Forex Signals US Session Brief, December 15 – Let the Market Sentiment Do the Talking Today

Posted on December 15, 2017 by Skerdian Meta

Today the economic data is pretty light, only with some manufacturing releases from Japan and the US. The market seems to be uncertain which direction to take so all forex majors are following their own mind at the moment. After two days of central banks, the market is trying to figure out what will happen next, so there’s no real direction today.

They all look depressed knowing that the only female in their gang is leaving soon

Where Do We Stand After Central Banks?

The FED hiked interest rates on Wednesday, while yesterday we had the BOE, ECB, PBOC and the SNB. If you don’t know the abbreviations, they stand for Bank of England, European Central Bank, People’s Bank of China and the Swiss National Bank.

As we know, the forex market moved around 100-150 pips on FED’s rate hike and the FOMC statement on Wednesday. Yesterday though, the forex market wasn’t too affected by the other central banks. But, they did leave forex trades scratching their heads.

The ECB acknowledged the improving economic conditions and inflation and they hiked expectations for 2018. But they also said that most of the inflationary pressure was coming from energy and food prices, hence the reverse in Euro pairs during the afternoon.

The rhetoric was similar from SNB and the BOE. They delivered some hawkish comments at the beginning, but they also made sure not to give the market any funny ideas so they tried to keep the expectations down.

As we said, EUR/USD lost nearly 100 pips yesterday and today it has been trading around 1.18. GBP/USD has been trading between 1.34 and 1.3450. I’m waiting for 1.35 in order to open a long term sell forex signal.

AUD/USD and NZD/USD retraced down yesterday, but they are back up now and we cashed in on our buy forex signal in NZD/USD. Almost forgot, the BOC head Poloz said that the “Canadian economy will need less stimulus over time”. That sent USD/CAD diving nearly 140 pips.

Trading the Market Sentiment

Market sentiment is a big driver in financial markets, especially when there aren’t any fundamentals to move them around, such as comments from central bankers, economic releases or political events.

Today I can’t see any major fundamental events in forex calendars, so the markets are trading solely on market sentiment. Majors are all over the place today, which means that the sentiment is all over the place.

EUR/GBP has been reclaiming yesterday’s losses all morning today. But, the sentiment still remains bearish on this pair, especially when the price is around 0.8830s. We are quickly approaching that level so I’m getting ready to open a sell forex signal here.

Looking at the commodity Dollars, they have been climbing higher all week so the sentiment is bullish towards them at the moment. It’s for this reason that I’m also planning to trade one or two of these commodity pairs. AUD/USD is making decent retrace today, so I’m keeping an eye on this pair because it is approaching a decent level for buyers.

Trades in Sight

Bearish EUR/CHF

The trend has been bullish for months
The 100 SMA is providing support on the H4 chart
An ascending trend line has formed
Stochastic is almost oversold and heading higher

The trend line and the 100 SMA are working well together

We opened this forex signal yesterday actually and it has been going quite well since then. We opened our signal at the 100 SMA (red) which has been providing support for several weeks. It has been pierced in all occasions, but that’s how this moving average is working: a quick break below, followed by a reverse back up. The trend line was also providing support, so we decided to go long and it was a good decision since the price is close to our TP level.

In Conclusion

The US and Canadian manufacturing reports are coming up soon, but I doubt they will have an impact on the forex market today. We are looking to buy AUD/USD or to sell USD/CAD, so hang around for more forex trades to come in the afternoon.

Forex Signals US Session Brief, December 14 – Major Central Banks Dominate

Posted on December 15, 2017 by Skerdian Meta

Yesterday the FED made their decision to increase interest rates after several months. The central bank bonanza is not over yet. The Bank of England (BOE) and the European Central Bank (ECB) had their appointments scheduled for today. It seems they have a master plan, although, we don’t know yet what it is. The other majors are not doing much apart from the USD decline after the FED.

They all look depressed knowing that the only female in their gang is leaving soon

USD Down After the Rate Hike

The US Dollar is losing ground fast, again. The FED increased the interest rates to 1.50% yesterday, but the USD did the opposite of what the forex textbooks tell us. It has lost more than 100 pips since the fundamental event. This is a good example of how fundamental events can mislead you in this business.

Sometimes, the forex market behaves exactly as expected, but often we see forex pairs take the opposite approach. This was one of those cases.

Why could this be? As I mentioned yesterday, the market had already priced in the rate hike yesterday. Everyone knew what was coming and forex traders had already taken their positions long before the forex event happened. There was no element of surprise in the rate hike yesterday.

We have to figure out when the market might go in the direction of the event and when the chances are that it will go the opposite direction, so we don’t get caught on the wrong direction. The market usually goes against the event when the event has been talked about over and over and everyone knows what’s going to happen.

It’s good we closed our long-term sell forex signal in EUR/USD yesterday before the FOMC meeting. Now, after having pocketed around 100 pips, we are looking at opening another sell signal at a better price.

BOE and ECB in Action

As we mentioned above, central banks have been the focus of the last 24 hours. Yesterday we had the FED; today we have the ECB and the BOE. Earlier this morning we had the People’s Bank of China (PBOC). I know the PBOC doesn’t move the market; it doesn’t move the Chinese Yuan either because the commies have pegged their currency to the USD with minor fluctuations, but it’s worth mentioning.

The BOE and the ECB just had their meetings and they left interest rates unchanged as expected. The GBP has slipped about 30 pips lower, while the Euro is slowly creeping higher.

The GBP is lower because the statement from the BOE was a bit soft. The statement suggested that rate hikes will be “limited and gradual” which isn’t exactly what the buyers like to hear. On the other hand, Brexit is the elephant in the room. EU officials are having a meeting about it in the coming days, so GBP traders are being careful. We have a trade idea for GBP/USD, which we will present in the section below.

The Euro is continuing yesterday’s climb. The ECB event didn’t offer much, so EUR/USD is still in the same mindset following last night’s FED rate hike decision.

Trades in Sight

Bearish GBP/USD

1.3500-50 has been established as a mid-term top for this pair
The price is forming a downtrend on the H4 chart
Brexit won’t let buyers get ahead of themselves

GBP/USD is forming a downtrend, so we’re thinking of shorting it soon

As you can see from the H4 chart above, this forex pair is starting to form a downtrend. The price is making lower highs and lower lows. My take here is that we wait for a push up to around 1.35 and then open a long-term sell forex trade. The area between 1.3500 and 1.3550 has formed a resistance and we should try to get some good pips from it.

In Conclusion

The Swiss National Bank had their meeting today. Although, none of the central banks had much impact on the forex market today. The market is still trading the FED event. The US retail sales report is due soon, so keep an eye on that as well.

Selling USD/JPY on a Bearish Chart Setup

Posted on December 15, 2017 by Skerdian Meta

The Fall

USD/JPY went through a rough time yesterday. It tumbled more than 100 pips top to bottom as the USD crumbled after the FED rate hike. You’d expect this forex pair to take off when the FED increases interest rates, but forex is never straightforward.

The Weak Retrace

However, late in the evening the sellers unloaded some of their sell positions and this pair started to reverse. It has been retracing higher since then, albeit the retrace seems weak. USD/JPY has only reclaimed about 40 pips in the last couple of trading sessions.

This sort of price action tells us that the sellers remain in control. The retrace is weak and the trend is down on the hourly timeframe chart.

The Forex Trade

So, we decided to open a sell forex signal up here. As you can see from the hourly chart, the area around 112.85-90 has provided resistance last week. Now, it looks as it is turning into resistance.

The retrace up should be over soon

The stochastic indicator is overbought as well, which means that the retrace up is over on this chart. Another bearish sign is the last candlestick which closed as a doji. A doji is a reversing signal after a short term trend such as the uptrend we have seen overnight in this foerx pair.

The 100 (red) and particularly the 200 (purple) moving averages are also in favour of the sellers. They are scaring the buyers, so hopefully the retrace will be over soon and we will see another push down from the sellers.

Going Short on AUD/USD

Posted on December 8, 2017December 8, 2017 by Skerdian Meta

The USD lost more than a handful of pips after the US employment report was released. That shook the forex market a bit and it opened a few trade opportunities for us.

We mentioned EUR/USD and AUD/USD in the previous update apart from NZD/USD where we already had an open signal. We just opened another sell forex signal, this time in AUD/USD, so let’s see the chart setup for this forex trade.

This chart looks all bearish.

The stochastic indicator is almost overbought, which means that the H1 chart is overbought. So, the retrace up is complete according to this technical indicator.
The 20 SMA (grey) is broken, but the 50 SMA provided solid resistance after the initial jump. That’s a strong bearish indicator in a downtrend.
Speaking of the downtrend, it has been bearish all week and it has picked up pace recently.
The area around 0.7530 provided resistance yesterday and it did the same during that jump.

So, here are the four technical indicators which are pointing down at the moment. We took this forex trade and are looking for another trade in EUR/USD, but we will wait a bit further before making it three forex trades long on the US Dollar.

USD Trembles on Earnings, but New Forex Trades Appear

Posted on December 8, 2017 by Skerdian Meta

The US employment report came out more or less as expected, apart from a few hiccups. Earnings increased, which is a good thing. But they didn’t meet expectations, which were for a 0.3% increase against the actual 0.2%.

Payrolls (NFP) came at 228K which is about 30k above expectations. That’s slightly positive but it is counterbalanced by the miss in expectations. The unemployment rate stood steady at 4.1% and I don’t expect any big changes soon.

Average earnings (wages) are obviously the most important factor in this report at the moment. They translate into higher sales and higher inflation in general, which is what the FED is looking for right now. But, the last month was revised lower to -0.1%. At 2.5%, the yearly number also missed expectations which were for a 2.7% reading.

The retrace higher is almost done in EUR/USD

So, the US Dollar is going through a selloff period with EUR/USD jumping more than 30 pips after the release. This jump is taking us to some interesting levels and we are getting ready to buy the Buck. I am looking at selling EUR/USD and/or AUD/USD, so hang around guys.

Forex Signals US Session Brief, December 7 – Market Awaiting Unemployment Claims and Draghi, But Not Bitcoin

Posted on December 7, 2017December 7, 2017 by Skerdian Meta

Today we have a few important fundamental forex events on the calendar. At the moment, we find the forex market a bit confused, that’s why we don’t have a lot of forex signals. However, that’s not the case with Bitcoin – it is currently pushing higher. Over the last two days, Bitcoin has gained more than $3,000 on my platform and it doesn’t look like it is going to stop anytime soon.

Bitcoin is worth more than diamonds now I suppose

Brace Yourself for Unemployment Claims and Super Mario

In a short while, we have the unemployment claims and a speech by Mario Draghi. Unemployment claims have been holding around the 220-240k region for ages, so it is a steady report.

The ADP non-farm employment change usually holds around these levels as well, 220-250k. But, yesterday, this fundamental indicator dived below the 200k level. This means there’s a chance that the unemployment claims number might be affected by lower ADP jobs.

Super Mario has a speech scheduled for later this afternoon at the ECB headquarters in Frankfurt. It is always (well, usually) interesting to hear him because he likes to take some shine off the Euro when the Euro is feeling great and bury it lower when the Euro is not feeling great.

We have a long-term sell forex signal in EUR/USD, meaning we are bearish on the Euro and hope that Super Mario plays his game right today. The market is waiting for his speech because all majors forex pairs are feeling numb, and hopefully, this will give them a push.

GBP/USD jumped 40 pips higher about an hour ago, but in the following hour, it dived 100 pips lower. That’s the sort of price action that Brexit brings, but we made a nice profit during that move on EUR/GBP, so we can’t complain.

Where the Hell Is Bitcoin Going

Yes, it is getting crazier by the day with Bitcoin. Only a couple of months ago it looked like the $5,000 level was going to be the top, at least for this year. Two months later and that level looks so far now.

Bitcoin took out the $5,000 level and headed for $10,000. That was the other big level on everyone’s mind, but it didn’t last long either. It proved to be a lightweight and the price pierced right through it.

Of course, that wasn’t enough for Bitcoin traders. In the last few days, Bitcoin has claimed nearly $5,000 and now we are challenging the $15,000 level.

Although, if you look at the H1 Bitcoin chart below, the price tumbled around $1,000 lower in less than an hour. The price touched the 20 SMA (grey) and stopped there. That was a good opportunity to go long, but the moves are so fast nowadays in Bitocin. Besides, this sort of price action is pretty scary.

The price is $600 higher now, so we missed that opportunity. That moving average has turned into a buying indicator now. Therefore, we should keep an eye on that for future Bitcoin trades if this cryptocurrency makes another pullback lower.

Those moving averages are good buying indicators for Bitcoin traders.

Trades in Sight

Bearish AUD/USD

The trend has been bearish in the last few months
The downtrend picked up pace this week
Price action today is totally bearish for Com Dolls

Last week’s support at 0.7550s should be a good place to sell if AUD/USD retraces up there.

In the last two weeks, commodity Dollars have been consolidating sideways, but on Tuesday, the downtrend resumed. Today, the Kiwi and the Aussie accelerated the decline. I am waiting for a retrace higher in order to open a sell forex signal. Last week’s support at 0.7550s is likely to turn into resistance making it a good place to sell. But, we have to be patient until then.

In Conclusion

The USD is slowly crawling higher today so the sentiment is turning bullish session after session. On a side note, the forex market is waiting for the US unemployment claims and ECB president Draghi to give us some direction, so don’t be too sure of anything until then.

USD Trying to Decide Before the Employment ADP Report

Posted on December 6, 2017 by Skerdian Meta

The US ADP employment report will be released shortly. The USD has been trying to decide on a direction since yesterday, so this data might give us a direction at last. The statement from the BOC (Bank of Canada) is also scheduled for today, so we’ll keep an eye on the CAD as well.

They will be the guys to watch today

USD Trying to Make its Mind Up Before the Employment ADP Report

The US ADP employment report dived below the 200k level a few months ago. Yet, last month, this report returned to its normal above 200k. The NFP (non-farm payrolls), which is due on Friday, is the employment report with the most impact on the GBP.

The USD has been in no-man’s-land over the last few trading sessions. It climbed a bit yesterday against some major currencies, but it stopped there. Since then, it has been trying to decide whether it wants to continue higher or reverse and continue this year’s larger downtrend.

The hope is that this report will finally give the USD some direction. There are no other important economic releases scheduled from the US today apart from the Oil inventory build-up, which doesn’t really have an impact on the USD.

Given today’s light economic calendar, the market will be very interested in the ADP numbers. They could hint at the content of more important US employment report which is due to be released on Friday.

The CAD Is Feeling Nervous Ahead of BOC and Oil Inventories

The Canadian Dollar is starting to feel nervous. It looked nervous yesterday as well., while the other commodity Dollars did great. As the Kiwi and Aussie were climbing fast, the CAD was feeling dizzy. USD/CAD climbed about 80 pips yesterday, which means the CAD lost more than 80 pips across the board. This was a sign that this forex pair wasn’t behaving correctly.

Today, we saw USD/CAD dive 40 pips lower which means that the CAD has gained 40 pips. But, the NZD and AUD have been declining. That is another sign that nerves are catching up with CAD traders.

I don’t blame them. The BOC will make a decision about interest rates and the future of the monetary policy. Besides that, the US Crude Oil inventories will be released an hour later and they have a considerable impact on the CAD usually. This makes today a double whammy for CAD trader.

Last Thursday’s impressive Canadian GDP and unemployment reports delivered a blow to CAD sellers as USD/CAD declined about 250 pips top to bottom. So I guess, CAD traders don’t want to take any risks before today’s economic releases.

It’s hard to predict a direction now because we don’t know what path the BOC might take regarding monetary policy. But, after the great economic data last week from Canada, I have a feeling that they will turn a bit hawkish, although they might try to lower expectations.

Trades in Sight

Bullish AUD/USD

The trend has been bearish for months
The downtrend picked up pace last night
The 100 SMAs are providing resistance on the H1 chart
The stochastic indicator is oversold

After the morning star candlestick, this pair is turning bullish again

Last night, the Australian GDP was disappointing, especially because it came 24 hours after the great retail sales report. This caused the market sentiment to turn even more bearish on AUD/USD and we decided to move our sell trades from NZD/SUD to AUD/USD.

We opened a sell forex signal a while ago after it completed a retrace higher. We think it is complete because the stochastic is overbought and the 100 SMA is providing resistance on the H1 forex chart. Right now it is in profit, so it’s going well.

In Conclusion

The interest rate decision and the following statement from the Bank of Canada are the most important forex events today, so the CAD will appear unsure until then. US Oil inventories add to the uncertainty, so be careful, particularly with CAD pairs.

Forex Signals US Session Brief, December 5 – Bearish GBP and Bullish Com Dolls

Posted on December 5, 2017 by Skerdian Meta

The British Pound has turned bearish again on Brexit talk. It seems like this is how the GBP is going to be for the next few months; one day both sides feel great and so does the GBP, the next everything turns sour and GBP crashes. The commodity currencies, on the other hand, turned suddenly bullish.

How do you pick a direction during these moves?

GBP Turned Bearish, We’re Going Bullish

As we mentioned in one of our forex updates today, the GBP is quite unstable and unpredictable to trade, particularly for the medium term. You can give it a go with short-term trades, using the hourly and H4 chart.

Yesterday, we heard some positive comments from both sides and it looked like the divorce was going to be settled. The GBP found some strong bids and it climbed more than 100 pips based on those comments.

Today seems quite the opposite. The children want their share and the divorce has become tough once again. Ireland is teaming up with the DUP party (the representative of Northern Ireland in the British government), helping Theresa May to keep a majority in the parliament. They, of course, want a soft Brexit since a Hard Brexit would make the commotion too difficult for both sides of Ireland.

The Scottish are also pushing for a soft Brexit, given that the majority of Scots voted to remain in the EU. However, the leading Scottish party lost quite a few seats in the Parliament in the last elections, so they are not in a very strong position to demand anything. Otherwise, the GBP would have lost another yard.

We’re putting our trust in the 50 SMA today.

We are going bullish on GBP or better yet we’re going bearish on EUR/GBP. We opened a sell forex signal on this forex pair just below the 50 SMA (yellow) and stochastic is almost overbought. That means that the retrace upward is almost done on this downtrend which started a couple of weeks ago.

Bullish Commodity Dollars

The Canadian Dollar turned bullish last Thursday when the Canadian employment and GDP reports impressed us all. The GDP returned to positive territory and unemployment dropped by 0.4%. Since then, the Loonie (USD/CAD) has been sliding lower and the CAD has gained 250 pips.

Today, USD/CAD is still pushing lower, nevertheless, be careful because the Canadian trade balance report will be released in about an hour. It’s not a very important report for most currencies, but it is for the CAD because it is directly linked to Canadian exports such as Oil, Gas and raw materials.

Today, the other commodity Dollars turned bullish as well. The speech from the RBNZ (Reserve Bank of New Zealand) and the statement from the RBA (Reserve Bank of Australia) went in favor of their currencies. Usually, the opposite is true – the central bankers try to talk their currencies down.

That wasn’t the case today; both the AUD and NZD are considerably higher and still pushing upward. The positive report from Chinese services is another important factor for the bullish price action in Com Dolls today.

Trades in Sight

Bullish USD/JPY

The trend turned bullish early last week
The fundamental situation has calmed after Friday’s panic
The 100 and 200 SMAs are providing support on the H1 chart
The stochastic indicator is oversold on the H4 chart

After the morning star candlestick, this pair is turning bullish again.

We went long on USD/JPY earlier today when we opened a short term buy forex signal. The area around 112.40 has formed a support for this forex pair overnight and the 200 SMA (purple) has prevented the sellers from pushing lower. The stochastic indicator is oversold on this timeframe chart, as well as in the H4 chart, which means that the retrace is over.

In Conclusion

We must get back on track after last night’s losing signal in NZD/USD which got smoked during that spike following the RBNZ. So, we opened three more signals today. The EUR/JPY was closed in profit, while the other two look pretty good at the moment, so hopefully, we’re slowly getting back on track.