Daily Market Analysis from ForexMart

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Fundamental Analysis: May 4, 2016

Insignificant forecasts has been issued by the USA which is the ISM New York and IBD/TIPP Economic Optimism indices wherein the data came in at 48,7 in opposition to the reported 46,6. The stabilization of the price can be viewed already, yet it is too soon to determine whether this is enough for a rate hike. At the next meeting that will take place in June, the decision for the rate hike will come up.



Meanwhile, the Producer Price Index in Eurozone for March displayed -4.2% wherein the report was -4.3% and the recent value was -4.2%. And for the first time this year, the index heightened. It could be a sign that the growth is impossible to decline for the next months.



The pound reduced on Tuesday from being on peak for four months when the manufacturing activity of the UK dropped in April for the first time over the past three years wherein the data came in at 49.2 from 51.0 in March contrary to the reported 51.2. The index that has been issued heightened the concerns regarding the probable growth in the second quarter.



Meanwhile, in the midst of the Constitution Day, the Bank of Japan did not have any activity on Tuesday.

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Technical Analysis for GBP/USD: May 4, 2016

Declining to its bottom-most level since February 2013, the Markit Manufacturing PMI in the UK modulated to 49.2 in April. This data was lower than the re-assessed value of 50.7 in March and below the economists' expectation of 51.2. The Manufacturing is still one of the most unpredictable sectors of the economy and still faces challenges including poor demand in the Asian markets and the slowing down of the euro area.



The first support occurs at 1.4480 and at 1.4400 subsequently. The first resistance stands at 1.4560 and at 1.4670 subsequently.



A confirmed and a sturdy buy signal has been found. The price is over the Ichimoku Cloud and it is on top of the Chikou Span. The Tenkan-sen and the Kijun-sen display a horizontal motion. The ascending movement will remain until the price is on top of the Cloud.



The MACD indicator is in a positive location. The price is strengthening.

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Technical Analysis for AUD/USD: May 4, 2016

After experiencing its steepest fall this year, the Australian Dollar gained some ground on Wednesday as Fed officials put the greenbacks in a positive light.

The Reserve Bank of Australia (RBA) put the interest rate at 1.75 percent, paring off 25 basis points. Governor Glenn Stevens cited the recent deflation and sluggish global growth as reasons to cut the rate.

One of the central bank’s aim, which is to lower the local currency, materialized upon the announcement. The AUD/USD slid to 73 cents on Tuesday. RBA officials previously said that the AUD has been overvalued since the beginning of the year.

The spot exchange has now returned to 0.75 levels, showing that perhaps one rate cut is not enough to jawbone the AUD. It reached a high of 0.7516 today and is trading within a range of 49 pips.

Fed presidents Dennis Lockheart and John Williams said on Tuesday that a rate hike is visible for the USD, taking it to bullish territory.

The first support is at 0.7366 and 0.7329 subsequently. The first resistance is at 0.7603 and 0.7641 subsequently. The MACD indicator is in negative location. The price is rising.

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Technical Analysis for NZD/USD: May 4, 2016

Mixed labor data burdened the Kiwi and started a downturn from its upsurge on Monday. The pair is playing at 68 cents and occasionally bobs above 68. The price is declining as of writing time and the MACD indicator is in negative location.

Employment in New Zealand gained 1.2 percent in the first quarter from 0.9 percent in the period ended December 31. It exceeded forecasts of 0.7 percent. However, the unemployment rate is in the opposite direction as it added 0.4 percent from last quarter’s 5.3 percent. The RBNZ retained the 2.25 percent interest rate last week.

The first support is at 0.6840 and 0.6806 subsequently. The first resistance is at 0.6985 and 0.7020 subsequently.

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Technical Analysis for AUD/USD: May 5, 2016


Favorable market data trimmed the Aussie dollar's losses and bounced it back to 0.75 handle in the early session.

Australia's statistics bureau revealed on Wednesday that retail sales gained 0.4 percent in March from February's 0.1 percent, topping a projected 0.3 percent growth. However, retail sales for the first quarter only rose by 0.5 percent, just 0.2 points shy of analysts' 0.7 percent expectations. Retail sales in Q4 of 2015 was 0.6 percent.

But the upbeat data still failed to propel the once-glowing USD to 76 cents. AUD/USD is currently trading at 0.7492, struggling to break through 0.75 level, although it reached an intraday high of 0.7515 before sinking back down.

Scott Morrison, Australia's treasurer, said on Thursday that RBA deputy governor Philip Lowe will take Glenn Stevens' place as governor on September 18. Lowe will fill the post for seven years.

The first support occurs at 0.7416 and 0.7379. The first resistance is at 0.7488 and 0.7525. The MACD indicator is in negative location. The price is increasing.

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Technical Analysis for EUR/USD: May 5, 2016


The pair is extending its losses amidst negative macroeconomic data and the greenback’s attempt to recover from bearish territory. The euro is struggling to reach 75 cents.

The region’s services PMI was expected to remain at the previous release of 53.2, but instead fell to 53.1. Monthly retail sales was down by 0.5 percent in March after gaining 0.3 percent in February. Economic growth in the Eurozone was at 0.6 percent in Q1 from Q4’s 0.3 percent.

The gloomy warning issued by the European Commission also burdened the EUR/USD. The international body revised its forecast on the Eurozone’s economic growth. It initially projected a 1.6 percent expansion for 2016 but downgraded it to 1.6 percent. However, the region will grow by 1.8 percent in 2017.

Most markets using the euro are closed today due to Ascension Day.

The first support is at 1.1446 and 1.1388 subsequently, while the first resistance is at 1.1508 and 1.1566 subsequently. The MACD indicator is in positive location. The price is declining.

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Technical Analysis for AUD/USD: May 6, 2016

The anticipation for the US’ nonfarm payrolls blocked the AUD’s slight uptrend on Thursday session, sending it down to slump at 0.73. The current spot exchange is 0.7372. A decline in crude oil prices and the RBA’s statement of monetary policy (SOMP) released today tightened the bears’ grip on the AUD/USD.



After the RBA slashed interest rates to 1.75 percent on Tuesday, its SOMP revealed further cuts on inflation forecasts. From the previous estimate of 2 to 3 percent growth, the RBA lowered its projection for the 2016 to just 1 to 2 percent. The central bank is aiming for a 2 to 3 percent inflation rate by the end of the year.



Forecasts for the next two years’ inflation were also revised down to 1.5 to 2.5 percent from the initial 2 to 3 percent. RBA’s statements indicated another possible rate cut.



The MACD indicator is in a negative location. The first support is at 0.7459 and 0.7422 subsequently. The first resistance is at 0.7522 and 0.7560 subsequently. The price is falling.

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Technical Analysis for GBP/USD: May 6, 2016

The sterling hardly reached the 1.45 level when dismal figures on the UK’s services sector was released. GBP/USD retreated to 1.44 levels and bottomed at 1.4456. The current exchange rate is 1.4496.



The service industry’s purchasing managers index (PMI) slimmed to 52.3 in April from the previous month’s 53.7, recording the softest PMI in three years.



Economists expected a 53.5 growth. Traders are closely watching for the NFP data from the US which will help decide the Fed’s next move on its interest rates.



The first support is at 1.4442 and 1.4403 subsequently while the first resistance is at 1.4494 and 1.4496 subsequently. The MACD indicator is in neutral location. The price is increasing.

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Technical Analysis for AUD/USD: May 10, 2016



The AUD/USD has now settled at the 0.73 handle as data from China, Australia’s largest trade partner, did little to boost the Australian dollar’s value against the greenback. The AUD bottomed at 0.7299 today and peaked at 0.7351.



The impact of China’s bearish consumer prices, which grew by 2.3 percent in April from the same period last year, was lukewarm. Markets were expecting a 2.4 percent rise. Its PPI fell by 3.4 percent, not as much as the forecasted 3.8 percent decline. Exports and imports, which stood at -1.8 percent and -10.9 percent y/y respectively, were also on the red.



Buying interest on the USD firmed slightly due to an increase in wages, which was up 0.3 percent m/m in April and 2.5 percent y/y. Only 160,000 jobs were added to the nonfarm payrolls opposed to a projected 202,000 additional positions.



The spot exchange is now at 0.7339 and the price is rising. However, we are yet to see the AUD breach 0.74 today.



The immediate support is at 0.7272 and 0.7236 subsequently while the first resistance is at 0.7364 and 0.7397 subsequently. The MACD indicator is in a negative location.

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Technical Analysis for NZD/USD: May 10, 2016

The NZD/USD is showing a shaky flight as the USD rallies despite muted nonfarm payrolls released last week. China’s modest CPI and PPI lifted the bird slightly, although not enough to push the kiwi above 0.6780, its intraday high.

Traders are going short on the NZD with little impetus coming this week. The Reserve Bank of New Zealand will publish its biannual Financial Stability Report later today followed by Governor Graeme Wheeler’s remarks.

We will scout for foreshadowing in Wheeler’s speech that may indicate the next route of the central bank’s interest rate. Retail sales will follow on Thursday.

The pair is now at 0.6741 and is continuing to decline. The MACD indicator is in a negative location.

The first support occurs at 0.6723 and 0.6689 subsequently while the first resistance occurs at 0.6809 and 0.6843 subsequently.

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Fundamental Analysis: May 11, 2016

Tuesday, the dynamics of the market was enliven with the help of the calendar of economic events. Job Openings was issued by the US wherein the data came in at 5.757 million contrary to the report of 5.431 million.



The euro currency heightened a little in opposition with the dollar. The euro zone has made a report about Industrial Production in Germany for March which the data dropped low more than what was expected wherein it came at -1,3% contrary with the expectations of -0,2%. Meanwhile, exports displayed a fast growth showing 1,9% against expectations -0,1%.



The Trade Balance which has sustained the pound was showed by the United Kingdom. The Bank of England Governor Mark Carney apprised the commercial banks and other financial institutions regarding a probable rate cut if ever the UK departs from the European Union.



The fall of the yen currency is an aftermath of the statement of the Minister of Finance on Monday. If it happens that the yen continues to grow, the regulator is ready to intercede, as stated by the ASO. The Japan Minister of Economy Nobuteru Ishihara stated that after the rally of the yen in the past week, he is nearly observing the financial markets.

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Fundamental Analysis: May 12, 2016

Yesterday, in opposition with the US dollar, the major pairs has been rectified. We haven't heard EU stating significant data and the market's volatility was weak. The market was not affected by the British data through the main cross-pair EUR/GBP and most of the trades were unperturbed and smooth.



The scarcity of drivers helped the UK market to stay still. But the forthcoming referendum can probably become one of the drivers in the future. As stated by Michael Sanders, Bank of England Monetary Committee representative, if Britain favors the exit from EU, the Central Bank will be obliged to heighten the rates to 3.5% by the end of 2017, because the exit out of the EU union will facilitate the slump of the pound and will probably strengthen the inflation.



Due to the profits taken by the investors, the dollar slumped in opposition with the yen on Wednesday. It was an aftermath of the recent rally gaining a two-week highs and the Japanese speech regarding its preparation for an intercession. Yet, Japan were expected by many investors to refrain from doing any activity to enfeeble the yen before the G7 meeting.

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Technical Analysis for USD/JPY: May 12, 2016

The increase of risk appetite caused a positive effect on investor's sentiment. As a funding currency, the yen were pressured by the optimism showed by the leading stock exchanges. However, the US and Japanese government bonds yield differential had been decreasing for many consecutive trading days. The dollar/yen pair decreased by the end of the trades.



The first support occurs at 108.20 and at 107.40 subsequently. The first resistance stands at 109.00 and at 109.80 subsequently.



The price is in the Ichimoku Cloud and it is over the Chikou Span. The Tenkan-sen displays a descending movement and the Kijun-sen forms a horizontal movement. The MACD indicator is in a positive location. The price is consolidating.

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Fundamental Analysis: May 13, 2016

The sturdiness of the world economy was left vague even though the dollar was sustained by the restored risk appetite. The Initial Jobless Claims volume was issued by the US wherein the data came in at 294,000 contrary with the expected 270,000. The political event of the day were the statements which came from Rosengren E. and Mester L, the Fed representatives. Mester stated that the risks which relative with the Fed reports should not affect the monetary policy management. While Rosengren proposed that the risks of leaving the rates unmodified seem too inferior for a long term of time.



The Germany issued the Wholesale Price Index wherein the data came in at 0,3% m/m in opposition with the expected 0,2% m/m while the Eurozone issued Industrial Production wherein the data came in at -0.8% m/m contrary with the expected 0.1% m/m.



The significant event of the day was the Bank of England meeting. The rate was remained unmodified by the regulator at 0.5%. At the same time, the inflation report of the Central Bank became the center of attraction. We hope that the growth in assessment of the inflation in the present year could help the pound to rise and counterbalance concerns about the cost of lending decrease. The Central Banks anticipates the inflation to restore at 0.2%.



In the midst of short positions closing, the dollar still managed to increased in opposition to yen. However, the US currency was still under pressure caused by the vagueness of probable increase in the global market.

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Technical Analysis for GBP/USD: May 13, 2016

The significant event on Thursday was the inflation report of the Bank of England. As we have expected, the Central Bank statements about the economy and the inflation increase were quite negative. The rate remained unmodified by the UK regulator at the level of 0,5%.



The first support occurs at 1.4400 and at 1.4320 subsequently. The first resistance stands at 1.4480 and at 1.4560 subsequently.



A confirmed and a sturdy sell signal has been found. The price is below the Ichimoku Cloud and it is below the Chikou Span. The Tenkan-sen displays a horizontal motion and the Kijun-sen forms a descending movement creating a "Golden Cross". The descending movement will remain until the price is below the Cloud.



The MACD indicator is in a negative location. The price is declining.