Thread: Daily Market Outlook by HYCM

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Here we post best ideas and market outlook on primary forex currency pairs made by out top experts. Follow the thread!

Here we post best ideas and market outlook on primary forex currency pairs made by out top experts. Follow the thread!


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EUR/USD


The so long awaited BOJ and FED's economic policies announcements ended up being a big disappointment for dollar bulls, as both Central Banks decided to leave their policies basically unchanged. The BOJ left rates at -0.1%, a move meant to protect banks, but decided to introduce an interest rate target for 10-year government bonds, in a way to control the yield curve. The US Federal Reserve, also left its key rates unchanged, but this time, there were three dissenters, up from one last time, somehow indicating that a rate hike is around the corner. In the press conference, Yellen reiterated that the case for a rate hike strengthened, also indicating that a rate hike is not far away. As for the FED's ´dotplot´, it shows that policy makers are still expecting one more rate hike left for this 2016, and just two for 2017. Officers, however, cut their median growth projection for 2016 to 1.8% from 2%, mirroring the drop in the longer-run forecast, based on median estimates. Inflation is projected at 1.3% in the fourth quarter, down from a forecast of 1.4% in June.


The dollar initially plummeted across the board, with the EUR/USD pair reaching 1.1196 before retreating modestly ahead of the press conference. Yellen's words, who said that they decided to leave rates unchanged due to labor market slack and low inflation, adding also that the economy has room to run, cast doubts over the pace of rate hikes, hurting any upward potential of the greenback. As for the technical picture, the EUR/USD pair did little progress, maintaining a neutral-to-bearish technical stance in its 4 hours chart, as indicators turned lower within neutral territory, while the price has been unable to advance above the 100 and 200 SMAs. Given the limited upward scope of the greenback, however, the pair may advance this Thursday, with a steady advance beyond 1.1200 required to confirm so.


Support levels: 1.1160 1.1120 1.1080


Resistance levels: 1.1200 1.1245 1.1280

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EUR/USD
The greenback extended its decline this Thursday, still pressured by FOMC's decision to keep rates unchanged during their last meeting. Even through a December rate hike is a possibility, investors believe that policymakers are not yet ready to abandon the current accommodative stance and fully compromise with the tightening path. There were no macroeconomic releases in the EU, while in the US, data came in mixed, with weekly unemployment claims down to 252K for the week ending September 16, from the previous week's unrevised level of 260K. Existing-home sales eased up in August for the second consecutive month, declining by 0.9% to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July.
The EUR/USD pair advanced up to 1.1257, a fresh weekly high, before pulling back during the US afternoon, nearing the 1.1200 ahead of Wall Street's close. There was no catalyst behind this last intraday decline, except maybe the lack of follow-through forcing speculators to take some profits out of the table. The pair maintains a neutral stance, having stalled its advance below last week's high of 1.1283, still the level to surpass to confirm more sustainable EUR gains. The 4 hours chart suggests that such scenario is becoming unlikely, as the technical indicators in the mentioned chart have turned sharply lower within positive territory from near overbought readings, whilst the price is now back around its 100 and 200 horizontal moving averages. While it is too early to call for a slide according to technical readings, further slides below the 1.1200 level will put the pair at risk of a downward extension towards the base of this week's range at 1.1120.
Support levels: 1.1200 1.1160 1.1120
Resistance levels: 1.1250 1.1280 1.1335
See more analysis at https://www.hycm.com/en/markets/daily-outlook

EUR/USD
The EUR/USD closed Friday at 1.1226, range bound for a fourth consecutive week. Since late August, the pair has been trading within a well-limited 200 pips' range, with uncertainty ahead of the US Federal Reserve decision sending investors to the side-lines. Still, the Central Bank failed to set the tone for the pair, offering a mixed tone, as while it left doors open for a December hike, it also showed no rush in tightening rates. Things in Europe were not helping the bullish case for the common currency, as September preliminary Markit PMIs showed that the services sector activity fell to a 21-month low. Manufacturing on the other hand, improved, both for the EU and Germany, but that was not enough to outpace services' reading, resulting in the EU Markit composite PMI falling to a 20 months low of 52.6 and the German reading falling to 52.7, the lowest in over a year.
For this upcoming week, the US will once again take center stage, with the release of PCE inflation, Durable Goods Orders, the final revision for the Q2 GDP figure, and at least nine FOMC members scheduled to speak.
The technical picture is neutral, as long as the price holds above 1.1120, but below 1.1366, August high. The pair continues developing within two large trend lines, with the longest being the ascendant one, coming from November 2015 low of 1.0505, and around 1.1080/90 for the upcoming days. As for the descendant trend line, it began at 1.1615, May 2016 high, and should offer some resistance if reached, currently around 1.1280. In the daily chart the price is above the moving averages, but the indicators remain all together and without directional strength, reflecting the absence of direction, while technical indicators hold within neutral territory. In the 4 hours chart, the pair presents a moderate bullish tone, as the price is above its moving averages, and technical indicators in positive territory, although losing upward strength.
Support levels: 1.1190 1.1160 1.1120
Resistance levels: 1.1250 1.1280 1.1335


See more analysis at https://www.hycm.com/en/markets/daily-outlook

EUR/USD
The EUR/USD pair enjoyed some short term demand, rallying up to 1.1278 on Monday, before better-than-expected US housing data gave investors to reject the advance around a major static resistance level. As usual lately the week started in slow motion, with most majors trading in quite limited intraday ranges. New Home sales in the US slipped by less than expected in August, running at a 609,000 seasonally adjusted annual rate, down by 7.6% on the month when compared to July, against expectations of a 8.6% decline. Also, helping the greenback were comments from FED's Lacker, an usual hawk, who said that the case for a December hike is strong. In the EU, Germany released its IFO survey showing that the business climate rose sharply in September, to 109.5 from 106.2 in August, with surged in both the current assessment and the expectations components.
As for the technical picture of the EUR/USD pair, it continued trading within its latest range, stalling its recovery around a major resistance level, a daily descendant trend line coming from this year high at 1.1615. The pair also has multiple intraday highs and lows around the 1.1280 region, and as long as the price remains below it, the upward potential will remain limited. Technical readings in the 4 hours chart are starting to show some divergences, as while the price remains above a sharply bullish 20 SMA that already advanced above the 100 SMA, the Momentum indicator heads south towards its mid-line, while the RSI indicator retreats from near overbought readings. Additional declines below 1.1225 will increase the risk of a bearish continuation for this Tuesday, with 1.1160 as a probable bearish target should the dollar strengthen steadily.
Support levels: 1.1225 1.1190 1.1160
Resistance levels: 1.1280 1.1335 1.1365
See more analysis at https://www.hycm.com/en/markets/daily-outlook

EUR/USD
The American dollar closed last week firmly up against all of its major rivals, helped by a flash crash in the British Pound early Friday. Still, the greenback was supported by generally encouraging local data released at the beginning of the week, that indicate that the US economy keeps growing at a steady pace. On Friday, the long awaited employment report came in a little lower than expected, but it was not enough to deny the case of a December rate hike. In September, the US created 156K new jobs, against 172K expected, the unemployment rate ticked up from 4.9% to 5.0%, whilst average earnings figure rose less than expected, but in line with average readings, up 0.2% MoM and back to 2.6% YoY. The EUR/USD pair seesawed after the release, but ended up recovering from a twomonth low printed at the beginning of the day at 1.1104, to end the day a handful of pips below the 1.1200 level, trapped within the same range for a sixth consecutive week. The absence of directional conviction among investors has deepened after both Central Banks moved to the sidelines, and market's attention is now on the second US presidential debate, late Sunday night, as a possible catalyst for some USD moves. Technically, the pair remains trapped between two longterm trend lines, with the longest being the ascendant one, this week around 1.1090/1.1100. In the daily chart, the price is hovering around horizontal moving averages, while indicators are within neutral territory, while in the 4 hours chart, technical indicators have recovered from oversold readings and pared gains around their midlines, while the price is above its 20 SMA, but below the 100 and 200 SMAs. Overall, the risk remains towards the downside, as long as selling interest surges in the 1.1245/1.1280 region.


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Support levels:1.1160 1.1120 1.1080


Resistance levels: 1.1245 1.1280 1.1335

EUR/USD


The week started once again in slow motion, as in addition to the usual quietness of Mondays, there were bank holidays in Japan, the US and Canada. The main theme of the day was the US second presidential debate that took place late Sunday, although it had a limited impact on the FX board, resulting, however, USD supportive. Before the first debate, US candidates were head to head, but at this point, Hillary Clinton seems to have taken the lead back, emerging victorious from the two debates according to the media. US polls, said she is leading now by around 5%. Stocks benefited the most, with European equities closing firmly higher. There was little in the calendar, although Germany released its August trade balance data, showing that the foreign trade balance recorded a surplus of €22.2 billion in August 2016, while exports increased by 9.8% and imports by 5.3% in the mentioned month, on a yearonyear basis. Also, sentiment in the EU improved according to the Sentix Confidence Index, which printed 8.5 in October from 5.6 in September. As for the EUR/USD pair, it slowly but steadily moved lower all through the day, contained by selling interest in the 1.1200/10 region, and nearing the base of its latest range ahead of the Asian opening. The technical picture is increasingly bearish, given that in the 4 hours chart, the price has faltered around its 100 and 200 SMAs before extending its decline below a now bearish 20 SMA. Technical indicators in the mentioned time frame maintain downward slopes within negative territory, supporting a bearish extension, despite the limited momentum, this last due to reduced volumes.


Support levels:1.1120 1.1080 1.1040


Resistance levels: 1.1160 1.1205 1.1245
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WTI CRUDE


Crude oil prices retreated from the multimonth highs posted this Monday, in spite of positive news coming from the International Energy Agency, as the organism said that oil market may rebalance much faster if the OPEC and Russia agree to reduce production, although the agency also said that is unclear how long it would take. West Texas Intermediate crude futures traded as low as $50.38, but settled a few cents below 51.00, indicating some profit taking, probably triggered by dollar's strength, rather than suggesting that the bullish move has reached a top. From a technical point of view, the daily chart shows that the technical indicators have retreated from near overbought readings, but remain above previous weekly lows, whilst the 20 SMA keeps heading north below the current level, all of which limits chances of a steeper decline. In the 4 hours chart, the commodity has met buying interest around its 20 SMA, while technical indicators have turned higher from their midlines, also indicating that buying interest outpaces selling one.


Support levels:50.30 49.40 48.70


Resistance levels:51.60 52.20 53.00


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EUR/USD


The dollar remained firm after Tuesday's rally, extending its gains against the common currency to the highest in over twomonths, as the EUR/USD pair fell down to 1.1004, early US session and ahead of the release of FOMC Minutes. The Pound was an exception, outperforming on news that UK Prime Minister May has accepted that Parliament should vote on her plan for exiting the EU. At the beginning of the day, the Eurozone industrial production surprised on the upside in August up August by 1.6% when compared to July, while compared to August 2015, it rose by 1.8%, beating expectations and due to production of durable consumer goods rising by 4.3%, capital goods by 3.5%, energy by 3.3% and intermediate goods by 1.4%. Despite the figure shows a strong bounce in growth from July's poor figures, the common currency remained under selling pressure. FOMC's Minutes disappointed as usual, as whilst several voters thought that rates should rise "relatively soon,", they also said that a reasonable case could be made for both, hiking and waiting. Also, a substantial majority saw risk roughly balance, although low inflation cast doubts over the upcoming hike. A clearly split FED and more uncertainty surrounding the timing of the so long awaited rate hike. The market barely reacted to the news, with the EUR/USD pair bouncing modestly from its daily low, and technically poised to extend its decline, as in the 4 hours chart, the 20 SMA has extended its downward move to converge now with the long term daily ascendant trend line broken earlier this week, a line in the sand for the ongoing downward move. In the same chart, technical indicators have lost their downward strength, but hold within oversold readings. Adding the fact that the pair is near the critical 1.1000 level, further slides are likely on a break below the psychological figure.


Support levels:1.0990 1.0960 1.0920


Resistance levels: 1.1045 1.1080 1.1120


See more analysis at https://www.hycm.com/en

EUR/USD


The EUR/USD pair closed the week at its lowest in over two months, and not far from July's low of 1.0951, on continued dollar's demand amid firming expectations of another rate hike in the US before the yearend. Risk appetite came back early Friday, as fears over a Chinese economic slowdown receded following betterthanexpected local inflation data. Further supporting the greenback was a modest uptick in US retail sales in September, up by 0.6% compared to August, matching expectations. The core figure, exautos, came in at 0.5%, beating expectations of a 0.4% reading. Also, the producer price index was slightly firmer than expected up 0.7% yearonyear basis, and by 0.3% in September from previous 0.0%. Dollar's momentum continued in spite of a downward surprise in Michigan's consumer sentiment index that plunged to 87.9 from previous 91.2 in October, it's lower in over a year, attributed to the contentious presidential election campaign. During this upcoming week, attention will center on US September CPI figures, as a pickup, particularly in core readings, will further increase hopes of a FED's hike. Additionally, the ECB is having an economic policy meeting, although no new announcements are expected from the ECB, largely expected to maintain the focus on QE's implementation. As for the technical picture, this last week's decline has left daily indicators in oversold readings, but with a strong downward momentum, indicating that the pair may extend further it's decline before pulling back some in correction mode. In the same chart, the price has finally moved away from the congestion of moving averages that anyway persists around 100 pips above the current level. In the 4 hours chart, the 20 SMA heads sharply lower, offering a dynamic resistance around 1.1025 for this Monday, while the Momentum has turned flat within bearish territory, after failing to overcome its midline, while the RSI indicator heads south around 26, also supporting additional declines. The immediate support is the mentioned July low at 1.0950, followed by the postBrexit low, at 1.0910.


Support levels:1.0960 1.0910 1.0860


Resistance levels: 1.0990 1.1025 1.1060