Crude Oil, Weekly

San Francisco Fed president Williams: said over the weekend that there is a “strong case” for a December rate hike. This sparked a dollar rally and some commodity volatility this morning. Today the Washington Post said that Saudi Arabia’s government is willing to cooperate with other producers to maintain stable prices. Therefore it’s not surprising that Nymex crude has had a mixed trading day today. Crude oil had a gap opening higher (we’ve been talking about Crude being at support!) in start of the futures trading.  Then oil slid lower before bouncing higher again. Commodity currencies underperformed, with USDCAD whipsawing up and down with the oil market.

In the weekly picture crude oil has been forming a vast bullish wedge formation. This price action is taking place near multi-year low that took place in 2009. Current price action is taking place at lower Bollinger Bands and near a 37.75 support from August this year. Stochastics are oversold and the last week’s bar was a narrow range candle with open and closing prices near each other. Such candles signal that supply and demand are in a relative balance. Nearest resistance level is at 42.58 while the nearest support level is at 37.75.

Crude Oil, Daily

In the latest Live Analysis Webinar we focused on the fact that Crude oil was trading at a pivotal support (37.75 – 40.50) while the USDCAD has been trading near this year’s highs. This combination suggests that both markets are near potential turning points. Today’s opening gap to the upside together with OPEC’s comments supports the view while the bullish pin bar (a hammer) from Friday suggests the same. Stochastics, RSI and Money Flow Index are edging up from oversold levels. Today’s price advance was turned as the pivotal resistance at 42.58 invited sellers to push the price down yet again. Support area: is a pivotal candle support at 37.75 – 40.51 while resistance levels are at 42.58, 45.90 and 48.32.

Crude Oil, 240 min

The 42.65 proved to be too much for the oil bulls to handle and today’s rally was quickly rejected. The last 4h candle from Friday is bullish but today’s failure to challenge the resistance takes some of its edge away. Price is not trending lower anymore in this timeframe and there is some attempt to change direction from the support.

Conclusion

In the latest Live Analysis Webinar we identified the 37.75 to 40.50 area as potential support and 42.60 as a resistance. These S&R areas have proven to be highly valuable as Crude Oil has been bouncing between the levels. This is a good example of how fundamental information impacts the market and the technical levels as still very valid and valuable. The increased volatility with an opening gap suggest that market participants put two and two together and are looking for a turnaround in oil. However, the sideways move in the weekly chart is fairly near and could cause sideways action between it and the below support range. Saudi comments suggest oil market is near levels where the turnaround can actually take place.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

USDCAD, Weekly

In the beginning of this year I suggested that the USDCAD pair will move beyond the high of 1.2793. This resistance penetration took place in July and since then the pair has created a higher low almost at the same level. Now USDCAD has been once more facing an area that is a previous high. In the weekly picture price has bumped into resistance at higher Bollinger Bands while the ascending regression channel low wasn’t too far either. The Stochastics are almost in the overbought area and therefore support the idea that the bullish momentum is, at least temporarily, fading.

USDCAD, Daily

The pair has created a wedge formation below the weekly high while yesterday’s candle was a bearish pin bar (a shooting star) and was quickly followed by a sell off. This move brought price below 1.3300 level that supported price over the last two days. At the time of writing price is getting near a pivotal support at 1.3223, a level that coincides with an upward sloping trendline. The next support is at 1.3194 while the resistance area is between 1.3300 and 1.3374.

As Canadian economy is strongly oil dependent the price of crude oil and the USDCAD have an inverse relationship. Crude oil is at a support area (37.50 – 40.00) created by a pivotal candle from August. If downside in crude oil is limited then the upside in USDCAD in near term should be limited as well.

USDCAD, 240 min

There is a pretty clearly defined wedge in the 4h chart as well. A projection based on the width of the formation (dotted arrow) points to the proximity of 61.8% Fibonacci retracemen but there is a significant support at 1.3220 which could turn the price higher before it can hit this projection. Price is currently trading at a support area created by 38.2% Fibonacci level and a pivot candle from November 12^th. The 4h resistance area is between 1.3323 and 1.3370.

Conclusion

The proximity of the upper weekly Bollinger Bands and previous high at 1.3457 together with a shooting star candle in the daily timeframe suggest there’s weakness ahead. The fact that crude oil is near previous lows (a pivotal low at 37.50 – 40.00) supports the view. Therefore it makes sense to look for shorting opportunities should the price rally higher (to 1.3300 – 1.3374 range) from the current support. Short term traders might also consider engaging the long side but considering the bearish technical factors in the weekly and daily timeframes the upside might be limited. Therefore price advances might run into considerable resistance between 1.3300 and 1.3370. Due to rising trendline and a pivotal low coinciding near 1.3220, 1.3220 – 1.3240 could work as a short target should the price first rally into the resistance and reversed lower. Traders have different price objectives but whether they are looking for a quick intraday gain or a swing trade they should look for buy signals at support and sell signals at resistance areas as defined in this analysis report.

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Two days ago GBPUSD formed a narrow body candle at 1.5246 resistance. This bearish candle was followed by a down day and became a pivotal candle as a result. Today price has dipped below Friday’s pivotal candle low suggesting GBPUSD is in a sell the rallies mode in short term.  This view is confirmed by the price moving below a rising trend line. Price is now trading at lower 4h Bollinger Bands and could therefore react higher from here. If this corrective move takes place we should look for short trade signals between 1.5190 and 1.5230 with a view of looking to cover the shorts near November 6th low. Targets 1: 1.5130 and target 2: 1.5040.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Gold, Daily

After the dreadful events in Paris the market participants are once again turning to the oldest of safe haven plays, gold. This morning gold price jumped higher with a gap opening and is trading now 1.25% higher than it closed on Friday. Such a strong opening after price has found support from a previous low is usually a sign of higher prices to come. Another factor that’s likely to have played some role in today’s gold rally is the fact that Japan’s GDP tumbled 0.8% in Q3 (q/q). The drop was much larger than anticipated and comes in the context of Japan, one of the largest economies in the world slipping yet again into a recession.

While writing this Gold almost reached the nearest resistance level at 1097.70 and reacted lower. The next resistance level is at 1103.80 while the 1073 level is the nearest significant daily support. These nearest resistance levels coincide with the 23.6% Fibonacci support level at 1101.20 (as drawn from the October high to the latest low), and the 50% Fibonacci retracement at 1132.50 coincides with a 50 day SMA.

A break above the 1103.80 resistance could bring the 50% retracement level into play but I’m interested on price reactions at supports after a possible pull back closer to supports. If price pulls back at or below 1089 we should be looking for long entry signals as per my teachings in the webinars. Should this happen the proximity of 50% Fibonacci level and the moving averages at 1133 and 1139 act as a target area for swing trades, while short term traders might want to consider 1097 to 1103 as a target range.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

GBPUSD, 240 min 

UK unemployment unexpectedly dropped to a new cycle low of 5.3% in September data, down from 5.4% in August and July’s 5.5%. The consensus had been for an unchanged 5.4% reading. This takes the jobless rate further south of the BoE’s NAIRU (non-accelerating inflation rate of unemployment) threshold of 5.5%. The employment rate, meanwhile, rose to 73.7% the highest since records began in 1971.

Despite this, wage data disappointed: the ex-bonus average household pay packet rose 2.5% y/y in the three months to September, down from the 2.8% increase of August, while the with-bonus figure rose 3.0% y/y, unchanged from August and shy of the median forecast for 3.2%. The weaker wage data has been the main takeaway for markets, with sterling trading weaker in the wake of the release, though with inflation fractionally negative, incomes continue to trend firmly upwards in real terms. The October claimant count has been somewhat overshadowed on this occasion, coming in with a rise of 3.3k, slightly worse than the 1.4k median forecast. The claimant count rate remained unchanged at 2.3%.

GBPUSD is trading just above the 23.6% Fibonacci retracement level after it reacted lower from the proximity of 1.5197 resistance level. It is trading near the upper 4h Bollinger Bands while the 30 period SMA and a consolidation from yesterday appears to give some support. Even though the market turned lower before hitting my intended shorting level I am still looking for short signals at or near 1.1597 resistance (coincides with 38.2% Fibonacci level) with an aim to cover the trade near 1.5060 level.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.