Mon, Jan 18, 2021 @ 02:16 GMT
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Technical Analysis

Forex Technical Analysis

EUR/USD The breakthrough the crucial 1.0740 signals a positive bias, for a rise towards 1.0870 resistance zone. Initial intraday support lies at 1.0770, followed by 1.0740.

EURUSD Looking For A Turning Point Lower

On the 4h EUR/USD chart we are tracking a corrective bounce from December lows, labeled as an expanded flat correction. It's a contra-trend movement in three waves which can still be in the making, as recent overnight rally suggests that wave C of 4) is still incomplete. That said we see a potential turning point around the 161.8 Fibonacci ratio, where bulls can slow down and bears take over control.

Daily Technical Outlook And Review

The EUR made considerable ground against its US counterpart yesterday, after US President Trump’s trade advisor commented that the euro was ‘grossly undervalued’. The move was further exacerbated by lower-than-expected US consumer sentiment and a disappointing Chicago PMI, as well as a decline in the 10-year treasury yield!

US Dollar Struggles To Find Strength During January

The EUR/USD turned around – yet again – for one more bullish push higher. The price action, however, remains very choppy and corrective. Price has also reached the next Fibonacci resistance: the 88.6% level. A break above the 88.6% makes a wave 2 (brown) unlikely and a break above 100% invalidates this wave structure. A break below support could spark waves 3.

Daily Technical Analysis

The EURUSD had a bullish momentum yesterday after a false break below the bullish channel and 1.0650 key support as you can see on my H1 chart below. This fact keeps the bullish phase remains valid. The bias is bullish in nearest term testing 1.0850/75 region. Immediate support is seen around 1.0750. A clear break below that area could lead price to neutral zone in nearest term testing 1.0700 area but key support remains at 1.0650. Overall I remain neutral.

Foreign Exchange Market Commentary

The American dollar plunged early US session following comments from Trump's trade chief, Peter Navarro, who accused Germany of taking advantage of the US and its European counterparts by keeping the euro "grossly undervalued." This is not the first time US President Trump moves to talk down the local currency, as he already said last week that the dollar was "too strong" making US production less competitive against countries like China, which has a government-regulated currency. The EUR/USD pair traded as high as 1.0811, level last seen early December, before pulling back modestly.

Market Morning Briefing

Dollar Index (99.65) has suffered a strong decline and it is now testing the major support zone of 99.50-00. The FOMC announcement tonight is expected to set the near term direction but the Dollar bulls need 99.50-00 to hold to keep any bullish possibilities open. On the other hand, a break below 99.00 may damage the technical structure considerably and open up much lower levels till 97.00 in the medium term. Inflection point.

EURUSD – Strengthens, Eyes The 1.0774 level And Beyond

EURUSD - With the pair strengthening strongly during Tuesday trading session today, more bull pressure is envisaged. We expect to first retarget its resistance located at 1.0774 level. On the upside, resistance comes in at 1.0800 level with a cut through here opening the door for more upside towards the 1.0850 level. Further up, resistance lies at the 1.0900 level where a break will expose the 1.0950 level. Conversely, support lies at the 1.0700 level where a violation will aim at the 1.0650 level. A break of here will aim at the 1.0600 level. Conversely, All in all, EURUSD faces further upside pressure short term.

EUR/USD Surges On Eurozone Economic Data, Trump Adviser Comments

EUR/USD surged to major resistance at the key 1.0800 level on Tuesday after several economic data points from the Eurozone showed higher-than-expected consumer inflation (CPI) for January and better GDP growth for last quarter than previously forecast. Additionally, the unemployment rates for both Germany and the Eurozone as a whole were significantly better than expected.

USD/CAD Drops To Test 1.3000 On Canadian GDP, Weaker USD

Canada's Gross Domestic Product (GDP) for November 2016 reported better-than-expected at +0.4% against forecast of +0.3%. Canadian dollar surged, pressuring USD/CAD to dip below key 1.3000 psychological support on Tuesday. USD/CAD also pressured by US dollar's continued weakening on Tuesday, driven partly by US protectionist stance and Trump Administration 'talking down' the dollar while boosting 'grossly undervalued' euro.

Silver Breaks Out As Dollar Slumps, Stocks Ease

It has been a rather volatile day across the financial markets as investment funds reposition their portfolios ahead of the new month. Equities and the dollar fell further, precious metals bounced and oil gushed higher. In FX, the safe-haven yen strengthened as did the euro while the pound recovered from its early weakness to turn decisively higher against the dollar. Inaction from the Bank of Japan weighed on the USD/JPY, while the EUR/USD surged after Donald Trump's adviser said Germany was using "grossly undervalued" euro to exploit US and EU partners. The euro was also boosted by stronger Eurozone data, suggesting that the European Central Bank’s large bond buying programme is finally working its magic. Inflation rose as unemployment fell and GDP expanded more than expected. As the EUR/USD surged, the Dollar Index fell back below 100. On a day when equities also fell, the sell-off in the dollar meant that buck-denominated and perceived safe-haven assets were in demand: gold and in particular, silver, surged higher, extending their advance from Friday.

High Level Look At Oil

These Oil charts looks just just like Tuesday's GBP/JPY trend line break. A trend line break out into horizontal support/resistance. Without momentum, this is just waiting to be sold into the level and then for price to tuck back inside the trend line as it is sold off lower.So often we see trend lines reactivated this way. Could a reactivation of bearish trend line resistance be on the cards for Oil, or will it continue higher?

ECB’s QE Working its Magic… Finally

The European Central Bank's large bond buying programme appears to be finally working its magic. Inflation is on the rise, unemployment is falling and the economic bloc is - believe it or not - growing, all thanks to years of zero interest rates, several versions of bond purchases programme and a resulting weak currency. Today's mostly stronger-than-expected macro pointers from the Eurozone suggests that for the first time, the ECB may seriously consider tapering its QE stimulus programme in order to avoid overcooking inflation.

EUR/US Below 1.07 Mark

On Tuesday morning the EUR/USD currency exchange rate remained rather flat just below the weekly PP, which is located at 1.0709. However, the course of the rate can be forecasted. Previously, during Monday's trading the pair fell down to 1.0620 mark and rebounded there. As a result a surge began which lasted into Tuesday and reached the weekly PP. Afterwards the rate bounced off of the resistance level and set a course southward. Due to that reason the pair is set to fall down to the weekly S1 at 1.0644. Although, the decline is set to be hindered by the 20-day SMA at 1.0652.

GBP/USD To Climb Back Above 1.25

The British currency sustained further losses against the US Dollar on Monday, with the immediate demand area around 1.2515 failing to limit the losses. Although the Cable slipped back under 1.25 yesterday, another tough support area is now likely to keep the pair afloat. The support cluster is formed by the monthly PP, the weekly S1, the 20 and the 55-day SMAs, all located around the 1.24 major level. However, the 100-day SMA could also play its part and still trigger a rebound. Technical indicators also suggest the Sterling could edge higher today, but with the 1.26 mark remaining intact, as there is no impetus present for a surge that far up.

USD/JPY Risks Sliding Under 113.00

Risk-aversion kept driving the markets yesterday, causing the US Dollar to lose nearly 100 pips against the Yen. The Buck, however, remains on the back foot, risking to post more losses versus the Japanese currency today. The monthly and the weekly S1s could still provide sufficient support in order to avoid this outcome, but that would imply a close in the green zone, with the 114.00 mark being reclaimed again. Ultimately, a drop towards 112.60 is possible, namely a strong psychological support level, which is expected to cause a U-turn if things get out of hand for the Greenback. Meanwhile, technical studies are unable to confirm any scenario, as they keep giving mixed signals.

Gold Reaches Above 1,200 On Tuesday

The yellow metal continues to surge, as political uncertainty increases demand for a safe haven investment. However, from a technical perspective, it seems that the 20-day SMA was strong enough to push the yellow metal higher. In addition, during the move the bullion broke through the resistance put up by the weekly PP, which is located at 1,196.86. Due to that reason the commodity price might rise up to the weekly R1 at 1,213.16, as there are no other levels of resistance up to that mark.

AUDUSD Trades In Extended Sideways Mode Above Key 100/200SMA Supports

The pair remains directionless, trading within initial 0.7510/0.7607 range. Yesterday's Doji candle confirms indecision, as near-term studies are in neutral mode. Key supports, 100/200 SMA's (0.7494/0.7487) remain intact for now and maintain sideways mode, following upside rejection at 0.7600 zone.

USDJPY – Near-Term Focus Turned Lower After Rejection Under Key Barrier At 115.55

Rejection under strong 115.55 barrier (daily cloud top / Kijun-sen line) and yesterday’s fall, turned near-term focus lower. Recovery from today’s low at 113.23 stays for now caped by daily Tenkan-sen at 114.05, with Tenkan-sen / Kijun-sen lines being in bearish setup, together with negative daily studies, maintaining downside pressure.

GBPUSD – Near-Term Outlook Remains Negative, Daily Tenkan-Sen Marks Key Support

Strong three-day pullback from 1.2671 peak was for now contained by sideways-moving daily Tenkan-sen at 1.2460. Mild recovery was seen so far, with price action now above thinning daily cloud that is also twisting and expected to attract for fresh downside attempts. Weakening near-term studies support scenario, as three consecutive long bearish daily candles weigh, however, sustained break below Tenkan-sen support is needed to confirm bearish

EURUSD – Fresh Upside Attempts Could Be Expected While Daily Tenkan-Sen Is Holding

The pair is trading within narrow 1.0680/1.0710 range in early Tuesday and holding above cracked daily Tenkan-sen (1.0680) for the fourth straight day. Yesterday's strong downside rejection signals that downside attempts are short-lived for now, with upper boundary at 1.0710, being currently under pressure.

EURUSD Trading At The Beginning Of A Higher Degree Bearish Impulse

On the 4h EUR/USD chart we are tracking a corrective bounce from December lows, labeled as an expanded flat correction. It's a contra-trend movement in three waves which can be finished based on recent turn down from 1.0775 highs. In fact, we see an ending diagonal placed in wave C of 4) which is a reversal pattern so strong decline may follow, especially if we consider that rise from 1.0340 was slow, so now momentum may pick up and cause a strong fall into wave 5). If that's the case then current wave bounce can be subwave 2 with resistance seen at 1.0740.

Daily Technical Outlook And Review

During the course of Monday's sessions, the single currency clocked highs of 1.0740 a few hours after the open and then rapidly turned course, falling sharply against its US counterpart throughout the London morning segment. Breaking below the 1.07 handle and a neighboring H4 trendline support extended from the low 1.0340, the pair attacked a H4 Quasimodo support at 1.0621 and once again, this time going into the US open, hit the brakes and changed course, driving prices back up to the 1.07 region by the closing bell.

GBP/USD Bearish ABC Zigzag Challenges 1.25 Support

The GBP/USD is building an ABC bearish zigzag (orange) within a downtrend channel (brown/blue lines). A break above the 100% Fibonacci level of wave B vs A invalidates the ABC bearish zigzag and indicates a potential bullish breakout scenario above the bearish channel. A break below the support trend line (green) could see price retest the bottom of the channel (blue).

Forex Technical Analysis

USD/JPY The break through 114.10 signals a negative bias with a risk of another test at 115.50 lows. Initial intraday resistance lies at 114.10.

Market Morning Briefing

Dollar Index (100.35) has been holding above the support of 100.05-99.75 despite the failure to rise above 101.20-25, the near term resistance we have been watching. The swing high of 101.02 becomes the new reference point as only a higher high may signal a reversal to the upside. The near to medium term direction may be set by the FOMC announcement coming tomorrow.

USD/JPY Falls Ahead Of BoJ And Fed Policy Meetings

USD/JPY dropped back below 114.00 as the Japanese yen surged on Monday, ahead of the Bank of Japan's (BoJ) monetary policy decision and statement scheduled for early Tuesday in Japan. The BoJ is not expected to make any substantial changes to its negative interest rate policy or its extensive quantitative easing program at the current time. The yen has generally been strengthening since the beginning of the new year as the US dollar has lagged, prompting a sharp pullback for USD/JPY.

GBP/JPY Long: Same Level, Take 2

A couple of weeks ago, we were looking for a possible GBP/JPY counter-trend long. The Beast was sitting at a horizontal support/resistance zone and if it had have held then we were looking for that first intraday pullback to get long off of. But alas the level didn’t hold and price dropped lower through it. Three weeks later and price is back at the zone again and the setup has some real promise.

USD/CHF Looks Poised for a Big Move

The USD/CHF spent the whole of last week consolidating in a very tight range around that psychologically-important 1.00 handle. The consolidation suggests its coiling for a potentially big move. In the short-term, it all depends on whether we will see a decisive break of the 0.9960/70 support area OR the 1.0020/27 resistance area. Given the overall bullish market structure, we think that the move will more likely be to the upside rather than the downside. Even if it breaks lower, the potential sell-off will probably be limited.

Gold – Near-Term Risk Remains Shifted Lower While Daily Tenkan-Sen Caps

Gold – near-term risk remains shifted lower while daily Tenkan-sen capsPullback from $1219 double-top is for now holding above important support at $1182 (Fibo 38.2% of $1122/$1219 upleg), with near-term price action in consolidation mode. Downside remains at risk after weekly close in red (the first bearish close after month-long rally), with daily MA’s turning in negative setup and double-top continuing to weigh. Renewed attack at $1182 trigger could be expected and firm break here to trigger fresh bearish acceleration towards $1173/71 (daily Kijun-sen / 50% retracement).