Daily Market Review – 28/04/2015

Facebook Stock Resurgence to Boost U.S Equities


USDCHF Potential Breakout | Triangle Support at .9500

USDCHF is still stuck in a descending triangle pattern and is hovering close to the triangle support at the .9500 major psychological level. With the upcoming major market catalysts this week, the pair could be in for a strong breakout in either direction.

Take note that the chart pattern is roughly 600 pips in height, which means that the resulting move could be of the same size. A break above the triangle resistance around .9600 could lead to a move up to the 1.0200 handle while a break below the support at .9500 could push USDCHF down to the .8900 mark

The FOMC statement could provide a strong catalyst for a breakout, as their stance could determine where the dollar is headed in the long run. Recall that data from the US economy has been coming in weaker than expected recently, forcing Fed officials to rethink their hawkish bias and their rate hike plans.

If Fed Chairperson Yellen reiterates that they can afford to hike rates sometime this year, the dollar can be able to regain ground against its forex counterparts and break higher against the franc. On the other hand, if Yellen acknowledges the downturn in the US economy and admits that they’re not ready to tighten yet, the dollar could head lower.


EURJPY Long-Term Reversal | Double Bottom Formation

EURJPY might be in for a reversal from its long-term selloff, as price is forming a double bottom on its 4-hour forex chart. Price has failed in its last two attempts to break below support at the 127.00 major psychological level and found resistance around the 131.00 major psychological level.

The pair is still a few pips away from the neckline resistance, but an upside break could confirm that an uptrend is materializing. In that case, EURJPY could climb by around 400 pips, which is around the same height as the chart pattern. If the 131.00 mark holds as resistance, the pair could make another test of support at the previous lows.

The path of least resistance is to the upside, as positive developments in the Greek debt negotiations are lifting the shared currency. It appears that a default and a potential Grexit could be averted, as the Greek government put Finance Minister Varoufakis in the backseat for the debt talks.

The upcoming BOJ rate statement could also be a significant catalyst for this pair this week, as the central bank might emphasize that technical details for an exit strategy are being discussed. On the other hand, if Kuroda admits that they are a long way from exiting QE, the yen could give up its recent gains.



Facebook Shares Testing MA Support | Uptrend Still Intact

Facebook shares have been retreating recently as risk appetite has weakened, although support at the exponential moving average on the daily chart is holding as a floor. Price could be ready to resume its climb soon if risk sentiment improves, depending on how market events pan out this week.

The FOMC statement poses the biggest risk among the events lined up, as this could show whether or not the recent slump in the economy is just a soft patch. Upbeat remarks could shore up US equities, including FB shares and push prices up to the previous highs around $86/share.

On the other hand, a pessimistic outlook could derail the stock’s rally and lead to a downside break of support around $81/share. If so, Facebook shares could sell off until the next floor around $78/share. Stochastic is already indicating oversold conditions though, which means that a bounce could take place soon.

News that Facebook messenger added video chat could help keep the company’s stock afloat, as this could draw in more users. The feature already boasts of 600 million users and could be a major player in global internet calls, competing with the likes of FaceTime and Skype.