Forex Technical Analysis: Trend potential – Goals of buyers are 114.09 and 114.59

USDJPY - Down

Daily chart: flat continues in wide range 111.99-114.59 (Bollinger Envelopes). ADX is passive it falls that is why this corridor can be trade without touching with sides. You should to be very modest in establishing aims in flat range.

Н4: horizontal corridor 112.24-113.97 could be under north load. ADX is rising and locating in active zone. It is strong resistance in 114.59 zone. If upper envelope is broken through we can consider correction in direction of middle Bollinger line (113.09)

Н1: local resistance is on 114.09 (upper Bollinger line). Support is on 113.37 (middle). ADX is rising so it is possibility that bulls will reach 114.59 aim.

Expectation:

Main possibility is growth to 114.59 and then correction to 113.37

Alternative possibility is down pullback from 114.09 and correction to 113.37.

Trading decisions:buy to 114.09 and 114.59


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Forex Technical Analysis: Trend potential – Miss down pullbacks and look for rising signals

GBPUSD - Flat

Daily chart: bulls broke through the middle Bollinger line and has consolidated in upper envelope. It is good indicator for further upper movement in 1.4567 direction (upper Bollinger Line). ADX is rising and located above "30" line, it shows preparing for trend. Pullback is possible to middle line (1.4196), we are looking only for buying.

 Miss down pullbacks and look for rising signals

Н4: consolidation in range of Bollinger envelopes (1.4163-1.4296) we are expecting pullback.

 Miss down pullbacks and look for rising signals

Н1: now pair is on local support of middle Bollinger line (1.4259),from this growth is possible to upper (1.4337, look at the blue pointer).

If this support is broken through it will be decrease to 1.4196 level, where we would buy in medium- term volume (look at the red pointer).

 Miss down pullbacks and look for rising signals

Expectation:

Main possibility is straight growth to 1.4337

Alternative possibility is decrease to 1.4196 and then growth to 1.4337

Trading decisions:

1) Look for signals on enter into zone 1.4196 and 1.4259.


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Forex Technical Analysis: Trend potential – Different directions of trades

EURUSD - Up

Daily chart: yesterday was very intense day. ECB has surprised. Not all NFP could be seen. We try to find possibilities for further development of pair.

ADX hasn’t got trend zone or turned back. It is strong possibility that we are waiting down pullback to 1.1290 (upper Bollinger line) and moving to middle line (1.1068)

 Different directions of deals

Н4: it is considering bearish intraday bar. We are waiting decrease to 1.1025 (middle Bollinger line), from this level we can start rising to 1.1290 zone

 Different directions of deals

Н1: support is more localize on 1.1058 level(middle Bollinger line)..

 Different directions of deals

Expectation: we are waiting decrease to 1.1058 and then growth into 1.1290 direction (possible it will be transferred on weekends).

Trading decisions:

1) Sell to 1.1058

2) Buy from 1.1058 to 1.1290 (extra day)


You may check other analytical reviews on the web-site of FreshForex company. Source: freshforex.com.

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Mid session comment

The forenoon period of the session clearly shows that the market is moving towards a consolidation phase after high opening. As a result, the WIG20 is located at a level above 1,900 points with less than impressive turnover. Noticeable is the growing d... [...]

Dramatic journey of Euro in the aftermath of ECB – Rabobank

Piotr Matys, EM FX Strategist at Rabobank, notes that the ECB revealed a comprehensive package of easing measures to boost inflation and economic activity in the Eurozone.

Key Quotes

“Key measures include a 10bp cut in the deposit rate to -0.40% and 5bp cut in the main refinancing rate to 0.00% accompanied by a new series of four targeted long-term refinancing operations (TLTRO 2) and expansion of the QE program by EUR20bn to EUR80bn a month.

Initially the markets responded well to ECB’s bazooka. EUR/USD plunged to an intraday low of 1.0822 (the lowest level since the beginning of February) and risky assets rallied. It didn’t last. What happened over the next few hours was a total carnage.

EUR/USD surged beyond the 1.12 level after Draghi admitted that the ECB has no intentions to cut interest rates further. Almost 400 points range (!) is the widest so far this year and not far from the 457 range set on December 3 when the ECB really disappointed the markets (the main difference is that on this occasion the ECB actually exceeded expectations, at least in our view).

EUR/GBP plummeted to 0.765 low only to rally to 0.785 high. We witnessed similar moves in EUR/CEEMEAs. To illustrate that, after the ECB revealed its measures EUR/TRY depreciated sharply to 3.1201, but produced a painful squeeze to almost 3.23. EUR/PLN also ended Thursday’s session higher at 4.336 fully recovering from the lowest level in more than two months of 4.2870.

What now for the euro, which sets the tone for a wide set of various asset classes? ECB officials may intervene verbally in the coming days to convince the markets that the shift from cutting interest rates further in favour of the ECB’s unconventional policy tools such as Targeted Long-Term Refinancing Operations (essentially the ECB paying banks to lend to business and households) will increase the effectiveness of low interest rates that will stay “very low for a long period of time.”

The damage to bearish bets against the euro, however, has been done. Those market participants, including yours truly, who went into the ECB meeting with a bearish view on the euro ended Thursday’s session calculating their losses instead of celebrating profits.

The euro is still one of the main funding currencies and for that reason we are sceptical that gains in EUR/USD will prove sustainable and we would not chase EUR/CEEMEAs higher. That said, after such a massive blow as on Thursday Draghi and other ECB officials may find it even more difficult, if they choose to do so, to talk the euro down.

Perhaps the US Federal Reserve will come to Draghi’s rescue and prevents EUR/USD from gaining even strong momentum? With the US economy proving somewhat resilient to the sell-off in financial markets at the beginning of the year and the USD unable to extend its last year gains, the Fed may surprise the markets with more hawkish/less dovish statement next week.”

Piotr Matys, EM FX Strategist at Rabobank, notes that the ECB revealed a comprehensive package of easing measures to boost inflation and economic activity in the Eurozone.

(Market News Provided by FXstreet) [...]

Euro is paring the recovery – BBH

Research Team at BBH, notes that the euro is paring the recovery that began in the middle of the ECB's press conference yesterday.

Key Quotes

“The markets had reacted as one intuitively would expected to broad easing of interest rates and credit conditions.

The market reversed, and violently so, only after Draghi seemed to rule out further interest rate cuts. Many investors took this to mean the ECB had gone all in and that monetary policy had reach the end. We do not expect this interpretation to be sustained.

Even though we suspect that Draghi could have simply said that with the new initiatives, the ECB was reasonably confident that deflation forces will be arrested and the tightening of financial conditions will be reversed. He could have continued to explain that the ECB does not pre-commit and that it is prepared to take fresh actions should they be judged necessary.

However, we recognize Draghi's constraints. He indicated that a tiered deposit rate was rejected because the exemptions would imply the complete removal of a lower bound of interest rates. The ECB does not accept that. Even if there were some doves that believe that minus 40 bp is some kind of floor, when other central banks, like the Swiss National Bank, has more negative rates, there likely had to be a compromise with those who are uncomfortable with the negative rate regime.

There are three things that much of the post-mortem commentary has missed. First, Draghi directed the focus of additional measures on credit easing, that is QE, rather than rates. Draghi had previously indicated that interest rate policy had reached the end of tether, only to backtrack. Second, most of the criticism has been levied against monetary policy rather than communication. It was essentially one comment by Draghi that reversed the markets' initial constructive response. Third, the success or failure of the ECB's new initiative cannot be judged by the reaction to largely one class of investors (speculators) in the first 24-hours.

The ECB did easy policy and ease aggressively. It not only cut all key interest rates and accelerated the asset purchases by a third, but the ECB also included investment grade corporate bonds in the eligible assets, while also increased the amount of international bonds that can be included, and a new TLTRO scheme that could result in the ECB paying banks to participate.”

Research Team at BBH, notes that the euro is paring the recovery that began in the middle of the ECB's press conference yesterday.

(Market News Provided by FXstreet) [...]

EUR/GBP slumps to 0.7750 on GBP-buying

The selling pressure around the single currency is picking up pace today, now sending EUR/GBP to test fresh lows in the mid-0.7700s.

EUR/GBP down from 0.7850

The European cross is losing around a cent since overnight tops in the 0.7850 area, falling further in response to a re-emergence of the risk appetite in the global arkets and rising buying interest around the sterling.

GBP has found extra legs after the UK’s trade deficit has come in lower than expected at £10.29 billion during January, down from December’s £10.45 deficit.

EUR/GBP key levels

The European cross is now down 1.03% at 0.7748 facing the immediate support at 0.7700 (psychological level) followed by 0.7650 (low Mar.10) and finally 0.7547 (61.8% Fibo of 0.7310-0.7931). On the other hand, a breakout of 0.7901 (high Feb.11) would open the door to 0.7931 (2016 high Feb.25) and then 0.7977 (high Dec.1 2014).

The selling pressure around the single currency is picking up pace today, now sending EUR/GBP to test fresh lows in the mid-0.7700s...

(Market News Provided by FXstreet) [...]

UK construction output fell by 0.2% m/m in January – TDS

Research Team at TDS, notes that the UK construction output fell by 0.2% m/m in January, broadly in line with their expectations of a flat reading.

Key Quotes

“New work fell by 0.8% m/m while repairs and maintenance increased by 0.8% m/m. Public new work in particular led the month lower, falling over 10%, while private sector new work rose 0.6% m/m.

Trade data was also released, showing the visible trade balance roughly as expected, but significant downward revisions to December’s data meant that January showed an improvement in the deficit, against expectations of a deterioration. The improvement came from a deterioration in imports, however, rather than an increase in exports.

Finally, the BoE released its quarterly BoE/TNS Inflation Attitudes Survey, which showed long-term inflation expectations unchanged from November, while year-ahead inflation expectations posted their lowest level since 1999.”

Research Team at TDS, notes that the UK construction output fell by 0.2% m/m in January, broadly in line with their expectations of a flat reading.

(Market News Provided by FXstreet) [...]

European stock markets mid session: stocks traded higher on the ECB’s further stimulus measures

Stock indices traded higher on further stimulus measures by the European Central Bank's (ECB). The central bank cut its interest rate to 0.00% from 0.05% (this decision was not expected by market participants) and deposit rate to -0.4% from -0.3%. The ECB also expanded its monthly purchases to €80 billion from €60 billion, to take effect in April. Purchases will include non-bank corporate debt. The central bank will launch further four targeted longer-term refinancing operations (LTRO).

The U.K. Office for National Statistics (ONS) released trade data for the U.K. on Friday. The U.K. trade deficit in goods narrowed to £10.29 billion in January from £10.45 billion in December. December's figure was revised down from a deficit of £9.92 billion.

The decline in deficit was driven by a smaller gap with non-EU countries.

The total trade deficit, including services, narrowed to £3.46 billion in January from £3.70 billion in December. December's figure was revised down from a deficit of £2.71 billion.

Construction output in the U.K. declined 0.2% in January, after a 2.1% rise in December. The decline was mainly driven by a drop in all new work, which plunged 0.8% in January.

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