EUR/JPY Is Testing The Support At 138.60

EUR/JPY formed a doji candlestick on the daily filter chart right under the resistance at 141.00 and moved to the downside, but reached the support at 138.60 and is currently testing it. Whether or not it will manage to break below the support is uncertain, considering the candlesticks that have formed on the four hour filter chart, but if it does manage to break below that level the pair will continue falling until it reaches the support at 137.00. If it fails to do that we can expect the pair to start climbing again in another attempt to break above 141.00.

GBP/USD Correction Continues

 The GBP/USD correction continues. The pair failed to break above the resistance at 1.5550 and moved to the downside again, dropping with almost 60 pips in about an hour. It was to be expected, considering the doji candlestick that had formed in the 30 minute filter chart. Whether or not the move to the downside will continue depends on whether the pair will manage to break below the support at 1.5480. Should it bounce off the support I expect it to start climbing again to test the resistance at 1.5550 once more and then the one at 1.5610, which is visible on the daily filter chart.

Greece Has A New Reform Plan

Greece submitted a new reform plan to EU and IMF. This happened days after Greek PM Alexis Tsipras rejected the set of reforms offered by EU Commission President Jean Claude Juncker.

The EU and IMF want further economic reforms before they release €7.2bn (£5.3bn) of bailout funds.
It is believed Athens has conceded ground on VAT reforms, pensions and the country's primary surplus target.
The reform plan comes a day before Mr Tsipras meets the French president and German chancellor.
Last week, Greece "bundled up" a €300m (£221m) payment to the IMF, delaying the payment until the end of June when a total of €1.5bn is due to be paid.
Among the plans being put forward by the government, it is believed Greece is willing to increase VAT, but still maintain three rates: a standard rate, a reduced rate for food and medicine and a further reduced rate for books and hotel accommodation.
The government has proposed increasing its three rates of VAT, according to Greek newspaper Ekathimerini.
Athens is also willing to move closer to creditor demands over the primary surplus as well, the newspaper reports.
The EU and IMF want the economy to run a primary surplus of 1% of GDP thisyear and 2% next year. Athens prefers a target of 0.6% of GDP this year and 1% next year.

EUR/USD Started Climbing Again

EUR/USD dropped considerably after the US Non-Farm Payrolls on Friday, but today the pairing started moving to the upside again. I admit I am not too surprised – events like this might have a significant effect on the market but it is usually only temporary.

As I said, EUR/USD is climbing again. The pair is headed for the resistance at 1.1440, visible on the weekly filter chart. Should it break above that resistance, and in my opinion it is quite possible that it will, the pair will reach target 1.1550 – 1.1560 so the correction will continue for the foreseeable future.

USD/JPY: Next Target Is Likely 126.40

Most traders tend to wait for the first Friday of the month with great trepidation, because that is when the US Non-farm Payrolls are released, and as we all know, that is one of the scheduled events that causes a lot of volatility on the market, and that means you can make significant profit if you know what you are doing. I confess I don’t always use this opportunity, because sometimes it causes the price to move too quickly in both directions to react on time, but other times it’s a perfect opportunity to trade.

Take a look at the screenshot to see the effect the NFP had on the USD/JPY pair today:

 As you can see, the USD/JPY has been in consolidation for the past few days, but once the NFP came out, it quickly moved to the upside again and climbed for a little over a 100 pips. I managed to make good use of it, and I hope many of you did as well.

Clearly the bullish trend will continue for now, and next week we can likely expect a new move to the upside, at least until the pair reaches target 126.40.

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UK Interest Rates Have Been Kept at 0.5%

The UK interest rates have been kept at a record low again by the Bank of England. The Bank also kept the size of the bond-buying stimulus programme unchanged at £375bn.

The decision by the Bank's Monetary Policy Committee (MPC) comes more than six years after the record low was introduced.
The half-dozen years of ultra-low interest rates have cut savings' returns, while mortgage borrowers have benefited from lower repayments.
Ultra-low inflation, which turned negative in April at -0.1%, has put on hold expectations about the Bank raising rates in 2015.
Last month, the Bank indicated in its quarterly inflation report that it was likely to raise the cost of borrowing in the middle of next year.
Meanwhile, recent ONS figures confirmed that UK gross domestic product (GDP) growth slowed to 0.3% in the first quarter, which was its worst showing since the end of 2012.
The nine-strong MPC has voted unanimously to keep rates on hold in all its previous meetings so far this year.
Howard Archer, chief economist at IHS Global Insight, said: "The Bank of England was always a nailed-on certainty to keep interest rates at 0.5%. Indeed, the odds currently strongly favour the Bank of England sitting tight on interest rates (and on the stock of quantitative easing) over the rest of 2015."
He added: "We expect the Bank of England to start edging interest ratesup in the first half of 2016.

EUR/USD Is Likely Headed for 1.1440

Today ECB announced its rate decision and Mario Draghi did his press-conference. Unsurprisingly, these events had a significant if expected effect on the market. EUR/USD had formed a hammer candlestick right above the support at 1.0940 visible on the weekly filter chart, which was a good indication that a move to the upside is about to begin. The move to the upside had already started when the ECB decision came out, which only caused the pair to climb even higher. EUR/USD is likely headed for the previous high at 1.1440. Should it break above that resistance, the pair will probably reach target 1.1570, which is a significant level of resistance as well.

GBP/USD: Take A Look At The Monthly Filter Chart

GBP/USD broke below the support at 1.5230 and continued descending slowly all day. Soon the pair will reach 1.5150, a very strong level of support visible on the weekly filter chart. I admit I spent some time wondering whether the pair will break below that level and continue descending, and then it occurred to me to take a look at the monthly filter chart, something I don’t do very often for obvious reasons. As you can see on the screenshot here:

GBP/USD has formed a doji candlestick pattern on the monthly filter chart, which is a pretty serious indication that the pair will probably continue descending. Considering that information, I concluded that GBP/USD is very likely to break below the support at 1.5150 and head for target 1.4630.

GBP/USD Has Reached 1.5230, Now What?

Earlier this week I predicted that GBP/USD would reach 1.5270 and not only did the pair reach that level, but it broke below the support coinciding with the (89)MA and continued dropping until it reached 1.5230. This is a pretty serious level of support and understandably the pair bounced off it before the market closed for the weekend. The question is, will the pair manage to break below that level? It is quite possible, but at the same time I will definitely be on the lookout for any candlestick formations that indicate a move to the upside. In case it does break below that support, I think GBP/USD will continue descending until it reaches 1.5150.

UK Car Production Fell in April

UK car production dropped in April after an increase of vehicle output failed to offset a decrease in imports.

Production in April was 3.8% lower than last year, according to the Society of Motor Manufacturers and Traders (SMMT).
The number of cars produced for the domestic market increased by 11.1% to 29,930.
However, those intended for export, which represents a much larger portion of the market, fell 7.6% to 98,382.
Low demand in Europe may have hindered UK exports. "Europe as a whole is three million units off its peak," SMMT chief executive Mike Hawes told the BBC.
Economic confidence and interest in new models may be behind the UK's rising demand," said Mr Hawes.
"The UK buyer is more confident than the average buyer across the rest of Europe," he said.
The growing availability and popularity of car finance packages had also pushed up domestic sales, he added. About three-quarters of purchases are now made with a finance package.
"Brits have a greater predilection to buy on credit. These packages areattracting people into the showrooms," he said.

GBP/USD: Next Target Is 1.5270

GBP/USD move to the downside has been slow, with the pair testing the support levels at 1.5460 and 1.5380 for some time before it managed to break below both and nothing so far has managed to stop its descent. The pair is currently headed for target 1.5270, which is (89)MA on the daily filter chart and is also a pretty serious level of support. However, I do think the pair is very likely to break below that support and continue descending until it reaches 1.5190 – 1.5200.  Should it break below that level, GBP/USD will continue falling towards target 1.5160. Considering the situation, I am still keeping my short positions open.

The USD/JPY Consolidation Is Finally Over

The USD/JPY consolidation has continued since the end of 2014, but it looks like it’s finally over because the pair broke above the resistance at 121.90, which it has tested three times for the past months, and climbed a little over 100 pips for the past day. The bullish trend continues and I think the pair is headed for target 125.50, although it may continue climbing higher than that. That said, I think this is the last rally of the bullish trend which has lasted since the beginning of 2012. Once the bullish trend ends, I think we can expect a very long-term correction to begin. For now, however, I have opened new long positions and I intend to keep them open for the time being.

USD/JPY: Waiting For A Breakout?

The USD/JPY correction has been continuing for months now, but the pair is making yet another attempt to break above the resistance at 121.90.  The pair has attempted to break above that level twice already – back in 2014 and more recently in March this year, but failed both times. This is the third attempt, and who knows, this time might be charm. That said, I will not be opening any new long positions before I see it break above the resistance and I am on the lookout for any candlesticks that might indicate another move to the downside even though I think said move would likely be quite limited.

GBP/USD: Testing The Support At 1.5460

Eartlier this week I took a look at the hammer candlestick on the four hour filter chart that had formed right above the support and predicted that the pair was about to move to the upside. After a short consolidation it did just that, reaching the resistance at 1.5700. The pair failed to break above that resistance and started descending again. The pair is currently testing the support at 1.5470 – 1.5480 and I doubt it will be able to break below that level before the market closes for the weekend. That said, depending on whether or not GBP/USD manages to break below the support next week we can expect a further move to the downside to target 1.5300, or a new move to the upside to test the resistance at 1.5700.