Daily Technical Analysis by XtreamForex

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GBP/USD – 1.39 ON THE CARDS?

GBP/USD chewed through a key resistance zone on Friday.
CME data show max additions in 1.39 strike call option.
Technicals favor further upside.
Having defended 1.35 levels since the beginning of the year, the GBP/USDchewed through strong resistance in the 1.3659-1.3710 area on Friday and closed above 1.37 for the first time since June 2016.

The strong move upwards seems to have revived interest in the GBP/USDcalls. The CME data for GBP/USD February expiry options shows the open interest/open positions in call options rose by 1526 contracts on Friday. Meanwhile, the open interest in put options increased by a mere 408 contracts.

What’s more interesting is that open interest at 1.39 strike call went up by 754 contracts. Also, additions were seen in 1.3950 call, 1.40 call and 1.4050 call. The numbers indicate the investors could be betting on a further upside in the pair, possibly towards 1.39 levels.

Read more : http://www.xtreamacademy.com/forex-news/gbp-usd-1-39-cards/

 

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Nzd/usd on a corrective slide near 0.7300 ahead of nz gdt

NZD/USD ON A CORRECTIVE SLIDE NEAR 0.7300 AHEAD OF NZ GDT

DXY rebound caps the upside.
A stronger Yuan fix underpins.
Eyes on NZ GDT price index
The NZD/USD pair kicked-off Tuesday on a bearish note, correcting a part of yesterday’s rally to fresh 4-month tops of 0.7315, as the bulls take a breather ahead of the key NZ GDT price index release.

NZD/USD finds support near 0.7285

The spot failed to sustain above the 0.73 handle and corrected briefly before finding fresh bids near 0.7285 region, after the PBOC set the Yuan reference rate for today at 6.4372, the strongest since Dec-mid 2015. The NZD is used as a liquid proxy for bets on China, as China is New Zealand’s top trading partner.

However, the Kiwi keeps losses as the US dollar stages a minor rebound against its major peers after it fell to more-than three-year lows of 90.05 a day before. Increased expectations of higher global interests rates, suggests that the Fed is not the only central bank to move towards policy normalization this year, which in turn weighed heavily on the buck.

Read more : http://www.xtreamacademy.com/forex-news/nzd-usd-corrective-slide-near-0-7300-ahead-nz-gdt/

 

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Gbp/usd rejected at 1.3835, surrenders 1.3800

GBP/USD REJECTED AT 1.3835, SURRENDERS 1.3800

Closely tracks DXY price-action.
Brexit headlines will continue to weigh.
Focus shifts to the US industrial figures.
The GBP/USD pair failed once again to sustain above the 1.38 handle, now accelerating the corrective slide from fresh post-Brexit vote highs reached at 1.3836.

GBP/USD back to test 5-DMA at 1.3768

The spot ran into the key resistance zone located near 1.3835, as the US dollaris seen recovering early losses versus its main peers, having dipped to the lowest levels since Dec 2014 at 89.98. The USD index looks to stabilize near 90.25 levels, as attention now turns towards the US industrial production data due later on Wednesday.

The AceTrader Team explained, “although the greenback snapped its recent losing streak initially on Tuesday and staged a rebound against the majority of its peers on short-covering, the intra-day decline in U.S. stocks where the Dow tumbled from record highs of 26086 triggered renewed broad-based USD selling in late New York trade.”

Read more : http://www.xtreamacademy.com/forex-news/gbp-usd-rejected-1-3835-surrenders-1-3800/

 

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NZD/USD STUCK AT 0.73 FOR A FIFTH CONSECUTIVE SESSION

Kiwi struggles to cut through offers around 0.76.
Overbought technical conditions at play?
Focus on US-NZ yield spread and US government shutdown.
The NZD/USD is struggling to rise above 0.76 in a convincing manner for the fifth straight session.

Having rallied 7.67 percent from the November low of 0.6780, the pair looks overbought as per daily RSI. Still, the downside has been capped near 0.7230 this week, courtesy of broad-based US dollar weakness.

The story has not changed much this Friday. The US 10-year treasury yield rose above 2.63 percent; the highest level since December 2016. Still, the USD has failed to catch a bid. Also, keeping USD no the back foot are fears of a US government shutdown.

Earlier today, the US House of Representatives passed a bill to fund government operations through Feb. 16. However, the bill still needs an approval by the Senate, where it faces an uncertain future.

Read more : http://www.xtreamacademy.com/forex-news/nzd-usd-stuck-0-73-fifth-consecutive-session/

 

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Usd/jpy: Bearish below 100-d sma ahead of boj this week

USD/JPY: BEARISH BELOW 100-D SMA AHEAD OF BOJ THIS WEEK

USD/JPY Bulls unable to get above 100-D SMA.
USD/JPY traders turn to BoJ this week.
In a day of no data in Asia, the market is quiet and USD/JPY is stationary in Tokyo around the closing prices for Friday. Currently, USD/JPY is trading at 110.63 with a high of 11.85 and a low of 110.51.

Contained by the 10-D SMA, USD/JPY is consolidating the recent losses that occurred last week from 111.48 to aforementioned lows today despite strong US Treasury yields that climbed to their highest since September 2014. The 10-year yields finished up on Friday at 2.64% having ranged between 2.61% and 2.66%. Also, the US government shutdown was a thorn in the Bull’s hooves while we await the outcome of this week’s BoJ.

Special update: US Government officially shut down

BoJ on the cards this week

“The Bank of Japan also meets this week and under current term, this will be Kuroda’s last quarterly ‘outlook’ meeting. The BoJ Governor is likely to send a message that official interest rates are going nowhere just yet. With neither central bank likely to signal policy changes this week, further US$ weakness may be averted,” explained analysts at Westpac.

Read more : http://www.xtreamacademy.com/forex-news/usd-jpy-bearish-100-d-sma-ahead-boj-week/

 

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Gbp/usd rises above 1.40 for the first since post-brexit vote

GBP/USD RISES ABOVE 1.40 FOR THE FIRST SINCE POST-BREXIT VOTE

Cable peeps above 1.40 in Asia.
Defies weak UK data and rising treasury yields.
Will it hold above 1.40?
GBP/USD clocked a new post-Brexit vote high of 1.4003 and was last seen trading at 1.3990 levels.

As discussed yesterday, the rally looks unjustified if we take into account the widening 10-year UK-US yield spread. Also, the RSI has diverged on 1-hour and 4-hour time frame (has not made news highs along with price), signaling the potential for a pullback. Further, a false upside break would be confirmed if the spot closes below 1.3945 (Jan 19. high).

That said, the macro data out of UK has not been encouraging either. As Kathy Lien from BK Asset Management says, consumer price growth slowed year over year and retail sales nosedived in the month of December. Excluding auto purchases, retail sales experienced its largest decline in 7 months.

Hence, GBP bulls may find it hard to keep the pair above 1.40 unless the labor data due tomorrow shows a sharp rise in the wage growth figures.

Read more : http://www.xtreamacademy.com/forex-news/gbp-usd-rises-1-40-first-since-post-brexit-vote/

 

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AUD/USD RALLIES HARD TO TEST 0.8100 ON AGGRESSIVE USD SELLING

DXY keeps falling.
Aussie nears Sept 2017 tops.
Focus shifts to the US data.
The offered tone around the US dollar keeps growing bigger, now pushing the AUD/USD pair sharply higher in a bid to regain 0.81 handle.

AUD/USD: Further upside still in play?

The Aussie extends its renewed upside into a second day this Friday, as the bulls continue to take advantage of the persistent weakness seen in the US dollar against its major rivals amid a change of stance by the US authorities on the US dollar exchange rate. The US dollar index came under aggressive selling pressure after the US Treasury Secretary Mnuchin said that a weaker USD is good for trade opportunities.

Moreover, an extension of the weakness in Treasury yields combined with rising oil prices boosts the demand for the AUD as a higher-yielding currency while the rebound staged by its OZ counterpart, the NZD, following a big miss on the CPI figures, also provided extra legs to the ongoing rally in the spot.

Valeria Bednarik, Chief Analyst at, writes, “The strong momentum in commodities, with US oil above $65.00 a barrel and gold prices firmly above $1350.00 a troy ounce, fueled the rally. The pair is not far below 2017 high of 0.8124 achieved last September, a possible bullish target for the upcoming sessions.”

Read more : http://www.xtreamacademy.com/forex-news/aud-usd-rallies-hard-test-0-8100-aggressive-usd-selling/

 

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Usd/jpy back in no man’s land after a turbulent ny session

USD/JPY BACK IN NO MAN’S LAND AFTER A TURBULENT NY SESSION

USD/JPY to crumble again or…?
USD/JPY not quite out of the woods yet.
After a day caught between the ECB surprise and the Trump comments sending the dollar all over the place overnight, currently, USD/JPY is trading at 109.60, up 0.31% on the day, having posted a daily high at 109.79 and low at 109.19.

USD/JPY rallied on the Trump comments around the dollar when he was speaking in a CNBC interview, saying that he wants a ‘strong dollar’, and reiterating the comments that he had made in Davos earlier when he said that Mnuchin comments were taken out of context. He said that the dollar was going to get “stronger and stronger”.

The dollar’s reversal

The dollar reversed to make a high of 89.5800 and a big figure higher than the lows of the day, closing near to the opening price of 89.2830 to end near enough flat on the day. US yields were in a range of between 2.61%-2.67% -0.97% on the day closing at 2.62%. USD/JPY collapsed to 108.49 before the Trump rally and a close of 109.40 after a high of 109.70 that was faded.

Read more : http://www.xtreamacademy.com/forex-news/usd-jpy-back-no-mans-land-turbulent-ny-session/

 

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NZD/USD – CORRECTIVE MOVE ON CARDS?

USD due for a technical correction.
Upbeat US core PCE could yield boost USD.
The NZD/USD chart looks toppy.
“Technically, the dollar is due for a bounce, but on a fundamental basis, there needs to be a catalyst”, says Kathy Lien from BK Asset Management.

As Analysts at ANZ writes, “the focus this week will be the FOMC, non-farm payrolls, end-month flows and continued trade/political talks, such as NAFTA developments.”

That said, the NZD/USD might witness a healthy correction even on the back of upbeat US core personal consumption expenditure (due at 13:30 GMT), given the last week’s toppy price action after dismal NZ Q4 CPI reading.

Read more : http://www.xtreamacademy.com/forex-news/nzd-usd-corrective-move-cards/

 

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Gbp/usd – low odds of further near-term gbp gains?

GBP/USD – LOW ODDS OF FURTHER NEAR-TERM GBP GAINS?

Risk reversals indicate falling demand for GBP calls.
Theresa May is now odds-on to resign in 2018, most options will hurt sterling.
GBP/USD options activity indicates a near-term top could be in place at 1.4345 (Jan. 25 high).

The implied volatility premium for GBP calls over GBP puts has quickly faded, as indicated by the risk reversals, suggesting investors are less concerned about a further near-term rally in GBP.

GBP/USD One-week 25 delta risk reversals are paid at 0.22 GBP puts today from a 0.17 GBP call bias two weeks ago. Meanwhile, the benchmark 1-month 25 delta risk reversals are 0.03 GBP calls from 0.375 GBP calls last week (also the long-term high).

PM May’s resignation could hurt Pound

Speculation is on the rise that “window is closing” on PM May’s leadership after recent complaints about her lack of vision and rows about the direction of Brexit. That said, May’s exit could be bad for the British Pound.

Reuters report says, “of the eight shortest priced names-in-the-frame quoted by bookmaker Paddy Power, at least four would raise the risk of a GBP-negative disorderly Brexit. Those four are Jacob Rees-Mogg, Boris Johnson, Andrea Leadsom and Michael Gove, all of whom backed the leave campaign.”

Read more : http://www.xtreamacademy.com/forex-news/gbp-usd-low-odds-near-term-gbp-gains/