Navigation FX - Technical & Fundamental Analysis

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Hi Everyone!

New to the forum, very excited to start here. Looking to post much material including fundamental and technical analysis on the EarnForex forum. Currently this thread is on technical analysis.

We are a team of experts who work together.

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Looking forward to interacting with new and professional forex traders like yourselves. You can ask us any questions and share your ideas!

Please feel free to message us, tweet us, post to us, comment and even start a conversation. Even if you think we are wrong, we can all have a great chat

Anyways, happy trading!

 

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NZD/USD – End of Week Technical Analysis

Since the rate cut from RBNZ from 2.00% to 1.75% the NZD has been on a bearish run.

We can see an equidistant channel from the technical analysis. It is approaching the support line of the channel.

By looking at RSI it is well below 50 (momentum turning bearish). If the support was to break the line of the channel, selling pressure will increase.

We estimate that if the channel breaks, NZD/USD will depreciate 500 pips (the height of the channel)

A really big short opportunity to look out for. Keep your eye on it.

 

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Australia & New Zealand Session Wrap

New Zealand Markets

• BREAKING: EARTHQUAKE 7.8 and 6.2 in NZ

An Earthquake of magnitude 7.8 hits New Zealand on Sunday at 11:02 GMT. The earthquake was felt across New Zealand and Wellington and hit hit 59 miles (95km) from Christchurch. A Tsunami was formed hitting the north-eastern coast 2 hours later. Residents had been warned to head inland or for higher ground whilst thousands have fled their homes.

‘Unfortunately again, another earthquake hit New Zealand of magnitude 6.2 in the early hours of this morning at 00:45 GMT. This earthquake hit 75 miles (120km) North West of Christchurch.

A “large wall of water” up to 15 metres high is surging down the Clarence River and nearby residents are being warned to move to higher ground as soon as possible.

A slip dammed the river about 10 kilometres upstream from the mouth, north of Kaikoura, after Monday morning’s 7.5-magnitude earthquake. The banked-up water burst through the wall of debris about 4.20pm. A helicopter in the area saw the breach and the water beginning to roll downstream.

It would take three to five hours for the deluge to reach the coast, passing alongside about a dozen houses situated along the river.

They have been urged to evacuate for higher ground’. 2 deaths have been reported so far. More homes being evacuated. For more on the New Zealand earthquake, click here

• Oct Services PMI was due to be released yesterday, however due to the earthquake, has been delayed until later today

• New Zealand house prices Median at +10.9% y/y
  • Number of sales for October 2016 fell 9% on September
  • Decline of 14% y/y
  • Bryan Thomson from the Real Estate Institute of New Zealand (REINZ):
    “The national sales volumes fell by 14% in October compared to the same time last year and the number of properties for sale as measured by realestate.co.nz has fallen by almost 7,400 over the past year. Our data suggests that the impact of the revised LVR rules is having more of an effect on lower-priced sales compared to higher priced sales, with a surge in the percentage of sales over $1million and a noticeable decline in the number of sales below $400,000 compared to 12 months ago”

Australian Markets

• Australia’s Hidden Stimulus Boosts Economy as Currency Lags Commodity Rebound
  • “Australian policy makers were publicly frustrated by the currency’s stubborn strength when commodities tumbled earlier this decade. Now they’re conspicuously quiet as it fails to keep pace with resurgent resource prices.Since the end of June, JPMorgan Chase & Co.’s real effective exchange rate for the Aussie has risen 4 percent, while Westpac Banking Corp.’s Australian export commodity index has soared by 43 percent. The mismatch is another reason why central bank Governor Philip Lowe is comfortable sitting on his hands: he’s getting an easing of financial conditions without having to touch the monetary policy lever.” More on this piece from Bloomberg

KEY Dates that highlight potential risk domestically for Australia this week (Sydney time):

• Tuesday – 11:30am (00:30 GMT) RBA Board Minutes from November
  • Unlikely to add further detail since the RBA’s recent Statement on Monetary Policy
  • Statement made no material change on RBA forecasts of GDP or inflation
• Tuesday – 7.15pm (08:15 GMT) Speech by Reserve Bank of Australia Governor Lowe
  Title is ‘Buffers and Options’
  
  
  • The title ‘Buffers and Options’ implies some discussion on the effectiveness of low interest rates and the outlook for inflation
  • Lowe’s post board meeting statement contained very few changes apart from slightly more concern being expressed around the housing market – where the term “briskly” was used when describing recent house price appreciation
• Wednesday – 11.30am (00:30 GMT) Wage Price Index
  • NAB forecasting +0.5% in the September quarter
  • Annual growth down from 2.1% to 2.0%

• Thursday – 11.30am (00:30 GMT) Labour Force data for October
  • Trend employment growth shows it has slowed to just 3.9k a month, well below the 15k minimum to keep unemployment rate from rising
  • Recent jobs growth has been driven by part-time employment, helping to contribute towards elevated underemployment
  • Expected employment data this month will be important in providing clarity over Australia’s labour market and the extent to which the momentum has slowed.
  • NAB expectations are that employment is to rise 20k with unemployment rate steady at 5.6%

 

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Sell orders at 200 Moving Average
Following last Friday's post of NZD/USD - Click here

The equidistant channel has broken, however sellers have not fully come into the market yet. We expect to see a vast amount of sellers emerging once the 200 moving average (purple line) is hit as shown in the graph.

Keep a close eye as this will be a big short opportunity....

 

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USD/CHF – Potential Bullish Break

USD/CHF is testing its resistance (0.9983) on the height of the triangle.

Currently USD/CHF is trawling around at 0.9967.

With the USDX increasing in price, it may be possible that this triangle will break.

RSI shows its getting closer to 70. The last time it hit this figure was in November 2015. However, after it hit 70, there was a bearish decline. This you must be careful of as it may be a repeat pattern.

 

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GBP/USD – When to go short?

The GBP/USD has been on a recovery trend since for the last 2 weeks. The impact of this was due to PM Theresa May failing to win the high court ruling for the government to impose Article 50.

After the volatility from the presidential elections, it reached its peak at 1.2674.

Noting the long term trend is still bearish. The real question is, when shall we start building up short again?

The bearish momentum could start again after the break of the trend line support for the last 2 weeks recovery as we highlighted on the chart.

The levels to watch 1.2450 and 1.2340.

 

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XAU/USD – Is there a new hope for Gold?

This is a real question many of us have been asking for some time now.

Gold has been on the increase with regards to instability and concern in global markets with this years peaks reaching to $1374 on the 11th July after UK’s Brexit vote to leave the European Union indefinitely. Since then, gold fell down to $1241 on the 7th October about amid ease that the world economy was not slowing down.

Tensions in the US elections was a main driver to the latest increase in gold prices in October and November. With most of the world stunned at Trump winning the US elections over Hillary Clinton to become the 45th president of the USA. Gold rose over 600 pips after the result.

Yet, gold fell sharply to $1211. Why is this? Investors saw that Trump is not as ‘aggressive’ as he was personed with his first speech indicating that he would work with all countries. Investors saw this as a positive note, appreciating the strong dollar and also having a thriving stock rally.

What hope is there at the movement?

Since USDX is on a strong move due to the increasing probability of a fed hike, it turns out that a Trump presidency might not be a big concern for markets, its is too early to talk about a decent gold rally. However, we may see a $10 recovery to $1240 due to short covering if the $1231 resistance is broken.

More here: http://www.navigationfx.com/xauusd-new-hope-gold/

 

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EUR/USD – Head and Shoulders Pattern

The EUR/USD has been on a downtrend for quite some time.

The last time we saw a 1.06 low in the EUR/USD was December 2015. So do you think it is going to go even lower?

We have drawn a downward trend line which seems to be very consistent. In the highlighted area we can see a head and shoulders pattern. With both of these properties present, EUR/USD may be expected to fall 100 pips (the height between the head and the neckline).

With the increasing probability of a US fed hike, making the dollar appreciate, this can also support the technical analysis.

 

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Crude Oil – Ascending Triangle

Crude oil prices had recorded a $2 rally yesterday after Opec Secretary-General Mohammed Barkindo said that they are fine tuning the production cut agreement for the first time in eight years. On Sept 28th, OPEC decided to reduce its output range between 32.5-33 million barrels a day where they are expected to meet this target on Nov 30th. A recent Bloomberg survey found that in October 34.02 million barrels were produced a day.

From looking at the graph, we drew an ascending trend line. We can see that there is a strong resistance at $52.20 where it has been tested twice as well as a strong support thus forming an ascending triangle.

If the rally continues and the resistance breaks, then the triangle implies there may be an increase of $16, a great long opportunity. However, as mentioned before, we are expecting to see weather OPEC can get to the target production that they are planning.

 

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EUR/GBP – What next for this major parity?

EUR/GBP has been on an upwards trend since BREXIT.

We see from the technical analysis that RSI is well in the undersold area and a invasion of buyers may well be looking to come in. With the RSI not passing under 30 since March 2015, it is highly unlikely too unless next weeks GDP data is not to expectations.

We expect to see buyers come in the market on the upward trend line which acts as a support.

 

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NZD/USD - Strong support formed

NZD/USD has been on a relatively easy trend to follow.

The trend has been bullish since 20th January following reports of the economy growing.

On the 8th September the RBNZ decided to cut interest rates to 2.0% which led to an appreciation in the currency. We then see the same trend again on the 9th November where RBNZ cut interest rates to 1.75%. The currency appreciated over 380 pips.

We can see on the graph that a strong support has occurred (0.698), forming another channel perpendicular to the strong bullish channel in blue. RSI at 37 indicating to us that it is oversold. Maybe a good time to enter a long position.

If the resistance is broken (0.7056) we can expect it to surge to at least 0.7084. More to follow later on, keep a close eye.

 

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USD/CAD – Bearish Flag Formation

USDCAD has been under pressure form the strong US dollar because of the recent oil rally from OPEC expectations to reduce production.

The fall in USDCAD since the beginning of last week has created a bullish flag formation which implies when the flag is violated the price will move as much as the height of the flag which is 150-160 pips.

Fundamentally oil prices are set to decrease, therefore resulting in CAD weakness for this formation.

 

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AUD/USD – Triangle with strong supports

The Australian Dollar has been forming a bearish downtrend against its US counterpart in the aftermath of the US presidential election.

Currently we can see that at the 0.7363 level provides a good basis support. A strong support had been formed on the 21st November 2016 at 0.7309 where the bullish trend bounced. Even so, we can clearly see a channel that has been formed.

If we see the 0.7363 level pushes through, it will most certainly test the strong 0.7309 level.

Currently AUD/USD is trading at 0.73918

 

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XTI/USD OPEC Crude Oil – Technical Analysis

Crude Oil – Head and Shoulders Pattern

The headline news this week is OPEC and Oil. Will OPEC deliver a production cut for oil?

All the eyes are on Vienna and OPEC’s annual gathering with a waited decision on production levels. An OPEC deal on Wednesday delivering a concrete supply reduction of at least 1M barrels a day, with non-members such as Russia on board could increase oil beyond the $40-$50 range.
Traders pushed Brent towards $50 a barrel last week. News on Friday that Saudi Arabia would not attend a meeting with Russia and Kazakhstan on Monday pulled back crude below $48.

Following our technical analyst. We had drawn an ascending triangle which seems to be very consistent as shown in our recent post. On the diagram we have highlighted the 2 shoulders. With both of these properties present, Crude Oil may be expected to fall $9 (the height between the head and the neckline).
The area highlighted in blue shows an estimation of where we believe this may happen if OPEC meeting.

However, there is much uncertainty still fundamentally, we are awaiting to hear more from OPEC on Wednesday.

For more: http://www.navigationfx.com/xtiusd-opec-crude-oil-technical-analysis/

Thanks for the read!

 

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USDCAD – Channel formed and latest from OPEC

The Canadian dollar has started the week with strong gains. On the release front, we just recieved the current account data from Canada

• Canada Current Account (Q3) – -18.3B vs. -16.8B exp. Previous -19.0B

OPEC members will meet in Vienna on Wednesday, hoping to reach an agreement to reduce and cap oil production in order to increase oil prices. OPEC would like to include non-OPEC member countries such as Russia (in favour of freeze, but not in cut).

Recent developments include Indonesia’s energy minister who has sparked the selloff, by telling reporters in Vienna that he’s “not optimistic” that the cartel will agree a supply cuts deal tomorrow. It’s far from certain that OPEC members will reach an agreement. Iraq, Libya and Nigeria have all asked to be left out of a deal which would require production cuts.

Previous attempts to reach a cap agreement have ended in failure, and it’s questionable whether this time will be any different. For those of you new to Forex, Canada exports lots of Oil (25% of their total exports) making USDCAD correlated with the price of Oil (Oil goes up, CAD goes up). Given the uncertainty as to whether an agreement will be reached, we could see continue to see strong movement from the Canadian dollar this week, as the currency is closely tied to oil prices. If a deal is reached, the Canadian dollar could post strong gains.

The success, or failure, of Opec’s meeting appears to depend on Saudi Arabia, Iran and Iraq. Analysts reckon that the authorities in Tehran and Baghdad had hoped that Riyadh would swallow the proposed output cuts itself, allowing them to keep pumping. But Saudi are taking a harder line, even though their economy is suffering badly from the low oil price.

On the 4 hour (H4) graph, we can see a very nice channel being formed.

There also is a strong support at 1.3395.

If we see OPEC production cut we could see the support and the channel break making at least 150 pips. However, if OPEC can not finalise a deal tomorrow for oil prices it may pass the resistance of 1.3586 bringing in well over 125 pips.

We will keep you updated on OPEC

 

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AUD/USD – Triangle with correction imminent

If you remember last week we posted an AUD/USD triangle, click [URL deleted]

There was a sharp decline, with a recovery starting on the 18th November. However, a correction could be imminent.

The 38.2 fibo level suggests it has been acting as a strong resistance. If the trend line breaks, an overwhelming amount of sellers may enter the market making a correction that started at the beginning of last week bringing AUDUSD down to 0.73385 (over 100 pips).

Likewise with AUDCAD there was a 100 pip fall today. We wait to hear more form OPEC and AUDUSD.

 

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USD/CAD – Bearish Golf Flag Formation

USDCAD had appreciated on the recent news of the OPEC agreement with Crude & Brent Oil rising over 10%.

A channel was formed as shown in our previous posts in which had broke. Currently USDCAD is showing bearish momentum with RSI down steeply at 41 points. If USDCAD breaks the golf flag formation, it may well drop down to the 100DMA (Orange line) to 1.3180 bringing in over 60 pips.

For more: http://www.navigationfx.com/usdcad-technical-analysis-2/

 

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EUR/USD channel with 38.2 fibo and 200 H4 MA crossing

EURUSD has been under pressure since the increase in USD from president elect trump and the Italian referendum, however since this afternoon EUR has recovered significantly among many of it’s pairs.

The image below shows the Daily EURUSD which has strong channel forming.

With the slight bullish trend, the H4 gives us a clearer picture of its momentum. RSI is at 45 viewing to us that it is undersold and that buying momentum is increasing.

We can see that at the 38.2 fibo level the 200 H4 DMA crosses. At this level we may see a sudden outbreak of buyers at 1.08070 bringing in potentially 80 pips.

For more: http://www.navigationfx.com/eurusd-technical-analysis-2/

 

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AUD/USD – Ascending triangle with strong support
Yesterday the RBA held interest rates again at +1.5% for December.

We can see on the technical analysis that there is a strong resistance at 0.7498, with an ascending triangle being formed.

There is also stipulation that if the resistance is broken that buying momentum will significantly increase hitting the 200 DMA gaining a minimum of 30 pips. If this does happen, the new resistance may well act at 0.7550 – 0.7581 respectively, just surpassing the 50 and 100 DMA.

 

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GBPCHF - Technical Analysis

The technical drawing shows a strong resistance at the 50.0 fibo level at 1.2897 with a descending triangle.

Adding to this RSI has dipped below 70, showing to us that buyers have overbought and are now slowly selling.

This may show a good opportunity to go short on GBPCHF.

A good support would be at the 38.2 fibo level at 1.2518. We may see a strong reaction once the 50 DMA and 100 DMA meet.

For more on this analysis: http://www.navigationfx.com/gbpchf-technical-analysis/

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