 
NZD/USD Technical Analysis: January 30, 2017

The American dollar was able to sustain a bid tone last Friday. Meanwhile, the markets highly anticipated for the further plans of Trump coupled with the GDP of the country for the fourth quarter. The NZDUSD kept intact in the ascending channel pattern on Friday. The price were pushed by the downward impetus toward its lower limit last 26th of January. Moreover, a recovery lasted overnight showed insignificant results. The European traders solely managed to drive the spot upwards

The pair was able to expand its recovery during the NA session. The price continuously sits on top of the moving averages according to the 4-hour chart. The 100 and 50-EMAs moved higher while 200-EMA is positioned in the neutral trend mentioned in the similar chart. Resistance entered 0.7300, support reached the 0.7250 region. The MACD indicator confirmed weak buyer’s position as it decreased steadily.

Bullish sentiment was likely to prevail for today. The short-term goal for the pair is 0.7311.
 
AUD/USD Technical Analysis: January 30, 2017

The AUD/USD pair closed lower at .7546 with an increase of 0.0014 or 10.78% on Friday since the release of economic data of Australian Consumer Inflation report that pulled down the U.S. dollar higher than what was expected in the last quarter in 2016. This could prompt the central bank to reduce its benchmark interest rate for this year.

There are no major Economic news from Australia to be released today but several data are scheduled to published from U.S. such as Core PCE Price Index, Personal spending, Personal Income, Pending Home Sales and Loan Officer survey later in the afternoon GMT time.

The main trend is heading upward in the daily chart but there is not enough momentum as the price reversed as it reached the .7608 level on Tuesday last week. However if the trade continues above the said level, it is possible for the upsurge to continue and establish .7511 as a new trading floor The trading range swayed between .7777 and .7159 levels with retracement levels from .7541 to .7468 area. The market extend across this range giving an upside tone with the retracement levels as support levels.

The near-term range lies within the .7159 to .7608 level. If the market reached the .7383 to .7330 area proceeding its reversal trend, this becomes the next floor target as it closes with a bearish tone.

The trading closed at 0.7546 on Friday and the next direction of the pair will depend on traders activity with Fibonacci level at 0.7541. If the current trend prolonged, this implies the strong stance of buyers leading the market. The followed uptrend with the possible resistance levels at .7568, .7588 with the last level to reach at .7598 before the highest level at .7608 mark. If it skips the .7608 level, the uptrend may continue towards the next target at .7639 level giving a bullish tone to the market.

However, if the price maintained lower than the .7608 level moving across the .7528 downtrend angle, indicating sellers dominating the market. It could go much lower towards the .7468 level. This could induce the market to jump towards the .7399 ad .7384 as the next support range. Overall, the price trend for this pair will depend on the market reaction to .7541 level to determine whether buyer or sellers will dominate the price for this day.
 
USD/CAD Technical Analysis: January 30, 2017
The USD/CAD pair declined in the week while testing the 1.30 level or lower for support. The former uptrend line continues to move offering strong resistance. Its support level is found at 1.3018 followed by a rebound towards the 1.3053 mark. This rebound may be a signal to consolidate a downtrend at 1.3387 level and could further go down towards the 1.2900level. If a break above the 1.3230 Resistance level, this finishes the decline of the pair.
For now, it is more favorable to trade in short-term instead of long-term trades. Traders should monitor the oil market as it has a big impact to the Canadian dollar which is not performing well while the traders are still uncertain of what to do next.
 
EUR/USD Fundamental Analysis: January 30, 2017

The Euro has recovered this morning trading amid the high risk and uncertainty in the market that has also affected the U.S. dollars. It seems that the current global condition reverses where that safe haven assets such as dollar and gold as seen as a go-to investment because of its stability but this is not happening. The greenback gives off high risk with market concerns on the changes in U.S. policies while yen and gold gain with risk off sentiment of the traders.

Change in U.S. administration following Trump’s inauguration and its team looks into update of campaign promises such as modification of Obamacare, immigration rules in wholesalers and muslim ban and other migrants making it difficult for them to come back in the country attracted public controversy. The stand of the U.S. who is aiming for a renegotiation of NAFTA and other trade agreements, is significant in the global trading swaying the balance in trades where some leaders had dissatisfaction where this is heading. This has increased the uncertainty on what will happen in the next 4 years altering U.S. policies and influencing market sentiment that drags the dollar down while the pair gains from it.

With the recent Chinese New Year holiday, there is no new major economic news expected to be released today. Hence, the market is in consolidation while later on, market should expect high volatility with the release of economic data in the middle to later of the week. The U.S. dollar may continue to weaken for some time while the EUR/USD pair would remain in consolidation state with a tone of bullishness.
 
USD/JPY Fundamental Analysis: January 31, 2017

The Japanese yen inched higher as opposed to the US dollar as a result of a flight-to-safety trend across the market, which was triggered by investor reactions to a sudden drop in global equity markets. Meanwhile, stocks were sold off as a result of Donald Trump’s immigration ban. The USD/JPY pair closed off the previous trading session at 113.778 after decreasing by -1.10% or 1.269 points.

A lot of investors have sought the protection of the Japanese yen after protectionism concerns arose due to the immigration ban since these could possibly have a negative effect on both exports and imports and could also create substantial risks for the economy. Towards the latter part of yesterday’s session, the Japanese Household Spending data came in with a reading of 0.3%, exceeding market expectations of 0.8% and the previous reading of -1.5%. However, the unemployment rates for the country remain stagnant at 3.1%. Meanwhile, the Bank of Japan chose to maintain its current benchmark interest rates at -0.10%, a move that was generally anticipated by the majority of market players. The central bank also increased its GDP forecast to 1.4% as opposed to its past prediction of 1.0% back in October. In addition, the BoJ also stated that it is expecting an inflation surge of around 2% come the fiscal year 2018.

Interest rate differentials could have a positive effect on the USD/JPY pair since the central bank chose to maintain its interest rates while the Fed hinted at high-frequency rate hikes for 2017. In the short term, the USD/JPY could be driven by volatility coming from the equity markets. However, the dollar-yen relationship could possibly be influenced by the positive interest rate differentials.
 
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