FXML’s Forex Signals Analysis of July 14-20, 2014
Skerdian Meta • 7 min read
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FXML’s Forex signals analysis of July 14, 2014
Last week we saw USD/JPY was confined in a downtrend after being rejected by the 100 moving average around 102.30-40 which is a mild resistance. I mentioned last week that 101 level with a 20 pip range each side is a strong support dating back five months and that I was going to look for opportunities to buy around there. As we can see from the daily chart the smooth 100 MA lies around there as well which adds more strength to the support. Last Friday's candle closed as a pin, indicating a reversal and RSI and Stochs started to turn after getting close to oversold levels.
On the weekly chart the 50 simple moving average has been containing the pair from moving down and that is another reason to long this pair around 101 targeting at least 100 pips. On the 4 hour chart this pair had a quick dip to 101.05 last Thursday, but another bullish candle followed right after and that's where I decided to pull the trigger. I went long around 101.20 and now this trade is risk free after I moved the stop to breakeven. Daily chart looks perfect for the trade and 101.00-30 is not far now.
USD/JPY daily chart – last week was all about the downtrend.
USD/JPY weekly chart – 50 simple moving average has been containing the pair from moving down and the price is now touching it again.
USD/JPY 4 hour chart – Stochs and RSI oversold, indicated by black lines.
USD/GBP has been in a yearlong uptrend but is feeling wobbly around 171.60-80. It has had several failed attempts to break it and move higher over the last two weeks and has formed a concave shape which might be the beginning of a downtrend or at least a retrace. The next two days we have the CPI, Retail Sales and Unemployment coming out of UK and the risk is to the downside. The good numbers can't impress much anymore, because the market is used to them now, but a few bad ones and we'll see the bears jump in, don't forget we had the manufacturing disappointment last week.
The rate hikes are already priced in the actual price and the UK's self-reviving of the economy has reached its limits. Its biggest trading partner Europe is still not in shape to help UK's exports and economy grow further. I missed the chance today to get in short at 171.40 and if it gets around there again I'll look to sell with stop above 172 and take profit around 170.
GBP/USD daily chart – uptrend seems to be coming to its end.
GBP/USD 4 hour chart – good chance to get in short before the big bearish candle.
FXML’s Forex signals analysis of July 15, 2014
Three days ago EUR/USD formed a pin at the 1.3580s support on the daily chart and looked like it was about to form an uptrend. Yesterday's daily candle closed according to this scenario but today's FED head Yellen reversed that scenario and the candle looks like it will close really bearish. So the fundamentals win again against the technicals as is often the case lately. Right now we are at around 1.3560 and the next mild support is around 1.3540-50.
On the H4 chart the pair was capped on the top side by the 100 smooth moving average yesterday and today. On the hourly chart we had a jump at 12:30 GMT after the US data but it reversed quickly after the details in the numbers showed a pick-up in the US economy. So I'm short biased on this pair until 1.3500-20 and when we get there, if we do, then I'll reconsider and probably take a long there.
EUR/JPY has been acting in a similar way the past couple of days but is less volatile due to the Yen weakness. The 100 daily smooth moving average here lies below and has acted as support for the last two months. 138 where we are right now is a three month support line as we can see from the daily chart and if that and the 100 moving average goes then the resume of the bearish trend will be confirmed. On the H4 chart the yellow 50 moving average has put a lid on the pair this week, so it would have been wise to sell around there. The outcome on this pair during the coming week will depend on how Euro and Yen will perform against the USD.
FXML’s Forex signals analysis of July 16, 2014
Following up on yesterday's analysis, EUR/USD remained on the downtrend that started yesterday after Yellen's speech. Today's candle looks set to close as a bearish candle as well, but I'm weary of this downtrend continuation over the next few days. Right now we are in the 1.3520s region with resistance just below and Stochastics and RSI near oversold levels. I missed the chance to get in long a few hours ago here but after a short lived jump to 1.3540 we're back here and just opened a long position.
Yesterday evening I took a small long around 1.3560 and pocketed about 20 pips. After it got back down to the 60's I took another long after 2 H4 dojis, but there were no other pullbacks so that trade is flushed now. Today Yellen was on again in a conference but we had no reaction at all, or a small USD negative reaction to the same questions and answers as yesterday. This means that the downside is limited on fundamentals near term and a jump might follow, unless technicals take charge. If the 1.35 level breaks then the path to the downside is open, but that doesn't look likely now.
GBP/USD had a really bullish day yesterday going up more than 100 pips after the CPI data which was way better than expected and the beginning of Yellen's speech, and reached 1.7190 where it met resistance. It pulled back from the highs and closed around 1.7140. Today we had the unemployment data falling to 6.5% from 6.6% and the Claimant Count falling more than expected. Last month GBP rallied about 50 pips to the same data with similar results, but today we can see in the H1 chart that it fell about 30 pips. This was due to the average earnings which came out softer than expected. So this tells us that the market is now more focused on the inflation and wages than the growth of the economy and the focus should change in the coming weeks/months.
FXML’s Forex signals analysis of July 17, 2014
EUR/USD has been in a downtrend for the last two days. The pair has had a couple of attempts at the 1.3500-20 strong support but without much luck. This level has held multiple times last month and is showing strength again. The daily candle today looks like it's going to close as a doji. This shows indecisiveness and that the buyers are matching the sellers at the moment. I was waiting to see today the US data and how this pair was going to react, whether good data was going to breach the 1.35 resistance. The Unemployment Claims and the Philly Fed Manufacturing Index came out much better than expected but no reaction was seen at all, so the bears look like they are starting to get exhausted. This means that in the coming days we might see a jump to 1.3560 and 1.3600 before another attempt is made at the level.
USD/JPY has been in an uptrend on Monday and Tuesday after the daily pin candle at 101 resistance and the 100 smooth moving average. But yesterday's candle closed as a reverse pin and today that trend reversed without completing its course. The daily candle today looks like it will close really bearish. This pair bears were given a helping hand today by the Malaysian Airlines plane being shot down by missiles down by separatists in eastern Ukraine. While our condolences go for the people on that plane we have to keep doing our job in trading the markets and in such an event, safe heavens currencies like the Yen and CHF get bid. This might push the pair down during the coming days and maybe break the 101 support, but we will observe it meanwhile.
FXML’s Forex signals analysis of July 18, 2014
NZD/USD has been in an uptrend for more than a month. At the beginning of this week it formed three doji candlesticks on the daily chart, which indicates a trend reversal or a retrace. Apart from that there was some divergence with the Stochs and RSI as well. (Learn about Divergence Trading Strategy). At the end of last week there was some weak data out of New Zealand but the price didn't drop right away. As is the case here, sometimes the market needs to digest the data before making its mind up, so it started to fall on Tuesday and the last three days have been really bearish.
On the H4 chart, the moving averages have provided mild support and after being broken one after the other they have turned into resistance. Right now we sit just above the 400 smooth MA on the H4 and the 50 simple MA. The Stochs have reached oversold areas and if today we close around these levels, then the uptrend might resume, because it seems like the retrace has run its course.
A few days ago GBP/USD had a go at the 1.72 level after some good data out of UK and the Yellen testimony, but it failed to break above. The next day formed a pin candlestick and yesterday we had a bearish day. I mentioned a few days ago that the pair has stretched quite far and almost everything is priced in by the market at these levels, so good data from UK won't catch the market by surprise near term and push it higher. The risk is on the downside, if the data won't keep the pace of the recent months then we might see the pair retracing and giving up some of the gains. Yesterday the 1.7100-20 support gave way and it looks like it will turn to resistance in the days to come.
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