Capital Trust Markets Daily Market Commentary

[CapitalTrustMarkets]

NZD/USD Eyes 0.8515 Before A Bullish Reversal

The New Zealand Dollar (NZD) fell broadly against the US Dollar (USD) last week and the same trend is expected to continue this week until the pair bottoms near the swing low of the previous wave. The sentiment remains very bullish due to Higher High (HH) and Higher Low (HL) in the recent wave.

Technical Analysis

As of this writing, the NZD/USD is being traded near 0.8625. A hurdle may be noted near 0.8647 that is the 50% fib level ahead of 0.8678, the 38.2% fib level and then 0.8779 which is the swing high of the previous wave. A break above 0.8779 will result in another Higher High, confirming the bullish sentiment about the Kiwi Dollar.

On the downside, the pair is likely to find a support near 0.8577, the 76.4% fib level ahead of 0.8515 that is the swing low of the recent downward wave. A break below 0.8515 will turn the long term sentiment to bearish, opening doors for 0.8352 which is the 161.8% fib level as demonstrated in the above chart.

US Budget Statement

The Financial Management Service is due to release the US monthly budget statement today. According to the median projection of different economists, the account deficit remained $36.9 billion during April as compared to $114.0 billion account surplus in the month before. Generally speaking, the account deficit is considered negative for the economy and vice versa so if the deficit came out to be higher than $36.9 billion, then it will be considered bullish for the NZD/USD and vice versa.

Trade Ideas

Considering the overall technical and fundamental scenario, buying the Kiwi Dollar just before the swing low of the recent downward wave could be a good strategy; a tight stop should be placed at the swing low as described above.

 

[CapitalTrustMarkets]

Technical Updates for May 13, 2014

EURAUD

Technical outlook and chart setups:

1.Unchanged. The EURAUD has produced an engulfing bullish candlestick last week as seen here and rallied towards the 1.49/1.50 handle. The counter trend rally might have completed at the 1.5 handle as seen here. A break below 1.4800/1.4750 will confirm that an intermediary top is in place. Please also note that the 1.51/1.52 handle is past support turned resistance now, and rallies through 1.51 should be taken as opportunity to go short again. The 1.41 handle remains minimum expectations for now.
2. Immediate support is at 1.44, followed by 1.43 and lower, while resistance is at 1.51/1.52 (intermediary), followed by 1.55 and 1.58 respectively.
3.The structure reveals that a counter trend rally could be shaping up (probable finished) at the moment towards 1.51/1.52 handle, which is support turned resistance now. The pair could reverse current levels as well. More conservative approach would be to initiate fresh short positions from higher levels.

Trading recommendations:
Remain 50% short positions now, risk is at 1.5200, and target is open.





Crude

Technical outlook and chart setups:

1. Crude reversed sharply after testing the 105.00 levels earlier as seen here. This could be a larger reversal towards the 96.50 levels as shown. Keeping the larger view in mind, the upside potential remains up to 110.00 levels, till prices stay above 94.00. Now 97.50 remains of interest to go long again and 101.00 levels is immediate trend line resistance.
2. Immediate support is at sub 97.00 and 96.00/50 levels (Fibonacci 0.618 support), followed by 94.00/30 and 92.00, while resistance is at 105.25 (intermediary), and followed by 108.00 and 110.00 respectively.
3. The structure remains in favour of bulls at the moment after bouncing off the 99.00 levels and reveals that they shall remain in control till prices stay above 99.00 levels in the near term and subsequently above 94.00 levels in the medium term. A corrective fall remains possible from current levels towards 96.50, though.

Trading recommendations:
Remain flat; look to buy lower.




Gold

Technical outlook and chart setups:

1. No change. Gold takes out $1,275.00 levels, prints lows at $1,270.00 and reverses sharply last week. The metal has produced a bullish reversal (last week) on the daily chart view here and stands significance. Furthermore it has broken above the intermediary downtrend line and furthermore the $1,310.00 levels, which is extremely encouraging for the bulls. But still the yellow metal need to take out $1,330.00 levels to remain in further control. At the moment, the metal has seen support at $1,280.00 handle and a rally may be a probability. Prices can reach up to $1,365.00 levels.
2.Immediate support is at $1,230.00/40.00, followed by $1,210.00 and lower, while resistance is at $1,330.00, $1,350.00/60.00 region, followed by $1,388.00 respectively.
3. The structure still reveals that Gold rally should extend at least till the $1,350.00 levels if not further. We would watch before entering fresh long positions though. $1,330.00 holds the key for now.

Trading recommendations:
Remain 50% long now, stop below $1,270.00, target is open.





Silver

Technical outlook and chart setups:

1. No change. Silver breaks below $19.00 levels yet again and prints fresh lows last week, but the $18.75 handles remains intact for now. The activity is still encouraging for bulls and further push through $19.90/$20.40 levels would confirm that the rally gathers pace. Furthermore, the metal has produced an engulfing bullish reversal candlestick signal indicating further rally. On the flip side, a reversal and break below $18.90 levels would be extremely bearish.
2.Immediate support remains at $18.75 and sub $18.00, while resistance is at $19.90/$20.40, followed by $21.70/80(intermediary), $22.10(intermediary) and $23.00 respectively.
3. The structure still reveals that bulls shall remain in control till prices remain above $18.75 levels from here on. High probability from current levels is for a rally though.

Trading recommendations:
Initiate 50% long positions now. Stop at $18.00, target is open.




Prepared by Harsh Japee, Technical Analyst at Capital Trust Markets

 

[CapitalTrustMarkets]

Here’s Why Euro’s Downfall Won’t Be Easy

Fundamental Bias: Neutral

Key Takeaways
• ECB’s attempt to push the Euro down was successful, as EURUSD traded below 1.3800.
• EURUSD reacted strongly from the triangle resistance zone before collapsing.
• The pair is now heading towards a critical support zone at around 1.3730-1.3680 levels.

The Euro is approaching a critical support zone where buyers are expected to return, so investors looking to sell the Euro need to be careful moving ahead.

Technical Analysis
There is a monster contracting triangle on the daily timeframe for the EURUSD pair. The recent run towards the all-important 1.40 level failed right around the triangle resistance zone following the ECB’s press conference after the interest rate decision. The pair formed a nice bearish daily candle and moved lower. However, the pair is now approaching a critical support. There are several support levels starting with the 100-day simple moving average and followed by a confluence support area of triangle trend line, trend line connecting lows and 200-day SMA. It is important to note that the 50% fib level of the last move higher from the 1.3478 low to 1.3996 high at 1.3734 is also likely to act as a strong support. So, there are many reasons for the pair to gain traction around the mentioned support zones.

Alternatively, if the buyers fail to defend the support zone, then a break lower might take the pair towards the previous low at 1.3500 in the medium term. A break and close below 1.3660 could be crucial for the pair, as it would be mean that the pair has placed an important top right around 1.40 level.

There is a major risk event scheduled during this week – Euro zone inflation report, which is likely to act as a strong mover for the EURUSD pair. The market and investors are always forward looking, so any surge higher in the inflation rate would suggest that the ECB might stay away from easing in the near future.

Interesting Read - Possible Head And Shoulders Could Take Sterling Lower

 

[CapitalTrustMarkets]

EUR/USD: Bullish Pin Bart Hints At Strong Upside Potential

EUR/USD retraced almost all the losses yesterday after a EuroStat report revealed that the inflation across the Eurozone finally increased in April. The pair closed with a huge bullish pin bar on the daily chart which is considered a strong indication for upside rallies in the near future. The sentiment has however turned to bearish due to Lower Low (LL) on the daily chart.

Technical Analysis

As of this writing, the pair is being traded near 1.3711. A support can be seen around 1.3648, the low of the bullish pin bar ahead of 1.3477, the swing low of the last major move. A break below the 1.3477 support area could incite renewed selling interest, opening doors for a deeper correction towards the old 1.3000-3300 levels.

On the upside, the pair is likely to face a hurdle around 1.3728, the 23.6% fib level ahead of 1.3777, the 38.2% fib level and then 1.3818 that is the 50% fib level as demonstrated in the above chart. The sentiment will remain bearish as far as the 1.3993 resistance area is intact.

Eurozone Inflation

The Consumer Price Index (CPI)—a key indicator for inflation—rose to 0.7% in April as compared to 0.5% in the same month of the year before, broadly in line with the expectations of economists. Similarly, the Core CPI – a more accurate measure for inflation—also rose to 1.0% last month as compared to 0.7% in the same month of 2013, better than the forecast of 0.7% increase.

Trade Ideas

Considering the daily bullish pin bar, buying the pair around the current levels appears to be a good strategy; the stop should be placed at the swing low of the pin bar, the initial target may be around 1.3818.
******
Prepared by Usman Ahmed, Chief Fundamental Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

Technical Updates for May 19, 2014

EURAUD

Technical outlook and chart setups:

1. The EURAUD has printed fresh lows around the 1.4600 levels as seen here. The pair could stage a rally towards 1.4750/1.48 levels from here on before revering. The counter trend rally might have completed at the 1.5 handle as seen here. A break below 1.4800/1.4750 has confirmed that an intermediary top is in place. Please also note that the 1.51/1.52 handle is past support turned resistance now, and rallies through 1.51 should be taken as opportunity to go short again. The 1.41 handle remains minimum expectations for now.
2. Immediate support is at 1.44, followed by 1.43 and lower, while resistance is at 1.51/1.52 (intermediary), followed by 1.55 and 1.58 respectively.
3.The structure reveals that a counter trend rally could be shaping up (probable finished) at the moment towards 1.51/1.52 handle, which is support turned resistance now. The pair could reverse current levels as well. More conservative approach would be to initiate fresh short positions from higher levels.

Trading recommendations:
Remain 50% short positions now, risk is at 1.5200, and target is open.




Crude Oil

Technical outlook and chart setups:

1. Crude reversed sharply after testing the 105.00 levels earlier as seen here. This could be a larger reversal towards the 96.50 levels as shown. Keeping the larger view in mind, the upside potential remains up to 110.00 levels, till prices stay above 94.00. Now 97.50 remains of interest to go long again and 101.00 levels is immediate trend line support.
2. Immediate support is at sub 97.00 and 96.00/50 levels (Fibonacci 0.618 support), followed by 94.00/30 and 92.00, while resistance is at 105.25 (intermediary), and followed by 108.00 and 110.00 respectively.
3. The structure remains in favour of bulls at the moment after bouncing off the 99.00 levels and reveals that they shall remain in control till prices stay above 99.00 levels in the near term and subsequently above 94.00 levels in the medium term. A corrective fall remains possible from current levels towards 96.50, though.

Trading recommendations:
Initiate long positions, stop below 101.00, target is open.




Gold

Technical outlook and chart setups:

1. Gold takes out $1,275.00 levels, prints lows at $1,270.00 and reverses sharply last week. The metal has produced a bullish reversal (last week) on the daily chart view here and stands significance. Furthermore it has broken above the intermediary downtrend line and the $1,310.00 levels, which is extremely encouraging for the bulls. But still the yellow metal need to take out $1,330.00 levels to remain in further control. At the moment, the metal has seen support at $1,280.00 handle and a rally may be a probability. Prices can reach up to $1,365.00 levels. The cone consolidation must break though.
2.Immediate support is at $1,230.00/40.00, followed by $1,210.00 and lower, while resistance is at $1,330.00, $1,350.00/60.00 region, followed by $1,388.00 respectively.
3. The structure still reveals that Gold rally should extend at least till the $1,350.00 levels if not further. We would watch before entering fresh long positions though. $1,330.00 holds the key for now.

Trading recommendations:
Remain 50% long now, stop below $1,270.00, target is open.




Silver

Technical outlook and chart setups:
1. Silver breaks below $19.00 levels yet again and prints fresh lows last week, but the $18.75 handles remains intact for now. The activity is still encouraging for bulls and further push through $19.90/$20.40 levels would confirm that the rally gathers pace. Furthermore, the metal has produced an engulfing bullish reversal candlestick signal indicating further rally. On the flip side, a reversal and break below $18.90 levels would be extremely bearish.
2.Immediate support remains at $18.75 and sub $18.00, while resistance is at $19.90/$20.40, followed by $21.70/80(intermediary), $22.10(intermediary) and $23.00 respectively.
3. The structure still reveals that bulls shall remain in control till prices remain above $18.75 levels from here on. High probability from current levels is for a rally though.

Trading recommendations:
Remain 50% long positions now. Stop at $18.00, target is open.


Interesting Read: Euro Remains In The Drivers' Seat...




Prepared by Technical Analysis Team, Capital Trust Markets.

 

[CapitalTrustMarkets]

Technical Updates for May 20, 2014

EURAUD

Technical outlook and chart setups:

1.Unchanged. The EURAUD has printed fresh lows around the 1.4600 levels as seen here. The pair could stage a rally towards 1.4750/1.48 levels from here on before revering. The earlier counter trend rally might have completed at the 1.5 handle as seen here. A break below 1.4800/1.4750 has confirmed that an intermediary top is in place. Please also note that the 1.51/1.52 handle is past support turned resistance now, and rallies through 1.51 should be taken as opportunity to go short again. The 1.41 handle remains minimum expectations for now.
2. Immediate support is at 1.44, followed by 1.43 and lower, while resistance is at 1.51/1.52 (intermediary), followed by 1.55 and 1.58 respectively.
3.The structure reveals that a counter trend rally could be shaping up (probable finished) at the moment towards 1.51/1.52 handle, which is support turned resistance now. The pair could reverse current levels as well. More conservative approach would be to initiate fresh short positions from higher levels.

Trading recommendations:
Remain 50% short positions now, risk is at 1.5200, and target is open.




Crude

Technical outlook and chart setups:

1.Unchanged. Crude reversed sharply after testing the 105.00 levels earlier as seen here. This could be a larger reversal towards the 96.50 levels as shown. Keeping the larger view in mind, the upside potential remains up to 110.00 levels, till prices stay above 94.00. Now 97.50 remains of interest to go long again and 101.00 levels is immediate trend line support.
2. Immediate support is at sub 97.00 and 96.00/50 levels (Fibonacci 0.618 support), followed by 94.00/30 and 92.00, while resistance is at 105.25 (intermediary), and followed by 108.00 and 110.00 respectively.
3. The structure remains in favour of bulls at the moment after bouncing off the 99.00 levels and reveals that they shall remain in control till prices stay above 99.00 levels in the near term and subsequently above 94.00 levels in the medium term. A corrective fall remains possible from current levels towards 96.50, though.

Trading recommendations:
Exit long positions now. Look to buy lower.





Gold

Technical outlook and chart setups:

1. No change. Gold takes out $1,275.00 levels, prints lows at $1,270.00 and reverses sharply last week. The metal has produced a bullish reversal (last week) on the daily chart view here and stands significance. Furthermore it has broken above the intermediary downtrend line and the $1,310.00 levels, which is extremely encouraging for the bulls. But still the yellow metal need to take out $1,330.00 levels to remain in further control. At the moment, the metal has seen support at $1,280.00 handle and a rally may be a probability. Prices can reach up to $1,365.00 levels. The cone consolidation must break though.
2.Immediate support is at $1,230.00/40.00, followed by $1,210.00 and lower, while resistance is at $1,330.00, $1,350.00/60.00 region, followed by $1,388.00 respectively.
3. The structure still reveals that Gold rally should extend at least till the $1,350.00 levels if not further. We would watch before entering fresh long positions though. $1,330.00 holds the key for now.

Trading recommendations:
Exit long positions. Remain flat for now.





Silver

Technical outlook and chart setups:

1. No change. Silver breaks below $19.00 levels yet again and prints fresh lows recently, but the $18.75 handles remains intact for now. The activity is still encouraging for bulls and further push through $19.90/$20.40 levels would confirm that the rally gathers pace. Furthermore, the metal has produced an engulfing bullish reversal candlestick signal indicating further rally. On the flip side, a reversal and break below $18.90 levels would be extremely bearish.
2.Immediate support remains at $18.75 and sub $18.00, while resistance is at $19.90/$20.40, followed by $21.70/80(intermediary), $22.10(intermediary) and $23.00 respectively.
3. The structure still reveals that bulls shall remain in control till prices remain above $18.75 levels from here on. High probability from current levels is for a rally though.

Trading recommendations:
Exit long positions. Remain flat for now.



Interesting Read: Silver To Continue Trading In A Range..

 

[CapitalTrustMarkets]

EUR/USD Falls Ahead of Germany’s GDP Report

Market Sentiment: Bearish

Key Takeaways:
• EUR/USD eyes deeper correction ahead of key data
• Inside bar breakout to provide short term direction
• 1.3477 and 1.3992 are two key levels in the long run

The Euro (EUR) extended downside movement against the US Dollar (USD) on Friday, dragging the EUR/USD to less than 1.3650 ahead of some major economic releases. The sentiment remains bearish due to Lower Low (LL) on the daily chart.

Technical Analysis

As of this writing, the pair is being traded near 1.3645. A support may be seen around 1.3634, the low of the bullish pin bar which emerged on Wednesday ahead of 1.3477 which is the swing low of the previous correction wave as demonstrated in the following chart. A break below the 1.3477 support area could spur renewed selling pressure, opening doors for a deeper correction.

On the upside, the pair is likely to face a hurdle around 1.3729, the 23.6% fib level ahead of 1.3779 that is the 38.2% fib level and then 1.3910, the 76.4% fib level. The bias will remain bearish as far as the 1.3992 resistance area is intact.

Germany Growth

Today the Statistics Department of Germany will release the Gross Domestic Product (GDP) report for the first quarter. According to the median projection of various economists, the economy grew at 2.3% during the first four months of the ongoing year as compared to just 1.3% growth in the same duration of the year before. Similarly, Germany managed to grow at 0.8% in the first quarter compared with 0.4% in the quarter before, the forecast added; better than expected actual outcomes will be seen as bullish for EUR/USD and vice versa.

Trade Ideas

If the Germany’s GDP data comes better than expectations, then buying on a bullish inside bar breakout could be a good strategy, the stop should be placed at the swing low of the Wednesday’s bullish pin bar.

 

[CapitalTrustMarkets]

AUD/USD Survives Key Support Area As Buyers Emerge

Market Sentiment: Bullish

Key Takeaways

• Bullish inside bar breakout hints at strong buying interest
• The pair holds off key support area
• A break below 0.9202 will validate the double top pattern

The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Tuesday, increasing the price of AUD/USD to more than 0.9250. The pair survived the key support area and printed Higher Low (HL) on the daily chart, confirming the bullish sentiment in the long run.

Technical Analysis

As of this writing, the pair is being traded near 0.9255. A hurdle may be noted around 0.9277, the 23.6% fib level ahead of 0.9409, the swing high of the last upside rally. A break above the 0.9409-61 resistance area will invalidate the double top pattern which emerged on the daily chart this month.

On the downside, the pair is expected to find a support near 0.9202, the swing low of the previous wave as demonstrated in the above chart. A break below the 0.9202 support area—the neckline of the double top patter—will confirm the validity of the price pattern, exposing a deeper correction below the 0.9000 handle.

Fed Manufacturing Index

The Federal Reserve of Richmond is due to release the Fed Manufacturing Index on Tuesday. According to the average forecast of various economists, the manufacturing activity declined to 5 points in May as compared to 7 points in the month before, better than expected actual outcome will be seen as bearish for AUD/USD and vice versa

Trade Ideas

Buying the pair near the swing low of the recent downward move appears to be a good strategy, a tight stop should be placed just below the 0.9202 support area. Not to mention, always use proper risk/reward ratio to optimize your profits.

 

[CapitalTrustMarkets]

USD/JPY Plunges As Falling Wedge Formation Remains Intact

Market Sentiment: Bearish

Key Takeaways
• USD/JPY falls as the daily wedge holds off
• Japan’s unemployment rate meets expectations
• A breakout through the wedge will provide long term direction

The US Dollar (USD) extended downside movement against the Japanese Yen (JPY), dragging the USD/JPY to less than 101.70 on Friday following the release of some key economic reports. The sentiment remains bearish due to Lower Low and Lower High in the recent waves. A breakout through the daily wedge will provide a clear direction to the pair.

Technical Analysis

As of this writing, the pair is being traded near 101.67. A hurdle may be seen around 102.00, the trendline resistance as well as psychological number as demonstrated in the following chart. A break and daily closing above the trendline resistance will push the pair into bullish territory, validating a rally above the 103.40 resistance area.

On the downside, the pair is likely to find a support near 101.42, the intraday low of yesterday ahead of 100.82, the swing low of the recent wave and then 100.71 which is the trendline support. A daily closing below the trendline could spur a deeper correction below the 100.00 handle.

Japan Unemployment

The rate on unemployment in Japan remained 3.6% in April as compared to the same rate in the month before, meeting the average forecast of different analysts, a report by the Ministry of Internal Affairs & Communications revealed today. Generally speaking, higher unemployment rate is seen as negative for the economy, thus the local currency tends to weaken if the unemployment rises.

Trade Ideas

Considering the overall technical and fundamental analysis, selling the pair around the trendline resistance can be a good strategy in the short term, the target may be near 101.80.

Also Read: EUR/JPY Outlook By Alex Zekany

 

[CapitalTrustMarkets]

AUD/USD Shuns Trade Balance News; Eyes 0.9113

Market Sentiment: Bearish

Key Takeaways:

AUD/USD breaks key trendline resistance
Australia’s trade deficit misses expectations
0.9113 remains crucial resistance

The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Thursday, increasing the price of AUD/USD to more than 0.8800 following the release of trade balance news. The pair although broke a major trendline resistance however the long term bias remains bearish due to Lower Low in the recent wave.

Technical Analysis

As of this writing, the pair is being traded near 0.8804. A hurdle can be seen around the current levels, the 55-Day Simple Moving Average (SMA) at four-hour timeframe ahead of 0.8834, the 38.2% fib level and then 0.8888, the 50% fib level as demonstrated in the following chart.

On the downside, the pair is likely to find a support near 0.8770, the 23.6% fib level ahead of 0.8700, the trendline support and then 0.8663, the swing low of the recent downside wave. The bias will remain bearish as far as the 0.9113 resistance area is intact.

Australia’s Trade Balance

The trade deficit of Australia remains 787 million in August as compared to 1075 million deficit in the month before, down beating the average forecast of 700 million. Generally speaking, higher trade deficit is considered negative for the Australian economy however the pair completely overlooked the downbeat data and continued upside rallies after the bullish breakout.

Trade Ideas

Considering the overall technical and fundamental outlook, buying the pair around the trendline resistance turned support appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing below the trendline support.

Another Interesting Read: EURAUD – Euro Poised For Continued Weakness Ahead Of ECB

 

[CapitalTrustMarkets]

Market Sentiment: Bearish

Key Takeaways:

• AUD/USD extends upside rallies
• Eyes 0.9000 in the medium term
• Unemployment rate exceeds expectations

The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Thursday, increasing the price of AUD/USD to more than 0.8870 following the release of some key economic events. The long term bias however remains bearish due to Lower Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 0.8870. A support can be noted around 0.8821, the 23.6% fib level ahead of 0.8641, the swing low of the recent dip as demonstrated in the following chart. A break and daily closing below the 0.8641 support area could spur renewed selling pressure, validating a move below the 0.8600 handle.

On the upside, the pair is likely to face a hurdle near 0.8932, the 38.2% fib level ahead of 0.9021, the 50% fib level and then 0.9111, the 61.8% fib level. The long term bias will remain bearish as far as the 0.9400 handle is intact.

Employment News

The number of employed people in Australia reduced by 29,700 in September as compared to the 32,100 increase in the month before, down beating the median projection of the 20,000 increase, a government report revealed today. Similarly, the rate of unemployment remained 6.1% in September as compared to 6.0% in the month before, up beating the average forecast of 6.2%, the report added. Generally speaking, low unemployment rate is considered positive for the economy thus a better than expected actual outcome spurred bullish momentum in the price of Aussie Dollar.

Trade Ideas

Keeping in view the overall technical and fundamental analysis, buying the pair around the current levels or buying on dips could be good strategies, a tight stop should however be placed at 0.8641, the swing low of the recent wave.

Another Interesting Read: Cable's Outlook

 

[CapitalTrustMarkets]

Market Sentiment: Bullish

Key Takeaways

• EURUSD resumes downside move
• ECB hints at Quantitative Easing
• Four-Hour trendline acts as key resistance level

The Euro (EUR) gave up gains against the US Dollar (USD) on Friday, dragging the price of EUR/USD to less than 1.2700 following the remarks by the European Central Bank (ECB) Chief Mario Draghi. The bias has turned bullish due to Higher High in the recent upside rally on the four-hour timeframe.

Technical Analysis

As of this writing, the pair is being traded around 1.2700. A hurdle can be noted near 1.2720, the confluence of 23.6% fib level and 100-Day Simple Moving Average (SMA) ahead of 1.2750, the trendline support turned resistance as demonstrated in the following chart.

On the downside, the pair is likely to find a support around 1.2680, the 38.2% fib level ahead of 1.2643, the confluence of 50% fib level and 55-Day SMA. The bias will remain bullish as far as the 1.2500 handle is intact.

Draghi’s Speech

The ECB head Mario Draghi yesterday expressed concerns over the low inflation across the Eurozone but vowed to take unconventional measures to save the economy from deflation. The speech was an open indication that the Central Bank is mulling over huge asset purchase program, commonly known as Quantitative Easing (QE) which could kick off a major bearish run over the next few weeks, threatening the 1.2000 milestone.

Trade Ideas

Considering the overall technical and fundamental outlook, selling the pair around the trendline resistance appears to be a good strategy in short to medium term, the trade should however be stopped out on a four hour closing above the trendline.

Another Interesting Read: British Pound Primed For Lift-Off

 

[CapitalTrustMarkets]

Market Sentiment: Bearish

Key Takeaways:

GBPAUD threatens the descending triangle formation
Britain’s inflation misses expectations by a long shot
Bearish breakout could provide a good short opportunity

The Great Britain Pound (GBP) extended downside movement against the Australian Dollar (AUD) on Tuesday, dragging the price of GBP/AUD to less than 1.8270 following the release of downbeat CPI figure. The short term bias remains bearish due to Lower High in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded around 1.8265. A hurdle can be noted near 1.8291, the confluence of 76.4% fib level & trendline resistance as highlighted in the following four-hour chart. A break and 4-hour closing above the descending triangle could halt the ongoing bearish pressure.

On the downside, the pair is expected to find a major support near the 1.8200 handle which is the confluence of trendline support, swing low of the recent dip as well as psychological level. A break below the 1.8200 support area would confirm the bearish bias, spurring renewed selling pressure in medium to long term.

Britain’s Inflation

The Consumer Price Index (CPI) –a key yardstick for inflation—remained just 1.5% in the United Kingdom last month as compared to 1.9% in the month before, missing the median projection of 1.8% by a long shot. Generally speaking, higher CPI figure is considered positive for the economy thus a worse than expected actual outcome spurred selling pressure in the price of GBP/AUD.

Trade Ideas

Considering the overall technical and fundamental outlook, selling the pair around the upper trendline resistance appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the trendline resistance area.

Another Interesting Read: Euro's Fundamental Outlook

 

[CapitalTrustMarkets]

Market Sentiment: Bearish

Key Takeaways:

GBPUSD falls following the BoE Monetary Policy
US Inflation exceeds expectations
Cables tests key support area

The Great Britain Pound (GBP) fell against the US Dollar (USD) on Wednesday, dragging the price of cable to less than 1.6075 following the Bank of England (BoE) monetary policy announcement. The bias remains bearish due to Lower Low (LL) in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded around 1.6051. A hurdle can be noted near 1.6071, the 55-Day Simple Moving Average (SMA) ahead of 1.6093, the 100-Day SMA and then 1.6123, the 38.2% fib level.

On the downside, the pair is likely to find a support around 1.6050, the horizontal support area ahead of 1.6010, the channel support and then 1.6000, the psychological number. A break and daily closing below the trendline support area could incite a deeper correction towards the 1.5700 support area.

BoE Monetary Policy

The Bank of England kept the benchmark interest rate steady at 0.50% on Wednesday amid fragile growth and inflation outlook. The price of cable slid down following the BoE monetary policy announcement.

US Inflation

Inflation in the US remained 1.7% during September as compared to the same rate of inflation in the same month of the year before, more than the average forecast of 1.6%, a report by the US Bureau of Labor Statistics revealed. The data accelerated the downside movement in cable during the New York session.

Trade Ideas

Keeping in view the overall technical and fundamental outlook, buying the pair around the current levels appears to be a good strategy in short to medium term as the key support area holds off.

Another Interesting Read: AUDNZD Looks Set For 1.1091 As Key Support Holds Off

 

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USDJPY Faces Tough Resistance As Key Trendline Weighs

Market Sentiment: Bullish

Key Takeaways:

USDJPY plunges as key trendline resistance weighs
US Services PMI report is due today
Rejection near the trendline resistance eyed

The US Dollar (USD) fell against the Japanese Yen (JPY) on Monday, dragging the price of USDJPY to less than 107.90 ahead of some key economic releases which are due later in the US session. The long term bias remains bullish due to Higher High on the daily chart.

Technical Analysis

As of this writing, the pair is being traded near 107.89. A hurdle can be seen around 107.90-108.10, the trendline resistance, psychological number as well as 61.8% fib level as demonstrated in the following chart. A break and daily closing above the trendline resistance would spur a renewed buying interest, validating a new rally towards the 110.00 handle.

On the downside, the pair is expected to find a support around 107.60, the 50% fib level ahead of 107.00, the 38.2% fib level and psychological number. The bias will remain bullish unless the pair pulls back from the current levels, leaving a Lower High on the daily chart.

US Markit Services PMI

The services sector of the US grew by 58.0 points in October as compared to 58.9 points in the month before, the median projection of different economists say. Generally speaking, higher Services PMI is considered positive for the USDJPY and vice versa.

Trade Idea

Keeping in view the overall technical and fundamental outlook, selling the pair near the trendline resistance area could be a good option in short to medium term if we see a clear rejection in the form of bearish pin bar, shooting star or bearish engulfing candle.

Prepared by Usman Ahmed, Chief Currency Strategist at Capital Trust Markets

Another Interesting Read: Gold Eyes Trendline Resistance, Triple Bottom Neckline In Long Run

 

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Market Sentiment: Bullish

Key Takeaways:

USDCAD faces resistance near key trendline
1.1384 remains key resistance area
US Consumer Confidence report is due today

The US Dollar (USD) inched higher against the Canadian counterpart on Tuesday, increasing the price of USDCAD to more than 1.1240 before the release of some major economic reports. The pair is facing tough hurdle near the key trendline support turned resistance.

Technical Analysis

As of this writing, the pair is being traded around 1.1241. A hurdle can be noted near 1.1248, the trendline resistance as demonstrated in the following chart. A break and daily closing above the trendline could spur a renewed buying wave, validating a rally towards the 1.1400 milestone.

On the downside, the pair is expected to find a support around 1.1200, the psychological number as well as 23.6% fib level ahead of 1.1091, the 38.2% fib level and major horizontal support area. The bias will remain bullish as far as the 1.1070 support area is intact.

US Consumer Confidence

The consumer confidence in the US remained 87 points during October as compared to 86 points in the month before, the median projection of different economists say. The Consumer Board will announce the actual outcome today. Generally speaking, higher consumer confidence reading is considered positive for the economy thus a better than expected actual outcome will be seen as bullish for USDCAD and vice versa.

Trade Idea

Keeping in view the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the 1.1384 resistance area.

Another Interesting Read: EURJPY Slow and Steady Uptrend

 

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Gold Continuous Record Breaking Spree As $1150 Looks In Jeopardy

Market Sentiment: Bearish

Key Takeaways:

Gold plunges broadly on US Monetary Policy Outlook
$1150 looks in jeopardy
Investors wait for nonfarm payrolls

Gold extended the record-breaking losing streak on Wednesday, with another plunge below the $1150 handle, dragging the price to less than even $1145 during the London session. The sentiment remains bearish due to Lower Low on all the timeframes. Investors look cautious ahead of the Friday’s nonfarm payrolls release.

Technical Analysis

As of this writing, the precious metal is being traded near $1144 an ounce. A support can be noted around $1100, the psychological level ahead of $1044, a major swing level as demonstrated in the following chart.

On the upside, the yellow metal is expected to face a hurdle near $1156, the 61.8% fib level ahead of $1183, the 100 Simple Moving Average (SMA) on the monthly chart. The bias remains bearish as long as the $1255 resistance area is intact.

Nonfarm Payrolls

The US labor department will release the nonfarm payrolls report on Friday. According to the average forecast of different economists, the US economy added 231K jobs in October as compared to 248K in the month before. Generally speaking, higher nonfarm payrolls are considered positive for the economy thus a worse than expected actual outcome will be seen as bullish for the yellow metal and vice versa.

Trade Idea

Keeping in view the overall technical and fundamental outlook, buying the precious metal appears to be a good strategy in short to medium term if the price leaves a bullish pin bar or bullish engulfing pattern on the daily chart.

Another Interesting ReadGBPAUD Looks Vulnerable As Key Resistance Holds Off

 

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The Euro (EUR) extended downside movement against the Australian Dollar (AUD) on Friday, dragging the price of EURAUD to less than 1.4460 after the emergence of bearish pin bar on the daily chart yesterday. The bias remains bearish due to Lower High on the daily chart.

Technical Analysis

As of this writing, the pair is being traded around 1.4454. A hurdle can be noted near 1.4462, the 50% fib level ahead of 1.4519, the 61.8% fib level and then 1.4590 which is a confluence of horizontal resistance, high of the yesterday’s pin bar as well as 76.4% fib level as demonstrated in the following chart.

On the downside, the pair is expected to find a support around 1.4450, the 200 Simple Moving Average (SMA) on the four-hour timeframe ahead of 1.4405, the 38.2% fib level and then 1.4315 that is a major horizontal support area. The bias will remain bearish as long as the 1.4590 resistance area is intact.

RBA Statement

The Reserve Bank of Australia (RBA) today once again expressed concerns over the strength of the Aussie Dollar saying that despite the recent decline in the exchange rate, the currency remains well above the fundamental levels particularly when compared with the falling commodity prices. The RBA comments may incite short term bullish momentum in the price of EURAUD which could consequently offer a nice short opportunity as per the above technical analysis.

Trade Idea

Selling the EURAUD currency pair near the 1.4520 resistance area could be a good strategy in short to medium term. The target can be around 1.4315 while a tight stop should be placed at 1.4592.

Another Interesting Read: Crude Oil Remains Vulnerable Ahead of the US Employment News

Prepared by Usman Ahmed, Chief Fundamental Analyst at Capital Trust Markets

 

[CapitalTrustMarkets]

USDCAD Eyes 1.1465 As Downward Slope Channel In Jeoperdy

Market Sentiment: Bullish

Key Takeaways:

1. USDCAD eyes 1.1465
2. Downward slope channel looks in jeopardy
3. FOMC minutes incite bullish momentum in dollar

The US Dollar (USD) extended upside movement against the Canadian Counterpart on Thursday, increasing the price of USDCAD to more than 1.1340 following the release of FOMC minutes. The pair is being traded within a downward slope channel, consistently keeping the price under selling pressure.
Technical Analysis
As of this writing, the pair is being traded around 1.1344. A hurdle can be seen near 1.1356, the trendline resistance ahead of 1.1381, the 23.6% fib level and then 1.1465, the swing high of the recent upside rally as demonstrated in the following chart.

On the downside, the pair is expected to find a support around 1.1328, the 38.2% fib level ahead of 1.1286, the 50% fib level and then 1.1244, the 61.8% fib level. The sentiment will however remain bullish as long as the 1.1121 support area is intact.
Fundamental Outlook
The Federal Reserve yesterday released the minutes from the recent FOMC meeting. Investors sold dollars immediately following the minutes’ release, initially viewing the language as somewhat dovish. Soon, though, long-term investors moved in and bought dollars on the dip in price. The Fed has ended its bond-purchasing program, which weighed on the dollar, and is pondering when to raise interest rates from near zero for the first time since the financial crisis. Higher US rates would increase the dollar’s attractiveness, as they would boost returns on assets denominated in the currency.
The minutes confirmed the market’s view that the Fed would raise rates in mid- to late-2015.
Trade Idea
Considering the overall technical and fundamental outlook, buying or selling the pair on a breakout through the downward slope channel appears to be a good strategy in short to medium term.

Another Interesting Read: Euro Likely To Grind Higher Versus Canadian Dollar