The AUDUSD managed to recover after a big drop caused by equities, Chinese market and Yuan devaluation. As we know, Chinese markets correlate to AUD and a possible loss of competitiveness in Chinese export market is also negative for AUD.
Technically AUDUSD is sitting at POC 0.7005-15 (H3, DPP, 50.0) and it could reject towards 0.6950. The problem is that Equidistant channel is out of sync with price which is caused by a bullish divergence. That could spike the price up towards 0.7040 zone (H4,E89,78.6) and the price should reject towards 0.6950. In order for the price to follow with a bearish trend continuation, the pair should close below 0.6945 (L3 within EQ channel) and a close below should target 0.6911.
At this point it is important to see if the price rejects from POC and POC2 as it is still in a bearish trend.
After a strong bounce from 1.0800 the EURUSD is still bought on dips. The lack of important data today and US bank holiday will probably keep the pair within the range, but it will also give us the opportunity to long on dips.
Technically POC comes within 1.0870-80 (L3, X cross.T-89 pattern) and it is also supported by a hidden bullish divergence. Hidden divergence is a trend continuation type of divergence and in this case it supports the bounces off the support. Adding to that we can see the Ascending scallop pattern right off the trend line.
However, the pair needs to stay above 1.0800 and only below 1.0800 we will see stop grabbing towards 1.0740 zone.
After yesterday’s BOE Governor mr.Mark Carney comments where he stated there was no timetable for raising interest rates, GBPUSD fell heavily from POC suggested both 1.4225 and 1.4050 levels. The first rejection off 1.4225 made more than 100 pips to the upside but Carney’s comments made a huge drop in the exchange rate. In the midst of Chinese growth hitting 25y low we have concluded that BOE is unlikely to raise interest rates soon.
Technically GBPUSD is sold on rallies. 1.4200 has been broken and we should pay attention to a possible retest. The price is in retracement due to regular bullish divergence and 1.4200-10 is looking interesting for intraday shorts. However, better retracement could come at POC which is a tad higher within 1.4235-60 zone. We see a multiple confluence of previous double bottom, 50.0,61.8 H4 and EMA89. The buffer zone for shorts 1.4235-60 is bigger due to a multiple important confluence points. The targets are 1.4124 and 1.4095. If 1.4124 breaks we could see a breakout setup towards 1.4095 without any retracement to the upside. Below 1.4095 we have a very important level which is 1.4050.
So we need to pay attention to 1.4200-10 and 1.4235-60 with a potential breakout of 1.4124.
The EURUSD has completed its first swing within he channel and on intraday chart we can see a range with bearish bias. POC comes within 1.0850-60 zone (H4, EMA89, EQ channel top, previous breakout spot) and the price could be rejected towards 1.0770-50. Only a clear break of 1.0770 can tank the price down to 1.0710.
However if we see a strong momentum or 4h close above 1.0880 we could see 1.0920 and 1.0970. So, from R:R perspective shorts are justified as long as EURUSD stays within POC range and stops are placed slightly above 1.0880.
USDJPY momentum suggesting bullish continuation
BoJ’s dovish move to introduce negative rates was in response to poor inflation in Japan and a strengthening JPY, which the later, has the potential to cause a negative impact on its economy and its exports. Nonetheless, in the short term, the JPY should weaken on this news.
The pair has made a momentum break above L4 support -119.30 and EMA89 has closed above suggesting a valid breakout. The price may either a) continue with the trend b) retrace to POC zone (DPP, L3, 50.0). Watch the chart carefully- because we have a strong momentum break on USDJPY we might see a shallow retracement to 23.6 (blue coloured -121.00) and the price might continue towards H3 resistance at 121.95.
If the price respects a zig-zaggish standard retracement pattern, it could drop towards POC and reject from there. The zone is 120.15-30 and as long as the price holds above 119.30 the targets are 121.95 and 122.80 if we get hourly or 4h close above 121.95.
The GBPUSD has spiked above 1.4600 zone and as I have shown in the latest AUDUSD coverage very often a retracement is mistaken for a trend change which is wrong. Similarly to AUDUSD (which has perfectly rejected from POC making 180 possible pips), the GBPUSD is in a similar situation. Any retracement towards POC zone could be considered another sell into rally with the 1.4255-40 as the target zone.
POC (Xcross, 50.0, EMA89, Bearish order block) comes within 1.4500-10 zone. Rejections from the zone target 1.4375 and 1.4240. Around 1.4240 the price might bounce making another retracement to the upside. A strong 1H momentum or 4h close below 1.4375 should also tank the price towards 1.4240.
The light volume and lower volatility made AUDUSD possible trade bidirectionally. The initial rebound from 0.7050 made 30 pips initially as suggested on previous Session Recap webinar followed by a decline caused by investors dumping assets. Today’s FED’s chief Yellen testimony could be volatile and that is why I recommend caution. The testimony has been scheduled for 15:00 GMT. As head of the central bank, which controls short term interest rates, she has more influence over the nation’s currency value than any other person so pay attention to subtle clues about future monetary policy.
Technically the AUDUSD could retrace towards POC zone (0.7125-40) that consists of H3, triple top, 61.8 and X-cross ™. However, we can also see Inverted Head and Shoulders pattern on H1 but also a HUGE Head and Shoulders variant characterized by the triple top.If the price rejects from POC it could target 0.7080-70 (EMA89 and 38.2 fib) potentially going lower towards 0.7030 and 0.7000. If the price makes a 4h close above 0.7150, bearish rejection could be negated.
USDJPY has tanked breaking important patterns and supports clearly showing risk-off sentiment. Purely risk off sentiment across markets is the cause for Yen to appreciate against the G10 currencies.Many carry trades involving cheap credit from Japan are invested across foreign markets, and during risk-off, many of those trades are reversed and repatriated back into Yen, causing demand for Yen.
Technically USDJPY still has the room to fall down. As we can see on the chart, bear pennant has been broken to the downside making USDJPY hit L5 weekly CAM support. Pullbacks within POC zone 113.90-114.10 could be used for another short selling. The zone shows strong confluence selling at the Bearish pennant breakout and we should see institutional selling again if the price retraces.
However if the price breaks now moment double bottom -110.98 it should proceed to 110.06 previous weekly high.
We have heard many times before “Buy the dips, sell the rips”. Recently we had some USD gains and there were some rumours that OPEC may cut production, so Oil price went up. If OPEC cuts production traders should go long all equities with both CAD and RUB currency crosses. Remember Oil is connected to CAD and RUB. Because USA and Canadian markets are on holiday we are not seeing some big price movements at this moment.
Technically USDCAD is showing multiple patterns suggesting that selling on rallies is the option. At the top price has failed to break the neckline of inverted Head and Shoulders. It dropped heavily making a correction with the successful break of inverted head and shoulders at the bottom. The backwind of Inverted Head and Shoulders made a Bear flag variant pattern and 1.3885-1.3900 looks like a good place to short. POC (38.2, H3, EMA89, H3, DPP) should hold the price and in the case of positional POC sell the target is 1.3780. Any breakout below 1.3780 targets 1.3710. We should pay attention to current price around 1.3820 as it shows a potential inverted head and shoulders in progress which if realized could spike the price UP towards our POC for a subsequent sell.
As we know AUDUSD is a hard commodity currency.Basically, when its risk-on environment, commodities prices tend to increase, and traders go long AUD due to that factor. When commodities prices go up, Stock Markets go up and there is demand for positive swaps on AUD pairs currently as opposed to JPY (JPY weakened today). AUD bounce has also been stimulated by the PBOC, Oil and RBA. Oil is connected to commodity currencies so it gave AUD additional boost.
Technically AUDUSD is showing a possible breakout and positional trading. The pair is slowly grinding up in an ascending channel towards important levels. If the price retraces to 0.7130-40 POC (50.0, WPP, EMA89) we might see another bounce towards 0.7212. The price is currently 0.7191 so we might even see a direct test of 0.7212 before any retracement.
If the price closes above the channel and makes a breakout above the channel and H4 confluence (0.7215), next level should be 0.7267. So pay attention to any retacement towards POC for long setups or a breakout as stated above.
Risk warning: your capital is at risk
An unexpected jump in Crude Oil inventories (It influences the price of petroleum products that affects both growth and inflation) had a small impact on USDCAD yesterday as gains were limited and the pair continued to tank during US session.
The USDCAD is technically bearish and we can see a strong POC at 1.3465-80 (H4, X cross, EMA89, the channel top) that we can use for possible short trades. However the price is showing sellers in now moment (green rectangle) and we could see an immediate rejection towards 1.3390. If that doesn’t happen eyes should be on POC. The pair is initially targeting 1.3390 and a strong momentum or H1/H4 close below 1.3365 will target 1.3320-10, the channel bottom and L5 confluence zone.
The EURUSD is focused on ECB meeting this week on Thursday where investors will re-assess ECB further policy but until then we need to analyze the possible intraday movement of the most traded Forex pair. After good NFP but bad wages data on Friday the EURUSD spiked to 1.1040 region after the rejection from 1.0920.
Today the pair has initially been sold but the overall trend is bullish. H1 shows a cup with handle pattern where handle is formed in upper half of the cup. POC for positional trades is 1.0925-50 but only above 1.0955 the pair can gain upside momentum towards 1.1040. Point A is the right cup lip and it serves as the breakout point whereas point B is the handle low confluence. Only above 1.1040 the price will open the door for 1.1150.
However the pattern and the setup will become invalid if the price breaks below 1.0895.
Your capital is at risk
As we could see, after yesterday’s webinar USDJPY dropped like a stone from POC giving us more than 140 pips of a profit. The setup was based on a running triangle and general 114.00 rejections and straight after the webinar we had a trade that is more than 140 pips in profit now. But that’s not all. Traders should pay attention to L4 breakout as 4h close or H1 momentum below could tank the price further down to 112.20 all the way to 111.55. If the price rejects off 112.50-60 zone watch for a retest of 113.20-35 zone (L3, doube trend line, EMA89) that could give us another shorting opportunity. MACD momentum is very strong so L4 breakout is possible too but only if we see a valid H1/H4 close.
This is what I like to see and this is when traders can make both pips and money trading momentum, breakouts and subsequently making positional trades. Yesterday FED neutral to dovish statement (more dovish though) sparked the upside momentum on the EURUSD pair and BOOM! The pair behaved as was published before FOMC and after a perfect consolidation the pair broke all upside levels hitting the target.
What would EURUSD need to do for an encore? Obviously the pair is going towards magnetic 1.1375 level (Feb high + H4 camarilla WPP) where we could see some initial selling. 4h close above it will expose 1.1555 that could be next swing target. Positional trades could happen within 1.1260-50 zone (23.6, H3, inner trend line). Because we don’t see any retracement on 4h time frame yet we can use historical price action that is repeating in now moment (see the chart). That’s the beauty of Forex trading.
The AUDUSD is gaining its handle above 0.7500 level and the RBA stayed neutral on recent AUD strength. In my opinion its mainly USD weakness, but Commodities prices have improved the last few weeks - Iron Ore, Copper, Oil (LNG), Gold, and Bauxite and AUDUSD is linked to hard commodities.
The technical analysis is showing the ascending scallop formed on H1 chart and clear POC within 0.7560-75 zone (X-cross, WPP, 38.2, EMA89). Additionally there is an inner trend line that shows buying strength on pullbacks (red rectangles) Retracement within the zone is additionally supported by historical breakout point (blue rectangle) at 0.7590 so that level can also reject the price. The target is 0.7670 and 4h close above 0.7670 will target 0.7750. In my opinion its mainly USD weakness, but Commodities prices have improved the last few weeks, Iron Ore, Copper, Oil (LNG), Gold, Bauxite, etc.
Bad inflation data is weighting on the GBPUSD pair (0.3 % vs 0.4 % expected) and that could possibly mean no rate hike anytime soon and it caused a deeper retracement in the price. Technically we can see an uptrend on H4 time frame and the price is reaching deeper retracement zone and important crossroads.
POC (78.6, historical buyers, trend line) 1.4140-55 is important as the price could find now moment buyers that would spike the price up towards L4 1.4220. However only if the 4h candle closes above 1.4220 we could see 1.4350 again. POC is very close to the first leg of bearish M pattern too, so if 1.4115 is lost the price will go for another test of 1.4050 and 1.4000.
The EURUSD went down early today towards 1.1400 and was rejected. As I thought, Friday profit taking tanked the pair towards 1.1350 where it showed the range. The pair is still in range however, price action suggests that the range might break.
Why do I say bullish range? Take a look at EMA 89. On Friday it was flat BUT above the ascending 3 touch trend line. Today price spiked from confluence making for another possible long trade and at the same time EMA angle has shifted upward but still above the trend line. However it is still Monday and the price might either break or retrace. If a retracement happens, watch for POC within 1.1370-90 zone ( L3, Ascending Trendline,WPP) where the price should reject towards 1.1453 high with interim resistance at 1.1470. If we don’t see a breakout pure H1 momentum or H4 candle close above 1.1470 would target for 1.1528. L5 Weekly target.
Only a break below 1.1325 negates the scenario and the price is back into a downtrend towards 1.1270.
EURJPY broke below sideways chop last night when it was announced that OIL production cut back negotiations failed. There was a gap on JPY pairs and today early correction has closed most of gaps. JPY and OIL correlation links back to Risk-off sentiment, as Oil price drops, some sectors of Equities drop. So If Oil is dropping, inflation expectations would drop, which is not necessarily a good thing for Equities. In that environment risk-off prevails, and JPY gets stronger.
Technically EURJPY broke below sideways chop range (red rectangle) and if risk off sentiment prevails EURJPY could reject from POC (50.0, Doji, previous breakout point L3 ) within 122.55-70 else any breakout of 122.90 towards 123.05 zone might put the pair back into the sideways chop range. If we see a rejection 122.14 and 121.72 are targets for another bearish support retest.
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NZDJPY is one of the pairs pair that has a strong correlation to equities. Nikkei and DAX are +92/90 correlated to NZDJPY and that is extremely high correlation, so they are moving in the same direction. Most important Yen crosses ( USDJPY, AUDJPY, NZDJPY) are an excellent Risk ON/OFF indicator. As the rate of one currency increases relative to another, investors are attracted to the higher yielding currency.
Technically NZDJPY is bullish but we see an inner trend line that has been broken with H4 perfectly aligned with previous swing. If we see H1 momentum above or H1 close above H4 camarilla pivot, the pair can make a bullish breakout to H5 and that is 77.54. If we see a pullback towards 75.64-80 zone (previous breakout point, bullish order block (A), 50.0,L5) the price could spike from POC towards 76.34 (L3), and further towards the H3 - 76.86. market is currently calm ( as expected ) so we might expect volatile session later during the day. We may expect a movement just before, during Draghi speech today or after.
*Your capital is at risk
Today Federal Reserve Chair Jane Yellen and other FOMC members could give us cues about potential rate hike in June. Market doesn’t expect changes in Federal Funds Rate ( 0.50 % vs 0.50 %) decision today so we should focus on the statement itself as it is focused on the future. FOMC members always vote on where to set the target rate. All the individual votes are published in the FOMC statement afterwards.
USDJPY should be observed today as it is clearly in the range set by a Bearish Two Crows pattern. Pre FOMC range is 111.52-110.85. If we see 1h close above H3 camarilla PP or momentum breakout above 111.53 the pair could spike towards 111.85. Breakout below 110.83 should target 110.50 and 110.30. Be careful with ANY positions today as other USD and Yen crosses will be affected too.
*Your capital is at risk
