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Technical Analysis – Japan 225 stock index strongly bullish at 11-month high

Posted on December 6, 2016 at 11:43 am GMT

The Japan 225 stock index has eased from the 11-month high it set last week but the momentum for Japan’s leading share index remains strongly positive. The index hit the highest since January on December 2nd, peaking at 18747. It has now retraced around 60% of the downtrend that took place between June 2015 (20945) and February 2016 (14776). Prices are currently finding resistance at the 61.8% Fibonacci retracement level of this downleg at around 18585. The near-term bias is [..]

Technical Analysis – AUDJPY bullish above 200-day moving average

Posted on December 6, 2016 at 9:04 am GMT

AUDJPY staged a strong rally from September to reach a high of 85.53 on Monday, the highest since April 24. The crossover of the 50-day moving average above the 200-day moving average that took place at the end of November was a strong bullish signal. The overall market structure is bullish in the short term so there is scope for further upside. The next target would be 86.30, which is an area that was tested several times in March and [..]

Asian Session – Aussie falls after RBA cautions on slower growth; euro consolidates gains

Posted on December 6, 2016 at 7:47 am GMT

The Australian dollar was in focus in today’s Asian session as the Reserve Bank of Australia held its monthly policy meeting. The RBA decided to leave the cash rate unchanged at 1.50% as expected and its statement cautioned about a slowdown in growth in the near term. All eyes will be on Wednesday’s third quarter GDP report, which many economists forecast will show the Australian economy contracted. The aussie fell after the RBA announcement but the currency had already started [..]

European Session – Euro in sharp reversal as Italy vote shock dissipates; Sterling at 2-month high as Brexit hearing gets underway

Posted on December 5, 2016 at 3:58 pm GMT

The euro made a dramatic turnaround after slumping to its lowest since March 2015 earlier in the day as markets reacted to the expected ‘No’ vote in Italy’s referendum on constitutional reforms. However, market calm was soon restored with both the single currency and European stocks heading higher, while sterling climbed back towards 2-month highs even as the UK Supreme Court started deliberating on the Brexit hearing. Fears that the Italian voters’ rejection of changes to the country’s constitution would [..]

Forex News – Euro makes strong rebound as initial panic over Italian ‘No’ vote subsides

Posted on December 5, 2016 at 12:17 pm GMT

Italians overwhelmingly rejected plans to reform the country’s constitution on Sunday, forcing the resignation of the Italian prime minister and triggering a fresh political crisis for the Eurozone. Voters decided against reducing the power of the Senate that would have simplified the process for the government to pass through legislation. However, the outcome of the vote was seen more as a rejection of the Prime Minister’s economic policies than the proposed changes to the constitution itself. A ‘No’ vote was [..]

Technical Analysis – EURUSD drops to 20-month low; bearish bias below 1.07

Posted on December 5, 2016 at 9:03 am GMT

EURUSD tumbled to a 20-month low early on Monday to touch 1.0505. Prices consequently bounced higher to retrace most of the morning’s losses but the overall bias is still bearish. After breaking below the key 1.0700 level in mid-November, the market reached oversold territory as RSI fell below 30. This led to a consolidation and the market is now neutral in the near term. Strong resistance now lies at this key level of 1.0700 so any rallies are expected to [..]

Asian Session – Euro plunges to 20-month low in reaction to Italian referendum No vote

Posted on December 5, 2016 at 6:49 am GMT

The euro plunged against the US dollar to reach its lowest level in 20-months after news that a referendum on constitutional change in Italy on Sunday resulted in a “no” vote. This prompted Prime Minister Matteo Renzi to announce his resignation. The referendum was also seen as a vote of confidence for Renzi and after suffering a crushing defeat this weekend, his resignation brings political uncertainty to one of the Eurozone’s largest economies. The rejection of the proposal for constitutional [..]

European Session – Dollar snaps three-weeks of gains, falls after mixed nonfarm payrolls report

Posted on December 2, 2016 at 3:53 pm GMT

The dollar snapped three weeks of gains today and fell on the release of the latest US jobs report. The actual payrolls number beat forecasts and rose in November, while the unemployment rate fell to the lowest in nine years. But average hourly earnings were a miss and fell by 0.1% versus a 0.2% increase expected. The dollar weakened across the board after the jobs data. Against the yen, it dropped below the key 114 yen level to reach 113.32 [..]

Week Ahead – ECB to hold meeting following key Eurozone elections

Posted on December 2, 2016 at 2:57 pm GMT

The ECB’s last meeting of 2016 will probably be the main event of the week ahead, although the markets will first have to grapple with the results of the weekend elections in Austria and the outcome of the Italian referendum (both on Sunday). Other key events next week will include the Reserve Bank of Australia rate-setting meeting as well as GDP data for the country. It will be comparatively quiet in terms of major US data, with exception of Factory [..]

Technical Analysis – GBPUSD rally fails to break 1.2700

Posted on December 2, 2016 at 9:35 am GMT

GBPUSD had a strong bullish run this week to come close to the key 1.2700 level on Thursday but failed to break above it. Momentum is improving as RSI is above 50 and is rising so there is a possibility of further upside to target resistance at 1.2732 upon a sustained break above 1.2700. This resistance level is the 50% Fibonacci retracement level of the September to October downleg from 1.3400 to 1.2025. If the market holds above this level to [..]

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