Fundamental Analysis for EUR/GBP: July 27, 2016

    The EUR/GBP pair went up by 47 points as the British pound reversed its gains after comments from the Bank of England made traders upset, as well as forecasts that the UK will most probably go into recession after the Brexit vote. According to the Chartered Institute of Procurement and Supply (CIPS), which issues monthly Purchasing Manager Index (PMI) surveys of the UK economy, a “Flash UK PMI” survey will soon be published which will reportedly follow the principles of Markit’s Flash PMIs for the Eurozone.

    Last week’s market activity already exhibited the effects of the Brexit vote on Britain’s declining economic status. An additional report from CIPS/Markit indicated that business activity in the region has been declining at a fast rate, its fastest since 2009. The Composite version of the survey which was released last Friday printed at 47.7, its lowest dip since April 2009.

GBP/USD Technical Analysis: July 28, 2016

    The British Pound’s value decreased after Wednesday’s session in spite of the positive GDP data for the 2nd quarter of the year. But the sterling pound obtained support from the United States after the Fed’s decision to keep their rates unchanged.

    The GBP/USD pair remained neutral all throughout the session last Wednesday, with its trading instrument maintaining a support of 1.3100. Meanwhile, the resistance amounted to 1.3300. MACD’s indicator has dropped near the centerline, which signals a negative outcome for this particular indicator. A lack of movement from the histogram and its refusal to leave negative territories will mean a significant increase in the strength of buyers. However, if the MACD returns to its positive state then the buyers will ultimately have the ball, while the RSI remains ambiguous.

    A downward trend is also seen in the 50, 100, and 200-day EMAs, which eventually led to a bearish cross forming in the hourly charts. The instrument went over the said EMAs and went past the 1 hour chart.

    Ultimately, trends are looking bearish, with the GBP/USD pair in danger of falling below 1.3100. But this does not not eliminate the possibility of the said currency pair experiencing an increase of up to 1.3300.

Fundamental Analysis for EUR/GBP: July 29, 2016

    The EUR/GBP pair increased by 62 points after the euro went up and the sterling pound declined during Thursday’s session. The currency pair is presently trading at 0.8425 points. The British pound still continued its decline even after a reported second-quarter increase in UK’s economic growth, whose increase was initially seen to be a positive sign for the currency pair.

    The UK economy went up by 0.6% during the second-quarter which was sealed by the controversial Brexit vote, a significant increase compared to the 0.4% during the first quarter of 2016. The British pound plummeted its lowest in two weeks after Bank of England policymaker Martin Weale said that PMI surveys would be of importance during BoE’s next policy meeting. He also added that in order for an interest rate cut to happen, there must be a concrete evidence of the UK economy losing its strength.

    In July, the Bank of England shocked the financial market when it refused to snip the benchmark for the borrowing cost from its all-time low of 0.5%. However, decision details from last week’s BoE meeting showed that most policymakers will be expected to endorse a yet unknown set of measures in order to help strengthen Britain’s economy.

AUD/USD Technical Analysis: August 1, 2016

    The AUD/USD pair went significantly higher last Friday after the disappointment caused by the stimulus measurements of the Bank of Japan and the weak US GDP report. This increase was further augmented by the inflation data of the Australian market and the neutrality of the Federal Reserve monetary policy statement.

    This coming Tuesday, investors are anticipating the rate statement of the Australian Reserve Bank, where a lot of investors believe that the central bank will decrease its benchmark interest rate 25-basis points from 1.75% to possibly up to 1.50%. The main trend went down after the Federal Reserve’s statement caused a volatile reaction. However, should there be a trade at .7675, the main trend may change according to the daily swing chart.

    Friday’s close indicated a strong buying, after the testing of the retracement zone of .7490 to .7571 which has been tested all throughout the month of July, with its major range at .7834 to .7145. The retracement zone is now in control of the market’s long-term direction.

Fundamental Analysis for EUR/GBP: August 3, 2016

    The EUR/GBP pair traded at 0.8462 points prior to the Bank of England meeting this coming Thursday. Certain factors may weigh in on the value of the said currency pair, such as the Bank of England’s prospective move to cut its base rates below the US rates, which can add to its passive quantitative easing. However, some major banks are speculating that the dollar might be prone to a squeeze following the release of data on Friday.

    The EUR has surprisingly done well in spite of the controversy brought about by the Brexit vote three weeks ago. It traded slightly lower than the dollar but is still higher compared to its value last February and has traded higher against the pound, its highest since three years ago. But the IMF has already stressed that Brexit is somewhat more damaging to the EU economy than it is for Great Britain, and the  latest ZEW survey has shown reports of confidence going down, with economic sentiment indicators decreasing to its lowest levels since Germany’s financial crisis last 2012.

    Some economists believe that this data means that investors are more concerned with Brexit’s effects on the German economy than the financial market’s response to Brexit.

EUR/USD Technical Analysis: August 4, 2016

    The EUR/USD is trading at a lower value inside yesterday’s range and during the mid-session, which hints at an impending volatility and an indecision among investors. The most recent data on private sector jobs from ADP, which is slated to come out at 12:15 GMT, is being anticipated by investors since the said report will show that there have been 170,000 jobs added by the US economy last July.

    The said pair might have a stronger value if the ADP data released will be below the expected estimate. However, if the data comes out higher than expected, then this will drive the EUR lower and increase the value of the US dollar. According to the daily swing chart, the general trend is a downward surge, and even though the EUR/USD pair has increased its trading value since July 25, this has not affected the current trend. The pair is also still trading within the post-Brexit range in spite of its high-pointing momentum levels.

    With the pair’s current pricing at 1.1197, the closest resistance point will be the Fibonacci level at 1.1229. A possible trigger for acceleration to the upside might happen if there will be an overtake of the weekly high at 1.1233 and the upward angle at 1.1286. This might also mean another point for a deeper rally at an angle of 1.1356. The EUR/USD will be in a bearish position if there will be a crossover to the weaker side of the angle, which is at 1.1146. This also means that there will be possible targets coming in a support cluster at 1.1092 to 1.1091.

Fundamental Analysis for GBP/USD: August 5, 2016

    The cable pair GBP/USD went down by 150 points after the good news brought about by the Bank of England. The BoE added stimulus by cutting its rates, which increased the sterling pound’s trading value at 1.3165. The Bank of England increased its asset purchases by 425 billion pounds and cut 0.25% from its lending rates. It has also announced its plans to follow in ECB’s footsteps by buying corporate bonds. Money markets were also completely priced in a quarter-point decrease to the main rates of the central bank, and investors and economists believe that there will soon be new measures which can cause the economy to surge after the UK’s decision to cut itself off from the European Union.

    On the other hand, the USD remained firm in spite of Thursday’s most recent low in six weeks, while the GBP remained in a tight range on top of renewed anticipation that the BoE will be cutting its interest rates for the first time since 2009 in an attempt to stave off a possible recession.

    The dollar index fell flat at 95.56 on top of a six-week low of 95.003 early this week. The most recent focus for the USD is the expected release of US jobs data on Friday. It is expected that this will cause the Federal Reserve to increase its interest rates on the latter part of the year. US futures interest rates are suggesting a 40% chance of the Fed increasing its interest rates this coming December.

Fundamental Analysis for USD/CAD: August 8, 2016

    The USD/CAD pair experienced an upsurge at 1.3175 after employment data in Canada disheartened investors, while US jobs data went up at an impressive rate. The week’s forecast for the greenback showed a continued surge for the currency pair. According to Statistic Canada’s labour force survey, the market lost a total of 31,200 in jobs last July, the biggest one-month drop in the last five years. Another report also showed Canada’s international trade deficit, which reached up to $3.6 billion last June.

    The said data caused the CAD to go even lower against the greenback, which caused a reversal of a short-term moderate strength. The Canadian economy was deprived of one of the most crucial support in the past years because of the stagnant consumer demand during the last two months. This is while the other sources of growth, like energy patch, business investment, and manufacturing continue its struggle.

    Analysts are suggesting that a dip in the Q2 GDP is likely to happen, mainly because of the losses incurred after the Alberta wildfires. Short-term interest differentials in the USD/CAD pair will remain in the USD’s favor due to a divergence in the general growth trends. The CAD also weakens during the latter part of the year, and seasonal considerations are being foreseen for the said pair.

Fundamental Analysis for USD/JPY: August 10, 2016

    The USD/JPY pair plummeted by 11 points, trading at 102.34 after the release of China’s inflation data proved to be better than its forecast. This helped the yen to rally since the Chinese economic situation might see some improvement. Investors are now awaiting more data from Japan, Bank of     Japan comments and government statement about stimulus programs. The JPY was initially sent higher by investors, however its fiscal stimulus failed to meet the high expectations set by the market. The USD, on the other hand, went up by a significant amount following a positive US labor market report, erasing most of JPY’s early-week gains.

The Japanese economic stimulus remains as the main focus since BoJ will be releasing its Summary of Opinions from the monetary policy announcement last July 29. This particular BoJ statement has previously caused the JPY to surge since the new policy fell short of its previous expectations. The Bank of Japan is currently in a tight position as it has little room for more stimulus after its easing regulatory policies. However, BoJ predicts that it will be able to reach its headline inflation rate by 2017. However, only its officials believe in BoJ’s ability to reach its targets, since both businesses and consumers are in disagreement with BoJ’s prediction.

Fundamental Analysis for EUR/JPY: August 11, 2016

The EUR/JPY pair went down further after Wednesday’s session, trading at 113.006, going down by 0.264 or -0.23%. The tight trading range remained as a result of the absence of major economic and political news from Japan and the eurozone. However, Japan’s Tertiary Industry Activity Index was released before the opening of Wednesday’s session and showed an increase by 0.8%, exceeding the initial report expectations which only predicted a 0.3% increase.

Volatility and volume levels were particularly light during Wednesday, since the Japanese public holiday on Thursday will mean closed markets, with volumes expected to be below average. Some major market players will also be having an extended weekend, as most of them will be absent on Friday as well. The EUR/JPY is expected to weaken further due to disappointments caused by stimulus programs from BoJ and the Japanese government, and the ECB is not expected to release another statement until September 8.

The overall trend prediction for EUR/JPY is a decrease in its rates, and is expected to continue, with a possible post-Brexit low of 109.519. An increase in selling pressure is also expected to manifest during the latter part of this year, especially once UK files Article 50 and formerly relieves its membership in the European Union.

USD/JPY Technical Analysis: August 12, 2016

    The USD/JPY pair weakened further following the release of the Jobless Claims Report, with traders clamoring for a response from the Bank of Japan. Should the weak state of the pair continue, then the BoJ will have to release a statement sooner or later.

Thursday’s session showed a remarkably low volatility in the market which only became active after the release of the US Jobless Claims Report. A positive US labor data strengthened the USD, causing traders to push prices upward. The instrument rallied at 101.40 and broke the level, with the resistance coming in at 102.50 and support levels at 101.40. The MACD is currently at the center level, and a histogram entry at the positive side will mean an increase in buyers’ strength. On the other hand,  sellers will regain its control of the market should the MACD go over the negative side. The RSI indicator is projected to increase after going over the oversold area.

The 50 and 100 EMAs were broken by prices in the 1-hour chart, after which the EMA pairs further increased its strength. The 200-EMA now acts as a barrier for the USD/JPY pair, with the moving averages going down within the said time frame. The USD/JPY will possibly move to test the next bullish target at 102.00, along the area of the 200-day moving average.