Sample Category Title

Weekly
    •    Last Candlesticks pattern: Shooting doji
    •    Time of formation: 01 May 2017
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Long white candlestick 
    •    Time of formation: 20 Oct 2017
    •    Trend bias: Near term up



USD/CAD – 1.2814




The greenback has maintained a firm undertone after surging to 1.2917 late last week, adding credence to our bullish view that the rise from 1.2061 low is still in progress and may extend further gain to 1.2925-30 (50% Fibonacci retracement of 1.3794-1.2061) and then 1.3000, however, loss of near term upward momentum should prevent sharp move beyond 1.3100 and reckon dynamic resistance at 1.3130-35 (61.8% Fibonacci retracement) would hold from here, risk from there has increased for a retreat later.

On the downside, whilst pullback to the Tenkan-Sen (now at 1.2769) and then 1.2700 cannot be ruled out, reckon downside would be limited to the Kijun-Sen (now at 1.2667) and bring another rise later. Only a daily close below the Kijun-Sen would defer and suggest top is possibly formed, bring weakness to previous resistance at 1.2599 (now support) but a daily close below there is needed to confirm, bring correction to 1.2550, then towards 1.2500-10, having said that, price should stay well above support at 1.2433. 

Recommendation: Buy at 1.2700 for 1.2950 with stop below 1.2600


On the weekly chart, as the greenback has eased after faltering below last week’s high at 1.2917, suggesting minor consolidation below this level would be seen and pullback to 1.2700 cannot be ruled out, however, reckon support at 1.2612 would limit downside and bring another rise later to 1.2925-30 (50% Fibonacci retracement of 1.3794-1.2061 and current level of the Kijun-Sen), break there would extend the rise from 1.2061 low to 1.3000 and then 1.3100 but still reckon upside would be limited to 1.3150-60 and the lower Kumo (now at 1.3224) should remain intact. 

On the downside, although initial pullback to 1.2700 is likely, reckon downside would be limited to 1.2650-60 and last week’s low at 1.2612 should hold, bring another rise later. A drop below previous resistance at 1.2599 (now support) would defer and suggest top is possibly formed, bring weakness to 1.2550, then towards 1.2500 but reckon the Tenkan-Sen (now at 1.2489) would limit downside and bring another rise later. Only a drop below support at 1.2433 would signal the rebound from 1.2061 has ended instead, bring further fall to 1.2390-00 and later towards 1.2300-10 but reckon 1.2121 support would remain intact. 

The U.S dollar continues to ease around the 114 level against the Japanese yen, after the announcement of the new FED Chair Jerome Powell had been in-line with what market participants had been expecting. The USDJPY pair showed a muted reaction after the news, with price-action continuing to trade just below the three and a half month high, at 114.44. Traders now await the release of the U.S Non-farm payrolls job report, with 300,000 new U.S jobs expected to be created in October.

USDJPY buyers retain control of the pair while price-action holds above the 113.89 level. Further intraday buying towards the 114.24 and 114.50 levels remains most likely.

If intraday USDJPY sellers push price-action below the 113.89 level for a sustained period, a further decline towards the 113.57 and 113.33 levels remains the most likely scenario.

The British pound continues to fall sharply against the U.S dollar, with price-action hitting 1.3040, during late Thursday trading. The GBPUSD pair currently trades around the 1.3060 level, with the U.S dollar index remaining well supported after the announcement of the new FED Chair Jerome Powell and the Trump administration tax plan. Traders now await the release of the U.S Nonfarm payrolls job report.

Further GBPUSD selling pressure should remain while price-action trades below the 1.3070 technical level. Sellers will likely target the 1.3040 and 1.3023 support levels.

Should price-action trade above the 1.3070 level for a sustained period, a relief-rally towards the 1.3130 and 1.3200 resistance remains possible.

On Friday, the US Department of Labor will release the most closely watched data event of the month. The October nonfarm payrolls report will make its way through the financial markets at 12:30 GMT, and could set the tone for the remainder of the session.

The monthly jobs report is expected to show a whopping 312,000 jobs added to the economy last month, following a decline of 33,000 in September that was caused by volatile weather in Texas and Florida. The jobless rate is expected to hold steady at 4.2% with average weekly hours going unchanged.

On Wednesday, payrolls processor ADP Inc. said private sector employers added 235,000 workers in September. That was much higher than the 200,000 forecasted by economists.

NFP data influence everything from stocks to forex. Any reading that deviates significantly from the consensus forecast is likely to trigger a volatile response from the market.

The Commerce Department will also release its September trade balance during the same time as the NFP report. The trade deficit is forecast to expand slightly to $43.2 billion from $42.4 billion the previous month.

Later in the day, the Institute for Supply Management (ISM) and IHS Markit will unveil the latest services PMI report for October. The ISM report is expected to show a slight cooldown in non-manufacturing growth after the PMI approached 60 in September.

A report on US factory orders will also make headlines at 14:45 GMT. Orders for factory goods are expected to climb 1.3% month-on-month.

On the policy front, Federal Open Market Committee (FOMC) member Neel Kashkari will deliver a speech at 16:15 GMT.

Of course, the financial world stretches far beyond the United States. North of the border, the Canadian government will also release its monthly jobs report for October. The net change in employment is expected to show a monthly gain of 15,000 jobs for Canada. Unemployment is widely expected to remain at 6.2%.

Statistics Canada will also report on the latest trade balance for September. Canada's trade deficit is forecast to shrink to $3 billion during the month.

EUR/USD

The euro gained some upward traction on Thursday, but failed to generate significant support above 1.1670 US. The EUR/USD was last seen trading roughly 10 pips below that level, with investors setting their sights on nonfarm payrolls.

USD/CAD

The Canadian dollar clawed back some of its recent declines on Thursday, with the USD/CAD crumbling back toward the 1.2800 handle. Friday will be a big session for the pair, with data from both countries set to make headlines.

US CRUDE

Crude prices are trading at their highest level for 2017, a sign that investors are more comfortable with the supply/demand outlook. US crude prices were up again on Friday, adding half a percent to $54.83 a barrel. The market has enough momentum to continue higher, based on the fundamental indicators

Key Highlights

• The US Dollar remained elevated above the 113.50 pivot against the Japanese Yen.
• There is a crucial bullish trend line in place with support at 113.60 on the 4-hours chart of USD/JPY.
• The US Non-farm Productivity in Q3 2017 (Preliminary) rose 3%, compared with the +2.4% forecast.
• Today, the US nonfarm payrolls report for Oct 2017 will be released, which is forecasted to register +312K versus the -33K previous.

USDJPY Technical Analysis

The US Dollar remains in a solid uptrend and recently moved above the 113.60 resistance against the Japanese Yen. However, the USD/JPY pair is facing many hurdles near 114.30, 114.50 and 115.00.

The 4-hours chart of USD/JPY suggests that the pair is struggling to break the 114.30-114.50 resistance zone. There were at least five failures near the mentioned levels. Above 114.50, there is another crucial barrier for buyers near 115.00.

A close above 115.00 is required for sustained gains towards 118.00 in the near term. On the flip side, if the pair fails to move above 114.50 and 115.00, there can be a fresh downside wave. An initial support is near a crucial bullish trend line with support at 113.60 on the same chart.

The stated 113.60 support is also near the 50% Fib retracement level of the last wave from the 112.95 low to 114.26 high. A close below 113.60 should spark further declines toward 113.00.

US Non-farm Productivity

Recently in the US, the Non-farm Productivity for Q3 2017 (Preliminary) was released by the Bureau of Labor Statistics of the US Department of Labor. The forecast was slated for an increase of 2.4% in the Non-farm Productivity compared with the previous quarter.

However, the actual result was better since there was a rise of 3%, which is double compared with the last increase of 1.5%. The output increased by 3.8% and hours worked rose by 0.8%.

The report added:

From the third quarter of 2016 to the third quarter of 2017, productivity increased 1.5 percent, reflecting a 2.9-percent increase in output and a 1.4-percent increase in hours worked.

Overall, the USD/JPY pair remains in the bullish region, waiting for Oct's nonfarm payrolls report for the next move. An increase in the US NFP by more than 250K could be a great bullish signal for USD/JPY to break the 114.50 resistance and test 115.00.

Economic Releases to Watch Today

UK's Services PMI for Oct 2017 – Forecast 53.3, versus 53.6 previous.

US nonfarm payrolls Oct 2017 – Forecast 312K, versus -33K previous.

US Unemployment Rate Oct 2017 – Forecast 4.2%, versus 4.2% previous.

US Average Hourly Earnings (MoM) Oct 2017 – Forecast 0.3%, versus 0.5% previous.

US Services PMI for Oct 2017 – Forecast 55.9, versus 55.9 previous.

Canada's employment Change payrolls Oct 2017 – Forecast 15K, versus 10K previous.

Canada's Unemployment Rate Oct 2017 – Forecast 6.2%, versus 6.2% previous.

DAX rally from 8/29 low is unfolding as a double three Elliott Wave structure where Intermediate wave (W) ended at 13089 and Intermediate wave (X) ended at 12903. Up from there, the rally from 12903 low appears to be unfolding as an impulse. Minute wave ((i)) ended at 13066, and Minute wave ((ii)) ended at 12906.5. Minute wave ((iii)) ended at 13481.5 and pullback to 13401 ended Minute wave ((iv)). While pullbacks stay above 13401, but more importantly above 12906.5, expect 1 more leg higher towards 13657.69 – 17836.55 to complete Minor wave A. Pair should then pullback in Minor wave B in 3, 7, or 11 swing before the rally resumes. We don’t like selling the proposed pullback.

DAX 1 Hour Elliott Wave Analysis

Double three ( 7 swings) is one of the most important patterns in Elliott wave’s new theory. It is also one of the most common patterns in the market these days. Double three is also called a 7-swing structure. It is a very reliable pattern and it gives traders a good opportunity to trade with a well-defined level of risk and target areas. The image below shows what Elliott Wave Double Three looks like. It has labels (W), (X), (Y) and an internal structure of 3-3-3. This means that all 3 legs has corrective sequences. Each (W) and (Y) is formed by 3 wave oscillations and has a structure of A, B, C or W, X, Y of smaller degrees.

USD/CHF - 0.9985

Most recent candlesticks pattern : N/A

Trend                                    : Up

Tenkan-Sen level                  : 0.9988

Kijun-Sen level                    : 0.9978

Ichimoku cloud top                 : 1.0009

Ichimoku cloud bottom              : 0.9994

Original strategy :

Bought at 0.9950, Target: 1.0050, Stop: 0.9915

Position : - Long at 0.9950

Target :  - 1.0050

Stop : - 0.9915

New strategy  :

Hold long entered at 0.9950, Target: 1.0050, Stop: 0.9930

Position : - Long at 0.9950

Target :  - 1.0050

Stop : - 0.9930

Dollar’s retreat after faltering below indicated resistance at 1.0038 has retained our view that further consolidation below this level would be seen, however, still reckon downside would be limited to 0.9945-50 and bring another rise later. Above 1.0005-10 would bring retest of 1.0038 but break there is needed to confirm recent upmove from 0.9421 low has resumed and may extend further gain to 1.0050-55, then towards 1.0075-80 but price should falter below 1.0100 resistance.

In view of this, we are holding on to our long position entered at 0.9950. Below said support at 0.9938 would abort and signal top is formed instead, risk correction to 0.9920-23 (38.2% Fibonacci retracement of 0.9737-1.0038) but 0.9885-90 (50% Fibonacci retracement) should limit downside and support at 0.9869 would remain intact. 

GBP/USD - 1.3072

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.3062

Kijun-Sen level                    : 1.3166

Ichimoku cloud top              : 1.3276

Ichimoku cloud bottom        : 1.3257

Original strategy :

Sell at 1.3170, Target: 1.3040, Stop: 1.3205

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.3150, Target: 1.3030, Stop: 1.3185

Position : -

Target :  -

Stop : -

Yesterday’s selloff together with the breach of support at 1.3070 signals early erratic rise from 1.3027 has ended and bearishness remains for further fall, however, break of said support at 1.3027 is needed to signal early downtrend has resumed for weakness to psychological support at 1.3000, then towards 1.2970-75 which is likely to hold from here due to near term oversold condition.  

In view of this, would not chase this fall here and would be prudent to sell cable on recovery as the Kijun-Sen (now at 1.3166) should limit upside and bring another decline later. Above 1.3200 would defer and prolong choppy trading, risk rebound to 1.3235-40 first.

EUR/USD - 1.1662

Most recent candlesticks pattern   : N/A

Trend                      : Down

Tenkan-Sen level              : 1.1661

Kijun-Sen level                  : 1.1657

Ichimoku cloud top             : 1.1657

Ichimoku cloud bottom      : 1.1639

Original strategy  :

Sell at 1.1705, Target: 1.1605, Stop: 1.1740

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.1705, Target: 1.1605, Stop: 1.1740

Position : -

Target :  -

Stop : -

Although near term sideways trading is likely to continue and another corrective bounce to 1.1685-90, reckon upside would be limited to 1.1700-05 (50% Fibonacci retracement of 1.1837-1.1574) and bring retreat later, below 1.1600-05 would signal the rebound from 1.1574 low has ended, bring retest of this level first. A drop below said support at 1.1574 would extend recent decline from 1.2093 top to 1.1550-55 but loss of downward momentum should prevent sharp fall below 1.1520-25 and reckon 1.1500 would hold.

In view of this, we are looking to sell euro on further subsequent recovery as 1.1700-05 should limit upside and bring another decline. Only above previous support at 1.1725 (now resistance) would signal low is formed instead, bring retracement of recent decline to 1.1750-55 first. 

USD/JPY - 114.01

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 113.99

Kijun-Sen level                  : 113.88

Ichimoku cloud top             : 113.99

Ichimoku cloud bottom      : 113.62

Original strategy  :

Buy at 113.20, Target: 114.20, Stop: 112.85

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 113.40, Target: 114.30, Stop: 113.05

Position :  -

Target :  -

Stop : -

Although the greenback rebounded after finding support at 113.54 and gain to 114.20-25 cannot be ruled out, however, break of indicated strong resistance at 114.45-50 is needed to retain bullishness and confirm early upmove has resumed for headway to 114.75-80 and later towards 115.00 but overbought condition should limit upside. If said resistance continues to hold, then further consolidation would take place and another retreat to 113.40-45 cannot be ruled out but 113.15-20 should hold, bring another rise.

In view of this, we are looking to buy dollar on pullback as 113.40 should limit downside and bring another rise later. Only a break below said support at 112.96 would abort and suggest top has been formed at 114.45, bring retracement of recent rise to 112.70-75 (61.8% Fibonacci retracement of 111.65 to 114.45) but previous resistance at 112.48 should hold.