USD/CAD falls to session lows amid surging oil prices, Canadian CPI in focus
Our preference: short positions below 1.3175 with targets at 1.3135 & 1.3110 in extension.Alternative scenario: above 1.3175 look for further upside with 1.3195 & 1.3215 as targets.
• The USD fails to capitalize on the attempted intraday bounce.
• Surging oil prices underpin Loonie and add to the selling pressure.
• Focus remains on today’s release of the latest Canadian CPI figures.
The USD/CAD pair finally broke down of its Asian/early European session consolidative phase and refreshed session lows,
below mid-1.31000s in the last hour.
The pair extended previous session’s sharp retracement slide from the vicinity of 100-day SMA barrier and traded with a
negative bias for the second consecutive session, albeit has managed to hold its neck above three-week lows set at the
beginning of this week.
The Fed Chair Jerome Powell’s overnight comments, reiterating that the central bank would stay patient on monetary policy,
kept a lid on the US Dollar’s attempted intraday bounce from multi-week lows and kept exerting some downward pressure.
Adding to this, a strong follow-through surge in crude oil prices provided an additional boost to the
commodity-linked currency – Loonie and was seen as one of the key factors behind the pair’s
latest leg of a sudden drop of around 25-pips in the last hour or so.
The pair has now weakened back to the very important 200-day SMA support,
which if broken should pave the way for a further downside,
albeit investors’ reluctant to place any aggressive bets ahead of today’s release of Canadian
CPI figures might help limit deeper losses.
EUR/USD’s Current Swing Looks Corrective In Nature
Our preference: long positions above 1.1325 with targets at 1.1390 & 1.1410 in extension.
Alternative scenario: below 1.1325 look for further downside with 1.1300 & 1.1275 as targets.
USD/CHF sidelined below 1.0050 level, traders await clarity on US-China trade talksOur preference: short positions below 1.0035 with targets at 0.9990 & 0.9970 in extension.Alternative scenario: above 1.0035 look for further upside with 1.0060 & 1.0080 as targets.
I wrote yesterday that key levels looked like holding and the price seemed to be going nowhere,
although there was a hint of the beginning of a more bearish trend so a short trade from a firm rejection
of the resistance at 1.0058 could be an interesting opportunity especially if it happens early in the
London session – I would take a bearish bias if that sets up. This was a good call as the trade did set up,
although later in the day than I had hoped for and was profitable.
The picture is now more bearish as the USD weakens and the former support at 1.0028 flips to become new lower resistance.
It is also more obvious that the price movement is contained by a bearish price channel which is shown in the chart below.
I would take a bearish bias today if we have a strong bearish rejection of the resistance at 1.0025
Technical Talk:EUR/AUD Technical Analysis: Inverted hammer at 50% Fibo guards upside, although doji confirms traders’ indecision
Our preference: the downside prevails as long as 1.5891 is resistance.
Alternative scenario: above 1.5891, look for 1.5938 and 1.5965.
The EUR/AUD pair trades little positive around 1.5970 during the early Asian sessions on Tuesday.Daily chart confirms traders’ indecision on Monday’s “Doji” candle after guarding the upside by Friday’s “Inverted Hammer”.
While “inverted hammer” supports the claim of consolidation considering across the board USD strength, “doji” portrays traders’ dilemma.
The 100-day simple moving average (SMA) at 1.5930 can offer immediate support to the pair before diverting market attention to the 1.5855-50 support-zone, including 61.8% Fibonacci Retracement of its December-January surge.In case prices slip under 1.5850 on a daily closing basis, the 1.5730 and the 1.5670 may come back on the chart.
Alternatively, 50% Fibonacci retracement level of 1.6015 seems adjacent upside barrier for the pair,
a break of which can propel the quote to upward sloping resistance-line at 1.6065.
During the pair’s successful rise over 1.6065, the 1.6100 and the 1.6185 may please the buyers.
Gold remains capped below $1315-16 supply zone, US CPI in focus
Our preference: long positions above 1309.50 with targets at 1314.25 & 1315.75 in extension.Alternative scenario: below 1309.50 look for further downside with 1308.00 & 1306.00 as targets.
• Dovish Fed expectations continue to lend support and limit downside.
• Renewed USD buying/risk-on mood seemed to cap further up-move.
• Traders eye US consumer inflation figures for some meaningful impetus.
Gold held on to its mildly positive tone through the early European session,
albeit struggled to make it through the $1314-16 immediate supply zone.
Having found decent support ahead of the key $1300 psychological mark earlier this week,
the precious metal traded with a positive bias for the fourth session in the previous five and remained
supported by growing market expectations that the Fed was in no hurry to tighten rates further.
However, a combination of negative forces – renewed US Dollar buying interest and the prevalent risk-on mood,
which tends to dent demand for traditional safe-haven assets,
kept a lid on any strong follow-through up-move for the dollar-denominated commodity.
The US President Donald Trump’s overnight comments,
saying that he could let the March 1 tariff deadline to slide for a while,
fueled optimism over a breakthrough in the US-China trade talks and continued boosting investors’
appetite for riskier assets – like equities.
Meanwhile, the greenback stalled its overnight corrective slide and regained some traction during the early
European session on Wednesday, which further collaborated towards capping any
meaningful up-move for the commodity, at least for the time being.
Moving ahead, today’s US economic docket, highlighting the release of the latest consumer inflation figures,
might influence Fed rate hike expectations and eventually provide some meaningful impetus for the non-yielding
yellow metal later during the early North-American session.
NZD/USD Technical Analysis: Bull RSI divergence on 1H chart, focus on CNH
Our preference: as long as 0.6734 is support look for 0.6809.
Alternative scenario: the downside breakout of 0.6734 would call for 0.6706 and 0.6690.
The NZD/USD pair beat the 200-day moving average (MA) hurdle at
0.6765 soon before press time and could rise further to 0.68 as the hourly chart is reporting a bearish-to-bullish trend change.
At press time, most currencies are reporting gains against the greenback,
possibly tracking the strength in yuan. The USD/CNH pair (offshore yuan exchange rate)
is currently trading 0.13 percent lower on the day at 6.7737, having clocked a low of 6.7646 earlier today.
USD/CAD climbs to over 1-week tops, near mid-1.3200s
Our preference: long positions above 1.3225 with targets at 1.3265 & 1.3285 in extension.Alternative scenario: below 1.3225 look for further downside with 1.3205 & 1.3170 as targets.
• Remains well bid for the fourth straight session amid the continuation of the USD rally.
• Weaker oil prices further undermine Loonie and remain supportive of the positive move.
The USD/CAD pair continued gaining positive traction on Thursday and
climbed to over one-week tops in the last hour.
The pair built on its recent recovery move from near three-month lows,
with a combination of supporting factors fueling the ongoing positive momentum for the fourth consecutive session.
Despite the recent dovish turn on rate hikes by the Federal Reserve,
the US Dollar extended its recent upward trajectory and strengthened further beyond the 96.00 handle, or near two-week tops.
This coupled with a weaker tone surrounding crude oil prices,
amid concerns over rising US supply, further undermined the commodity-linked currency Loonie and remained supportive.
Today’s up-move, back closer to mid-1.3200s could further be attributed to
some follow-through technical buying, especially after yesterday’s close above the 1.3200 handle,
or 100-day SMA barrier.
It would now be interesting to see if the pair is able to extend the trajectory
or witness some profit-taking at higher levels, given this week’s appreciating move of over 150-pips.
In absence of any major market moving economic releases,
the USD/oil price dynamics might continue to act as key
determinants of the pair’s momentum through Thursday’s trading session.
EUR/GBP: Upside correction remains in force – Commerzbank
Our preference: target 0.8749.
Alternative scenario: above 0.8819, look for 0.8846 and 0.8862.
According to Karen Jones, analyst at Commerzbank, EUR/GBP’s
correction higher remains in force and is capable of gains to .8840/90 where they are looking for signs of failure.
“Below .8700 attention will revert to the .8620/18 2018 and 2019 lows. We have minor support at
.8723 and this guards the .8620/18 lows. Failure at .8620/18 would suggest ongoing weakness to the base of the channel at .8545 and potentially the 200 week ma at .8349.”
“The market stays directly offered below the 200 day ma at .8864,
and only above here allows for a move to the 55 day ma at .8898 and this,
together with the October .8941 high, are expected to contain the topside.”