Forex Update

EUR/USD: Downtrend Continuation to 1.2700

The EUR/USD made a three wave rally in this week which was expected in wave 4, but pair is already turning lower again after the completed zig-zag at 1.3000 psychological level. We can see that the price broke through the lower side of a corrective channel, which is a very important evidence for further EUR/USD weakness, this time to 1.2680/1.2730 for wave 5. The critical level now stands at 1.3000; the bearish trend is below.

Forex Analysis by Gregor Horvat at ForexPros. com

USDCHF: Sideways Within Uptrend; Be Aware Of a Break Higher

The USD/CHF has been slow, choppy and sideways over the last few days. This is indication of the character of a corrective price action. We think that the USD/CHF is trapped in a wave four position, which could be forming a triangle in 0.9580-0.9760 range. If that's the case, then the pair will stay sideways another day or two and then break sharply higher, into wave 5) that could lift the pair to 0.9830/0.9860 region based on our Fibonacci projected levels.

Forex Analysis by Gregor Horvat at ForexPros. com

USD Index: Corrective Pullback To 83.30/83.50 Within Larger Uptrend

The USD index is trading lower from recent highs, which now appear to be start of a deeper corrective retracement. We are tracking the wave 4) pullback now, as we can already count a completed five sub-waves in red wave 3). As such, current bearish waves are only temporary, and should prove corrective.

Ideally we should see three sub-waves down in the wave 4 to 83.30-83.50 area where the market may find a support; around former wave four, 38.2% Fibo level and at base channel.

Forex Analysis by Gregor Horvat at ForexPros. com

EUR/USD: Bearish Cycles Remains In Play

The EUR/USD reversed slightly higher on Thursday from 1.2840 support but not for long. Recovery found resistance very soon, so it was probably just a fourth wave within larger wave 3 down.

Our bias remains unchanged and we are looking for a weaker EUR/USD, towards 1.2800 as a next projected target, where we could see a temporary low and a wave 4 pull-back. Short-term critical level is at 1.2935, as wave four must not trade into the territory of a wave one.

S&P500: Intra-Day Resistance Comes In At 1655

The S&P 500 is still trading higher, which is not a surprise as we are tracking an impulsive rally that should be sub-divided by five waves. Well latest corrective retracement to 1623 was wave (iv) so current new leg up should be wave (v) final leg in impulsive trend that could stop around 1655. Keep in mind that after every five waves correction follows, so if our count is correct then we will see a reversal back to 1623 swing zone.

Traders who are long will make tight stops, traders on the sideline will wait pull-backs. S&P 500

EURUSD: A Bearish Set-Up?

EUR/USD broke sharply lower last week after a break through the trend-line support connected from April lows.

This break usually leads to a continuation of a larger trend which in our case is down. For now, decline from the high is still in three waves, but we will go with one-two one-two scenario because of a larger bearish view for the EUR. With that said, we are bearish now and expect 1.2935 break that will put 1.2800 level in play for this week. Resistance for current wave (ii) comes in at 1.3030 followed by 1.3070.

On the other-hand, we will turn bullish only if we see an impulse back up to 1.3130 that will make wave (2) rally even more complex. EUR/USD

USD/JPY Could Be In Final Stages Of An Uptrend

The USD/JPY broke higher last week, out of a triangle pattern that we have been tracking since mid-April. This triangle has been placed in wave four, so we must be aware of a bearish reversal in the next few days/weeks; this type of patterns always occurs prior to the final move of the larger trend. So current leg up should be our final leg; most-likely wave 5 of an ending diagonal. However, each leg in ending diagonal should be sub-divided at least by three waves, so that current pull-back is probably wave (b) with wave (c) yet to come - and that could hit the 103.00/103.50 level. After a completed ending diagonal we will be looking for a sharp reversal lower. A fall back beneath 100 would be a first but important sign for a completed ending diagonal and weaker prices ahead.

EUR/USD: Broken Daily Trend-line Puts The EUR In Bearish Mode

The EUR/USD fell sharply last week, closing well below 1.3034 swing low support which puts bearish price action in play. In fact, a decline from 1.3195 was very strong and sharp, which in many cases represents an impulsive wave and direction of a trend. As such, we need to respect this price action so it’s better to stick to the downtrend and look for possible short entries.

From an Elliott Wave perspective we are tracking one-two, one-two set-up with sub-wave (ii) now underway to 1.3020/50 resistance area.

The reason why the bearish price action could continue is a broken channel line on the Daily chart as shown below. We would turn bullish again only if the 1.3130 level is passed.

India's forex reserves down $2 billion

India's forex reserves down $2 billionMumbai, May 11 : India's foreign exchange (forex) reserves decreased by $2.06 billion to $294.30 billion for the week ended May 3, according to data released by the central bank.

The reserves had risen by $1.60 billion to $296.37 billion for the week ended April 26.

The foreign currency assets (FCA) - the biggest component of the forex reserves - fell by $299.7 million at $263.72 billion, according to the weekly statistical supplement released by the Reserve Bank of India.

The FCA had risen by $1.61 billion at $264.02 billion in the previous week.

Euro Gains Strength on SME Lending

Euro Gains Strength on SME LendingEuro gained compared to USD after the statement of ECB' Mersch regarding the ABS market. European agencies are looking at ways to restart ABS market to increase the lending for SME sector.

The Euro gained further ground after the statement. There was speculation and the Euro was trading at 1.3160 compared to USD.

In terms of GBP/ USD, the demand was higher before the BoE policy decision today. GBP/USD was at 1.5539.

Indian currency lost further ground to USD after a good start for the day. USD-INR was at 54.25 while Euro-INR was at 71.40.

USD/CAD Could Look For A Support At Trendline From 2012 Low

The Canadian dollar was one of the best performers last week, gaining strongly against the USD. We can see a sharp fall on the USD/CAD, back to the 1.0050 area, but still only into a third leg of decline from 1.0340, which is a structure of a contra-trend movements.

GBP/USD: Trying To Form Bearish Reversal

On cable we can count five completed waves-up in wave C that show signs of a top around 1.5606 because of the ending diagonal in wave 5, divergence on the RSI and now also accelerating price action below the trading channel, which suggests the pair is in the early stage of a minor wave (iii). Further weakness toward 1.5450 would be a strong and very important sign for further GBP/USD top.

AUD/USD Looks Bearish For Now

AUD/USD is under pressure, having fallen sharply in the last 12 hours on speculation of possible coming rate cut from the RBA after worse than expected Chinese PMI figures (50.6 vs. 50.8 exp). Pair also extended lower after a sell-off on US stocks futures caused by bad U. S. ADP Nonfarm Employment numbers; 119K vs. 154K.

From a technical point of view AUD/USD has a nice pattern here; three waves up to 1.0380 followed by a sharp drop through the lower support line of a corrective channel. That’s a very nice clear bearish signal for the pair, so traders can consider shorts while the market is trading below critical level. We are considering new alert for members but it seems we will have to wait on FOMC statement and rate decision first.

USD Index Breaks Below 81.70 Which Opens The Door For 81.00

The USD index extended its losses yesterday, falling through 81.70 swing low from mid-April, which makes a corrective decline from 83.50 much more complex than first thought.

We are now tracking a new five wave decline from 83.20, which represents wave (C), a final leg of a zig-zag in wave E that could look for a bottom around 80.80-81.20 area.

India's forex reserves down $485 mn

RBIMumbai, April 27 : India's foreign exchange (forex) reserves decreased by $485.9 million to $294.76 billion for the week ended April 19, according to data released by the central bank.

The reserves had risen by $1.40 billion to $295.24 billion for the week ended April 12.

The foreign currency assets (FCA) - the biggest component of the forex reserves - fell by $489.2 million at $262.41 billion, according to the weekly statistical supplement released by the Reserve Bank of India (RBI).

The FCA had risen by $1.38 billion at $262.90 billion in the previous week.

Crude Oil Is Looking Impulsive On the Intra-day Basis; Could See $93.00

Oil is forming an impulsive price action from an 87.87 swing low. The reason is recent strong reaction towards the 92.00 figure yesterday - very strong and sharp in a short period of time. That's the personality of a third wave, so we think that the market is forming a five wave pattern.

With that in mind, be aware of more upside, this time towards the 93.00 mark. Current sub-wave four may look for support around the 91.00 level. The market will remain in bullish shape as long as 89.92 support is not breached.

Forex Analysis by Gregor Horvat at ForexPros. com

AUD/USD: Prices Remain Trapped In Triangle Pattern

We turned bearish on AUD early last week after a daily close beneath the trend line connected from March lows.

Notice that recovery from there was made only in three legs, which is the corrective price action, so we are now looking for even weaker AUD as wave E in a big triangle wave IV) appears incomplete.

Ideally market is now in a second zig-zag headed beneath 1.0100 where we see a rising trend line connected from the 2011 low plus a 78.6% retracement compared to wave D.

GBP/USD Could Turn Bearish This Week

GBP/USD has extended higher in the last two weeks after its broken trend-line connected from above 1.6300. As such, we labeled its recent big fall as a completed five wave fall in wave I, followed by a corrective bounce which we think is wave II.

That said, recovery from the lows is just temporary so we must be aware of a new sell-off once the pair breaks through the lower support line of a corrective channel. A close somewhere around 1.5050 or lower would suggest that the rally is done and weakness is underway.

Forex Analysis by Gregor Horvat at ForexPros. com

India's forex reserves up $1.40 billion

central-bank-indiaMumbai, April 19 : India's foreign exchange (forex) reserves increased by $1.40 billion to $295.24 billion for the week ended April 12, according to data released by the country's central bank.

The reserves had risen by $1.19 billion to $293.84 billion for the week ended April 5.

The foreign currency assets (FCA) - the biggest component of the forex reserves - grew by $1.38 billion at $262.90 billion, according to the weekly statistical supplement released by the Reserve Bank of India (RBI).

The FCA had risen by $1.78 billion at $261.51 billion in the previous week.

EURUSD Could Extend To 1.2900/1.2950 After Broken Support Line From 1.27

The EUR/USD reversed sharply lower yesterday from 1.3200, clearly in impulsive fashion beneath rising trend-line from 1.2745 and as well as wave B) swing low. This is a very clear bearish price action that should send prices even lower in minimum three waves, possibly to 1.2900/1.2950 in the next few trading days. Meanwhile, the pair must not get back above 1.3200 critical level, but could see a pull-back to 1.3110 where a broken trendline may become a resistance.

Forex Analysis by Gregor Horvat at ForexPros. com




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