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On Friday the 3rd of August, trading on the euro closed down. High volatility was observed in light of the publication of the the US labour market report. July data on the number of those employed in the non-agricultural sector of the US did not meet market expectations. Although the data was below 189 thousand, the report is not bad, as the average hourly salary has grown and the indicators for May and June have been revised upwards. US 10-year bond yields fell on news of the report, with many major currencies closing in positive territory on Friday as a result. As a result of last week, major currencies closed in the red zone against USD. The greatest decline was shown by the British pound (-0.84%). Then came the euro (-0.75%), the New Zealand dollar (-0.68%), the Japanese yen (-0.23%), the Australian dollar (-0.03%), and the Swiss franc (-0.02%). The Canadian dollar was the only currency to record growth (+0.55%). US data: The number of new jobs was 157 thousand (forecast: 189 thousand). May figures were revised from 244 thousand to 268 thousand, and in June - from 213 thousand to 248 thousand. The overall revision amounted to +59 thousand. The unemployment level fell to 3.9% (previous: 4.0), which coincided with expectations. The average hourly earnings index was 0.3% (forecast: 0.3%, previous: revised from 0.2% to 0.1%). The ISM business activity index for the service sector for July was 55.7 (forecast: 59.0, previous: 59.1). Day's news (GMT+3): 9:00 Germany: factory orders s.a. (MoM) (Jun). 11:30 Eurozone: Sentix Investor Confidence (Aug). Fig 1. EURUSD hourly chart. Source: TradingView Current situation: Friday's multidirectional fluctuations once again confirm that it's pointless to make market forecasts on payrolls day. The 157th degree acted as a support. The price bounced off that area three times and now sellers are trying to test it below 1.1550. I see the pair is poised to rebound to 45 degrees (1.1558). The Stochastic Oscillator isn't favouring buyers at the moment, so it will only be safe to enter long positions if the trend line gets broken. The balance line (Lb) will act as an intermediate resistance. Now it is passing through 1.1600. The economic calendar is looking pretty scarce. There's nothing to stop buyers from inducing a correction. See more forex strategies in Alpari.com

S&P 500, Dollar, EURUSD, Gold Talking Points: A mere day after the S&P 500 earned a record high and the DXY Dollar Index broke to a multi-year low, both benchmarks put in for a reversal The FOMC minutes seemed to encourage the turn, but it didn’t exactly align to the timing of the about-face for markets Liquidity conditions remain my guiding light; but stimulus, trade war, FX intervention data and anticipation headlines will hold potential for volatility ahead RECORD HIGHS DON’T SEEM TO EARN WHAT THEY USED TO FOR THE S&P 500 Not a day after posting the technical progress necessary to qualify for technical breakouts, both the S&P 500 and EURUSD seemed to tip back into a reversal. Naturally, this abrupt directional change has more than a few eager market participants fretting that a systemic reversal has set in; but I maintain concern that the most remarkable matter is the shallow degree of conviction that continues to plague the market as a reflection of ‘summer’ liquidity. Looking to the US equity index, the slide through Wednesday seemed to generate the same degree of speculative surprise as the nominal record high earned the day before. Through it all, the medium-term (2 weeks) ATR continues to signal remarkable restriction inactivity. ‘Fear’ does historically pose a greater volatility threat than ‘greed’, but we are still some ways from signaling a market that is overriding its circumstances. Chart of S&P 500 Overlaid by VIX Volatility Index with 10-Day ATR (Daily) Outside of the S&P 500, the most recent measures of speculative charge present a clear reticence to throw weight behind unwinding or build up. From the more concentrated risk milestones, the tech-heavy FAANG and Nasdaq were in modest retreat this past session. More broadly, the breadth of speculative performance was seriously underperforming. With DAX, FTSE 100, and the Nikkei 225 slipping; the ‘rest of world’ VEU ETF was leaning back towards the floor of its rising wedge. The EEM Emerging Market ETF technically nudged its own trendline support. Carry trade in the FX column was also rousing dubious reversal threats with pairs like AUDJPY eyeing wedge/triangle support. Chart of AUDJPY with 20-Day Moving Average (Daily) IF A DOLLAR BREAKOUT CAN FALL APART, DON’T THROW TOO MUCH CONFIDENCE IN REVERSAL Where the benchmark US index was posing only a paper breakout and superficial reversal against that move, the Greenback urged a more impressive breakdown and then rebound. The scale of the DXY Dollar Index was certainly more impressive Tuesday and Wednesday, but the same shallow conviction haunts this benchmark currency. Just a day after slipping 92.50 and trading to a more-than-two-year low, the dollar posted its biggest single-day rally since June 11th to move back into the previous three-week range. While that may be a more impressive statistics in historical terms, this doesn’t pose much more confidence for intent than what the risk measures present. Chart of DXY Dollar Index with 20-Day Moving Average (Daily) Chart of EURUSD with Net Spec Futures Positioning and Consecutive Candles (Weekly) OTHER AREAS OF TARGETED VOLATILITY While the status of liquidity and the bearing of risk appetite remain my prevailing concern for their perspective on what the markets are capable of exacting, there are some interesting targeted flare-ups in other areas of the market. Trade wars for example continue to offer an important pressure with USDCNH and the Shanghai Composite stabilizing after President Trump offered a troubling perspective on the status of US-China relations. Another impressive performance would arise from gold which suffered its second-most intense single-day loss since June 2013. As far as escape velocity goes, that would seem to override the gravity of holiday conditions. I remain unconvinced. However, for those that believe the metal’s drop was just a side effect of the Dollar, an equally-weighted index of the commodity — priced in Dollar, Euro, Pound, and Yen — showed much the same drop. Chart of Equally-Weighted Gold Index in Dollar, Euro, Pound, Yen Terms (Daily) Again, TopAsiaFX has reportedly stated that another atypical area of activity to note this past session is one that seems to cater to liquidity well. EURCHF managed to urge a sharp move higher that fell outside event risk. The Swiss National Bank (SNB) has a clear mandate to try and ease the Swiss currency to support the country’s economic trade. Are they perhaps taking advantage of shallow markets to urge a speculative shift? Ahead, I will monitor event risk from Canada such as the ADP payrolls, the UK sentiment surveys (CBI and GfK), and anticipation for Friday’s August PMIs. Be mindful. GoodLuck!

On Wednesday the 5th of September, trading on the euro closed up. Market volatility was high during both the European and US sessions. At the beginning of the European session, the single currency live currency rates dropped against the dollar from 1.1608 to 1.1543. In the US session, the euro bulls pushed the session high up from 1.1608 to 1.1640. The greenback came under pressure from a rising pound, which occurred on the back of a Bloomberg report that the UK and Germany have decided to give up certain demands, which should make it easier for the sides to reach a deal. This unexpected piece of news fits in with my market expectations, although I haven’t accounted for volatility. Day’s news (GMT+3): 09:00 Germany: factory orders (Jul). 15:15 US: ADP employment change (Aug). 15:30 Canada: building permits (Jul). 15:30 US: nonfarm productivity (Q2), unit labour costs (Q2), initial jobless claims (31 Aug). 15:45 Eurozone: ECB's Lautenschläger Speech. 16:45 US: Markit services PMI (Aug). 17:00 US: ISM non-manufacturing PMI (Aug), factory orders (Jul). 17:30 US: EIA crude oil stocks change (31 Aug), FOMC member Williams speech. Fig 1. EURUSD hourly chart. Current situation: Now let’s look at the hourly chart. While the pair has deviated from my weekly projection, I haven’t removed it from the chart because the rate has now returned to its projected level on the hourly cycles. I’ve double-checked the cycles and nothing has changed. The pair just strayed from the weekly projection for a bit. Given yesterday’s pricing model, I’m prepared to entertain the possibility of a double top formation, although the general technical picture suggests a jump to the 67th degree. 1.1605 will act as a support today. The market has been swinging for the last few days, so don’t expect volatility to subside and be ready to see some full retracements of previous movements. I don’t really have any trading ideas to apply to my forecast. I think that today, everyone will be preparing for tomorrow’s nonfarm payrolls report.

On Thursday the 8th of November, trading on the euro closed down. The euro fell markedly against the US dollar after the publication of the European Commission's report, which is expected to slow the Eurozone economy in 2019. The European Commission lowered the GDP forecast in the Eurozone from 2% to 1.9%. After the meeting, the US Federal Reserve's Open Market Committee (FOMC) accelerated the pair's descent. As expected, the FOMC decided to leave key interest rates in the country in the range of 2.00%-2.25%. The Committee confirmed its forecast for a gradual increase in interest rates. The statement that risks would remain balanced was present in the September statement, and remains intact. The next meeting is scheduled for December. Another rate hike is expected later this year. See economic calendar here! Day's news (GMT+3): 10:45 France: industrial output (Sep). 12:30 UK: GDP (Q3), total business investment (Q3), industrial production (Sep), trade balance (Sep), construction (Sep). 16:00 UK: NIESR GDP estimate (Oct). 16:30 US: PPI (Oct). 18:00 US: Michigan CSI (Nov). 21:00 US: Baker Hughes US oil rig count. Fig 1. EURUSD hourly chart Current situation: Our forecast for the high and low was accurate. I did not consider the jump from the high (1.1447). I expected a fall to the trend line on Friday, while sellers passed this yesterday. In addition, there was a breakout of the upwards channel and the area around the 112th-135th degree acted as a support. I did not make a forecast for Friday due to the conflicting situation we have. The price may fall to 1.1313, or via a correctional movement under the trend line. There is no important news scheduled for today for the euro, and should the euro strengthen to 1.1375, that could cancel the bearish scenario.

By Kathy Lien. Investors sent EUR/USD to its highest level this month on the back of the European Central Bank’s monetary policy announcement. Considering that euro was trading strongly ahead of the rate decision, it didn’t take much for the currency pair to hit 1.17 and now that it has, many traders are wondering if they should fade or follow the move. To answer this question, we need to dissect Super Mario’s latest outlook – judging from his comments, we know he’s worried about growth (hence the lowered GDP forecasts for 2018 and 2019), protectionism, emerging-market turmoil and external demand. Yet EUR/USD rallied because low inflation has become less of a concern. According to Mario Draghi, domestic cost pressures are strengthening and inflation should pick up toward the end of the year and rise gradually in the medium term. The central-bank Governor’s concerns about trade tensions are also tempered by his view that global demand is strong. Despite the GDP downgrades, a healthy labor market keeps their economic outlook broadly balanced. Market sentiment and positioning is very important when it comes to trading major event risks. Had the euro been hovering near this month’s low ahead of the rate decision, traders would have latched on to the central bank’s lower economic projections. However, the possibility of a GDP downgrade was leaked on Wednesday, giving investors the opportunity to discount the central bank’s move. The recent decline in Italian bond yields also helped euro stabilize this week. So when the softer US consumer price Index was released, EUR/USD popped higher and extended its gains to 1.1700. Traders, who were looking for a reason to cover their shorts, focused on the positive elements of Draghi’s comments. They were happy that he had anything positive to say at all and relieved there was no mention of the data disappointments in Germany and Italy. EUR/USD: A Buy Or Sell? On a technical basis, the pair broke out of an 8-day long consolidation but Thursday’s rally stopped right at the 100-day and 20-week SMAs, which are natural areas of resistance. Shorter-term charts show the possibility of continued gains but that’s predicated on Friday’s U.S. retail sales report. Producer and consumer prices surprised to the downside this week with year-over-year US CPI growth slowing to its weakest pace in 4 months. While neither one of these reports will stop the Federal Reserve from tightening this month, they increase the chance that it’ll be the last hike of the year. If retail sales also surprises to the downside like economists anticipate, it would reinforce the EUR/USD’s positive bias and take the pair to 1.18, use profit calculator. However if consumer spending improves – and we think it could given the acceleration in wage growth – the record-breaking moves in U.S. stocks and stronger spending reported by Johnson Redbook, EUR/USD could sink back down to support near 1.1610. Sterling also traded higher on Thursday but not as a result of the Bank of England’s monetary policy announcement. GBP/USD actually weakened slightly after the central bank voted unanimously to leave interest rates unchanged. Its decision wasn’t a surprise considering that BoE just raised interest rates in August. The central bank expects inflation to ease next year due to an energy price cap but pay could be stronger due to a healthy labor market. Ongoing tightening will be needed according to the central bank but future rate hikes will be limited and gradual. It wasn’t until the release of U.S. CPI that GBP/USD started to strengthen. The pair eventually broke above 1.31 on the back of the ECB’s optimism and general USD weakness. Looking ahead, Brexit negotiations continue to go well and we think that they will carry GBP/USD to 1.32. The Australian and New Zealand dollars stretched higher while the Canadian dollar held back. AUD and NZD benefitted from the general improvement in risk appetite and Wednesday night’s stronger-than-expected labor-market report. A total of 44K jobs were created in August, the majority of which were full time. The Australian economy has held up remarkably well despite slower Chinese growth and China’s troubles with the U.S. but eventually the challenges faced by Australia’s largest trading partner could come back to haunt the currency. The Canadian dollar failed to participate in Thursday’s rally because there haven’t been any breakthroughs in trade talks between the U.S. and Canada. Apparently there were reports on Thursday that Trump told donors he would drop Canada from the U.S.-Mexico-Canada pact if they don’t agree to his terms. The talks haven’t broken down completely but Canadian Foreign Minister Freeland was the first to admit that plenty of work still needs to be done.

Still EURAUD market has the possibility to come down. So it is a strong opportunity to the sellers that support level is strong and according to the moving average and trend line it is blatant. So to the sellers the entry point will be at 1.4987 and the closing point will be at 1.4772.

During the press conference, Draghi said that the ECB had upgraded their economic forecasts for GDP and inflation growth. Projected GDP growth in 2018 has been revised upwards from 1.8% to 2.3%, while projected inflation has been revised from 1.2% to 1.4%. Draghi added that if the conditions for economic growth get any worse, the ECB would expand its asset purchasing program. The US dollar rose against most of the majors after positive statistics on employment and retail sales. The number of initial jobless claims last week fell by 11,000 to 225,000. The retail sales index grew by 0.8% against a forecast of 0.3% and a previous reading of 0.5% (revised from 0.2%). Yesterday, I wrote that technical analysis doesn’t work when the heads of central banks a speaking or when large blocks of economic data are released. Yes, the price does take all events into account, but only post factum. Market expectations often diverge from the actual outcome. The past is a static picture. It doesn’t change under any circumstances. We can analyse a price’s historical behaviour, and simulate different scenarios, but the future can be shaped by us as fundamental data and statements from officials change market expectations in forex investment calculator. The W-model is off the cards. If the euro starts to rise again, we could see the formation of an upwards impulse towards the TR2 trend line. For that to happen, the euro needs to move from its current level and rise above the 45th degree, which is at 1.1819. At the time of writing, the euro is trading at 1.1784. This is close to the LB balance line. The price is in equilibrium on the hourly timeframe. My forecast has the euro dropping to the lower boundary of the A-A channel. The stochastic has reversed downwards, so I’m expecting the euro to open down in Europe.