Daily Technical Analysis – Forex Action
Tuesday was a volatile day for the single European currency. The day started with an extension of the uptrend moves from the previous day, and towards the open of the European session, the pair managed to hit resistance at 0.9985. There, however, the bears took over, and after the release of the positive interest rate data given by the managers of the services sector in the United States, they further strengthened the dollar and managed to reach a new level. low that had not been recorded for more than 20 years, or 0.9863. There, the bulls decided to shape their attack further and corrected some of the decline, ending the day around 0.9902. Today, between 06:00 and 08:00 GMT, traders will be awaiting a set of data on the state of the EU economy that could help the euro recoup some of its losses. However, should the data end up disappointing FX market participants, the Euro’s uncontrollable slide could continue to new lows.
Once again we have seen a new day and a new high for the Ninja. From the early hours of Tuesday, the previous resistance of 140.65 was breached, and without any swing, USD/JPY managed to achieve record highs of 143.05 as the European session drew to a close. The current strength of the dollar against the Japanese currency is exceptional and no change should occur anytime soon on this front. The currency pair continues to alternate uptrends with consolidations which, however, do not last more than a day. Today’s comments from FOMC members on the next package of key rate hikes could give the dollar further strength, but if they end up disappointing traders, we could see consolidation instead.
On Tuesday, Cable moves started the day promisingly as it traded around the key level at 1.1600 near the open of the European session. However, after the 08:30 GMT statement regarding the state of the UK construction sector made no difference, even after several hours of non-stop consolidations around the mentioned price, the bears took control of the pair and brought it back towards 1.1497. A slight upward correction followed and GBP/USD ended the day around 1.1516. Traders are largely holding their breath today for the UK monetary policy report due out at 09:00 GMT. It remains to be seen after the report whether the 1.1497 low will provide good support for the bulls and allow them to continue their attack, or whether the bears will form a new low in the currency pair.
The usual correlation with US indices was absent on Tuesday. After bouncing off support at 12717, the German index managed to hit a new weekly high in the early hours of the day, hitting 12929 towards the open of the European session. In the hours that followed, however, we witnessed high volatility which only allowed the EUGERMANY40 to break out of its consolidation at the end of the session and the day ended around 12813. Today, the German industrial production data, which is due at 07:00 GMT, may have an impact on the index. It remains to be seen if the downward trend will continue or if some of the declines from last month will be recovered in the coming days.
On Tuesday, the blue chip index started with a slight uptrend that hit 31590 just hours after the European session opened. There, however, the bears found a good entry point and the US30 fell again, reaching as low as 31044. The declines subsided at these levels and the day ended around 31155. today, the statements of the FOMC members on the future package of interest rate hikes should have their effect on the index. The downtrend is strong and the lack of fuel for uptrend moves continues to push the instrument deeper and deeper into bearish territory, but any dovish comments could push the US index towards recovery.