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Sunday, November 3, 2013

Trade Recommendations: WC 4th November 2013



  
GBPUSD






Last week saw open the Asia session at 161610 closing the week just under 159211 in a surge of selling during the NY session. This week, the BOE will announce their Interest Rate Decision and Asset Purchasing Facility which currently sits at £375. The more recent releases, have seen the BOE refrain from making adjustments to the Asset Purchasing Facility, which in terms of price movement, has translated into prompting a bullish move for the the pair post release. 

Fundamentally, the UK is still on track with its recovery, holding some to speculate that adjustments to Monetary Policy may come earlier than forecasted. This has kept the Pound on the radar for a bounce back in the future, given that economic data continues to support a progressive improvement.  Looking at the upcoming trading sessions, we may see GU consolidate ahead of its events later this week. However movements in the USD may sway this in the interim, which if this  the case, should see GU find support at nearby key levels. 




Level to Watch:
159405
What to look for:

BUY:  159660 (break above)
SELL: 159081 (break below)

A break above 159405 (23%) will see 159660(DP)) as the next test point. A break above this level will then promote a bullish  move towards 160130 (76%) which if price breaks above this level, will see GU aim for higher targets upon breaking resistance at 160454. Targets are: 160230, 161227 and 161802.

Alternatively, there are 3 price levels that will still keep GU within a bearish view.  The first capping level is 159405 (23%), followed by 159660 (DP) and 160130 (76%). A break below 159405 followed by a break below 159081 will see the following targets come into view: 158595 followed by 158031 and then 157011.

Bullish Levels:
T1: 160230,  T2: 161227 T3: 161802
Bearish Levels
T1: 158595, T2: 158031, T3: 157011
Potential Catalysts:
PMI Construction (Nov 4), Markit Services PMI (Nov 5 ), Industrial Production (YoY)(Sept), Manufacturing Production (Nov 6) NIESR GDP (Nov 6), BOE Rate Decision, BOE Assest Purchase Facility (Nov 7), Goods Trade Balance, Total Trade Balance (Nov 8)




 


EURUSD






Quite an eventful week for the Euro after ascending to a high of 138110, which rejected promptly, sending EU spiraling down to a low of 13492 during the last NY session. The recent appreciation of the Euro has already spurred  a reaction from some European  officials  who have voicing their public concern, urging the ECB to take action. Meanwhile,the Euro Zone still continues to face its challenges in meeting their economic milestones. More recently, are talks circulating that the Euro Zone may be travelling down the same path as Japan as "deflation" now becomes the new topic of conversation.  This has prompted many to think the ECB will now consider cutting Interest Rates as the ECB do what is necessary to avoid a more detrimental outcome. This along with profit taking is what led to the grand slide  from the 138 region, as investors and traders ultimately lost faith in  holding longs over the  138 price mark.

Therefore, this now strengthens the case for a bearish Euro and personally, I am still bearish on the Euro until otherwise  noted and believe it does hold the potential to see 132, 130 and possibly lower, looking ahead. We have the Economic forecasts due this week from ECB, which may provide some sort of indication or clarity over their views regarding the  major economy.


Level to Watch:
135054 (23%)  / 135630 (76%)
What to look for:

BUY:  13507 / 135888 ( break above)
SELL: 135599 (break below)


1st Trade: Buy on break above 135054 with a target of 136530.

Second Trade:

Key Level to watch: 135630

Currently price is trading near the previous day low at 134880. Having closed NY lower and Asia looking to continue A break above  135630 will see 135888 as the next resistance level. A break above 135888 will then promote the following targets: 136528 followed by 137039 and then 137805.

Breaking above 137805 will see EU re-test the previous highs with 138260 as the next target. Breaking above this level places see EU resume its bullish trend prior to its decline late last week.

Alternatively,  a rejection of the 135628 price level will see EU look for support towards 135054(23%).   A confirmed break through the 23% level, will then promote a continuation of the current bearish move with the following targets in view: 133907 followed by 133686 and then 133009. Breaking below 13309 will target the following levels: 132656, 132509, 131380.

Bullish Levels:
T1: 136528, T2: 137039   T3: 137805
Bearish Levels
T1: 133907,  T2: 136860   T3: 133090
Potential Catalysts:
Markit Manufacturing PMI (Nov 4), EC Economic Growth Forecasts, PPI (Nov 5), GER Markit Services, GER Factory Orders (Nov 6), GER Industrial Production, ECB Interest Rate Decision, ECB Monetary Policy  Statement and Press Conference (Nov 7), GER Current Account, GER Trade Balance (Nov 8)        




   




AUDUSD



The start of Asia saw AU re-test and reject the previous day low with price breaking above DP and the 76% (94730) upon retail sales released earlier this morning. However with the RBA announcing the cash rate decision tomorrow, a surge to new highs may be kept on hold until tomorrow's event. AU  is another pair tipped to take the lead with economic recovery. However recent events have inspired an adverse short term view as the pair declined on the back of RBA commentary, coupled by strength in the USD. Unlike the other majors, AU has fought the 9480 level a few times during the more recent intra-day sessions having found support towards the lower region of the 94 price range.

With the Interest Rate Decision due tomorrow, there is an expectancy that the RBA will keep rates on hold in light of supporting data figures showing improvements in various sectors of the economy. In the upcoming London and NY sessions, we will more than likely see AU consolidate ahead of  its upcoming major event, otherwise it may jump on the bandwagon of market sentiment should  we see something move the majors against the USD collectively. This will see AU once again take a free ride until the RBA take the spotlight tomorrow.


Level to Watch:
94730
What to look for:

BUY: 94890(break above)
SELL:94583(break below)

The start of Asia has seen AU re-test and reject the previous day low with price breaking above DP and the 76% (94730) upon retail sales released earlier this morning. However with the RBA announcing the cash rate decision tomorrow, a surge to new highs may be kept on hold until tomorrow's event.

A break above 94890 will see AU reach for the following targets: 94990 followed by 95620 and then 96004.

Alternatively, should AU break back below  94730(76%), the next support level to watch is 94583 (DP) followed by 94370 (23%). Breaking below the 23% level and 94210 (previous day low) will see the following targets come into view: 93960 followed by 93630 and then 93534.



Bullish Levels:
T1: 9499,  T2: 95620 , T3: 96040
Bearish Levels
T1: 93960,  T2:93630,  T3: 93534
Potential Catalysts:
TD Securities Inflation (Nov 03), House Price Index, AIG Performance of Services Index (Nov 4), RBA Interest Rate Decision, RBA Statement (Nov 5), Trade Balance (Nov 6), Unemployment Rate, Employment Change, Full-time employment(Nov 7), RBA Monetary Policy Statement (Nov 8) 








USDJPY



Last week saw UJ summit to new heights as it embarked on an exciting journey to new highs from an open of 97595 to closing the week leaning towards 99 at a final price of 98664.  This is also a full week of economic data for the USD, including NFP and the Unemployment rate. We should see some decent movement on the back of the important events this week. In regards to the US, tapering is still a topic on the table, with speculation as to whether the US Fed will finally set December as the commencement month. Friday's NY session should be interesting, especially following the round of earlier economic releases from the other currencies.

Looking at Japan, "the likelihood of near-term easing is limited, while the likelihood of additional easing next year remains" according to BOJ Governor Kuroda. So far Japan is showing improvements towards rising inflation which is a positive for the economy. This should see the Yen back on track and contained from further appreciation in the future.


Level to Watch:
98598
What to look for:

BUY:  98844 (break above)
SELL: 98446 (break below)


Look for price to move back to 98598 first. Once this level has been re-tested, a break above 98844 will promote bullish momentum opening up the following targets: 99060 followed by 99175 and then 99361. A break above 99361 will see the next set of targets come into view: 99478, 99706 and then 100113. 

Alternatively, a break below 98598 (76%) will see the first test of support at 98407 followed by 98048 (23%). Breaking below the 23% level will see 97802 as the next support level.

Breaking the previous day low will then see the following targets come into view: 98009 followed by 97787 and then 97379. Breaking below 97379 will see UJ target 96969.
   

Bullish Levels:
T1: 99060, T2: 99175, T3: 99361
Bearish Levels
T1: 98009, T2: 97787, T3: 96969
Potential Catalysts:
US Factory Orders (Nov 4), US ISM Non-Manufacturing PMI (Oct), JPY BOJ Monetary Policy Minutes (Nov 5), Mortgage Applications (Nov 6), US GDP, US Initial Jobs Claims, US Personal Consumption Expenditure, US Core Personal Expenditure, US Consumer Credit Change, JPY Foreign Bond Investment, JPY Foreign Investment in Japan stocks (Nov 7), US Average Hourly Earnings, Average Weekly Hours, US NFP, US Personal Income, US Consumer Personal Expenditure Price Index, US Personal Spending, US Unemployment Rate, US Reuters/Michigan US Consumer Sentiment Index (Nov 8)


Please note that all trade set ups provided in this post  are suggestions only and no responsibility will be taken for any loss of money in the FX markets. If you have any feedback or comments, please feel free to leave a comment or email liveforextradingmarketanalysis@gmail.com.

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