USDCAD is retracing towards POC
US FED will release the statement today, without any press conference and we will probably have some range-bound market till FED statement. Expectations towards rate hike are rising and we could see a rate hike in between September and December. US CPI has come in line with expectations, Core Durable Orders also while major news release for CAD will be GDP later in the week (Friday). However any mention of a possible hike is bullish to USD and traders will pay close attention to FED’s statement.
Technically USDCAD has broken through 4h trend line and it is falling towards POC. POC1 (L4, triple bottom, 50.0 fib ) comes at 1.2930 zone and the zone could reject the price. If the retracement continues, next zone to watch for is 1.2865-45 (L5, 61.8 fib) just above strong round number support which makes a confluence with double top/historical breakout point and 78.6. That support is naturally 1.2800. If the pair gains upward momentum after rejection it will target .1.3030 and 1.3100. Only H4 close above 1.3100 will target 1.3150.
However a drop below 1.2800 could extend towards 1.2750 and 1.2700.
USDJPY strength even after bad advance GDP data
USDJPY has bounced after FED statement which clearly stated that the rate hike is inevitable after further job gains. We think it could come in September or December, but December seems more likely. According to Reuters poll economic growth in US is picking up pace which goes in accordance with FED’s possible tightening monetary policy in September.
USD has shown strength even after bad preliminary GDP data.
Technically USDJPY is showing V shaped reversal variant 2 with a possible rejection from current levels towards 123.40 zone. If rejection happens we could use POC zone at 123.40 ( 78.6, L4, historical buyers ) for a new long trade towards 124.55. 4H close above 124.55 will target 125.05.Judging from current sentiment even lower TFs show a predominant long trend and if we align lower with higher TF we are getting a good picture of an overall trend
Last week NZDUSD dropped by a huge percent after PBOC devalued Yuan. Usually soft commodities ( AUD ) perform better then hard commodities ( NZD ), but this time NZD also dropped by a volatilty caused by devaluation. The pair is correcting itself now, and technically it shows Regular Bearish Divergence on H1 chart.
V Shaped Reversal that happened has retraced the pair to the level where it was sold instantly ( 0.6650 ), Next wave of sellers is showing up at POC ( H4, historical sellers, 61.8, regular bearish divergence ) at 0.6600 zone. Pullbacks towards 0.6600 could be used for further shorts towards 0.6550-40 and only a momentum break or 4H close below L4 ( 0.6540 ) would target 0.6510-00. Pay attention to the triangle as vortex of the triangle is close so, if the pair rejects from POC it still needs to pass below DPP/L3/Triangle lower TL ( 0.6550-40 )
Waiting for FOMC meeting minutes and report which is due on Wednesday, EURUSD has dropped after 4h closed below 1.1070. Fundamentally economic growth in Germany looks strong as we know that lower EUR fits exporters such as Germany. But still. Every FED meeting minutes is important as we might get a clue on rate hike timing
Technically the pair shows strong confluence at 1.1070 and 1.1000 zone. 1.1070 is showing the battle between buyers and sellers ,indicated by wicks, but also weekly PP. We know that PP are used for placing new orders , so traders should always pay attention to both Daily and Weekly PP. If we get H4 close ( presumably with stronger body ) above 1.1070, the pair could proceed to test 1.1185 and 4h close above 1.1185 will target 1.1250-65 the confluence zone of ascending upper trend line and H4 camarilla pivot.
Looking the downside we can spot lower ascending trend line, previous lows and inner trend line thrust. It is clear that 1.1000 is very important. Below EURUSD is targeting 1.0940 and if we get 4h close below it should target 1.0820-10.
Looking at the whole picture it looks like EURUSD is setting up for a Rising wedge ( upper ascending and lower ascending TL ) which is bearish. As the main trend is bearish, adding the forming of a bearish wedge, EURUSD could be traded both ways but selling into rallies is the better option at the moment.
GBPUSD has been trading inside an equidistant channel which supports the uptrend zig zag. The price has been making higher highs and higher lows which is showing us a scholastic example of uptrend. At 78.6 fib – deeper retracement there is a strong confluence with equidistant channel lower trend line so the price might get a bounce in the zone ( 1.5670-85 ) and try another push toward 1.5740 and 1.5780. That being said if the price gets H4 close above cam H4 level ( 1.5780 ) it will target 1.5855 the confluence spot of H5 and upper equidistant channel.
The bullish bias should persist as long as GBPUSD is above 1.5620.
original Material is provided by Admiral Markets
USDJPY reached 120.50 after a big spike down preceded by PBOC decision to reduce its interest rate and ease bank reserve requirements. Technically a huge drop which we see on USDJPY chart is actually a BEARISH PENNANT and short to mid term the pair could bounce from 120.50 targeting even 114.40 levels (!). Bearish pennant can be seen on H4 chart but zooming in we can see it better on H1 chart. Adding the flagpole distance to the projected distance from breakout and we get 114.40.
Weekly cam pivots show L4/L5 confluence with a bearish pennant adding one more part of chart confluence. The projected move is short to mid term. Intraday shorts could reach 119.10 zone. Have in mind that the move is valid as long as 121.50 stands strong.
Original material is provided by Admiral Markets
GBPUSD felt heavily after EUROSTOXX50 futures surged couple of days ago and was influenced by a global fear of China slowdown and PBOC Yuan devaluation. Also, BOE is still holding off from rate hikes and we have some clues that the hike could come at the end of the year. BOE’s governor Carney unwillingness to share any more details about recent events and possible rate hike led to a strong sell off of GBPUSD pair.
Technically the pair sold off 1.5800-20 zone as i suggested on LIVE webinars- pre fact, but even I am a bit surprised of the huge GBPUSD weakness in the recent days. 1.5530 level shows the X Cross- the intersection of trend lines. X cross usually finds strong confluence with other price factors, this time it is H5 camarilla pivot. 1.5530 is a strong point for taking short trades. Interim resistance is 1.5445 zone as we can see H3 camarilla and double top confluence. Interim support lies at 1.5360 and if that level is broken the price should accelerate to 1.5330. Notice that 1.5330 is previous double bottom and when you are reading price action you should always take HISTORICAL price action into account. Historical buyers lie at 1.5330 and in the context of historical vs now moment buyers we could see bounce from that spot. if 1.5330 is lost 1.5260 is next
Original material is provided by Admiral Markets
Not surprisingly RBA decided to put rates on hold , leaving rates unchanged. During RBA monetary policy meeting it was concluded that the inflation forecast is consistent whereas low interest rates support both borrowing and spending. RBA statement caused just a small bounce in the pair effectively leaving the pair within the sideways range.
Technically last 10 days AUDUSD has been trading below 0.7200 and any rallies toward have been a chance to short it further as I have stated before. The pair shows hidden divergence and compression triangle shows a possible breakout soon. Hidden bearish divergence is telling us that the pair is ready to proceed down possibly testing 0.7070 and 0.7020. Anyway, for trend traders some pullback is required as R:R is significantly higher then. POC comes around 0.7205 spot and if 0.7230 stays strong , another good opportunity for short is there. Historical sellers, 50.0 fib, Divergence top all constitute a strong POC and upper trendline of the triangle will be adjusted then too for additional resistance.
AUDUSD is bearish targeting 0.7070, 0.7020 and 0.6990 but the decision should be about either going for a breakout trade or a classic pullback trend trade.
Original material is provided by Admiral Markets
If you remember my past article about EURUSD on 24.AUG I warned that 1.1255 is crucial for EURUSD upside. EURUSD dropped mainly because of Chinese equity markets, Shaghai index and EUROSTOXX50 futures especially at London open. Some hawkish comments about possible rate hike also gave boost to USDx which additionally lowered the pair. Yesterday we saw 2 rejections from 1.1260 each for 50+ pips and finally 1.1260 level was broken again. PMI rose to 53.3 from 51.8 and it better then preliminary estimate.
Technically we can spot HUGE Bearish M pattern which went below 1.1260 and it stopped at 1.1155 .EURUSD was sold subsequent spike to 1.1260 ( green circles ) and we can easily spot Historical vs Now moment sellers. Last drop from 1.1260 was good for intraday shorts but now the price is heavily bought from BUFFER ZONE. BUFFER zone shows clear levels which we should be focused on.
Historical PA shows BPC pattern at 1.1260 (1) so my conclusion is – as long as EURUSD is above 1.1260 it is bullish and below 1.1155 it is bearish. MACD is gaining a possible momentum ( when above 0 line ) so above 1.1260 we can expect 1.1360 and 1.1395. Only h4 close above 1.1395 will target 1.1500 again.
Below 1.1155 we can expect 1.1000 but so far this looks like a bullish price action with a possible scope for 1.17 retest.
Original material is provided by Admiral Markets
While we are patiently waiting for FOMC meeting we need to know that interest rate differential between US and Switzerland definitely favors the dollar. Having a record unemployment rate at 5.1 % FOMC is a step closer to rate hike and recent Yellen comments suggested that China turmoil had no significant impact on FED’s plans about the hike.
USDCHF is buy the dips mode. Technically we can spot V shaped reversal which has been very strong to the extent that it is forming a giant inverted head and shoulders pattern on H4 chart. We should be focused on a retracement towards 0.9630-40 zone ( 78.6, previous buyers, L3, X cross ) If the retracement happens we could take a long position with a good r:r . Inner trendline is providing support so 0.9595 should hold ( inner trend line, 88.6 ).
Rejection from POC targets 0.9760 and H4 close above the level will target 0.9820.
The GBPUSD fell sharply after UK deficit rose. Adding to that public borrowing has risen unexpectedly and BOE revised down their growth outlook for the next half of the year. We also see no rate hike hints in near future.
Technically we can see that a giant triangle on the pair has been broken to the downside. On 4 hour time frame there has been no retest at this point. Also we see that POC ( L4,23,6, previous double bottom/historical sellers ) stands at 1.5320-40 and if its reached the pair should dip towards 1.5250 and 1.5190 initially. Have in mind also that when watching lower time frames we can also see that 1.5275 too is a level to watch for as it shows confluence on lower TFs.
NZDUSD pair is correlated to Chinese markets and China A50 index and any turmoil is reflected on the pair. Weak data reflects at the price and as I analyzed it earlier NZDUSD is sold on rallies. Next fade could come soon as we can spot a strong POC which could reject the price.
POC comes at 0.6410-30 as we see a confluence of historical sellers ( blue rectangles ), H3, 88.6 deep fib retracement and X cross. Initially NZDUSD is targeting 0.6295 zone and if H4 candle closes below 0.6295 (L4 camarilla) then Breakout-Pullback-Continuation pattern should target 0.6250 and 0.6220. Have in mind that H4 camarilla pivot needs to hold ( 0.6480 ) for the price to remain bearish.
The AUDUSD has had a relief rally after the RBA decided to keep the rates at 2 %. The RBA indicated at the start of 2015 that it wanted to achieve 0.75 for the AUDUSD pair; currently it has surpassed this achievement as it is currently at 0.7200. As I have also explained 2 days ago on that basis, I doubt the RBA will cut rates further. Having said that, if commodities continue to weaken further, expect AUDUSD to weaken further under free markets.
Technically we have 2 POCs. The first POC is 0.7210-0.7225 zone (61.8, descending trend line) and the price could reject here BUT we see that HISTORICAL sellers are a bit higher. POC 2 shows historical sellers, 78.6 ,and X-cross. The zone is 0.7255-70 and if the price get here, we could expect now moment sellers. First target for any rejection off POC or POC2 is 0.7190 zone (H3, 89 EMA) then 0.7150 and 0.7110 (23.6, inner trend line )
The full article is available on Admiral Markets
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.
