Forex analytics
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The upward trend of the AUD/CAD chart which steadily continued amid a decreasing of oil prices and other factors, is under the risk of being completed. A rising of oil prices and a strengthening of the USD allowed the Canadian currency to strengthen amid disappointing statistics on the economy of Australia. The support line has been broken and greatly displaced down. That is why now we can see that the downtrend is formed, though it's early to say whether the current upward trend is over - it can still be restored next week. The Australian currency may take again the initiative, considering that in the near future the market is not expecting any important data on the Canadian economy.
At the same time, next week we expect important information from China and New Zealand, which may impact the value of the Australian currency, as Australia is a leading trade partner of these two countries. Yesterday the AUD increased significantly during a single day - with 0.997 up to 1.008 CAD, thanks to the latest information about the economy of China, where in March exports grew 16.4% year-on-year and imports by 20%. In particular, imports from Australia grew by 74.8%. Something else that also positively impacted the strengthening of the Australian dollar are the strong statistics on the labour market - recent reports by the Australian Bureau of statistics show the employment change indicator was 60.9K, against the predicted three times less 20.
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How about Swiss Franc? Worth buying?
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GBP/JPY Technical Outlook & the Golden Cross
For the fifth consecutive day the GBP/JPY currency pair has been in a downward direction movement which pushed the prices back from 137.77 to 135.57 (220 pips in five days). The pair is trading now at 135.80 and it's stable below the 50% Fibonacci from the upside wave from 124.81 to 148.47. It's expected that the pair's daily close will be below 50% and lead the pair to 61.8% levels.
For the coming weeks it's expected that the pair will rise after we saw the Golden Cross last month. This happened when the SMA 55, 100 and 200 cut across and the SMA 200 slope turned upside on the daily time frame. The Stochastic indicator gave us a buy signal when the two lines crossed and made the oversold process, but today we don't expect any large movement because due to the Easter holiday most of the banks are closed.
The Next Few Days
From this analysis of the daily chart we can sell the pair now from the current prices at 135.80 and keep our first target at 134.70 and the second one at the 61.8% at 133.80. However, if the pair makes a bullish price action candle on the H4 chart, we can buy it with large targets at 138.50 and 141.20.
We have to be careful in the upcoming days regarding hot news like Carney's speech on Thursday and the Retail Sales on Friday from the UK.
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EUR/SGD: Review & Forecast
The rates of the EUR/SGD continue to be in the frames of the downward trend. It was expected that this week volatility on the market will decrease until the results of the elections in France become available, but yesterday the UK's Prime Minister Theresa May announced early parliamentary elections. The market reacted positively and the Pound strengthened, which had an impact on the value of the EUR.
The decision about early elections is perceived positively because it can remove the uncertainty on the question of Brexit. Results of the UK's elections will show surely if they move towards the exit from the EU or, in case of a victory for the opponents of Brexit, will finally drop this question. Thus, investors expect from the new Parliament a clear political and economic course.
The Singapore dollar was under significant pressure since yesterday. Stable macroeconomic statistics were unable to change anything amid significant political events, which directly affect the future of the EU.
At the moment the Stochastics and MACD oscillators are unanimous in the decision to open short deals. After a significant price hike after the aforementioned news, the rates may continue in the frames of the downtrend. Now the rates have consolidated and can go down, so in short-term trading the deals to SELL are the best solution. In medium-term trading it is better to wait a few days before the elections in France. Based on those results we can obtain an absolutely new value of the Euro in case of a victory for Marine Le Pen, otherwise it will strengthen for some time.
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Hello there, We invited You to attend an event organized by our Introducing Broker in Selangor, Mr. Dan Imran. The event will take place this Saturday, April 22 between from 10:00-17:00 at the following address:
Sky Nova Ventures Training Centre
No 13, Jln PPAJ 2/7,
Pusat Perdagangan Alam Jaya,
Bandar Puncak Alam, Selangor
The event will be led by analyst Dan Imran. He is the founder of Sky Nova Ventures, a company that he would like to develop as a training hub for traders. Imran has been active on the Forex market since 2007. He remember that in his early days it was difficult to find a successful strategy to match his style. However, he learned from his losses and as of 2015 he started enhancing his analysis by using naked charts. He increasingly discovered more and more techniques that he implemented and tested in his trading.
Through trial and error he was finally able to devise a strategy for success - and now he is willing to share it with you! Imran believes learning is the key to mastering the Forex market, and now he welcomes you to join him for this training seminar.
Imran’s Certifications:
1. Kirkpatrick Training Certified
2. PSMB Malaysia Certified Trainer
3. Behavioural Based Interviewer Certified
Here is the program for the seminar:
10.00 am - 10.30 am: Introduction, Breaking the Ice
10.30 am - 12.30 pm: Basic Forex by Ali
12.30 pm - 2.00 pm: Lunch Break/Prayer
2.00 pm - 3.00 pm: Basic Forex by Ali (continued)
3.00 pm - 4.30 pm: Forex Analysis by Dan Imran
4:30 pm - 5.00 pm: Speech by Vladimir Syrov, CEO of SuperForex
Get in touch with Mr. Imran:
Email: [email protected]
Whatsapp/Phone: +6016-6344660
Telegram: @DanImran
Come and join us for a productive day and finally discover the perfect trading strategy to bring you success!
Best,
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NZD/JPY: short market review and forecast
The NZD/JPY rates is in the frames of rapid downward trend. However, the new Zealand dollar had stopped falling and consolidated in the range 76,0 - 76,76 JPY. Yesterday it's been received important statistics related with 2 currencies. Economic statistics from New Zealand, positively impacted the NZD. The consumer price index grew in 2.2% year on year, exceeding forecasts. It is also the highest annual growth rate since 2011. For the 1st quarter of the year the index grew in 1%, slightly exceeding forecasted 0.8% level. At the moment, that was enough to stabilize the exchange rate of the NZD. In a week, the market expects new data about trade balance of New Zealand that may affect the value of the NZD.
On the other hand, the trade balance of Japan, already known, and taking into account seasonal fluctuations, amounted to only 0.17 T, although it was expected that this indicator will be 3 times more, and will be at 0.61. That's disappointed investors, although overall the economy of Japan is at good level. Volume of exports and imports grew, and exceeded predicted forecasted values. This also becomes the main growth factor of the Japanese economy in the future. Investors expect growth by 1% in 2017.
At this moment, the oscillators MACD, Stochastics, the RSI are neutral. It should be noted that since April 10, we can see formation of the flat trend, thought at the moment, it is early to say about ending of the downtrend. There're no enough preconditions for that. You should pay attention to the points of entry 76.75 and 76.2 JPY. At the moment, upon medium-term trading, it is recommended to open the short deals on the trend.
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How to Be a Successful Introducing Broker - Seminar in Jakarta
SuperForex would like to invite you to take part in an exclusive training event this Wednesday that will show you the tricks to making a successful career as an Introducing Broker.
During the workshop you would be able to learn more details about being an IB. We would discuss topics such as online and offline methods of promotion and other business secrets from inside the world of Forex. We would also coach you on how to use SuperForex money in your practice as an IB, how to integrate the Local Depositor function into your work, and how to increase your IB turnover to get maximum profit.
The Event
The training workshop will be led by our local representatives in Indonesia as well as the CEO of SuperForex, Mr. Vladimir Syrov. Refreshments will be provided. The time and address of the workshop are as follows:
April 26, 13:00-17:00
One Pacific Place - Jl. Jend. Sudirman No.Kav 52-53, RT.5/RW.3, Senayan, Jakarta, Kota Jakarta Selatan
Please reserve a spot in advance by calling:
+628118308743 (whatsapp Yoga)
+628111351109 (whatsapp Dicky)
We hope to see you there!
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EUR/GBP/USD: More Elections - More Opportunities to Earn on Forex
Political elections or referendums in key countries can be considered a real gift for traders. Luckily, this year is full of such political events which give us the unique opportunity to receive great profit in just one day. One such example is predicting the outcomes of important elections.
Brexit and the presidential elections in the United States in 2016 were only the beginning. Of course, for many people the results of these political events came as a surprise, but their effect has exceeded all expectations. However, elections give us the opportunity not only to get profit based on the results, but also to be active during the election campaign because even preliminary polls influence the market and exchange rates.
Many traders prefer to wait out the unstable period, however, the elections in France prove that it's very easy to predict the outcome of the election, though the effect of price hikes can't be compared with any other hikes that you can see usually on the market. Bear in mind that this was is only the first round of elections. Just in two weeks we would witness round two. If the results from the elections are obvious, then the possible impact for the Euro is also easy to foresee, even without a deep knowledge of Forex and the basics of technical analysis.
Last week we also found out that we can expect one more important political event - parliamentary elections in Britain. This news affected the market and significantly raised the value of the GBP to long-forgotten levels. We can say that Theresa May and the whole of Great Britain gave us another opportunity to earn on the Forex market by predicting the outcome of these elections.
We want our traders to be able to take advantage of the many opportunities to get profit. We can certainly say that more elections means more opportunities to earn on Forex without putting a lot of effort or doing tons of research in advance. In the next few years we likely won't have this many political events and chances to make a profit so easily.
Take a chance while the market is still hot with the news of fresh elections! This is just the beginning and many important political events will be coming our way very soon.
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This week the gold has been under the strong pressure of the Euro based on the results from the first round of elections in France. Investors have got some confidence in the future of the EU and the victory of the loyal-to-the-EU candidate Emmanuel Macron. The Euro has considerably strengthened against most currencies and investors became more active on the market towards risker, more profitable assets.
The only thing that hasn't allowed the gold to lose much in price is a slowdown in the US economy, an uncertainty in the Fed increasing the interest rate, as well as a lack of interest in a strong dollar from the government and the U.S President D. Trump. The rates continue in the frames of a downward trend, which is becoming more intense despite the fact that geopolitical tensions and uncertainty started to subside amid good news from the EU, and the situation with military conflicts which did not worsen.
It should be noted that despite the increased volume of gold mining by some mining companies, long-term forecasts say there might be an inrease in the yellow metal's value in the future. According to BMI research, by 2020 the price for gold will be $1500, but considering the probability of military conflicts and geopolitical tensions in the world, it can be sooner. On this basis, we can say that at this moment there are no preconditions for the end of the upward trend, which has lasted from the end of 2016, although the support line is now in danger to be shifted down.
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Investing.com - Quotes and Financial News
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CL/WTI: Review & Middle-term Forecast
Oil prices continue weakening but the rates are still in the frames of the upward trend which began over a year ago. However, the trend is near its completion and now on the daily chart you can see signs of a flat trend formation (like the prices from November 2016) that remains in the range of $47-$54 per barrel.
Support and resistance lines haven't been broken yet. The increase of the drilling rigs in the United States for the 15th consecutive week continues to adversely affect the price of oil. It reached a minimum level, which only happened twice in six months.
On the market we can see an uncertain situation: on the one hand, OPEC countries are going to continue their agreement to reduce oil production and investors believe that it will be done at the next meeting pn May 25. On the other hand, the USA cancels all these efforts with their growing oil production. An increase in oil demand is unlikely to resolve the issue with the overabundance of oil on the market.
Amid all of this, the long-term forecasts of some analysts, in particular experts from Citigroup (NYCE:C), about a further increase in the price of oil to $65 in the second half of the year do not seem probable because oil prices are constantly under the pressure of a number of factors. This week it was the restart of oil production in Libya, the recession of business activity in China and, as mentioned above, the constant increasing in drilling rigs in the United States. Factors that could unambiguously support the price of oil are not enough, but the situation may change at the end of the month based on the results from the OPEC meeting.
At this moment the entry point to the market can be the levels of 47.4 and 48.2. The most optimal right now are the deals to BUY which can be effective to get the profit on the price correction. The MACD and RSI oscillators partially confirm this. It is most likely that after reaching a new minimum level the price will move up. Soon investors will focus on the next OPEC meeting, and news from countries-participants of the agreement to limit oil production. This can slightly enhance the price of the black gold in the short term.
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USD/CHF Daily Overview
The pair we’d look at today is the USD/CHF. We have seen some gains recently and expect this trend to continue. The pair overcame the falling trend line in the beginning of the new month; we have confirmations of the increase by the 20- and 50-period moving averages, so we definitely expect the pair to continue its bullish movement.
In news from the United States (or lack of such), the Fed decided not to raise interest rates due to disappointing economic reports from the past weeks. They do not necessarily see the slow growth as a problem because the States still demonstrate a strong labor market, so likely the lukewarm stages of growth are just a temporary issue as the country has been adapting to a new government and a new president for the past few months. Overall, the Federal Reserve is not alarmed and while they left the rates unchanged at their last meeting, increasing them later in 2017 is still an option if new economic data comes in positive.
What’s important right now is to watch out for the bullish movement’s continuation. If the pair remains above 0.9915, keep an eye on the nearby resistance level at 0.9955. Just in case, bear in mind that the rate is also near a support level at 0.9900.
As of the moment of writing this article, the USD/CHF is around 0.9924 and most technical indicators are giving us sell signs.
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On the French Front
A few weeks back we talked about the relation between the economic stability of Europe and the politics that guide it. With elections in France, Germany, and the recently-announced preliminary vote in the United Kingdom, there is much that can impact the markets.
France is the first of these three major factors. As one of the most advanced states in the world, France is an important pillar of the European Union and its fate can affect the world in many ways. This year France is choosing a new president. Let us remind you that France is a presidential republic, so the president there actually has executive power to do a lot of things.
As April rolled out, we saw the first round of elections in France where all candidates competed and, as forecasted, Emmanuel Macron and Marine Le Pen got most of the votes. Since neither of them collected more than 50% they are set to face each other in a second round this Sunday.
A little bit is in order about the two candidates. On the one hand, we have Macron, a man and politician that is best described as average or ordinary. There is nothing particularly scandalous or inspiring about him. If the conditions were different and he wasn’t running against Le Pen, perhaps he wouldn’t even have made it to the second round. But with his stable look and pro-EU attitude, Macron seems to his French voters as someone who would preserve the order in France as it is, which makes him a good candidate.
On the other hand, there is Marine Le Pen, leader of the far right in France, which she inherited from her father. Her supporters are loud and passionate (much like Trump’s); they are eager to see changes in France. However, Le Pen plans to make those changes happen by breaking with the European Union and focusing on a “strong” but isolated France. Although she has more class and political savvy than her American counterpart, Le Pen still suggested policies based on racism and Islamophobia.
Preliminary polls predict an easy win for Macron, mostly on account of the fact that he would collect the protest vote against Le Pen and would likely unite the voters against her. A Macron win would also stabilize the European Union (and the euro), which is why it’s desired by investors.
The euro already moved up yesterday against the dollar based on Macron doing better in the presidential debate than Le Pen. The latter appeared not to have a clear plan about her proposal to leave the eurozone – Le Pen wasn’t able to point out whether she wants France to revert back to the franc or how it would pay off its debts. Leaving the eurozone most certainly will lead to a default and an economic crisis in France.
So here you have it: Macron is good for the euro, Le Pen is not. Polls predict a strong Macron win. These are the results to watch out for. However, 2016 proved that polls can get it wrong, and if by any chance Le Pen wins, there will be mayhem on the markets. Keep an ear to the ground for any news from France. We hope you’d be able to profit from any resulting volatility.
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GBP/JPY Technical Outlook & H4 Chart
In our last report about the GBP/JPY currency pair from April 17 we said the pair had a golden cross on the daily chart but we sold the pair until seeing a bullish price action. Indeed, we saw the bullish pin bar on the same day and bought the pair, which achieved all of our targets by more than +540 pips in just one trading week.
After the pair broke the down trend line which started last December, we saw the GBP/JPY rally to rise by more than 1150 pips till now. The pair is trading inside a price channel which still supports the positive movement. The moving average is below the prices which represent a support area, while the Stochastic indicator gave a lot of overbought processes. The pair is still rising ahead of the last top 148.47.
The Next Few Days
Based on this analysis of the H4 chart we can buy the pair now from the current prices at 146.90, keeping our first target at 148.40 and the second one at 150.10, that is in case the pair is still trading inside the price channel. However, if we see it break the channel down we can sell it, especially considering the cash rate decision this week.
We have to be careful in the upcoming days regarding hot news like the Official Bank Rate and Manufacturing Production from the UK next Thursday.
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AUD/CAD: review and forecast
The rates of the AUD/CAD continues in the frames of the upward trend. The canadian dollar remains under the pressure of low oil prices. Volatility for this currency pair remains very high. So, in early may, disappointing statistics about economy of Australia and China, have led to significant falling of the AUD value. During 1 day it has been lost 2 CAD cents. It was influence of the data about the trade balance of Australia. Investors expected the growth of the surplus to 3.4 billion while it was just 3.1 billion; also disappointed the value of the business activity index in the services sector in China.
By the end of next week, the volatility in the market can be decreased. The market don't expect any important data until next Friday. Then, the market will receive information about retail sales and consumer prices in Canada, for April. A day earlier, also expect information on employment in Australia in April. It should also be noted that this month will be the summit of the OPEC and volatility will be gradually increasing together with the oil prices. So it can strengthen the CAD because it is expected that on the upcoming summit countries-exporters will extend the agreement about Reduction of the oil extraction. Therefore, oil prices will rise for some time, but countries which didn't join the agreement, mainly the US, unlikely will let oil to rise significantly in price for a long period because if prices increase the USA increasing the volume of oil production, adversely affecting the market.
Oscillators are neutral at the moment, but considering perspectives of oil prices growth in the near future, and consequently the strengthening of the Canadian dollar, the optimal solution now is to open the deals to SELL upon medium term trading. Upon the short-term trading, it is also possible to open the deals on the trend.
Read more analytic reviews at https://superforex.com/analytics
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Dollar Reign
The American dollar appears to be making its fluctuations yesterday’s news as it’s headed for new heights and is currently at its highest level for May, perhaps even for 2017 so far. This new strength largely results from positive economic reports from the States, as well as the high probability of a rate hike next month.
Looking back into the past months, the dollar starter 2017 in a fantastic manner: after Trump’s election the USD reached levels unseen for the past decade. However, Trump’s presidency saw a good amount of challenges and investors began to doubt whether he’d succeed at implementing the economy-boosting measures he promised, which led to a decline in the dollar. This continued up until a few days ago when Trump again surprised us by dismissing Comey, the head of the FBI, for reasons that are still dubious.
Still, the USD somehow was able to overcome all this and start gaining again, most probably because we’ve had a more or less calm week in terms of political events, so the markets haven’t been disturbed much. The Federal Reserve seems extremely likely to increase interest rates again in June. Considering that the rest of the world is focused on the opposite kind of measures, this creates a lot of potential for the dollar to strengthen more against other major currencies.
Perhaps talks of parity with the euro may begin to circulate again. Although the European currency rallied earlier this week with the relief that Macron won the presidential elections in France, the impact was not strong enough to make the euro invulnerable and it has declined since.
On the contrary, economic data from the US comes in consistently positive. We are awaiting further reports even today. Overall, it seems that the labor market is stable and if the Fed increases interest rates to battle inflation, the American economy could prosper.
Still, we should not forget that the American president is a highly volatile factor. He has already shown that he can be inconsistent in his opinions and impulsive in his actions. If the market participants feel distrust towards him, that could pose a significant hurdle for the dollar to truly take off.
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GBP/JPY Technical Outlook & Daily Chart
Today we’d look at some details around the GBP/JPY currency pair, which shows the potential for growth. The GBP/JPY recently went through a number of bullish checkpoints and kept moving up consistently. The moving average at 50 and the relative strength indicator of the pair both demonstrate a stable tendency for the pair to be moving further up.
In order to predict the pair’s movement on the daily chart, it’s important to remember that if the pair is moving above the pivot at 146.15, then it’s likely that it will go up to the resistance level at 147.00; if that is overcome, the next important resistance lies at 147.35. If this is what’s going on in the chart, then we recommend opening long positions with the above-mentioned resistance levels as targets.
However, if you have any doubts about a retreat and you see the pair move under the pivot, then the appropriate strategy would be to expect a drop in the price and open short positions with targets at the support levels of 145.70 and 145.35.
At the moment of the publication of this article, the GBP/JPY is trading around 146.66, above the pivot point. The moving averages are giving us a buy signal; the technical indicators vary a bit more, but overall also lean towards a buy.
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EUR/SGD: review and forecast
Strengthening of the Euro, which began since the 1st round of elections in France, continues now. Political risks for the EU has been decreased and future of the EU does not cause serious doubts among investors anymore. Good economic indicators in the Eurozone, allow the Euro to grow, against most of currencies including the SGD. So we can see that on the chart of the EUR/SGD was formed by the rapid upward trend which may continue in the future. The value of the Euro reached the price 1.5455 SGD which is the highest level for the last 12 months.This week, the Euro also strengthened significantly against the USD, reaching the highest for the 6 months level.
Obtained data on GDP matched with expectations of investors, as well as recently received data about the consumer price index, so they continue to invest in Euro. At the same time, the Singapore dollar is losing value and can't find an incentive to strengthen. Received today data about Domestic Exports of Non Oil (NODX) in Singapore decreased to - 0.7 % yoy while investors were expecting for 12.4% growth considering that last month NODX volumes increased up to 16.5% yoy It should be noted that fall of exports, has been fixed for the first time in 6 months, so the market took it negatively.
New upward trend will probably continue, but in the near future we can expect for price correction. Oscillators MACD, Stochastics, RSI, unanimously indicate a good moment to open the short deals against the trend. Though upon medium-term trading it is better to open the deals on the trend.
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Seminar for traders in Singapore
Hello there,
We invite everybody to attend a free event organized by our partner in Singapore, Mr. Edward Khoo. The event will take place on Saturday, May 27 from 13:00 until 17:00 at the following address:
Mercure Singapore Bugis 122 Middle Road 188973, SINGAPORE
The seminar will be led by Mr. Edward Khoo, the founder of LS Capital Pte Ltd, a company that specializes in developing and selling highly profitable Forex trading Expert Advisors (automated software/trading robots). Mr. Khoo has more than 35 years of financial trading experience which includes trading stocks, shares, gold, Forex, and more. He used to own 15% of a banking software development company in Indonesia from 1992 to 1999. Throughout his career Mr. Khoo has tested over 2000 Forex indicators, 4000 Forex EAs and hundreds of Forex trading systems.
With in-depth research and testing, he finally came up with an Expert Advisor that has been sold to more than a thousand customers. The latest LS Golden Unicorn Super EA has been tested to achieve 724% in 2016 and is now ranked number one not only in Singapore but also globally. We are certain there is no EA in the market that rivals such a high profitability!
Here is the program for the seminar:
1:00pm to 1:30pm – Registration
1.30pm to 2.00pm – Golden Unicorn Super EA Design Concept – Simon Leung
2.00pm to 3.00pm – Comparison with other EAs with Test Results – Edward Khoo
3.00pm to 3.15pm – Q & A – Edward Khoo/Simon Leung
3.15pm to 3.30pm – Tea Break
3.30pm to 4.00pm – Introduction of SuperForex, open accounts, IB opportunities, Q&A
– Edward Khoo/Vladimir Syrov
4.00pm to 5.00pm – Lucky Draw, Opening of trading accounts, Fill EA special offer Form.
5.00pm – Seminar close
The CEO of SuperForex will be present at the seminar and available to provide answers to all of your questions, as well as further advice about trading and partnership opportunities.
This seminar is absolutely free of charge. All you need to do is reserve a spot and join us for an informative and fun afternoon! Confirm your spot in this free event by contacting the Mr. Khoo at:
Email: [email protected]
Phone/WhatsApp: +8618603062255
We hope to see you there!
Best,
SuperForex
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EUR/USD are moving comparatively
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AUD/JPY Technical Outlook
Today we would talk about the AUD/JPY currency pair. In our previous report we recommended selling the pair after breaking the channel which you can see in the chart. We sold the pair at 83.60 and booked our profit at the first target level at 82.00.
The yen’s gains mirror the continuing trouble for the Trump Administration, which is jumping from one crisis to another. Last week Trump’s cabinet was rocked by reports that he had asked former FBI director James Comey to end an investigation into connections between Russia and the Trump campaign team during the US presidential election. As a result, the pair rose back again directly after touching the 38.2% from the large upside wave which started after Brexit and lasted till February 16.
The AUD/JPY is trading now at 83.20 below a downside trend line which supports our negative predictions for the next days. Especially considering that the prices are trading below the Moving Average 50 (which is a resistance level), the pair may decline after touching the SMA.
The Next Few Days
After this analysis we can sell the pair now at the current prices if the pair doesn’t break the SMA up. We can sell it again if it reaches the downside trend line at 83.90, keeping our first target at 82.20 and the second one at 80.35 - that's in case the pair is still trading below the trend line.
This week the market doesn’t have any hot news from Australia and Japan but we have to be careful about any unusual tidings as they may change the market direction.
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CAD/JPY: Fundamental Review & Forecast
The rates of the CAD/JPY for a long time have been in the frames of a rapid downward trend, but now the situation might change. The trend has lost its intensity and the Canadian dollar strengthened against the yen. Perhaps we can see the beginning of a new trend. Actually it has been formed already and we can see that the resistance line has shifted and turned up. However, given that the strengthening of the CAD is mainly based on the increase of oil prices, which continue to grow due to the upcoming summit of OPEC this Friday, crude oil prices may resume their decline for the next few weeks. This could happen in any case - if OPEC countries extend their agreement on the reduction of oil production and in case they do not. The reason is that extending the agreement by the OPEC member states does not solve all questions about the overabundance of oil on the market. The United States and Canada can negate all OPEC efforts, and higher prices will only motivate them to further increase their oil production. This has been proven in practice.
The Japanese yen wasn't able to resist successfully the onslaught of the Canadian dollar due to disappointing data from Japan this week: the trade balance of Japan was 0.1T in April, although investors expected a level of 0.25T, the volume of exports grew by only 7.5% against the expected growth of 7.8%, and the volume of imports increased by 15%, which is more than expected but in the future is a threat to the trade balance of the country. Next week important data that could support the yen is not expected at all.
Thus, we can say that in the short term, the CAD will strengthen against many currencies due to the increasing of oil prices. It's happening now - oil prices on Monday achieved a five-week high and continue to grow, so the deals to Buy will be the most effective at this moment in short-term trading.
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GBP/JPY Technical Analysis & Daily Chart
Today we’d be looking at the GBP/JPY pair. Overall, the GBP/JPY seems to be doing well as it shows a clear bullish movement on the chart. If we consult the relative strength index of the pair, we’d see it’s showing us that the pair has a good potential to keep growing. That would likely be the case, at least while the GBP/JPY pair manages to remain above the important pivot point at 144.50.
This is the case we can observe right now as the pair is located above 144.50. This bodes well for all traders who are hoping to see the pair rise further. If the GBP/JPY keeps this up, then we can open long positions and use the two nearby resistance levels at 145.20 and 145.45 as our targets. In case the opposite happens and we see the pair drop below 144.50, then we would probably see it sink further down; in this situation it’s recommended to go short and use the support levels at 144.05 and 143.75 as targets.
As of the moment of this article’s publication the GBP/JPY is trading around 144.87. This is clearly located above the pivot point, so it leans towards the first scenario described above.
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Chinese Problems
Over a year ago we began talking about China’s economic slowdown and its impact in the world, including as a contributing factor in the ongoing oil crisis. Today we would once again return our gaze to the most populated country on Earth and its economic problems as we saw China’s credit score get downgraded for the first time since 1989.
So what is the root cause for China’s unfavorable economic standing? In short – debt. According to data by the Bank of International Settlements, China’s debt last year amounted to the staggering 170% of its GDP, much more than the average debt of most countries. This massive debt is believed to have been accumulated after the financial crisis of 2008 when China engaged in heavy financial borrowing in order to funds its extensive infrastructure projects.
Of course, this is not news to China itself. The government has been aware of the issue for years and has been taking some measures to tackle it. Among revising policies to limit the negative impact of loans, however, the Chinese government hasn’t implemented anything drastic because they are still trying to preserve the country’s high growth rates.
Investors are split on the matter. Some think that China isn’t doing enough to solve the debt problem. Others fear that if the government intervenes too dramatically, it could make matters worse and even trigger a financial crisis in the country.
Nevertheless, while economist are actively interested in the issue, they are not too worried about it. China has a relatively low government debt, so they could potentially issue some bailouts to balance out their economy. So while China might be in a bit of trouble, it is by no means desperate and has in fact many options to deal with its corporate debt.
Still, it’s important to follow any news pertaining to new policies in China, as well as Trump’s pressure on the trade deficit. These may exacerbate the problem – and since China is the second largest economy in the world, its problems are everyone’s problems too.