GBP/USD Aims Recovery While EUR/GBP Is Sliding GBP/USD is attempting a recovery wave above the 1.3220 resistance. EUR/GBP is declining and is gaining pace below the 0.8550 level. Important Takeaways for GBP/USD and EUR/GBP The British Pound is facing resistance near the 1.3280 and 1.3300 levels. There was a break above a major bearish trend line with resistance near 1.3240 on the hourly chart of GBP/USD. EUR/GBP started a fresh decline from well above the 0.8580 support level. There is a major bearish trend line forming with resistance near 0.8540 on the hourly chart. GBP/USD Technical Analysis The British Pound declined heavily below the 1.3300 level against the US Dollar. The GBP/USD pair formed a base above the 1.3265 level and recently started an upside correction. The pair recovered above the 1.3200 resistance level. There was a break above the 50% Fib retracement level of the downward move from the 1.3289 high to 1.3163 low (formed on FXOpen). Besides, there was a break above a major bearish trend line with resistance near 1.3240 on the hourly chart of GBP/USD. The pair is now trading near the 1.3250 level and the 50 hourly simple moving average. It is close to the 76.4% Fib retracement level of the downward move from the 1.3289 high to 1.3163 low. On the upside, an initial resistance is near the 1.3265 level. If there is an upside break above the 1.3450 resistance and the 50 hourly SMA, the price could surpass 1.3280. The main resistance is near the 1.3300 zone. Therefore, a proper break above the 1.3300 resistance could open the doors for a steady increase. The next major resistance for the bulls could be 1.3350. If not, the pair could start a fresh decline below 1.3220. An immediate support is near the 1.3200 level. The first key support is near the 1.3180 level. Any more losses could lead the pair towards the 1.3150 support zone. The next major support sits near the 1.3080 level. Read Full on FXOpen Company Blog...
Will We See Santa Rally This December? As this trading, pandemic-stricken year is nearing its end, the one thing left to emphasize is the stock market's rally. Not all market indices have rallied, for example, emerging markets: their indices performed poorer than developed markets by more than 20%. The strongest rally happened in the United States. All major indices, Dow Jones, Nasdaq 100, and S&P 500, are nearing their all-time highs. Nothing could deter their advance. For most of the year, the tapering of asset purchases had been the main reason to expect a correction. The Fed did announce tapering, a small correction did happen, but only for bulls to step in and buy the dip again. With the Fed's meeting looming large next week, is it possible for stocks to reach their new all-time highs? Also, is a Santa Rally possible even with the Fed turning hawkish? What is a Santa Rally — and what are the chances to see one This December? [ Stocks tend to rally later in December, hence the Santa Rally name. A close look at the chart above shows that the chances for a Santa Rally are quite high. Most rallies occur after December 20, and if, say, the S&P 500 goes up more than 20% YTD, as is the case this year, it will outperform the average December return. The performance record dates back to 1950, so it is fair to say the likelihood is high for the stock's rally going on. Furthermore, after this year’s negative November, December has delivered a positive return of 2.7% on average, with a probability of 86.3%. In other words, investors are betting on continuation of the economic recovery despite Omicron fears and the Fed's intentions to tighten the policy. All in all, a Santa Rally is not just a possibility but a probability; 86.3% is enough to keep buyers in control. FXOpen Blog
Get Ready For December’s Most Important Trading Week The most important trading week of the month has started, and traders are preparing for a sharp increase in volatility. No less than four central banks are expected to announce their monetary policy decisions, which will raise the currency market’s volatility. Moreover, the moves may be exacerbated by lower liquidity levels typical for December. After all, December is known for most of the investment houses decreasing their market activity in light of the end-of-the-year holidays. Inflation pressures central banks to tighten the monetary policy sooner than they would have wanted too. Last week, the US November inflation data showed that the prices of goods and services increased by 6.8% YoY, a rate not seen in the last 39 years. Therefore, the pressure on the Fed and other central banks increases to normalize their policies. What to expect from the FOMC meeting on Wednesday The Fed is due to announce its decision on Wednesday. The risk is that it will have a more hawkish tone than the markets expect as higher inflation is threatening the Fed’s mandate of price stability. A couple of weeks ago, the Fed’s chair, Jerome Powell, announced that it is time to stop describing inflation as “transitory”. The problem with higher inflation in the States is that it will be exported to other parts of the world due to global trade partnerships, and also to the fact that the US is the largest economy in the world. Three central banks to announce policy decisions on Thursday One day after the Fed’s decision, three central banks will announce their monetary policy stance: the Swiss National Bank, the Bank of England, and the European Central Bank. Out of the three, the focus will be on the BOE and the ECB, because the Swiss National Bank is not expected to change its policy. In the UK, while no rate hike is expected, the market participants will focus on the MPC asset purchase facility votes. Just like in the case of the Fed, the risk is that the BOE will be hawkish. Finally, the ECB is facing a tough decision. The euro was weak all year, reflecting the bank’s dovishness. On the one hand, it does not plan to hike in 2022, in sharp contrast with the Fed. On the other hand, higher inflation forces its hand to taper asset purchases, a move that may be perceived as hawkish by financial markets. This is what makes this trading week the most important in December. After Friday, volatility will decline as investors prepare for the end of the year festivities and holidays. FXOpen Blog
BTCUSD and XRPUSD Technical Analysis – 14th DEC, 2021 BTCUSD: Head and Shoulders Pattern Below $50,000 Bitcoin was unable to sustain its bullish momentum on 12th Dec and declined after having touched a high of $50,701. We can observe a continuous fall since it touched its all-time high of $59,119 on 30th Nov. This fall in BTCUSD can also be attributed to the broad-based December selling in crypto markets; this is a time when global investors seem to withdraw their profits and investments due to the upcoming Christmas and New Year holiday season. In today’s European trading session, bitcoin is again back in the bearish channel, trading below the $50,000 handle. We can clearly see a head-and-shoulders pattern below the $50,000 handle which signifies a fall in the price of Bitcoin and a continuation of the bearish downtrend. At present, the price of bitcoin has entered a consolidation phase below the $48,000, and this is expected to continue in the US trading session. Both the Stoch and StochRSI are indicating an OVERBOUGHT level, which means that in the immediate short-term, a decline in the price is expected. Bitcoin is moving below its both 100 hourly simple and exponential moving averages. The average true range is indicating a lesser market volatility, which means that markets will be entering a consolidation phase soon. Bitcoin trend reversal is seen below $50,000 Stoch is indicating an OVERBOUGHT level The price is now trading just above its pivot level of $46,895 All the moving averages are giving a SELL signal at current market level of $47,146 Bitcoin: Bearish Momentum Below $50,000 Confirmed BTCUSD is struggling to keep itself above the $50,000 mark, and we can see a mild bullish channel which suggests that a further decline can be expected. Some of the major technical indicators are giving a SELL signal, which means that the price will fall below $45,000 soon. In the European trading session, the price of BTCUSD is trading above its classic support level of $46,708 and Fibonacci support level of $46,594. In the last 24hrs, BTCUSD has gone DOWN by 3.74% with a price change of $1,830, and has a 24hr trading volume of USD 33.547 billion. Compared to yesterday, there was a 41.25% increase in the trading volume. This increase happened thanks to the increased selling pressure, as well as liquidation of bitcoin holdings by investors. The Week Ahead Bitcoin continues tumbling down from its Nov 30th all-time high of $59,119. A further decline will push it below the $45,000 handle. The medium to long-term outlook remains BULLISH for bitcoin, with a target of $55,000. At present, the markets are giving a SELL signal, so it would be best to enter into short positions. The relative strength index of 42 is indicating a bearish channel, and fresh selling is expected in the markets at any time. This is also due to the renewed fears related to the Omicron coronavirus variant, and many countries shutting down their international borders. Technical Indicators: Stoch (9,6): at 98.95 indicating an OVERBOUGHT level Average directional change (14-day): at 42.60 indicating a SELL Rate of price change: at -0.837 indicating a SELL Moving averages convergence divergence (12,26): at -447.70 indicating a SELL Read Full on FXOpen Company Blog...
The low Turkish Lira and the tourism opportunity Turkey, a huge nation which is home to over 84 million people, is in an interesting position economically and politically and has been for some time. The current economic outlook is one of surprising doom, and the focus over the past day by mainstream economists in Western countries has been on the anticipation of a rate cut which has caused the Lira to plunge to a new low, which is quite a significant market event given that it began this month at a very low value. Yesterday was a particularly interesting session for the Lira, given that it was trading at 14.33 to the dollar at 1:25 p.m. in Istanbul, representing a slight recovery from the record low of 14.99 earlier in the day but still languishing at all time lows. The mere thought that a commonly-traded currency which is not a major and could be considered to be one of the 'exotics' which is often traded against majors would plunge to a lower value than ever recorded could well prove to be a point of interest among traders and market participants. Turkey may well be having a fiscal apocalypse in the eyes of its own central bank and policymakers and financial leaders globally, as the nation's own central bank began to intervene directly in the FX market on Monday this week by selling dollars to prop up the lira, but there are two sides to this situation which could lead to some degree of volatility. Whilst President Recep Tayyip Erdogan has taken a hardline stance against raising interest rates, Turkey's finance minister aligns with the idea as do many global economists which agree would actually aid the currency and go toward stemming the rampant inflation, which is now at approximately 20%. Thus, the currency is in the doldrums but the wider economy of Turkey has perhaps some degree of potential, as it is one of the only countries within which tourism makes up a vast percentage of the national industry base which is welcoming tourists without many restrictions. In 2018, Tourism directly accounted for 7.7% of total employment in Turkey, directly employing 2.2 million people and total income from tourism was 3.8% of GDP. The nation's nominal per capita income - effectively the average salary per person - in Turkey is $9,300 which is considerably short of the national average per capita GDP in Western nations which are home to major currencies, which means that any movement in the all important tourist industry makes all the difference to the outlook within Turkey and therefore could directly affect the value of the Lira Turkey's government has officially announced just three weeks ago that it will not be implementing any lockdowns going forward, and Turkey remains open to tourists. Every year, over one million British tourists flock to Turkey's sun-soaked resorts and with those resorts very much open for business, the possibility of restrictions being implemented across the United Kingdom over the winter period and the low value of the Turkish lira meaning that British travelers get more bang for their buck, it could be that the Turkish economy may get a boost from those looking for an escape from further curtailment of freedoms to a warmer climate for a few weeks with a great exchange rate. Many residents of Germany visit Turkey each year, some for vacation and others to visit their families and FX transactions between Germany and Turkey put the Euro and the Lira against each other very regularly. Given Germany's current strict Covid rules, Turkey's low value Lira and open society with little restrictions may appeal. Bearing in mind the internal issues of inflation and a beleaguered economy and the restrictions in Europe which may drive an open-for-business Turkish tourist industry forward, there may be some degree of volatility in the Lira when traded against the Euro or the Pound. FXOpen Blog
EUR/USD and USD/CHF: Dollar Could Gains Momentum EUR/USD is struggling to gain momentum above the 1.1300 zone. USD/CHF is rising, and it might extend gains above the 0.9250 level. Important Takeaways for EUR/USD and USD/CHF The Euro failed to gain strength and declined below 1.1300 against the US Dollar. There was a break below a key bullish trend line with support near 1.1270 on the hourly chart of EUR/USD. USD/CHF started a decent increase from the 0.9200 support zone. There is a major bearish trend line forming with resistance near 0.9250 on the hourly chart. EUR/USD Technical Analysis The Euro attempted an upside break above the 1.1325 resistance zone against the US Dollar. The EUR/USD pair failed to gain strength above 1.1325 and started a fresh decline. There was a clear break below the 1.1300 and 1.1280 support levels. Besides, there was a break below a key bullish trend line with support near 1.1270 on the hourly chart of EUR/USD. The pair even broke the 1.1260 support and the 50 hourly simple moving average. EUR/USD Hourly Chart It traded as low as 1.1250 on FXOpen and is consolidating losses. On the upside, an initial resistance is near the 1.1272 level. The 23.6% Fib retracement level of the recent decline from the 1.1326 swing high to 1.1250 low is also near 1.1272. The next major resistance is near the 1.1285 zone. It is near the 50% Fib retracement level of the recent decline from the 1.1326 swing high to 1.1250 low. A clear upside break above the 1.1300 zone could open the doors for a steady move. The next major resistance sits near the 1.1325 level. On the downside, an immediate support is near the 1.1250 level. The next major support is near the 1.1220 level. A downside break below the 1.1220 support could start another decline. The next major support sits near 1.1150. Read Full on FXOpen Company Blog...
GBP/USD Aims Recovery While EUR/GBP Is Sliding GBP/USD is attempting a recovery wave above the 1.3220 resistance. EUR/GBP is declining and is gaining pace below the 0.8550 level. Important Takeaways for GBP/USD and EUR/GBP The British Pound is facing resistance near the 1.3280 and 1.3300 levels. There was a break above a major bearish trend line with resistance near 1.3240 on the hourly chart of GBP/USD. EUR/GBP started a fresh decline from well above the 0.8580 support level. There is a major bearish trend line forming with resistance near 0.8540 on the hourly chart. GBP/USD Technical Analysis The British Pound declined heavily below the 1.3300 level against the US Dollar. The GBP/USD pair formed a base above the 1.3265 level and recently started an upside correction. The pair recovered above the 1.3200 resistance level. There was a break above the 50% Fib retracement level of the downward move from the 1.3289 high to 1.3163 low (formed on FXOpen). Besides, there was a break above a major bearish trend line with resistance near 1.3240 on the hourly chart of GBP/USD. The pair is now trading near the 1.3250 level and the 50 hourly simple moving average. It is close to the 76.4% Fib retracement level of the downward move from the 1.3289 high to 1.3163 low. On the upside, an initial resistance is near the 1.3265 level. If there is an upside break above the 1.3450 resistance and the 50 hourly SMA, the price could surpass 1.3280. The main resistance is near the 1.3300 zone. Therefore, a proper break above the 1.3300 resistance could open the doors for a steady increase. The next major resistance for the bulls could be 1.3350. If not, the pair could start a fresh decline below 1.3220. An immediate support is near the 1.3200 level. The first key support is near the 1.3180 level. Any more losses could lead the pair towards the 1.3150 support zone. The next major support sits near the 1.3080 level. Read Full on FXOpen Company Blog...
Is the EURUSD heading for parity? We have all been here before. Despite the major currencies not being particularly volatile for many years, the differences between those on each side of the Atlantic is now becoming quite marked and has perhaps been the direction to watch for a considerable period of time. Today, the EURUSD pair is trading at 1.13, which is the second-lowest point in over one year. Just a month ago, at the beginning of this strong and continual period of downward movement for the 'cable' pair, analysts in senior positions in Wall Street and the City of London were beginning to consider the possibility that the EURUSD pair's value may make a return to that of 2014 when parity was almost achieved. Given that many of the more industrially developed nations within the Eurozone have become subject to further restrictions at the hands of their respective governments, confidence has been affected as market participants take into account the potential effect slower production and less effective working practices in Austria, Germany and Holland could have on the wider Eurozone's stability. In particular, Germany, which has a population of over 80 million and a traditional industry base which requires employees to attend their place of work as opposed to many large scale, high producing businesses in the Anglosphere which are often internet based or intrinsically linked to the big tech giants, therefore meaning working from pretty much anywhere would not stifle output. Germany's largest employers are heavy manufacturing businesses such as Volkswagen, Bosch and Siemens, all of which require staff to travel to their factories. Restrictions being implemented by the national government would have a direct impact on this. Whilst the US government is also talking about introducing restrictions, it has not brought in any Covid passport system yet, and has only done so for travel purposes whilst some of the European nations are doing so for access to everyday events and there is concern that this may extend to workplaces. Looking at the EURUSD pair one month ago, it was trading at a healthy 1.22 which had been the case for quite a number of months, however as the year draws to a close we are looking at a clear downward line. Just two weeks ago, the euro-Swiss franc pair fell below parity on November 1 for the first time in almost a year, echoing the same sentiment among traders. At the beginning of this month, options traders were investing in options with longer expiry dates even before the euro dropped below 1.15, showing that a conservative approach is the current default. Whether we will see parity or not is yet to be determined, however this is a really unusual downturn and has been on this trajectory for long enough to make it a real feature within the FX market. FXOpen Blog
ETHUSD and LTCUSD Technical Analysis – 16th DEC, 2021 ETHUSD: Double Bottom Pattern Above $3,600 Ethereum started this week on a mild bullish tone by touching a high of $4,169 after which the decline started pushing its prices below the $4,000 handle. We saw Ethereum touching an intraday low of $3,654 yesterday, after which fresh buying in the market pushed its prices all the way above the $4000 mark. The recovery was also backed by the Three Arrows Capital hedge fund purchasing $56 million worth of Ether. ETHUSD is slowly preparing itself for its next move against the US dollar. We can clearly see a double bottom pattern above $3,600, which signifies the end of a downtrend and a shift towards an uptrend. ETH is now trading just above its pivot level of $3,998 and moving in a bullish ascending channel. The price of ETHUSD is about to break its classic resistance level of $4,048, its Fibonacci resistance level of $4,035, and is now aiming towards the $4,200 handle in the US trading session. All the major technical indicators are giving a STRONG BUY signal. ETH is now trading above its 100 hourly and below its 200 hourly simple moving averages. Ethereum trend reversal seen above $3,600 Short-term range appears to be bullish for ETHUSD All the moving averages are giving a BUY signal Average true range is indicating LESS market volatility Ether: Bullish Reversal towards $4,200 Confirmed ETHUSD has recovered from its losses and is now moving in the consolidation phase below the $4,200 handle in the European trading session. Stoch and average directional change are indicating a NEUTRAL market. We can see a 34.50% increase in the trading volume as compared to yesterday, because the market was in a consolidation phase, and today, new buyers have entered as the bullish pattern is clearly visible. ETH has gained +4.58% with a price change of +176.90$ in the past 24hrs and has a trading volume of 26.810 billion USD. The Week Ahead Ether is now waiting for its next move against the US dollar. We can see that the price continues to hold above the important psychological support level of $4,000. The medium to long-term outlook for Ether remains bullish with targets of $4,500 to $5,000 in January 2022. This is also a time when long-term investors tend to liquidate their holdings and withdraw the profits. Because of the coming end-of-year Christmas and New Year holidays, the liquidity will remain low and the advances limited. We have detected an MA5 crossover pattern which signifies a bullish trend in the coming days. A bullish crossover pattern is also seen in the MA100. Technical Indicators: Ultimate oscillator: at 54.75 indicating a BUY Moving averages convergence divergence (14-day): at 54.07 indicating a BUY Commodity channel index (14days): at 34.51 indicating a NEUTRAL market Rate of price change: at 8.161 indicating a BUY Read Full on FXOpen Company Blog...
AUD/USD and NZD/USD Remains Supported On Dips AUD/USD gained pace after there was a clear move above 0.7200. NZD/USD is correcting gains, but dips might be limited below the 0.6750 support. Important Takeaways for AUD/USD and NZD/USD The Aussie Dollar started a steady rise above the 0.7200 resistance against the US Dollar. There is a key bullish trend line forming with support near 0.7135 on the hourly chart of AUD/USD. NZD/USD rallied towards the 0.6840 level before there was a downside correction. There was a break above a major bearish trend line with resistance near 0.6765 on the hourly chart of NZD/USD. AUD/USD Technical Analysis The Aussie Dollar started a major increase after it formed a base above the 0.7100 level against the US Dollar. The AUD/USD pair gained pace for a move above the 0.7200 for sustained upward move. The pair even broke the 0.7220 resistance zone and the 50 hourly simple moving average. It traded as high as 0.7223 on FXOpen before it started a downside correction. There was a move below the 0.7210 and 0.7200 levels. AUD/USD Hourly Chart The pair traded below the 23.6% Fib retracement level of the upward move from the 0.7093 swing low to 0.7223 high. The pair is now testing the 0.7155 level and the 50 hourly simple moving average. It is finding bids near the 50% Fib retracement level of the upward move from the 0.7093 swing low to 0.7223 high. There is also a key bullish trend line forming with support near 0.7135 on the hourly chart of AUD/USD. If there is a downside break below the 0.7135 support, the pair could extend its decline towards the 0.7100 level. On the upside, an immediate resistance is near the 0.7180 level. The next major resistance is near the 0.7200 level. A close above the 0.7200 level could start a steady increase in the near term. The next major resistance could be 0.7250. Read Full on FXOpen Company Blog...
