Sample Category Title

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

Daily
    •    Last Candlesticks pattern: Bearish engulfing
    •    Time of formation: 5 May 2017
    •    Trend bias: Down



USD/CAD – 1.2590




As the greenback has continued heading south after recent selloff below indicated previous support at 1.2969, adding credence to our bearish view that early erratic rise from 1.2461 has ended at 1.3794 earlier, hence further fall to 1.2550, then 1.2500 would be seen, however, oversold condition should limit downside to previous support at 1.2461 and price should stay well above 1.2400, risk from there has increased for a rebound to take place later. 

On the upside, whilst initial recovery to 1.2700, then test of the Tenkan-Sen (now at 1.2761) cannot be ruled out, reckon 1.2830-40 would limit upside and bring another decline later. Only above the Kijun-Sen (now at 1.2963) would abort and suggest a temporary low is formed instead, risk a stronger rebound to resistance at 1.3015, however, still reckon upside would be limited to 1.3050 and price should falter well below previous support at 1.3165, bring another selloff later in late Q3. 

Recommendation: Sell at 1.2830 for 1.2530 with stop above 1.2930.


On the weekly chart, as recent selloff has gathered momentum, adding credence to our view that the recovery from 1.2461 (2016 low) has ended at 1.3794 early last month, hence bearishness remains for further weakness to 1.2500-10, then test of said support at 1.2461, however, break there is needed to confirm early decline from 1.4690 top has resumed and extend further fall to 1.2400, then towards 1.2300-10 but near term oversold condition should prevent sharp fall below 1.2240-50 and price should stay above 1.2175 (61.8% Fibonacci retracement of 1.0621-1.4690). 

On the upside, although initial recovery to 1.2700-05 cannot be ruled out, reckon upside would be limited to 1.2800 and 1.2850-60 should hold, bring another decline later. Above 1.2940-45 would defer and risk a stronger rebound to 1.3015 resistance but price should falter below the Tenkan-Sen (now at 1.3063) and bring another selloff later to aforesaid downside targets.

USD/CHF - 0.9508

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9508

Kijun-Sen level                    : 0.9558

Ichimoku cloud top                 : 0.9564

Ichimoku cloud bottom              : 0.9552

Original strategy :

Sell at 0.9555, target: 0.9455, Stop: 0.9590

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.9555, target: 0.9455, Stop: 0.9590

Position : -

Target :  -

Stop : -

The greenback ran into renewed selling interest at 0.9622 yesterday and has dropped sharply since, confirming recent decline has resumed and bearishness remains for further weakness to 0.9490, then towards 0.9460, however, near term oversold condition should prevent sharp fall below previous support at 0.9440-44, risk from there is seen for a rebound later.

In view of this, we are looking to sell dollar on recovery as the Kijun-Sen (now at 0.9558) should limit upside and bring another decline. Above 0.9580-85 would suggest an intra-day low is formed, bring a stronger rebound towards resistance at 0.9622 which is likely to hold from here.

USDCHF recorded a fourteen-and-a-half-month low of 0.9492 during yesterday's trading. Today the pair has been edging lower and currently trades in proximity to yesterday's low.

The bias is clearly tilted to the downside – the MACD is negative as well as below the red signal line, while RSI is well into bearish territory at 32 and keeps heading lower. Notice that RSI is close to oversold levels.

If the price reverses course, resistance could be met around 0.96, a potential psychological level. Further up, the area around 0.9650 was a rather congested one in the recent past and might act as a barrier to the upside as well.

On the downside, yesterday's low seems to be providing immediate support. The price is close to this level at the moment and should it cross below, additional support could come around the 0.94 handle, another potential psychological mark.

Price action taking place below both the 50- and 200-day moving averages (MAs) supports the negative medium-term signal given by the bearish cross that was recorded in late May when the 50-day MA moved below the 200-day one.

Overall, the pair is bearish in the short- and medium-term.

GBP/USD - 1.2985

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2977

Kijun-Sen level                    : 1.2982

Ichimoku cloud top              : 1.3066

Ichimoku cloud bottom        : 1.3028

Original strategy :

Sell at 1.3030, Target: 1.2930, Stop: 1.3065

Position : - 

Target :  -

Stop : -

New strategy  :

Sell at 1.3030, Target: 1.2930, Stop: 1.3065

Position : -

Target :  -

Stop : -

Cable recovered after falling to 1.2933 yesterday and minor consolidation would be seen, however, as the drop from 1.3126 signals a temporary top has possibly been formed there, reckon upside would be limited to the lower Kumo (now at 1.3028) and bring another decline later, below 1.3932-33 (61.8% Fibonacci retracement of 1.2812-1.3126 and said support would bring test of previous support at 1.2912 but break of latter level is needed to retain bearishness and extend the fall from 1.3126 top to 1.2880-85 first. 

In view of this, we are looking to sell cable on recovery as the lower Kumo (now at 1.3028) should limit upside. Only break of resistance at 1.3062 would abort and signal an intra-day low is formed instead, bring a stronger rebound towards 1.3090-00 but resistance at 1.3126 should remain intact. 

The Australian dollar tumbled amid a dovish speech by Reserve Bank of Australia Deputy Governor Guy Debelle. The US dollar remained under pressure against most majors following the plunge yesterday when news broke out about expansion of an investigation into Trump's links with Russia.

The aussie fell to $0.7907 during Asian trading as the RBA Deputy Governor said that no importance should be given to the board's discussion around the neutral rate and that it doesn't imply monetary policy tightening. Earlier in the week, investors had understood that a potential tightening of the RBA's monetary policy was coming, following the release of the central bank's minutes. This had sent the aussie near the $0.80 level. Governor Philip Lowe is due to speak next week.

By contrast, New Zealand finance Minister Steven Joyce said he wasn't worried about the strength of the nation's currency as it reflects strong economic fundamentals and equally robust exports. Kiwi/dollar hit a fresh 10-month high to last trade at 0.7425 in the pre-European session.

The US dollar returned to its lowest in almost a year as investors digested yet another probe into Trump's links with Russia. US special counsel Robert Mueller said yesterday that he was expanding his investigation of President Donald Trump to examine his financial dealings. Dollar/yen continued weakening during the Asian session to last trade at 111.83.

The euro continued strengthening following yesterday's boost when it initially hit a 14-month high and shortly after climbed to a 23-month high. European Central Bank President Mario Draghi's speech sent the euro to $1.1575, while the news about yet another investigation into Trump's activities with Russia pushed the euro to an intra-day high of $1.1657. Today the eurozone currency continued firming to last trade at 1.1650 ahead of the European session.

During Asian trading, sterling recorded small gains after a week of losses against the greenback. Despite yesterday's upbeat retail sales figure, the pound was negatively impacted by political woes around Brexit. Pound/dollar closed yesterday at 1.2971, to last trade today at 1.2985.

The Canadian dollar was up during Asian trading ahead of the key inflation and retail sales data today. Dollar/loonie was down at 1.2577 ahead of the European open. Economists are forecasting a gain of 0.2% in Canadian retail sales in May. The results of these data sets will likely be closely monitored by loonie traders.

Oil prices were broadly steady during Asian trading and ahead of the US Baker Hughes oil rig count data later in the day. Last week a slowdown in the rigs count boosted oil prices. WTI was last trading at $46.92 a barrel while Brent was at $49.31.

Gold continued building on late-last night gains during the Asian session. The precious metal was up 0.30% to last trade at $1,247.50 an ounce.

The US Labour Department released Jobless claims data, on Thursday, showing a drop of 15K for the week ended July 15th to 233K. This was the lowest level for 5 months and is a strong indication of a strong job market. The US labour market is at near 'full employment' with the latest jobless rate at 4.4%.

With such a robust set of data the markets believe this will likely keep the Federal Reserve on track to hike rates later this year and start to reduce its large bond and mortgage back securities portfolio. The ECB Monetary policy statement and press conference was held on Thursday with President Draghi acclaiming European growth. The ECB kept its easy monetary policy unchanged, as expected, with President Draghi stated 'incoming data confirmed the strength of the euro zone's economy' even though he simultaneously pledged additional stimulus if needed. And more political woes for President Trump as reports suggest that US Special Counsel Robert Mueller is expanding his investigation of President Trumps financial dealings – coming just a day after Trump told the NY Times that 'any digging into his finances would cross a red line'.

Following the ECB statement EUR rallied close to 1% against USD as EURUSD hit a high of 1.16568 on the day, the strongest it has been in 23 months. Currently EURUSD is trading around 1.1635

JPY weakened slightly against USD following the Bank of Japan's announcement that they will maintain stimulus. USDJPY traded to a low on Thursday of 111.754, its largest decrease in nearly 2 weeks, before retracing to currently trade around 111.92

GBPUSD climbed off Thursday lows of 1.29326 to trade nearly a cent higher to 1.30319. GBPUSD is currently trading around 1.2985

AUDUSD traded lower following the monthly jobs report for June showing a surge in full time employment. AUD is the best performing G10 currency rising 10% in 2017. However, RBA Deputy Governor Debelle stated in a speech that 'there was no significance in the board discussing the neutral rate' which caused AUD to weaken. AUDUSD is currently trading around 0.7910

Gold recovered from a low of $1,235.16 on Thursday to currently trade around $1,246.00

With a burgeoning global supply, Oil surprisingly maintained its recent strength with WTI gaining 0.6% on the day. Currently WTI is trading around $46.98pb

Equity Indexes rose on Thursday with the UK100 gaining 0.6%, to trade at his highest level in a month, at 7502.69 whilst Germany30 saw its largest rise in almost a week.

At 11:30 BST the Office of National Statistics (ONS) will publish UK Borrowing data for June. As we are in the early stages of the financial year it is usually very difficult to draw any meaningful inferences on the state of public finances.

At 15:30 BST Statistics Canada will release Consumer Price Index (YoY) (Jun). The market consensus is for 1.1% which will improve on the previous 1.3% reading. The Bank of Canada has targeted that inflation stay in a 1% to 3% range. If the release is significantly lower, we can expect the pace of future interest rate rises will be slowed.

EUR/USD - 1.1651

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1648

Kijun-Sen level                  : 1.1578

Ichimoku cloud top             : 1.1544

Ichimoku cloud bottom      : 1.1522

Original strategy  :

Buy at 1.1580, Target: 1.1680, Stop: 1.1545

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1580, Target: 1.1680, Stop: 1.1545

Position : -

Target :  -

Stop : -

Yesterday’s rally after finding renewed buying interest at 1.1479 signals recent upmove has resumed and bullishness remains for this move to extend further gain to indicated upside target at 1.1680, then towards previous chart resistance at 1.1714, however, break there is needed to retain bullishness for the rise from 1.0340 low to head towards 1.1750. 

In view of this, we are looking to buy euro on pullback as previous resistance at 1.1583 should limit downside. Below the upper Kumo (now at 1.1544) would abort and suggest an intra-day top is formed, bring correction to 1.1510-15 but said support at 1.1479 should remain intact.

USD/JPY - 111.81

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 111.90

Kijun-Sen level                  : 111.95

Ichimoku cloud top             : 111.97

Ichimoku cloud bottom      : 111.94

Original strategy  :

Exit long entered at 111.80,

Position :  - Long at 111.80

Target :  -

Stop : -

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Although the greenback fell marginally to 111.48, lack of follow through selling and the subsequent bounce suggest consolidation would be seen and above 112.05-10 would bring another corrective rebound towards resistance at 112.42 but break there is needed to signal a temporary low is possibly formed, bring retracement of recent decline to 112.70 and then test of resistance at 112.87.

In view of this, would be prudent to stand aside for now. Below said support at 111.48 would signal recent decline from 114.50 top has resumed and extend further weakness to 111.20-25, however, reckon 111.00 would hold from here due to near term oversold condition, bring rebound later. 

Currency pair EUR/USD

The EUR/USD continued the uptrend yesterday after bouncing in the 1.15 support zone. Price reached the 161.8% Fibonacci target at 1.1650 and could continue to higher Fib targets when considering the strength of yesterday's daily candle close near the high.

The EUR/USD showed strong bullish momentum after breaking above the resistance trend line (dotted red). The EUR/USD completed a wave 4 (grey) correction as expected in yesterday's analysis and is continuing with wave 3 (orange). Currently price is building a small triangle. A bullish break could see an extension towards the Fibonacci targets whereas a break below support could price retest 1.1575-1.16.

Currency pair USD/JPY

The USD/JPY did not manage to break above the horizontal resistance levels (red) and continued with the downtrend. Price will need to break below the support trend line (blue) to confirm a wave 3 (orange) otherwise a wave C (yellow) could be the alternative.

The USD/JPY will need to break below support (blue) or above resistance (red) before a wave 123 or ABC becomes more likely.

Currency pair GBP/USD

The GBP/USD broke below the support trend line (dotted green) and round level of 1.30 which makes a bullish impulse less likely. Price is therefore most likely extending its correction towards the Fibonacci targets of wave Y (orange).

The GBP/USD seems to have completed a wave B (grey) triangle and an ABC (grey) within wave W (purple). The GBP/USD could potentially complete a new ABC (grey) within wave X (purple), which means that the Fib levels of wave X vs W could act as resistance.

EUR/USD

The Euro broke above 1.1585 resistance yesterday and extended gains to 1.1650. The pair is overbought in the short-term, but demand is likely to remain high on any dips and it should recover quickly.

Look for initial support at 1.1585, followed by stronger support at 1.1540. In the near-term, losses are likely to be limited to 1.1490/1.15. Following the clear breakout above 1.16, the next significant resistance level lies at 1.1714 (summer 2015 high).

GBP/USD

The break below 1.30 confirms the recent high at 1.3120. Cable is now approaching major support at 1.2930 and is near the rising trendline support from the late June low.

Should 1.2930 fail to hold, a larger retracement seems likely, with the next notable support level then lying at 1.2820.

USD/JPY

The break below 1.30 confirms the recent high at 1.3120. Cable is now approaching major support at 1.2930 and is near the rising trendline support from the late June low.

Should 1.2930 fail to hold, a larger retracement seems likely, with the next notable support level then lying at 1.2820.

AUD/USD

The Aussie Dollar failed at 0.80, but remains resilient. Initial support is seen around 0.79. AUD/USD has stronger support at 0.7840 should that level fail. A bounce off 0.7840 would confirm that the short-term uptrend remains intact and pave the way for a rally towards 0.80.

NZD/USD

NZD/USD broke above a significant area of resistance between 0.7380 and 0.7410. However, the Stochastic is showing heavily overbought conditions on the hourlies, as well as Daily & Weekly chart. Therefore, the New Zealand Dollar is unlikely to keep up the momentum it had so far.

Strong resistance is noted at 0.7490 and 0.75. However, NZD/USD will likely need a retracement before the uptrend continues. Key support is now seen at 0.7340/50.

USD/CAD

The Canadian Dollar continues to struggle. Trendline resistance on the hourlies have capped the topside so far, and heavy resistance is noted in the area between 1.2630 and 1.2660. CAD traders can expect to see a bounce around the 1.25 level, but a larger rally seems unlikely in the near-term.

XAU/USD

Gold is approaching an important area of resistance between $1250 and $1255. Should it be able to overcome that obstacle, a rally back towards $1300 seems likely.

A daily close above $1255 would be a strong confirmation of the short-term uptrend. The recent bounce off $1232 shows that momentum is solid, and Gold should continue to benefit from the USD weakness as well.

WTI

Oil briefly broke above $47.30 resistance, but failed to close the trading day above it. This shows that WTI still has not enough momentum to clear that major resistance level. A break back below $46.15 would signal a correction to $45.

To the topside, should WTI be able to close the day above $47.30, momentum is likely to increase and a rally towards the falling trendline resistance could follow.