Currency trading analysis and daily forex market forecast, by forum.forex

[Somrat4030]

Feb-23, 2022, EU, US market analysis and currency trading latest forecast.​

Thus far a relatively sanguine response in the FX space to the first round of sanctions on Russia. That said, in the short term, market sentiment will continue to change on a whim from headline to headline, staying agile is the prudent approach in this current environment. I remain a longer term bull on the Euro, which can also be expressed via EUR/GBP. EUR/USD continues to hold onto the 1.13 handle with the recent break below failing to inspire in much the way of a follow through. Now while this may be encouraging for Euro bulls, the current geopolitical risks suggest that the currency is not out of the woods yet. Not to mention we are also approaching month-end rebalancing, which may well see similar price action that we saw at the end of last month. So far the S&P 500 is down 4.6% MTD and as the chart below highlights, when the index reports MTD losses of at least 3%, the USD picks up in the last few days of the month, before paring the entirety of the move in the first week of the new month.

EUR/USD​

Going along with that trendless US Dollar has been the mirror image in EUR/USD, and there's been a similar tightening action showing here with price action coiling deeper into compression.

There's a couple of trendlines at-play here and that goes along with existing support and resistance structure. The 1.1374 level remains relevant, and a breach there opens the door for a push up to 1409. On the support side, 1272 remains important, and tests below that open the door for longer-term support from 1187-1212.

On the other hand, The Canadian dollar was trying to strengthen against its US counterpart on Wednesday as global financial markets started off calm in Asia.​

However, risk sentiment flipped on its head with investors waiting to see Russian President Vladimir Putin's next move after he sent troops into separatist regions of Ukraine.



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[Somrat4030]

Mar-04, 2022, EUR/USD, GBP/USD trading analysis and US job market data updates, by forex forum.​

Weekly close above 1.10 may slightly take the edge off the euro's sharp losses of late.​

"With no end in sight to the war in Ukraine and more event shocks ahead (like the nuclear power plant yesterday), the EUR is at risk of losses to 1.08 in the short run."

"EUR/USD now faces limited support markers until psychological floors in the 1.09 and 1.08 zones."

"A weekly close above the figure may slightly take the edge off the currency's sharp losses of late, but upward momentum remains limited and there are no clear signs of a reversal being in the works."

Moreover, Energy prices will hurt growth in the euro area more than in the US.​

"The repercussions for energy prices are most severe in Europe due to its energy dependency on imports. The US is in comparison energy self-reliant and a net petroleum exporter. It is also worth noting that European households spend a higher proportion of their income on heating/gas/electricity compared to American households. Hence, the economic ramifications will be more pronounced for the European economies than in the US."

On the other hand, Non-farm Payrolls was released this morning to the tune of +678k . This is the final NFP release ahead of the March FOMC rate decision where the bank is expected to hike rates for the first time since 2018. But, perhaps more importantly, this would be the first step towards paring back some of the outsized accommodation that had been set since the onset of Covid.

Jobs data has remained in focus as this has been the Fed's pressure point for liftoff. Inflation raged throughout last year but the bank continually avoided any element of tightening for fear of choking off the labor market recovery.

Overall, the job gains continue to show strong growth with the unemployment rate falling as well toward full employment. However, the wage data was contained with earnings on the month virtually flat and the YoY declining to 5.1% from 5.5%.

*. EURUSD is continuing to trade near session lows
*. GBPUSD is also trading lower (higher USD).
*. Dow -234 point.
*. S&P -28 points
*.NASDAQ -80 points

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Elsewhere, The GBP/USD pair continued lowing ground through the early North American session and weakened further below mid-1.3200s in reaction to an upbeat US monthly jobs report. The pair was last seen trading around the 1.3240-1.3235 region, down nearly 0.80% for the day.

The pair added to the overnight losses and continued falling for the second successive day on Friday amid a blowout US dollar rally, bolstered by the global flight to safety. The Russian attack on Ukraine's Zaporizhzhia nuclear power plant - the largest of its kind in Europe - raised fears of an environmental catastrophe. This, in turn, unnerved investors and boosted demand for traditional safe-haven assets.

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[Reinow6]

Is the US Dollar the best trading currency or the British Pounds Sterling?

 

[Somrat4030]

Is the US Dollar the best trading currency or the British Pounds Sterling?

In my opinion US dollar is the best traded currency pairs.

 

[Somrat4030]

Mar-11, 2022, Currency Trading weekly Analysis and Market Forecast, By Forex Forum.



EUR/GBP Analysis Today



EUR/GBP has stabilised on Friday just to the south of the 0.8400 level as traders mull how the Ukraine war and related global economic impact effects the UK/EU economic outlook, as well as the outlook for BoE/ECB policy. Speaking of, after Thursday's more hawkish than expected shift in the ECB's QE policy (towards ending net purchases in Q3 despite Ukraine uncertainties), EUR/GBP rallied to one-month highs in the 0.8430s, but these gains were short-lived. The pair has since dropped back to the 0.8375 area, down about 0.7% from Thursday's peaks, with about 0.2% of that drop coming on Friday, with better-than-expected UK January GDP figures likely weighing a tad.



On the other hand, YEN WEAKNESS AND OIL DEPENDENCY FAVORS USD/JPY BREAKOUT.



The Japanese Yen has been a rather frustrating pair to watch due to its tendency to trade in a sideways manner since the invasion of Ukraine. Typically, in times of geopolitical uncertainty, the Japanese Yen appreciates in line with its 'safe-haven' appeal, but not this time.

Japanese Yen crosses have largely benefitted from a recent depreciation in the Asian currency as it sees its trade balance continue to struggle. The value of Japanese imports have outpaced exports since August last year apart from November when it temporarily recovered above zero.


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[Somrat4030]

April-27, 2022, Currency market latest forecast, by forex forum.​

​

The pound’s recent demise entered new depths on Tuesday after it sunk into the 1.26 range against a broadly firm dollar for the first time since July 2020.​

Concerns about Britain’s economic outlook deepened following the release of government debt numbers and mounting fears that Covid-19 restrictions in China will dent the global economy.

Data from the Office for National Statistics showed that British government borrowing during the 2021/22 financial year was almost 20% higher than the consensus.

The figures highlighted the challenge facing chancellor Rishi Sunak, who is under pressure to offer fresh financial support to households and businesses hit by sky-high inflation, despite the amount of new debt held by the government.

Technical analysis

At the time of writing, GBP/USD is trading at $1.2545, down 0.3% from today’s opening levels.

Elsewhere, The Australian currency is weakening against the yen, pound, and euro but is strengthening against the U.S. dollar.

The prices are under pressure amid new coronavirus restrictions lockdowns in China. Possible blockage of Beijing causes fears in the market that the country will significantly reduce the consumption of raw materials and energy resources, including iron ore and coal, supplied from Australia. Finally, the Australian dollar is facing uncertainty because of the upcoming parliamentary elections, which could well lead to a change of power. According to polls, Scott Morrison’s ruling coalition is currently far behind the opposition, even though the Prime Minister has promised to introduce a number of tax breaks for citizens in case of re-election.

XAUUSD Technical analysis
Technically, Gold Price breached the March 29 lows of $1,890 but found bids just above the end-February lows near $1,880.

Even though XAUUSD is bouncing back towards the $1,900 mark, the 14-day Relative Strength Index (RSI) keeps pointing lower below the midline, suggesting that any recovery attempts are likely to remain shallow.

If bulls succeed in recapturing $1,900 on a sustained basis, then Tuesday’s high of $1,911 could be retested.

Further up, the $1,950 psychological level will be closely followed by XAU bulls.

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[Somrat4030]

May-06, 2022, Weekly Currency trading forecast, by forex forum.


The British pound appears to regain composure but remains losing in the day, down 0.06%, after the Bank of England hiked rates by 25-bps on Thursday. At the time of writing, the GBP/USD is trading at 1.2352.

US employment figures came positive, and the BoE expects inflation to reach 10%
Global equities remain down during the North American session, while the US 10-year Treasury yield rose to a YTD high of around 3.131%. Albeit higher US yields, the greenback is giving back some earlier weekly gains, as portrayed by the US Dollar Index, a gauge of the buck’s value against a basket of six currencies, down 0.18%, sitting at 103.370.

Elsewhere, The dollar slipped against a basket of currencies on Friday after two volatile days as investors focused on how aggressive the Federal Reserve will be in hiking rates as it tackles rising inflation.

The dollar index hit a 20-year high overnight on safe haven demand, following a sharp stock selloff on Thursday driven by concerns about the Fed's aggressive tightening and as European currencies weakened on worries about growth in the region.

It retraced some of these gains, however, as investors evaluated how much of the Fed’s hawkishness is already priced into the greenback, and as some analysts argued that inflation may be nearing a peak.

Data on Friday showed that U.S. job growth increased more than expected in April. Average hourly earnings increased 0.3% after advancing 0.5% in March. That lowered the year-on-year increase in wages to 5.5% from 5.6% in March.

Moreover, the EURUSD is remaining near its lows going back to 2017.

However, the price is trying to stay above its shorter-term 200 hour moving average at 1.05516 and its 100 hour moving average at 1.05425. The current price is trading at 1.0577. The low price for the cycle reach 1.04703 last week.

On the other hand, Earlier this morning the Reserve Bank of Australia (RBA) released its monetary policy statement. Listed below are the important issues addressed by the central bank:

1. Inflation forecasts have been revised higher and is expected to remain elevated above the 2%-3% range.

2. No concern over weakening AUD – trading around similar levels pre-pandemic as well as the start of 2022.

3. Tight labor market with low unemployment levels.

Price action on the daily AUD/USD chart shows bears looking to test the 0.7000 psychological support zone for the third time since December 2021.

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