Market analysis and trade recommendations by FBS

[riki143]

USD/CAD: loonie is on a holiday
3/30/2017

On the USD / CAD daily chart, the bulls failed to test the resistance at 1.3405. This led to the formation of the consolidation range 1.328-1.341. A breakout of the lower border of the upward trading channel followed by successful tests of the supports at 1.3305 and 1.328 will send quotes lower. In contrast, a successful test of the resistance at 1.3405 can lead to the transformation of the "Shark" pattern into 5-0 and restoration of the uptrend.

On the USD/CAD hourly chart, there is consolidation in the range of 1.328-1.34. Traders should bet on a breakout of its upper or lower borders.

Recommendation: BUY 1,34 SL 1,3345 TP 1,352, SELL 1,328 SL 1,3335 TP 1,312.

ore:
https://new.fxbazooka.com/analytics/13044

 

[riki143]

Morning brief for March 30
3/30/2017

The UK has finally filed its divorce papers yesterday. As a wife wanting to scoop all family’s possessions she could lay her hands on, the UK voiced its ambitious demands in a quite menacing tone (the UK PM Theresa May cited “security” 11 times in her letter willing to remind the EU members of their vulnerability to terror attacks and thereby push them to struck a security deal with the UK). German Chancellor Angela Merkel took a hard stance saying that Britain’s future relationships with the EU will be discussed only after the UK “honors all its legal, financial and budgetary obligations” (in lay terms, after the country pays a bill of around 60 billion euros). It seems that it’s going to be a rather tough and messy separation. And it might last more than 2 years considering the case of Canada-EU free trade agreement. It took 5 years to strike a deal and another 2 years to ratify it.

GBP/USD edged up to 1.2440 after dropping to the sterling’s one week low (1.2375). Now, the pound is passing through its corrective phase. Most likely, it will be ranging within the tight range of 1.2475-1.2350 (the borders of Ichimoku cloud on the daily timeframe).

The euro was down to 1.0750 from its earlier 1.0790 after ECB policymakers claimed that they are not ready to recourse from their easing programs (well, not until June). Fed’s officials said they are ok with hiking two more times this year given the progress on the Fed’s mandate targets of full employment and 2% inflation rate. In today’s European session we will get CPI figures for Spain And Germany. They might send quotes lower (as inflation rates are expected to have eased in March). The immediate support can be found at 1.0725 (100-H4 MA). In case of a deeper pullback, the prices might stumble across the support at 1.0690 (38.2% Fibo level traced from this year low).

USD/JPY surged to 111.20 in the Asian session having partially recouped its losses after Trump’s failure to repeal Obamacare bill. Today’s focus will be on the US quarterly GDP reading, unemployment claims and numerous comments from the Fed’s members (Fed Mester, Kaplan, Williams, Dudley are on the roster). The US dollar will likely be responsive to GDP reading that, according to the consensus forecast, shouldn’t change from the last-month prints. The talk of Fed’s officials will be less interesting as we have already heard lots of them this week.

Commodity-linked currencies (AUD, CAD, and NZD) were the leaders of the board yesterday supported by rising surging oil prices and steadiness in iron ore. In the Tokyo morning, they were down a few points.

Aussie slid to 0.7655. But the positive undertone for AUD/USD is still intact unless bears manage to reclaim the support at 0.7610.

Kiwi lowered to 0.7020. NZD/USD is still in the consolidation phase. It might continue ranging within the quite broad range of 0.6990-0.7090.

The economic calendar for commodity currencies light. The loonie’s watchers will be waiting for the monthly update of raw material prices coming from Canada at 12:30 MT time. At the present moment, USD/CAD is hovering below the key resistance level at 1.3353 (50-H4 MA). If this level is broken, the prices will try to test the next hurdle at 1.3380.

More:
https://new.fxbazooka.com/analytics/13045

 

[riki143]

USD/TRY: near-term fundamentals and technical levels
3/30/2017

USD/TRY currency pair is now available on the FBS trading platform and we are happy to provide you with the market analysis for your daily trades.

General overview

Turkish lira is the currency that was worst hit after Fed increased its interest rate on March 15 mainly because of country’s distorted current account data and low domestic policy credibility. After the massive downfall, TRY moved into the consolidation phase. At the present, USD/TRY is trading in a range of 3.6620 – 3.6250 (50- H4 MA).

Fundamentals

Most likely the currency pair will continue its corrective movement in the near-term being driven by US dollar fundamentals. If investors renew their hopes for Trump pro-growth policies, USD will easily regain its strength across the board. And the lira might suffer significantly.

The key event of the next month is the Turkish referendum on a proposal to reshape Turkey’s current political system by abolishing the post of prime minister and offering President Recep Tayyip Erdogan broad executive powers. It will be held on April 16. The best result for TRY would be a “yes” vote as markets associate it with the maintenance of political status quo and formalization of Erdogan’s role. De facto the current Turkey’s political system is presidential widely supported by the ruling AK Party (Erdogan is a formal party leader). So, handing more powers to Erdogan would be mean “no change” in market’s language. A “No” vote would be more destabilizing for markets as it would lead to the continuation of the debate on Erdogan’s legitimacy. The investors will probably start to sell on the concerns about the results of the upcoming election (the probability of the win of opposition party will increase).

Supporters of the introduced constitutional changes believe that offering Erdogan broad authority is the only way to achieve the political stability need for concentration on the economic reforms (that are so needed for the salvation of staggering economic growth of the country). A yes vote could strongly support the lira at for a short period of time. The central bank’s tightening measures don’t facilitate the nation’s currency valuation, neither they help to lower rising inflation rate. So far, they failed to affect bank’s lending to consumers and businesses.

Another Achilles’ heel of Turkish lira is distorted trade balance data that is almost irreparable for a score of reasons. Turkey’s trade deficit is the biggest of all top 50 economies relative to output and the biggest problem is that most of the Turkish imports and foreign debt are priced in US dollars.

Technical levels

In the short term, USD/TRY will probably continue trading within the narrow range of 3.6260 – 3.6550. If the US dollar manages to regain its recent strength (least seen when investors were betting on Trump’s pro-growth policies), the quotes will rise towards 3.6660 (100-H4 MA). On the downside, there are several supports at 3.6260 (50-H4 MA) and 1.5845 (March 27 low).

More:
https://new.fxbazooka.com/analytics/13047

 

[riki143]

Review on the book of Mark Douglas
3/30/2017

https://new.fxbazooka.com/img/articles/13048/mark-douglas-dead.png[/MG]

Basically, Mark Douglas’s book is a teaching guide containing ample instructions on how to enter the “zone” – a mental space where your mind and the collective consciousness of the market are in sync. Don’t confuse a zone with the ability to forecast direction of the market, or to determine the dominant market sentiment. It is more than that. Being in the “zone” is being in complete harmony with other market participants unconsciously, naturally, like if you were a bird in a flock migrating from north to south seasonally. Trader who managed to set up his mind in a way it to be magically consistent with collective mind of the market can anticipate all possible changes in the direction of quotes and, therefore, never leave the winning streak.

The author of the book also explains how to ignore redundant information, how to overcome fear, block anxiety and reach the state of mind when you act and react instinctively, irrationally, without weighing alternatives or considering consequences of your executed orders. You cannot get automatically into a zone of your own free will. What you can do, though, is to set up the special kind of mental conditions that facilitate your entry into a “zone”. If you want to learn how to do this, you should consider reading “Trading in the zone.” Once you learn how to reach the point where there is no fear to screw up your trade, where you’re in absolute harmony with the market you won’t have any problems with earning money in FX market. You will obtain a special kind of attitude about trading, making mistakes, earning, losing money that will never leave you out in the cold. You will always be a winner of the situation.

DOWNLOAD THE BOOK

More:
[URL=https://new.fxbazooka.com/analytics/13048]https://new.fxbazooka.com/analytics/13048[/URL]

 

[riki143]

USD/JPY: the yen met the dragon
3/31/2017

On the USD/JPY daily chart, quotes went our from the downward trading channel and broke up the resistance area of 111.55-111.75. Now, this area serves as a solid support. There is a transformation of the "Shark" pattern into 5-0. To restore the uptrend, the bulls should break the levels of 114.4-114.94. In contrast, a rollback from 38.2% and 50% levels of the CD wave will be a signal for the opening of short positions.

On the USD/JPY hourly chart, the "Dragon" pattern has been formed. If the bulls manage to keep quotes above 111.6 (the curl of the Dragon's tail - EMA21 and the lower border of the upward trading channel), there will be a great risk of continuation of the rally towards 112.8 and 113.44.

More:
https://new.fxbazooka.com/analytics/13049

 

[riki143]

Gold: bulls are losing their control
3/31/2017

On the daily chart of gold, the bulls failed to update the February high, and at the present time, there is a correction to the uptrend. The nearest support levels are located near the $1,236 and $1,229. The resistance is lying at $1,260. Until the quotes are still within the upward trading channel, the control over the bullion is still in buyers' hands.

On the hourly chart of gold, the "Shark" pattern was activated. Its 88.6% and 113% targets help us to identify the convergence zones. The technical outlook for the pair is still bullish, so the drop of quotes to $1,229 and $1,223 will allow us to open long positions.

Recommendations:

BUY 1229 SL 1220 TP 1254,

BUY 1223 SL 1212 TP 1254.

More:
https://new.fxbazooka.com/analytics/13050

 

[riki143]

Morning brief for March 31
3/31/2017

The euro suffered substantial losses overnight after we received softer than expected German and Spanish inflation releases. Decreasing inflation rate prove that the ECB still needs a very substantial degree of monetary policy accommodation and relieves markets superfluous idle talks about the QE tapering. The US economic data was a mixed bag with solid GDP figures and rising number of unemployment claims. EUR/USD dropped to 1.0675 overnight. The technical outlook for the pair is neutral. The prices will likely continue consolidating within the range of 1.0655 – 1.0690. Today traders will be watching for the euro area monthly inflation readings. Consensus forecasts indicate slight declines. The figures are usually scrutinized by the ECB officials trying to assess the sustainability of prices pressures. So, in case of disappointing headlines, the euro might head into the negative territory.

The yen was the main mover in the past trading sessions. USD/JPY spiked to 112.20 after we received a rather disappointing data on Japan’s household spending and core CPI. Then, USD lost its ground against the yen and slid to 111.80. US dollar watchers will be waiting for core PCE reading and personal spending data which are due at 12:30 MT time. The Chicago PMI and final University Michigan consumer sentiments are also expected tonight. Another focus will be on the speeches of Fed’s officials.

In the early hours of Tokyo morning, we got some comments from the Australian prudential regulator (APRA) on the growth in housing credit. Surging house prices have been a concern for the Australian government. APRA will try to tighten up lending for housing. What does this news mean for traders? It means that the Reserve Bank of Australia might cut rates further clipping Aussie’s wings. This news didn’t cause and outcry from AUD, but they should be taken into consideration as we approach the next RBA meeting. AUD/USD dropped to 0.7635, then, partially regained its losses having advanced to 0.7640. There is still a room for further expansion towards 0.7660/0.7680 levels.

GBP/USD rose to 1.2475 in the Asian session. Many analysts believe that the pound can still move higher in the near-term due to a squeeze on existing short GBP and investors’ disbelief in Trump’s ability to push through his pro-growth policies. The immediate resistance can be found at 1.2475. on the downside, there are plenty of supports at 1.2410, 1.2360. They might serve the good turn if today US data beats market’s expectations.

US dollar/loonie was trading choppily in the past sessions trying to imitate the movements of oil prices. USD/CAD dropped to 1.3320, then, regained its ground and rose to 1.3340. Brent oil futures slipped a few points in the Asian session having fallen to $52.80 from yesterday’s high at $53.10. A tailwind for oil was the Kuwait’s support of the prolongation of the OPEC-led production cut deal.

More:
https://new.fxbazooka.com/analytics/13051

 

[riki143]

Key option levels for Friday, March 31st
3/31/2017

EUR/USD

ain trend Short-term period Medium-term period
Neutral Neutral
Changes in the open interest + 21 248 ? + 39 453 ?
Closest resistance levels 1.0713; 1.0761; 1.0786; 1.0829
Closest support levels 1.0662; 1.0628; 1.0608; 1.0585
Trading recommendations
Baseline scenario Short EUR/USD below 1.0662 (or from 1.0713), with target points at 1.0628 and 1.0608
Alternative scenario Moving above 1.0713 can be considered as a signal to Buy the pair, with target at 1.0761 and 1.0786

GBP/USD

Main trend Short-term period Medium-term period
Bullish Bearish
Changes in the open interest + 126 ? - 42 ?
Closest resistance levels 1.2473; 1.2501; 1.2531; 1.2568
Closest support levels 1.2434; 1.2405; 1.2371; 1.2331
Trading recommendations
Baseline scenario Long GBP/USD above 1.2473, with target points at 1.2501 and 1.2531
Alternative scenario Moving below 1.2434 can be considered as a signal to Sell the pair, with target at 1.2405 and 1.2371

USD/CAD

ain trend Short-term period Medium-term period
Neutral Bullish
Changes in the open interest + 619 ? - 9 ?
Closest resistance levels 1.3330; 1.3356; 1.3373; 1.3401
Closest support levels 1.3286; 1.3261; 1.3215; 1.3189
Trading recommendations
Baseline scenario Long USD/CAD above 1.3330 (or from 1.3286), with the target points at 1.3356 and 1.3373
Alternative scenario Moving below 1.3286 can be considered as a signal to Sell the pair, with target at 1.3261 and 1.3215

More:
https://new.fxbazooka.com/analytics/13052

 

[riki143]

EUR/JPY: bears are moving south
4/3/2017

On the daily chart, EUR/JPY is trading within descending channel. The bears keep the pair under control, and successful test of support at 118.6 will strengthen the risks of decline towards 117.35 and 116.6. The bulls still have chances to change the situation and make the pair form the inverted 5-0 pattern. To do that they will firstly need to overcome resistance at 119.95.

On H1, EUR/JPY keeps forming the reversal widening wedge pattern. For this wedge to be formed the pair should overcome resistance at 119.8. On the other hand, decline below March low would allow the bears to keep going south.

Recommendation: SELL 118,6 SL 119,15 TP1 117,35 TP2 116,6 BUY 119,8 SL 119,25 TP 120,8.

More:
https://new.fxbazooka.com/analytics/13054

 

[riki143]

NZD/USD: bulls are running out of power
4/3/2017

On the daily chart, NZD/USD made several attempts to bring the quotes outside of the descending channel but failed. In order to break the short-term descending trend, the buyers need a successful test of 0.7070. On the other hand, the return of the quotes to 0.6975 and its following break will increase the risks of a 5-0 pattern.

On H1, NZD/USD successful test of support at 0.6975 will trigger the Shark pattern. Its 113% target is close to 0.687. To resume the medium-term bullish trend the buyers need to return the price inside the previous uptrend channel.

Recommendation: BUY 0,707 SL 0,7015 TP 0,7205, SELL 0,6975 SL 0,703 TP 0,687.

More:
https://new.fxbazooka.com/analytics/13055

 

[riki143]

Key option levels for Monday, April 3rd
4/3/2017

EUR/USD

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest + 18 496 ? - 36 800 ?
Closest resistance levels 1.0706; 1.0752; 1.0778; 1.0820
Closest support levels 1.0660; 1.0628; 1.0609; 1.0586
Trading recommendations
Baseline scenario Long EUR/USD above 1.0706 (or from 1.0660), with target points at 1.0752 and 1.0778
Alternative scenario Moving below 1.0660 can be considered as a signal to Sell the pair, with target at 1.0628 and 1.0609

USD/CAD

Main trend Short-term period Medium-term period
Neutral Bullish
Changes in the open interest + 78 ? + 259 ?
Closest resistance levels 1.3310; 1.3358; 1.3403; 1.3430
Closest support levels 1.3273; 1.3250; 1.3210
Trading recommendations
Baseline scenario Long USD/CAD from 1.3310, with the target points at 1.3358 and 1.3403
Alternative scenario Moving below 1.3273 can be considered as a signal to Sell the pair, with target at 1.3250 and 1.3210

AUD/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 86 ? + 3 ?
Closest resistance levels 0.7636; 0.7655; 0.7676; 0.7710
Closest support levels 0.7610; 0.7581; 0.7542; 0.7497
Trading recommendations
Baseline scenario Short AUD/USD below 0.7610 (or from 0.7636), with the target points at 0.7581 and 0.7542
Alternative scenario Moving above 0.7636 can be considered as a signal to Buy the pair, with target at 0.7655 and 0.7676

More:
https://new.fxbazooka.com/analytics/13056

 

[riki143]

GBP/USD: bears are pulling down
4/5/2017

On the daily chart bears managed to lead the quotes out of the descending channel. This increases the risks of triggering "Bat" pattern with a target at 88.6%. The necessary condition of this scenario is the successful test of support at 1.2370. On the other hand, the pound's return above resistance at $1.2495 will increase the risks of uptrend resumption.

On H1, patterns "Bat' and AB=CD allow determining potential of the downward movement. Their targets are close to 1.2305 and 1.2160. The break of support at 1.2420 will increase the risks of a decline.

Recommendation: SELL 1,242 SL 1,2475 TP 1,2305.

More:
https://new.fxbazooka.com/analytics/13063

 

[riki143]

AUD/USD: will Aussie catch a crab?
4/5/2017

On the daily chart, bears managed to reach 78.6% target of the Gartley pattern. If the current support at 0.7540 doesn's stop them, Gartley will transform into Crab pattern will increase the risks of decline towards 0.7315. The necessary condition for this scenario is a successful test of resistance at 0.7515.

On H1 AUD/USD is trading within a downtrend channel. The bears retain control for the pair. The best strategy is to sell Australian currency on its advance to 0.7595.

Recommendation: SELL 0,7595 SL 0,765 TP1 0,75 TP2 0,7315.

More:
https://new.fxbazooka.com/analytics/13064

 

[riki143]

Key option levels for Wednesday, April 5th

EUR/USD

https://new.fxbazooka.com/img/articles/13065/EURUSD(159).png[/IG]

Main trend Short-term period Medium-term period
Neutral Neutral
Changes in the open interest + 6 193 ? - 28 558 ?
Closest resistance levels 1.0693; 1.0738; 1.0764; 1.0808
Closest support levels 1.0649; 1.0619; 1.0579; 1.0554
Trading recommendations
Baseline scenario Long EUR/USD above 1.0693 (or from 1.0649), with target points at 1.0738 and 1.0764
Alternative scenario Moving below 1.0649 can be considered as a signal to Buy the pair, with target at 1.0619 and 1.0579

GBP/USD

[IMG]https://new.fxbazooka.com/img/articles/13065/GBPUSD(126).png

Main trend Short-term period Medium-term period
Bullish Bearish
Changes in the open interest + 291 ? - 228 ?
Closest resistance levels 1.2464; 1.2492; 1.2533; 1.2567
Closest support levels 1.2414; 1.2380; 1.2340; 1.2295
Trading recommendations
Baseline scenario Long GBP/USD above 1.2464 (or from 1.2414), with target points at 1.2492 and 1.2533
Alternative scenario Moving below 1.2414 can be considered as a signal to Sell the pair, with target at 1.2380 and 1.2340

AUD/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 63 ? + 80 ?
Closest resistance levels 0.7608; 0.7653; 0.7701; 0.7751
Closest support levels 0.7576; 0.7547; 0.7523; 0.7491
Trading recommendations
Baseline scenario Short AUD/USD below 0.7576 (or from 0.7608), with the target points at 0.7547 and 0.7523
Alternative scenario Moving above 0.7608 can be considered as a signal to Buy the pair, with target at 0.7653 and 0.7701

More:
https://new.fxbazooka.com/analytics/13065

 

[riki143]

USD/JPY: a further downfall is not ruled out
4/6/2017

On the USD/JPY daily chart, the bulls failed to push quotes outside the downward trading channel. The 5-0 pattern has been fulfilled. Rollback from the 38.2% level of the CD wave allowed us to open short positions. The update of March lows will increase the risks of continuation of the downward movement towards108.8 and lower.

On the USD/JPY hourly chart, the attack on the important resistance at 111.45 has failed. A successful test of the support at 110.25 will activate the AB = CD pattern with target 109.6.

Recommendations:

SELL 110,25 SL 110,8 TP1 109,6 TP2 108,8,

BUY 111,45 SL 110,90 TP 112,85.

More:
https://new.fxbazooka.com/analytics/13066

 

[riki143]

USD/CAD: bulls are forcing their way through
4/6/2017

On the USD/CAD daily chart, a breakout of the resistance at 1.3405 will allow us to talk about the continuation of the implementation of the 5-0 pattern. After a rollback in the direction of 50% level of the CD wave, the bulls managed to restore the uptrend. They might extend their gains to 1.354 and 1.357.

On the USD/CAD hourly chart, if quotes manage to go out from the 1.328-1.34 consolidation range within "Splash and ledge" pattern, we will be able to open long positions. If the bulls manage to update the March highs and activate the AB = CD pattern, there might a continuation of the rally towards 1.36 direction.

Recommendations: hold long positions (BUY 1,34 SL 1,3345 TP 1,352).

More:
https://new.fxbazooka.com/analytics/13067

 

[riki143]

Morning brief for April 6
4/6/2017

Traders were toiling like galley slaves overnight as there were plenty of economic releases that led to some intraday moves. ADP payrolls showed a gain of 263K vs consensus 184K. It is a great result for the current point of the business cycle, and since the correlation between official and ADP prints has improved in the past months, we might wait for something like “the data beats market expectations” from Friday’s NFP.

Non-manufacturing ISM was worse than expected. Then, there was the FOMC Minutes showing that the Fed is going to trim its $4.5 trillion balance sheet well into the end of this year, or even earlier. This was interpreted as implying less need for Fed’s rate increases as a phasing down of the reinvestment policy can act as a de facto tightening.

There was also a disappointing headline in the news. Senate Majority Leader Paul Ryan said that the House, Senate and Mr. Trump are definitely not on the same wavelength with regard to tax policy. So, It would take more time for policymakers to decide on the tax reform than on the repeal of Obamacare bill (which is still not resolved). The English of this is there won’t be any repeal of healthcare, no wall, no lower corporate tax rates in the near-term. It seems that we will have to arm ourselves with lots of patience.

This session will be as busy as previous one (mid-week time, what else to expect from it). There will be the much-hyped first meeting between Xi and Trump. The US President might touch upon China’s currency manipulations and unfair trade policy, or might not if we believe on his bare word addressed to FT journalists (in the recent interview, Trump told that he would prefer not to talk about tariffs at the upcoming meeting with Xi). North Korea is likely mentioned – especially after yesterday’s missile test.

EUR/USD ticked up in the course of Tokyo session from 1.0667 to almost 1.0690. The downward pressure is still present though, another drop towards the 1.0595 support is not ruled out until prices manage to test 1.0730/1.0770 levels successfully. Euro watchers will be waiting for the ECB President Draghi’s speech which is due at 9:00 pm MT time.

Aussie/greenback outlook is neutral for the present moment. The quotes are trading around 1.0765. The immediate pressure is still on the downside towards 0.7615. A break of resistance at 0.7650 will allow us to talk about a further upsurge towards 0.7660. The Australian economic calendar is light. The pair is likely driven by USD fundamentals today.

Kiwi was one of those who little changed on the session, although it did take a shot to rise higher. NZD/USD is now ranging within 0.6975 – 0.6995 levels.

USD/JPY was lower on the session from 112.20 to 111.65. The support at 111.50 is still intact. If it is broken the quotes will slide towards the restraint at 110.00. The technical outlook will change from neutral to bullish if prices go out of their 110.00/112.20 consolidation range.

USD/CAD dropped to 1.3295 in the course of this week due to the recent rally in oil prices. Brent oil futures hit $55.06 yesterday but then skipped some points after US government reported a sudden increase in US crude inventories. Loonie watcher should focus their attention on Canadian building permits coming out at 12:30 pm today.

More:
https://new.fxbazooka.com/analytics/13068

 

[riki143]

Ahead of Donald Trump-Xi Jinping meeting
4/6/2017

US President Donald Trump is meeting China’s President Xi Jinping at his Mar-a-Lago resort later today. While Trump treated Japan’s PM Abe to golf, no such outing is planned for the leader of China. So, it is going to be all business, nothing personal.

The meeting for Xi Jinping

It is an opportunity to establish a personal rapport with Trump and prevent an imminent trade war that threatens to pull China's economy to pieces and make the current economic slowdown more painful. There is also a potential risk for Xi’s reputation as General Secretary of the communist Party of China. Some party members are not satisfied with Xi’s reform plans. They will be searching for some “ammunition” in Trump-Xi meeting for the political debates in which they will try to thwart the introduction of new reforms. A conflict with the US leader could potentially undermine Xi’s leadership credential he has been forging during his tenure as China’s President.

The meeting for Trump

It is an opportunity to rebuke Chinese government for its manipulation of the currency, unfair trade policies, militarization of the South China Sea and failing to make more efforts to stop North Korea’s aggression. Most likely US President will use the One-China policy regarding Taiwan as a bargaining chip to strike a better trade deal with China.

China will probably try to deny Trump’s evidence-free accusations of currency manipulation. And it would be fair. While yuan was long viewed as undervalued, now it is no longer the case. In the recent years, Beijing allowed the renminbi to appreciate. Moreover, if China refused to control the exchange rate of its nation’s currency, it would have considerable adverse ramifications for trade and global growth.

What would be the market reaction?

In the last interview with the FT Trump said that he wouldn’t be surprised if he and Xi did something that would appear “really dramatic and good for both country”. It might happen given the Trump’s willingness to flaunt his influence after numerous failures on the legislation front.

If this happened, it would definitely be positive for traditional safe-haven currencies, gold and Treasuries.

More:
https://new.fxbazooka.com/analytics/13069

 

[riki143]

EUR/USD outlook after today’s Draghi’s speech
4/6/2017

ECB Governor Mario Draghi made a scheduled speech earlier today. Overall, his comments were dovish. It seems that the central bank officials are starting to talk down markets’ taper expectations. The CB head Draghi said that there is no need to deviate from the present wording of bank’s monetary policy stance.

Ultra-loose ECB measures proved to be effective. The general outlook for the euro area economies is gradually improving. The unemployment rate did decrease in the past years, but it is still unclear how quickly lower jobless figures feed into wages. The inflation rate is still well below the coveted 2%; there is scant evidence that it is steady enough (we saw inflation figures hitting ECB target in February; in March, we saw them slowing dramatically driven by lower energy prices), thus, a substantial degree of monetary accommodation is still needed. So, according to Mario Draghi, it is too early to snap into the reassessment of the current monetary policy stance; the ECB policymakers will wait for more evidence before leaving the path of their current ultra-loose monetary policy.

EUR/USD skipped some points on Mario Draghi’s dovishness. Going ahead the euro will probably stay under some pressure in light of the release of ECB monetary policy meeting accounts. At the present moment, the pair is still going through its consolidation phase – it is trading around 1.0690. The immediate resistances can be found at 1.0730 (100-H4 MA) and 1.0770 (23.6% Fibo level traced from this year low). On the flip side, there are several supports located at 1.0655 (200-H4 MA) and 1.0620 (50% Fibo retracement level). They are likely tested if the wording of the minutes is extremely dovish.

More:
https://new.fxbazooka.com/analytics/13070

 

[riki143]

Gold resurfaced
4/7/2017

On the daily chart of gold, there was a breakout of the important resistance at $1262 per ounce. As a result, the AB = CD pattern has been activated. Its 200% target is located near $1335. To reach this target, the bulls will need to push quotes out of the long-term downward trading channel and test the resistance at $1280.

{IMG]https://new.fxbazooka.com/img/articles/13071/Screenshot_2017_04_07_08_16_20.png[/IMG]

On the hourly chart of gold, the ascending triangle pattern has been realized. The bulls might try to retest the upper border of the triangle located at $1262. In case of breakout, there will be a continuation of the rally.

More:
https://new.fxbazooka.com/analytics/13071