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Japanese Economy Defies Expectations

Japanese economy grew faster than analysts expected it would between January and March, increasing hopes that it is recovering from the recession last year.

The economy expanded 0.6% in the period compared to the previous quarter, marking its second consecutive quarter of growth.
The result was far better than the 0.4% analysts had expected.
On an annualised basis, the economy grew 2.4% in the period against forecasts of 1.5%.
Analysts said the first quarter growth rate was "very positive".
"The recovery seems to be well on track," Tony Nash, chief economist at Complete Intelligence, told the BBC.
"This must bring a smile to Prime Minister Abe's face and is a vindication that his economic policies are moving things in the right direction."
The country came out of recession in the fourth quarter of last year.
Japan relies on domestic consumption for about 60% of its economy, but it has been recovering from a sales tax hike which has dampened spending.
Private consumption and capital spending were both up 0.4% in the quarter, but capital spending was expected to rise by 0.8%.
Capital Economics analyst Marcel Thieliant said in a note that the acceleration in economic growth for the period "was mostly due to a jump in inventories".
"And a range of indicators point to a slowdown in the second quarter.
"Industrial production in March was 4% below its January peak, and thedrop in the manufacturing PMI (Purchasing Manager's Index) to a multi-month lowin April suggests that conditions are unlikely to improve quickly," headded.

GBP/USD: Will The Pair Continue Its Descent?

Last week GBP/USD reached a very strong level of resistance at 1.5800 which coincides with the (89) MA on the weekly filter chart. The pair could not break above the resistance and moved to the downside again, descending to 1.5445, which is slightly below the (89)MA on the four hour filter chart. However, the pair quickly returned above the support at 1.5480 and formed a hammer candlestick on the four hour filter chart, which is an indication that it will likely start climbing again so it can test the resistance 1.5800. Despite this temporary pullback I am quite convinced that the bullish trend is not over yet.

Greens Wants A Loan Deal By The End Of The Month

Greece says it wants to reach a  loan deal with its creditors by 31^st May. The country seems to be running out of cash and government spokesman Gabriel Sakellaridis has said that a deal is required immediately.

Greece has to make a payment £1.09bn to the International Monetary Fund (IMF) on 5 June.

Last week , the government raided its IMF reserves in order to pay €750m in debt interest on its existing loans.
"A deal is required immediately, this is why we are talking about the end of May, to resolve these critical liquidity issues," Gabriel Sakellaridis said.
The Greek government, EU and IMF have been locked in negotiations for four months over economic reforms the IMF and EU say must be implemented before the latest €7.2bn tranche of the country's bailout fund is released.
The deadlock has created fresh fears that Greece will run out of cash.
Issues still to be resolved are thought to include pension reform, deregulation of the labour market, and the re-hiring of 4,000 former civil servants.
There have been suggestions Greece could default on loan repayments as early as the next €1.5bn payment due to the IMF.
Greece faces a stringent repayment schedule in the coming months, and alsoneeds to continue paying salaries and pensions.

China Will Invest £32 billion in Brazil

China will invest £32bn in Brazil to build new infrastructure projects.

The deal will be signed by banks on both countries when the Chinese prime minister Li Keqiang visits Brazil next week.

The money will go towards building a railway link from Brazil's Atlantic coast to the Pacific coast of Peru to reduce the cost of exports to China.
It says the fund will also finance a joint venture to produce steel.
Brazil currently exports much of its iron ore to China.
Jose Graca Lima, Brazil's undersecretary of state with special responsibility for Asia and Oceania, said: "We shall have to await the end of the visit to expand upon which projects."
As well as the giant railway project, the money is expected to be invested in car parts, energy, ports, hydroelectric power and railways.
Brazil's economy, once among the fastest-growing in the world, has flagged in the past five years.
A corruption scandal at the state-owned oil giant Petrobras, which has embroiled many high-profile figures, has also shaken the public mood.
The Chinese prime minister will also be visiting Colombia, Peru and Chile.
In January Chinese President Xi Jinping pledged $250bn in investment toLatin America over 10 years.

GBP/USD Will Likely Continue Testing 1.5800

As I thought it would earlier this week, the GBP/USD rally continued and the pair reached the resistance at 1.5800 which coincides with the (89)MA on the weekly filter chart. While the pair is currently in retracement that will possibly continue for a little while, I have little doubt that it will continue testing the resistance at 1.5800 and will likely break above that level. Should it do so we can expect the pair to continue climbing until it reaches 1.6000 – 1.6100. Not to mention that if you look at the multi-year range on the monthly filter chart you will notice that there is a serious possibility for GBP/USD to climb much higher than that.

EUR/USD Continues Rallying

One should always remember that the doji candlestick represents indecision in the market, but does not necessarily signify a reversal. That is especially true when we have a situation like the one on this screenshot:

As you can see, the doji candlestick is right on top of the resistance at 1.1180, rather than under it. Past experience has taught me to treat that kind of a candlestick with suspicion and to wait and see what will follow next, rather than make any decisions based on the doji candlestick alone. My suspicion was justified, because EUR/USD continued climbing. The pair is likely headed for target 1.1600 – 1.1700 and for the moment I intend to keep my long positions open.

GBP/USD: The Rally Continues

Yesterday I was looking at the GBP/USD weekly filter chart and I was wondering whether the pair would be able to break above the resistance at 1.5600. It did and not only did it break above the resistance but it steadily continued climbing all day. I think it is safe to say that the pair is headed for the resistance level at 1.5800, although I doubt it will stop there. Should it be able to break above the resistance at 1.5800, the pair will probably continue rising until it reaches 1.6000, perhaps even 1.6100, both of which are serious levels of resistance visible on the monthly filter chart.

GBP/USD Has Reached 1.5600

GBP/USD has finally reached the resistance at 1.5600. As I thought, the move to the downside was only temporary and after the pair reached the support at 1.5090, it could not break below it and started climbing again. This time it managed to break the resistance coinciding with the previous high at 1.5550 and the rally continued. Actually, not only did the rally continue, but the pair reached the resistance at 1.5600. It is possible for the pair to stop climbing here, form a doji, hammer or a shooting star candlestick and start descending again, or it will break above the resistance and head for the next resistance level at 1.5800.

How Disappointing

Were you expecting that the US Non-Farm payrolls to provoke some strong volatility on the EUR/USD chart? I certainly did, but once they came out I was pretty disappointed. Nothing major happened. The pair returned below the 1.1230 level and reached the support at 1.1180. Apparently we will have to wait for next week for any changes. I think there is a strong possibility for the pair to continue falling and reach the support level at 1.1140, or perhaps even 1.1080. I wonder, however, whether this is the end of the EUR/USD move to the upside or is it just a temporary setback.

Greece Claims It Will Keep Its Electoral Promises

Syriza wants to have its cake and eat it too. In other words, they are claiming that they will keep their electoral promises not to cut pensions. Frankly, I am really curious how exactly they're planning to do that.

Gabriel Sakellaridis said at a press conference in Athens that labour and pension issues are non negotiable.
"We won't go beyond the limits of our red lines. It's clear that we cannot cut pensions."
Talks with the International Monetary Fund (IMF) and the European Union (EU) will continue over the weekend.
Creditors have demanded cuts in spending, including plans to trim the civil service and privatisation of state assets, in order for Greece to continue receiving loans.
But Greece's ruling left wing Syriza party, led by Alexis Tsipras, was voted in last year on promises to ease up on the highly unpopular austerity measures with increases in the minimum monthly wage and a job creation programme.
Mr Sakellaridis said: "There should not be an expectation on the part of institutions... that the government will back down on everything.
"When you negotiate, there should be mutual concessions."
Some creditors, notably Germany, are losing patience with what they see as Greece's profligacy.
The prospect of a deep schism between Greece and the financial community,particularly the eurozone area, has haunted financial markets for years. 
The president of the European Commission, Jean-Claude Juncker, said it would not be wise to openly discuss a Greek exit from the euro: "If I were to say that "Grexit" [Greek exit from the EU] was an option, what do you think would happen then on the financial markets?"

Should A Trader Read All The Information They Find On The Internet?

Do you remember what it was like when you first started trading? I certainly remember what it was like for me. I was immensely curious and I wanted to know everything that could help me become a better trader. So I started reading all the information I could find – textbooks, online tutorials, news, etc. I quickly realized, however, that although there was a lot of information out there, said information was usually all over the place. There were a lot of different opinions written by different people and more often than not they  contradicted each other. In the end it was all more confusing than helpful.

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EUR/USD Is Headed For 1.1700 – 1.1800

EUR/USD moved to the downside, but that drop was very short-lived because the pair could not break below the support at 1.1060 and rallied again, breaking above the resistance at 1.1230 with relative ease. I think correction will continue for the foreseeable future and the pair will likely reach target 1.1700, perhaps even 1.1800. It is also quite possible for it to continue climbing until it reaches the resistance at 1.2000. Either way, I have opened new long positions and I intend to keep them that way for the moment.

AUD/USD: What An Incredible Doji Candlestick

When you study candlestick theory – and all sorts of analysis theories in general – the textbooks you read usually come with numerous illustrations explaining the theory you just studied. Once you sit down before the computer screen, however, and actually begin trading in real life, you quickly realize that reality is rarely as neat and ideal as those textbooks examples.

This, however, is one of those rare cases where reality does look like a textbook example. Look at this incredible doji candlestick on the AUD/USD weekly filter chart that has formed under the resistance at 0.7840. It is a clear indication that the pair is very likely to move to the downside again, probably until it reaches the support at 0.7500, should it break below the support at 0.7800.

GBP/USD: Is This The End Of The Bullish Trend?

GBP/USD climbed to impressive heights in the past week or so – the pair almost reached the previous high at 1.5550. Unfortunately, it could not break above the resistance at 1.5500, formed something of a double top and retracement began. Does this mean that the bullish trend is over? Personally, I highly doubt that is the case. In my opinion, this is only a temporary pullback and when the pair reaches the support at 1.5250 I will be on the lookout for candlestick patterns indicating a new movement to the upside, because GBP/USD is yet to test the resistance at 1.5550.