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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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

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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

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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.

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

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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.

EURUSD, Daily

EURUSD failed to stage a recovery and now trades at 6 month lows. EUR bears get a boost as ECB member Liikanen said that the central bank stands ready and willing to act, confirming speculation that a cut in the deposit rate is in the works for December. Since price broke the 1.0810 support now turned resistance, but failed to touch the 1.0660 next relevant support level, this leaves me with the view that price may attempt to trace out a short term measured move higher to create a new lower top below 1.0870 before we see an attack on the next leg lower near the 1.0580′s. The risk however, with this type of trade set-up, since momentum analysis remains firmly to the downside, is that we cannot rule out any sudden sharp declines if price fails to make any progress towards the 1.0810 area.

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.

EURUSD, 240 min

After the huge surprise in the US Non-Farm Payrolls numbers on Friday the market participants saw the December rate hike in the US as a done deal. This dropped EURUSD to a 1.0666 – 1.0752 support range and drove the US Dollar Index into a resistance (see Friday’s TCM report). As a result EURUSD has recovered slightly and is at the time of writing up by 0.27% from Friday’s close.

All in all the pair is still in a downward sloping channel with resistance ahead at 1.0833. The upper end of the channel isn’t far away from the resistance while the 38.2% Fibonacci retracement level coincides with the general area of this resistance. In addition the 30 period SMA happens to be relatively near to the resistance at 1.0872. Based on several technical factors coinciding between 1.0833 and 1.0872 I am looking for short trade signals in this bracket should the price rally to these levels. My target for a short trade is at 1.0755.

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.

EURUSD, Daily

US nonfarm payrolls surged 271k in October from a revised 137k in September (was 142k) and 153k in August (was 136k) for a net 12k upward bump. These put the 3-month average at 187k. The unemployment rate dipped to 5.0% from the 5.1% over the prior two months. The labor force rebounded 313k from -350k previously, while household employment climbed 320k from -236k. The participation rate held at 62.4%. Average hourly earnings were up 0.36% from September’s unchanged. The workweek was steady at 34.5. Private payrolls jumped 268k with increases of 27k in the goods producing sector, 31k in construction, with manufacturing unchanged. Employment in the services sector climbed 241k with strength in business services, education, and trade/transport. The government added 3k. Start the countdown.

Surprise strong number send the USD higher against the currencies and Gold while European equity markets reacted higher. EURUSD traded almost down to 1.07 and is at the time of writing reacting a bit higher. This number increased the markets’ belief that the Fed will hike the rates in December. Therefore the previous support at 1.0837 should act as a resistance and we’ll be looking for short signals at the level should the market rally there next week. The nearest support is at 1.0666.

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.

The EURUSD fell to its lowest price levels since August, as strong U.S. data supports USD strength. USD buying is seen across the board. The employment component improved to 59.2 from 58.3. New orders climbed to 62.0 versus 56.7, and new export orders increased to 54.5 from 52.5. The data suggests the service sector remains healthy.

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.