Sample Category Title
Trade Idea Wrap-up: USD/CHF – Sell at 0.9885
USD/CHF - 0.9859
Most recent candlesticks pattern : N/A
Trend : Near term down
Tenkan-Sen level : 0.9845
Kijun-Sen level : 0.9845
Ichimoku cloud top : 0.9819
Ichimoku cloud bottom : 0.9808
Original strategy :
Sell at 0.9875, Target: 0.9775, Stop: 0.9910
Position : -
Target : -
Stop : -
New strategy :
Sell at 0.9885, Target: 0.9785, Stop: 0.9920
Position : -
Target : -
Stop : -
Dollar’s rebound after falling to 0.9778 earlier this week suggests consolidation above this level would be seen and marginal gain from here cannot be ruled out, however, reckon upside would be limited to 0.9876 (previous support) and bring another decline later, below 0.9815-20 would bring a retest of said support at 0.9778, break there would extend recent decline from 1.1038 top towards 0.9730-37 support area but reckon support at 0.9705 would hold from here, bring rebound later.
In view of this, we are looking to sell dollar again on further subsequent recovery as previous support at 0.9876 should turn into resistance and limit upside. Only break of 0.9895-00 would defer and signal a temporary low is formed instead, bring a stronger rebound to 0.9920 but price should falter well below resistance at 0.9947.
Trade Idea Wrap-up: GBP/USD – Stand aside
GBP/USD - 1.3409
Most recent candlesticks pattern : N/A
Trend : Near term up
Tenkan-Sen level : 1.3406
Kijun-Sen level : 1.3326
Ichimoku cloud top : 1.3328
Ichimoku cloud bottom : 1.3321
New strategy :
Stand aside
Position : -
Target : -
Stop : -
Despite falling briefly to 1.3221, as cable found renewed buying interest there and has staged another rally, suggesting the erratic rise from 1.3027 low is still in progress, hence near term upside bias remains for this move to extend further gain to 1.3435-40, however, overbought condition should prevent sharp move beyond previous resistance at 1.2455 and price should falter below 1.2475-80, bring retreat later.
In view of this, would not chase this rise here and would be prudent to stand aside in the meantime. Below 1.3355-60 would suggest an intra-day top is formed instead, bring weakness t the Kijun-Sen (now at 1.3315) but reckon downside would be limited to 1.3260-65, bring another rise later.
Trade Idea Wrap-up: EUR/USD – Stand aside
EUR/USD - 1.1837
Most recent candlesticks pattern : N/A
Trend : Near term up
Tenkan-Sen level : 1.1850
Kijun-Sen level : 1.1858
Ichimoku cloud top : 1.1908
Ichimoku cloud bottom : 1.1908
Original strategy :
Bought at 1.1845, stopped at 1.1825
Position : - Long at 1.1845
Target : -
Stop : - 1.1825
New strategy :
Stand aside
Position : -
Target : -
Stop : -
As the single currency has fallen again after meeting renewed selling interest at 1.1883, dampening our bullishness and near term downside risk remains for the fall from 1.1961 top to bring retracement of recent upmove to 1.1805-10 (61.8% Fibonacci retracement of 1.1713-1.1961), however, oversold condition should prevent sharp fall below 1.1770 and price should stay well above support at 1.1736, bring rebound later.
In view of this, would not chase this fall here and would be prudent to stand aside for now. Above said resistance at 1.1883 would suggest an intra-day low is formed instead, bring a stronger rebound to 1.1900 but break of 1.1920 is needed to signal the retreat from this week’s high at 1.1961 has ended, bring retest of this level first.
Trade Idea Wrap-up: USD/JPY – Buy at 111.40
USD/JPY - 111.96
Most recent candlesticks pattern : N/A
Trend : Near term down
Tenkan-Sen level : 111.72
Kijun-Sen level : 111.57
Ichimoku cloud top : 111.27
Ichimoku cloud bottom : 111.18
Original strategy :
Buy at 111.00, Target: 112.00, Stop: 110.65
Position : -
Target : -
Stop : -
New strategy :
Buy at 111.40, Target: 112.40, Stop: 111.05
Position : -
Target : -
Stop : -
As the greenback has surged again after brief pullback, adding credence to our view that low has been formed at 110.84 earlier this week, hence consolidation with upside bias remains for this rebound to bring retracement of recent decline, then further gain to 112.20 and possibly 112.40 would be sen, however, near term overbought condition should limit upside and price should falter below resistance at 112.72, bring retreat later this week.
In view of this, we are still looking to buy dollar on dips as 111.35-40 would limit downside. Below 111.05-10 would abort and signal the rebound from 110.84 has ended, bring retest of this level, break there would signal recent decline has resumed and extend weakness to 110.70 and possibly towards 110.50.
The Meaning Behind $1.38 GBP/USD
What has happened to all of the prophetic statements about the British pound falling below $1.15/$1.10 and remaining there?
After crashing last year to $1.1840, a 31-year low (some prices suggest $1.1500), it is now up by 12%. The pound is the only currency in G10 FX to rise against the US dollar over the past 3 months. Will the pound recover above the $1.50 level next year? Or will Brexit dynamics force the currency back under $1.20? In this piece, I shall focus on the technical forces shaping the GBP/USD pair in the medium run and will not discuss macro fundamentals, Brexit or political risk.
Different catalysts, one support
The most striking development in the 35-year chart of the GBP/USD below is the manner in which the $1.3800 support was finally broken in 2016 after three failed attempts spanning over a 7-8 year cycle. The duration of the cycle is not as important as the recurring emergence of $1.38 to act as a crucial foundation in each of the selling attacks sustained by the pound.
The two episodes of 1992 and 2016 share similar catalysts in the sense that they were both triggered by a singular event — the UK's decision to abandon supporting the pound vs the Deutsche mark under the Exchange Rate Mechanism in 1992; and the fateful Brexit referendum of June 2016, ending Britain's 40-year economic and political relationship with the European Union. Indeed, the pound had been weakening considerably ahead of each of those events, but both occasions were highlighted by a singular announcement/outcome.
The sterling's selloffs of 2000-2001 and 2007-2008 were triggered by global economic catalysts as well as UK-specific events, yet, are also highlighted by the $1.38 support.
After the break
The enormity of the Brexit implications is underlined by the fact that $1.38 had finally floundered after surviving three major attacks. Keeping fundamental factors and economic/political analysis aside, technical analysis raises 2 questions: Will GBP/USD return to $1.37-$1.38? And will GBP/USD succeed in breaking above $1.38? The answer to the first question is strong "yes". As long as $1.28 is sustained and the 200-day MA holds, the probability of regaining $1.37 has more than 75% chance probability of occurring. A breach above $1.38 would mean the 2nd violation of a level that once held for more than three decades. In order for such occurrence to manifest itself, chances remain below 30%.
SPOT GOLD Eases Below Daily Cloud as Greenback Rallies after Yellen
Spot Gold dipped below daily cloud after Fed Yellen's remarks inflated dollar, which received further support on better than expected US q3 GDP numbers (3.3% vs 3.2% f/c). Fresh bearish acceleration and extension through cloud base weakened near-term structure, seeing increased risk of further easing.
Initial negative signal was generated on Monday's strong rejection just ahead of psychological $1300 barrier and Tuesday's Doji candle.
Close below daily cloud today would be additional bearish signal for further retracement of $1263/$1299 recovery leg.
Bearish acceleration found footstep at $1285 (Fibo 38.2% of $1263/$1299) which marks next pivot.
Break here would open $1281 (50% retracement/daily Kijun-sen) and $1277 (Fibo 61.8%) in extension.
Broken cloud base marks immediate resistance at $1288, with return and close in the daily cloud expected to ease bearish pressure.
However, stronger recovery needs to regain session high at $1296 to shift near-term focus higher again.
Res: 1288; 1290; 1296; 1299
Sup: 1287; 1285; 1281; 1277
USDJPY Still Bearish Below 111.70 Level
The U.S dollar remains intraday bearish against the Japanese yen, after another failed attempt at the pair 200-day moving average, at 111.69. The USDJPY pair currently trades around the 111.50 level, as price-action is caught between daily support and resistance. Yesterday the USDJPY pair received a boost, after U.S Consumer Confidence figures helped lift the US dollar, after posting the best set of numbers since December 2000.
The USDJPY pair is likely to remain under pressure while trading below the 111.70 technical level. Any upside attempts above 111.70 may trigger further buying towards the 112.20 level.
Should price action decline back below the 111.34 level, sellers will look to test back towards the 110.83 level, with extended daily USDJPY support at the 110.60 level.
GBPUSD Strongly Bullish Above 1.3360 Level
The British pound has moved sharply higher against the U.S dollar, hitting 1.3380, after reports surfaced that the UK is prepared to offer the EU over forty billion euros, as part of the 'divorce' deal. The GBPUSD pair currently trades above the key 1.3360 level, as bullish momentum continues to build over short and medium-term horizons. Yesterday sterling dipped to 1.3220 level support, but quickly recovered as dip buyers came in. The major risk events for the GBPUSD pair today are third quarter GDP figures from the U.S, and Janet Yellen's testimony before U.S congress.
The GBPUSD pair remains strongly technically bullish while trading above the 1.3360 level. Further upside towards the 1.3410 and 1.3500 levels seems possible today.
Should price-action on the GBPUSD pair decline below the 1.3360 support level, sellers will likely target the 1.3307 level, with extended support at 1.3280.
US: Strong Q3 Growth Revised Higher, as Corporate Profits Surge
As expected, real GDP was revised up in the third quarter, to 3.3% annualized, versus the 3.0% in the BEA's advance estimate of 3.0%.
Part of the upward revision was related to stronger business investment (+4.7%, up from 3.9%). Spending on equipment grew 10.4% (previously 8.6%) and investment in intellectual property was up 5.8% (prev. 4.3%). These upward revisions more than offset a downgrade to spending on structures (-6.8% versus -5.2%).
Other areas of upward revisions were government spending, which now grew 0.4% (prev. -0.1%), and inventories. Investment in inventories contributed 0.8%-points to growth in Q3, a hair above the 0.7%-point contribution in the advance estimate.
Consumer spending was revised down slightly, to 2.3% from 2.4%. This is not overly concerning as household spending was held back in many regions by hurricane activity. Residential investment subtracted less than previously thought, contracting by 5.1% (prev. -6.0%).
Corporate profit growth accelerated (after IVA and CCA) in the third quarter, up $91.6bn (18.4% annualized), after a 2.8% gain in the second. This gain was entirely driven by financial corporations.
Key Implications
Given the data seen since the advance GDP report, today's upgrade was largely expected. Still, economic growth at a three-year high is likely to garner some positive headlines. Today's data confirms that the U.S. economy has had back-to-back quarters of 3%+ growth for the first time in three years. To a certain extent, the strength in Q3 borrows a bit from Q4, where we expect growth to ease very slightly to closer to 2 ½% -- still well-above the economy's potential rate (around 2.0%).
FOMC members were already pretty upbeat about economic growth, and a hike at December's meeting was essentially fully priced in before this release. Still, fixed income yields have pushed higher on the positive headlines.
USDJPY – Hawkish Remarks from Fed Yellen Lift Dollar above 200SMA Barrier
The dollar rose across the board on optimistic remarks from Fed chair Yellen, ahead of her testimony to Congress later today.
Yellen said that strengthening of the US economy will warrant continues interest rate increases and weak inflation is seen transitory with expectations for gradual increase of interest rate to be appropriate.
Despite Yellen did not talk about the timing of next rate increase, markets took her comments as bullish shift from the recent release of minutes of last FOMC meeting when a number of Fed's policymakers expressed their concerns about stubbornly low inflation.
USDJPY pair surged through strong barrier at 111.68 (200SMA) which capped the action in past few days.
Extended bullish acceleration dented next resistance at 112.00 (falling Tenkan-sen), turning focus towards next pivot at 112.32 (Fibo 38.2% of 114.73/110.83 downleg).
Close above 200SMA will be initial signal of basing and extended recovery while sustained break above Fibo barrier at 112.32 would generate firmer bullish signal for stronger recovery and test of daily cloud top (112.74) which marks next pivotal point, violation of which would confirm reversal.
Res: 112.32; 112.74; 113.00; 113.24
Sup: 111.68; 111.35; 111.02; 110.81
