Daily Technical Outlook

Discussion in 'Technical Analysis' started by katetrades, Feb 12, 2013.

  1. katetrades

    katetrades Master Trader

    2,303
    7
    84
    GBPJPY Channel Support (Oct 25, 2017)

    GBPJPY has been trending higher on its short-term time frames, moving inside an ascending channel on its 1-hour chart. Price just bounced off resistance and could be due to test support at the 149.00 major psychological level.

    This potential floor lines up with the 61.8% retracement level and the 200 SMA dynamic inflection point. The 100 SMA is above the longer-term 200 SMA so the path of least resistance is the upside, which means that the rally is more likely to resume than to reverse.

    Stochastic has already pulled up from the oversold region to signal a return in bullish momentum but is turning back down to indicate that sellers are putting up a fight. However, the 100 SMA is also holding as dynamic support so far and might be enough to push price back to the swing high or channel resistance.

    Yen weakness has been in play since the Japanese elections over the weekend as the victory for PM Abe and his political party meant the likely implementation of another tax hike in 2019 and the continuation of the BOJ's easy monetary policy. However, dollar weakness as also been in play recently, buoying the yen higher in effect.

    As for the pound, the only piece of data released so far was the CBI industrial order expectations index which fell from 7 to -2 instead of improving to 9. Brexit concerns are also lurking and any negative updates could weigh heavily on the currency.

    [​IMG]

    Up ahead, the UK preliminary GDP is due and analysts are expecting to see another 0.3% growth figure. Stronger than expected data could assure traders that the economy is staying resilient ahead of Brexit but a downside surprise could undermine confidence. As for Japan, the next set of data isn't due until Friday and this comprises the national and Tokyo core CPI readings.

    By Kate Curtis from Trader's Way
     
  2. katetrades

    katetrades Master Trader

    2,303
    7
    84
    GBPAUD Triangle Resistance (Oct 26, 2017)

    GBPAUD has been on a strong climb recently and may have enough momentum to break past its symmetrical triangle resistance around 1.7200. The chart pattern spans 1.5900 to 1.7700 so the resulting uptrend could be of the same size.

    The moving averages are still oscillating to reflect consolidation action on the daily time frame but the 100 SMA is starting to cross below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the resistance is more likely to hold than to break.

    If so, GBPAUD could head back to the triangle support currently at 1.6500-1.6600. Stochastic is heading north but is already in the overbought zone, so profit taking could force the rally to pause.

    UK economic data turned out better than expected, though, as the economy grew by 0.4% in Q3 according to the preliminary GDP release. This is higher than the estimated 0.3% expansion and the earlier 0.3% growth figure.

    Meanwhile, the Aussie was previously weighed down by weaker than expected quarterly CPI. Headline inflation rose 0.6% versus 0.8% while the trimmed mean CPI was up 0.4% versus 0.5%. This could keep a lid on RBA tightening expectations while rising inflation in the UK increases the pressure on the BOE to act.

    [​IMG]

    Earlier today, Australia reported a 1.6% slump in import prices for Q3, further weighing on inflation prospects. Only the CBI realized sales index is lined up from the UK but a drop from 42 to 14 is eyed, which might be pound bearish.

    By Kate Curtis from Trader's Way
     
  3. katetrades

    katetrades Master Trader

    2,303
    7
    84
    EURUSD Head and Shoulders Breakdown (Oct 27, 2017)

    EURUSD broke below the neckline of its long-term head and shoulders pattern, confirming that a downtrend is underway. The chart pattern is approximately 400-500 pips tall so the resulting selloff could last by the same amount.

    The 100 SMA is still sufficiently above the longer-term 200 SMA on the daily time frame, so the path of least resistance is to the upside. However, price is breaking below the dynamic inflection point to signal a pickup in bearish pressure.

    Stochastic was on its way up but turned back down to indicate a return in selling momentum. The oscillator is closing in on the oversold region, though, so a bounce on profit-taking might happen.

    The ECB announced its plans to maintain its 60 billion EUR monthly asset purchase program until the end of the year then tapering it down to 30 billion EUR per month from January to September 2018 or beyond if necessary. Bulls seemed unimpressed by this announcement as many expected an earlier or larger reduction.

    During the presser, Draghi admitted that the decision was not unanimous and that inflation has not been encouraging. Still he expressed optimism about growth and employment, but euro traders appeared to brush these positive remarks aside.

    Meanwhile, the Greenback has gotten a boost from news that the House passed a budget resolution to allow the tax bill to clear Senate without achieving a supermajority. This means that Republican support could be enough to carry the bill through, even as Democrats strongly oppose the proposals.

    [​IMG]

    US advance GDP data for Q3 is due next and hopes are running high after the durable goods orders report suggested a stronger contribution from the business sector for the period. Analysts are expecting to see a 2.6% growth figure, slower than the earlier 3.1% expansion. News on Trump's Fed Chair pick could also lead to big moves for the dollar.

    By Kate Curtis from Trader's Way
     
  4. katetrades

    katetrades Master Trader

    2,303
    7
    84
    EURAUD Channel Support (Nov 6, 2017)

    EURAUD is trending higher and is moving inside an ascending channel on its 4-hour time frame. Price has just bounced off support and looks ready for a test of resistance at 1.5400-1.5450.

    The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This means that the rally is more likely to continue than to reverse. In addition, the moving averages are close to the channel support, adding to its strength as a floor.

    Stochastic is on the move up to reflect the presence of bullish momentum. However, the oscillator is nearing overbought levels to signal exhaustion among buyers. In that case, another dip to support at 1.5150 is still possible.

    The main event risk for the Australian dollar is the RBA interest rate decision, during which the central bank could keep rates on hold at 1.50%. The RBA is one of the less hawkish central banks around, but any shift in their tone could still lead to big moves for the pair.

    As for the euro, the shared currency had a bearish reaction to the ECB announcement earlier on, but the fact remains that the central bank will begin tapering its asset purchases by next year. German factory orders data is due next and a 1.0% decline is eyed.

    [​IMG]

    There are no other major events lined up for both economies for the rest of the week, so there's a chance that the current trend could carry on, barring any major changes in monetary policy bias. Overall risk sentiment could also drive price action, with risk-off moves favoring the euro over the Aussie.

    By Kate Curtis from Trader's Way
     
  5. katetrades

    katetrades Master Trader

    2,303
    7
    84
    GBPJPY Broken Channel Retest (Nov 07, 2017)

    GBPJPY was previously trending higher inside an ascending channel before breaking below support to signal a reversal. Price bounced off the 148.75 level before showing signs of pulling back to the broken support.

    Applying the Fibonacci retracement tool on the latest swing high and low shows that the broken support lines up with the 50% Fib and the 150.00 major psychological mark. This is also close to the moving averages' dynamic inflection points.

    However, the 100 SMA is still above the longer-term 200 SMA on this time frame, so the path of least resistance is to the upside until a crossover forms. Stochastic is already indicating overbought conditions to show rally exhaustion and a potential return in selling pressure.

    Yen weakness was in play at the start of the week after the dovish BOJ minutes and speech by Governor Kuroda. Risk-taking also came into play later on in the sessions, further weighing on the lower-yielding yen.

    Meanwhile, the UK BRC retail sales monitor printed a 1.0% decline, erasing part of the previous 1.9% gain. The Halifax HPI is due next and a smaller 0.2% uptick is set to follow the previous 0.8% gain.

    [​IMG]

    Later in the week, Japan will release its data on core machinery orders and the current account balance. The Economy Watchers Sentiment index and the tertiary industry activity index are also on the docket. UK manufacturing production is due on Friday and a 0.3% uptick is eyed.

    By Kate Curtis from Trader's Way
     
  6. katetrades

    katetrades Master Trader

    2,303
    7
    84
    USDCAD Uptrend Correction (Nov 08, 2017)

    USDCAD continues to trend higher and is moving above an ascending trend line connecting the lows on the 4-hour time frame. Price looks prime for another correction and the 50% level lines up with the trend line support at 1.2700.

    The 100 SMA is still above the longer-term 200 SMA so the path of least resistance is to the upside, which means that the rally is more likely to continue than to reverse. Stochastic is on its way up to signal that bullish momentum is already in play.

    A larger pullback could last until the 61.8% Fib or the 200 SMA, but if the rally is already resuming from here, a move towards the swing high at 1.2900 or higher could be underway.

    In his testimony this week, BOC head Poloz warned that slack in the labor market could keep a lid on wage growth and overall inflation. He reiterated that policymakers are more careful about future rate hikes and that there are several uncertainties present. However, he also mentioned that the BOC would be comfortable with inflation overshooting its 2% target.

    As for the dollar, roadblocks in tax reform such as the possibility of Senate imposing a one-year delay before implementing tax cuts have weighed on the currency. Congress is scheduled to vote on the proposal next week and there has been some opposition within the GOP, so nothing is set in stone yet.

    [​IMG]

    Medium-tier data from the US came in stronger than expected on Tuesday but there are no reports due today, so the focus could remain on tax reform. There are also no reports due from Canada so the crude oil inventories data could push the Loonie around.

    By Kate Curtis from Trader's Way
     
  7. katetrades

    katetrades Master Trader

    2,303
    7
    84
    NZDUSD Downtrend Correction (Nov 09, 2017)

    NZDUSD has been trending lower since breaking below the neckline of a head and shoulders pattern. Price is also moving below a descending trend line connecting the highs since mid-September.

    A pullback to this trend line appears to be underway after the pair bounced off the .6825 level. Applying the Fib tool on the latest swing high and low shows that the 50% level lines up with the trend line at the .7000 handle.

    The 100 SMA is still below the longer-term 200 SMA, so the path of least resistance is to the downside. The 200 SMA is close to the Fibs and trend line resistance, potentially acting as the last line of defense in this downtrend correction. Stochastic is moving up to reflect bullish presence but is nearing overbought conditions.

    The RBNZ decided to keep interest rates on hold as expected at 1.75% but the central bank adjusted its forecast for when New Zealand would hit its inflation target by a few months earlier. This also meant adjustments to its OCR timeline.

    Apart from that, Acting Governor Spencer also assured that proposed government changes to the central bank mandate would have little effect on economic conditions.

    [​IMG]

    Meanwhile, the US dollar is being bogged down by setbacks in tax reform as Senate is set to unveil their version of the bill within the week. This is said to have huge differences from the Congress version, which will be voted upon next week.

    By Kate Curtis from Trader's Way
     
  8. katetrades

    katetrades Master Trader

    2,303
    7
    84
    EURUSD Area of Interest (Nov 10, 2017)

    EURUSD has been trending lower since breaking below the neckline of a head and shoulders pattern. Price is now moving inside a descending channel pattern and looks ready for a pullback to the resistance.

    Applying the Fibonacci retracement tool on the swing high and low shows that the 50% to 61.8% levels are close to the channel resistance. This also coincides with the 200 SMA dynamic inflection point.

    The 100 SMA is below the longer-term moving average so the path of least resistance is to the downside, which suggests that the downtrend is likely to continue. Stochastic is still pointing up but already dipping into overbought territory to reflect rally exhaustion.

    The US dollar took some hits on setbacks to the tax plan as the Senate version contained several key differences with the one in Congress. This suggests that it would take much longer than initially expected before any of these are implemented, especially since Senate is also proposing a one-year delay for the cuts.

    Medium-tier US data has been mixed, with initial jobless claims coming in higher than expected and final wholesale inventories printing a 0.3% increase as expected. US banks are closed for the holiday today but the UoM preliminary consumer sentiment index is still up for release and analysts are expecting to see an increase from 100.7 to 100.8.

    [​IMG]

    The euro drew support from upgraded forecasts by the EU, which supported the idea of tapering next year and possibly an interest rate hike later on. ECB member Coeure also had a testimony with hawkish remarks suggesting that QE cannot go on indefinitely.

    By Kate Curtis from Trader's Way
     
  9. katetrades

    katetrades Master Trader

    2,303
    7
    84
    EURJPY Range Support (Nov 13, 2017)

    EURJPY has been trading sideways recently, bouncing off support near 132.00 and resistance at 136.25. Price is testing support once more and could be due for another climb to the top or at least until the middle of the range around 133.00.

    The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside, which means that support is more likely to hold than to break. However, stochastic is already indicating overbought conditions and is starting to turn lower to signal a pickup in selling pressure. A downside break of support could lead to a drop of around 400 pips or the same height as the chart pattern.

    Economic data from the euro zone turned out mostly weaker than expected on Friday as French preliminary private payrolls and Italian industrial production came in short of consensus. Japanese data was also downbeat as the tertiary industry activity index posted a 0.2% decline instead of the estimated 0.1% dip.

    Only the preliminary machine tool orders data is due from Japan today and a stronger increase compared to the earlier 45% year-over-year gain could be positive for the yen. Meanwhile, Germany is set to print its wholesale price index and might show a 0.4% increase.

    [​IMG]

    Flash GDP readings from the euro zone nations and the region itself are lined up for the next few days and this should give traders more insight on how the ECB might proceed with its policy changes. Japan also has its preliminary GDP reading due and a 0.4% expansion is expected for Q3.

    By Kate Curtis from Trader's Way
     
  10. katetrades

    katetrades Master Trader

    2,303
    7
    84
    AUDUSD Range Breakdown (Nov 14, 2017)

    AUDUSD was previously trading sideways between support around .7650 and resistance at .7700-.7725. Price has just broken below the range support and looks ready for a pullback before heading further south.

    Using the Fib tool on the breakout move shows that the 38.2% level is close to the broken support that might now hold as resistance. Stochastic is climbing out of the oversold region to indicate that sellers are taking a break.

    Still, the 100 SMA is below the longer-term 200 SMA on this time frame to indicate that the path of least resistance is to the downside, which means that the selloff is likely to resume at some point. These moving averages are closer to the 61.8% Fib, which might be the line in the sand for the downtrend.

    The US dollar has been extra sensitive to tax reform updates from Washington in the past few days as the economy is waiting on tax cuts before the end of the year. The House is scheduled to vote on their version of the bill by Thursday and US President Trump is set to give a speech to urge them to work together before the vote.

    In terms of data, CPI and retail sales are up for release from the US on Wednesday and strong upside surprises could revive dollar demand. Speeches from a number of FOMC members are lined up on Thursday as well.

    [​IMG]

    As for the Australian dollar, the employment report is due later in the week but the currency could take its cue from Chinese reports earlier on. Industrial production and fixed asset investment are foreseen to dip, which would mean lower demand for raw material commodity products and a likely drop in risk appetite.

    By Kate Curtis from Trader's Way
     
  11. katetrades

    katetrades Master Trader

    2,303
    7
    84
    GBPAUD Triangle Breakout (Nov 15, 2017)

    GBPAUD is slowly breaking above the resistance of its symmetrical triangle pattern on the daily time frame. This chart pattern is approximately 2000 pips tall so the resulting uptrend could be of the same height.

    The 100 SMA has just crossed below the longer-term 200 SMA on this time frame but appears to be ready for another upward crossover that could draw bulls back in. Stochastic has been on the move down but is turning higher as well.

    UK CPI came in weaker than expected for October as the reading held steady at 3.0% instead of improving to the estimated 3.1% figure. Core CPI was also unchanged at 2.7% instead of rising to 2.8%.

    Traders are now waiting on the release of the claimant count change and the average earnings index for signs of wage growth. The index is slated to dip from 2.2% to 2.1% to signal weaker spending and inflationary pressures.

    [​IMG]

    As for the Australian dollar, the currency was weighed down by downbeat Chinese industrial production and fixed asset investment which signaled slower demand for commodities. The Aussie also got hit by weaker than expected quarterly wage price index, which posted a 0.5% gain versus the estimated 0.7% increase. Australia's jobs figures are due tomorrow.

    By Kate Curtis from Trader's Way
     
  12. katetrades

    katetrades Master Trader

    2,303
    7
    84
    EURAUD Bullish Momentum (Nov 16, 2017)

    EURAUD was previously trading inside an ascending channel pattern and has surged past the resistance to signal a steeper climb. Price stalled upon reaching resistance at the 1.5600 mark, so a correction to the broken resistance could be due.

    This lines up with the 38.2% Fibonacci retracement level around 1.5400-1.5450, which might keep losses in check. A larger correction could last until the 61.8% Fib at 1.5300.

    Stochastic is on its way down so price could follow suit while sellers remain in control. The 100 SMA is above the longer-term 200 SMA so the path of least resistance is still the upside, which means that the uptrend could resume at some point.

    Australia's jobs figures turned out weaker than expected as the economy added only 3.7K jobs in October versus the projected 17.8K gain. On a less downbeat note, the previous reading enjoyed a significant upgrade to show a 26.6K increase in employment while the unemployment rate improved from 5.5% to 5.4%.

    Prior to this, Australia's quarterly wage price index fell short of estimates at 0.5% versus 0.7%. Chinese reports also turned out weaker than expected, suggesting slower demand for raw materials.

    [​IMG]

    As for the euro, the shared currency got a strong boost earlier in the week from stronger than expected flash GDP readings. The region's trade balance also turned out stronger than expected and final CPI readings are due today.

    By Kate Curtis from Trader's Way
     
  13. katetrades

    katetrades Master Trader

    2,303
    7
    84
    GBPJPY Descending Channel (Nov 17, 2017)

    GBPJPY continues to trend lower on its short-term time frames. Price is testing the resistance at 149.00 and could be ready for a drop to the channel support at 147.50.

    The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. The 200 SMA also lines up with the channel resistance, adding to its strength as a ceiling.

    Stochastic is pointing down to indicate that sellers are in control of price action, but buying pressure could still return once the oscillator hits oversold levels and turns back up.

    UK retail sales turned out stronger than expected with a 0.3% gain versus the estimated 0.1% uptick. Prior to this, the claimant count change report and average earnings index also beat expectations. CPI data, on the other hand, fell short of consensus.

    Brexit issues and uncertainties in PM May's government are also keeping a lid on pound gains at the moment. So far, May has been able to defend the plans to leave the EU in the debates this week. However, the discussions are set to carry on for the next weeks and any major changes could pose more uncertainties for businesses.

    [​IMG]

    As for the yen, Japanese data hasn't been all that impressive either. The economy grew 0.3% in Q3 versus the projected 0.4% expansion while the price index came in line with expectations of a meager 0.1% uptick.

    By Kate Curtis from Trader's Way
     
  14. katetrades

    katetrades Master Trader

    2,303
    7
    84
    USDJPY Range Resistance (Nov 20, 2017)

    USDJPY looks ready to trade sideways on its daily time frame as price has bounced off the resistance around 114.25. This could put the pair on track towards its range support at 108.50.

    The 100 SMA is still below the longer-term 200 SMA so the path of least resistance is to the downside. However, the gap between the moving averages has narrowed and an upward crossover appears imminent. These moving averages could hold as dynamic support as well.

    Also, stochastic is dipping into oversold levels, which suggests that sellers are already exhausted. If buyers are able to take over, another test of the range resistance could take place.

    Over the weekend, Japan printed a stronger than expected trade surplus of 0.32 trillion JPY versus the projected 0.21 trillion JPY figure and the earlier 0.27 trillion JPY reading. There are no reports due from Japan today so the yen could take its cue from market sentiment or bond yields.

    Meanwhile, the dollar also saw strong US data on Friday, particularly in the construction sector. Building permits jumped from 1.23 million to 1.30 million, surpassing the consensus at 1.25 million, and housing starts rose from 1.14 million to 1.29 million.

    [​IMG]

    Only the CB leading index is due from the US today and another strong gain could keep the currency supported. Apart from that, updates on tax reform could also impact dollar movement.

    By Kate Curtis from Trader's Way
     
  15. katetrades

    katetrades Master Trader

    2,303
    7
    84
    EURGBP Range Support (Nov 21, 2017)

    EURGBP has been trading sideways recently, finding resistance around the .9000 major psychological level and support near the .8750 minor psychological mark. Price has just bounced off the ceiling and is halfway through on its way to the floor.

    The 100 SMA is below the longer-term 200 SMA on this time frame so the path of least resistance is to the downside, which suggests that sellers could take it all the way down to the range support.

    However, stochastic is already dipping to oversold levels, which signals exhaustion among sellers and a potential return in buying pressure. In that case, the moving averages might hold as dynamic inflection points around the middle of the range.

    Uncertainty in German politics has weighed on the euro for the most part of the week as German Chancellor Merkel failed to strike a coalition with the Greens and FDP over the weekend. This could prompt the call for another round of elections, which could keep the shared currency in limbo for a while.

    However, euro zone fundamentals remain stable and upcoming PMI readings could hint at further improvements. The ECB minutes are up for release, though, and their latest decision was considered a "dovish taper" announcement.

    [​IMG]

    As for the pound, the BOE Inflation Report hearings could prove to be an event risk as this would contain more details on the central bank's inflation outlook and rate hike bias. The Treasury's Autumn Forecast Statement is also scheduled later in the week and would have updated economic estimates.

    By Kate Curtis from Trader's Way
     
  16. katetrades

    katetrades Master Trader

    2,303
    7
    84
    USDJPY Channel Resistance (Nov 22, 2017)

    USDJPY is trending lower on its short-term time frames, moving inside a descending channel and currently testing resistance. This lines up with the 100 SMA and 50% Fibonacci retracement level, which appears to have held as resistance.

    The 100 SMA is also below the longer-term 200 SMA so the path of least resistance is to the downside, which means that the selloff is more likely to resume than to reverse. The gap between the moving averages is also widening to reflect stronger bearish pressure.

    Stochastic is pointing down to signal that sellers are in control of price action, but that could chance once the oscillator hits oversold levels and turns back up.

    The dollar slid lower against most of its peers as bond yields ticked lower on Tuesday. Yellen spoke of how the central bank is "reasonably close" to achieving its goals but that rate hikes should proceed at a gradual pace to avoid having inflation run below target for too long or to push unemployment too low.

    Yellen also expressed uncertainty about inflation rebounding, adding that it's possible for price levels to keep running below target for much longer. This probably cast doubts on rate hikes next year, weighing on the dollar as well.

    [​IMG]

    As for the yen, the Japanese currency appears to be taking its cue from market sentiment and dollar price action. Japan's all industries activity index turned out weaker than expected with a 0.5% drop versus the estimated 0.4% decline.

    By Kate Curtis from Trader's Way
     
  17. katetrades

    katetrades Master Trader

    2,303
    7
    84
    GBPUSD Triangle Breakout (Nov 23, 2017)

    GBPUSD appears to have finally broke out of its consolidation pattern on the 4-hour chart. Price surged past the resistance of its descending triangle, indicating its intention to go for more gains.

    The chart pattern is approximately 900 pips tall so the resulting breakout could be of the same height. However, the 100 SMA is still below the longer-term 200 SMA so the path of least resistance is to the downside. Stochastic is also indicating overbought conditions, which means that buyers are starting to feel exhausted.

    Still, the gap between the moving averages has narrowed to show a potential upside crossover that might draw more buyers in. A quick pullback to the broken triangle resistance at 1.3150-1.3200 could take place before the pair heads any further north.

    The pound took hits due to downgraded growth forecasts released during the Autumn Forecast Statement and increased its borrowing estimates for the next few years to offset the impact of Brexit. However, the currency stabilized as Hammond reassured that support will be provided to help the economy weather any uncertainties.

    Meanwhile, the dollar was weaker across the board during the release of the FOMC minutes as it confirmed that policymakers were increasingly concerned about weak inflation. Many participants worried that inflation would run below target for much longer than expected, hinting at a less aggressive pace of tightening for 2018.

    [​IMG]

    US banks are closed for the Thanksgiving holidays so lower liquidity and higher volatility for major pairs are eyed. The UK is scheduled to release its second estimate GDP for Q3 but no revisions to the earlier 0.4% estimate are expected.

    By Kate Curtis from Trader's Way
     
  18. katetrades

    katetrades Master Trader

    2,303
    7
    84
    AUDUSD Descending Channel (Nov 24, 2017)

    AUDUSD is currently trending lower but looks prime for a correction to its descending channel visible on the 4-hour time frame. This is in line with the 200 SMA dynamic inflection point, but price is already testing the 100 SMA at the moment.

    The short-term moving average is below the longer-term one, so the path of least resistance is to the downside. This means that the selloff is more likely to resume than to reverse. Also, stochastic is indicating overbought conditions and looks ready to turn lower, indicating a pickup in bearish momentum as well.

    The dollar has been on weak footing recently, as traders are reacting to the more cautious view on inflation shared by Yellen and FOMC members. In her speech earlier in the week, the current Fed Chairperson admitted that it may take longer for inflation to recover. The FOMC minutes also signaled that policymakers are worried that inflation could run below target for much longer.

    Meanwhile, the Australian dollar has been bogged down by cautious RBA minutes which expressed concerns about wage growth and spending. This suggests that the central bank could stay in its neutral stance for much longer.

    [​IMG]

    Most US traders are out enjoying the Thanksgiving holidays today, so liquidity could be thin. US flash manufacturing and services PMIs are up for release and these could lead to larger than usual moves for the dollar if they come in way above or below expectations.

    By Kate Curtis from Trader's Way
     
  19. TradersWay

    TradersWay Active Trader

    484
    0
    37
    USDCAD Triangle Resistance (Nov 27, 2017)

    USDCAD has formed lower highs and found support around 1.2675, creating a descending triangle on its short-term time frames. Price has just bounced off the triangle bottom and is making its way back to the top around 1.2750-1.2775.

    The 100 SMA has crossed below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the resistance is more likely to hold than to break.

    Stochastic is still heading north to reflect the presence of bullish momentum that might take price up to the triangle resistance. But if buyers are strong enough, they could push for an upside break and 200-pip climb, which is roughly the same height as the chart formation.

    The main event risk for the Loonie might be the OPEC meeting as the cartel is widely expected to announce an extension of their output deal. However, since this scenario has been long priced in, profit-taking could ensue during the actual event and force the oil-related currency to retreat.

    Meanwhile, the dollar has the US preliminary GDP on deck and any major revisions could dictate its direction. Traders are also waiting for more updates on tax reform as lawmakers reconvene to discuss the proposal.

    [​IMG]

    Canada also has its jobs data due later in the week and stronger than expected data could keep the currency supported. Downbeat results, on the other hand, could lead to losses as traders continue to push back rate hike expectations.

    By Kate Curtis from Trader's Way
     
  20. katetrades

    katetrades Master Trader

    2,303
    7
    84
    EURUSD Neckline Correction (Nov 28, 2017)

    EURUSD recently broke past the neckline of a complex inverse head and shoulders pattern visible on the 4-hour time frame. Price looks ready for a retest of the broken resistance around 1.1800-1.1850.

    This lines up with the 50% to 61.8% levels, which might keep losses in check and allow more buyers to join in the rally. The 100 SMA is still below the longer-term 200 SMA so the path of least resistance is to the downside, but an upward crossover appears to be brewing to draw more bulls in.

    Stochastic is heading down from the overbought level to signal that sellers are in control of price action for now. However, the oscillator is moving close to oversold levels and turning back up could reflect a return in bullish momentum.

    The dollar has been able to regain some ground against its peers when US President Trump stoked confidence in tax reform progress ahead of the Senate vote that might happen as early as Thursday this week. This could revive hopes that tax cuts could be implemented before the end of the year, which would be positive for businesses and overall economic performance.

    Data from the US has also been stronger than expected as new home sales rose from 645K to 685K versus expectations at 627K. The dollar dipped slightly on Kashkari's remarks but managed to recover when incoming Fed head Powell's speech indicated decisiveness to act in order to contain economic risks.

    [​IMG]

    Meanwhile, the euro has managed to shrug off previous political jitters from Germany as signs point to a coalition being formed. Data from the region has also been mostly upbeat last week and traders are setting their sights on another pickup in inflation to be reported in the days ahead.

    By Kate Curtis from Trader's Way
     

Share This Page