EUR/USD: Profit taken on EUR/USD long after Macron won first round of French presidential vote
Macroeconomic overview: Leader of the En Marche! movement, Emmanuel Macron, won the first round of the presidential election in France, scoring 23.86%. Macron’s key rival Marine Le Pen, who leads France’s right-wing National Front political party, received 21.43% of the vote. Macron and Le Pen will face each other in a runoff election on May 7.
France’s former Prime Minister Francois Fillon, the Republicans political party candidate, is third with 19.94%, followed by Jean-Luc Melenchon, leader of the far-left La France insoumise movement, who won 19.62%.
The EUR pared gains after scaling a five-month high against the USD on Monday after the centrist candidate won the first round of voting, reducing the risk of an anti-establishment shock in the final round. Short-covering on election relief lifted the single currency and triggered stop-loss orders.
The French vote and the euro’s rise come ahead of a European Central Bank policy meeting on Thursday, at which the central bank’s ultra-easy stance is set to remain unchanged. ECB Governing Council member Ewald Nowotny said the bank has decided on interest rates and bond purchases for the rest of 2017 and will decide what to do beyond that in the second half of this year. Nowotny’s remarks were in line with recent comments by other policymakers pushing back against German Finance Minister Wolfgang Schaeuble, who has called for the ECB to move away from its ultra-accommodative monetary policy. But Nowotny’s remarks suggested that the soonest any decision would be reached is July.
Technical analysis: We saw the big moves in the early trading hours when liquidity was thin. The EUR/USD opened with a gap and we expect closing the gap in the very short term. Long-term charts lean bullish and we think that after corrective move the upward trend will be continued.
Short-term signal: We took profit on EUR/USD long at 1.0900 in the early trading hours. We are looking to open another long position at 1.0740. Long-term outlook: Bullish
USD/JPY: Focus of yen traders is turning to North Korea
Macroeconomic overview: With the first round of France’s election out of the way, the focus of yen traders is once again turning to rising tension on the Korean peninsula, any flare-up of which could once again spark safety bids.
South Korea said on Monday it was in talks about holding joint drills with a U.S. aircraft carrier strike group, as U.S. President Donald Trump called the leaders of Japan and China amid fears Pyongyang could conduct another nuclear test.
Japanese Prime Minister Shinzo Abe said on Monday he and Donald Trump had agreed to maintain close contact over North Korea. North Korea said on Sunday it was ready to sink a U.S. aircraft carrier to demonstrate its military might.
Technical analysis: The USD/JPY opened with a gap after first round of French presidential vote. We expect a corrective move to at least 109.42 high on April 21. We think that USD/JPY is likely to fall also in the long term, but April’s low seems to be a strong support and the JPY would probably need more fundamental strength to fall below this level.
Short-term signal: We opened USD/JPY short at the opening (110.27), but we have raised the target to 109.30. Long-term outlook: Long-term outlook remains bearish, but April’s low may be a strong support level now.
TRADING STRATEGIES SUMMARY: FOREX – MAJOR PAIRS:
Forex Major Pairs
FOREX – MAJOR CROSSES:
Forex Major Crosses
Precious Metals Trading Strategies
How to read these tables? 1. Support/Resistance – three closest important support/resistance levels 2. Position/Trading Idea:BUY/SELL – It means we are looking to open LONG/SHORT position at the Entry Price. If the order is filled we will set the suggested Target and Stop-loss level.LONG/SHORT – It means we have already taken this position at the Entry Price and expect the rate to go up/down to the Target level.3. Stop-Loss/Profit Locked In – Sometimes we move the stop-loss level above (in case of LONG) or below (in case of SHORT) the Entry price. This means that we have locked in profit on this position.4. Risk Factor – green “*” means high level of confidence (low level of uncertainty), grey “**” means medium level of confidence, red “***” means low level of confidence (high level of uncertainty)5. Position Size (forex)- position size suggested for a USD 10,000 trading account in mini lots. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size). You should always round the result down. For example, if the result was 2.671, your position size should be 2 mini lots. This would be a great tool for your risk management!Position size (precious metals) – position size suggested for a USD 10,000 trading account in units. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size).6. Profit/Loss on recently closed position (forex) – is the amount of pips we have earned/lost on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.Profit/Loss on recently closed position (precious metals) – is profit/loss we have earned/lost per unit on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
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