Monday, 30 March 2020
[EUR] Euro in the Correction 2020 0330
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Recovering Euro 2020 0327
cf. [EUR] Just Watching the Market 2020 0323
cf. [EUR] Euro in Complicated Crisis 2020 0316
The currency pair EUR/USD is under the correction after the breakthrough 1.1145 on last Friday.
This correction is reasonable, because euro rose without the correction for almost week. Euro succeeded to form the double-bottoms pattern which is a price-increase pattern in the four-hour chart in last week.
The currency pair may fall to 1.10 or more, and it seems that euro will find the new trend in the four-hour chart. If we think Fibonacci, euro could retreat to 1.0961, which is 38.2 percent correction.
The pair retreats to 20 Simple Moving Average in the daily chart. I think euro will rebound to the adjusted downward trend line over 1.1250.
Though euro may get the downward trend line in short-or-mid term against dollar, it is still valid to keep long bias on euro in the yearly term.
Dollar has risen sufficiently since US-Sino Trade War and coronavirus outbreak. As the US real economy is affected by the pandemic, greenback gradually falls.
When we recall Global Financial Crisis in 2008, greenback surged whatever Fed chair and other governors of the central banks around the world did.
It was the financial crisis in the finance system, and this crisis is from real economy. We need to watch the market and think whether the difference of the crisis origin is determine dollar's trend.
Gjallarhorn liquidated the long position of euro-fx at CME. It will watch the market for some days and decide the bias after checking Non-Farm Payrolls released on this Friday.
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Friday, 27 March 2020
[EUR] Recovering Euro 2020 0327
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Just Watching the Market 2020 0323
cf. [EUR] Euro in Complicated Crisis 2020 0316
One of the major currency pair, EUR/USD has risen for a week. There was a price-turning, double-bottoms pattern after a price-falling, Head-and-Shoulders pattern in the four-hour chart.
Euro is in the correction after a-week-long rally. It is 1.1010 in FX Margin and 1.1051 in futures CME as of 10:38(UTC). It is around bottom band of Bollinger Bands in one-hour chart.
Though euro may fall against dollar, it is still valid to keep long bias on euro.
Dollar rose sufficiently since US-Sino Trade War and coronavirus outbreak. As the US real economy is affected by the pandemic, greenback gradually falls.
When the pandemic spreads around the world, panic investors sold the risky asset and bought only US dollar. Dollar Index, dollar's value against the basket of major six currencies rose above 100 and the stock markets were bearish and panic.
As the COVID-19 patients increase in the United States as did in Europe and Asia, dollar falls against euro. Dollar Index falls to 99.25 as of 11:14(UTC).
The unemployment claims hit 3 million 283 thousands recording high, it lowered dollar, too. It means that the pandemic affect US real economy and a lot of workers, more 3 millions, were dismissed in the last week.
I recommend that the trade should be cautious, because its rising doesn't mean the upward trend yet.
When recalling the memory in global finance crisis 2008, all gauges were out of order and dollar surged. It was financial crisis and this crisis is pandemic and real economy problem.
US Parliament agreed the packages worth more than $ 2 trillion, including one-off funds for individuals, increased unemployment benefits, corporate support including small business loans and debt relief, and state support. It is expected to come into effect shortly after the House of Representatives vote and the signature of US President Donald Trump.
Though euro rises, the main trend line since summer 2008 is downward. When euro rises to 1.19, it may meet the trend line. The currency pair of EUR/USD is just 1.10s.
Gjallarhorn has a long position of euro at futures, CME.
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Thursday, 26 March 2020
[JPY] Dollar's Rally against Yen 2020 0326
 |
| USD/JPY four-hour chart, source:FXDD.com |
cf. [JPY] Falling Safe-Haven Asset Yen 2020 0320
cf. [JPY] Fear Easing and Yen Falling 2020 0205
Japanese Yen has been regarded the safety haven. While the fear of COVID-19 outbreak has increased, JPY, Japanese Yen surged against other currencies including dollar.
But as Federal Reserve begins super Quantitative Easing program, JPY falls and greenback rises.
The daily chart of currency pair USD/JPY shows the explicit V pattern, rapid price recovery pattern and keeps the price rising. The price of the currency pair has turned over the previous support line. The currency pair made Double-bottoms pattern, price-turning-to-rise pattern in the four-hour chart.
The price-rising of the pair means dollar rising.
The price of the currency pair fell on Thursday, it could be regarded the correction after the continuous rising, not trend turning.
It is still valid to hold long bias about the pair, dollar rising.
Japanese central bank, Bank of Japan has decided to increase Quantitative Easing and Japanese Prime Minister Shinzo Abe announced the postponement of the Olympic Games 2020 to next year.
The Abe and IOC's decision may carry the burden on yen.
And Federal Reserve cut the Federal Funds Rate one percent point to near zero percent and began the Quantitative Easing Program simultaneously.
It is reasonable just to watch the market without position. But if the deal should be gone on, Dollar Long position is valid till the medicine or vaccine against the respiratory virus are developed.
Gjallarhorn bought a long position of futures, euro fx 2020-06. Gjallarhorn guesses euro would recover in this year after dollar's rally last year.
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Monday, 23 March 2020
Sunday, 22 March 2020
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Euro in Complicated Crisis 2020 0316
One of the major currency pair, EUR/USD rises as the week begins. Euro tries to come in the bands from the bottom band of Bollinger Bands in the daily chart and the weekly chart.
The trade should be cautious, because its rising doesn't mean the upward trend yet. We need to think it as a correction while falling, considering the movement in Asian session on Monday gives less reliability.
Getting the long positions is valid when euro rises against US dollar over 1.0812 which previous peak in one-hour chart and four-hour chart. If it succeeds to break through the previous peak, it can build the double-bottoms pattern in one-hour chart and gives the momentum of exceeding 20 moving-average in four-hour chart.
Euro surges against dollar on Monday last week when US benchmark rate was cut one percent point. But dollar won the match after all.
Therefore the bias of strong dollar is still effective in the short term.
When recalling the memory in global finance crisis 2008, all gauges were out of order and dollar surged. It was financial crisis and this crisis is pandemic and real economy problem.
It is recommended just watching the market rather than get a long or short position of currencies. This crisis is from the respiratory virus outbreak and real economy then. It's not the matter of finance as did in Great Depression and global finance crisis in 2008. The news of success of making vaccine and medicine is more important than that of central bank's policy news and government's fiscal policy
Dollar Index, dollar's value against the currency basket of six major currencies hit 102 last week. It rose to 102.99 once,
Greenback's value surged as the demand of dollar has been increased by companies and investors. Because the investors buy greenback to exchange their asset for dollar and to prepare the possible margin call, and the corporations around the world concern over reduced sales and repayment of existing dollar loans.
The pair takes clues from the US dollar’s broad strength following the Senate’s failure to pass the COVID-19 bill.
The US Senate fails to pass even the first barrier of its much-awaited stimulus package, estimated around $2.0 trillion, as opposition Democrats show the sign to renegotiate the key bill with the ruling Republicans.
Some major economy indices are released in the week, it is predicted investors to listen not-good records due to the pandemic coronavirus outbreak.
Manufacturing PMI is expected to be sluggish in both the Eurozone, Germany and the United States.
If the U.S. indicators appear to be sluggish, the dollar's rise could slow down.
The number of weekly unemployment claims ended on the 14th was 281 thousands, an increase of about 70,000 from 211,000 in the previous week, and it is predicted to increase to 750 thousands.
German Ifo releases German Ifo Business Climate on Wednesday. It was 87.7 last month and it is expected to be 87.9 in the month.
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Wednesday, 18 March 2020
[JPY] Falling Safe-Haven Asset Yen 2020 0320
 |
| USD/JPY four-hour chart, source:FXDD.com |
cf. [JPY] Fear Easing and Yen Falling 2020 0205
cf. [JPY] Rising Yen 2020 0130
cf. [JPY] Rising Expected after Correction 2020 0126
The pandemic breaks a dashboard of economy.
Currency pair USD/JPY rises completing price-rising pattern, double-bottoms pattern in the four-hour chart and V pattern in the daily chart respectively. And it surges strongly from under the bottom band of Bollinger Bands in the weekly chart. We can guess the currency pair will keep upward.
The price plunged under the support line three weeks ago, and it is still under the line and faces it soon. The line which was support line at 109.11, may hinder the rising price. And there will be the correction.
If you buy long position of USD/JPY, you can get a chance when it rebound after the temporary correction.
Yen fell 0.42 percent or 0.45 yen against dollar on Wednesday.
The pandemic of coronavirus, CoVid-19 recalls global financial crisis and drags financial asset down. And it boosts US dollar. When the scare of recession, investors buy safe-haven asset such as greenback, Swiss Franc and Japanese Yen as well as traditional gold.
But in this case, investors buy only US dollar and dollar price surges against most of another currencies. Therefore Dollar Index(USDX), dollar's value against the basket of six major currencies rose 1.46 percent to 100.976 recording high since March 2017 on Wednesday.
The economic blockade due to the respiratory virus outbreak makes people worry about dollar liquidity and buy greenback.
The economy news agency, Yonhap Infomax reported, the increasing dollar demand called liquidity deficit of greenback. And it reported, Goldman Sachs said, strong dollar reflected the greenback's position in the global economy and the finance system, and it raised dollar.
Japanese central bank, Bank of Japan decided to increase Quantitative Easing on Monday, but it is not helpful yet.
And Federal Reserve cut the Federal Funds Rate one percent point to near zero percent and began the Quantitative Easing Program simultaneously on Sunday, before the opening of Asian stock market and Forex market. The US economy daily Wall Street Journal reported, Fed has never cut the benchmark interest rate two times between regular FOMC meetings since 1994. It means Fed thinks the economic crisis due to the pandemic of CoVid-19 outbreak seriously.
It is reasonable just to watch the market without position. But if the deal should be gone on, Dollar Long position is valid till the medicine or vaccine against the respiratory virus are developed.
Gjallarhorn doesn't have any position of currency pair and futures items.
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Monday, 16 March 2020
[EUR] Euro in Complicated Crisis 2020 0316
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Before FOMC Meeings 2020 0315
cf. [EUR] Correction of Euro 2020 0311
cf. [EUR] Correction or Downward trend 2020 0305
cf. [EUR] Recovering Euro 2020 0302
cf. [EUR] Between the technical rebound and upward trend 2020 0226
Euro surges on Monday. US Fed Chair Jerome Powell announced Federal Funds Rate was cut one percent point and it raised euro against dollar.
Beginning of Europe session, euro broke through 20 moving average in four-hour chart and kept its rising momentum. But there are 120 Exponential Moving Average in one-hour chart and 20 SMA in four-hour chart simultaneously as the resistance line. It is inevitable to be in the correction.
And the price of currency pair EUR/USD tries to build the price-decline, Head-and-Shoulders pattern in four-hour chart. We need to watch the chart rather than to buy euro. Gjallarhorn recommends to buy euro after confirming rebound of euro. Euro could retreat to 1.099 and decline to 1.0799 in the worst case.
At least the trader should check whether euro succeeds at 1.10~1.099.
Federal Reserve cut the Federal Funds Rate one percent point to near zero percent and began the Quantitative Easing Program simultaneously on Sunday. FOMC meetings are planned to be held on Tuesday and Wednesday, and market participants predicted Fed would cut the benchmark rate on this day.
The economy daily Wall Street Journal reported, Fed has never cut the benchmark interest rate two times between regular FOMC meetings since 1994. It means Fed thinks the economic crisis due to the pandemic of CoVid-19 outbreak seriously.
WSJ reported, Jerome Powell decided decided to hold the emergency meeting ahead of the weekend on last Thursday. The officials held a video conference and decided to cut the rate by 1 percent point to meet market expectations. In 5 years, the United States has decided not only to open the era of zero interest rates again, but also to cut interest rates in two weeks.
Fed Chair Powell announced the rate cut before Asian stock market opening. The scheduled FOMC meeting on Tuesday and Wednesday is replaced by the emergency announcement of the day.
And South Korea's central bank BOK also cut the benchmark rate 0.5 percent point to 0.75 percent in a temporary conference on Monday. The meeting of BOK was not planned on the day.
BOJ, Japanese central bank held the meeting earlier than schedule and decided to increase double to purchase ETF.
Though these efforts, stock markets around the world move down. Asian market declined on Monday. Japanese NIKKEI225 declined 2.46 percent and Topix 2.01 percent down. Chinese Hang Seng Index was down 4.03 percent, Korean KOSPI 3.19 percent down, too.
Central banks around world cut their key interest rates and begin their QE programs. But we should know the pandemic is controlled by doctors and vaccine researchers not by bankers and economists.
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Sunday, 15 March 2020
Saturday, 14 March 2020
[EUR] Before FOMC Meeings 2020 0315
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Correction of Euro 2020 0311
cf. [EUR] Correction or Downward trend 2020 0305
cf. [EUR] Recovering Euro 2020 0302
cf. [EUR] Between the technical rebound and upward trend 2020 0226
One of the major currency pair EUR/USD dropped on Friday and it showed the possibility of building Head-and-Shoulders pattern in the four-hour chart. And we need to watch the market with short bias of euro in the short term.
The euro, which has been rising so far, retreated significantly in the weekly chart as if the upward trend was shifted to downward. If euro keeps dropping, it could be supported at 1.099x which has been the price-support band.
Though it succeeds to rebound next week, it may face 1.12 as the resistance line. The four-hour chart makes Head-and-Shoulders pattern.
And we should wait FOMC meeting held on Tuesday and Wednesday. Because the trend may be determined after US benchmark rate by FOMC.
Markets have been threatened by the global pandemic and oil war between two oil maker, Russia and Saudi Arabia.
The surplus oil-produce by top two oil producers led greenback and equities' prices in New York stock market. And euro could surge 1.29 percent on Black Monday, last week.
But the WHO's declaration of pandemic and oil-price plunge recalled the risk-off again.
Meanwhile, US President Donald Trump declared a national emergency over the coronavirus outbreak on Friday, and it made greenback surge. Currency pair EUR/USD plunged 0.57 percent or 0.0064 dollar to 1.11149 dollar. Dollar Index, dollar's price against the basket of major six currencies, rose 0.88 percent to 98.347.
Federal Open Market Committee, FOMC is held this week and it is expected to cut its benchmark rate, Federal Funds Rate, again. The benchmark interest rate band is 1.0~1.25 percent and market anticipate it 0.5 percent point cut to 0.5~0.75 percent. Fed Chair Jerome Powell already cut the benchmark interest rate 0.5 percent point early this month and euro rose.
European Central Bank, ECB froze its key rate, but it was not satisfactory to market participants. It kept euro down. Market expected more key-rate cut and more powerful action, but ECB didn't. Euro sank again, as it did in two previous months.
Due to the uncertainty, the market fluctuates every day.
Therefore Gjallarhorn thinks, the long bias of euro is still valid in long term. Lots of market participants expect Fed will cut the rate 0.5 percent point to max 0.75 percent on Wednesday. Falling euro may rebound after FOMC meetings and press conference.
Gjallarhorn plans to buy euro after confirming the trend.
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Wednesday, 11 March 2020
[EUR] Correction of Euro 2020 0311
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Correction or Downward trend 2020 0305
cf. [EUR] Recovering Euro 2020 0302
cf. [EUR] Between the technical rebound and upward trend 2020 0226
cf. [EUR] Expecting Euro Recovery 2020 0223
Is Euro going to rise against dollar? Euro is under the correction, and it may retreat again. The weekly chart signals the correction and short-term downward trend. Four-hour chart shows reverse V pattern. But V pattern is less reliable than double-tops and head-and-shoulders patterns. And there is possibility of building double-tops pattern, too.
We need to be more careful to see the trend turn downward with the reverse V pattern. It is important to watch the weekly chart of EUR/USD in which the price exceeded 120 exponential moving average for the first time. In my experience the 120 EMA is not broken at once. It means euro could retreat, then the reverse V pattern in four-hour chart is supported.
If euro retreats, it could be supported at 1.12 first. The price, 1.1070 can be set for the second support line.
If euro succeed to rebound after the correction, euro is expected to rise to 1.20, where the main downward trend line is located.
US dollar rose 1.32 percent against euro on Tuesday. The market expected US fiscal stimulus and equities in New York stock market rebounded after Black Monday.
As well as new coronavirus, CoViD-19, the conflict between oil producers, Russia and Saudi Arabia threatened the financial market on Monday. OPEC and Russia failed to agree to decrease crude oil. Two oil producer increased oil produce suddenly, then the price plunged some 30 percent a day. It called Black Monday.
The market participants think, the pandemic outbreak makes more expenses from government and it is positive to the market.
Tempo's Juan Perez, a foreign exchange trader, said, the market wanted fiscal stimulus than rate cut or quantitative easing, Yonhap Infomax reported on Wednesday.
Yonhap Infomax also reported, Fed's possible quantitative easing would lower greenback and support euro quoting experts' mention.
But the expectations for the Donald Trump administration's stimulus package are showing signs of decline in a day. There are reports of President Trump's proposal to reduce the payroll tax rate to zero percent for the remainder of the year, but the question is whether it will be feasible.
In Wednesday morning(GMT), Asian stock market closed down and New York Futures Index was down.
Due to the uncertainty, the market fluctuates every day.
Therefore Gjallarhorn thinks, the long bias of euro is still valid in long term. But the deal is done when the price succeed to rebound.
Gjallarhorn has liquidated its Euro FX, long position. Though it recorded the profit, Gjallarhorn missed additional one big profit after potential big loss in multi-months. It was a beginner's trading style.
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Friday, 6 March 2020
Thursday, 5 March 2020
[EUR] Correction or Downward trend 2020 0305
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Recovering Euro 2020 0302
cf. [EUR] Between the technical rebound and upward trend 2020 0226
cf. [EUR] Expecting Euro Recovery 2020 0223
One of the major currency, EUR/USD began to rally since February 20 and is under the correction after Fed's big shot on Tuesday.
The daily chart gives clue, euro moves along upper band of Bollinger Bands after succeeding of reaching the band. The negative candle after some positive candles supports that the retreating is the correction for more rising. We can have long bias to euro.
Hours charts send signal of downward trend. One-hour chart may build triple-tops pattern and double-tops pattern in four-hour chart. The down-turn pattern was not built yet, and the signal may be noise.
But we need to watch the chart carefully and check the momentum of euro, rebounding signals.
The currency pair can set support line at 1.1100 first and 1.1070 second.
One of the powerful event, Non-Farm Payrolls is released on this Friday. Market expects 175-thousand increase. The previous record was 225-thousand increase.
Euro has passed the edge of triangle pattern upward. It broke through 1.11, but faced the correction as Federal Reserve cut the benchmark rate 0.5 percent point to 1.0~1.25 percent on Tuesday. FOMC is planned to be held two weeks later and market participants expected Federal Funds Rate would be cut 0.25 percent point at the meeting. Someone predicted Fed would do before FOMC meeting.
On the contrary the ordinary response, equities in New York plunged. Because the market thought the economy situation was worse and Fed did big cut.
The expectation of other central bank's interest-rate cut made greenback to rise against euro and yen on Wednesday. Dollar index, dollar's value against the basket of six major currencies rose to 97.36 in five days.
The major market participants anticipate more benchmark-rate cut and predict euro to rise. The key rate in euro zone is zero percent, but the deposit rate is already negative, ECB has less cards to stimulate euro-zone economy. And some economist expect EUR/USD to 1.15 in the second quarter, economy news wire, Yonhap Infomax reported on Wednesday.
Gjallarhorn has still long position of euro..
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Monday, 2 March 2020
[EUR] Recovering Euro 2020 0302
 |
| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Between the technical rebound and upward trend 2020 0226
cf. [EUR] Expecting Euro Recovery 2020 0223
cf. [EUR] 기술적 반등, 유효한 매도적 관점 2020 0221
cf. [EUR] Downward Trend Euro 2020 0215
One of the major currency, EUR/USD has begun to rebound after the long and deep fall. Euro recorded the multi-year low since April 2017, but began to recover the price since February 20.
It broke through 1.10 and passed the edge of two trend line which was broken by falling euro.
The price of EUR/USD is 1.1111 as of 12:50(UTC) and it is higher than previous peak on January 31 in four-hour chart and exceeds upper band of Bollinger Bands in the daily chart.
Surging euro gives the market participants the expectation of its reaching 1.12, but it isn't uncertain and difficult process.
Forex market moves with recursion of rising and falling. It looks like vibrating unlike equities movement. As euro has fallen repeating up and down, it will repeat up and down then its trend will be determined after the fluctuation in the chart. We should not be optimistic easily.
Final Manufacturing PMI in euro zone in February was released on Monday and was 49.2 better than expected 49.1, and it supported euro.
Forex market in 1st quart was driven by not its own momentum but external facts, the pandemic respiratory virus. As the greenback did in last year, it surged early the year and euro sank to multi-years low.
As the coronavirus outbreak threatens the global economy, the participants expect central banks' action. They especially expect the Federal Reserve to cut the key interest rate.
To overcome the outbreak of nCoViD-19, coronavirus, governors of central banks of major economy entities would cut the benchmark rate, respectively, Wall Street expects.
Market Watch reported, major central banks will cut the key interest rate soon, quoting blog of Bill Nelson, chief economist of BPI. The rate cut may reach 0.50 percent point at least.
According to Nelson's blog, governors would do on Wednesday.
And Goldman Sachs predicts Fed will cut Federal Funds Rate, benchmark interest rate earlier March 16~17, in which Federal Open Market Committee(FOMC) is held.
Recent interest rate of Fed is higher than ECB's. If two central banks cut their interest rate simultaneously, Fed's action is more powerful and it support euro rising.
Though Gjallarhorn says the careful prospect to Forex but it keeps long position of Euro FX in CME. The plunge in the euro makes big loss.
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