Analyst Articles – Forex News 24

Strength Ebbs as PMIs Point to Flat Eurozone Economy
Gold Price Looks Oversold, Silver Price Perched on Support
Euro and Stocks May Fall on Gloomy Data, Italy Instability Fears
Swedish Krona Watching Unemployment Data
Crude Oil Price May Recoil at Chart Barrier as Market Mood Sours
Why the S&P 500 Will Struggle for a Record High and Dollar is Due a Break
Rupiah Gains as Jokowi Leads in Indonesian General Election
AUDUSD Jumps on Upbeat Employment Data
Euro Downtrend Expected to Resume
AUDUSD Price at Risk Ahead of Aussie Jobs Data

Strength Ebbs as PMIs Point to Flat Eurozone Economy

Posted: 18 Apr 2019 02:12 AM PDT

EUR price, news and analysis:

EURUSD has climbed this month but its rally looks to be reversing.
The pair has not been helped by Eurozone PMIs implying that a possible pickup in China's economy has yet to filter through to Europe.

Eurozone PMIs leave Euro struggling

EURUSD is giving up some of this month's gains after Purchasing Managers Index (PMI) data for the Eurozone suggest early signs that the Chinese economy is steadying have yet to be reflected in Europe.

EURUSD Price Chart, Hourly Timeframe (April 1 – 18, 2019)

Chart by IG (You can click on it for a larger image)

The PMIs imply that growth in Germany, France and the Eurozone as a whole remains tepid, with the table below showing the latest data and the comparable figures for a month earlier.

Thursday's PMIs also showed little growth elsewhere, with only a marginal increase in business activity in Australia, and the Japan manufacturing PMI below the 50 mark separating expansion from contraction for the third straight month.

Hopes are low too for the US PMIs due later in the session, with economists expecting a small pickup in the US manufacturing PMI in April offset by a decline in the US services sector.

You can read here about how to use news and events to trade forex

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— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

2019-04-18 09:00:00

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Gold Price Looks Oversold, Silver Price Perched on Support

Posted: 18 Apr 2019 01:34 AM PDT

Gold and Silver Price Analysis and Charts.

Gold chart remains negative but short-term oversold.
Silver propped up by the long-term moving average.

DailyFX Q2 Forecasts and Top 2019 Trading Opportunities.

Trading the Gold-Silver Ratio: Strategies and Tips.

Gold – Chart Remains Oversold and Negative

The recent sell-off in gold has turned the medium-term outlook for the precious metal to negative with further losses likely ahead. To the downside, 50% Fibonacci retracement at $1,262.8/oz. guards the 200-day moving average around $,1258/oz. Gold also closed below the $1,276.8/oz. – $1,280.9/oz. zone which will likely change to resistance in the short-term. Gold bulls may find some hope from the CCI indicator at the bottom of the chart which is at its most oversold since mid-November and at an extreme level which may fuel a short-term uptick.

How to Trade Gold: Top Gold Trading Strategies and Tips.

Gold Daily Price Chart (June 2018 – April 18, 2019)

Silver – Chart Respecting the 200-Day Moving Average for Now

Silver remains propped up by the 200-day moving average for now, but any further re-tests of this level may see its price fall further. The long-term ma currently sits around $14.95 just ahead of the 23.6% Fibonacci retracement at $14.92. A close below all three moving-averages would change the chart bias to negative. The CCI indicator has just moved out of oversold conditions. To the upside, there are a cluster of recent highs and the 20- and 50-day moving averages between $15.10 and $15.35.

How to Trade Silver: Top Silver Trading Strategies.

Silver Daily Price Chart (July 2018 – April 18, 2019)

IG Client Sentiment shows how retail traders are positioned in a wide range of currencies, commodities and cryptocurrencies. See how recent changes in positioning affect our trading bias.

— Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

2019-04-18 08:18:00

Euro and Stocks May Fall on Gloomy Data, Italy Instability Fears

Posted: 18 Apr 2019 12:15 AM PDT

TALKING POINTS – YEN, AUSSIE DOLLAR, EURO, STOCKS, ITALY, PMI, RETAIL SALES

Aussie Dollar struggles to make good on a second day of upbeat data flow
Yen may extend gains as bellwether stock index futures hint at risk-off bias
EZ and US data flow, political jitters in Italy may sour market sentiment

The Australian Dollar failed to make much of a second day of supportive economic data flow. The currency was unable to sustain a brief upward spike following better-than-expected jobs data having similarly shrugged at outperforming Chinese GDP data just the prior day.

Furthermore, the sentiment-linked Canadian and New Zealand Dollars faced noticeably concentrated selling pressure while the anti-risk Japanese Yen traded broadly higher. In all, this seemed to imply a broad-based defensive pivot across the G10 FX space.

Most Asia Pacific stocks traded tellingly lower. Healthcare names led the decline, echoing a similar dynamic on Wall Street. Futures tracking bellwether US and European equity index futures are pointing meaningfully lower, hinting at continued de-risking in the hours ahead.

EUROZONE AND US DATA, ITALIAN BUDGET WOES MAY COOL RISK APPETITE

Eurozone PMI figures are now in focus on the data docket. The regional composite gauge is expected to show a pickup in the pace of manufacturing- and service-sector growth in the single currency area in April. However, the projected rise would still put the index within a hair of January's near-five-year low.

Furthermore, political instability fears may overshadow a PMI uptick. Lawmakers in Italy are set to debate the government's latest economic forecast updates. These brought sharp downgrades of growth and budget deficit projections.

Traders will be keen to listen along, looking for signs suggesting that another clash between Rome and EU authorities in Brussels is ahead. For its part, the administration seems to be hoping that a round of privatizations will allow it some space for deficit reduction.

If it appears that Italy will struggle to bring down the budget shortfall in line with last year's commitments – stoking political instability fears as regional bigwigs are pushed to consider penalties on the eve of already troubling European Parliament elections – risk appetite and the Euro might wilt.

Analogous US PMI statistics as well as the retail sales report could compound negativity. Data flow out of the world's largest economy has increasingly disappointed relative to baseline projections over recent months, hinting analysts' models are overly optimistic and setting the stage for continued underperformance.

What are we trading? See the DailyFX team's top trade ideas for 2019 and find out!

CHART OF THE DAY – S&P 500 CHART WARNS BEARISH REVERSAL MAY BE IMMINENT

Bearish cues continue to build up in S&P 500 technical positioning. The appearance of a Rising Wedge formation along with negative RSI divergence have been warning of a looming top for some time. A series of indencisive candles with telltale extention at the upper wick – speaking to failed forays to the upside – is now seeing tepid follow-through toward the Wedge floor.

Confirmation of reversal requires a close below this as well as the 2865.00-78.50 resistance turned-turned-support zone. Such a move would initially expose the next downside barrier in the 2807.50-24.25 area. The broader implications would be weightier however, arguing for a double top having been set below 2950 and beckoning a lasting risk-off pivot across worldwide capital markets.

FX TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

2019-04-18 06:37:00

Swedish Krona Watching Unemployment Data

Posted: 17 Apr 2019 11:39 PM PDT

TALKING POINTS – SWEDISH KRONA, SWEDEN UNEMPLOYMENT, EUROZONE FLASH PMI

Swedish Krona traders are waiting for unemployment data
NOK and SEK are eyeing Eurozone flash PMI publication
How will Sweden unemployment impact Riksbank policy?

See our free guide to learn how to use economic news in your trading strategy!

Swedish Krona traders will be eagerly waiting for the release of the country's unemployment rate. Analysts estimate that unemployment will remain unchanged at 6.6 percent. According to the Citi Economic Surprise Index, Sweden's economy has been underperforming relative to expectations, with unemployment rising from 5.50 percent in November to its current rate.

Yesterday, German Finance Minister Olaf Sholz spoke in Berlin and cut growth forecasts for 2019 down to 0.5 percent. Eurozone CPI was published with all indicators falling in line with expectations. Neither events induced any major market volatility. This indicates that perhaps markets had already priced in a less-than-optimal outlook from Sholz, and since CPI came in at expectations it left SEK and NOK shrugging.

Later in the day, Italy's lower house will be debating the government's economic forecast for growth in 2019. Current estimates show between 0.1-0.2 percent growth, down from the 1.0 forecast. The country recently entered into a technical recession with the broader regional slowdown lingering in the background. The risk of a Eurozone debt crisis with Rome at the center of it is a worrying (and not completely unrealistic) prospect.

Insight on the state of economic affairs in Europe will be further illuminated by the release of Eurozone Flash PMIs. Often viewed as a leading indicator, traders with exposure to European assets will be closely watching the publication. Nordic traders will also be keeping a close eye on the report due to the unique relationship Scandinavian countries have with their European counterparts.

Interested in learning more about European financial markets? Be sure to follow me on Twitter @ZabelinDimitri.

Riksbank policymakers will be closely monitoring unemployment data as the central bank approaches its rate decision on April 25. Officials have expressed concern and frustration over the stubbornly weak Krona and have been disappointed that inflation has been coming in under the central bank's forecasts. The Riksbank is intending on raise rates in the latter half of 2019, though it is difficult to see how they could afford to do so.

If key inflationary indicators continue to disappoint, it could force policymakers to delay the rate hike and continue to keep rates at -0.25 percent. While an accommodative monetary policy has helped Sweden's economy recover, it has also created unintended risks. Cheaper credit has also inflated the country's OMX stock index, primarily due to investors taking advantage of cheap credit to inflate equities.

CHART OF THE DAY:

NORDIC TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

2019-04-18 06:30:00

Crude Oil Price May Recoil at Chart Barrier as Market Mood Sours

Posted: 17 Apr 2019 09:09 PM PDT

GOLD & CRUDE OIL TALKING POINTS:

Crude oil prices fall with stocks but larger reversal unconfirmed for now
Gold prices down as US Dollar rise overwhelms support from lower rates
Eurozone PMIs, US retail sales, Italy outlook debate now in the spotlight

Sentiment-geared crude oil prices fell alongside stocks as risk appetite soured in Wall Street trade. Gold prices also edged lower. A supportive pullback in bond yields was overwhelmed by a recovery in the US Dollar. The benchmark currency attracted haven demand as the markets' mood turned defensive, undermining the appeal of anti-fiat assets.

COMMODITIES AT RISK ON INCOMING DATA, ITALY OUTLOOK

A steady stream of eye-catching economic data informing investors' global growth outlook is in focus from here. The Eurozone PMI survey roundup and US retail sales data take top billing. The former is expected to show the pace of regional factory- and service-sector accelerated a bit in April while the latter is seen delivering the largest monthly receipts rise since October.

Macro news flow out of the single currency area has improved relative to forecast recently, opening the door for supportive outcomes. Any cautious optimism that follows may be cooled as Italian lawmakers debate the government's economic forecasts. The markets are likely to listen in with interest, wondering if another budget clash between Rome and EU authorities in Brussels is in the cards.

The anti-establishment administration of PM Giuseppe Conte recently cut its 2019 growth outlook from 1.0 to 0.2 percent and claimed a wave of privatizations will allow it to meet deficit reduction goals. If the tenor of discussions casts doubt on the latter part of the strategy, political instability fears might sour investors' mood. Soft US retail data echoing a recent string of disappointments may reinforce the dour mood.

Crude oil is likely to weaken further if this cumulatively translates into another risk-off day for global financial markets. As before, the implications for gold will depend on the relative magnitude of divergent moves in bond yields and the US Dollar. If yesterday's example proves to be telling, the yellow metal might continue to lose ground as traders' defensive disposition puts a premium on USD's unrivaled liquidity.

See the latest gold and crude oil forecasts to learn what will drive prices in the second quarter!

GOLD TECHNICAL ANALYSIS

Gold prices continue to drift lower after completing a Head and Shoulders (H&S) topping pattern. From here, a break below support in the 1260.80-63.76 area exposes the 1235.11-38.00 zone next, though the H&S setup implies a larger decline to 1215.00. A move back above neckline support-turned-resistance 1281.26 sets the stage for a retest of the 1303.70-09.12 region.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices remain locked in a narrow range at resistance in the in the 63.59-64.88 area. This is reinforced by a further barrier in the 66.09-67.03 inflection zone, with a daily close above that opening the door for a test of the $70/bbl figure. Alternatively, a downward reversal confirmed on a break below 60.39 neutralizes the near-term uptrend and sets the stage to challenge the 57.24-88 region.

COMMODITY TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

2019-04-18 04:00:00

Why the S&P 500 Will Struggle for a Record High and Dollar is Due a Break

Posted: 17 Apr 2019 08:26 PM PDT

Volatility and Liquidity Tralking Points:

Where the Nasdaq advanced to a record high, the S&P 500 and Dow are still floundering – and other risk assets are even further back
Chinese GDP avoided a new multi-decade record low in expansion, but broader trade wars and earnings interests garner more attention
Liquidity is falling rapidly into the extended holiday weekened with the Dollar’s 10-day range proferring yet another extreme reading

What do the DailyFX Analysts expect from the Dollar, Euro, Equities, Oil and more through the 2Q 2019? Download forecasts for these assets and more with technical and fundamental insight from the DailyFX Trading Guides page.

Neither Chinese GDP Nor Trade War Progress Seem to Spark a Fire

If any of the major fundamental themes that we have been tracking these past months was already in command of the market’s intent – direction and intensity – this past session’s headlines could have shaken the market’s refusal to commit to a clear course heading. Alas, both skepticism over the robustness of recent developments and the market’s slipping back into the habit of utter complacency has found provocative headlines less able to establish the clear fundamental traction so many expect and even yearn for – most would prefer trend over volatile indecision. This past session, the most overt thematic stir would come through growth considerations. The Chinese 1Q GDP figures starts the weeks-long stretch of official government quarterly growth figures that are spread out for weeks over the season. Few still judge country’s updates on a like-for-like basis relative to the other major economies’ updates, so the official 6.4 percent annual pace didn’t stoke immediate enthusiasm. This was a ‘better than expected’ reading owing to the official forecast for a slip to 6.3 percent which would set a fresh multi-decade low pace, but it doesn’t carry much enthusiasm beyond averting deeper pain. The monthly data (retail sales, jobless survey, industrial production, etc) draws the same degree of skepticism. As caveat-laden as Chinese growth is, the general state of growth influence over risk trends is fighting an uphill battle against liquidity. For that reason, it is reasonable to maintain a similar expectation of restraint heading into this week’s final fundamental flush with April PMI figures.

Another theme of merit and depth that is coming up short on market influence is the sway of trade wars. Once again, China was crowding out the headlines this past session with reports that negotiations were near some critical inflection point. According to unnamed sources quoted by the WSJ, the two sides were heading for an agreement to be struck sometime towards the end of May. That would be encouraging, but we have seen this same time frame floated in the past weeks, so presumably this is just a questionable air of ‘confirmation’ that a possible course is solidifying. What’s more, we have seen confident statements of clear timelines in the past fall apart under political strain. It is therefore little surprise that the market treats these rumors with serious skepticism. The same uncertainty is being applied to reports that the European Union (EU-27) has agreed to negotiate with the US on trade moving forward. That suggestion was circulated Monday, but the optimism neither spread to equities (risk) nor EURUSD. President Trump weighed in on the suggestion saying the commitment to only discuss industrial goods didn’t suit his intention with the auto tariff threat circulating in the background. Where USDCNH and AUDUSD were teased by these themes, no trend intent seemed imminent from either – and the implications for broad risk trends didn’t seem even seem to register.

Chart of USDCNH

Why the S&P 500 Will Struggle for a Record High and Dollar is Due a Break

There’s Your Problem, You’re Low on Liquidity

Risk trends this week have proven notoriously uneven and generally lacking. Yet, from a wider comparison of risk assets, it remains clear that there is a preference not for value but rather the outlier potential for sustained momentum for momentum’s sake. We can see this at work in the comparison between the US equity indices. The Dow and S&P 500 have struggled with any semblance of direction since the week began. In fact, the S&P 500’s range Wednesday completely enveloped the tepid scope of market activity the preceding three trading sessions. Given how restricted the past day’s range was, that does not inspire volatility conversations. The outlier seemed to be the Nasdaq which gapped higher on the open for a sixth straight trading day, the most recent effort pushing the tech-heavy index to a record high. While follow through was nonexistent, the disparity with the blue-chip and broad indices is remarkable. Over the past years, the technology sector has outperformed all others which has afforded it significant speculative prestige – a seemingly self-endorsing appetite. We find this same contrast between US indices and equities the world over or emerging markets or junk asset any number of risk metrics. In other words, sheer speculative appetite seems to control the day.

Chart of Nasdaq to S&P Performance Ratio

Why the S&P 500 Will Struggle for a Record High and Dollar is Due a Break

While there is an overt flaw in the market’s appetite for risk assets, this fundamental inequity is not what presently holds the financial system up. The real issue this week is the drain in liquidity that we are dealing with. While not all markets will be close, the US and Europe will be offline on Friday (and the latter will be closed into Monday). That will severely limit the depth of the markets ahead which will almost certainly cap intent found on the basis of speculative appetite itself. Historically, there is a strong correlation between market volume and volatility – though there is considerable debate over which leads the other. I’m of the belief that the leading factor depends on the circumstances. If we are to project a record high from the S&P 500 or Dow, that would imply a serious level of market-wide intent if there would be any hope of follow through. Mustering this against our troubled economic backdrop would be hard enough if markets were topped off. In liquidity-drained conditions, forging such a move is nigh impossible. That is not to say we may not see the shallow conditions amplify volatility. Yet, any breaks should be eyed as prime candidates for failure.

Dollar Range Hits a Fresh Extreme, Pound Won’t Shake Brexit, A Nod to Aussie and Loonie Dollars

With a struggle in the market backdrop ahead, I suspect little different from the most liquid currency market participants. Yet, with some of these benchmarks, there are more overt signs that an eventual break is inevitable and more likely violent when it does come to pass. I’ve mentioned before that the 40-week range for the DXY Dollar Index is sporting one of the most constrained ranges in history – only a period in the Summer of 2014 and a spat back in 1996 offered up a more powerful sense of restraint. Yet, 40 weeks is a medium-term signal. Consider from more recent weather patterns the scale of price action over just the past 10 trading days. This span relative to current spot is also one of the smallest we have seen in a long time. Breaking from of such engrained lethargy is not easy, but it is far less likely to occur during such a truncated period market activity as the holiday conditions we are dealing with ahead. Just as the trade balance failed to the Greenback this past session, I am not setting my expectations high for the retail sales and April PMIs on tap Thursday.

Chart of DXY Dollar Index and the Range of Past 10-Trading Days as Measure of Sport (Daily)

Why the S&P 500 Will Struggle for a Record High and Dollar is Due a Break

The other ‘majors’ are facing restrictions all of their own. For the British Pound, we were already struggling with the unresolved Brexit threat through the recent agreement by the EU-27 to extend the deadline for Article 50 discussions another six months to October 31st. Normally, this news would stir hope that more time would allow for a compromise to eventually by found, but the speculative interests have grown far too hardened to observe such optimism. The UK inflation figures had little impact on the Sterling, so I don’t expect much more from UK retail sales or the Bank of England’s (BOE) credit conditions survey. Brexit uncertainty is an effective disincentive. Meanwhile, the Euro has shown little proclivity for any fundamental influences – even those systemic issues that we track. The PMIs through Thursday are likely no different. If you set your expectations to volatility primarily, it is less likely that you start with unrealistic beliefs that the market just can live up to. That said, the Canadian Dollar’s positioning for favorable growth and financial conditions as well as the Aussie Dollar’s slide despite the Chinese news should make for interesting marks. We discuss all of this and more in today’s Trading Video.

If you want to download my Manic-Crisis calendar, you can find the updated file here.

2019-04-18 03:07:00

Rupiah Gains as Jokowi Leads in Indonesian General Election

Posted: 17 Apr 2019 07:47 PM PDT

USD/IDR, Indonesian General Election Talking Points

Rupiah gaining as Jokowi leads in Indonesia General Election
Road ahead for USD/IDR eyes external risks, FX intervention
USD/IDR broke support, faces 2019 lows as downtrend extends

Trade all the major global economic data live as it populates in the economic calendar and follow the live coverage for key events listed in the DailyFX Webinars. We'd love to have you along.

The Rupiah is falling after Indonesian President Joko Widodo is anticipated to secure a second term following the 2019 general election. Unofficial counts have him ahead of challenger Prabowo Subianto, who had recently been closing in on Jokowi's lead according to survey polls in the lead-up to the election. The official announcement is anticipated to be released later in May.

Overnight, as preliminary tallies crossed the wires, the iShares MSCI Indonesia ETF rallied before regional markets opened for trading on Thursday. This signaled that the Indonesian Rupiah was about to appreciate against the US Dollar on the chart below. In fact, USD/IDR tends to have an inverse relationship with the ETF, showing its sentiment-linked status.

USD/IDR, iShares MSCI Indonesia ETF

Chart Created in TradingView

In the immediate sense, Jokowi appearing to secure a second term reduces the uncertainty that a Subianto victory might have entailed given what markets were pricing in. Thus, the passing of event risk bodes well for the Rupiah and volatility seems to be kept in check given what seems to be the status quo ahead. With that in mind, the road ahead for the Indonesian Rupiah is fundamentally bound to the central bank and external risks.

For the most part, the Indonesian central bank has made it clear that it intends to uphold the value of IDR and maintain price stability using FX intervention. Inflation has however been trending lower since the middle of 2017. Meanwhile, the central bank embarked on rate hikes last year to stem a selloff in the Rupiah with them now on hold. Governor Perry Warjiyo noted that they are watching external risks while on a rate pause.

USD/IDR Technical Analysis

At the time of this writing, this is appearing to look like the best week for the Indonesian Rupiah since late January. USD/IDR is attempting to clear near-term support at 14010, eyeing the current 2019 lows around 13923. Meanwhile, a falling trend line from December seems to be keeping the dominant downtrend intact. For more updates on the Indonesian Rupiah, you may follow me on Twitter here at @ddubrovskyFX.

USD/IDR Daily Chart

Chart Created in TradingView

Indonesian Rupiah Trading Resources

— Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

2019-04-18 02:30:00

AUDUSD Jumps on Upbeat Employment Data

Posted: 17 Apr 2019 07:10 PM PDT

TALKING POINTS – AUSTRALIAN DOLLAR, RBA, AUDUSD, AUSTRALIA EMPLOYMENT

AUDUSD jumps on better-than-expected employment data
Aussie given additional boost from yesterday's China GDP
Fundamental backdrop remains the same – will AUD's rise hold?

See our free guide to learn how to use economic news in your trading strategy!

The Australian Dollar spiked following the release of impressive employment data. 25.7 thousand jobs were added, beating the 15.0 thousand forecast with the previous report being revised upward from 4.6 thousand to 10.7 thousand. While the unemployment rate did rise to five percent – as analysts had estimated – so too did the participation rate.

AUDUSD – 15-Minute Chart

According to the Citi Economic Surprise Index, Australia’s has been outperforming relative to economists' expectations. It seems as though the better-than-expected employment data fell in-line with the broader trend in economic activity. This comes as China – Australia's largest trading partner – has begun to make a modest recoveryafter introducing economically-stimulative policies.

The data could also have a significant impact on the Reserve Bank of Australia's monetary policy outlook. At the latest policy meeting, officials stated that they see no case for near-term adjustment in rates and stated that the outlook remains balanced. Meaning, the probability of a cut or a hike is relatively equal. This data could reduce rate cut expectations amidst the RBA's concern over unemployment and its effect on inflationary pressure.

However, the Aussie's jump struggled to be sustained following the employment data. It also reacted with greater enthusiasm to bad news – like New Zealand's recent CPI data – than to good news. This signals a possible bearish bias toward Aussie. Looking ahead, the sentiment-linked currency will continue to monitor the global economy with a particularly close eye on US-China trade relations.

FX TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

2019-04-18 01:33:00

Euro Downtrend Expected to Resume

Posted: 17 Apr 2019 05:57 PM PDT

EUR/USD Technical Strategy: BEARISH

Euro downtrend intact after rebound form support below 1.12
Candle structure, negative RSI divergence hints at downturn
Break of near-term support near 1.1280 may be confirmation

See the quarterly Euro forecastto learn what is likely to drive price action through mid-year!

The Euro rebounded from support below the 1.12 figure against the US Dollar to retest resistance guiding the single currency lower since late September 2018. Prices action has been choppy, but a shallow series of lower highs and lows suggests the prevailing near-term bias remains bearish.

Candlestick structure hints at indecision. Long upper wicks and small candle bodies point to forceful rejections on back-to-back tests of resistance hints at fraying bullish conviction. Early signs of negative RSI reinforce the sense that upside momentum is ebbing.

Zooming in to the four-hour chart, the first layer of support looks to be at 1.1285, the intersection of a chart inflection barrier and a counter-trend line. Breaking below that exposes 1.1250 next. A minor upside hurdle lines up at 1.1332 but bearish bias invalidation calls for a break of trend resistance, now at 1.1390.

EUR/USD TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivakon Twitter

2019-04-18 00:30:00

AUDUSD Price at Risk Ahead of Aussie Jobs Data

Posted: 17 Apr 2019 02:46 PM PDT

AUDUSD CURRENCY VOLATILITY – TALKING POINTS:

AUDUSD overnight implied volatility skyrockets to 12.1 percent, the metric's highest reading since the Currency Market Flash-Crash on January 3
Australian employment numbers in addition to a slew of economic indicators out of the United States will be closely watched during Thursday's session seeing that the data will likely dictate AUDUSD's next direction
Lack of market liquidity due to the upcoming Good Friday and Easter Sunday holidays threaten possible breakouts from recent narrow trading ranges which could exacerbate price movements
Check out this free educational guide covering an Introduction to Forex News Trading

AUDUSD could experience a volatile session tomorrow considering overnight forex options contracts are pricing in the largest expected move for spot prices since the flash-crash witnessed by markets on January 3. Uncertainty surrounding Thursday's high-impact economic data out of Australia and the US has likely bid up AUDUSD 1-day implied volatility to its second highest reading of the year.

AUDUSD OVERNIGHT IMPLIED VOLATILITY

FOREX MARKET IMPLIED VOLATILITIES AND TRADING RANGES

Forex Market Implied Volatility EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, NZDUSD Currency Market Implied Volatility AUD, USD, EUR, GBP, JPY, NZD, CAD, CHF

Australia's economic data is expected to cross the wires at 1:30 GMT during Thursday's session. Markets are expected to closely scrutinize the Aussie employment numbers for potential insight into the country's labor market, especially considering tepid language found in the Reserve Bank of Australia's March meeting minutes published yesterday.

The RBA's remarks unsurprisingly weighted negatively on AUDUSD seeing that the central bank stated a decrease in the overnight cash rate would likely be appropriate if inflation fails to firm and unemployment trends higher.

FOREX ECONOMIC CALENDAR – AUDUSD

AUDUSD Forex Economic Calendar Chart

Visit the DailyFX Economic Calendar for a comprehensive list of upcoming economic events and data releases affecting the global markets.

Although Australian employment numbers will likely take the spotlight for AUDUSD traders during Thursday's session, a slew of economic data out of the US could weigh on the currency pair later in the day. It's worth mentioning that the Citi US Economic Surprise Index shows a sizeable drop-off since January, indicating that America's economic data has broadly surprised to the downside as of late.

That being said, a data-dependent Fed could adopt a dovish tilt following suit from central banks around the world if leading indicators like the Markit Services and Manufacturing PMIs disappoint. On the contrary, better than expected economic reports out of the US will likely bolster the greenback.

AUDUSD PRICE CHART: DAILY TIME FRAME (NOVEMBER 12, 2018 TO APRIL 17, 2019)

According to AUDUSD overnight implied volatility, the currency pair is calculated to trade between 0.7139 and 0.7231 with a 68 percent statistical probability. Spot AUDUSD currently trades at 0.71659 with prices forming a rising channel since the beginning of the month. Recent gains have pushed the Aussie above near-side resistance from the downtrend line formed by the tops printed on December 4, 2018 and January 31, 2019. Yesterday's advance also helped reclaim the 23.6 Fibonacci retracement line drawn from the flash-crash low on January 3 this year to its 2019 high – a level that now looks to serve as technical support.

However, if Australian economic data falters tomorrow, AUDUSD fundamentals could quickly weaken considering the RBA has a previously stated that a deteriorating jobs market would likely put a rate cut on the table. That being said, an increase in the unemployment rate has potential to send spot AUDUSD plunging. With overnight implied volatility suggesting a mere 46 pip move, the possibility of a risk-reversal could be underpriced. On the contrary, a robust employment report could drive AUDUSD to fresh month-to-date high.

AUDUSD TRADER SENTIMENT PRICE CHART: DAILY TIME FRAME (OCTOBER 19, 2018 TO APRIL 17, 2019)

AUDUSD Trader Sentiment Price Chart

Check out IG's Client Sentiment here for more detail on the bullish and bearish biases of EURUSD, GBPUSD, USDJPY, Gold, Bitcoin and S&P500.

The latest AUDUSD trader sentiment data from IG shows that 43.4 percent of traders are net-long resulting in a ratio of traders short to long at -1.31 to 1. Moreover, the number of traders net-long is 7.3 percent lower than yesterday and 10.9 percent lower relative to last week.

TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

– Written by Rich Dvorak, Junior Analyst for DailyFX

– Follow @RichDvorakFX on Twitter

2019-04-17 21:30:00