Today’s Forex Guide

Weekend summary & the week ahead


Nov.17.2014

G20 & Brisbane Action Plan

The G20 summit at the weekend tried to resolve what they see as the biggest three challenges facing the world at the moment: Ukraine, Ebola and economic growth (climate change also got a look in, but as long as there is cold weather during winter, the world leaders don’t seem to truly buy into the whole global warming thing).

Business vision

Throughout the summit Russia continued to deny its presence in Ukrain and even criticized Kiev for cutting off public services to Eastern Ukrainian territories held by rebels. Ukraine leaders were quick off the mark with criticism for Putin, with Canadian PM Stephen Harper saying to him "I guess I'll shake your hand... you need to get out of Ukraine".

Criticism was about the only thing aimed at Putin though and already growth has taken priority. David Cameron is apparently also interested in repairing relations between Moscow and the West, while Francois Hollande acknowledged that sanctions are hurting both sides. Angela Merkel said that more sanctions on Russia would not help to resolve the Ukraine crisis. Good times for Mr. Putin, right? I bet he’s back half naked on his pony while laughing his heart out.

On the global growth front, ministers have agreed a global initiative to boost global GDP by 2.1% over the next five years. Prime Minister Tony Abbott said Australia focused on three key themes: boosting growth and employment, enhancing global economic resilience and strengthening global institutions. The "Brisbane Action Plan" aims to add trillions to the global economy and will reduce red tape on growth while matching private sector investment with public sector funding. This global push could persuade European leaders to allow sovereign bond purchases by the ECB and also possibly divert the funds sat in the ESM and EFSF bailout pots to be partially spent on growth.

On Ebola, that was agreed to be solved with more money. Small change compared to anything else the G20 have planned, with the IMF (International Monetary Fund) agreeing to stump up another $300m to try and fight the outbreak that has already claimed around 5,000 lives.

Climate change also got the same sort of attention, with a short speech from President Obama saying that the US isn't as efficient as it should be and pledging $3bn to developing countries to help them deal with the damage that the US has caused. Once that speech was out of the way, the politicians and the reporters moved on.

Japan is Back to Recession

Heads up forex traders! Japan announced yesterday that their economy is back in recession. This week’s set of events in Japan could make or break the yen’s longer-term trend. Here are 3 potential game-changers:

1) Japan’s GDP Release

Preliminary Q3 GDP data showed the country failed to break out of Q2's negative growth slide, revealing that Japan has indeed fallen into a technical recession.

2) Sales Tax Hike Delay

This news will almost certainly put a halt to the second planned sales tax increase, which was originally scheduled for October 2015. With recent data from Japan indicating that the economy is too fragile to withstand another blow to spending, Abe might push the tax hike further back to April 2017.

3) Abe Could be Out Soon

Japanese government is very quick to kick out prime ministers and sometimes we have seen over 3 snap election during only one year.  The latest round of reports from Japan suggest that Prime Minister Shinzo Abe’s policies might be doing the economy more harm than good. This was probably why Japanese officials hinted last week that Abe might dissolve parliament and call for a snap election this year.

Rumor has it is that the snap election could be held in December 14, with campaigns set to start in December 2. This legislative shake-up could pave the way for revised economic and fiscal plans, as the current ‘Abenomics’ is losing support. Prime Minister Abe is expected to make his announcement regarding the snap election schedule in tomorrow’s Asian trading session.

Week Ahead
Looking to this week, Mr. British Pound will be back in focus when the Bank of England release the minutes from their last meeting. The Pound was on the back foot last week as the inflation report ruled out any kind of price pressures in the medium term that might force the BoE to raise interest rates. The meeting minutes will likely expand on this and we see Sterling struggling to regain much upside in the short term.

We also get press conferences from Australia, Japan and Europe. Also from Europe, we have composite PMI readings and consumer confidence numbers.

 

Intraday Forex Technical Levels


EUR/USD 4-hour Forex Dance Floor
EUR/USD 4-hour: Broke above 23% Fibonacci

Invest Diva Likes: Long positions above 1.2487 with targets at 1.2563 and 1.2624 in extension.

If Pair Goes Nuts: Below 1.2487 look for further downside towards 1.2363 and 1.2299.

What's up on the Forex Dance Floor: The pair reached our bullish target at 1.2563 after entering the Ichimoku's cloud, and is now teasing its upper boundary and our pivot level at 23% Fibonacci. The RSI is heading up above the neutrality area.

Supports and Resistances
1.2624

1.2563

1.2487 Pivot Point

1.2363

1.2299


GBP/USD 4-hour Forex Dance Floor
GBP/USD 4-hour: Rebounding.

Invest Diva Likes: Long positions above 1.5591 with targets at 1.5731 and 1.5817 in extension.

If Pair Goes Nuts: Below 1.5591 look for further downside towards 1.5481 and 1.5409.

What's up on the Forex Dance Floor: The pair is consolidating between the previous bottom and 23% Fibonacci level below the Ichimoku's cloud. The RSI is heading up from the oversold zone.

Supports and Resistances
1.5817

1.5731

1.5591 Pivot point

1.5481

1.5409


USD/CHF 4-hour Forex Dance Floor
USD/CHF 4-hour: Rebounded from 50% Fibonacci level.

Invest Diva Likes: Long positions above 0.9622 with targets at 0.9687 and 0.9737 in extension. .

If Pair Goes Nuts:. Below 0.9548 look for further drops with targets at 0.9503 and 0.9448 in extension

What's up on the Forex Dance Floor: The pair is rebounded above our bearish target and 50% Fibonacci level at 0.9548 and teasing the pivot level below the Ichimoku's cloud. The RSI is moving below the neutrality area.

Supports and Resistances
0.9737

0.9678

0.9622 Pivot point

0.9592

0.9548


AUD/USD 4-hour Forex Dance Floor
AUD/USD 4-hour: Rebounding.

Invest Diva Likes: Short positions below 0.8791 with targets at 0.8678 and 0.8544

If Pair Goes Nuts:. Above 0.8791 look for further upside towards 0.8888 and 0.8985

What's up on the Forex Dance Floor: The pair failed to break above a key resistance level at 0.8791 and heading down towards the Ichimoku cloud. The RSI is moving above the neutrality area.

Supports and Resistances
0.8985

0.8888

0.8791 Pivot Point

0.8678

0.8544


USD/JPY 4-hour Forex Dance Floor
USD/JPY 4-hour: Consolidaitng.

Invest Diva Likes: Long positions above 116.56 with targets at 117.50 and 118.86 in extension.

If Pair Goes Nuts: Below 116.56 look for further downside towards 115.60 and 114.16.

What's up on the Forex Dance Floor: The pair is consolidating after reaching our bullish target at 116.56 above the Ichimoku's cloud. The RSI is moving above the neutrality area.

Supports and Resistances
118.86

117.50

116.56 Pivot Point

115.60

114.16


USD/CAD 4-hour Forex Dance Floor
USD/CAD 4-hour: Breaking below Ichimoku's cloud.

Invest Diva Likes: Short positions below 1.1317 with targets at 1.1272 and 1.1226 in extension.

If Pair Goes Nuts: Above 1.1317 look for further upside towards 1.1372 and 1.1463.

What's up on the Forex Dance Floor: The pair broke below the Ichimoku's cloud and wasn’t able to break above the 38% Fibonacci level. The RSI is heading down from the neutrality area.

Supports and Resistances
1.1463

1.1372

1.1317 Pivot Point

1.1272

1.1226

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