Sample Category Title

Technical analysis

The CADJPY pair is at risk of further heavy losses as the Relative Strength Index indicator is issuing a strong sell signal.

The daily time frame shows that the CADJPY pair could test towards the bottom a descending broadening wedge pattern, around the 86.00 support zone.

What the possible outcomes are

In our most likely scenario, the downward price trend continues in the medium-term horizon, with the CADJPY pair eventually falling towards the 86.00 support level.

Alternatively, the CADJPY pair will stage a recovery from slightly below current trading levels and then start to rally back towards the 89.25 resistance level.

Key levels

Support 86.80 86.00

Resistance 88.00 89.25

Daily Pivots: (S1) 151.27; (P) 152.07; (R1) 152.59; More...

No change in GBP/JPY's outlook and intraday bias stays neutral first. We're favoring that case that corrective fall from 156.05 has completed at 148.43. Break of 153.46 will resume the rise from 148.43 to retest 156.05 high. Though, break of 151.55 minor support will dampen this bullish view, and turn bias to the downside for 148.43 support.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). Focus remains on 156.59 resistance (2018 high). Sustained break there should confirm long term bullish trend reversal. Next target is 61.8% retracement of 195.86 (2015 high) to 122.75 at 167.93. On the downside, sustained break of 149.03 support, however, will argue that rise from 123.94 has completed. Further break of 142.71 would open up the bearish case for retesting 122.75 low.

Daily Pivots: (S1) 129.45; (P) 129.93; (R1) 130.27; More....

EUR/JPY is staying in consolidation from 128.58 and intraday bias remains neutral first. Deeper fall remains mildly in favor with 131.07 resistance intact. On the downside, break of 128.85 will resume the fall from 134.11 to 127.07 resistance turned support next. On the upside, break of 131.07 resistance will argue that choppy fall from 134.11 has completed. Intraday bias will be turned back to the upside for 132.68 resistance first.

In the bigger picture, rise from 114.42 is seen as a medium term rising leg inside a long term sideway pattern. As long as 127.07 resistance turned support holds, further rise is still expected to retest 137.49 (2018 high). However, firm break of 127.07 will argue that the medium term trend has reversed, and open up the case for retesting 114.42.

Daily Pivots: (S1) 0.8533; (P) 0.8545; (R1) 0.8563; More...

Intraday bias in EUR/GBP stays neutral for the moment and outlook is unchanged. On the downside, break of 0.8498 support will resume the choppy corrective fall from 0.8718 towards 0.8470 low. On the upside, break of 0.8555 minor resistance will turn bias back to the upside for 0.8668 resistance instead.

In the bigger picture, price actions from 0.9499 are still seen as developing into a corrective pattern. Deeper fall could be seen as long as 0.8718 resistance holds. However, firm break of 0.8717 would argue that a medium term bottom was already formed. Stronger rise would be seen to 0.8861 support turned resistance to confirm completion of the corrective pattern.

Daily Pivots: (S1) 1.6085; (P) 1.6135; (R1) 1.6174; More...

Intraday bias in EUR/AUD is turned neutral with current retreat, and some consolidations could be seen. But near term outlook stays bullish as long as 1.5925 support holds. On the upside, break of 1.6182 will resume the rise from 1.5250 to 1.6827 resistance next.

In the bigger picture, a medium term bottom was formed at 1.5250, on bullish convergence condition in daily MACD. Rise from 1.5250 is currently seen as a correction to the down trend from 1.9799 first. Stronger rise would be seen to 38.2% retracement of 1.9799 to 1.5250 at 1.6988 next. We'd tentatively expect strong resistance from there to limit upside, at least on first attempt.

Daily Pivots: (S1) 1.0735; (P) 1.0751; (R1) 1.0762; More....

Intraday bias in EUR/CHF remains on the downside with focus on 1.0737 cluster support (61.8% retracement of 1.0505 to 1.1149 at 1.0751). Sustained trading below there will extend the fall from 1.1149 to retest 1.0505 low. On the upside, break of 1.0802 support turned resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, rebound from 1.0505 (2020 low) should have completed at 1.1149 already. The three wave corrective structure argues that the downtrend from 1.2004 (2018 high) is not over yet. Medium term outlook will now stay bearish as long as 1.1149 resistance holds. Break of 1.0505 low would be seen at a later stage.

During the first half of Monday's trading session, the common European currency surged by 35 pips or 0.30% against the US Dollar. However, the EUR/USD pair surrendered the earlier gains by the end of Monday's session.

As for the near future, the exchange rate could continue to edge higher in an ascending channel pattern. Bullish traders are likely to target the upper line of the channel pattern at 1.1920 within this session.

Although, the 50– hour simple moving average at 1.1877 could provide resistance for the currency exchange rate in the shorter term.

Surprisingly, the RBA remained optimistic about the economic outlook despite the lockdown in various states over the past weeks. At today’s meeting, the members decided to go ahead with QE tapering from September and upgraded economic forecasts.

The central bank maintained a upbeat view over Australia’s economy. As governor Philip Lowe suggested, “the experience to date has been that once virus outbreaks are contained, the economy bounces back quickly”. He added that, “prior to the current virus outbreaks, the Australian economy had considerable momentum, and it is still expected to grow strongly again next year. The economy is benefiting from significant additional policy support and the vaccination program will also assist with the recovery”. The RBA upgraded its economic growth forecast to +4% in 2022, from +3.5% previously. The unemployment rate is expected to drop to 4.25% next year, from the previous projection of 4.5%.

The monetary policy remains unchanged from what was announced in July. On asset purchases, the weekly purchase of AUD5B will continue until early September. After that, it will be trimmed to AUD4B until at least mid November. The cash rate stays unchanged at 0.1% and policymakers reiterated the forward guidance that no rate hike is likely until 2024. The measures aim at achieving RBA’s inflation target between 2-3%. As the central bank reiterated, “meeting this condition will require the labor market to be tight enough to generate wages growth that is materially higher than it is currently”.

The British Pound edged lower by 43 pips or 0.31% against the US Dollar on Monday. The decline was stopped by the weekly pivot point at 1.3876 during Monday's trading session.

Currently, the exchange rate is trading near the lower boundary of an ascending channel pattern and could be set for a breakout.

If the breakout occurs, a decline towards the 1.3820 area could be expected today.

However, if the channel pattern holds, buyers could drive the GBP/USD currency exchange rate higher during the following trading session.

The US Dollar fell by 49 pips or 0.45% against the Japanese Yen on Monday. The currency pair was pressured lower by the 55– hour simple moving average during Monday's trading session.

The exchange rate is currently trading near the lower line of a descending channel and could be set for a breakout.

If the breakout occurs, sellers are likely to target the weekly S2 at 108.66 within this session.

However, if the channel pattern holds, the currency exchange rate might edge higher during the following trading session.