USDCAD Forecast Bullish Fed sends Canadian dollar to 8-week low
Our preference: long positions above 1.3145 with targets at 1.3230 & 1.3280 in extension.Alternative scenario: below 1.3145 look for further downside with 1.3125 & 1.3100 as targets.
The Canadian dollar has posted losses in the Friday session, following the trend seen on Thursday. Currently,
USD/CAD is trading at 1.3195, up 0.31% on the day. The pair is trading at its highest level since early September.
There are no Canadian events on the schedule. In the U.S., PPI and Core PPI are both expected to post gains of 0.2% for October,
unchanged from the September readings. As well, UoM Consumer Sentiment is forecast to slow to 98.0 points.
After the intense excitement surrounding the U.S. mid-term elections,
he Federal Reserve meeting paled in comparison. The markets were not expecting much drama, as it was not really a “live meeting” – there was virtually no chance of a rate hike and no press conference from Fed chair Jerome Powell.Fed policymakers continued to sound hawkish in the rate statement, in a similar vein to the previous statement in September.
Fed policymakers noted that job creation is solid, unemployment is down and consumer spending has been growing.The one caveat to this rosy picture was that business investment has slowed. The statement added that further “gradual increases” are expected,given that headline and core inflation are close to the Fed target of 2 percent. The Fed next convenes in mid-December,
with the CME Group pegging the odds of a December rate hike at a strong 76 percent.
WTI Oil Outlook: Oversold conditions warn of correction but bears to remain intact while falling 10SMA caps.Our preference: long positions above 61.50 with targets at 62.65 & 63.20 in extension.Alternative scenario: below 61.50 look for further downside with 61.20 & 60.75 as targets.
WTI oil is consolidating above new marginally lower 7 ½ month low at $71.19,
posted on Wednesday in extension of massive fall which extends into fifth straight week.
Fading concerns about stronger impact on global supply from sanctions on Iran and another rise in crude stocks(EIA report on Wednesday showed build of 5.78 million barrels vs forecasted rise of 2.43 million barrels)
along with increase in global oil production (US; Russia; Saudi Arabia; Iraq) continue to weigh strongly on oil price and maintain strong bearish sentiment.
On the other side, signals that China is on track to keep its oil imports at record highs this year, provides support,which is so far insufficient to offset strong negative sentiment.Strong recovery rejection on Wednesday which left daily Doji candle with long upper shadow,adds to negative outlook but at the same time signals indecision.Oversold daily studies warn that bears are running out of steam and generate initial signals of correction.Daily slow stochastic and RSI are turning north and reversal from oversold territory would provide support scenario.Falling 10SMA ($63.99) and broken weekly cloud top ($64.66) mark pivotal barriers,break of which is needed to generate stronger bullish signal and put bears on hold.Meanwhile, the price may hold in extended consolidation, with the downside to remain vulnerable, as bears keep psychological $60 support in focus.
AUDUSD Outlook: Fresh bullish signal on extension above daily cloud
Our preference: long positions above 0.7235 with targets at 0.7325 & 0.7360 in extension.Alternative scenario: below 0.7235 look for further downside with 0.7210 & 0.7180 as targets.
The Australian dollar advance further on Wednesday,
extending steep recovery rally from 0.7020 (26 Oct spike low)
and generates bullish signal on break above pivots at 0.7265/74 (100SMA / daily cloud top).Bulls were additionally boosted by of US election results and attack resistance at 0.7284 (bear-trendline drawn off 0.7988,11 Feb high / Fibo 23.6% of 0.8135/0.7020).
Daily MA’s returned to full bullish setup and support the advance along with strengthening bullish momentum,with close above daily cloud to add to bullish signals.Bulls eye target at 0.7314 (26 Sep spike high),violation of which would open way for further recovery and expose targets at 0.7381 (21 Aug lower top) and 0.7446 (Fibo 38.2% of 0.8135/0.7020).Overbought studies suggest bulls may take a breather and position for fresh advance.
Technical Talk: NZDUSD Analysis: Breaches 50-hour SMA
Our preference: short positions below 0.6665 with targets at 0.6625 & 0.6600 in extension.Alternative scenario: above 0.6665 look for further upside with 0.6690 & 0.6715 as targets.
The New Zealand Dollar depreciated about 55 base points against the US Dollar on Friday.The currency pair tested the 50-hour simple moving average at 0.6646 during the first part of today’s session.
Currently, the exchange rate is trading near the bottom border of an ascending trendline at 0.6654 and could be set for a breakout. If the breakout occurs, the NZD/USD currency pair could aim at the 100-hour SMA at 0.6597 within this session.
On the other hand, if the support level holds, the currency exchange rate could target Friday’s swing high of 0.6690 during the coming hours.
AUD/USD Analysis: awaits macroeconomic data releases
Our preference: long positions above 0.7190 with targets at 0.7270 & 0.7305 in extension.Alternative scenario: below 0.7190 look for further downside with 0.7160 & 0.7135 as targets.
Upside risks prevailed in the market on Thursday, thus sending the Australian Dollar to surged more than 100
base points against the US Dollar. The currency pair broke a dominant descending channel during the first half of Friday’s session.
By the middle of the day, the exchange rate was located above the upper boundary of the dominant descending channel pattern at 0.7234.
By and large, it is likely that the Aussie continues its bullish momentum within this session.
However, the US macroeconomic data releases scheduled at 12:30 GMT
could change the overall positioning of the currency exchange rate today.
USDJPY Neutral near-term mode looks for a catalyst; US NFP data in focus
Our preference: short positions below 113.10 with targets at 112.65 & 112.40 in extension.Alternative scenario: above 113.10 look for further upside with 113.40 & 113.70 as targets.
The pair holds in neutral mode on Thursday after bulls from 111.37 low
stalled at strong Fibo barrier at 113.33 but subsequent pullback failed to
clearly break below initial support at 112.83 (30SMA), keeping near-term action within tight range.
Weaker dollar across the board made bulls to run out of steam,
but yen also stands at the back foot after BoJ kept ultra-low rates
and signaled that effort to hit its inflation target could be delayed by persisting global trade tensions as well as Japan’s slow wage growth.
Sideways-moving daily indicators support current neutral stance,
with direction signals expected on violation pivotal points on both sides.
Bears could expect signal on break below converged 10/20SMA’s (112.55),
while break and close above cracked 113.33 barrier (Fibo 61.8% of 114.54/111.37 descend)
would signal continuation of near-term upleg from 111.37 (26 Oct low).
US Non-Farm payrolls data on Friday could provide stronger signal. Forecasts show 190K jobs created in Oct,
well above previous month’s 134K which could boost the greenback on release near/above consensus.
On the other side, another key release, average hourly earnings,
is expected to dip in Oct (0.2% f/v vs 0.3% in Sep) which could sour the sentiment and pressure the greenback on release at/below forecast.