Berita & analisis pasar

After a Liberal leadership crisis hit the Australian dollar last week, the victory of former Treasurer, Scott Morrison brought some relief to the markets given that he was the most market-friendly option. This week the Australian banks are in the limelight. The banking sector recently made headlines over the Royal Commission’s investigation but a month before the first findings of the royal commission are released, a surprise increase in the variable home loan rates by Westpac stole the show.

The reason behind the hike appears to be the “higher borrowing costs from international markets”. The impact on the financial markets was immediate: ASX200 touched another fresh 10-yr high boosted by the financial index which jumped by 1.5%. Source: GO Markets MT4 (Weekly Chart) The Australian Dollar dropped sharply and saw more than 70 pips movement after the announcement.

Source: GO Markets MT4 (Hourly Chart) Westpac's move is similar to the RBA tightening of the economy. The Reserve Bank was under pressure to hike interest rate, and such a move should have cheered up the Australian dollar. However, higher mortgage repayments and a stagnant economy were the reasons behind the reluctance of the RBA to increase the interest rate.

The bank independent pricing decisions will increase the mortgage burden on Australians who are already bearing higher living costs- rising energy prices and private health insurance costs. Subsequently, Consumer Confidence and household spending will likely take a hit and those concerns could put pressure on the RBA to take actions. A rate hike is unlikely, and the markets are either expecting the RBA to stay on hold for longer than expected or even reduce rate.

Loan funding pressures can change the dynamics of the current monetary policy as the probability of a rate hike in 2019 decreases while the possibility of a cut increases. The central bank would have to wait and analyse the impact of this sudden bank interest rate hike on the macroeconomic level. All eyes are on the next RBA meeting as the local currency could suffer a more profound decline on a deeper dovish RBA expectations.

Upcoming News » 6:30pm Construction PMI - GBP » No release time, GDT Price Index - NZD As expected the RBA cut interest rates by 25 basis points. The AUDUSD dropped on the news but has retraced most of its drop. The AUDUSD lost 54 pips to.7488, buyers have come back in taking it back above.7500.

The AUS200 lost ground after the disappointing building approvals and trade balance figures. It found some buying support post rates release but is currently still trading lower by 23 points. The USD and JPY have seen quiet trade so far today with small Asain session ranges.

Signs did come in we might be some JPY selling but currently, it’s very choppy with little direction. Tonight I’m looking for weaker opens in Europe with strong selling on the GER30 and UK100 overnight. The UK100 has broken out of a trend channel and is sitting around a support base.

Gold is showing active sellers at 1354 this could come in as short term resistance off 1355. Price is still in a short-term trend up but I would like to see 1354.20 closed above to show a continuation towards 1366 highs. AUDUSD – Considering the negative influences today the AUD has held up very well.

The rate cut took prices down to.7490, this area has shown support and indecision previously. We have seen this area reconfirm today. I’d be paying attention to this level for the near term.

Continued buying could set up a failed low if buying holds out tonight. US30 – Today’s price is sitting on a key short-term level. Overall we have a bearish channel.

The key level 18395 has seen 5 tests holding up so far. To the top, we have a lot of downward pressure. A break lower set’s in new prices not seen since mid-July.

A break above the channel sets up a continuation of the current trend which could offer a buy idea. If we see a break lower, I’d be looking for a test down to 18235. XAUUSD - Gold is showing a normal trend formation with the current retracement not overlapping its previous high. 1355 is showing short-term resistance.

Overall the picture still looks good on the Med term for continued higher prices. I would like to see any short term pull back to find support from 1333 to 1341. A break and close below 1333 could be indicating a lower high is coming in and confirming.

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On 23 rd June 2017, Saudi Arabia and its allies issued a list of demands giving Qatar 10 days to respond to their ultimatum. It has now been just over a month since seven countries announced that they will be cutting all diplomatic ties with the Gulf nation 5 th July saw the leaders of the four countries seeking to isolate the tiny Gulf nation met in Cairo, the capital of Egypt and advised they have received a response from Qatar and will be looking to respond to their response in a timely manner. Here is the full list of the demands put forward by Saudi Arabia and its allies – Limit diplomatic ties with Iran and close their diplomatic missions there Stop all ties with terrorist organisations Shut down the Al Jazeera and its affiliates Shut down news outlets funded by Qatar With immediate effect terminate all Turkish military presence in Qatar and end any joint military cooperation with Turkey inside Qatar Stop all means of funding for individuals, groups or organizations that have been classed as terrorists Hand over all ‘terrorist figures’ and wanted individuals from Saudi Arabia, the UAE and Bahrain to their countries of origin End interference in sovereign countries internal affairs and stop granting citizenship to wanted national from Saudi Arabia, the UAE, Egypt and Bahrain.

Revoke Qatari citizenship for existing nationals where such citizenship violates those countries’ laws Stop all contacts with the political opposition in Saudi Arabia, the UAE, Egypt and Bahrain. Hand over all files detailing Qatar's prior contacts with and support for those opposition groups Pay reparations and compensation for loss of life and other, financial losses caused by Qatar's policies in recent years. The sum will be determined in coordination with Qatar Align itself with the other Gulf and Arab countries militarily, politically, socially and economically, as well as on economic matters, in line with an agreement reached with Saudi Arabia in 2014 Agree to all the demands within 10 days of it being submitted to Qatar, or the list becomes invalid.

The document doesn't specify what the countries will do if Qatar refuses to comply Consent to monthly audits for the first year after agreeing to the demands, then once per quarter during the second year. For the following 10 years, Qatar would be monitored annually for compliance [caption id="attachment_57005" align="alignright" width="600"] USOUSD Source Go Markets MT4[/caption] This has had an overall effect on the market, we have seen the oil prices plummet in the recent weeks (red vertical line – the day other countries announced cutting all diplomatic ties with Qatar), of course this is not directly linked with the situation with Qatar as there are other factors that can affect the price of oil. The two major being Geo political risk particularly with what happening in other parts of the Middle East such as Syrian Crisis and global supply and demand (mainly from developing countries).

This may still have an impact on the price as the dialogue with the countries involved continues. Top 30 countries by oil production [caption id="attachment_57007" align="aligncenter" width="447"] Source Wikipedia [/caption] QIG (Qatari Investors Group) [caption id="attachment_57006" align="aligncenter" width="600"] Source Bloomberg [/caption] It’s worth noting that the Qatari stock market lost around 15 billion dollars in market value (10%) since all diplomatic ties were cut off by the other countries involved. By: Klavs Valters GO Markets

Qatar Diplomatic Crisis 5th June 2017 a diplomatic crisis hit Qatar with seven countries. Saudi Arabia, Bahrain, United Arab Emirates, Egypt Yemen, Libya and the Maldives announced they are cutting all diplomatic ties with Qatar which came as a shock to the rest of the World. Reason? – Saudi Arabia made an announcement via Saudi Press Agency, stating it was taking this step to protect its national security from the dangers of terrorism and extremism and it is believed the rest of the countries have the same reasons for cutting its diplomatic ties with the tiny Gulf nation.

USOUSD Source: GO Markets MT4 Country profile – Qatar Capital: Doha Official language: Arabic Currency: Riyal (QAR) Population: 2,675,522 (2016) GDP total: $353,143 billion Qatar is a member of OPEC (Organization of the Petroleum Exporting Countries ) What has happened so far? » The five Arab states have cut off land, air and sea travel to and from Qatar » The Foreign Ministry of Bahrain have issued a statement to order all diplomats to leave Doha within 48 hours and that all Qatari diplomats should leave Bahrain within the same timeframe » All the involved countries have ordered their citizens to leave Qatar » Saudi Arabia, United Arab Emirates have given Qatari nationals two-week timeframe to leave their countries » Qatar has been expelled from the Saudi led intervention in Yemen » Saudi Arabia, the UAE, Bahrain and Egypt have all said they will close their airspace to Qataris national airline – Qatar Airways » All major airlines, including – Emirates, Etihad Airways, Gulf Air, EgyptAir, Air Arabia, Saudi Arabian Airlines and FlyDubai have suspended their flights to and from Qatar » Qatar Airways have also suspended their flight operation to Saudi Arabia Qatar has since responded to the shock announcements and has called the decisions ‘unjustified’. The statement reads ‘The measures are unjustified and are based on claims and allegations that have no basis in fact’ and it added that the decision will ‘not affect the normal lives of citizens and residents’. The impact It is still too early to see what the effect the diplomatic crisis with have on Qatar’s economy, but since the announcement was made the oil prices moved lower, raising further uncertainty about the oil productions in the Middle East.

Oil prices have dropped more than 4% in the last week, the largest decline since early May. USOUSD Source: GO Markets MT4 Another concern for Qatar is the border, the only way in by land is the border with Saudi Arabia. Every day there are hundreds of lorries which cross the border to supply Qatar with different supplies and one of the main supplies is food, in fact around 40% of Qatar’s food supplies is believed to come via this route, so it is a big concern for Qatar.

It is worth keeping up with further developments in this matter as it could have an impact in the oil markets. -By Klavs Valters GO Markets

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Annihilation of the Yen It was the year 2013. Some interesting events took place that caused some reverberations in global markets. The once one booming city of Detroit (known for its car manufacturing) filed for bankruptcy and the US government shutdown for almost two weeks.

But the most significant story was the fall of the Japanese currency against all its major counterparts. A dangerous climb In 2013 the value of the Yen fell 21% against the US dollar, making it the most sizeable yearly gain against the Asian currency since 1979. Whenever a currency pair rises or falls this quickly, traders have a tendency to become complacent and think it will continue regardless.

If we’re looking for an analogy, we can view the rise of the US dollar and other currencies to lofty heights against the Yen as something similar to an inexperienced or over-zealous climber attempting to reach the top, but failing to plan for future events and construct a safe passage back down. Resurrection of the Yen Despite the Japanese government’s best efforts – adopting negative interest rates and championing an aggressive stance to help weaken their currency – the Yen has gained both in strength and popularity in 2016. And this is creating some significant moves in the FX world.

Before we discuss the technical side of the charts, it is worth noting that all the Japanese pairs mentioned are currently following a bearish resistance line (BR) or downtrend according to the latest point and figure analysis. Finding 300+ pip moves In the previous newsletter introducing point and figure, we discussed why this method is an excellent tool for locating key areas of support and resistance. The recurring Yen pattern we’ve identified here was discovered using point and figure.

It suggests some long-term moves that could be over 300+ pips in total. The freefall pattern The pattern itself if is quite simple. It appears as if the sharpest JPY declines of 2013 are now becoming the largest JPY rallies of 2016.

Consider the climbing analogy, the latest price swings and resulting patterns are the climbing equivalent of forgetting to place anchors in the cliff face in preparation for the abseil back down. When we study the charts, there are simply no immediate signs of support or footholds that the pairs can target leaving them vulnerable to a potential freefall. As the same pattern is discussed over multiple pairs, we can analyse this into three sections: » Completed » In-progress » Emerging.

Completed Pattern - CADJPY Click to enlarge In a previous CADJPY article, we discussed the importance of the triple bottom located at the 90.00 level and the distinct lack of support below. This is the first example of the pattern of what might happen to some of these JPY pairs once key support levels are breached. No doubt the pressure of global oil prices on the Canadian dollar helped accelerate this move.

As we can see from the chart above, the CADJPY fell to our longer-term target of 80.50 before finding adequate support. The pattern almost resembles a window where price drops significantly to the previous level of demand. This pair may be consolidating now, especially looking at the most recent price action.

While the key level of 80.50 may continue to act as a strong support, resistance to the upside appears to be located at 84.00 and 86.50. In-progress pattern – USDJPY, GBPJPY USDJPY Click to enlarge We also discussed the latest USDJPY move in a recent article and currently we have a longer-term target price of 109.50. Clearly the break of the spread triple bottom at 116.50 was when this pattern activated and the price dropped from 116.50 down to 112.50 creating a 400 pip move.

The pair has since recovered but the main point to take note of is the recent change from an uptrend following a bullish support line (BS) to a downtrend following a bearish resistance line (BR). The level of 114.50 has established as short-term resistance and above here 116.50 may attempt to cap any bullish plays. GBPJPY Click to enlarge Similar to the USDJPY pair, we can see the pattern is in progress here with a downside target of 159.00 where a previous triple top is found.

The trigger point for this move was when the price broke through the spread double bottom at 165.00. Certainly one of the weakest currencies at the time of writing, the Pound has been one of the worst affected by the sudden surge in strength of the Yen. With the looming threat of a ‘Brexit’ (Britain exiting the Euro zone) towards the end of June this year, things may end up going from bad to worse for the GBPJPY pair.

Emerging pattern– EURJPY, NZDJPY, AUDJPY EURJPY Click to enlarge The last group, which we believe has the potential to move in similar fashion to the completed CADJPY pair, is sitting around key support levels which are beginning to look slightly exposed to the downside. The EURJPY has recently produced a sell signal after breaching the 125.50 level. If we look at the chart, there appears to be a glimmer of support around 124.00, but a longer-term target of 120.00 would be the more obvious choice.

The pair has had a rocky road on the way down so far perhaps this would be one of the most stable shifts down if the pattern continued. NZDJPY Click to enlarge The potential NZDJPY setup looks to be one of the cleanest examples of this freefall window pattern. During the past couple of weeks, price action has danced around the key support level 75.00 which is also a spread double bottom.

If this area fails to hold, the next longer-term support and initial target would be 69.00 at this stage. AUDJPY Click to enlarge Although closely related to the NZDJPY pair, the Australian counterpart AUDJPY doesn’t seem to belong to this group. Of course, the potential is still clearly visible on the chart between the levels of 80.00 and 75.00, but the Australian dollar may be more resilient based on recent events and previous price action.

In summary, the pattern itself is not unique. If you follow point and figure, you will notice similar setups on various trading products from time to time. What makes it interesting is that it appears to be happening on nearly all the Yen pairs simultaneously.

The completed pattern on the CADJPY went directly to the nearest support which was almost a thousand pips away. But do not be fooled by the process. Remember these are generally long-term set-ups and without any obvious signs of support, the market may gravitate towards round numbers with psychological importance or become less reliable in general.

There is also an alternate scenario whereby the Yen finds a bottom at current market levels and some of these key areas of support hold, perhaps providing a springboard for price action in the coming months. This also could present an opportunity to find some reasonable risk/reward trades. If you would like to keep up-to-date follow on Twitter or through the GO Markets technical analysis section.

The opinions and information conveyed in the GO Markets newsletter are the views of the author and are not designed to constitute advice. Trading Forex and CFD's is high risk. Adam Taylor | Senior Analyst Adam Taylor joined the GO Markets' team in early 2013 and has gone on to become a valued analyst on our Research and Trading team.

Adam's key strength lies in his technical analysis skills, perhaps honed over his time as a Champion Chess player for his native Scotland. While Adam's primary role is concentrated towards risk management for GO Markets, he's a regular contributor to our News and Analysis team, using the highly regarded but rarely used, point and figure method. Connect with Adam: Twitter | Email | Adam's posts