E-mini S&P 500 Index (ES) Futures Technical Analysis – Remains Weak Under 2999.00, Could Strengthen Over 3002.75

December E-mini S&P 500 Index futures are trading flat to lower on Wednesday, pressured by several factors including concerns over Brexit as U.K. and EU negotiators try to hammer out an acceptable alternative to a hard exit, renewed worries over U.S.-China trade relations and weaker than expected U.S. economic data. The potentially bearish events are helping to dampen yesterday’s earnings driven performance.

At 15:02 GMT, December E-mini S&P 500 Index futures are trading 2996.50, down 1.25 or -0.05%.

As far as U.S.-China trade relations are concerned, early Wednesday, China threatened countermeasures if the U.S. continues to “meddle” in its affairs over Hong Kong. President Trump has been noticeably silent on the matter, perhaps fearing he’ll offend the Chinese, causing the trade deal to fall apart.

Additionally, the Wall Street Journal questioned how much more in U.S. agricultural products China will actually buy and for how long.

Finally, keeping a lid on prices was a U.S. retail sales report that came in lower than expected, increasing the chances of an October 30 Federal Reserve rate cut.

E-mini S&P 500 Index
Daily December E-mini S&P 500 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3003.25 will signal a resumption of the uptrend.

On the downside, support comes in at 2960.50 to 2940.25.

Daily Technical Forecast

Based on the early price action, the direction of the December E-mini S&P 500 Index the rest of the session on Wednesday is likely to be determined by trader reaction to a Gann angle cluster at 2999.00 to 3002.75.

Bearish Scenario

A sustained move under 2999.00 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the downtrending Gann angle at 2979.75. This is a potential trigger point for an acceleration into the Fibonacci level at 2960.50.

Bullish Scenario

Overtaking and sustaining a rally over 3002.75 will signal the presence of buyers. Taking out yesterday’s high could trigger an acceleration to the upside with the main top at 3025.75 the next potential upside target.

Side Notes

I think the low volume is being caused by the lack of clarity for investors. Brexit, U.S.-China trade relations, U.S. economic data, and Fed rate cut decision may be too much for investors at this time, leading professional investors to head to the sidelines.

EUR/USD Mid-Session Update for October 16, 2019

The Euro is trading higher against the U.S. Dollar on Wednesday after U.S. retail sales fell for the first time in seven months in September, increasing the chances of a Fed rate cut at its policy meeting on October 29-30.

According to the Commerce Department, retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles. The decline was the first since February.

Data for August was revised up to show retail sales gaining 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast retail sales would climb 0.3% in September. Compared to September last year, retail sales increased by 4.1%.

After the release of the disappointing report, the chances of a Fed rate cut jumped from 78.4% to 88.2%, according to the CME FedWatch Tool.

Lower rates tend to make the U.S. Dollar a less-attractive investment.

At 14:20 GMT, the EUR/USD is trading 1.1048, up 0.0015 or +0.14%.

EURUSD
Daily EUR/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a trade through 1.1110. A move through 1.0879 will signal a resumption of the downtrend.

The minor trend is up. This move confirms the upside momentum. A trade through the minor top at 1.1063 will indicate the buying is getting stronger. The minor trend changes to down on a move through 1.0991.

The main range is 1.1164 to 1.0879. Its retracement zone at 1.1021 to 1.1055 is currently being tested. Trader reaction to this zone will determine the near-term direction of the EUR/USD.

The short-term range is 1.0879 to 1.1063. Its retracement zone at 1.0971 to 1.0949 is support.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at 1.1053 and the Fibonacci level at 1.1055.

Bullish Scenario

A sustained move over 1.1055 will indicate the presence of buyers. If this generates enough upside momentum then look for a move into the minor top at 1.1063, followed by the downtrending Gann angle at 1.1072. Overtaking this angle could drive the EUR/USD into the uptrending Gann angle at 1.1099.

Bearish Scenario

A sustained move under 1.1053 will signal the presence of sellers. This could trigger a retest of the 50% level at 1.1021. This is a potential trigger point for an acceleration to the downside with the next target angle coming in at 1.0989.

GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD continues to post strong gains. In Wednesday’s North American session. Currently, the pair is trading at 1.2830, up 0.55% on the day.

Cable Surges on Brexit Optimism

The British pound surged on Tuesday, climbing an impressive 1.2%. The pound has enjoyed an excellent October, gaining 4.0%. The catalyst for this run has been the Brexit withdrawal date of October 31 and whether a deal can be made in time. The pound has soared as the markets are clearly of the opinion that an agreement can be reached and a nightmarish no-deal scenario avoided.

Technical Analysis

GBP/USD easily broke through 1.2653 on Tuesday and proceeded to test resistance at 1.2750. The trend for the pound to dollar ratio is up, and if the pair continues to move higher, it could soon set its sights on resistance at 1.2870. On the downside, there is support at 1.2585.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD is trading sideways in Wednesday’s North American session. Currently, the pair is trading at 1.3214, up 0.07%.

Canadian CPI Beats Forecast

Canadian CPI moved closer to the Bank of Canada target of 2.0%. On an annualized basis, CPI showed a 1.9% gain, above the forecast of 1.7%. Trimmed CPI, which excludes the most volatile items which are covered in CPI, remained steady at 2.1%, on an annualized basis.

Technical Analysis

1.3240 remains an immediate resistance line and has been under pressure during the week. On the downside, the pair has tested support at 1.3200, but has not been able to push sustain downward movement below this level. I do not expect any significant movement for the remainder of the Wednesday session.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN has recorded slight gains on Wednesday. In the North American session, the pair is trading at 19.26, up 0.11% on the day.

Technical Analysis

USD/MXN broke through support at 19.30 early in the week and is putting pressure on 19.20, which is a major support level. This line, which has remained intact since early August, could be tested during the week. On the upside, there is resistance at 19.45.

Serial Entrepreneur, Marvin Steinberg, Explains Why STOs are Better than IPOs

Unfortunately, the reality is that startups often struggle for various reasons and the inability to push past these struggles can cause them to shut down even if they’re offering a genuinely good product/service.

German serial entrepreneur, Marvin Steinberg, explains that most startups do not anticipate all the upcoming obstacles and challenges they will face during just their first year, especially when it comes to making sure that they have enough funding to satisfy their needs. This lack of planning can be devastating for startups, and the room for error is really minor. They simply have to get it right from the start.

This also goes hand-in-hand with time management. Startups have to make hundreds of difficult decisions at any given time and no matter how much the team wants to work, there are only 24 hours in a day. Money problems hit startups hard, delaying the development of products or services as well as limiting growth.

Marvin Steinberg, an expert in marketing who has helped dozens of projects succeed, knows how hard it can be for startups to get started. Marvin explains that many of the problems startups face are rooted in capital constraints, and it’s no wonder.

Every business or marketing decision hinges on capital constraints: how much to spend on promotion, how many people to hire for the next expansion phase, invest in customer support or build another version of the product that might be able to be a good fit for another target audience. There are ample questions that – together with the sporading nature of funding – can create a lot of uncertainty for these ambitious companies.

However, there might be a way to significantly lower this uncertainty. According to Marvin, new technologies like the blockchain, cryptocurrencies, and new financial instruments are making it easier than ever for startups to raise funds.

As the most important thing for startups is to raise money, they definitely can’t afford to neglect these new promising technologies. And for a time, it seemed like Blockchain-based startups have found an easy way to raise funds by making use of ICOs, Initial Coin Offerings, a method alternative to the traditional IPO.

Initial Coin Offerings, a crucial development for blockchain-based startups

Over the last few years, companies realized that it’s getting harder and harder to reliably get the funding sources they need for expansion via traditional methods, so they started looking for new sources.

Fortunately, the timing was just right for an innovative solution. Blockchain technology was developing rapidly, and it quickly became obvious that it will serve as the basis for future innovation within the financial industry.

According to Don & Alex Tapscott, authors Blockchain Revolution (2016), “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”

By allowing digital information to be distributed but not copied, blockchain technology created the backbone for a new type of internet that would allow the use of digital currencies, Bitcoin, and other innovations.

Shortly after, in 2013, the Initial Coin Offering (ICO) technology was developed.

These have been a tremendous help for blockchain-based startups. There were many benefits to launching an ICO, as opposed to a traditional IPO. For instance, ICOs didn’t need to comply with regulations, and this meant that everyone could easily launch an ICO and everyone could easily participate in them. There were no barriers anymore.

This made ICOs extremely attractive to high-risk investors and helped startups raise funds easily. ICOs have helped blockchain projects raise billions from 2013 until today.

Unfortunately, this didn’t last too long as the lack of regulations also meant a huge risk for investors. In fact, leading blockchain agencies that offer research, including Mesari, estimate that around 90% of ICOs have either failed or were scams. The freedom to launch an ICO made the method extremely attractive to scammers and fraudsters. Combined with the cryptocurrency boom in 2017, the unregulated nature of ICOs led to hundreds of failed ICOs as well as hundreds of scams.

The Evolution of Initial Coin Offerings

Investors’ trust diminished significantly and ICO’s were almost guaranteed to fail unless there was a great product or service involved in the token sale. Regulations were also harder on ICOs with some countries outright banning them completely.

This led to the creation of other fundraising methods like IEOs (Initial Exchange Offerings) and eventually STOs (Security Token Offerings).

IEOs are similar to ICOs but the token sale is launched by an exchange. This method became quite popular after Binance launched their launchpad platform for IEO’s.

Marvin Steinberg continues saying that because IEOs are conducted on cryptocurrency exchanges, people usually think this means the token sales are scam-free as the exchange itself has to make sure the project is legit. However, Marvin warns people that most exchanges are faking their trading volume through wash-trading and other methods and that they don’t necessarily care if they offer a token sale from a fraudulent project.

Marvin Steinberg is a keen believer in STOs, Security Token Offerings. as they are fully regulated. this gives investors an extra layer of security. Marvin asserts that STOs are the safest and most reliable ways of conducting a fundraise for tokenized projects.

The Reality of IPOs

Marvin Steinberg explains that the primary means of conducting a regulated offering remains to be IPOs, or initial public offerings of equity. However, this is at the disadvantage of startups.

Mr. Steinberg continues that the reality of IPOs is that they are expensive, time-consuming, and studded with bureaucratic jargon that covers the process with red tape. In the hyper competitive nature of startups today, pursuing an IPO can often be a path to destructive decision-making as the limited team members will be constrained to fulfilling the IPO needs for an extremely long period of time, rather than the development of the company.

Despite these problems, IPOs raise far more capital than ICOs as they are regulated and thus offer a safe investment channel for investors. Marvin Steinberg asserts that this aspect draws the interest of important institutional investors who can enable not only access to more funds, but also great growth networks.

Thus, startups are at a tough choice. They need funds but should they do so with an IPO that could potentially also be the cause of their end?

The Real Solution is STOs

Marvin Steinberg, with his company Steinberg Invest, is the co-founder of CPI Technologies and one of the leading Security Token Offering (STO) experts and top-recognized crypto entrepreneurs in the industry. He’s helped hundreds of companies collectively raise over 250 Mio $ so far. He also has direct contact with family offices worldwide and his influential network includes almost all licensed companies that sell tokens internationally.

In a recent interview with Bitcoin Magazine, Marvin Steinberg explained how he also helped drive mainstream adoption for tokenized bonds and tokenized buildings like hotels with regulators across Europe, and how he’s the leading the largest STO project in the world, the Times Square project.

Marvin Steinberg explains that what startups truly seek is a security token offering, something that has all the positives of an IPO, without the negatives.

Marvin goes on that STOs are used for the issuance of security tokens, which are regulated offerings that offer investors the same rights and protections that would be delivered with an IPO. However, Marvin Steinberg continues, STOs do not involve the same amount of red tape as IPOs do.

And that’s because STOs completely changed the game by fixing all the problems with ICOs, in addition to offering even more flexibility. In fact, the tremendous experience accumulated by investors during the ICO boom made everyone realize that it’s crucial to always comply with existing regulations on securities.

Therefore, STO technology was specifically designed to open the door to safe global investments, revolutionize capital markets, change the way conventional securities circulate, and provide businesses with a simple yet efficient tool to access the global capital market.

Not only that but it also enables much more productive relationships between entrepreneurs and investors, thereby fixing another big problem that ICOs had: not enough protection for investors.

That fact of the matter is that IPOs are still dominated by traditional investment banks and an IPO demands massive bureaucratic hurdles. Marvin Steinberg explains that this is not the case with a STO. Marvin describes that security tokens allow both startups and enterprises to tokenize assets, including equity, and issue them on a blockchain, while retaining the legal safety that would otherwise attract institutional investors to only IPOs.

In addition, STOs have a number of extremely valuable benefits compared to anything else. For example:

  • The ability to raise more funds in record time without the hassle & uncertainty of traditional fundraising
  • A cost-effective way to get instant access to a worldwide pool of investors and virtually unlimited funding opportunities (hundreds of times larger than the ICO market)
  • Unprecedented freedom because – in contrast to stocks – STOs are globally liquid and not anchored to any trading platform
  • Peace of mind and lower risk because of cutting-edge blockchain technology and comprehensive regulatory controls that make scam almost impossible
  • The flexibility to raise funds not only for blockchain-based projects, but also for traditional enterprises, IT companies, and even general startups
  • Measurable and regulated investment risk, with guaranteed respect for the rights of investors. In contrast to utility tokens, a security token (Type #2) is a full-fledged instrument investment, since it’s secured by a particular asset
  • Instant online access to investment markets, and the ability to become “globally liquid”, thereby not being anchored to any trading platform (unlike traditional stocks and stock markets)
  • Better protection for both the issuing company and the investor because of verified investor eligibility and automatically secured investor rights

Marvin Steinberg is the co-founder of CPI Technologies, a company that is leading the market for white label STO solutions. In fact, the company has completed over 40 projects and its upcoming flagship venture is a $700M tokenization of a part of Times Square itself. Marvin explains that the tokenization of real estate makes it accessible to anyone, making way for opportunities that never existed before.

Marvin Steinberg, a successful serial entrepreneur, asserts that businesses that seek capital raise can dodge the jargon involved with an IPO and simply pursue the future of fundraising: STOs. He believes that much of the media does not yet reflect on STO news, but that is only due to the novelty of this technology.

In order to draw fresh exposure to security tokens, Marvin has created a short 2-minute quiz on STOs which – once completed – reveals whether starting an STO can help you secure more funding and grow your business, without the hassle of traditional fundraising.

This lets anyone get a quick footing of their knowledge about the most advanced solution on the market today for raising the essential capital they need.

This simple quiz only takes 2-minutes to complete and you don’t even need any special knowledge or skills for it.

Price of Gold Fundamental Daily Forecast – Poor U.S. Retail Sales Providing Support Along with Brexit, Trade Concerns

Gold futures are trading higher on Wednesday shortly after the cash market opening. The market has regained some of its upside momentum after rebounding from early session weakness. The catalysts behind the strength are lingering concerns over Brexit, pessimism over U.S.-China trade relations and weaker-than-expected U.S. economic data, which could mean an end of the month rate cut by the Fed.

At 12:57 GMT, December Comex gold is trading $1494.60, up $11.10 or +0.77%.

Renewed Brexit Worries

Gold is being underpinned this morning by renewed worries over Brexit after Tuesday’s optimistic outlook drove gold prices sharply lower.

On Tuesday, optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the divorce was being drawn up.

“Our team(s) are working hard, and work has just started now today, this work has been intense over the weekend and yesterday, because even if the agreement will be difficult, more and more difficult, to be frank, it is still possible this week,” Barnier told reporters in Luxembourg on Tuesday morning.

He added that “any agreement must work for everyone,” saying it is “high time to turn good intentions into a legal text.”

By mid-afternoon (Tuesday), one report suggested that a draft deal was in the works according to two separate sources familiar with negotiations.

On Wednesday, traders aren’t so optimistic about a deal and are seeking protection in gold. This comes after “constructive” talks between the U.K. and the E.U. to get a Brexit deal, went on past midnight. Investors are still unclear if both parties can avoid postponing the U.K.’s departure from the EU on October 31.

U.S.-China Trade Relations Sour

There’s a little more tension between the United States and China on Wednesday, which is raising concerns over whether the two parties will reach even a partial trade agreement over the near-term.

This is stemming from reports that China is threatening “countermeasures” in response to the U.S. House of Representatives passing four pieces of legislation taking a hard line on Beijing for its violent response to protesters in Hong Kong.

U.S. Retail Sales Underperform

U.S. retail sales fell for the first time in seven months in September, raising fears that a slowdown in the American manufacturing sector could be starting to bleed into the consumer side of the economy. Furthermore, the disappointing report could help alter the split in the Federal Open Market Committee (FOMC) with more policymakers leaning toward a rate cut.

Daily Forecast

I’m looking for prices to remain underpinned unless an actual deal between the U.K. and the EU over Brexit is actually announced.  The U.S. and China seem far apart in their efforts to finish phase one of their partial trade agreement and the retail sales report is helping to support an end of October rate cut by the Fed.

Futures Fall Despite Solid EPS, Retail Sales Miss, Brexit Deal Remains Elusive

Futures Fall As Worries Creep  Back Into Focus

The U.S. equity market is indicated lower in early Wednesday trading despite signs 3rd quarter earnings are better than expected. The Dow Jones Industrial Average and S&P 500 are both indicated lower by 0.20% while the NASDAQ Composite is down about -0.30%. The move is driven by growing concern China will not follow through on its pledge to buy more U.S. agricultural products. If this is the case it is likely additional tariffs will be enforced later this year. China has pledged as part of the Phase I trade deal to buy up to $50 billion in U.S. products.

In earnings news, financial stocks Bank of America and Bank Of New York Mellon both reported better than expected EPS. Both companies reported strength in consumer segments that helped drive share prices higher. Shares of BAC are up more than 2.5% while BNY-Mellon is up about 1.5%. In economic news, Retail Sales were weaker than expected. September retail sales fell -0.3% versus an expected gain of 0.3%. The mitigating factor is an upward revision to the past month of 0.2%. Later in the session traders will have an eye out for the NAHB Index and the FOMC’s Beige Book.

Europe Mixed, Brexit Deal Is Still Elusive

European markets are flat and mixed at midday as traders fret over trade and the Brexit. On the trade front, China’s demands the U.S. remove the threat of more tariffs before signing the Phase I deal has thrown a wrench into the works. At this stage it is becoming less and less likely Phase I will come to fruition. In Brexit news, negotiations stalled on Wednesday despite a narrowing of differences. The Irish PM confirms the back-stop is yet to be resolved but there is hope. The two sides will begin a two-day summit tomorrow that will, hopefully, result in a deal.

The German DAX is in the lead at midday with a gain of 0.22% while the FTSE and CAC are both edging lower. In stock news, shares of UK tech giant Micro Focus is up 4.3% on its results as is seafood producer Mowi. At the other end of the rankings, IMCD and DBA Aviation are both down more than -4.0%.

Asia Mostly Higher On Brexit Hopes

Asian markets are mostly higher at the end of Wednesday’s session. The Nikkie and ASX are both up more than 1.0% while the Hang Seng and Kospi are up closer to 0.70%. The moves are driven by hope for a Brexit deal, however elusive it may seem right now. In Hong Kong, leader Carrie Lam is under intensifying pressure as she rejects HK’s bid for autonomy. The Shanghai composite is the only index to move lower, it posted a loss of -0.41%.

Natural Gas Price Fundamental Daily Forecast – Traders Hunting for Stops Over $2.568 Amid Calls for Chilly Temps

Natural gas futures are edging higher for a fourth session on Wednesday, putting the market in a position to take out the two-week high and change the short-term trend to up.

Once again, the catalysts underpinning the market and driving out the weak short-sellers are stronger spot market prices amid forecasts pointing to chilly temperatures in store for the Great Lakes and Northeast late in the month.

At 12:50 GMT, December Natural Gas is trading $2.548, up $0.016 or +0.63%.

On Tuesday, the Global Forecast System (GFS) showed a “much colder pattern” compared to its European counterpart, and the midday GFS run trended even colder for late October, according to NatGasWeather.

“There remain three major periods of interest, starting with a cold shot currently sweeping across the northern U.S. for a bump in national demand,” the forecaster said. “This will be followed by national demand dropping below normal this weekend through early next week…but where the data is cold enough and bullish in most weather models is October 24-30 as a series of stronger cold shots advance deep into the U.S. with widespread lows of teens to 30s.”

Short-Term Weather Outlook

According to NatGasWeather for October 16-22, “A weather system with showers and cooling will sweep across the Midwest and Northeast the next few days with lows of 30s to 40s. Texas and the southern US will be mostly comfortable with highs of upper 60s to lower 80s, although locally hotter over the Southwest, South Texas, & Florida. High pressure and above normal temperatures will gain across the eastern half of the country this weekend with near perfect highs of 60s to 80s, while slightly cool over much of the West. Overall, decent demand the next few days, then lighter this weekend.”

Daily Forecast

The trend will change to up on a trade through $2.568, making this today’s upside target. Should a move through this level generate enough upside momentum, then with help from the “chilly” forecast, we could see an eventual surge into a 50% retracement level target at $2.636.

A failure to reach or blow through $2.568 will indicate traders are becoming concerned over Thursday’s government storage report that could show another triple digit build. However, since this is stale data and traders are more focused on the future weather, any correction is likely to be short-lived.

What is The Target of The Pound?

In less than a week, the British pound strengthened by 5% to the dollar and 4.3% against the euro to its highest levels in five months. The UK’s FTSE100 added 0.7% during the same period, and this week it is declining due to the strengthening of the national currency, although it rose in dollar terms by more than 4%. This performance better than the S&P500 growth by 3.5% over the same time.

Since last Thursday’s rally, GBPUSD has come a long way from near 1.22 and touched 1.28 last night. At the time of writing, the pound corrected to 1.2750, although the pair remains above the critical 200-day moving average line at 1.2710. It often acts as an essential trend indicator. Fixing the pound above this line at the end of this week will be a necessary signal for the markets to end the devaluation period.

The British pound sold out in July, declining below 1.20 in August and September, reflecting the maximum fear around chaotic exit of Britain from the EU. The appearance of significant signs of progress in the Irish border negotiations was a critical factor in the trend reversal.

If the EU and Britain agree deal on an exit on October 31 during Thursday and Friday summit, and the UK Parliament accepts it at the Saturday session, GBPUSD may quite quickly return to this year highs around 1.32.

The strengthening of the pound above its 200-day average in 2017 triggered a prolonged rally by 13% to 1.43. Fundamentally, the British currency in the coming months may get lift by both higher inflation rates and stronger economic indicators, which may be positively affected by the weakening of the British pound earlier. Without the uncertainty around Brexit, the Bank of England may well be more determined in its fight against inflation. Thus, the lows around 1.20 may well be a bottom for GBPUSD for the foreseeable future.

The EURGBP reached its peak near 0.93 in August, after which it turned sharply down, and now is trading by 7% below its peak levels at 0.8650. As the British and EU deal may have a positive impact not only on the pound but also on the euro, the potential for the weakening of EURGBP is noticeably lower – from 0.85 to 0.8350. Around 0.85, the pair consolidated from March to May, and on the way to 0.8350, it redeemed on the downturns in the period from August 2016 to May 2017, which makes these areas significant attraction points for the markets.

This article was written by FxPro

Crude Steadies, But Remains Under Pressure

Crude oil is showing little movement on Wednesday. In the European session, WTI is trading at $53.14, up $0.20, or 0.38%. Brent crude is trading at $58.91, down $0.06, or 0.10%.

Is a U.S-China Trade Deal at Hand?

Investors are keeping a close eye on trade talks between the U.S. and China. There has been some optimism that a limited deal (“Phase 1”) can be hammered out, which would be the first of up to three “mini agreements”. This would enable to sides to remove tariffs, while at the same time, postpone the most intractable issues for another time. If the sides can reach any kind of a deal, growth will improve and the demand for crude will increase. However, investor confidence slipped earlier in the week, as the Chinese media reported that China would demand further talks before agreeing to a Phase 1 agreement. The U.S. has sounded optimistic about reaching a deal, and has canceled tariffs which were set to take effect this week. A new 15% on $160 billion in Chinese goods is scheduled to take effect on December 15, but would likely be rescinded if the sides can reach an agreement before then. Traders should be prepared for further volatility from crude, depending on the progress of the current round of trade talks.

Crude Inventories – Another Surplus?

Another important factor for crude movement is the Energy Information Administration (EIA) crude inventory report. The weekly report has been posted four successive surpluses, pointing to an oversupply of U.S. crude. Another large surplus is expected on Thursday, with a forecast of 3.0 million barrels. This streak of surpluses is putting upward pressure on crude prices, and another surplus could push crude higher on Thursday.

WTI/USD 4-hour Chart

Oil Price Fundamental Daily Forecast – Underpinned by Upbeat Brexit News, but Gains Capped by Trade War Concerns

U.S. West Texas Intermediate and international-benchmark crude oil futures are trading nearly flat to slightly better on Wednesday, underpinned by optimism over Brexit and new signs that OPEC and its allies are willing to make further supply cuts, but pressured by renewed concerns over U.S.-China trade relations and potentially bearish weekly inventories reports.

At 11:54 GMT, December WTI crude oil is trading $53.04, up $0.16 or +0.30% and December Brent crude oil is at $58.71, down $0.03 or -0.05%.

Traders Hoping for Favorable Brexit Deal

Traders are optimistic that the European Union and the United Kingdom will strike a deal that avoids a “hard” or no-deal Brexit. This should boost economic growth and consequently oil growth and prices.

Early Tuesday optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the divorce was being drawn up.

“Our team(s) are working hard, and work has just started now today, this work has been intense over the weekend and yesterday, because even if the agreement will be difficult, more and more difficult, to be frank, it is still possible this week,” Barnier told reporters in Luxembourg on Tuesday morning.

He added that “any agreement must work for everyone,” saying it is “high time to turn good intentions into a legal text.”

By mid-afternoon (Tuesday), one report suggested that a draft deal was in the works according to two separate sources familiar with negotiations.

Further Supply Curbs Possible

OPEC Secretary-General Mohammad Barkindo said OPEC “will do whatever (is) in its power” along with its allied producers to sustain oil market stability beyond 2020.

Daily Forecast

The markets are at a stalemate on Wednesday because of fading hopes of a trade deal between the United States and China after the latter threatened countermeasures against the U.S. for showing support for the Hong Kong protesters.

Traders are also looking for further developments over Brexit. A deal to allow the U.K. without hard ramifications should underpin prices.

Late in the session, the price action will be driven by the weekly inventories report from the American Petroleum Institute at 20:30 GMT. It is expected to show U.S. crude stocks probably grew for the fifth straight week, according to a Reuters survey.

The report has been delayed one day because of Monday’s U.S. bank holiday. The Energy Information Administration will report on Thursday.

Silver Dips to 2-Week Low as U.S-China Trade Talks Continue

Silver prices are lower on Wednesday, following the downward trend seen on Tuesday. In the European session, silver is trading at $17.27, down $0.14, or 0.80% on the day. Earlier in the day, the white metal slipped to $17.21, its lowest level since October 3.

Stocks Up, Silver Down

Risk appetite rose on Tuesday, as investors are somewhat optimistic that the U.S. and China will reach a limited trade agreement. The “Phase 1” deal would be the first of up to three mini-agreements, allowing the sides to postpone dealing with thorny issues such as forced technology transfers to another time. The Trump administration has canceled tariffs that were scheduled to take effect this week. Still, the U.S. has yet to remove a new 15% tariff scheduled to commence on December 15 on $160 billion worth of Chinese goods. Treasury Secretary Mnuchin said this week that he expects a deal to be reached, which would cancel those tariffs. Investors have responded by buying equities, while precious metals have lost ground. Silver prices have been fairly steady in the month of October, but that could quickly change, based on developments in the U.S-China talks.

There is added pressure on China to show more flexibility in the negotiations, as the Chinese economy has been the big loser in the trade war with the U.S. In September, Chinese exports to the U.S. declined by 22%, on an annualized basis. The Chinese manufacturing sector is sputtering, as the Chinese Manufacturing PMI has pointed to contraction for the past four months.

Silver Technical Analysis

Silver is currently showing some downward movement, but the metal has remained close to the 17.50 line for most of October. The 50-EMA is at 17.46, but it is the 200-EMA at 16.90 which could become relevant, if the downward movement continues. On the upside, the round number of 18.00 has remained intact since late September.  
XAG/USD 4-Hour Chart

USD/JPY Fundamental Daily Forecast – Pressured by Renewed Safe-Haven Buying

The Dollar/Yen is trading lower on Wednesday after failing to follow-through to the upside following yesterday’s strong performance. On Tuesday, the Forex pair was boosted by strong demand for risky assets and higher Treasury yields. The rise in share prices was fueled by better-than-expected U.S. earnings reports. The move in yields was driven by optimistic news over Brexit.

At 09:28 GMT, the USD/JPY is trading 108.685, down 0.178 or -0.16%.

Today’s early weakness is likely being fueled by some light hedging pressure triggered by China’s threat of countermeasures in response to a U.S. bill supporting Hong Kong protesters.

China Vows ‘Strong Countermeasures’

Three bills were approved in the House of Representatives Wednesday evening, one supporting the right of individuals to protest, another allowing for the U.S. to check on Beijing’s influence over the territory and a third aimed at preventing U.S. weapons from being used by police against protesters.

“If the relevant act were to become law, it wouldn’t only harm China’s interests and China-U.S. relations, but would also seriously damage U.S. interests,” said Geng Shuang, China’s Foreign Ministry spokesperson, in a statement on the body’s website. “China will definitely take strong countermeasures in response to the wrong decisions by the U.S. side to defend its sovereignty, security and development interests.”

Geng said while China was working to restore law and order in Hong Kong, U.S. lawmakers were “disregarding and distorting facts,” by turning criminal acts and violence against police into issues of “human rights or democracy.”

“That is a stark double standard. It fully exposes the shocking hypocrisy of some in the U.S. on human rights and democracy and their malicious intention to undermine Hong Kong’s prosperity and stability to contain China’s development,” said Geng, who urged the U.S. to “stop meddling.”

Brexit Traders Eye Imminent Draft Deal

Perhaps helping to limit losses on Wednesday are optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the divorce was being drawn up.

IMF Warning

Another factor that could be pressuring the Dollar/Yen is a bearish report from the International Monetary Fund.  The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund (IMF) warned on Tuesday, adding that the outlook could darken considerably if trade tensions remain unsolved.

Daily Forecast

The markets are relatively calm overnight despite the threat of countermeasures by China to the U.S. legislation supporting the Hong Kong protesters. However, investors have taken precautionary steps by buying the Japanese Yen, gold and Treasury bonds for protection.

Keep an eye on this story to see if President Trump responds to the threat. He could trigger a huge break in the Dollar/Yen if he says anything negative about China that would put a trade deal in jeopardy.

Later today, traders will get the opportunity to respond to the U.S. retail sales report for September and the Fed Beige book. Both reports could influence the Fed’s decision on interest rates later in the month.

Bearish numbers will increase the chances of a Fed rate cut, further weakening the Dollar/Yen.

GBP/USD Daily Forecast – Sterling Holds Near Highs Awaiting Further Brexit News

Brexit Talks Resume in Brussels

EU’s chief negotiator Michael Barnier wanted a legal text of a potential deal delivered by Tuesday but after negotiating until 1:30 AM yesterday, an agreement could not be made. Talks resume today, taking it right down to the wire as negotiations are not meant to take place during the EU summit which starts tomorrow.

I suspect GBP/USD will extend gains if we get word later in the day that a legal text was finalized. However, UK Prime Minister Johnson still has his work cut out for him.

If he’s able to come to an agreement with EU negotiators today, the deal will still need to be approved by the member states at the EU summit which takes place on Thursday and Friday.

But more importantly, the UK parliament needs to vote on the deal. Since Johnson has lost his majority, it’s unclear if all his efforts will be fruitful since parliament could turn it down.

If a deal is not reached, Johnson will be required to request an extension under the recently passed Benn act. This could get tricky as the British PM has said several times that the UK will leave on October 31 no matter what. But when pressed for an answer, he has also said that he will abide by the law.

Technical Analysis

GBP/USD is up about 4% since Johnson announced last week that he found a pathway to a potential deal. Although technical indicators are in oversold territory at this point, I think the exchange rate can continue to move higher if there is further positive news.

GBPUSD 4-Hour Chart

The next level I have my eye on is 1.2924. This level was respected on a weekly chart after the referendum that took place over three years ago.

Price action is likely to be volatile and therefore I’m looking at support at 1.2575. Normally, that level would fall well out of the daily range for the pair. However, considering what is at stake, I’m not ruling out a dip towards it.

Bottom Line

  • An announcement might come that a deal has been agreed on with negotiators later today.
  • The legal text of these negotiations would then be put forth to a vote at the EU summit.
  • If approved at the EU summit, it will go to the UK parliament. In a rare move, parliament will convene on Saturday to decide on the next step.

Wrong Response by Trump to China’s Countermeasures Threat Could Blow Up Trade Deal

There’s a breaking story out of Asia early Wednesday that could blow up into something major later in the day if U.S. President Trump decides to exacerbate the issue. The current price action in the financial markets indicates a sense of caution may be developing in the financial markets with safe-haven assets – Treasury bonds, Japanese Yen and gold turning higher, while demand for risky assets is edging lower.

According to reports, China is threatening to take countermeasures against the U.S. in response to a bill that favors the Hong Kong protesters, the Chinese Foreign Ministry said Wednesday.

That is a pretty bold threat to make while the United States and China are trying to finalize the first phase of a partial trade deal agreed upon on Friday. It’s also closely similar to the threat China made against the National Basketball Association (NBA) before it caved to pressure from the Chinese government last week after an NBA team official made comments supporting the Hong Kong protesters.

The Background

Three bills were approved in the House of Representatives Wednesday evening, one supporting the right of individuals to protest, another allowing for the U.S. to check on Beijing’s influence over the territory and a third aimed at preventing U.S. weapons from being used by police against protesters.

China’s Response

“If the relevant act were to become law, it wouldn’t only harm China’s interests and China-U.S. relations, but would also seriously damage U.S. interests,” said Geng Shuang, China’s Foreign Ministry spokesperson, in a statement on the body’s website. “China will definitely take strong countermeasures in response to the wrong decisions by the U.S. side to defend its sovereignty, security and development interests.”

Geng said while China was working to restore law and order in Hong Kong, U.S. lawmakers were “disregarding and distorting facts,” by turning criminal acts and violence against police into issues of “human rights or democracy.”

“That is a stark double standard. It fully exposes the shocking hypocrisy of some in the U.S. on human rights and democracy and their malicious intention to undermine Hong Kong’s prosperity and stability to contain China’s development,” said Geng, who urged the U.S. to “stop meddling.”

Trump’s Problem

Last week, CNN reported, Trump, in a call with Chinese President Xi Jinping, promised that the U.S. would stay quiet on the Hong Kong protests while the two countries continued to negotiate a possible end to the ongoing trade war.

Early Wednesday, traders are taking precautionary positions in response to the comments from China’s Foreign Ministry Spokesperson. Bonds, gold and Japanese Yen are being bought and stocks in the U.S. and Europe are being sold.

What traders could be waiting for is Trump’s response. Will he defy his promise to Chinese President Xi Jinping, or will he remain silent?  It’s highly unusual for Trump to remain silent for too long especially when a foreign country threatens the U.S. with “strong countermeasures.”

Traders should keep an eye on this story because it could develop into something major during the trading session. Somewhere, somehow, somebody in the press may try to push Trump’s button’s to get a response, and if they push the wrong one, Trump could say something to shake up the financial markets.

Trump certainly knows how to pick his battles. He’s usually quick to respond to comments from CEO’s, coaches, athletes, politicians and celebrities. However, if he doesn’t speak up, he’ll show the world that he just gave in to pressure from China, the country he keeps saying is weaker than the United States.

EUR/USD Daily Forecast – Euro Continues to Battle 50-Day Moving Average

Brexit Talks Stand to Drive Volatility to EUR/USD

Price action in the FX markets on Tuesday provided a glimpse of which currencies are likely to see a reaction based on how things progress with reaching a Brexit deal.

Since last week, the British pound has been firmly bid and was last seen trading near highs not seen since June against the dollar. But yesterday’s surge higher in GBP/USD accompanied a bullish reaction in EUR/USD which we’ve not seen before.

EUR/USD had declined below the 1.1000 handle and then rallied nearly 50 pips in 30 minutes on Brexit news. This suggests if Brexit talks are favorable, EUR/USD is likely to continue its recent upward trend.

So far the 50-day moving average has been holding the pair lower on a daily close basis. But the indicator is not likely to be much of a hurdle on positive Brexit news. We are likely to get some market-moving news later today as Brexit negotiations will stop before the EU summit which starts tomorrow.

EUR/USD Little Changed After CPI Data

The consumer price index in the Euro zone was reported to rise at the slowest pace in nearly three years. Meanwhile, core CPI, which strips away volatile items such as food, energy, alcohol, and tobacco, remained unchanged at 1% in the year to September. The exchange rate had a muted reaction to the report.

Technical Analysis

Two items have been capping rallies in EUR/USD. A horizontal level at 1.1059 and the 50-day moving average.

EURUSD Daily Chart

If we get some further positive Brexit news, I’d expect this area to be breached, putting in focus resistance at 1.1129. This is a level that was major support April and in May.

In the absence of news, I expect that sellers will try and drive the pair lower once again. Although we may see buyers step in ahead of yesterdays low just below 1.1000, this continues to be an important area for the pair.

Bottom Line

  • Headlines related to Brexit stand to move EUR/USD and today could be a volatile day for the pair.
  • Euro zone CPI data fell short of expectations but did not have an impact on the exchange rate.

AUD/USD Forex Technical Analysis – Weakens Under .6721, Strengthens Over .6751

The Australian Dollar is trading lower on Wednesday, pressured by fresh tensions between the United States and China after Beijing threatened to retaliate over the passage of measures in Washington aimed at supporting Hong Kong Protesters.

“If the relevant act were to become law, it wouldn’t only harm China’s interests and China-U.S. relations, but would also seriously damage U.S. interests,” said Geng Shuang, China’s Foreign Ministry spokesperson, in a statement on the body’s website.

“China will definitely take strong countermeasures in response to the wrong decisions by the U.S. side to defend its sovereignty, security and development interests.”

At 08:00 GMT, the AUD/USD is trading .6733, down 0.0025 or -0.37%.

AUDUSD
Daily AUD/USD

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, three days of selling pressure have put the Forex pair in a position to change the main trend to down.

A trade through .6710 changes the main trend to down. A move through .6811 will signal a resumption of the uptrend.

The short-term range is .6671 to .6811. Its retracement zone at .6741 to .6724 is currently being tested. Trader reaction to this zone could determine the next near-term move since buyers will likely try to form another secondary higher bottom.

The main range is .6895 to .6671. Its retracement zone at .6783 to .6809 is resistance. This zone stopped the rally on October 11 at .6811.

Daily Technical Forecast

Based on the early price action and the current price at .6733, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at .6724.

Bearish Scenario

A sustained move under .6724 will indicate the selling pressure is increasing. This is followed closely by an uptrending Gann angle at .6721. If this angle fails as support then look for the selling to possibly extend into the main bottom at .6710.

Taking out .6710 will change the main trend to down. This could lead to a possible extension of the selling into the next uptrending Gann angle at .6696. This is the last potentially bullish angle before the .6671 main bottom.

Bullish Scenario

A sustained move over .6425 will signal the return of buyers. Since the main trend is up, buyers may step in on the test of the retracement zone at .6741 to .6724. Furthermore, they may try to defend the trend by protecting the main bottom at .6710.

The first upside target is the 50% level at .6741. This is followed by a downtrending Gann angle at .6781. Sellers came in earlier in the day on a test of this angle. Taking it out could trigger an acceleration into a pair of downtrending Gann angles at .6775 and .6781.

Asian Stocks Climb as US Banks’ Earnings Boost Equities

Gains in riskier assets are coming at the expense of safe havens, with Gold now trading below $1485, 10-year US Treasury yields surging past 1.77 percent before easing, while USDJPY touched the 108.86, its strongest level since the start of August.

Even with the gains in equities, some measure of caution is still warranted, as investors cannot rule out a sudden spike in US-China trade tensions or Brexit risks. While riskier assets are enjoying their time in the sun, they could see a rapid unwinding if any of these risks return to the fore.

Brexit deal optimism keeps Pound elevated

The Pound grazed the 1.28 mark against the US Dollar for the first time since May before moderating, as investors hold out hope that a Brexit deal can be secured with the EU in a matter of days. Sterling has strengthened against all G10 and Asian currencies so far this week.

Should the Brexit deal be approved at the upcoming EU leaders’ summit, that could prompt GBPUSD to claim more upside towards 1.30. The Brexit deal however, is expected to face a sterner political test in Westminster, where previous versions of a deal have failed. Should this Brexit deal fall short in overcoming any of its political hurdles this week, Sterling could then quickly tumble towards 1.22.

UK Prime Minister Boris Johnson may then be forced to ask for a Brexit extension, and in so doing, merely kick the Brexit can down the road once more and string the Pound along its volatile path for longer.

US retail sales data could shift Dollar, Fed rate cut expectations

With the Dollar Index (DXY) now trading around the lower 98 levels, DXY’s next move could be triggered by the upcoming September US retail sales data. Investors have been relying on US consumers to keep the momentum in growth intact, seeing as the US manufacturing sector has been feeling the strains from global trade tensions.

Should the retail sales print come in below market forecasts of 0.3 percent, that could prompt some softness in the Greenback as markets ramp up expectations for more Fed policy easing in 2019. At the time of writing, the Fed funds futures point to a 72.9 percent chance of a 25-basis point cut at the end of this month, followed by a 55.4 percent chance of the Fed leaving its benchmark interest rates unchanged in December.

The Dollar could moderate further if the risk-on mode is sustained following a “limited” US-China trade deal. US President Donald Trump may be forced to dilute his hardline stance in order to seal more policy wins in the lead up to the 2020 Presidential elections. Such a scenario could erode support for the Greenback, as global economic conditions and risk appetite draw relief from easing trade tensions.

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EUR/GBP Morning Star Pattern Should Push the Price Up

Dear Traders,

The EUR/GBP has made a morning star pattern straight off W L3 camarilla pivot support. The price is retracing.

There is still a lot headline risk within the GBP basket. Nevertheless, the GBP has been excellent to trade lately and today I am paying attention to the EUR/GBP. We could see the price going for a retest of the POC zone. This could possibly set up new short trades. 0.8780-0.8815 is the area for possible rejections. Targets are 0.8762, 0.8662 and 0.8632 after the POC retest. Below 0.8632 the price will be strongly bearish with a possible retest of 0.8550 zone.

The analysis has been done with the CAMMACD.MTF template.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

Asian Shares Rise as Upbeat Brexit News Offsets IMF’s Prediction of Lower Global Growth

The major Asia Pacific stock indexes are trading mostly higher on Wednesday, boosted by upbeat news regarding Brexit from the previous day. Brexit hopes were boosted by news that the European Union and United Kingdom were close to a deal. However, gains may have been limited by a warning from the International Monetary Fund (IMF) on Tuesday that the U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis.

At 07:09 GMT, Japan’s Nikkei 225 Index is trading 22472.92, up 265.71 or +1.20%. Hong Kong’s Hang Seng Index is at 26644.67, up 140.74 or +0.53% and South Korea’s KOSPI Index is trading 2082.83, up 14.66 or +0.71%.

In Australia, the S&P/ASX 200 Index is trading 6736.50, up 84.50 or +1.27% and in China, the Shanghai Index is at 2976.77, down 14.28 or -0.48%.

Brexit Traders Eye Imminent Draft Deal

Asian shares were supported on Wednesday after optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the divorce was being drawn up.

“Our team(s) are working hard, and work has just started now today, this work has been intense over the weekend and yesterday, because even if the agreement will be difficult, more and more difficult, to be frank, it is still possible this week,” Barnier told reporters in Luxembourg on Tuesday morning.

He added that “any agreement must work for everyone,” saying it is “high time to turn good intentions into a legal text.”

By mid-afternoon (Tuesday), one report suggested that a draft deal was in the works according to two separate sources familiar with negotiations.

IMF Says Trade War Will Cut Global Growth

The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund (IMF) warned on Tuesday, adding that the outlook could darken considerably if trade tensions remain unsolved.

The IMF said its latest World Economic Outlook projections show 2019 GDP growth at 3.0%, down from 3.2% in a July forecast, largely due to increasing fallout from global trade friction.

The World Economic Outlook report spells out in sharp detail the economic difficulties caused by the U.S.-China tariffs, including direct costs, market turmoil, reduced investment and lower productivity due to supply chain disruptions.

Other News

South Korea’s central bank cut its interest rate for the second time in three months on Wednesday, as expected, following its first cut in July.

In Australia, the listing of lender Latitude Financial, what was to be the biggest Australian IPO of the year, has been canceled, according to Reuters. The IPO was canceled because a large proportion of demand for shares was coming from hedge funds rather than desired long-term investors.

In New Zealand, the Reserve Bank signaled more rate cuts, or even unconventional stimulus measures, may be needed to counter global headwinds, as figures on Wednesday showed the country’s annual inflation rate slowed in the third quarter.

Inflation fell to 1.5% in the year to end-September from 1.7% previously, Statistics New Zealand said, moving further away from the central bank’s target, but slightly ahead of a 1.4% rise predicted in a Reuters poll of economists.

AUD/USD, NZD/USD, USD/CNY – Asian Session Daily Forecast

AUD/USD

AUD/USD has lost ground for a third successive day. In Wednesday’s Asian session, the pair is trading at 0.6743, down 0.14% on the day.

Investors Eye Job, Confidence Data

There are no key Australian events on Wednesday, but the markets are waiting for key employment numbers on Thursday. Employment change is expected at 15.3 thousand in September, lower than August but still a decent reading. The unemployment rate is projected to remain steady at 5.3%.

As well, the NAB releases its quarterly business confidence report. Traders should be prepared for stronger movement from the pair on Thursday.

AUD/USD Technical Analysis

AUD/USD continues to move lower and tested support at 0.6760 on Tuesday. Currently, the pair is slightly below this level. If the downward movement continues, support at 0.6710 will be vulnerable. This line is protecting the round number of 67.00, which last saw action in early October.

AUD/USD 4-hour Chart

USD/CNY

USD/CNY is showing limited movement in early Wednesday trade. In the Asian session, the pair is trading at 7.0915, up 0.14% on the day.

USD/CNY Technical Analysis

USD/CNY has reversed directions after the recent rally by the yuan, in which the pair lost close to 1.0%. The pair tested support at 7.0592 on Monday, but this line has since stabilized, with the pair moving higher. Still, this line could be further tested during the week. Below, we find support at the 7.0400 line. On the upside, 7.1100 is relevant and could face pressure if the upward movement continues.

USD/CNY 4-Hour Chart

NZD/USD

NZD/USD has posted slight losses on Wednesday.  In the Asian session, the pair is trading at 0.6285, down 0.14% on the day.

New Zealand CPI Beats Forecast

New Zealand CPI, which is released every quarter, was better than expected in the third quarter. Consumer inflation gained 0.7%, edging above the estimate of 0.6%. NZD/USD has responded to the release with marginal gains.

NZD/USD Technical Analysis

NZD/USD continues to test support at 0.6280, but is having difficulty consolidating below this stubborn line. Below, we find support at 0.6230. On the upside, 0.6357 has remained intact in resistance since mid-September.

NZD/USD 4-Hour Chart