FOREX TRADING ANALYSIS FOR FEB 27 – MAR 3
By Olawale Oladeji
waledejiwale@gmail.com
Forex trading last week ended with risk sentiment as mentioned in our analysis for prior week, as investors transferred funds from risky to time tested safe haven assets. The EURO suffered the deepest plunge, having lost 0.46% to the greenback and more than 1.13% to the Japanese Yen.
Traders who are following won’t be surprised however, because my analysis for last week was majored on mostly Euro pairs.
This trading week is one to watch out for as focus will be shifting toward US Economic data for hints about whether the Feds are going to hike rates or not.
But, it doesn’t mean it is going shift the Euro out of limelight as political worries and uncertainty in the zone’s affairs persist, especially when a candidate like Marine Le pen (whose campaign promise is to lead France out of The EU) is leading in the polls, a situation that is now generating huge concerns in the market.
WATCHLIST
EUR/CAD
I mentioned this pair in the a fortnight ago, particularly that we may likely see an upside, because of the price action spotted on the weekly chart, but this was not so, probably because of the uncertainty that weighed on the Euro and Canadia’s Consumer Price Index (month-on-month) report that came out though good, it was definitely insufficient to help the market break below the trendline support at 1.38044.
However, last week, it closed with another pin bar which keeps my bias on this pair bullish. Check my previous analysis to know what I’m planning on this pair.
Fundamental analysis
The Euro is still down due to political outlook on the Eurozone. The Canadian Dollar has a good CPI m/m data at 0.9% but its retail sale data came up worse at -0.5%. Which I know The Bank of Canada (BOC) is reviewing and will address this Wednesday. We don’t expect to see a change in interest rate, but a statement from the bank will go
a long way in hinting investors of its next line of action.
EUR/GBP
This is also one of the pair I wrote about a fortnight ago whose setup has become more interesting. The pair broke out of the wedge and also broke the 200SMA downwards for the first time since December 2015 when it first broke it higher (amazing! I must say). But the last three trading days after the break has been very indecisive as buyers and sellers slug it out within the range. Well, I wait to see further downside so I can look for a better position to sell this pair since I was unable to take the break. I’ll be looking out to sell bounce at 0.83300 support. But for now, I’m still sitting on my hands regarding this pair.
EUR/JPY
One of the biggest losers of the week is still on my radar as we are not done with risk aversion yet. So traders who followed my advice two weeks ago should hold position. And trader who are yet to enter this wonderful trade should be prepared, because in the prior week, I warned that we were going to break through 119.5 level and find support at 118.6 level, which we did. Now I am looking to add it to my trade, I’ll place a sell limit order at 119.6 level which is a 38.2% Fibonacci retracement of the move from 121.04 to 118.6 and also a Support Turn Resistance (S.T.R.) level. I will first take profit at 118.6 level and I’ll let the rest run as long as downtrend is intact.
USD/JPY
This pair has been distributing for a while now, I hoping it is about time we see a huge downside. After catching the 118.00 level, it fell off the cliff and broke the 115.00 level downward and consolidated between 115.00 and 112.46 area. Then went down to a key support level at 111.5 bounce off to 114.5 area and now it is fast approaching the
111.5 level again. The break of the 111.5 level will likely see more downside as more bears take over this pair. So I’m patiently waiting for the break of 111.5 level. And if you are not in this trade yet, I’ll advise you do the same.
NZD/USD
This pair is still on our watch list, despite the fact that the pair bounced off the 0.7133 support and 200 SMA on the daily chart. But it was unable to break the 0.72400 resistance that made it 50% fibonacci retracement of the total move from 0.73400 to 0.7133 and also keeps it in a transition between 0.724 and 0.7133 resistance and support levels respectively. Well, I already sold it at the top of the range since it refused to break the resistance level 0.724 and my first profit at 0.7133. I hope to add it to my position if we take through 0.7133 level and the 200 SMA on the daily timeframe.
Fundamental
The USD’s strength and weakness since 2016 has been based on whether to hike rate or not, a situation expected to play out ahead of the next meeting (coming up on March
10). But now the market is not really seeing a hike on the table for March which is making the USD’s strength to decline.
The NZD’s weakness is due to the RBNZ’s dovish comment in its last meeting and also poor price of the recent GDT index reports make NZD weak enough to be sold against the USD
NB: It can be sold against the Japanses Yen as well, check our previous analysis for more insights on that.
