"Fort Financial Services"- fundamental and technical analysis
The US currency was able to compensate some of the lost positions – the dollar basket index (USDX) closed the trades at the mark of 94.43. The US dollar found the support due to the stronger-than-expected US inflation report which showed a decrease to 255K against the previous 262K.
The pair EUR/USD finished the trades with a decline. The ECB representative Ewald Nowotny said that the ECB did not reach the inflation target. The regulator requires a new set of instruments. The euro zone released the September consumer price index and declared about the August trade balance changes, which turned out to be lower then expected – 11.2B against forecasted 20B. During the day, the pair was in a flat.
The pair GBP/USD had strengthened amid the EUR/GBP quotations reduction by the end of the day.
The pair USD/JPY finished the trades with a growth amid the US and Japanese government bond yields. According to the preliminary data the US Reuters/Michigan consumer sentiment index was higher than expected and amounted to 92.1 against forecasted 89.0. The NAHB October housing market index was published alongside with the vacancies level and the August labor turnover.
Yesterday the debt market began to form a reversal pattern for the German and the US Treasuries 10-year bond yields. This trend continuation will increase a demand for the US assets. We cannot ignore the "investors’ risk appetite" growth. The traders’ attention is directed the US industrial production and consumer confidence publications.
The first support is at the level of 1.1325, the second one is at the level of 1.1260. The resistance is at the level of 1.1410, the next one is at the level of 1.1530.
We have a confirmed and a strong buy signal. The price is above the Cloud now and it is under the Chinkou Span. The Tenkan-sen is crossing Kijun-sen downwards; the Kijun-sen shows a horizontal movement. That is possible “Dead Cross” formation. The pair keeps growing until it is above the Cloud.
The MACD indicator is in a neutral territory. The histogram is decreasing.
The price started its correction, still it intends to grow. If the growth is continued the EUR/USD will reach the level of 1.1530 soon. The decrease target is at the level of 1.1325.
Yesterday the US and the UK government bond yields increased in the debt market. Moreover, the US crude oil inventories publication supported the US currency. The traders’ attention is focused on the US industrial production report.
The pound continued its upward movement, beforehand it had corrected to the level of 1.5421.
The first support is at 1.5390, the next one is 1.5300. The resistance is at the level of 1.5460, the second one is at 1.5550. The pound upward trend is stopped; the pair began a consolidation phase.
There is a confirmed and strong buy signal; the price is above the Cloud. The pair is above the Chinkou Span. The Tenkan-sen and the Kijun-sen show a horizontal movement. The pair will keep its growth until it stays above the Cloud.
The MACD is in a positive territory. The histogram is growing.
The pair stooped its growth. If the pair breaks the level 1.5460 the growth will be continued. Otherwise it can return below the level of 1.5390.
The US and the Japanese moderate bond yields increased in the credit market which increases the US assets investments’ attractiveness. The Nasdaq high-tech index was the growth leader in the US stock market that indicates the interest growth for the risky assets. That is traditionally a negative factor for the Japanese yen as a funding currency. Meanwhile, investors are studying the US September industrial production release.
The USD/JPY started an upward corrective movement. The price managed to break the resistance level of 119.20.
The price is finding the first support at 119.20, the next one is 118.40. The resistance is at 120.40, the next one is at 121.60.
There is a strong sell signal. The price is below the Cloud now and the Chinkou Span. The Tenkan-sen shows a horizontal movement and the Kijun-sen is directed downwards. The USD/JPY will keep falling until it is below the Cloud.
The MACD indicator is in a negative territory now. The histogram is decreasing.
If the course remains unchanged we will see the pair at the level of 118.40. Otherwise it will return above the 120.40.
The dollar strengthened positions after the US Labor Department reported that the number of initial jobless claims fell by 7,000 to 255,000 from 262,000 the previous week. The US Commerce Department reported that the consumer prices fell by 0.2% last month that is in line with the expectations. Investors drew attention to the US industrial production report and to the consumer sentiment that is in search for economic recovery additional signs.
The price is finding the first support at 0.9420, the next one is 0.9370. The price is finding the first resistance at 0.9540, the next one is at 0.9650.
There is a confirmed and a strong sell signal. The price is below the Cloud and it is below the Chinkou Span. The Tenkan-sen and the Kijun-sen show horizontal movement. The downward movement will be until the price is below the Cloud.
The MACD is in a negative territory. The price is decreasing.
The first target is the level of 0.9420, the second one is 0.9370.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman.