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Daily Pivots: (S1) 1.0992; (P) 1.1021; (R1) 1.1076; More...

Immediate focus is now on 1.1075 resistance in EUR/USD as rebound extends today. Decisive break there will resume larger up trend from 0.9534 to 1.1273 fibonacci level. Break there will target 61.8% projection of 0.9534 to 1.1032 from 1.0515 at 1.1441. On the downside, break of 1.0995 minor support will now indicate that corrective pattern from 1.1075 is extending with one more falling leg before completion.

In the bigger picture, rise from 0.9534 (2022 low) is in progress for 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. Sustained break there will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high). This will now remain the favored case as long as 1.0515 support holds, even in case of deeper pull back.

Euro is making broad gains in Asian session, fueled by hawkish comments from a top ECB official who suggested that the next rate hike could be a 50bps one. Euro's strength is also lifting the Swiss Franc, while Sterling remains firm but lags slightly behind. In contrast, Australian and Canadian dollars are underperforming, with the Aussie looking particularly vulnerable ahead of tomorrow's CPI report and facing additional pressure from selling in cross against New Zealand Dollar.

Yen is also weak as markets anticipate BoJ will maintain its current policy stance unchanged at this week's meeting. Mild risk aversion in Asian stocks is providing slight support for the Japanese currency, but this may be short-lived. Dollar is mixed for now, alongside US stocks and bonds, but could be vulnerable to an extended selloff against European majors if key support levels are decisively broken.

Technically, Gold appears to be attempting to find a bottom ahead of 38.2% retracement of 1804.48 to 2048.26 at 1955.13. Break of 2012.18 resistance could signal that correction from 2048.26 is complete, potentially leading to a strong rally through 2048.26 and towards record high of 2074.48. If realized, this move may coincide with break of 1.1075 in EUR/USD, regardless of which one occurs first.

In Asia, at the time of writing, Nikkei is up 0.14%. Hong Kong HSI is down -1.62%. China Shanghai SSE is down -0.35%. Singapore Strait Times is down -0.80%. Japan 10-year JGB yield is up 0.0117 at 0.484. Overnight, DOW rose 0.20%. S&P 500 rose 0.09%. NASDAQ dropped -0.29%. 10-year yield dropped -0.055 to 3.515.

EUR/AUD, EUR/CAD, GBP/AUD, GBP/CAD uptrend resumptions

Both Euro and Sterling staged upside breakout against Australian and Canadian Dollar this week, resuming respective medium term up trend. Comments from a top ECB official overnight indicates that a 50bps is not off the table for May policy meeting. Meanwhile, recent data from the UK clearly indicates the need for extended tightening from BoE to fight the still-double-digit inflation. On the other hand, there is no data supporting BoC to move out from its pause. Aussie looks vulnerable to tomorrow's CPI release, which would be crucial to whether RBA would deliver a final hike in the currency cycle.

EUR/AUD's up trend from 1.4281 is now in progress for 100% projection of 1.4281 to 1.5976 from 1.5254 at 1.6949. Near term outlook will stay bullish as long as 1.6219 support holds, in case of retreat.

EUR/CAD's break of 1.4935 confirmed resumption of whole up trend from 1.2867. Immediate target is 61.8% projection of 1.3270 to 1.4640 from 1.4236 at 1.5083. Sustained break there could prompt upside acceleration to 100% projection at 1.5606. Meanwhile, outlook will stay bullish as long as 1.4261 support holds, in case of retreat.

GBP/AUD's breach of 1.8697 resistance argues that uptrend from 1.5925 is resuming. Outlook will stay bullish as long as 1.8393 support holds, in case of retreat. Sustained trading above 61.8% projection of 1.5925 to 1.8272 from 1.7218 at 1.8668 could prompt upside acceleration to 1.9218 resistance and then 100% projection at 1.9565.

GBP/CAD's break of 1.6846 resistance also indicates resumption of up trend from 1.4069. Near term outlook will stay bullish as long as 1.6535 support holds. Current rise should target 61.8% projection of 1.4069 to 1.6846 from 1.6075 at 1.7791 next.

ECB's Schnabel: Further rate hikes needed, 50 not off the table

ECB Executive Board member Isabel Schnabel said in a Politico interview that additional rate hikes are necessary, with the size of these hikes depending on incoming data. "The data we have so far shows that inflation is higher and the economy more resilient than projected," she added that "data dependence means that 50 basis points are not off the table" for May meeting.

She also noted that "it's far too early to declare victory on inflation." She explained that if core inflation remains high and persistent, even if it reaches a peak, the information content of that data point might be limited. "So what we really need is confidence that it's actually coming down in a sustained manner."

Schnabel acknowledged that she cannot predict the terminal interest rate, noting that rates must be set on a meeting-to-meeting basis. She also addressed concerns about a potential recession, stating, "So far, there are no particular signs of a weakening in economic developments. At this point in time, I have no reason to believe that a recession is coming."

ECB's Makhlouf: Too early to start planning for a pause

ECB Governing Council member Gabriel Makhlouf stated in a blog post that it is too early to plan for a pause in tightening of monetary policy, emphasizing the need to focus on incoming data. In a blog post, Makhlouf said, "on the evidence so far, it is too early to start planning for a pause in our tightening of policy." He further noted that based on current evidence, restrictive rate levels are necessary to balance supply and demand in the economy and reduce inflation.

In separate occasion, another Governing Council member François Villeroy de Galhau emphasized the role of climate change in affecting price stability and economic activity. He highlighted that addressing climate change is not an instance of mission creep or politicization, but rather a core duty of central banks worldwide. Villeroy stated, "It's not mission creep, it's not a politicisation of our mandate - it is our core business and core duty."

BoJ Governor Ueda stresses need for continued monetary easing

BoJ Governor Kazuo Ueda addressed parliament today, emphasizing, "In light of current economic, price and financial developments, it's appropriate to maintain monetary easing, now conducted through yield curve control."

Ueda reiterated the importance of keeping Japan's monetary policy loose to achieve the 2% inflation target in a sustainable and stable manner, along with wage hikes. He added that if wage growth and inflation accelerate faster than expected and require tightening monetary policy, BoJ is prepared to respond by raising interest rates.

Despite this, Ueda warned of the risk of inflation falling further below expectations, calling it "very worrying." He noted that "the risk of inflation undershooting forecasts is bigger than the risk of overshooting," emphasizing the need to maintain the BoJ massive stimulus for the time being.

Looking ahead

Swiss trade balance and UK public sector net borrowing will be released in European session. Later in the day, US will release house price index, consumer confidence and new home sales.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.0992; (P) 1.1021; (R1) 1.1076; More...

Immediate focus is now on 1.1075 resistance in EUR/USD as rebound extends today. Decisive break there will resume larger up trend from 0.9534 to 1.1273 fibonacci level. Break there will target 61.8% projection of 0.9534 to 1.1032 from 1.0515 at 1.1441. On the downside, break of 1.0995 minor support will now indicate that corrective pattern from 1.1075 is extending with one more falling leg before completion.

In the bigger picture, rise from 0.9534 (2022 low) is in progress for 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. Sustained break there will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high). This will now remain the favored case as long as 1.0515 support holds, even in case of deeper pull back.

Economic Indicators Update

Both Euro and Sterling have made significant gains against Australian and Canadian Dollars this week, resuming medium-term uptrends in respective crosses. Overnight comments from a top ECB official suggest that a 50bps rate hike may be on the table for May policy meeting. Meanwhile, recent UK data underscores the necessity for BoE to extend its tightening measures in order to combat persistently high, double-digit inflation.

On the other hand, there is no data supporting a shift from BoC's current pause in rate hikes. Australian dollar appears vulnerable ahead of tomorrow's crucial CPI release, which will likely determine whether RBA will implement a final rate hike in the current cycle.

EUR/AUD's up trend from 1.4281 is now in progress for 100% projection of 1.4281 to 1.5976 from 1.5254 at 1.6949. Near term outlook will stay bullish as long as 1.6219 support holds, in case of retreat.

EUR/CAD's break of 1.4935 confirmed resumption of whole up trend from 1.2867. Immediate target is 61.8% projection of 1.3270 to 1.4640 from 1.4236 at 1.5083. Sustained break there could prompt upside acceleration to 100% projection at 1.5606. Meanwhile, outlook will stay bullish as long as 1.4261 support holds, in case of retreat.

GBP/AUD's breach of 1.8697 resistance argues that uptrend from 1.5925 is resuming. Outlook will stay bullish as long as 1.8393 support holds, in case of retreat. Sustained trading above 61.8% projection of 1.5925 to 1.8272 from 1.7218 at 1.8668 could prompt upside acceleration to 1.9218 resistance and then 100% projection at 1.9565.

GBP/CAD's break of 1.6846 resistance also indicates resumption of up trend from 1.4069. Near term outlook will stay bullish as long as 1.6535 support holds. Current rise should target 61.8% projection of 1.4069 to 1.6846 from 1.6075 at 1.7791 next.

Key Highlights

• GBP/USD is consolidating above the 1.2380 support.
• A major bullish trend line is forming with support near 1.2395 on the 4-hour chart.
• EUR/USD is moving higher and stable above the 1.0950 support.
• Gold price is showing a few bearish signs below the $2,000 level.

GBP/USD Technical Analysis

The British Pound started a downside correction from the 1.2550 zone against the US Dollar. GBP/USD declined below 1.2450 but downsides were limited.

Looking at the 4-hour chart, the pair tested the 1.2350 support zone. A low was formed near 1.2353 before the price started a fresh increase. The pair climbed above the 1.2420 level and the 100 simple moving average (red, 4 hours).

It is also trading well above the 200 simple moving average (green, 4 hours). Recently, there were a few spikes above the 50% Fib retracement level of the downward move from the 1.2546 swing high to the 1.2353 low.

The first major resistance is near the 1.2475 level. It coincides with the 61.8% Fib retracement level of the downward move from the 1.2546 swing high to the 1.2353 low.

A clear upside break and close above the 1.2745 resistance might send the pair toward 1.2520 or 1.2550. The next key resistance is near the 1.2620 zone. Any more gains might send the pair toward 1.2650.

On the downside, there is a major support forming near 1.2400. There is also a major bullish trend line forming with support near 1.2395 on the same chart. The next major support sits near the 1.2350 level, below which the pair might accelerate lower.

Looking at EUR/USD, the pair remained stable above 1.0950 and might soon attempt an upside break above the 1.1100 resistance.

Economic Releases

• US House Price Index for Feb 2023 (MoM) - Forecast -0.2%, versus +0.2% previous.
• US New Home Sales for March 2023 (MoM) – Forecast +1.1% versus +1.1% previous.

Oh, the poor Canadian Dollar. It's been underperforming against the US Dollar lately, extending its losses from last week. What's causing this unfortunate turn of events? Well, it's none other than crude oil - a key export of Canada. The black gold has been taking a beating lately, with WTI down almost 7 percent in recent times. This has been caused by fears of a global growth slowdown, as highlighted in the Federal Reserve's beige book. And as if that weren't enough, China's economy is also playing a role, with industrial production falling behind, which is more sensitive to the health of the global economy. It's no wonder USDCAD has been climbing higher recently, marking its best week since March. So, where is USDCAD headed in May? Let's see what the Price Action has to say.

US DOLLAR - Weekly Timeframe

Most things have stayed the same on the US Dollar chart since my initial article. The close of the previous candle on the weekly timeframe only added even further confirmation to the sentiment from last week. The basic confluences are; a rally-base-rally demand zone, trendline support, 100-Period Moving Average, and the alignment of the Moving Averages in a proper ascending manner.

Analysts’ Expectations:

• Direction: Bullish
• Target: 103.933
• Invalidation: 99.629

USDCAD - Weekly Timeframe

Last week, I indicated a bullish intent on USDCAD based on the price action confluences I had seen, and true to the analysis, we ended the week with a bullish reaction from the rally-base-rally demand zone with the help of the other contributing factors; the trendline support, 50-Period Moving Average, and the Fibonacci retracement level. I believe this sentiment will play out for a while.

Analysts’ Expectations:

• Direction: Bullish
• Target: 1.38220
• Invalidation: 1.31822

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

In this article we’re going to take a quick look at the Elliott Wave charts of GBPUSD , published in members area of the website. As our members know, we have been favoring the long side in the pair. We recommended members to avoid selling , while keep favoring the long side. Recently we got correction that has unfolded as Elliott Wave Double Three pattern. It has reached our buying zone and made rally toward new highs as expected. In the further text we are going to explain the Elliott Wave Forecast and trading strategy.

Before we take a look at the real market example, let’s explain Elliott Wave Double Three pattern.

Elliott Wave Double Three Pattern

Double three is the common pattern in the market , also known as 7 swing structure. It’s a reliable pattern which is giving us good trading entries with clearly defined invalidation levels.
The picture below presents what Elliott Wave Double Three pattern looks like. It has (W),(X),(Y) labeling and 3,3,3 inner structure, which means all of these 3 legs are corrective sequences. Each (W) and (Y) are made of 3 swings , they’re having A,B,C structure in lower degree, or alternatively they can have W,X,Y labeling.

GBPUSD Elliott Wave 1 Hour Chart 04.06.2023

The pair is giving us wave ((iv)) pull back that is unfolding as Double Three pattern. At this stage we believe 5th swing is in progress,so missing 6th and 7th. We expect to get more short term weakness toward 1.2386-1.233 area which would be our next buying zone. We don’t recommend selling the pair against the main bullish trend. Strategy is waiting for the price to reach blue box- equal legs zone, before entering the long trades again. Once bounce reaches 50 Fibs against the (x) blue high , we will make long position risk free ( put SL at BE) and take partial profits. Invalidation for the long trades is break of 1.618 fib ext : 1.2330

Quick reminder:

Our charts are easy to trade and understand:
Red bearish stamp+ blue box = Selling Setup
Green bullish stamp+ blue box = Buying Setup
Charts with Black stamps are not tradable. 🚫

GBPUSD Elliott Wave 1 Hour Chart 04.14.2023

GBPUSD made 7 swing down and reached buying zone at 1.2386-1.233 area( blue box) . The pair is giving us very good reaction from the buying zone. The price has already made a break toward new highs. So, members who took the long trade are enjoying profits now in a risk free positions.

Keep in mind that market is dynamic and presented view could have changed in the mean time. You can check most recent charts in the membership area of the site. Best instruments to trade are those having incomplete bullish or bearish swings sequences. We put them in Sequence Report and best among them are shown in the Live Trading Room.

• CADCHF broke key support level 0.6600
• Likely to fall to support level 0.6535

CADCHF currency pair under the bearish pressure after the price broke the key support level 0.6600 (which stopped the previous impulse waves 1 and (3)).

The breakout of the support level 0.6600 accelerated the active impulse wave 3 which belongs to the intermediate impulse wave (5) from the start of April.

Given the strong daily downtrend and bullish Swiss franc sentiment, CADCHF can be expected to fall further toward the next support level 0.6535.

• GBPUSD reversed from key support level 1.2335
• Likely to rise to resistance level 1.2530

GBPUSD currency pair recently reversed up from the key support level 1.2335 (which stopped the previous corrections 2 and (ii)).

The support level 1.2335 was strengthened by the 20-day moving average and by the 38.2% Fibonacci correction of the upward impulse from March.

Given the clear daily uptrend and strong dollar sales, GBPUSD can be expected to rise further toward the next resistance level 1.2530.

BoJ BOJ Governor Kazuo Ueda addressed parliament today, emphasizing, "In light of current economic, price and financial developments, it's appropriate to maintain monetary easing, now conducted through yield curve control."

Ueda reiterated the importance of keeping Japan's monetary policy loose to achieve the 2% inflation target in a sustainable and stable manner, along with wage hikes. He added that if wage growth and inflation accelerate faster than expected and require tightening monetary policy, BoJ is prepared to respond by raising interest rates.

Despite this, Ueda warned of the risk of inflation falling further below expectations, calling it "very worrying." He noted that "the risk of inflation undershooting forecasts is bigger than the risk of overshooting," emphasizing the need to maintain the BoJ 's massive stimulus for the time being.

ECB Governing Council member Gabriel Makhlouf stated in a blog post that it is too early to plan for a pause in tightening of monetary policy, emphasizing the need to focus on incoming data. In a blog post, Makhlouf said, "on the evidence so far, it is too early to start planning for a pause in our tightening of policy." He further noted that based on current evidence, restrictive rate levels are necessary to balance supply and demand in the economy and reduce inflation.

In separate occasion, another Governing Council member François Villeroy de Galhau emphasized the role of climate change in affecting price stability and economic activity. He highlighted that addressing climate change is not an instance of mission creep or politicization, but rather a core duty of central banks worldwide. Villeroy stated, "It's not mission creep, it's not a politicisation of our mandate - it is our core business and core duty."