GBP/USD Fundamental Analysis: December 12, 2016

    The GBP/USD pair had a lackluster performance during the entirety of last week’s trading sessions since the sterling pound experienced constant pressure from the much stronger euro. The EUR plummeted last week after the ECB announced its plans to extend its quantitative easing program, and the EUR/GBP lost a significant amount of its value, causing the sterling pound to be affected as well. Prior to this sudden drop in value, the GBP has previously exhibited remarkable resiliency in spite of the confusion caused by the Brexit process. The GBP rose during the first part of last week and was even able to go through 1.2700 points before eventually reaching 1.2800 points before the announcement from the ECB dragged the GBP down.

    The GBP was also subject to added pressure due to delays in the implementation of the Brexit strategies as the Parliament is in the middle of heated debates regarding the implementation of Article 50 on the region. Since the timeline for the Brexit remains uncertain in spite of numerous meetings and debates within the Parliament, the sterling pound is expected to remain under pressure and any form of reversion should be immediately seen as a sell-off opportunity for the currency pair.

    For this week, the market is expecting the release of the CPI data as well as the Claimant count change data from the from the UK. The Bank of England is also expected to make a statement on whether the central bank would be maintaining its current interest rate of 0.25%, and the Fed is also scheduled to make an announcement regarding its interest rate hike, as well as a statement on whether the central bank will be adding up the frequency of its rate hikes next year. Due to the large number of economic data scheduled to be released this week, the market is expected to undergo an especially high level of volatility within the week.

EUR/USD Technical Analysis: December 12, 2016

The decision of the ECB to maintain its monetary policy had strengthened the dollar. However, the euro is weakening once again after it made a dipped on its fresh monthly highs and failed to hold its gains. Meanwhile, the EURUSD headed southwards on Friday. During the EU hours, the sellers successfully broke the 1.0600 region then continued to lead the prices through the 1.0550 lower, the pair surpass this level amid the NY session. The price rebounded in the 200-EMA downwards as shown in the 4-hour chart. After the euro and greens had broke both 50 and 100-EMAs, it continued to progress down in the moving averages. While the 100 and 200 EMAs preserved its bearish bias, 50 EMA rendered a neutral stance. Resistance touched the area of 1.0600, support is seen at 1.0550.

The MACD histogram makes its entry point within the negative zone. Should the indicator kept unmoved in the negative area, the sellers are able to gain further strength. The RSI remains oversold.

In case the prices settled below the 1.0600 support level, this will cause for a short-term downtrend. The next target of the sellers is  1.0500 and 1.0550.

USD/JPY Technical Analysis: December 13, 2016

    The Japanese yen experienced downward pressure during Monday’s session due to the OPEC production deal as well as the positive market sentiment with regards to the Fed rate hike scheduled this December. Japan had recently released its Machinery Order and turned out to be positive, but even this particular economic data’s effect paled in comparison to the aforementioned events which had a much larger impact on the safe haven currency.

    The price of the USD/JPY pair reverted from 116.00 points and went back to the 115.00 trading range. As seen in the currency pair’s 4-hour chart, the price of the USD/JPY stayed just above its moving averages and continued to inch higher. Resistance levels for the USD/JPY pair is seen to be at 116.00, while support levels are expected to come in at 115.00 points.

    The MACD indicators for the currency pair increased, showing a surge in buyer strength. Meanwhile, its RSI indicators were able to remain within the overvalued regions. The market is now monitoring the pair’s current position at 116.00, and if the USD/JPY manages to break through this region, then the pair could possibly hit the 117.00 trading region.

GBP/USD Fundamental Analysis: December 13, 2016

    The GBP traded on a more positive note during Tuesday’s trading session due to the release of the UK inflation data, which came out better than the initial market expectations. The GBP/USD rose in value and was able to reach 1.2723 points before settling at 1.2710 points after increasing by +0.31% or 0.0040 points.

    The inflation data from the UK exhibited a 1.2% increase last November, going well above the market expectation of 1.1%. The report also showed that the main catalysts for inflation in the region were culture, recreation, and clothing. The Core CPI data came in at 1.4%, again exceeding expectations of a 1.3% data release. Due to the positive economic data from the region, analysts are now saying that UK inflation could possibly reach the initial 2% goal during the first few months of 2017. However, this improvement might not be able to have much of an impact to the Bank of England’s impending decision-making this coming Thursday with regards to its adjustments in interest rates. BoE governor Mark Carney has also previously stated that the central bank would be willing to endure inflation overshoots if this would mean an increased economic support.

    Wednesday’s trading session is expected to be somewhat light and muted as the Fed meeting looms close. However, since the GBP/USD had mostly positive reactions with regards to the shadow of the expected Fed rate hike, the present inflation data from the UK should be able to underpin the currency pair.

NZD/USD Fundamental Analysis: December 15, 2016

The New Zealand dollar depreciated as more investors go for safe haven assets since commodity prices dropped in spite of the tension brought by the Federal Reserve's interest rate decision this week. The pair NZD/USD weakened by 17 points to 0.6698 after the greenback rebounded since the decline on Friday influencing the cross trades while the commodity prices remain low.

Currencies that are heavily influenced by commodities dropped to its lowest recorded rate for more than six years because of a drop in oil prices. Concerns in U.S. Junk bonds reemerged while majority are feeling pressured by the Fed's policy meeting this week. It is anticipated that the Federal Reserve Open Committee (FROMC) will proceed with the rate hike since the close to zero policy in December 2008 as the traders rely on hints for future changes.

The New Zealand's BNZ-BusinessNZ performance of services index for November will be announce today. While, Industrial production will also be released today from both Europe and Japan, as well as Tankan manufacturing index will be publicized by Japan.

GBP/USD Technical Analysis: December 19, 2016

The decision of the BoE to remain a constant rates did not surprise the market at all, seeing the rates to exist at 0.25%. The British currency was able to gain strength in spite of the reverse movement of its American counterpart subsequent to rally that took place on Friday.
Moreover, the sterling had a stronger stance as it bounced off its losses during the trades on Friday. The current rebound are considered as bear’s activity in selling its stock in order to gain despite of the sharp rise last week. Recovery seems weak and even there is a dollar retracement, the greens established a solid position generally.

The 4-hour chart showed that the price tested the 200-EMA, while the 50-EMA headed towards a lower level, both 100 and 200- day moving averages sustained a bullish pattern. Resistance is seen at the 1.2500 region, support is at the 1.2400 level. The MACD histogram increased which means a weak position for the sellers. RSI stayed in the oversold levels.

It is best to go short within the 1.2400 handle as its first target. In case that a price consolidation arise below the first target, it is expected that the GBP/USD will moved in the 1.2300 mark. However, a break on top of the 1.25 handle would weaken the U.S dollar. The pound have the tendency to expand its recovery through 1.2550.

USD/JPY Fundamental Analysis: December 20, 2016

    The Bank of Japan is expected to maintain its previous monetary policies and give more positive economic expectations, thereby cementing speculations that the central bank could possibly induce an interest rate increase instead of a rate cutback. Because of the lack of policy adjustments, USD/JPY traders will now be shifting their focus on BoJ’s Kuroda’s statement regarding the increase in Japanese yields. There are speculations that Kuroda could either talk about economic expectations for 2017 or the risks involved with a sudden surge in bond yields. However, it is more definite that Kuroda will be treading carefully with regards to increasing market expectations of an interest rate hike.

    The Bank of Japan could possibly sustain its present pledge-to-guide short term rates at -0.1% and 10-year Japanese Government bond yields at around 0% in spite of a somewhat positive sentiment for the Japanese economy. However, traders are advised to be careful with regards to holding Japanese bond yields at 0%, since long-term interest rates have now increased due to speculations of a steadier US rate hikes and an inflation surge under the Trump administration. The Bank of Japan is now under pressure due to calls for the central bank to add
up its 10-year yields target.

GBP/USD Fundamental Analysis: December 21, 2016

    The GBP/USD pair is now struggling to cope with the effects of the markedly low liquidity during this holiday season, much like other currency pairs. However, the GBP/USD managed to fare relatively better in terms of market volatility as compared to other currencies since it had a 100-pip range for the previous trading sessions. In spite of the USD’s current strength becoming the dominant feature of the financial market, the lack of market volatility has managed to offset the USD’s strength and has become advantageous to other currencies such as the sterling pound. The USD is expected to regain market control eventually, but until that happens, then the GBP could still range and consolidate at the lower region of 1.2500 points.

    As the Brexit process resumes, the GBP/USD is expected to trade with a bearish bias for the short term and medium term, especially since Scotland is apparently disagreeing with UK’s plans to leave the European Union and the UK will have to exert more effort in order to negotiate with all involved parties and make way for an easier Brexit process. Theresa May will also be needing additional support as the Brexit process begins, which is expected to become a long and arduous process.

    For today’s session, there are no major news releases from Britain, and with the holiday season fast approaching, liquidity is expected to drop further which could lead to more ranging and consolidation on most currency pairs.

USD/JPY Technical Analysis: December 21, 2016

    The JPY experienced a drop in value following the latest economic news release from Japan, where the Bank of Japan decided to maintain its current monetary policies until such time that inflation rates go beyond 2%. The Japanese economy is also reportedly continuing its recent recovery. The USD/JPY pair rallied during Tuesday’s trading session following this move from the BoJ, and buyers were able to take control of the pair and sent the USD/JPY soaring well beyond its daily highs. The USD went up from 117.00 to 118.00 in the London trading session, and was able to test the 118.00 region prior to the opening of the North American session. The value of the USD/JPY reverted from the 100 EMA in the pair’s hourly chart. Meanwhile, the USD went beyond the 50 EMA while on its way towards the upper region of the chart and veered away from its moving averages. Resistance levels for the currency pair is expected to come in at 118.00 points, while support levels are expected to be at 117.00 points.

    The MACD levels for the currency pair stayed within its previous level, indicating the increase in buyer strength. The RSI indicators for the currency pair went upwards as well. If buyers are able to maintain its control over the USD/JPY pair, then the price of the value could possibly move up further to 119.00 points.

AUD/USD Technical Analysis: December 23, 2016

The consecutive events regarding the economic growth of US together with the fiscal policy issued by Trump and hawkish outlook of the Fed for 2017 set the minds of the investors to avert from higher-yielding currencies including the Aussie dollar.

The market carried a bearish sentiment on Thursday. The AUD/USD pair further decline after the 2-day narrow consolidation. The sellers pushed the AUD towards 0.7200 from the previous 0.7250 region in the EU hours. Moreover, sellers failed to surpass the 0.7200 mark which caused them to take a pause. After the price touched the aforesaid levels, it made a roll back.

As shown in the 1-hour chart, the Australian dollar bounce back through the 50-EMA and resumed a downward trend. The moving averages maintained a bearish pattern as indicated in the same timeframe. Resistance is at 0.7250, the support holds the 0.7200 handle.

MACD grew less which means further strengthening for the sellers. RSI still was seen in the oversold territory and supported another downtrend.

Technical indicators exhibit a bearish tone. It is highly expected for a downward movement within the 0.7100 and 0.7150 levels.

GBP/USD Fundamental Analysis: December 28, 2016

    The GBP/USD pair traded within a tight range of 50 pips during yesterday’s trading session, and is expected to continue this particular trend along with ranging and consolidation for today’s session unless interrupted by a currency flow just before the month ends. The UK market was characterized by a remarkably low level of liquidity yesterday due to a UK holiday. However, some market players are banking on an increase in volatility just before this month draws to a close, as well as currency flows which could possibly occur towards the end of the week. However, the recent market trends are not expected to become completely altered even if the month-end currency flows appear and induce market volatility. This is because the recent dollar weakness is expected to continue up until the end of this week, and since the USD is expected to bounce back immediately after the holiday season, the recent trends might still be sustained even after the holidays.

    For today’s trading session, there are no major economic news releases expected from UK, and this means that the GBP/USD would most likely engage in more ranging and consolidation up until the end of today’s series of sessions.