Tag Archives: forex recommendation

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Buy GBP/CHF on dips – Capital Trust Markets

 

Capital Trust Markets reports the “recent price action in the GBPCHF pair suggests that it has more upside in the near term as buyers are here to stay.

Technical Analysis

The GBPCHF pair recently climbed towards the 1.4760 resistance area where the British pound sellers defended the upside. However, there is a major bullish trend line on the 4 hour chart of the GBPCHF pair, which might act as a catalyst in the near term if the pair moves lower from the current levels. The most important point is the fact that the 50 simple moving average on the 4 hour chart is also around the highlighted trend line. In short, there is a major support around the 1.4640 area where the British pound buyers might appear in the near term. The 4H RSI is above the 50 level, which is one more bullish sign moving ahead.

GBPCHF 03.03.2015

If the GBPCHF pair moves higher from the current levels, then the last high of 1.4760 level where buyers might continue to struggle in the near term. A break above the same might call for more gains.

The next area of interest can be seen around the 1.4800 area.

Swiss GDP

Later during the London session, the Swiss Gross Domestic Product will be released by the State Secretariat for Economic Affairs SECO. The forecast is slated for an increase of 1.7% in the fourth quarter of 2014, compared to the last gain of 1.9%.

Trade Idea

One might consider buying dips around the highlighted trend line in the GBPCHF pair.

Source: Capital Trust Markets

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Sell NZD/USD at 0.7600 limit – UBS

 

Swiss Bank UBS has suggested to clients to go short NZD. They report “NZD/USD should head lower. Sell rallies to 0.7600 with stops above 0.7720, targeting an eventual retest of 0.7300/0.7175″. Selling NZD against the USD is popular among brokers at the moment with BNZ also suggesting a short trade on NZD/USD.

Sell on limit at 0.7600, stop above 0.7720 with a limit at 0.7300 or lower.

Source: UBS

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UBS – Sell USD/CAD rallies to 1.2570

 

While other brokers such as SEB and SwissQuote recommend clients to look short USD/CAD, UBS has taken a different view noting USD/CAD “remains stuck right in the middle of the recent trading range. We expect the range play to continue. Sell rallies to 1.2570 with stops above 1.2670 and buy on dips to 1.24 with stops below 1.23″.

Source: UBS

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SEB sell order on AUD/USD

 

Trading company SEB have suggest to clients to get short AUD/USD. They report “the RBA left its cash rate unchanged at today’s meeting. However, the statement gives a clear signal more rate cuts should come. The AUD appreciated following the decision as a rate cut was widely expected. Use this uptick as an opportunity to short the AUD/USD”.

Sell AUD/USD at 0.7810 targeting 0.73, stop loss on daily close above 0.7930.

Source: SEB

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BNP Paribas forex trade – Go short EURAUD

 

BNP Paribas recommend to client to take a short EURAUD trade. They report “we see opportunity to short EUR vs high yielders amid a positive risk-taking environment. AUD is resilient to falling commodity prices and our positioning
indicator suggests further scope for EURAUD shorts.

We initiate a short EURAUD trade recommendation at 1.4260 targeting 1.3805 with a stop loss at 1.4490.

We expect EURAUD to trade lower during periods of improving risk appetite. While the Fed’s QE3 progamme has now officially come to a close, we expect increasingly aggressive easing programmes from the ECB and BoJ to provide
offsetting support for markets. Combined monetary base growth for the major central banks is likely to continue through 2015. We continue to favour long positions in risk-sensitive currencies funded in EUR and JPY and are now initiating a short EURAUD trade recommendation at 1.4260 targeting 1.3805 with a stop loss at 1.4490″.

bnp paribas euraud nov14

(Source: BNP Paribas)

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Short EURUSD trade – Westpac

 

Westpac suggest to clients to take a short trade on EUR/USD. They reason-

Macro: EUR/USD remains heavy even as some data points (e.g. PMIs) begin to show tentative signs of stability and resentment with Draghi’s policy path from the conservative faction of the ECB Governing Council lingers despite his stronger language at the Nov meeting. These developments should have offered more support for EUR than has been the case. Despite that, yield spreads continue to push against EUR/USD, anchoring the pair lower. EUR/USD downmove is likely to extend to 1.22 on this leg. EUR may fare better on select European crosses though.

Model: Draghi’s strong commitment to steer the Bank’s balance sheet back to early 2012 levels (signed off by the Governing Council) has tipped the model back into EUR shorts via a weaker total yield signal. That said, the position is only moderate at -6.4%. While our EUR growth signal is also firmly negative the model seems unlikely to return to aggressive EUR shorts (i.e. of the order of -20% of the portfolio) anytime soon. In the wake of the single currency’s fall this year long term valuation has swung from a meaningful negative to neutral, implying that either our growth and/or total yield signals need to turn even more negative to nudge the model into outsized EUR shorts.

Technical: Monday’s bounce provided a healthy correction from which to launch the next leg down. Target further decline towards 1.20/1.21.

Trade: Short EUR at 1.2435; stop above 1.26; target 1.21

(Source: Westpac)

 

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Bullish price action signals showing for NZD/USD

 

Capital Trust Markets reports “don’t fall for rumors that a major USD correction is coming, at least not just yet. Before all else, wait for technical confirmations around the main resistance areas.

Technical Analysis

NZDUSD10thNovember

NZD/USD traded near the edge for all of last week, at a huge technical crossroad, 0.7660/80 support area from June 2013 to be more precise. Post NFP, when all the news was digested, greenback bulls eventually caved based on worse-than-expected U.S. data. This allowed the Kiwi to rally and close the day with a large bullish engulfing bar, signaling a potential recovery for this week.

Friday’s bullish reaction saw a modest continuation in Asian trading and during the first half of the European session on Monday. Traders pushed NZD/USD up to 0.7793, where the bullish rally ended based on insufficient economical triggers to push higher. From a swing configuration perspective NZD/USD downtrend remains intact, with Lower Highs and Lower Lows.

While everyone believes the USD gains have overextended in recent weeks, traders should refrain from targeting higher levels for now. A huge resistance confluence lies around 0.7841, marked by previous Lower High, 100 and 200 Simple Moving averages on 4H. Unless the pair can rally above this levels and completely turn bullish (with targets at 0.7975 and 0.8050) NZD/USD will remain at risk for further losses in the near future”.

(Source: Capital Trust Markets)

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AUDNZD sellers looking to break 1.1200

 

Following two failures to overcome the resistance at 1.1300, Capital Trust Markets reports “traders have now turned their attention towards the support at 1.1200.

Technical Analysis

While recent price action indicated a strong bullish momentum buildup for AUD/NZD, the pair has been trading within a very large range since late July, with significant boundaries located at 1.1300 (resistance) and 1.0925 (support). Spot is currently trading around 1.1225, down for a second consecutive day. Sellers will most likely take another shot at 1.1200 tonight, with a successful break potentially paving the road for more losses.

AUDNZD4thNovember

A dip below 1.2000 will invalidate last week’s Higher Low and a four day range, triggering a cluster of stop losses accumulated from long positions. This should push AUD/NZD lower, at a minimum down to 1.1100/37 (large price pivot area strengthened by 200 Simple Moving Average on 4H and 50-Day SMA). Stochastic is turning lower from overbought territory on Daily, confirming a potential top followed by a correction lower. Even lower and traders will set their targets on 1.1000 support trendline and potentially a large crossroad for the long-term technical landscape.

Based on the rejection off the resistance at 1.1300, the uptrend will only be reactivated on a clean break and daily close above this level”.

(Source: Capital Trust Markets)

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GBPAUD buyers target 1.8682 limit

 

Capital Trust Markets reports “GBP/AUD is trading 170 pips higher than its Friday Close, putting a 5-week bearish channel at risk, with no immediate signs that buyers will step down from this rally.

Technical Analysis

GBPAUD3rdNovember

In less than two days with above average bullish momentum, GBP/AUD has successfully retraced nearly all losses sustained throughout the previous two weeks of trading. After trending lower for at a steady, albeit choppy pace, this pair went through a couple of bamboozling swings between 29th and 31st October. Plenty of offers located at 1.8100 lifted price higher on Wednesday, only to retrace lower immediately in order to fake a bearish breakout.

Today’s gap, followed by a sustained intraday rally, broke above an intermediary resistance trend and the most recent Lower High set at 1.8258, changing GBP/AUD bias to bullish. Spot is currently trading around 1.8350 during 3rd/11 U.S. session, just above the 200 Simple Moving Average on 4H chart. A successful break above 1.8400 will lead to an invalidation of a 5-week bearish channel, which should pave the way for more gains towards 1.8525, possibly as high as 1.8682 (1st October top).

On the other hand, if bears manage to assume control in this area, which could happen only if certain AUD fundamental triggers appear, price will re-test 1.8240/50 within the next few trading sessions”.

(Source: Capital Trust Markets)

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NZDUSD Traders targeting 0.7710 – likely to be hit next week

 

Steady grinds higher followed by extremely fast sell-offs has been NZD/USD distinguished mark in recent weeks. Capital Trust Markets reports “based on today’s technical landscape, confirmed by fundamental triggers, the pair is pursuing a fresh lower low.

Technical Analysis

NZDUSD31stOctober

Similarly with AUD/USD, NZD/USD price action has been quite tricky in recent weeks. Although U.S. economic recovery is undeniable and greenback strength dominates all around, traders preferred a zig-zag approach, baiting buyers on several occasions only to lead them to the slaughterhouse. After two identical repeats of the same event, buyers refused to be fooled for a third consecutive time. On our 4H chart, NZD/USD couldn’t correct higher before selling pressure exploded.

Spot is currently trading around 0.7785 in the early hours of U.S. trading. A large bearish engulfing bar has formed on 4H and a continuation below 0.7766 could lead to the same pattern forming on Daily as well.

0.7700/10 represents the main area of attraction for sellers, marked by 29th September and 6th October double lows. Stop losses from short positions will begin to accumulate just above today’s high, at approximately 0.7880. Only a rally above this level could trigger a bullish reversal, however this appears unlikely at this point”.

(Source: Capital Trust Markets)

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USDCHF poised for correction

 

The US Dollar (USD) extended upside movement against the Swiss Franc (CHF) on Thursday, increasing the price of USDCHF to more than 0.9570 following the US monetary policy announcement. Capital Trust Markets reports “the pair is currently facing a tough hurdle before testing the 0.9683 resistance area.

Technical Analysis

As of this writing, the pair is being traded around 0.9572. A hurdle can be noted near 0.9607, the 76.4% fib level ahead of 0.9683, the swing high of the last major upside rally as demonstrated in the following daily chart.

On the downside, the pair is expected to find a support around 0.9559, the 61.8% fib level before 0.9521, the 50.0% fib level and then 0.9482, the 38.2% fib level. The long term bias will however remain bullish as far as the 0.9358 support area is intact.

US Growth

The US economy grew at 3.5% in the third quarter as compared to 4.6% in the same quarter of the year before, up beating the average forecast of 3.0%, a report by the US Bureau of Economic Analysis revealed today. Generally speaking, a higher GDP reading is considered bullish for the US economy and vice versa thus a better than expected actual outcome spurred renewed buying interest in the price of USD/CHF.

Trade Idea

Considering the overbought outlook in the price action, selling the pair could be a good strategy if it leaves a bearish pin bar or bearish engulfing pattern around the current levels. The trade should however be stopped out on a daily closing above the 0.9700 resistance area”.

(Source: Capital Trust Markets)

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NZDJPY upside remains limited

 

Capital Trust Markets reports “despite entering bullish territory NZD/JPY remains in a long-term downtrend, thus upside is very limited. Traders should view this temporary correction as a change to sell the pair high when the next bearish signal appears.

Technical Analysis

NZDJPY29thOctober

The New Zealand Dollar is likely to end the 4th consecutive day in the positive against several major counterparts, including USD, EUR and JPY. Out of this lot, NZD/JPY buyers displayed the biggest show of force on Wednesday, when price rallied above a major price pivot line at 85.80 (level also strengthened by 200 Simple Moving Average on 4H timeframe).

With a bullish structure of higher lows and higher highs since 15th October, NZD/JPY could extend gains for a little while in order to complete its correction up to 86.81 (61.8% retracement level from 88.97 down to 83.32). On Daily, 100-Day and 200-Day Simple Moving Averages are slowly declining near 87, almost guaranteeing a bearish bounce if price reaches this level. Stochastic is currently entering overbought territory on Daily, also suggesting upside should be limited in the near future.

It remains to be seen how NZD/JPY will react post-RBNZ’s Rate Statement due out Wednesday evening. A slow return below 85.80 will not turn the pair bearish immediately, since HH LH structure and a bullish channel need to be invalidated first. Support lies over 120 pips lower, at 84.60, offering buyers plenty of breathing room to recover, no matter what happens today”.

(Source: Capital Trust Markets)

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Australian property market data set for release shortly

 

Shortly after the markets close in the US on Wednesday evening, property market data is scheduled to be released out of Australia.

Capital Trust Markets reports “the data will offer insight into the nation’s property market. The Australian dollar is relatively weak compared to the majority of its counterparts at present, and this is boosting the economy for the time being, but many leading economists suggest that this cannot persist and we may see some decline in the near future. One of the key components of Australia’s growth over the past two years has been the property market, and the upcoming HIA new home sales figure will reveal whether this sector remains buoyant, or whether we could see signs of trouble. So, with this in mind, what are the levels to keep an eye on as we head into the release – and how can we draw profit from anything unexpected? Here’s what you need to know.

First, what are the likely factors that will drive the bias inferred by the release? Well, the answer mainly lies in Australia’s relationship with China. Australia is heavily reliant on Chinese demand for its natural resource exports. Over the past six months or so, the Chinese economy is cooling and this demand has weakened. In response, the Australian government has attempted to rebalance its economy by shifting dependency from its mining sector to the housing market. This has been achieved by keeping interest rates low. Looking longer-term, the Australian property market seems to be in something of a bubble, with house prices in major cities rising more than 15% year-to-date, and across the nation more than 10%. This could lead to a potential bursting when the reserve bank of Australia (RBA) decides to raise rates, but as mentioned, this is more the long-term prospects. Short-term, markets will be looking for strong new  home sales data to suggest the Australian economy is waning and that we could get aforementioned interest rate hike near-term. So what are the levels to keep an eye on in the Aussie? Take a look at the chart below.

Aussie

As the chart shows, we’ve seen considerable volatility in the AUD USD as late. Recent range action was broken earlier this week and we are now trading above the 200 SMA on the four hour chart with in term support at 0.8815 and resistance at 0.8896. These are the levels to keep an eye on as we head into the release. While there is no forecast released for the figure, we can use its inference to form a bias. What I mean by this is that if we get a positive figure, i.e. anything above 0.0%, this can be taken as positive for the Australian dollar. In such a scenario, look for a break above 0.8896 to validate 0.8989 to the upside longer-term. Conversely, look for a negative figure to catalyze a break towards aforementioned in term support, with a close below this level bringing 0.8728 into play longer-term”.

(Source: Capital Trust Markets)

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USDJPY further gains expected

 

SwissQuote favour further gains for USDJPY. They report “Japanese inflation expectations are declining Hawkish expectations on US monetary policy have recently done the heavy lifting in USD/JPY. However, the Bank of Japan (BoJ) is likely to contribute more actively in the coming months. Indeed, as its monetary policy is highly focused on the inflation target, pressures are mounting on the BoJ to provide more support to inflation. This is especially true as inflation surveys do not match the BoJ’s outlook.

Households surveys show that a huge majority expects a slight rise, mostly caused by increases in food and gasoline prices. More durable drivers like wages are not expected. Coupled with weakening growth potential expectations, household surveys indicate that the “Abenomics” effect is wearing off.

The inflation outlook from corporations, which was recently added in the quarterly Tankan, also highlights a more modest view on inflation than the BoJ. Indeed, none of the enterprises surveyed see inflation higher than 2% (excluding the VAT effect) even on a 5-year horizon. Finally, economists surveys and market expectations (through the 5y5y inflation swap) also confirm a weakening outlook, suggesting that without additional easing from the BoJ, the 2% target is unlikely to be met.

The second round of sales tax hike unlikely to be postponed A postponement of the second phase of the sales tax rise is unlikely as it would further undermine the credibility of Abe’s structural reforms while damaging the relationships with the Ministry of Finance and the BoJ, as both entity endorse a further rise. As a result, conditions are likely to be increasingly supportive (especially for the Nikkei) in the near future to favour the endorsement of the second sales tax hike and to cushion any negative effects caused by it. Among regional spending programs, a lower corporate tax and GPIF diversifications, stimulus from the BoJ is expected. As a result, any weakness in USD/JPY should only be temporary”.

SwissQuote usdjpy oct14

(Source: SwissQuote)