Daily Market Analysis from ForexMart

[Luis ForexMart]

Fundamental Analysis for USD/JPY: October 5, 2016

The USD increased in relation to the Japanese yen during the last trading session, with the USD/JPY pair closing the session at 102.90 points after increasing by +1.24% or 1.265 points. The pair’s current value is its highest trading level since September 15, putting pressure on the currency pair to exceed its highest level last September 14 at 103.351 points.

The increase in the USD was mostly due to a significant increase in US Treasury yields. The positive ISM Manufacturing PMI data released on Monday triggered an upsurge in Treasury yields, increasing the possibility of an interest rate hike this coming December. Comments from Fed officials also strengthened the US dollar, after Federal Reserve President Jeffrey Lacker stated that there is a high probability that interest rates would be increased and that inflation rates would be put under control by increasing borrowing costs.

The CME Group’s FedWatch indicator also showed that traders are seeing a 63% chance that the Federal Reserve would increase its interest rates during its meeting on December 13-14, an 11% increase from the previous reading after the last Fed meeting on September. This was also cemented by comments from the Federal Reserve Bank of Cleveland’s President Loretta Mester, who called for higher interest rates from the Fed. Fed officials, however, are keeping their respective profiles low as of the moment.

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EUR/USD Technical Analysis: October 5, 2016

The dollar demonstrated a positive increase despite of the anticipated announcement of Fed regarding rate hike. The euro plummeted on Tuesday and unsuccessfully recover the previous resistance 1.1250.

The price proceeds near the 1.1150 however sellers lose their interest as the EURUSD tone down and cutback around the 1.1170 level. Moving averages were pushed in a descending manner as presented in the 4-hour chart. Resistance appeared at 1.1200, support showed up at 1.1150. MACD fell off that affirmed the seller's strength. RSI is heading to an oversold condition.[/SIZE]

[Luis ForexMart]

GBP/USD Fundamental Analysis: October 5, 2016

The well-established strength of the U.S dollar since yesterday does not make sense over the sluggish status that the sterling is confronted with. The newly recovered positive performance of the greenbacks had worsen the condition of the pound. On Monday, sterling were tone down due to the remarks disclose by the Prime Minister May about EU exit timeline. Bullish investors shouldn't miss the chance to obtain the 1.2825 region considering that it is the point far from the referendum registry.

Upon the opening of the EU session had made the dollar to enhance its execution trades plus giving the bearish investors some favor on their part.

The 1.2825 level break off because the pair it promptly dropped through the 1.2800 region approaching to the Brexit low seen at the 1.2790 mark. Bullish investors had lesser number than the bears who continuously trying to smash the level 1.2750 and aims to go beyond 1.2718.

It is expected that the PMI will be release today as well as good news from UK but this doesn't make an impact against the bear train.

At present, the support is found in the 1.2700 and resistance is expected to stay near the brexit low at 1.2790.

[Luis ForexMart]

USD/JPY Technical Analysis: October 6, 2016

The USD/JPY pair is now trading at the 103.65 range after its value reverted back to the middle of the 103 range. The currency pair went back into the red zone in the middle of the Asian trading session but was still able to go well above the 103 trading handle. The USD/JPY closed down the recent session at 103.45 points, decreasing by -0.07%.

The currency pair is now collecting its rallies into per-month highs after consecutive US fundamentals all turned out to be on the positive territory, increasing the possibility of an interest rate hike by the Federal Reserve during the latter part of 2016. The release of the US non-farm payrolls data this coming Friday is seen as a determinant as to whether the Federal Reserve will be pushing through with its interest rate hike in December.

The USD/JPY’s resistance levels are now at the 103.66 range. If the currency pair would be able to break through this particular range, then the pair could go within the 103.89 range and could possibly break through 104.14. However, if the pair further decreases its value, then it could hit immediate support levels at 103.00, 102.68 and even lower at the 102.25 range.

[Luis ForexMart]

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GBP/USD Technical Analysis: October 6, 2016

The GBP/USD pair is now trading within the 1.2370 range after the pair failed to take out in the 50-MA during the North American session and the Asian trading session. The two-year treasury yields increased by two points as a result of investors’ reaction to a heightened probability of an interest rate hike this coming December due to the positive data release of the ISM Non-Manufacturing PMI.

The GBP/USD is generally on the downside since market players are generally worried about a possible “hard brexit”. Should the GBP/USD break above the 50-MA level of 1.2751 points, then this could increase the possibility of a break into the 1.2789 trading range, which would then cause the currency pair to target the 1.2836 level of the 100-MA. However, if the GBP/USD continues to decrease, then this could cause the pair to break below the support levels of 1.2685, which was the pair’s lowest reach during the last trading session, and can also lead to the 1.2590 range.[/SIZE]

[Luis ForexMart]

USD/CAD Technical Analysis: October 6, 2016

The CAD increased its trading value following the release of the US crude oil inventories data this week, which portrayed a drop of 3 million barrels. The drop in the weekly data for stocks was unexpected since forecasts showed a significant increase after consecutive drops in the data. The CAD has been previously on the lower rung during the first few hours of the trading session after the data released showed a decrease in trade deficits from August’s $1.47 billion.

Meanwhile, the Bank of Canada is not yet expected to cut back on its interest rates in spite of the ambiguities portrayed in the recent trade data. This is because the BoC is still awaiting the fiscal stimulus data from the Canadian government and will keep the CAD from further appreciation by using dovish stances. Non-resource exports were not able to increase and the direction of oil prices are still uncertain after the OPEC’s cuts in its production will still be subjected to another review in another meeting in Vienna.

The USD/CAD pair decreased by up to 0.267 points during the last trading session. The currency pair is presently trading at 1.3166 points following an increase in oil prices. The CAD initially traded over the 1.32 price levels prior to the release of the crude stocks data but eventually plummeted to 1.3166.

[Luis ForexMart]

AUD/USD Technical Analysis: October 6, 2016

The Australian dollar has to find a way to match the signaled reversal of US dollar after the chart showed a Bearish Evening Star candlestick pattern. The near-term support is at 0.7597 with a 23.6% fibonacci extension. A break for a re-test of 0.7496 with an uptrend line of 38.2% level. After a reversal above the triple line of resistance at 0.7699, it reach a high at 0.7760 on August 11.

The AUD/USD price is still uncertain with the Head and shoulders emerge forming a higher top setup. The trend is close to near-term support for traders looking for short term trade weighing the risk-reward ratio. To wait and go for the sidelines is a suggestive move until a more profitable opportunity comes.

[Luis ForexMart]

EUR/USD Fundamental Analysis: October 6, 2016

The day for EURUSD had been very slow as it return to its naughty rangy ways subsequent to a 2-day volatility. The past days are remarkable because set of good and bad news were aired but euro is seen to be very volatile and fastened in the middle of 1.1050 and 1.1250 regions. This range barely have series of attempts yet breaks are always unsuccessful. This event had brought advantages to traders because they are confident that the range is firm and cannot be damage quickly plus they can execute better strategies since the losses and profits are well-defined.

Euro and dollar were caught between the regions 1.1200 and 1.12300 under a tight range and due to a steady progression in the stock exchange the pair were not easily persuaded out from its safety level.

EUR/USD rested at 1.1200 and relatively produce 15 pips for a few hours. Furthermore, big announcements were not present in the Euro region since risk elements are turned down.

[Luis ForexMart]

USD/CAD Fundamental Analysis: October 6, 2016

Today, the loonies and greens are experiencing a very tight range but with lesser movements. The pair attempted to break the level of 1.3180 support upon the first 12 hours of trading, however buyers were dominant over the market so it plunged off and produced a low resistance found in the 1.3220 region. It was a day for small resistance and support because they are able to repress the development of USDCAD.

As of yesterday's forecast, there is some build up consolidation inasmuch as it continually analyze its previous earnings. It is expected that USD/CAD will be much active on Friday due to the labor survey from U.S and Canada to be issued simultaneously. It remain to demonstrate a bullish trend approaching the 1.3280 to 1.35 and sooner or later would arrive at 1.40.

The pair is speculated to execute similar actions like the other day, after all there are no any major reports regarding Canada, the market still looking forward for further releases.

Furthermore, there are speculations that the Canadian economy will soften for the upcoming weeks as the oil price reduction made an impact to the country's entire production network. In addition to it, cutback in the interest rate is also anticipated. Categorical reasons are considered that's why the pair persist to be bullish.

[Luis ForexMart]

USD/JPY Fundamental Analysis: October 7, 2016

The USD closed down today’s trading session with a higher value against the JPY for the eighth consecutive session after an increased interest rate differential which caused the surge in the US dollar. The USD/JPY pair was able to reach its highest trading level since September at 104.155 points. The pair then settled at 103.948 points, increasing by +0.42% or 0.439 points

The US dollar continued its increase against the Japanese yen after a highly positive US jobs data further increased the possibility of an interest rate hike by the Federal Reserve before the end of 2016. Another additional reinforcement was the release of the Unemployment Claims report which came in at 249,000, which is considerable lower than the expected 255,000 and last week’s release of 254,000. This lowered unemployment claims data might be a suggestion that the US economy might be nearing full employment, with employers wary of letting go of their present employees due to the lack of qualified people for the job.

On the other hand, Japan’s economy rates are on negative territory, with benchmark yields for its 10-year treasury note increasing at 1.7146%. Japan’s 20-year treasury bonds also went up higher to place at 1.4623%.