Midnight Uncertainty

An algo trade caused the Euro to spike against its rivals in the early midnight European hours. The single curreny rose to 1.0652 against the dollar due to a trade that was designed to take advantage of the low liquidity in the markets at that time. 

As a result, the most effect was felt in Gold as safe haven which climbed to a high of $1,163, USD/CHF went below 1.0050 and Silver went to 16.25.

This is the second time an algo trade has caught investors by surprise, the first time being the Sterling flash crash on 7 Oct when the Pound dived 6.1% against the dollar.

This time it was a bit lighter, however, traders were hurt as their stops were taken out during the unexpected move. 

It is yet to be investigated what exactly is behind that trade, presumably the reason is a computer generated order causing a reverse flash crash.

USD/CHF Lower Today

USD/CHF is trading lower after a few days of consolidation at its highest point above 1.0300. The pair reached a high of 1.0344 and immediately retreated to lower levels but still managed to hold above key 1.0300 level. A few days passed and price was struggling to keep the momentum.

A few times the US dollar gave in to bullish pressure going below 1.0300 but then again got back up above and has entered into consolidation that continues up to now. Main trend on the long-term remains bullish but with the decent sideways trading we might expect to reach below 1.0230.

If that happens, next bear target would be to go below 1.0100 and then parity again. On the other hand, bulls are on standby awaiting January when President-elect will be officially sworn as President of the United States. Given his powerful administration, market participants have high hopes for the future of the US equities and currency and these expectations may provide the next boost in the US dollar against its counterparts.

Chart: USD/CHF D1

USD/CAD Higher

USD/CAD is having one last big move before the year ends in a few days. In the last trading days of 2016, USD/CAD registers a move to the upsde with prices going above 1.3550. Today, the pair is trading at its highest since the beginning of the bullish move on Dec 14. The price then was 1.3080 and had just met the long-term support.

Bulls did not miss the chance to go in and back the US dollar against its counterparty. Since then, the pair has made good progress going as high as 1.3580, which is seen as immediate resistance and also a double top.

If price goes above current levels, we might see a continuation of the upward move in early 2017. On the other hand, in the past few days we are seeing a timid and somehow protective US dollar, which might spread to the USD/CAD trading also. In that case, price could retreat to lower levels with first target at 1.3350.

Chart: USD/CAD D1

USD/JPY Post-Christmas Trade

USD/JPY has been consolidating around its highest levels since Christmas. The pair registered a high of 118.70 on Dec 15 and has been trading around that level eversince. Low volatility and low liquidity were to be expected after Christmas as market participants are away and no major news are expected to stir the market.

Traders and investors are taking a few days off to be with their families all around the world as business is put on hold. At least for a while before we start anew on Jan 1. Until then, the market is expected to trade flat with a calm US dollar.

USD/JPY can be expected to trade around 117.00-118.05 until volatility is back on stage and market is ready to take it to another level. Current market price is 117.28 in this post-Christmas calm Tuesday.

Chart: USD/JPY H4

EUR/USD Higher

EUR/USD is trading a bit higher in today's session going up to 1.0467 and is currently at 1.0461. The pair registered a good move to the upside last week when it traded at a low of 1.0351 and reached a high of 1.0498. Since then, the euro has been struggling to keep the momentum and has reached the resistance zone twice at current market price.

Euro bulls need to close above 1.0480 if they want to continue their rally towards the 1.05 goal. Short-term resistance can be expected at 1.06 while major resistance lies at 1.0870. On the other hand, dollar bulls have the advantage over the pair as they have a strong downwards momentum that might only be halted temporarily before continuing to parity.

A lof of experts and analysists predict parity in early 2017 which is the reason for other markets, such as Gold, to depreciate as market investors are pumping fresh money to back the US dollar in its historical rally.

Chart: EUR/USD H4

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USD/JPY On Hold

USD/JPY's latest and awesome rally appears to have come to a hold as price lost steam once it reached just slightly below 119.00. The pair reacted dovishly when it went as high as 118.65 and has been consolidating around that level eversince. 

Main trend on the long-term remains strongly bullish, but the effect by the Trump wave seems to have worn off and now if USD bulls want to continue their marching North they would need something strong othwerise bears have the advantage caused by low liquidity and weak bull support. 

Expectations are that USD/JPY will continue trading in the range between 116-something to 118 until years end as market participants are away to spend time with families taking the volatility with them. 

However, we still have some important news such as Consumer Confidence and Advance Retail Sales scheduled for next week that may cause unexpected rapid moves to either side.

Chart: USD/JPY D1

USD/CHF Double Top

In the week before Christmas despite all the prior volatility and uncertainty in markets there is still some good old pattern following movements. Markets are now calmer and contained as we head into 2017. USD/CHF made a high 1.0340 on 15 Dec and since then it's been trading around the 1.0300 level. That level is seen as a second top which comes less than a month after the first top made on 27 Nov.

USD/CHF is now trading at 1.0277 indicating that the resistance zone is acting strongly and preventing bulls from going above 1.0350. If that level holds we might see a move to the downside to a probable first target of 1.0000, or in other words - parity.

On the other hand, given how strong the US economy is right now and how optimistic the outlook is, bulls can very easily take out the resistance and go well above 1.0350.

No matter which one it might be, market participants usually are very quite in the last week of the year so low volatility can be expected.

Chart: USD/CHF D1

AUD/NZD Consolidation Continues

It has been a rough year for both the Australian and the New Zealand dollar. The pair made a low in September at 1.0230 which acted as a support zone, confirming the prior support levels at 1.0022 and 1.0042. After that recent low the Australian dollar started to appreciate against its counterpart going as high as 1.0763.

That level, however, was met with disapproval from the bear camp and they used the resistance created by the 200SMA to bring the price down to lower levels. Since then, the pair has been in consolidation forming a coil with very volatile and uncertain moves to both sides.

Currently, the pair is trading at 1.04640 and, as it appears, it might try to revisit the support level this time slightly below 1.0300. If we see a dip below that line, bears can take control over it and bring it even further below 1.0100.

On the other hand, if we can break above the 200SMA then bulls will have the upper hand.

Chart: AUD/NZD D1

USD/CAD Lower in Opening Hours

USD/CAD is trading lower in the first hours of the opening session today as market participants are cautious and careful in the week before Christmas. US dollar bulls are withdrawing a bit as the US currency is seen to decline against its competitors.

USD/CAD traded at 1.3418 last week and went slightly below 1.34, currently 1.3383. Main trend on the short-term remains bullish but on the long-term we can observe how narrow of a path the pair has chosen to go. Since May USD/CAD has been trading in the range between 1.27 and 1.34. Last week the USD made a low of 1.3080 against the CAD and that acted as a support, moreover the pair got assisted by the 200SMA.

What follows next might very well be a consolidation until years end as we have no major news or events that can inject new volatility. Traders and investors might take this time to get off the markets and spend time with their families in the warmest holiday of the year.

Chart: USD/CAD D1

Gold Sells Off as Dollar Surges

As we head into years end markets become more and more uncertain due to increased volatility and unexpected price changes. The interest rate yesterday acted as a catalyst to a new wave of dollar rally and that resulted in a sell off in the Gold market. 

The precious metal went from $1,165 to $1,138 on the day of the raise and continued to depreciate the next day going as low as $1,122. Currently, Gold is slightly recovered and is trading around $1,133. This, however, might only be a reflex from the sharp sell off and price still has a good chance to continue South to a probable first target level at $1,100. 

It wouldn't be surprising if bears try to reach that psychological $1,100 before the year ends as this looks a realistic goal for we have seen what Gold did in the second half of the year. 

In January this year Gold was at a low at $1,046, then went up almost 40% to a high of $1,375. Now Gold has lost almost every gain made throughout the year leaving all Gold bugs devastated. 

The economic outlook for the US economy is very optimistic and that might reflect on the price of Gold in the near future and Gold bulls might not like it.

Chart: XAU/USD H4

FED Raises Rates For The Second Time in a Decade

The FED decision was a unanimous "Yes" on a rate hike with 0.25 basis points. The notion, according to FED Chair Janet Yellen was that the economy has made considerable progress towards maximum employment and price stability. Over the past year, the US economy has produced 2.5 million net new jobs and inflation is moving towards the 2% goal.

What's even more interesting is that they said they are looking to raise rates three more times next year. The stock market didn't like that and we saw the Trump-induced rally in Dow Jones lose steam. The US dollar was the biggest winner in the event as it surged against all other markets.

EUR/USD fell below 1.05, USD/CAD reached above 1.33, USD/JPY was just a few pips shy of 118.

On the larger scale, President-elect Donald Trump wants to see the economy growing at a 3% to 4% growth rate and he's looking to pursue fiscal policy through tax cuts. Janet Yellen, however, wants to see the economy run a little bit faster and to lower the unemployment a bit more but she doesn't want to see the economy overheat. And if she sees the economy overheating, she's going to raise interest rates more. And that could make FED Chair Janet Yellen a thorn in the side of the new US President Donald Trump.

EUR/USD Awaits Key Meeting

Market participants are now anticipating the latest FOMC Meeting that will decide if the rates go up. It's considered by some that this is a "done deal" and the Interest rate will hike with 0.25 basis points. EUR/USD already is rallying as well as US equities. Yesterday the Dow posted a record breaker when it reached 19,956.

With Dow closing in on 20,000 and the US dollar approaching parity with the Euro many experts now say that the FED does not actually have a choice and it's mandatory to raise rates.

The result will be publicly announced at 2pm eastern time as market players are currently on hold with their trading waiting on the decision.

EUR/USD posted minor gains yesterday as it reached 1.0660 and is now trading at 1.0649. It is expected that price will continue trading in the same range until the news release.

Have in mind that volatility may be high and any exposure to markets poses a risk to your capital. Play it safe today and don't act based on emotions.

Chart: EUR/USD D1

Gold Weak Ahead of Key Meeting

Gold is seeing its worst days since the beginning of the year. The precious metal has found support in February levels around $1,160. Price is now $1,160.57 and it seems that the metal will now consolidate ahead of one of the most important events of the year - the last FOMC meeting for 2016 which will determine whether the interest rate will raise.

Market participants are sure that the FED Chair Janet Yellen will raise rates and they acted on this belief by supporting the US dollar in its latest rally against all competitors. This means that if we really get a raise, as everyone expects, the move down might not even happen as it did with the last interest rate raise - the US dollar did not do anything when the news came out.

The best thing you can do, as advised by all experts, is to not trade the news. This is important in such times as these where the uncertainty globally and locally in the US is the main environment for the market.

Analysts and experts predicted before the last raise that a Yes vote will put an end to all bullish hopes for Gold, but 2016 proved that the opposite actually happened.

Chart: XAU/USD D1

EUR/USD Holding Ground

EUR/USD managed to pull through the bear attack that has been going on for the past days. In November the pair went from 1.13 to a low of 1.05 then in December it climbed to a high close to 1.09 and now is trading at 1.0565.

The bear attack is far from over as this latest correction might be preparation to put the pair even lower - possibly below multi year low below 1.04. If the Interest rate goes up on Wednesday then we might witness a continuation of the sell off move and visit levels below 1.04.

However, it is possible that the move is already over and even if we get a raise we might not see a decline in price as the depreciation already happened.

Whatever the case, Wednesday will be the day where we find out the potential EUR/USD level for the year end.

Chart: EUR/USD D1

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EUR/USD Volatility At High

ECB Tapers bond purchases causing the EUR/USD to implode due to high volatility. That's what the day brought as we were observing the press conference held by Mario Draghi, the ECB President. The meeting turned out to be the major event of the day as it's effects were felt all over the currency markets.

President Draghi stated in his speech that the ECB will continue its easy monetary policy. The Euro was heavily impacted by the announcement driving the pair to a low of 1.0602.

Before the news, the US dollar was weaker than the Euro trading around 1.08. In the eye of the storm the pair reached a high of 1.0872 and then nosedived for the last three hours.

Now the EUR/USD is trading at 1.0627, only slightly better than the worst for today. Into the midst of this new cycle of bullishness in the aftermath of the election of Donald Trump as President the US dollar and the US equities are enjoying a series of record breakers. All this causes strong interest by traders and investors thus depreciating other markets and assets.

In this light, the FED is meeting on 13-14 Dec to discuss whether or not to raise rates and as rumor has it, they most likely will.

Chart: EUR/USD H1

Gold Weaker

Gold is having one of its worst performances in years. The precious metal began the year with the most successful percentage increase going almost to 50%. For the second half of the year, however, Gold lost most of its gains due to stronger dollar and overall economic strength in the USA.

Currently, Gold is trading at $1,170 and it looks like the drought is bound to continue as we head into December and approaching the rate decision in the middle of the month.

According to experts in the field, Gold will gravitate towards $1,200 with a possible low of $1,000 if the US economy continues to over perform in the same direction.

Gold reached a high of $1,375 mid-year and has been depreciating since then. Latest low was made yesterday when price reached $1,157. In order for the trend to turn we need strong fundamentals against the US dollar and that, in the current situation, is highly unlikely.

Chart: XAU/USD D1

EUR/JPY Higher

EUR/JPY has been in an uptrend since it reached a bottom at 112.59 in the end of October. The pair has been supported by the weakening Japanese Yen and most lately by the happening in the Eurozone. Although the Italian referendum did not pass and prime minister Matteo Renzi is about to leave the post, the Euro was strengthened against all its counterparts.

The initial reaction of the failed referendum yesterday was to sell the Euro with the idea that the Eurozone is headed into deeper recession. However, what we actually experienced was a reaction similar to the one we saw when Trump won the Presidency.

This is one of the beauties of the market. When people see an opportunity to buy low they do it. Yesterday the EUR/JPY reached a low of 118.70 and is now trading at 122.54 with a high of 123.21.

The situation remains very volatile as markets are anticipating the rate decision on 13-14 Dec. This would be one of the most awaited fundamentals of the year.

Chart: EUR/JPY D1

EUR/USD After The Italian Referendum

The Italian referendum was rejected as close to 60% of voters opt for "no". Italian prime minister Matteo Renzi said he will resign as a result of the failed referendum. In the opening hours of the trading day, the Euro slipped to a fresh 20-month low against the dollar going as low as 1.0505. 

Now the pair has slightly recovered and is trading at 1.0585. The referendum seriously damaged the Euro against its major counterparts and now with these new lows everything can happen. It is a time of great uncertainty on the global scale as governments fail, rulers resign and new order appears. 

Only with time we can know for certain what is good for the global economy as current market environment reacts based on fear and greed which of course is not a true indicator of the real market conditions. 

Until December a lot more is about to happen as the US will most likely raise rates which can boost the dollar even further and we might see parity in the EUR/USD for the first time since 2002.

Chart: EUR/USD H1

USD/CAD Uncertain

USD/CAD is trading lower in today's session marking a third consecutive day of losses. The pair has been one of the most uncertain instruments to trade this year. Although it did have major swings up and down, since the end of January it depreciated with more than 2000 pips, thus becoming one of the top assets to lose its price in 2016.

Apart from that, since bottoming out, USD/CAD has been trading sideways making it very difficult for investors and traders to choose a direction and stick with it simply because there is no trend.

Lately, things haven't been much different. The pair went to a high of 1.3587 on Noe 14 and market multi-month high. After that high, it went as low as 1.3255 in today's session.

Lack of direction is the reason to be cautious when trading this market as price fluctuates to extreme highs and lows day in and day out.

Chart: USD/CAD H4

USD/JPY Aiming Higher

USD/JPY continues its strongly bullish move that started on Election day when Trump won the Presidency. Since then, the pair has been trading sharply to the upside with price going from 101.20 to a high of 114.80. Main trend as of now is bullish as market sentiment shifted from the long-term bearish channel when the price reached a low of 98.97.

If tomorrow the news are for more jobs created and positive NFP data, we can expect further continuation of the bullish move. In light of that, first resistance is seen at current market price, which is also forming a double top at 114.80. If that level is taken out, we can expect price to reach 120.00 and even 121.70 to meet the second resistance.

The US dollar is definitely having the best time this year and it doesn't look like it's about to end with the end of the year. If we get a raise in mid-December and good tidings from President elect Trump the domination of the US dollar is bound to continue in 2017.

Chart: USD/JPY D1