USD/CAD edges lower to mid-1.3200s, remains well within a multi-day old trading range Our preference: short positions below 1.3280 with targets at 1.3240 & 1.3230 in extension.Alternative scenario: above 1.3280 look for further upside with 1.3290 & 1.3305 as targets
A goodish pickup in the US bond yields underpinned the USD, though failed to provide any impetus.Bulls also shrugged off a mildly softer tone around Oil prices, which tend to undermine Loonie demand.
Market participants now look forward to key US macroeconomic releases for some short-term impetus.The USD/CAD pair extended its sideways consolidative price action on Friday and remained confined in a broader
trading range held over the past one week or so.
Despite the prevalent bullish sentiment surrounding the US Dollar, backed by a goodish pickup in the US Treasury bond yields,
the pair continued with its struggle to attract any meaningful buying interest and remained well below the very important
200-day DMA barrier near the 1.3300 round-figure mark.
USD/CHf jumps to 1-week tops, eyeing 200-DMA near mid-0.9900s
Our preference: long positions above 0.9900 with targets at 0.9940 & 0.9960 in extension.
Alternative scenario: below 0.9900 look for further downside with 0.9885 & 0.9865 as targets.
Renewed US-China trade optimism helped build on the overnight goodish up-move.Sliding US bond yields seemed to weigh on the USD and might cap any strong gains.The USD/CHF pair finally broke out of its Asian session consolidation phase and spiked to one-week tops, around the 0.9935 region in the last hour.
Despite a subdued US Dollar demand, the pair on Thursday managed to gain some follow-through traction for the second consecutive session and built
on the overnight solid intraday recovery of around 75-pips from three-week lows.
Risk-on mood remained supportive
The prevailing risk-on mood, supported by renewed optimism over a possible resolution of the prolonged US-China trade disputes, weighed on the Swiss Franc’s perceived safe-haven status and remained supportive of the positive move.
Hopes of a meaningful progress on a US-China trade deal reignited on Wednesday after Trump told reporters that both the sides are having some very good conversations on trade and an agreement could happen sooner than anyone thinks.
Meanwhile, a subdued US Dollar demand, possibly on the back of a modest pullback in the US Treasury bond yields, failed to provide any additional boost and might turn out to be the only factor that might keep a lid on any runaway rally.
In absence of any major market-moving economic releases from the US, the broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the pair’s momentum and produce some short-term opportunities.From a technical perspective, the recent pullback stalled near a support marked by the lower end of a multi-week-old ascending trend-channel and hence, a subsequent move beyond the very important 200-day
SMA might set the stage for the resumption of the recent bullish trajectory.
RBNZ Meeting and RBA Speech On The Radar | NZD/JPY
Our preference: under pressure below 67.95.
Alternative scenario: above 67.95, look for 68.15 and 68.27.
RBNZ are expected to hold tomorrow,
which could leave potential for NZD crosses to bounce is there’s no easing bias in their statement.
Unless of course RBNZ want to throw another curveball and cut another 25 bps. On the 7th August,
RBNZ went above and beyond with a 50-bps cut, catching many off-guard who were expecting a 25-bps of easing.
Yet this aggressive stance is also why many expect for RBNZ hold tomorrow and await further data.
Currently the 1-month OIS is suggesting a mere 11% chance of a cut tomorrow and all economists polled by Reuters expect RBNZ to hold this month. GDP beat expectations last week and their TWI trades at a 4-year low, beneath their projection of 73 laid out in August’s monetary policy statement (ie good for exports and inflation). Therefore, a neutral hold and bounce for NZD is a potential scenario. That said, RBNZ aren’t known to mince their words so any dovish elements in tomorrow’s statement could see NZD extend their losses if traders suspect another cut may be on the horizon.
NZD/USD technical analysis: Bulls looking to extend the recovery further beyond 0.6300 handleOur preference: as long as 0.6283 is support look for 0.6345.Alternative scenario: below 0.6283, expect 0.6263 and 0.6251
The recovery move extends further beyond 100-hour SMA.
Technical set-up points to additional recovery to 0.6330 area.
The NZD/USD pair built on the overnight recovery move from multi-year lows and continued gaining positive
traction for the second consecutive session on Tuesday, with bulls now looking to extend the momentum further beyond the
0.6300 round-figure mark.
Given the previous session’s breakthrough a short-term descending trend-channel formation on the 1-hourly chart,
a follow-through move beyond 100-hour SMA and 23.6% Fibo. level of the 0.6452-0.6254 recent downfall support prospects for additional gains.
Moreover, technical indicators on the 1-hourly chart have been gaining positive traction and also recovered from the bearish territory on the 4-hourly chart, further reinforcing the near-term constructive set-up amid
improving risk sentiment.
However, oscillators on the daily chart maintained their bearish bias and warrant some caution before placing any
aggressive bets. This coupled with a follow-through USD buying interest might keep a lid on any runaway rally, at least for the time being.
Meanwhile, the recovery could get extended but seems more likely to fizzle out near 38.2% Fibo. level resistance near the 0.6330 region. On the flip side, the descending trend-channel resistance breakpoint –
around the 0.6275 region – now seems to act as immediate support.
NZD/USD technical analysis: Any subsequent recovery is likely to remain capped near 0.6300 handleOur preference: the upside prevails as long as 0.6258 is support.Alternative scenario: the downside breakout of 0.6258 would call for 0.6238 and 0.6226.
Oversold conditions helped bounce off a descending trend-channel support.
Set-up points to additional recovery, though seems likely to remain limited.
The NZD/USD pair gained some positive traction at the start of a new trading week and recovered a part of
Friday’s sharp intraday fall to fresh multi-year lows. Extremely oversold conditions on the 1-hourly chart
helped the pair to rebound from a support marked by the lower end of a one-week-old descending trend-channel.
Meanwhile, oscillators on 4-hourly/daily charts maintained their bearish bias but remained on the verge of oversold territory,
supporting prospects for further recovery. However, a goodish pickup in the USD demand and a fresh wave of global risk aversion trade might keep a lid on any runaway rally amid US-China trade pessimism.
Hence, any subsequent seems more likely to confront some heavy supply near the descending trend-channel resistance and
remain capped around the 0.6300 handle.
On the flip side, the 0.6260-55 region now becomes immediate support to defend, which if broken now seems to pave the way
for a further depreciating move in the near-term. Below the mentioned support, the pair is likely to accelerate the slide further towards August 2015 swing lows support near the 0.6220-15
region en-route the 0.6200 mark.
CAD/CHF Testing 200-hour SMA
Our preference: the upside prevails as long as 0.7486 is support.
Alternative scenario: the downside breakout of 0.7486 would call for 0.7463 and 0.7449.
The Canadian Dollar has appreciated by 2.08% in value against the Swiss Franc since August 14.The currency pair is currently testing a resistance level formed by the 200- hour simple moving average at 0.7429.
If the resistance level holds, the exchange rate might edge lower during the following trading sessions.On the other hand, if the CAD/CHF currency exchange rate passes the 200-period SMAs,
bullish traders might aim at the monthly pivot point at 0.7537 during next week’s trading sessions.
GBP/JPY Under pressure, but risks skewed to the upside
Our preference: the downside prevails as long as 134.68 is resistance.
Alternative scenario: the upside breakout of 134.68, would call for 135.28 and 135.63.
GBP/JPY is looking north with the weekly chart reporting a bullish reversal pattern. The pair could soon rise above the immediate resistance at 135.67.
GBP/JPY is currently trading around 134.45, representing 0.45% loses on the day. The losses, however, could be short-lived,
as technical charts are reporting bullish conditions.
For instance, the weekly chart shows a bullish candlestick reversal pattern – the pair ended last week with 2.82% gains,
validating or confirming the bearish-to-bullish trend change signaled by the preceding week’s big bullish engulfing candle.
The doors, therefore, look open for a sustained break above the immediate resistance of July 25’s high of 135.67.
The breakout, however, may be preceded by a minor pullback to 134.00 if the equity markets trade in the red in Europe due to fears of the European Union (EU)-US trade tensions and concerns of a deeper economic slowdown in China.
Technical Talk:AUD/USD Intraday: rebound.
Our preference: long positions above 0.6855 with targets at 0.6885 & 0.6895 in extension.Alternative scenario: below 0.6855 look for further downside with 0.6845 & 0.6830 as targets.
AUD/USD, “Australian Dollar vs US Dollar”
AUD/USD is trading at 0.6870; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency.
The markets could indicate that the price may test the cloud’s upside
border at 0.6840 and then resume moving upwards to reach 0.6975.
Another signal to confirm further ascending movement is the price’s rebounding from the support level. However, the scenario that implies further growth may be canceled if the price breaks the cloud’s downside border and fixes below 0.6760. In this case, the pair may continue falling towards 0.6675.
Gold jumps back above $1500 mark, multi-day tops
Our preference: long positions above 1496.00 with targets at 1511.00 & 1515.00 in extension.Alternative scenario: below 1496.00 look for further downside with 1490.00 & 1486.00 as targets
Growing US-China trade optimism exerted some initial downward pressure.
Rate cut expectations/a modest USD pullback helped regain positive traction.
Traders now look forward to ECB decision/US CPI for short-term opportunities.Gold quickly reversed an early Asian session dip and rallied back above the key $1500 psychological mark to hit three-day tops in the last hour.
The US President Donald Trump’s decision to delay a planned tariff hike on Chinese goods by two weeks to October 15 added to the recent encouraging signs and contributed to improving global risk sentiment, which eventually exerted some downward pressure on traditional safe-haven assets – like Gold.
EUR/USD technical analysis: Slips below 100-hour SMA, bears challenge symmetrical triangle support Our preference: short positions below 1.1050 with targets at 1.1015 & 1.1005 in extension.Alternative scenario: above 1.1050 look for further upside with 1.1060 & 1.1070 as targets.
The pair continued with its struggled to sustain at higher levels.
Bears are likely to wait for a sustained break below 200-hour SMA.
The EUR/USD pair has been oscillating between two converging trend-lines over the past one week or so, forming a symmetrical triangle on hourly charts. Wednesday’s early uptick quickly ran out of the steam,
rather met with some fresh supply near the triangle resistance.
The fact that the intraday pullback has now dragged the pair back below 100-hour SMA, the intraday bias might have shifted in favour of bearish traders and sets the stage for a move towards testing the triangle support, currently near the 1.1020 region, which is followed by 200-hour EMA.
With technical indicators on 4-hourly/daily charts still struggling to gain any meaningful positive traction and again drifting into the bearish territory on the 1-hourly chart, failure to defend the mentioned support levels might indicate the resumption of the prior/well-established bearish trend.
The pair might then turn vulnerable to slide back towards challenging multi-year swing lows, around the 1.0925 area, before eventually sliding farther below the 1.0900 round figure mark towards testing its next major support near the 1.0835-30 region – levels now seen since May 2017.
On the flip side, the 1.1050 region (triangle resistance) might continue to attract some fresh supply, which if cleared decisively should negate any near-term bearish bias and prompt some aggressive short-covering
move and assist the pair to surpass last week’s swing high resistance near the 1.1085 level.