The USD CAD is bullish. MA 50 and the blue trend line are playing the support. As long as these levels are held the price will surge to retest the 1.3083 resistance. There is a high chance for the bulls to break that ceiling.
Support: 1.2936, 1.2819 | Resistance: 1.3083
Buy at the current price, buy limit-1 at 1.2936, buy limit-2 at 1.2847, buy limit-3 at 1.2837 | SL: 1.2812
The EURUSD pair is actively losing value and yesterday reached a historical milestone, which coincides with a 20-year low at 1 the value of the euro caught with the value of the US dollar against the backdrop of a tense economic situation in the EU, where macroeconomic indicators are declining for the second quarter in a row. Today, statistics from Germany for July will be published, and, according to forecasts, the index of current economic conditions from ZEW may correct to -34.5 points from -27.6 points, and the economic sentiment index risks dropping to 2020 levels around –38.3 points, which puts pressure on the single currency.
The trading instrument is moving within the global downward channel, reaching its support line yesterday. Technical indicators maintain a global sell signal: indicator Alligator’s fast EMA oscillation range expands downwards, and the AO oscillator histogram has formed another down bar in the sell zone.
Resistance levels: 1.015, 1.037 | Support levels: 1, 0.99
On the daily chart of the asset, a downwards channel forms with dynamic boundaries 2450–2000, within which the price has almost reached the resistance line and is preparing to start a reversal. On a four-hour chart, the ascending wave looks like a classic Flag pattern with boundaries of 2450.0–2150.0, which increases the likelihood of forming a downward impulse towards 2000.
Technical indicators do not yet react to the current reversal and keep a local buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram forms rising bars above the transition level.
The shares of Meta Platforms, which owns the world’s largest social network Facebook, are moving within a downtrend around 163. On the daily chart of the asset, a global Triangle pattern is forming with local extremes at 18 and 150, and a sharp narrowing of the formation range may indicate that the price is entering its last third, where a signal to exit it will develop.
On the four-hour chart of the asset, the quotes are completing the formation of another ascending wave, after which they can break through the lower border of the pattern around 155 since the probability of a downside implementation is much higher. Technical indicators confirm the possibility of a decline, reversing downwards: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms upward bars in the sell zone.
EURUSD - the euro is held near the parity level with the US dollar
The European currency shows multidirectional trading dynamics, consolidating near the key level of 1.0000, which has not yet been actively tested. The day before, the instrument also traded near the parity level and even tried to fall to the level of 0.9990 for some time; however, the “bulls” quickly regained the lost positions. The euro is certainly receiving strong technical support near this psychological level, but the pressure on the single currency only intensifies as the region’s economic outlook deteriorates. The last time the euro traded at parity against the US dollar was in December 2002.
Yesterday’s macroeconomic statistics put additional pressure on the positions of the single currency, intensifying talks about a possible recession in the European economy: ZEW Survey on Economic Sentiment fell sharply in July from –28.0 to –51.1 points, while analysts expected a decline to only –32.8 points. In turn, ZEW Survey on Current Situation in Germany over the same period fell from –27.6 to –45.8 points, while the forecast was –34.5 points, and the Economic Sentiment index fell from –28.0 to –53.8 points, which also turned out to be significantly worse than market forecasts at the level of –38.3 points. Today, investors are focused on statistics on the dynamics of consumer prices in Germany in June, as well as May data on the dynamics of industrial production in the eurozone.
Bollinger Bands in D1 chart demonstrate active decrease. The price range is expanding, making way to new record lows for the “bears”. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic retains downward direction but is located in close proximity to its lows, which indicates the risks of oversold EUR in the ultra-short term.
Resistance levels: 1.005, 1.01, 1.015, 1.02 | Support levels: 1, 0.995, 0.99
Trading activity remains subdued this morning as analysts await the publication of key macroeconomic statistics on US consumer inflation for June, the current forecasts for which suggest acceleration from 8.6% to 8.8%, which will be a new record since December 1981. Faster growth is also not ruled out, which could put significant pressure on the US Federal Reserve when choosing the next measures to tighten monetary policy. The regulator’s meeting will be held next week, and at the moment a rate hike of 50 or 75 basis points is expected. About 10% of analysts suggest an increase of 100 basis points at once, but this is possible only in the event of a sharp acceleration of inflation in the country.
Additional pressure on the positions of silver is exerted by the situation with the incidence of coronavirus in China, where outbreaks of infections are still observed, which, coupled with the policy of “zero tolerance”, leads to new quarantine restrictions, which, in turn, are causing the fall in demand for industrial goods, as well as raw materials, including oil, copper and silver.
Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD indicator tries to reverse to growth and to form a new buy signal (the histogram should consolidate above the signal line). Stochastic is showing a similar trend, trying to retreat from its lows, signaling that silver is oversold in the ultra-short term.
Resistance levels: 19, 19.5, 20, 20.58 | Support levels: 18.71, 18.41, 18, 17.5
The Australian dollar is showing an uncertain rise, building on the corrective momentum that was formed on Tuesday, July 12, when AUDUSD traded at record lows of June 2020. The instrument is testing the level of 0.677 for a breakout, receiving support from strong macroeconomic statistics from Australia and China. In turn, the growing demand for the US currency prevents the emergence of a more active “bullish” dynamics.
Trade Idea
Sell, TP 0.6710 | SL: 0.6874
Conflicting macroeconomic statistics from the EU do not allow the euro to interrupt the protracted decline: inflation in Germany in June was 7.6%, which is the same as in May, and CPI in France rose not as much as analysts expected but still amounted to 5.8%, up from 5.2% in May, while the same figure for Spain reached a record high of 10.2%, up sharply from 8.7% in May. With such a significant increase in local values, the composite price index of the EU countries will also increase significantly, preventing a possible reversal and growth of the euro.
The trading instrument moves within the global downward channel, near the support line. Technical indicators maintain a global sell signal: fast EMAs on the Alligator indicator expand the range of fluctuations in the direction of decline, and the AO oscillator histogram forms downward bars in the sell zone.
Resistance levels: 1.015, 1.037 | Support levels: 0.998, 0.98
Brent Crude Oil quotes are correcting, trading just above 98, amid serious concerns about falling energy demand due to a new outbreak of coronavirus in China and, as a result, severe restrictions on the movement of citizens.
The market is awaiting the outcome of US President Joe Biden’s visit to Saudi Arabia. John Kirby, National Security Council strategic communications Coordinator at the White House, said yesterday that Biden intends to hold meetings with King Salman bin Abdulaziz Al Saud, as well as with Crown Prince Mohammed bin Salman Al Saud. This visit has a specific goal of persuading Saudi Arabia to increase oil production levels, thereby reducing its quotes on the world market. However, experts are sure that it will not be successful for the United States, since the day before it became known that at a recent online summit of the BRICS organization, which includes the Russian Federation and China, the issue of Saudi Arabia’s membership in the organization was discussed.
On the global chart, the price is trading below the key level of 100.00. Technical indicators are holding a steady sell signal, which is still strengthening: fast EMAs of the Alligator indicator are moving away from the signal line, and the AO oscillator histogram, being in the sell zone, is forming new descending bars.
Support levels: 96.22, 88.63 | Resistance levels: 100.7, 106
The British pound shows near-zero dynamics, testing 1.1820 for a breakdown, returning to active decline after an unsuccessful attempt at corrective growth, which was supported by optimistic macroeconomic statistics from the UK. On Wednesday, data on the dynamics of GDP and industrial production for May were released. The British economy strengthened by 0.5% after declining by 0.3% a month earlier, although analysts had expected zero dynamics. Industrial Production for the same period increased by 0.9% after falling by 0.1% in the previous month, with forecasts suggesting zero growth, and in annual terms, the figure corrected from 1.6% to 1.4%, while analysts assumed a sharp decline of 0.5%.
Resistance levels: 1.1854, 1.1933, 1.2, 1.2074 | Support levels: 1.18, 1.1758, 1.17, 1.16
On the daily chart of the asset, a global downwards channel is formed, within the framework of which the price is closed in the local Triangle pattern with dynamic boundaries 70 – 80. The four-hour chart shows that this figure is likely to work according to a classic scenario with consolidation the quotes below the lower border at 70. After reaching the pattern resistance line at 80 and the subsequent reversal, the scenario of subsequent downwards dynamics can be considered confirmed.
Technical indicators began to reverse towards the decrease: fast EMA on the Alligator indicator again began to approach the signaling line, narrowing the oscillation range, and the AO histogram forms downward bars in the purchase zone.
The ADAUSD pair is moving within a long-term downtrend, and this week it was able to break below the level of 0.43, which it had unsuccessfully tested several times for a month and a half. In the future, the price decline may continue to 0.3906 and 0.3418. If the middle line of Bollinger bands is broken upwards, the quotes may rise to 0.4882 and 0.5371.
Further negative dynamics seem more likely, as technical indicators confirm the continuation of the downward trend: Bollinger bands are directed downwards, the MACD histogram is increasing in the negative zone, and Stochastic has entered the oversold zone and is directed horizontally.
Resistance levels: 0.4600, 0.4882, 0.5371 | Support levels: 0.3906, 0.3418, 0.2929
H4
On the four-hour chart of the asset, at the level of 0.6107, there is a formation of a Hammer candlestick pattern, which signals a possible change in the trend to an upward one, as well as a “bullish” Engulfing pattern at the level of 0.6174, which means a reversal of quotes at the bottom. In the current situation, the priority scenario is an increase from the level of 0.6246 to the zone of 0.6559−0.6869. An alternative scenario is possible if the buyers fail to hold the key support level of 0.6107, then the price may drop even lower to the range of 0.5929–0.5755.
D1
On the daily chart, a Falling Wedge price pattern is observed, and at the moment, an upward exit from the “bearish” trend channel is being implemented. A positive signal for the asset is the appearance of a Hammer reversal pattern at the support level of 0.6107, which can act as a catalyst for the uptrend from the level of 0.6246 up to the level of 0.6869. If the price consolidates below the level of 0.6107, the trading instrument may show a decrease to the zone of 0.5929−0.5755.
Support levels: 0.6107, 0.5929, 0.5755 | Resistance levels: 0.6246, 0.6559, 0.6869
Tomorrow, market participants will follow the June macroeconomic data on consumer prices in the EU, which will determine the rhetoric of the European Central Bank (ECB) in terms of tightening monetary policy in the near future. Analysts expect inflation to remain at the May level of 8.6%, which is nonetheless unlikely given the sharp rise to 5.8% in France and 10.2% in Spain. If the experts’ forecasts come true, one should expect more “dovish” signals from the financial authorities and an increase in the interest rate with a standard step of 0.25% or 0.50%.
The trading instrument is within the global descending channel, near the support line. Technical indicators maintain the global sell signal: the fast EMAs of the Alligator indicator are significantly below the signal line, and the histogram of the AO oscillator is trading in the sell zone, forming new correction ascending bars.
Support levels: 1, 0.98 | Resistance levels: 1.0197, 1.037
The strengthening of the franc was supported by data on Imports volumes, which in June reflected an increase of 0.3% compared with the previous month, while the Producer Price Index reached 109.8 points, adding 6.9% compared to the same period a year earlier. The real estate market is mixed, with Civil Construction Spending up 0.1% year-over-year and Construction Overall Spending reduced by 0.4%, resulting in a 0.1% decrease in Total Investment in the sector.
On the global chart of the asset, the price is correcting within the side channel, preparing to continue the global growth. Technical indicators maintain a steady buy signal: the fast EMAs of the Alligator indicator are significantly above the signal line, and the histogram of the AO oscillator is held in the buy zone, forming local corrective bars.
Support levels: 0.9699, 0.9529 | Resistance levels: 0.9819, 1.
The BTCUSD pair continues to trade within the framework of a long-term downtrend, however, in the last few weeks the decline has slowed down, and the price has formed a sideways range of 18750 - 22500, within which it remains at the present time. Now the quotes of “digital gold” are testing its upper limit, the breakout of which will allow us to continue moving to the levels of 25000 and 28125. The key for the “bears” is the mark of 18750, at the breakdown of which the downward dynamics will resume to the range of 15625, 12500 and 10000.
In general, the long-term downward trend is still maintained, but in order for it to continue, quotes need to break through the current side channel. Judging by the indicators illustrating the uncertainty of the market, a trend change is unlikely in the near future, and the price will continue to move sideways.
Resistance levels: 22500, 25000, 28125, 31250 | Support levels: 18750, 15625, 12500, 10000
Fast Retailing Co., Ltd., which posted a positive Q3 financial report, remains the leader on the Japanese stock market. The revenue of 546.13 billion yen was posted, higher than analysts’ forecast of 508.8 billion yen, and earnings per share of 890.55 yen, the second-highest on record after 916.21 yen in Q4 2021. Moreover, according to preliminary estimates, at the end of this year, the holding’s management expects to receive total revenue of 2.25 trillion yen and a net profit of 250 billion yen, having improved the previous figures by 5.5% and 47%, respectively.
On the global chart, the index quotes remain within the local lateral channel, moving towards the resistance line. Technical indicators are about to reverse and give a buy signal: the histogram of the AO oscillator is decreasing in the sell zone, forming new ascending bars, and fast EMAs on the Alligator indicator continue to move away from the signal line.
Support levels: 26500, 25550 | Resistance levels: 27470, 28340
USDCHF - Technical analysis
H4
A Double Top price pattern is forming on the four-hour chart, and the USD/CHF quotes are currently near the Neck line, overcoming which will mean the continuation of the active phase of decline. The negative dynamics is intensified by the appearance at the resistance level of 0.9840 of the Shooting Star and Hanging Man figures following each other. In addition, the downward movement is due to the formation of the Three Black Crows trend continuation pattern in the range of 0.9840–0.9790. Currently, the asset has formed another Shooting Star candlestick analysis pattern at 0.9790, which signals growing “bearish” sentiment in the market. In the current situation, the scenario with a decrease in the trading instrument to the support level of 0.9697 seems more likely, overcoming which will allow quotes to fall to the area of 0.9548−0.9421. An alternative scenario is possible if the price consolidates above the resistance level of 0.9840 and then moves up to the level of 1.0117.
D1
On the daily chart, at the level of 0.9840, there is the formation of a Hanging Man reversal pattern, which indicates that the quotes have consolidated the top and met with strong resistance. This was confirmed by the formation of a classic Shooting Star candlestick analysis pattern, which similarly illustrates the completion of a “bullish” trend. At the moment, probably, there is a formation of the Falling Three Methods figure, which is a signal for the continuation of the downtrend. If the sellers overcome the support level of 0.9697, one should expect further continuation of the negative dynamics in USDCHF currency pair to the area of 0.9548−0.9421.
Support levels: 0.9697, 0.9548, 0.9421 | Resistance levels: 0.984, 1.0033, 1.0117
On the daily chart of the asset, the price is in a wide global channel with dynamic boundaries of 50–81, declining towards the support line, from which it moved away the day before. On the four-hour time frame, it is clearly seen that the quotes are increasingly clamped within the framework of the local Triangle pattern, before the implementation of which there is not much time left. The figure support line coincides with the annual low of 68.5, which can be updated as early as this week.
Technical indicators signal the presence of a weak corrective buy signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is still in the sell zone, forming ascending bars.
The trading instrument is under pressure from reports of a sharp deterioration in the epidemiological situation in Japan, as a number of prefectures recorded record levels of COVID-19 infection. The day before, the number of detected cases reached 110.670K, which is the absolute daily maximum since the beginning of the pandemic. The main focus of the spread continues to be Tokyo, where the statistics reflected 17.709K cases. As for the economic component, already on Thursday the Bank of Japan will publish its decision on the interest rate, and analysts suggest that the rate will be kept at a negative level of –0.10%, as the country’s financial authorities prefer to fight the unprecedented inflation by buying assets, rather than tightening monetary conditions.
The trading instrument is in the global uptrend, dropping below the annual high of 139. Technical indicators maintain a steady buy signal: the range of EMA fluctuations on the Alligator indicator is still wide, and the histogram of the AO oscillator is forming new multi-directional bars, being high in the purchase area.
Support levels: 136.73, 132.1 | Resistance levels: 139, 142