"Fort Financial Services"- fundamental and technical analysis
04.05.2015
Fundamental analysis
There was a multidirectional trend on the Forex market. At the end of the day the pair EUR/USD decreased amid the German 10-year bond yields increase relative to its main competitors. The US manufacturing sector in the first quarter showed a significant decline and taking into account the new industrial orders decrease it is difficult to expect the data better than the forecasted medians. In this regard, the US dollar will not be able to get support and to compensate for some lost ground.
On the contrary, after setting the fresh 2-month high of 1.5490 the pair GBP/USD was hit by the sales wave amid the long positions profit taking. The British pound can be further supported by the oil prices growth. On the other hand, the pair EUR/GBP cross-rate significant growth amid the Germany and the UK bond yields reduction may put pressure on the pound. By the end of the day the pair GBP/USD had decreased.
During the day the pair USD/JPY was in demand after the Bank of Japan negative economic forecasts publication. The GDP and inflation forecasts encouraged bulls for the long positions opening and against this background, the pair dollar / yen has increased.
Technical analysis
Euro (EUR)
General overview
The euro medium-term correction is still in force and bulls still open long positions on dips. The euro zone will not please traders with the important macroeconomic statistics and in this connection the traders’ attention will be focused on the US manufacturing sector business climate publication from the ISM.
The manufacturing sector showed significant decline in the first quarter and taking into account the new industrial orders decrease it is difficult to expect the data better than the forecasted medians. In this regard, the US dollar will not be able to get support and to compensate for some lost ground.
The price is finding the first support at 1.1150, the next one is 1.1050. The price is finding the first resistance at 1.1260, the next one is at 1.1450.
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 and the Kijun-sen show 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 may expect the fall towards 1.1150 and a consolidation further on we expect a growth
Pound (GBP)
General overview
The Great Britain and the United States published the manufacturing sector business climate reports. The industrial sector is showing clear signs of slowdown in both countries and we noted weak releases amid the new production orders low volume.
On the one hand, the British pound can be further supported by the oil prices increase. On the other hand, the pair EUR/GBP cross-rate significant growth amid the Germany and the UK negative bond yields will put pressure on the pound.
The price is finding the first support at 1.5100, the next one is 1.5015. The price is finding the first resistance at 1.5200, the next one is at 1.5300.
There is a confirmed and a weak buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen shows a downward movement and the Kijun-sen shows an upward movement and form a “Dead Cross”. The upward movement will be until the price is above the Cloud.
The MACD histogram is in a neutral territory. The price is correcting.
Trading recommendations
The approach to the level of 1.5100 may lead to a price rebound upwards. The potential rebound target is the resistance level of 1.5200.
Yen (JPY)
General overview
Firstly, it is difficult to expect the United States ISM manufacturing index positive data. Secondly, sales on the US stock market after the GDP weak report publication for the first quarter may cause a wave of carry trade transactions and against this background the Japanese yen may receive additional support.
Sellers have failed to break through the strong support level of 118.30. The pair rebounded upwards and broke through the resistance level.
The price is finding the first support at 119.20, the next one is at 118.30. The price is finding the first resistance at 120.40, the next one is at 121.60.
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 an upward movement and the Kijun-sen shows a horizontal movement. The upward movement will be until the price is above the Cloud.
The MACD indicator is in a positive territory. The price is growing.
Trading recommendations
We expect the 120.40 line break that will open the way for the buyers to 121.60.
Franc (CHF)
General overview
The Fed information has frozen the bears’ enthusiasm within the dollar. Obviously, the market decided to take time out for a more detailed US Central Bank statements analysis that appeared after the FOMC meeting which indicated that the door for interest rates increase is still quite wide opened.
The price is finding the first support at 0.9280, the next one is at 0.9160. The price is finding the first resistance at 0.9370, the next one is at 0.9540.
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 horizontal movement. The downward movement will be until the price is under the Cloud.
The MACD indicator is in a negative territory. The price is consolidating.
Trading recommendations
We advise to long with the first target - 0.9370. When the pair consolidates above the first target, we can open deals to the level of 0.9540.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman.