Forex News from Forexminute.com

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GBPUSD has been forming higher lows and lower highs, creating a symmetrical triangle pattern on its 1-hour time frame. Price recently bounced off the triangle support and looks ready to make another test of resistance.The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside, which suggests that the triangle resistance around 1.3200 could keep gains in check. Stocahstic is almost in the overbought region but seems to be turning lower, indicating that sellers are ready to push price back down again.Increased selling pressure could lead to a downside breakout, possibly pushing GBPUSD lower by 700 pips or the same height as the triangle formation. However, if buyers take over, price could push past the triangle resistance and rally by 700 pips as well.Event risks for this setup include the release of the US advanced GDP reading for Q2. A growth figure of 2.6% is eyed, nearly thrice as much as the 1.1% growth seen for the first quarter of the year. Stronger than expected data could keep expectations of a Fed rate hike in play, pushing the dollar higher against its counterparts.Earlier in the week, the UK printed a stronger than expected Q2 GDP reading of 0.6% versus the projected 0.5% expansion and the previous 0.4% reading. However, this failed to spur a strong pound rally since it reflects economic performance prior to the EU referendum. Traders paid closer attention to sharp fall in CBI realized sales from 4 to -14 instead.The FOMC statement came in line with expectations since Fed officials kept policy unchanged but highlighted the progress in the US economy. This spurred risk appetite after the announcement, weighing on the safe-haven dollar, but demand for the Greenback soon resumed in the later sessions.

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One might have expected tumult on the American markets as the country’s presidential campaign hots up, but traders will be interested to note that the dollar has actually risen against the yen this week.

With an upbeat message expected from the nation’s Federal Reserve ahead of its upcoming meeting, the dollar has proven buoyant, and now investors are keen to see whether more of the same can be expected.

The Dollar Rises

Forex is not a game for the simple man, and the complexities of the currency markets will always keep us guessing. Little surprise then that the dollar has bucked the trend seen amongst most currencies this week, and been in positively glowing good health.

Inching up against the yen on Monday, it managed to maintain a near four-week high against the euro in the wake of Brexit uncertainty.

The pattern emerges ahead of imminent meetings for the Bank of Japan and the U.S. Federal Reserve, both of which are expected to be dollar-positive.

This seems to be a direct result of improved economic signals and a bounce in job numbers for June, which make the Fed one of the few global central banks to have positive data to present.

Speculation around Japan’s Monetary Policy

America’s good fortune is in direct contrast to the ill winds surrounding Japan’s economy, with many speculating that the nation will ease its monetary policy. This comes after a month spent listening to leading figures in the country state that they will not finance either consumer or business spending more directly.

These factors indicate an imminent downturn for the yen, with all eyes focused on the decisions that these two central banks will make. As London-based strategist Richard Cochinos explains: “The macroeconomic outlook is 100 per cent focused on the Fed and the Bank of Japan.”

Indeed, the main sentiment amongst investors seems to suggest that additional quantitative easing is expected, accompanied by a boost in the value of the dollar, an observation that Mr Cochinos agrees with: “Short-term capital is positioning for dollar upside.”

However, he has cautioned that: “To retain significant upside, for it to get above 110 yen, you’re going to have to do more than just increase quantitative easing.”

With meetings for both banks looming on the horizon, it will not be long before we see whether or not he is proved correct. For now, however, all that you can do is keep a close eye on the markets to see which direction they begin to take.

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BTCUSD has been selling off recently but it looks like bears are getting exhausted from the drop. Price has failed in its last two attempts to break below the $645 level, creating a double bottom pattern on its 1-hour chart.

This is a classic reversal signal, although price has yet to close past the neckline around $665 before confirming that an uptrend is in order. For now the 100 SMA is below the 200 SMA so the path of least resistance is to the downside. In addition, the 200 SMA appears to have held as a dynamic resistance area.

However, the gap between the moving averages is narrowing so a crossover could be possible. In that case, more bulls could increase the upside pressure and likely take BTCUSD up to the highs around $680 or higher.

Meanwhile, RSI is on middle ground, barely providing any strong clues on direction. Stochastic is heading lower so BTCUSD could follow suit and make another test of the lows at $645 or even go for a break lower.

The FOMC decided to keep monetary policy unchanged as expected while issuing a slightly upgraded assessment of the US economy, particularly when it comes to employment and household spending. Market watchers continue to expect a rate hike probably in September, which suggests that the dollar could stay supported against its rivals until then.

The US is still set to print its Q2 GDP reading before the end of the trading week and a 2.6% expansion is expected. This is a much faster pace than the first quarter’s 1.1% growth figure, confirming that the US economy is on much better footing. Still, if the report is enough to spur risk-taking, further gains in bitcoin could be possible as it was seen after the FOMC decision.

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GBPJPY recently broke below support at the 139.00 major psychological level then dipped to the 136.00 area before pulling up. Applying the Fib tool on the latest swing high and low on the 4-hour time frame shows that the 50% level lines up with the broken support, which might now hold as resistance.This area also lines up with the moving averages, which usually hold as dynamic inflection points. The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. Stochastic is heading south so GBPJPY could follow suit.In that case, GBPJPY could eventually hit the lows at the 136.00 area or even go for new lows. A higher pullback could still find resistance at the 61.8% Fibonacci retracement level closer to the 140.00 handle.Data from the UK was stronger than expected yesterday, as the GDP showed a 0.6% economic expansion versus the projected 0.5% growth figure and the previous period’s 0.4% reading. However, reports from Japan suggesting that the government is ready to dole out a larger economic stimulus package than initially expected drove the yen lower.Price could continue to consolidate ahead of the BOJ interest rate decision, as traders refrain from taking any large positions ahead of the actual announcement. A conservative increase in stimulus could still lead to yen gains while an aggressive easing program could lead to sharp losses.Prior to the actual BOJ statement, Japan is set to release its latest batch of inflation readings, along with retail sales and industrial production data. The outcome of these reports could set the tone for the central bank decision. There are no major reports lined up from the UK for the rest of the week.

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Contracts for Difference, also known as CFDs, are an increasingly expanding market in the trading world with an increased amount of interest and investment from global retail traders. A CFD is essentially an agreement between two different parties wanting to trade the difference between the opening price and closing price of a contract.

You can use CFDs to deal and surmise the developments and movement of over thousands of financial markets, regardless of whether they are gaining financial momentum or dropping in value. According to leading broker platform, XTrade, trading CFD’s has a host of advantages and understanding the benefits of trading with the best CFD  broker is essential to your individual success as a trader.

Below are 5 of the most important things to identify when choosing the best CFD broker for you.

Support

When selecting a broker, support and training as well as advice and ease of platform navigation are key factors in the process. When selecting your broker make sure to check that these things are on offer. Support and assistance, such as webinars, how to videos, trading assessment and a resource library are the type of support features top trading brokers will provide for you to have the best trading experience.

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BTCUSD recently formed a head and shoulders pattern, with price breaking below the neckline and pulling up for a retest. This broken support zone seems to be holding as resistance for now as it lines up with the 100 SMA dynamic inflection point.

Speaking of moving averages, the 100 SMA is below the 200 SMA so the downtrend could carry on. Price has yet to break below the $645-650 area of interest before more sellers join the mix. RSI is on middle ground, pausing on its way down, while stochastic is pointing south so BTCUSD could head in the same direction.

In that case, price could be eyeing the next support around the $625-630 lows then at the major psychological $600 level. A break below that area could lead to a drop to the next key support around $575.

Catalysts for such move include the FOMC statement today, even though the Fed is likely to keep interest rates on hold. Upbeat remarks and indications that a rate hike or two are still possible this year could reinforce dollar demand against bitcoin. On the other hand, cautious comments on a potential global economic slowdown due to the Brexit could lead to a return in bitcoin rallies.

For now, the drop in commodity prices is also dragging BTCUSD lower, as this has kept risk-off moves in play. Traders are projecting that stockpiles could rise now that production has resumed in several key areas and demand during the summer months is weaker.

In any case, watch out for additional volatility around the FOMC statement since there is no press conference scheduled and traders will read between the lines of the announcement to spot any changes in monetary policy bias. US durable goods orders data are up for release ahead of the Fed announcement.

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USDCAD recently made an upside breakout from its symmetrical triangle pattern, signaling that buyers have taken control of price action. However, the rally was cut short at the 1.3200 area and a correction seems to be taking place.Applying the Fib tool on the latest swing high and low on the 4-hour time frame shows that the 50% level lines up with the broken triangle resistance at the 1.3050 minor psychological mark, which might now hold as support. A larger correction could last until the 61.8% Fib or the 1.3000 level, which is closer to the dynamic support at the 100 SMA.The 100 SMA is above the 200 SMA so the uptrend could carry on. In addition, the gap between the moving averages is widening so bullish momentum is strengthening. However, stochastic is pointing down, hinting that sellers are on top of their game for now and that buyers might wait until the oscillator reaches the oversold area.Event risks for this setup include the FOMC statement, during which policymakers are expected to keep interest rates unchanged. There is no scheduled press conference after this announcement so traders will be taking a closer look at the official statement to see if any shift in bias was made. Cautious remarks could dash hopes of a rate hike for the year while hawkish comments could mean another round of gains for the US dollar.Data from the US economy has been mostly upbeat, with the CB consumer confidence, Richmond manufacturing index, and new home sales figures beating expectations. US durable goods orders data are also due today, with the headline figure expected to show a 1.1% decline and the core figure estimated to print a 0.3% uptick.As for the Canadian dollar, weak crude oil prices have weighed on its price action recently while traders price in expectations of a buildup in stockpiles. US crude oil inventories data is due today and a reduction of 2.1 million barrels could be reported, likely easing fears of an oversupply and providing support for the oil-related Loonie.

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USDCAD formed lower highs and higher lows in the past few weeks since late May, creating a symmetrical triangle pattern on its 4-hour time frame. Price has broken above the triangle resistance, indicating that buyers are gaining the upper hand in price action.The chart pattern is approximately 500 pips tall so the resulting breakout could last by the same amount, taking the pair up to the 1.3500 major psychological resistance. The 100 SMA is above the longer-term 200 SMA, confirming that the path of least resistance is to the upside, and the gap between the moving averages is widening to show a pickup in bullish pressure.However, stochastic is already indicating overbought conditions so buyers might need to take a break and let sellers take over from here. If so, a pullback to the broken triangle resistance at the 1.3050-1.3100 levels could take place before the climb resumes.Falling crude oil prices have been mostly responsible for driving Loonie movement these days, as the commodity has slumped to its April lows. Data from the Canadian economy has come in mostly stronger than expected last week but traders appear to be reacting to risk aversion instead.US CB consumer confidence and new home sales data are due today, along with the Richmond manufacturing index. The consumer confidence index is expected to fall from 98.0 to 95.6 to indicate weaker optimism while new home sales could rise from 551K to 560K.There are no major data points from Canada for the next couple of days, although the US crude oil inventories report due tomorrow could push this pair around. Apart from that, the FOMC statement could also have a strong say in USD price action, as cautious remarks could spark weakness while upbeat comments could allow the rallies to carry on.Canada is set to print its GDP on Friday and a 0.5% monthly contraction is eyed, likely putting additional drag on the Canadian dollar. Also due then is the US advanced GDP reading for Q2, which might show a stronger pace of growth at 2.6% compared to the earlier 1.1% expansion in Q1.

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USDJPY has been trending lower on its longer-term time frames, moving inside a descending channel on its daily time frame. Price is currently testing the channel resistance at the 106.50-107.00 area, which lines up with a former support level. This also coincides with the 61.8% Fibonacci retracement level based on the latest swing high and low.The top of the channel is close to the 100 SMA, which could act as a dynamic resistance zone. This is below the longer-term 200 SMA, confirming that the downtrend could carry on and that the path of least resistance is to the downside. The gap between the moving averages is widening, reflecting stronger bearish momentum.Stochastic is indicating overbought conditions and is turning lower, indicating a return in selling pressure. In that case, USDJPY could resume its drop to the channel support around 98.50 or at least until the 100.00 major psychological support level.The main event risk for this setup is the BOJ decision towards the end of the week, as market participants still have mixed expectations for the outcome. Earlier in the month, PM Abe ordered the preparation of an economic stimulus package, leading traders to expect that the central bank would be ready to dole out more easing as well. However, BOJ Governor Kuroda suggested that “helicopter money” might not be the case.Still, in the G20 meeting, Kuroda mentioned that ruling out “helicopter money” doesn’t necessary mean that additional stimulus would be improbable. With that, market watchers are back to pricing in additional easing from the central bank, probably somewhere between 10-30 trillion JPY.As for the US dollar, the advanced GDP reading is up for release this week and a stronger figure for Q2 is eyed. The FOMC is also scheduled to announce its policy decision this week but no actual changes in interest rates are expected, although any indication that the Fed could still tighten this year might drive dollar gains.

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USDJPY has been moving inside a descending channel on its 4-hour time frame and is currently testing the resistance. This lines up with the 61.8% Fibonacci retracement level on the latest swing high and low, also coinciding with an area of interest at the 107.00 major psychological level.

If this holds as a ceiling, price could resume its drop to the previous lows at the 100.00 mark or onto the channel support at 98.00. The 100 SMA is below the 200 SMA for now, confirming that the path of least resistance is to the downside, but an upward crossover seems imminent.

If the moving averages complete this crossover, a reversal from the downtrend could take place, taking USDJPY up to the next area of interest at 109.00-110.00. Stochastic is on the move down, suggesting that sellers are still in control of price action, but the oscillator is nearing the oversold area to indicate bearish exhaustion. RSI is still heading south so USDJPY could follow suit.

BOJ Governor Kuroda mentioned that the central bank isn’t considering adding monetary stimulus just yet, dousing hopes for larger bond purchases in their upcoming monetary policy statement next week. This led the yen to regain ground after speculations of additional QE surfaced on PM Abe’s order to prepare a government economic stimulus program the other week.

Data from the US came in mostly stronger than expected yesterday with the exception of the Philly Fed index. Initial jobless claims, existing home sales, and the CB leading index beat forecasts. For today, flash manufacturing PMI data is up for release and an improvement from 51.3 to 51.9 is eyed, indicating a faster pace of industry expansion.

Earlier today, Japan’s flash manufacturing PMI beat expectations with a rise from 48.1 to 49.0, outpacing the consensus at 48.3 and indicating a slower pace of industry contraction.

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USDCAD has been trading in an ascending channel on its 4-hour time frame but might encounter resistance on this uptrend soon. Price is making its way towards the top of the channel at the 1.3200 major psychological level, which might hold as a short-term ceiling.  The 100 SMA is above the 200 SMA so the path of least resistance is to the upside and the pair could have enough momentum for a test of the channel resistance. However, stochastic is nearing the overbought zone, suggesting that buyers might need to take a break soon and let sellers take over.  If so, USDCAD could head back to the bottom of the channel around the 1.3000 major psychological level. This is also near the 200 SMA, which might hold as dynamic support for this uptrend. But if bullish momentum is very strong, price could even go for an upside break from the channel resistance.  Event risks for this setup include the release of Canada’s CPI and retail sales reports in today’s US session. Headline CPI is expected to show a 0.2% gain compared to the previous 0.4% uptick while core CPI could print a flat reading versus the previous 0.3% increase. Headline retail sales could show a flat reading versus the previous 0.9% gain while core retail sales could show a 0.3% increase compared to the previous 1.3% rise.  Only the flash manufacturing PMI report is due from the US economy today and a rise from 51.3 to 51.9 is eyed. Stronger than expected data could lead to more gains for the dollar, especially since earnings reports from top US companies have been churning out upbeat results.  Aside from that, a continued decline in crude oil prices could keep weighing on the positively-correlated Canadian dollar. Fears of a supply glut are back now that production has resumed in Alberta and inventories are rising once more.

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BTCCNY could be in for a reversal from its previous uptrend as price broke below the ascending channel support on the 1-hour time frame. Price also moved below the moving averages, indicating that sellers are taking control.

The 100 SMA is above the 200 SMA for now so buyers could still have a chance to allow the climb to resume. Price is now stalling at an area of interest around 4400.00, which held as resistance in the past.

RSI is turning higher to indicate that buying pressure could return. Stochastic is heading south but is nearing the oversold area, also suggesting that buyers could regain the upper hand. In that case, BTCCNY could pull up to the broken channel support for a retest before heading further south.

Improved Chinese fundamentals and an IMF upgrade on China’s growth forecast for this year are allowing investors to flock back to local assets, as fears of a slowdown have eased. The government has also reportedly reduced red tape on certain investments, encouraging a higher influx of funds.

Apart from all that, a return in risk appetite in financial markets has convinced several bitcoin traders to let go of their digital currency holdings to put more money in traditional assets like equities and currencies. Expectations of additional stimulus from a few major central banks could also shore up consumer and business activity in the near term, possibly leading to stronger market performance down the line.

With that, the trend could carry on for the next few days, barring any major changes in market sentiment. The European Central Bank has its monetary policy decision up next so volatility could still be seen for bitcoin. There are no major reports due from China, although changes in commodity prices could also influence BTCCNY price action.

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EURAUD has formed lower highs and found support at the 1.4500 major psychological level, creating an ascending triangle pattern on its daily time frame. Price appears to be bouncing off the support zone and could carry on with its climb depending on today’s top-tier events.  The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. This suggests that a break of support could take place, possibly taking the pair lower by around 1700 pips or the same height as the chart formation. Rallies could also find resistance at the dynamic inflection points around the moving averages.  Stochastic is on the move up, suggesting that buyers are in control for now. If they continue to keep bullish pressure in play, EURAUD could make it all the way up to the triangle resistance at 1.5250-1.5300 or at least until the middle of the triangle around 1.5000 where an area of interest is located.  The main event for this pair is the ECB interest rate decision, as analysts are divided on whether the central bank would announce additional stimulus measures or not. Governor Draghi seemed more dovish in the aftermath of the EU referendum but now that the political uncertainty has subsided, policymakers seem less worried about economic repercussions.  Data from the euro zone has been mostly weaker than expected as the ZEW economic sentiment indices from Germany and the region fell sharply to negative territory. Consumer confidence also weakened to show a larger degree of pessimism.  As for the Australian dollar, the downbeat RBA minutes are weighing on the currency since policymakers expressed some concern about their inflation outlook. The Aussie has also given up ground on risk aversion for the past few days.

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BTCUSD is still inside its ascending channel visible on the 1-hour time frame, confirming that the uptrend could continue. Price bounced off the channel support at the $670 area and is ready to climb back to resistance at $690.  The 100 SMA is above the longer-term 200 SMA, confirming that the path of least resistance is to the upside. Also, the 100 SMA held as dynamic support since it lined up with the bottom of the ascending channel. Another test of support could still bounce off the 200 SMA, which would be the line in the sand for this uptrend.  RSI is on middle ground, barely offering strong directional clues. Stochastic is indicating overbought conditions and is turning lower, hinting that sellers could still regain control. In that case, a downside break of support could be seen, taking price down to the next area of interest at $650.  The IMF’s decision to downgrade global growth forecasts spurred strong demand for bitcoin once more, as the cryptocurrency typically rallies when traders are seeing a higher degree of uncertainty in the financial markets.  Catalysts lined up this week include the ECB interest rate decision and the RBNZ’s economic update on Thursday. An easing bias could draw traders away from currency markets and equities, encouraging them to move funds to alternative assets like bitcoin instead.  On the other hand, reassuring remarks could bring risk appetite back to stock markets and lead traders to let go of their bitcoin holdings in the process. The US dollar appears to be strongly supported thanks to risk aversion and improving US fundamentals. Earnings reports from large companies could also have an impact on USD action.

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GBPUSD seems ready to resume its drop, as a head and shoulders pattern can be seen on its 1-hour time frame. This is a classic uptrend reversal signal, with selling pressure likely to increase once price has broken below the neckline at the 1.3100 major psychological level.  The chart pattern is approximately 350 pips tall so the resulting breakdown could last by the same amount, taking GBPUSD down to 1.2750 or its record lows. However, the 100 SMA is still above the 200 SMA so the path of least resistance might still be to the upside. In addition, stochastic is indicating oversold conditions so buyers might be ready to take control of price action.  In that case, GBPUSD could still bounce up to the resistance around the 1.3300 handle or the tops at 1.3450. A break past that area could signal that pound bulls could continue to gain traction.  Data from the UK came in stronger than expected yesterday. Headline CPI rose from 0.3% to 0.5%, outpacing the estimate at 0.4%, while core CPI rose from 1.2% to 1.4% versus the consensus at 1.3%. However, the pound failed to make a strong rally after the IMF downgraded growth forecasts for the UK economy for this year and the next due to the Brexit.  For today, the jobs figures are up for release. Claimant count could increase by 4.1K versus the previous 0.4K drop while the unemployment rate is expected to hold steady at 5.0%. The average earnings index might rise from 2.0% to 2.3% to show faster wage growth.  Weaker than expected data could trigger a sharp drop for the pound since this would reveal that the employment situation is already weak ahead of further downside pressure from the Brexit. As for the US, building permits and housing starts came in line with estimates yesterday. There are no reports due from the US today but earnings releases could dictate dollar action.

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BTCCNY is still on a steady uptrend and safely inside its ascending channel formation on the 1-hour time frame. Price was rejected on its test of the channel resistance and seems to be aiming for the channel support at 4480.00 once more.

The 100 SMA coincides with this channel support so a bounce could be due. In addition, the short-term 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside.

However, RSI appears to be on the move down for now, indicating that sellers are in control of price action. Stochastic is also heading south so BTCCNY might follow suit, taking it down to the channel bottom. If a bounce takes place, price could head back up to the top at 4600.00 or higher. On the other hand, a break lower could lead to a test of the 200 SMA dynamic support at 4450.00, which also lines up with an area of interest.

Renewed risk appetite thanks to strong US earnings data has led traders to flock to traditional investments again, dumping their bitcoin holdings in the process. Speculations of additional stimulus or easy money from the likes of the RBNZ, RBA, ECB, and BOJ are also keeping risk-taking in play.

Also, reports are showing that the Chinese government is easing the red tape in order to spur investment activity. This could lead to an influx of funds back to the Chinese stock markets and the yuan, forcing bitcoin to retreat from its recent rally. After all, data from the Chinese economy came in mostly stronger than expected last week so fears of a slowdown have subsided.

With that, there is potential downside for BTCCNY, depending on how long this type of market sentiment lasts. Price seems to be having trouble sustaining its climb anyway, although a return in risk aversion could spur demand for bitcoin once more.

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GBPNZD has been trending lower on its 4-hour time frame, moving below a descending trend line connecting the latest highs of price action. Using the Fib tool on the latest swing high and low shows that the 50% retracement level lines up with the trend line at the 1.9200 major psychological mark.

Stochastic is already indicating overbought conditions with a bit of bearish divergence, confirming that sellers are ready to take control. Similarly RSI seems to be turning lower so GBPNZD could follow suit. In that case, price could resume its selloff to the previous lows at 1.7720.

The 100 SMA is below the 200 SMA, also confirming that the downtrend could continue. The 200 SMA coincides with the descending trend line, adding to its strength as a potential price ceiling. However, a break past the 61.8% Fib at 1.9500-1.9600 could signal that a reversal is in order.

Last week, the RBNZ announced that it would provide an update on the economy on Thursday this week, spurring speculations that they are shifting to a dovish stance. Over the weekend, quarterly CPI data missed expectations of a 0.5% gain and came in at 0.4%. Earlier in the week, the RBNZ shared its plans to tighten lending requirements in the housing market to curb property prices.

These led market watchers to predict that the RBNZ might be gearing up to cut interest rates in their next statement or at least keep their policy options open should they need to ease. However, traders are also expecting additional stimulus from the Bank of England even though majority of policymakers voted to keep rates on hold last week.

UK data releases this week should provide volatility for this pair, with the CPI up for release today. Tomorrow has the jobs report due while Thursday has the retail sales report on tap.