fx

Elliott waves for Forex correlation analysis – GBPUSD Elliot Waves Analysis For 31 March 2016

GBPUSD - Flat

Wave Analysis:

GBP/USD is currently trading with a bearish bias. During the previous trading day, the cable traded long as forecasted and even hit out target resistance 1.4410 but could not close above it. Instead, the pair rebounded from this level and is currently heading short. We expect the current downward rally to be the unfolding of corrective three wave cycle with wave (a) ending along 1.4295. We will thus remain short with our target at 1.4295. A break below this level will push the market further down to 1.4196. In an alternative case scenario, should the price end up breaking above 1.4410, then buy the pair with your target at 1.488. The cable should be traded alongside Euro US Dollar. This pairs have a strong positive correlation of up to +0.89 and will likely move in a similar direction during this intraday. Only buy or sell pound if Euro is giving a similar signal

Trade Recommendations:

Remain short with your targets at 1.4295.  A break below this level will call for further short positions with your next target at 1.4196. Only buy if the price clearly breaks above 1.4410.


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[...]

EUR/USD heads towards 1.1300 ahead of German data

The shared currency is seen attempting a tepid bounce from session lows against the US dollar in early Europe, with EUR/USD fighting hard to hold above 1.1300.

EUR/USD trades above all major DMAs

Currently, EUR/USD trades -0.18% lower at 1.1318, within a striking distance of session lows struck at 1.1311 in mid-Asia. The main currency pair is seen struggling just ahead of 1.13 handle, extending its corrective slide from 1.1364 - seven-week tops printed on Wednesday.

The major ran through fresh offers at Tokyo open as the rate hit a stiff resistance place at 1.1342, and now reverts towards daily lows on the back of broad based US dollar recovery. On the wider perspective, EUR/USD looks to test 1.14 barrier as the US dollar remains on the defensive after dovish Yellen’s comments and a string of mixed Fed speaks, which puts the investors’ confidence in the US currency in disarray.

Looking ahead, markets continue to cheer upbeat German CPI figures and now gear up for another eventful European session, with Euro zone CPI in the spotlight. While the German retail sales data remains in immediate focus for fresh incentives on the pair.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance at 1.1339/44 (Mar 18 & 17 High). A break beyond the last, doors will open for a test of 1.1364/1.1373 (Mar 30 High/ daily R1). On the flip side, the immediate support is placed at 1.1286/84 (daily S1/ 1h 50-SMA) below which at 1.1259/30 (5-DMA/ 1h 100-SMA) could be tested.

The shared currency is seen attempting a tepid bounce from session lows against the US dollar in early Europe, with EUR/USD fighting hard to hold above 1.1300.

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

US: Stronger ADP report confirms robust labour market conditions – ANZ

Research Team at ANZ, notes that the ADP report for March showed jobs rose 200k - a touch higher than expectations (195k) and confirming that the labour market remains robust.

Key Quotes

“Revisions to February were minor at -9k, taking this measure of jobs growth in the month to 205k. However, Yellen said yesterday that the real fed funds rate is low and consistent with further improvement in the labour market, so these data are not going to change sentiment much, if at all. That said, if the labour market stays this strong (i.e. employment growth of c. 200k per month) that would put the unemployment rate at 4.7% in late Q2 according to the Atlanta Fed's jobs calculator.

June therefore may not be as remote a possibility for a rate hike as the market is pricing at the moment (22% odds of a Fed hike). But we know that for Yellen, in the short run anyway, financial market volatility and RMB stability are very important. The VIX is currently 13.8, below where the Fed raised rates in December and USD/CNY is around where it was when the FOMC raised rates (6.46).”

Research Team at ANZ, notes that the ADP report for March showed jobs rose 200k - a touch higher than expectations (195k) and confirming that the labour market remains robust.

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