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Technical Analysis for 30/09/2016

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Technical Analysis for 30/09/2016

Technical Analysis for 30/09/2016
September 30
09:00 2016

EUR / USD – Euro US Dollar


During the day, the pair is able to demonstrate the growth of quotations on the background of the multidirectional news flow. Today the euro zone may please the investors with positive data on the inflation for September. On the eve the preliminary assessment on the CPI was published by the locomotive of the region, Germany. The index has risen up to the maximum value since May 2015, amounting to 0.7% y / y, which allows us to rely on the release of the good data on the pan-European index. In general, it is not surprising, because of the increasing consumer costs and lending of the private sector. Thus, ultra-soft monetary policy of the ECB bears fruit. Today, the United States, on the contrary, can publish a moderately negative release on personal consumption expenditures. In August,  a decline in sales volume of automobiles, real estate as well as the decreased turnover in the retail trade was registered. In this regard, I expect the output of the indicator Core PCE worse than expected, which would put pressure on the dollar. The debt market is also optimistic for the euro: the yield spread on the10-year German and the US government bonds is growing, which is positive for the euro.

Against this background, during the day Buy position on the reduction of quotations should be opened within 1.1200 / 1.1170 and it is preferable to take profit at the level of 1.1240.

GBP / USD – British Pound Dollar


Today, the pair may again test the strength of the resistance level of 1.3056, for two reasons. Firstly, during three trading days the credit markets are experiencing the increased yield on the 10-year UK government bonds in relation to their counterparts from the United States and Germany, which increases the attractiveness of investments in British assets and, thus, will support the pound. Secondly, the release of the UK balance of payments for the 2nd quarter may please investors. In my opinion, the final figure can come out better than expected against the background of the median reduction of the negative trade balance as well as the volume increase in gold reserves. It is impossible to ignore the dynamics of the oil market: the black gold is in  the steady demand after the OPEC took the decision to limit the amount of the production from November, which is also a positive factor for the pair.

Against this background, during the day Buy positions on the reduction of quotations should be opened within 1.2950 / 1.2905 and it is preferable to take profit at the level of 1.2995.

USD / JPY – US Dollar Japanese Yen


At present, a mixed background is being formed. On the one hand, in the Asian trading session, we can expect the release of  the data on the inflation, which will be slightly better than median forecasts, against the background of rising wages in Japan. Despite the decline in corporate profits, Japanese corporations have begun to gradually improve working conditions over the last three quarters, which caused the growth of the consumer confidence index in August to its highest level over the past six months. Against this background, the yen may strengthen against the dollar to 100.70 / 100.50, where long-term investors can come to the market on order to build long positions. Why can we expect the arrival of the bulls in the market? In my opinion, long-term investors will buy the pair, counting on future changes in the monetary policy of the Fed and the Bank of Japan. The first regulator will raise interest rates this year due to the basic inflation. The second controller, on the other hand, will pursue measures to stimulate the economy as inflation expectations remain very low.

Against this background, during the day we can expect the flat within the range of 100.60 -101.60.

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