Daily Technical Analysis by Admiral Markets

[Admiral Markets Group]

PRE NFP Analysis: USD/JPY Might Drop Further on Bad NFP Report

As Japanese manufacturing numbers continue to improve, the core backbone of the Japanese export economy, is seen as good for the JPY. However, as Equities have been quite bullish since Trump's win, this has lead to risk-on and JPY weakness. Nonetheless, the USD Index has peaked a few days ago, and has seen weakness since FOMC minutes were released indicated a go slow on rate hikes.

[URL deleted] The NFP with Average Hourly Earnings and Unemployment Rate is the event of the week and should provide high volatility to this pair. The ADP was worse than expected so we might see worse NFP numbers. The pair is in downtrend on intra day time frame, within a bearish channel. However, the NFP report can provide either a continuation or reversal depending on results so I'd advise you to use VPS to minimize risks. POC zone is 116.40-55 (ATR, H4, trend line, EMA89, channel top). If the report comes better than expected (also watch for Average Hourly Earnings and Unemployment rate) we might see a spike towards the zone and price might extend to 117.55 on a strong momentum. But if we see worse than expected numbers, than target might be 114.75. 114.75 is a strong support so there might be some bounce and profit taking.

 

[Admiral Markets Group]

USD/CAD Leaned Inverted Head and Shoulders for Bullish Continuation

Despite the excellent data for CAD currency, the USD economy also showed good numbers on Friday. While unemployment is still at 4.7% and wages are going up, we might assume that the economy is very strong and that may lead to another rate hike. I personally believe the US Fed will continue to gradually raise rates in the US leading to gradual USD strength in the medium term.

Technically the USD/CAD is showing bullish SHS pattern (inverted head and shoulders) and is supported at 1.3230. 4h close or strong 1h momentum above 1.3270 could spike the pair up to 1.3312 (ATR target) and 1.3330 (H5), USD/CAD bullish outlook is also supported by bullish divergence, so we could see buying into dips towards 1.3312-30 targets.

 

[Admiral Markets Group]

AUD/NZD V Shaped Reversal Turning Into Ascending Scallop

With a giant inverted head and shoulders pattern on the AN pair on Daily/Weekly TF, this bullish move is strengthened by fundamental analysis too. Given President Elect Trump has plans to rebuild the USA, this had lead to bullish moves on base metals and this is good for the AUD. The NZ economy has been quite strong of late, but rate cuts have not been ruled out for the mainly Agri-economy, and this is largely contingent on Dairy prices.

As we could have seen on our Session Recap webinar yesterday, the price behaved exactly as planned, rejecting from 1.0460. Technically, we can spot a V shaped reversal pattern that is turning into ascending scallop, opening the door for more gains. 4h close above 1.0517 is needed and above 1.0530 preferred for next target 1.0570. Substantial momentum above 1.0570 will target 1.0640. Have in mind that ATR on AUD/NZD is not very high and it might take some time for the price to reach the target. POC is 1.0485-1.0500 (ATR pivot, X cross ™, bullish order block) and we might see rejections should price reach the POC zone.

 

[Admiral Markets Group]

EUR/USD is Bearish Below 1.0680

The EUR/USD has spiked to 1.0660 zone today and as I showed on previous Session Recap webinar, it was clear to me that it should reject from the zone. The situation is clear now too. We have a huge bearish divergence within 1.0650-75 zone (Bearish order block, ATR top, H4). This is a major resistance. Unless we see a momentum break of 1.0680 towards 1.0750, the EUR/USD should remain bearish. POC zone should hold for bears and if 1.0680 breaks, bulls could have a breakout towards 1.0720 and 1.0750 as it will possible be a stop grabber in play. targets are 1.0600 and 1.0560-30 zone. Below 1.0530 target will be 1.0490.

 

[Admiral Markets Group]

EUR/USD Bullish POC zone above 1.0560

The EUR/USD has turned bearish around 1.0660 where it was sold heavily as expected. The pair is currently ranging but as long as interim key support at 1.0500 is intact it might spike again. This time bulls might have a control as we see a confluence at 1.0560-80 (ABCD, L5, ATR, Order block). The spike above the POC might retest 1.0620 and 1.0685 subsequently. Additionally, we might see bears again around 1.0685 as we can easily see historical sellers there. Break of 1.0500 will put EUR/USD bears in stronger control. I personally don't believe in any sustained rally in this pair so if you take long positions, it is advised to scale out and place protective profit stops once you are in the profit.

 

[Admiral Markets Group]

GBP/USD Spiked after May Confirmed her Brexit Plan

The GBP/USD behaved as planned just before the May's press conference had started. Just before the conference it followed our Session Recap analysis and dropped for 65 pips originally. However the weakness in the GBP hasn't been sustained due to "sell the rumour, buy the fact" scenario. The vote on Brexit plans will be taken in both houses of parliament and there might be elections meanwhile.

Technically the GBP is still bearish. Levels and zones to watch for are pretty much shown on the chart. 1.2345 H4 resistance stands as interim resistance and we might see some short term rejections in the market close to that level. The POC zone 1.2380-2400 (78.6, Bearish order block) could reject the price as the ATR has already been overshot by huge extent. Traders need to pay attention on 4h close below 1.2250 for further bearish continuation towards 1.2185 and 1.2100. Another cue is also to look for MACD divergence at the top, that will be another confirmation for short trades, providing that bears want to see momentum fade. Due to recent developments in the GBP and UK, using profit stops is strongly advised should price reach the POC zone and reject from it.

 

[Admiral Markets Group]

USD/JPY Bullish Wolfe Wave Confluence with ATR

The USD/JPY is recovering from a recent drop and we can see a bullish structure forming on intraday time frame. The structure is a bullish Wolfe Wave where point 4 is between point 1 and 2 and that accounts for a strict bullish Wolfe Wave. Breakout of 113.45 could be a sign for bullish wave towards 113.70 and 114.00. EPA (Estimated Price at Arrival) or final TP per Wolfe Wave rules is the intersecting 1-4 line which points to 115.30 level. If the breakout is confirmed we might see development to EPA over next few days. 114.00 is ATR projection for intraday targets.

 

[Admiral Markets Group]

GBP/USD POC Zone is 1.2250-75

The spike that was caused after Theresa May's conference was successfully faded as we predicted in the previous GBP/USD coverage. However it has been clear that 1.2250 is very important support and that it needs to break for further bearish continuation. However if GBP/USD keeps above 1.2250-75 (Bullish order block, H3 weekly camarilla, 50.0 fib, EMA89) we might see an extension towards 1.2412 and 1.2480. 1.2300 is support now and the break of support might retest the POC zone. However if 1.2250 breaks to the downside we might see 1.2200 followed by 1.2150.

Currently the pair is showing an emerging Ascending Scallop pattern around 1.2300 level which further established 1.2300 as interim support.

 

[Admiral Markets Group]

EUR/USD Long Bearish Wolfe Wave Confirmed

The EUR/USD is slowly moving, waiting for investor action on Trump's speech and inauguration. Due to potential volatility later today we might see investors moving to protect their money. On the EUR/USD intraday chart we see a strict bearish Wolfe Wave with clearly defined 1-3 wave. In Wolfe Wave analysis the wave length is not fixed. This is a January wave and the breakout trigger could happen during the Trump's speech itself. Breakout is triggered at 1.0590 and the target is 1.0536 with the scope towards 1.0460 but only if bearish momentum is too high.

If we see a bullish EUR/USD it will still keep the wave intact. Due to profit taking today, the movement could be two directional so be careful.

 

[Admiral Markets Group]

EUR/USD Looks Stronger After Trump's Speech

The EUR/USD failure to break below the bearish Wolfe Wave that was indicated on Friday was caused by Trump's protectionist speech that weakened the USD. He also failed to provide any strong cues regarding infrastructure spending. Technically that failure to go below 1.0590 was the clear indication that the sentiment has changed in now moment. 1.0720 is now a support zone with a bullish order block confirming it. Watch the reaction off 1.0720 zone although it is a shallow retracement (H3,23.6). The stronger POC zone is 1.0675-90 (L3,61.8, bullish SHS trend line, L3,ATR pivot). Inverted Head and Shoulders (Bullish SHS) additionally supports the bullish outlook for the pair. Target is 1.0760 and sustained momentum and/or 4h close above 1.0760 targets 1.0790 and 1.0820.

 

[Admiral Markets Group]

GBP/JPY Inverted Triangle Upside Broken

Global equities rally that extended in Asia session weakened the Yen and it fell vs its main counterparts USD and GBP. Both USD/GBP/JPY are heavily connected to Equity markets and when Equities are going up both USD/JPY and GBP/JPY are going up too. The pair has formed an Inverted Triangle (ConTriangle) and subsequently broke its top so we might see a retest-continuation.

The POC (DPP, L3. ConTriangle top, 50.0, ATR PP) comes within the 141.85-142.00 zone. If the momentum persists and we don't see any retracement, then traders should pay attention to a possible continuation above 142.95 towards 143.40 (breakout level) and 143.60 projected high. Overshot above 143.60 targets 144.20. For intact bullish scenario the pair should hold above 141.50.

 

[Admiral Markets Group]

USD/CAD Rooftop Pattern with Two POC Zones

The USD/CAD dropped in Asia session and it mainly trades lower during Europe and early US Session. The rooftop pattern that has been formed at the top of weekly trading range might be a sign of a bearish continuation. The first POC 1.3125-1.3152 (38.2, H4, ATR pivot, order block, trend line) might spike the price down to 1.3090, 1.3040 and 1.3010. Breakout trade might happen at the break of 1.3010 where the target is 1.2970. However if the pair proceeds higher than 1.3152 pay attention to POC2 1.3180-1.3210 (61.8, ATR top, H5, rooftop support). Targets for PC2 rejection are 1.3150 and 1.3090. The POC zone is wider due to ATR of 122 pips, marking this pair as volatile. At this point POC1 might reject the price so pay attention.

 

[Admiral Markets Group]

The POC zone is wider due to higher ATR

The GBP/USD is currently undergoing a technical retracement and we can see the POC zone lurking below L3 camarilla weekly pivot. In the case of further intra day retracement traders should pay attention to POC zone 1.2440-1.2465 (61.8, L3, ATR low, inner trend line, bullish order block). The POC zone is wider due to higher ATR. Rejections might target 1.2520 and 1.2600. A strong 1h momentum or 4h close above 1.2600 should target 1.2710 resistance. Have in mind that this bullish scenario persists as long as 1.2375 holds its ground.

 

[Admiral Markets Group]

EUR/CAD Bearish ABCD and Trendline Confluence

The EUR/CAD is currently in a zig-zag downtrend. We can see a distinct trend line that makes a confluence with H3, ATR pivot and ABCD bearish pattern. ABCD is valid and confirmation of short continuation comes with 1.4025 break. Additionally, the POC zone is 1.4060-80 so watch for possible rejections off the zone too. Targets are 1.4000 and 1.3945. Only the break of 1.3940 will extend the target towards 1.3900 zone. Invalidation of this bearish scenario comes if 1.4110 is reached.

 

[Admiral Markets Group]

AUD/NZD Bounces Off Support

The AUD/NZD bounced off support as expected, driven by worse than expected Unemployment Rate (5.2 % vs 4.8 %) while AUD Commodity Prices showed an increase by 10.9%. Technically POC comes within 1.0355-1.0370 (DPP, L3, 61.8, ABCD hist). The up move is supported by historical ABCD pattern at L3 support so on the next retest of POC zone we might see another bounce towards 1.0430 region. If we don’t see a retracement to POC then a strong h1 momentum or 4h close above 1.0435 might push the price to 1.0470.

 

[Admiral Markets Group]

PRE NFP Report: EUR/USD has Almost Completed ABCD Pattern

The single most important event today is [URL deleted ]NFP with Average Hourly Earnings and Unemployment rate. The data that comes out will determine next movement of the EUR/USD pair. Currently the EUR/USD has almost completed the bearish ABCD pattern which still can retrace within the POC zone. POC zone 1.0680-1.0695 (ATR low, EMA 89, L3, DPP, Trend line) should either reject or break, depending on the US data today. If it rejects next targets are 1.0760 and 1.0810 followed by 1.0870. If the EUR/USD breaks below the POC zone - 1.0780 traders should watch for 1.0760 and 1.0630 followed by 1.0580. US data will be very volatile today so I suggest using a [URL deleted] VPS protection tool.

 

[Admiral Markets Group]

USD/CAD Bullish but Watch for Possible Bearish SHS Pattern

The USD/CAD spiked above the inner trend line with a strong marubozu candle making the POC zone strong enough on a possible retest. 1.3110-30 (H4, trend line, EMA89, ATR pivot) hasn't been re-tested yet on 4h time frame and subsequent retest could spike the price even more higher, towards 1.3220 and 1.3290. 1.3220 is strong resistance and only 4h close above, might spike the price towards 1.3290 otherwise it might give us short term bearish opportunities. If that happens, the USD/CAD will form bearish SHS pattern (head and shoulders) and we could see a rejection towards 1.3130 zone again. The pair is bullish until 1.2960 breaks to the downside. If that happens 1.2900 and 1.2800 will be exposed. The USD/CAD analysis is valid till the rest of the week. so traders should focus now on either POC rejection or a counter trade opportunities.

 

[Admiral Markets Group]

GBP/USD Master Candle Marks Trend Continuation

As I showed on Session Recap webinar, the GBP/USD has been in a steady uptrend that was almost interrupted by a stop grabber candle that was initiated after bad GBP/USD data yesterday. At this time we can see a Master Candle (MC) formed and a breakout above 1.2518 should spike the price towards 1.2560 and eventually 1.2600 zone. If a MC breaks lower below 1.2474 then it should retrace to POC zone 1.2435-50 where we might see a bounce towards 1.2515 and above. At this point the GBP/USD is still bullish and watch for a possible trend continuation.

 

[Admiral Markets Group]

EUR/JPY Trapped in a Consolidation Pattern

The EUR/JPY has been consolidating close to POC zone with M emerging pattern shaping up. The POC 121.15-30 (trend line, ATR pivot, 78.6, order block) is also very close to H4 camarilla resistance and rejections from the zone could confirm M pattern. Rejections from POC targets 120.75 and a break of 120.70 targets 120.54, 120.15 and 119.90. If the price spikes above 121.30 we might see 121.65 that is the top of ATR projection. As long as the EUR/JPY is capped below 121.65, chance for a bearish continuations are good.

 

[Admiral Markets Group]

CAD/JPY Downtrend Progressing Towards L4

As this week is a bit light with fundamental data and we have US holiday today, it is time to shift our attention towards crosses that are trending and have the scope to move during late New York/Tokyo session later. The CAD/JPY shows a bearish zigzag that might be targeting L3 and L4 camarilla levels. At this point the price is below historical low of a previous Master Candle and as long as it stays below it, continuation towards L3/L4 could happen without a retracement to POC. however a break above previous master candle low might trigger a retracement towards POC 86.60-75 (H4, ATR Pivot, 88.6, inner trend line). Rejection and continuation should target 85.90 and 85.65.