"Fort Financial Services"- fundamental and technical analysis
26.08.2014
Fundamental analysis
The American currency continued to strengthen against its major competitors on Friday - the dollar index (USDX) finished the last week at 82.32. The EUR/USD lost 0.3% amid the USA Fed Chairman comments in Jackson Hole. Janet Yellen said that the continued faster-than-expected employment growth may lead to an earlier federal funds rate increase. It was enough for the bears to push the EUR/USD rate to 1.3320, where traders began to fix the profits. The pair EUR/USD continued to fall on Monday trading.
The GBP/USD was traded in a narrow range of 1.6560 -1.6600. The market participants took a break to evaluate the pound downward trend prospects which we have seen the last 7 trading weeks. Even the Federal Reserve Chief’s speech on economic symposium in Jackson Hole could not push traders to an active trading.
The USD/JPY continued to grow to new maximums after a small technical correction. The bulls have responded positively to the Janet Yellen’s statement about the monetary policy possible earlier than expected tightening. The American dollar was in demand and the price reached the level of 104.20, then investors decided to take some profits on long positions. The pair slightly fell on Monday.
Technical analysis
Euro (EUR)
General overview
The European Central Bank head supported the idea of the euro further weakening his statements. Draghi’s speech was "dovish". He said that the ECB June easing measures should spur the demand, a weaker euro would support the economy and the European regulator was ready to the policy further softening if necessary.
The price three-week consolidation above the strong support level of 1.3360 was followed by a confirmed breakthrough. The sellers managed not only to break below 1.3360, but also to consolidate under the resistance level of 1.3290. The price updated the current month minimums on the increased volume during the President Draghi’s speech.
The price is finding the support at 1.3170. The price is finding the first resistance at 1.3230, the next one is at 1.3290.
There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen and the Kijun-sen show a downward movement. The downward movement will be until the price is under the Cloud.
The MACD indicator is in a negative territory. The price is fixing.
Trading recommendations
The downward movement will be continued. The pair may go to 1.3170 soon.
Pound(GBP)
General overview
The British pound was steady against the dollar and closed the session almost at opening prices. There were not any thing interesting from the newsflow, the pound was under the external information influence and the most important driver for the market could be the technical factors presented by the strong support. The British pound trading has been continuing in the narrow downward channel direction for the second month.
The dollar confirmed strengthening against the GBP has been stopped at the support level of 1.6570, which came at a reduced price volumes.
The price is finding the first support at 1.6570, the next one is at 1.6500. The price is finding the first resistance at 1.6640, the next one is at 1.6700.
There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen shows a horizontal movement and the Kijun-sen shows a downward movement. The downward movement will be until the price is under the Cloud.
The MACD histogram is in a negative territory. The price is consolidating.
Trading recommendations
We expect a bounce upwards. The upward bounce potential target is 1.6640.
Yen (JPY)
General Overview
After the central bankers symposium, the dollar/yen has taken another upward jump, but has been stopped by the strong resistance levels, which resulted in a relatively small increase in the dollar against the yen on the Friday trading basis. This was the bulls’ week final point where the main driver was the Fed’s minutes publication, showing the growth in the policy tightening sentiments in the USA Central Bank leadership.
The resistance level of 102.60 has been an obstacle for buyers during six months, despite the fact that it has made its way up twice. The third level breakthrough, apparently, was the signal for the medium-term uptrend continuation.
The level of 102.65 breakthrough up comes amid low volumes, this allowed the bulls to raise the price to the historical resistance level of 103.90 - 104.00 formed from 2014.04.03.
The price is finding the first support at 103.70, the next one is at 103.30. The price is finding the first resistance at 104.00, the next one is at 104.35.
There is a confirmed and a strong buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen shows a horizontal movement and the Kijun-sen shows an upward movement. The upward movement will be until the price is above the Cloud.
The MACD indicator is in a positive territory. The price is correcting.
Trading recommendations
We believe the growth will be continued now. The first target is the level 104.00. Having overcome the first target the price might go upwards to 104.35.
Frank (CHF)
General overview
Today the debt crisis problem has receded, but the economic recovery stop in the eurozone by the end of the second quarter and the ECB promise to keep rates low for a long time do not allow the SNB to abandon the restrictions on the foreign exchange market. In Zuercher Kantonalbank believe that the Switzerland's central bank is limited in decision-making till the ECB will not start raising rates.
The franc also fell against the background of the dollar comprehensive strengthening. The dollar strengthened significantly after The Fed Chairman Janet Yellen said that the United States economy was recovering, and added that the situation in the labor market had been also improved.
The price is finding the first support at 0.9130, the next one is at 0.9090. The price is finding the first resistance at 0.9170, the next one is at 0.9210.
There is a confirmed and a strong buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen shows a horizontal movement and the Kijun-sen shows an upward movement. The upward movement will be until the price is above the Cloud.
The MACD indicator is in a positive territory. The price is correcting.
Trading recommendations
We advise to long with the first target - 0.9170. When the pair consolidates above the first target, we can open deals to the level of 0.9210.