Forex Update

EUR/USD: Prices In A Corrective Retracement

EUR/USD: Prices In A Corrective RetracementEUR/USD was trading higher for almost the whole last week but then found resistance on Thursday and Friday when pair declined for almost 100 pips.

This reversal in price should not be a surprise as the wave pattern shows a five wave rally from 1.3105 swing, so correction has obviously been expected.

Corrections are three wave patterns that usually retraces back to the wave four termination point.

In our case that comes in around 1.3475 so pair could fell further in days ahead or at least stay sideways.

Forex Analysis by Gregor Horvat at ForexPros. com

India's forex reserves drop by $1.11 billion

India-forexMumbai, Oct 5 : India's foreign exchange (forex) reserves fell by $1.11 billion to $276.26 billion for the week ended Sep 27 as compared to $277.38 billion in the previous week due to a sharp drop in the value of foreign currency assets, official data showed.

The forex reserves has declined sharply after a significant gains in the previous two weeks. The reserves had increased by $277.38 billion and $544.7 million respectively in the previous two weeks.

South Korea forex hits new high

Seoul, Oct 4 - South Korea's foreign reserves hit another record high in September due to the depreciation of the US dollar, central bank data showed Friday.

The reserves reached $336.92 billion, up by $5.83 billion compared to August, according to the Bank of Korea, reports Xinhua.

The reserves recorded the highest monthly gain since October 2011 when the figure increased by $7.59 billion.

Sales of foreign currency stabilization bonds by the South Korean government also contributed to the growth in the foreign reserves.

Bangladesh forex reserves reach $16.15 bn in September

Bangladesh-forexDhaka, Oct 3 : Bangladesh's foreign exchange reserves reached $16.15 billion at the end of September this year, Xinhua reported Thursday citing the country's central bank.

A Bangladesh Bank official, who preferred to be unnamed, said that "the country's foreign exchange reserves stood at $16,154 billion at the end of the last month after reaching $16,250 billion at the end of August".

Bangladesh's foreign exchange reserves hit a record high of over $16 billion in August, reflecting the country's strength from the economical and financial point of view.

USD/CAD: A Bearish Structure

USD/CAD: A Bearish StructureCanadian Dollar (USD/CAD) is recovering from 1.0180 but in corrective fashion labeled as wave (iv) that is part of a larger incomplete five wave decline from August high.

We can see that rally from 1.0180 is in three waves that retraced back to former wave four for 38.2%-50% retracement area. As such, that's an ideal zone for a reversal back to previous lows; 1.0280 break will confirm the bearish case for this market, while rise above 1.0450 will invalidate it.

Forex Analysis by Gregor Horvat at ForexPros. com

More USD Weakness Expected After US Government Shutdown

More USD Weakness Expected After US Government ShutdownUSD is sharply down across the board after the US government shutdown.  Some would think that US stocks futures will turn lower, but we in fact can see higher prices since the news came out.

However, we may see a risk aversion (lower stocks) if government will be shutdown for too long, lets say around 3 weeks.  In the past the longest close was 21 days, back in 1995 (source Wikipedia).  The longer the shutdown will last, more nervous investors will become.

German Dax and EUR/USD Could Turn Bullish Soon

EUR-USDMarkets gaped on Sunday, particularly against the EUR after five ministers in Berlusconi’s party have resigned from the government coalition. Stocks futures are also lower, but based on German Dax wave structure and the USD Index price action remains in downtrend while stocks could form a bullish reversal.

Last week we posted the 4-hour bullish count for German DAX to our members and mentioned a possible retracement to open gap zone. Well, price is now lower and very close to that “reversal zone” so be aware of a move higher especially if we consider only a three wave pull-back from latest high which we think it was a wave four.

India's forex reserves jump by $2 bn

India-forex-reservesMumbai, Sep 28 : India's foreign exchange (forex) reserves jumped by $2.03 billion to $277.38 billion for the week ended Sep 20, the biggest weekly gain in nearly two years, on the back of concessional swap facilities offered to banks by the Reserve Bank of India (RBI).

The forex reserve has increased sharply for the second consecutive week. It had jumped by $544.7 million in the previous week.

According to RBI's Weekly Statistical Supplement, the country's foreign currency assets, the biggest component of the forex reserves, increased by $1.97 billion to $249.22 billion for the week ended Sep 20.

USD Index: Rally Looking Corrective, Bearish Waves To Resume?

USD Index: Rally Looking Corrective, Bearish Waves To Resume?The markets are still very slow and choppy in tight ranges, so our view remains unchanged. We think that FX pairs are forming just a corrective price action within larger trend against the USD.

Elliott Wave Forecast For EUR/USD And USD/CHF

The market has been very slow for the last few sessions. We suspect that the pairs are trapped in a corrective price action, and that will send the USD lower in the near-term, particularly against the EUR, GBP and CHF. Commodity currencies such as the AUD and CAD could stay under pressure, or maybe sideways, while metals, oil and other commodities are weakening.

Our focus is still on the EUR/USD where we see a three wave move from the top which we think its corrective wave (iv), that already tested 38.2% retracement area so uptrend could resume soon up in wave v).

EUR/USD 1h EUR/USD 1h Elliott Wave Analysis

EUR/USD Could Move Above 1.3600

EUR/USD Could Move Above 1.3600EUR/USD closed above 1.3500 figure last week which suggests more upside this week. The reason for the bullish outlook in the short-term is a sharp rally from 1.3320 low which appears to be a third leg within a third, based on the personality of the move.

Recently a third leg stopped at 1.3565 so we suspect that current contra-trend movement is wave iv that could look for completion around the upper trendline of a base channel.

India's foreign exchange reserves rise by $544.7 mn

India's foreign exchange reserves rise by $544.7 mnMumbai, Sep 21 : India's foreign exchange (forex) reserves increased by $544.7 million to $275.35 billion, led by healthy rise in core currency assets, the Reserve Bank of India (RBI) data showed.

According to the central bank's Weekly Statistical Supplement, the country's total reserve stood at $275.35 billion for the week ended Sep 13, posting a weekly gain of $544.7 million.

The forex reserves had declined by $685.1 million in the previous week.

Elliott Wave Forecast: US Bonds Turn Into A Correction?

I hate to say this again, but major pairs on the FX market place still have a very unclear price action and no direction at all on the intra-day basis. It's probably "calm before the storm" ahead of highly anticipated FOMC press conference of the last few years, when Bernanke could announce tapering. Statement will be out at 18:00GMT and press conference will be scheduled 30 minutes later.

Gold's Elliott Wave Pattern Points Lower

Gold's Elliott Wave Pattern Points LowerGOLD turned bearish last week and made a sharp decline toward 1300 with the personality of an impulsive price action; a strong and large move in a short period of time. As such, we believe the metal is in a new bearish period, which could bring price back to June lows. We will be looking lower as long as 1434 is in place.

That said, to take advantage of the current down move it’s important to keep an eye on intra-day wave patterns and any evidences of a corrective or contra-trend patterns that will give you an opportunity to join the trend.

EUR/USD Gaps Higher, USD/JPY Moves To The Downside

EUR/USD Gaps Higher, USD/JPY Moves To The DownsideMarkets gapped against the USD on Sunday, away from Friday's close price. We can see higher prices on EUR/USD, US bonds and also US stocks futures after Lawrence Summers withdrew from the contest to succeed Ben Bernanke as the next chairman of the Federal Reserve. We have also seen a gap down on Crude Oil Futures after the U. S. and Russia have agreed on a framework for Syria to destroy its chemical weapons stockpile by the middle of 2014, as by media on Saturday.

India's forex reserves down $685 mn

India's forex reserves down $685 mnMumbai, Sep 14 : India's foreign exchange (forex) reserves decreased by $685.1 million to $274.80 billion for the week ended Sep 6, according to data released by the Reserve Bank of India (RBI).

The reserves had fallen by $2.23 billion to $275.49 billion for the week ended Aug 30.

The foreign currency assets (FCA) - the biggest component of the forex reserves - fell $656.5 million to $246.74 billion, the weekly statistical supplement of the central bank showed.

The FCA had declined by $3.08 billion at $247.40 billion in the previous week.

GBP/USD: A Bearish Reversal?

GBP/USD: A Bearish Reversal?GBP/USD is in bullish mode and reached our projected zone for this week; 1.5800-1.5900 which is actually a very important resistance zone in combination with the wave principle and Fibonacci levels.

USD/CAD: Two Scenarios, Both Bullish

USD/CAD: Two Scenarios, Both BullishUSD/CAD is in bearish mode since Friday which means that move from 1.0243 was actually made only in three waves, so this rally is now part of a larger complex correction, either a flat or a triangle. For now we will focus on a triangle but need to see an evidence of a low around 1.0300 zone and rally back to 1.0468 to confirm idea of a contracting triangle.

GBP/USD: Patiently Waiting On Bearish Reversal

On GBP/USD we are tracking a corrective rally from March low, which is a complex pattern most likely a flat in wave II. And it seems that pair could reach levels above 1.5750 this week after recent bounce from the lower side of a current upward channel.

However, this new high will be just a final leg, fifth wave within wave (C), so larger bearish trend remains in view but market just needs more time than firstly thought.

EUR/USD: Temporary Pull-Back Within Larger Downtrend

EUR/USD: Temporary Pull-Back Within Larger DowntrendEUR/USD found a support on Friday after the NFP report around the 1.3100 area from where we have seen 80 pip rally back to the wave 2-wave 4 trendline.

Usually when this occurs it means that five wave decline is complete and that market reversed into a temporary correction. As such, we are now tracking an A-B-C retracement back to 1.3225-1.3250 region before we may turn bearish again. In that zone we can also see a former wave four that may react as a reversal zone and cause a new sell-off for the pair.

Forex Analysis by Gregor Horvat at ForexPros. com

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