EURUSD Outlook: bulls eye 1.12 zone after break of key barriers
Our preference: long positions above 1.1148 with targets at 1.1171 & 1.1200 in extension.Alternative scenario: below 1.1148 look for further Downside with 1.1100 & 1.1065as targets.
The Euro maintains firm tone on Thursday and keeps focus at the upside after
strong bullish signal was generated on Wednesday’s surge and close above key 1.1140 resistance zone.
Rising bullish momentum on daily chart and MA’s in bullish setup support the advance,with long-tailed bullish candle of last Friday also underpinning the action. Fresh bulls retest cracked barrier at 1.1162 (50% of 1.1239/1.1084) and
eye 1.1180/1.1200 (Fibo 61.8% / 6 Jan high/Fibo 76.4%). Broken 1.1140 pivot now offers strong support which is expected to hold and keep bulls in play
EUR/USD Forecast: Three reasons for the bounce and why it may not last
Our preference: long positions above 1.1123 with targets at 1.1170 & 1.1221 in extension.Alternative scenario: below 1.1123 look for further Downside with 1.1101 & 1.1080as targets.
EUR/USD has been rising after the US published weak jobs figures.
Optimism about trade is weighing on the safe-haven greenback.
The currency pair has escaped crashing below the uptrend support line.
Has the world’s most popular currency pair bottomed out?
While the common currency is enjoying the misery of the dollar,
it has weak foundations to lean on.
Here are the reasons for the bounce:
1) Weak US Non-Farm Payrolls
The US economy gained only 145,000 jobs in December, worse than 164,000 that appeared on the calendar – and also below higher “whisper numbers. for the Non-Farm Payrolls. Estimates had been revised to the upside ahead of the publication. Moreover, the labor market’s
gains in 2019 were the worst since 2011.
Also, wage growth disappointed with 0.1% monthly and 2.9% yearly,
showing that inflation – which the Federal Reserve also targets – is unlikely topick up anytime soon.
2) Trade hopes
Liu He, China’s Vice Premier, is heading to Washington to sign Phase One of the trade deal. Ahead of the ceremony, the world’s largest economies expressed optimism – and the upbeat tone weighs on the safe-haven dollar.
Steven Mnuchin, the US Treasury Secretary, suggested that both countries should restart their strategic dialog. This mechanism for defusing tensions was last in use by President George W. Bush in 2006
GBP/USD a decisive positive candle forming to leave support around $1.3050
Our preference: long positions above 1.3141 with targets at 1.3185 & 1.3243 in extension.Alternative scenario: below 1.3117 look for further Downside with 1.3084 & 1.3043as targets.
The near term outlook has taken on an increasingly uncertain configuration in recent sessions.
However, taking a step back and we continue to view support around $1.2900/$1.3000 on a medium term basis as a buying
opportunity. Ongoing positive configuration on momentum (RSI above 40, MACD lines above neutral,
Stochastics rising above 50) suggests that corrections remain a chance to buy.
Yesterday’s reaction only adds to that view,
with a decisive positive candle forming to leave support around $1.3050. However,
looking on the hourly chart there is a lack of conviction,
as the hourly RSI oscillates between 30/70 (turning back from 70 again) whilst the MACD and Stochastics lines both post
bear crosses. It suggests a lack of traction follow through from yesterday’s rebound.
Above initial resistance at $1.3180 would test the 23.6% Fibonacci retracement (of $1.2192/$1.3515) around $1.3200,
but the key near term resistance is at $1.3285.
GBP/USD Sterling might show limited upside action on Tory’s victory and would crash if Labour winsOur preference: below 1.3154 with targets at 1.3078 & 1.3001 in extension.Alternative scenario: above 1.3154 look for further upside with 11.3212 & 1.3275 as targets.
Cable ticked to new nine-month high at 1.3228 in Asia on Thursday in extension of post-Fed rally but eased
back to 1.3200 zone in early European trading.
The pair remains biased higher on positive sentiment over UK election as Conservative Party is expected to win majority.
The pound will be the first to react on election results and two scenarios are in play.
Tory’s victory with comfortable is expected to be bullish signal but reaction might not be as strong as many anticipate.
The pound rallied nearly 10% against dollar and Euro in past four months,
driven by rising optimism for final end of Brexit story and traders may book profits to avoid risk,
that bring in play ‘buy the rumors-sell the facts’ scenario.
Also, technical studies on larger timeframes are overbought and massive monthly cloud weighs heavily (cloud base lays at 1.3337),
adding to the possibilities of limited advance, however,
extension through monthly cloud base and 2018 high at 1.3382 would allow for stronger rally and expose 1.40 zone.
On the other side, sterling might be hurt if leading party fails to get comfortable majority that would lead
towards hung parliament.
And finally, shock on Labour’s victory would push the pound significantly lower and risk losses of several big figures.
Polls will close at 22:00 UK time and first results can be expected in the following hours,
when initial market reaction can be anticipated.
XAU/USD – How far will Gold reach before the upcoming reversal?
Our preference: below 1464 with targets at 1456 & 1451 in extension.
Alternative scenario: above 1464 look for further upside with 1474 & 1483 as targets.
How Far Will Gold Reach Before the Upcoming Reversal?
ANALYSIS | Published Dec 03, 2019 05:40 (+00:00)
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Just when most traders thought that the previous week is going to end in the red for gold,
something exceptional happened.
The USD Index reversed after rallying, and gold rallied sharply in response. In the end,
gold ended the week in the green by forming a clear weekly reversal.
That was actually the second weekly reversal that we saw recently.
Why is this important? Because of what happened shortly after we saw the opposite of it not so long ago.
EUR/GBP is not ruled out in the very near term – Commerzbank
Our preference: above 0.8521 with targets at 0.8543 & 0.8558 in extension.
Alternative scenario: below 0.8521 look for further upside with 0.8511 & 0.8502 as targets.
Following the recent price action, EUR/GBP could attempt a bounce in the next days, according to Karen Jones,
Team Head FICC Technical Analysis Research at Commerzbank.
“The market came under pressure last week, however given that the market has again seen divergence of the daily RSI,
we suspect we will see only a very slow grind lower at best and may in fact see a bounce higher this week.
EUR/GBP remains stuck below last week’s high at .8606 and has now eroded last week’s low at .8522.
Below here lies the May low at .8465. We note the TD support at .8440 and we look for the market to hold here”.
“Above last week’s high at .8606 lies a minor downtrend channel resistance line at .8622
ahead of the four month downtrend line at .8760. Overhead resistance is reinforced by .8786 the mid-September low”.
EUR/USD EMAs Show Expanding Momentum on Daily
Our preference: short positions below 1.0999 with targets at 1.0941 & 1.0975 in extension.Alternative scenario: above 1.0999 look for further upside with 1.1064 & 1.1092 as targets.
The below is the daily chart of EURUSD. The currency pair’s EMAs are in a bearish stack (aqua ellipse). I.e. the green 5-day EMA is below the orange 13-day EMA, and the orange 13-day EMA is below the black 34-day EMA.
Moreover, the EMAs are starting to angle and separate. This is a characteristic of expanding momentum. Simarlarly, we note that the RSI is on the bearish side of 50 (blue rectangle). As long as the chart indicators maintain these positions the likely trajectory for the currency is down.
USD/CAD struggles near 1-week lows, bears await a break below 1.3200 mark
Our preference: short positions below 1.3215 with targets at 1.3190 & 1.3175 in extension.Alternative scenario: above 1.3215 look for further upside with 1.3235 & 1.3250 as targets
The USD remained depressed amid renewed US-China trade uncertainty.
Weaker oil prices undermined the loonie and helped limit the downside.
The USD/CAD pair was seen oscillating in a narrow trading band through the early European session on Tuesday, with bears awaiting a sustained break below the 1.3200 handle.
The pair lacked any firm directional bias on Tuesday and consolidated the recent sharp pullback from one-month tops. A combination of diverging forces failed to provide any meaningful impetus and lead to a subdued/range-bound price action.
Weaker oil prices offset trade uncertainty
The US dollar remained depressed amid receding hopes for a preliminary US-China trade deal. In the latest trade-related development, CNBC reported on Monday that Chinese officials are pessimistic that a trade deal will be signed with the United States.
The report, which cited government sources,
said the bleak outlook was due to the US President Donald Trump’s reluctance to roll back tariffs and weighed on the USD, albeit a modest uptick in the US Treasury bond yields helped limit the downside.
Meanwhile, oil prices fell for the second straight day on Tuesday amid fresh US-China trade jitter and expectations of a rise in the US inventories, which undermined the commodity-linked currency – loonie and extended some support to the major.
Moving ahead, market participants now look forward to the US economic docket, featuring the release of housing market data, which coupled with speeches by influential FOMC member might produce some meaningful trading opportunities later this Tuesday.
AUD/USD rebounds from 2-week low, lacks follow-through
Our preference: short positions below 0.6850 with targets at 0.6825 & 0.6810 in extension.Alternative scenario: above 0.6850 look for further upside with 0.6865 & 0.6875 as targets.
Slightly better Aussie data helped gain some positive traction.
The risk-off mood/US-China trade uncertainty capping gains.
The US CPI and Powell’s testimony eyed for a fresh impetus.
The AUD/USD pair staged a modest rebound from over two-week lows,
albeit seemed struggling to extend the momentum further beyond mid-0.6800s.
The pair stalled its recent pullback and managed to find some support near
the 0.6830 in reaction to a strong rebound in the Westpac Consumer Confidence Index, which rose to +4.5% in November as compared to -5.5% recorded in the previous month.
USD/CAD technical analysis: 50-day EMA, 1.3220/25 exert downside pressure
Our preference: long positions above 1.3135 with targets at 1.3175 & 1.3195 in extension.Alternative scenario: below 1.3135 look for further downside with 1.3120 & 1.3105 as targets.
USD/CAD bounces off 23.6% Fibonacci retracement of May-July downpour.
1.3100 holds the key to October lows, 1.3000 round-figure.
The USD/CAD pair’s recent pullback from 23.6% Fibonacci retracement falls short to conquer 50-day EMA and near-term key resistance-confluence. The quote seesaws around 1.3160 during Wednesday’s Asian session.
Should prices follow static conditions of 14-bar Relative Strength Index (RSI) and extends recovery, 50-day Exponential Moving Average (EMA) level of 1.3193 seems to be the key for intra-day buyers,
a break of which could push them to confront 1.3220/25 region including 100-day EMA and 38.2% Fibonacci retracement.