There is a chance that their prays were finally listened. As you can see on the daily chart, Crude is now drawing a hammer candlestick pattern. Hammer is a strong bullish reversal formation, in this case, promoting a start of a new up wave.
Current hammer on Oil has a very important meaning. The long tail, shows us another test of the 51.3 USD/bbl. support (pink). That was the second test in October. Price was trying to get lower since June without a success. This indicates, that this area is a real stronghold for the demand and that they will protect it at all costs. Long tail in today’s hammer is indicating a rejection of lower prices and willingness to go up. What is significant here is that this hammer is being build after two shooting stars.
Apparently, sellers are very weak at the moment and their inability to use shooting stars in their favor shows that.
Do not get too optimistic though. The day has not ended yet. Signal from a daily candle is active only, when the day is over. Still a lot can happen till midnight but in case the hammer will hold, we will get a very promising bullish signal.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory
There is no trading signal here yet, but once it will be triggered, we should receive a sweet long-term deal, with a target of hundreds of pips. This setup is present on the NZDUSD and for a legitimate signal we just need several pips.
Formation, which you can see marked with a yellow color is an inverse head and shoulders pattern. This is a strong bullish pattern, announcing a movement to the upside. One thing is missing here though – breakout of the blue neckline. Today, NZDUSD tried to jump above this resistance but without a success.
Apparently, we will have to wait a bit more. Another positive sign here is the breakout of the red down trendline, which was connecting lower highs since the end of July. Last but not least is the blue horizontal support. It is absolutely crucial here and shows us, that iH&S pattern did not emerge in a random place. The blue support comes from the long-term lows from 2015 – in theory, that is a sweet spot for a reversal, the best one on this pair.
To sum things up, as for now, we have to wait. In theory, the proper buy signal, will be triggered, when the price will break the blue neckline. Positive sentiment will be denied, once the price will come back below the red line but as for now, it is rather unlikely.
We did not have many reasons to be optimistic, at least from the technical point of view. Surprisingly, the main pair, started October on the front foot, giving hope to the short and mid-term bulls.
The reversal, which we are witnessing right now, started with the inverse head and shoulders pattern (yellow rectangles, orange neckline). This formation, is in the same time a false breakout below the long-term lows on the 1.093 (grey line). False breakouts are this kind of structures that love to bring the opposite signal, so in this case – buy. It seems, that everything is ready for this scenario – the price is back above the grey area and already broke the neckline.
What is more, EURUSD holds above the mid-term horizontal support on the 1.096 (green). For those that prefer to be safe than sorry, there is still one more resistance left. That is the mid-term down trendline (red), connecting lower lows since the beginning of August. Breakout of that one, will leave sellers pretty much empty handed.
The positive sentiment stays here, as long as the EURUSD is trading above the grey line. Bullish outlook, will be strengthened, once the price will break the red line, which in the current situation seems very probable.
SP500 ended July with a strong sell signal, coming from the breakout of the triple top formation neckline. First few days of August were catastrophic but later the dust settled and the price entered the correction stage. Friday brings us the test of the upper line of this correction, which in this case is the upper line of the rectangle pattern. Price breaking the 2936 points will be good for a start as the real buy signal will be triggered only, when the SP500 will come back above the resistance on 2960.
August ends negatively for the Bitcoin, where the price is under the bearish influence coming from the breakout of the lower line of the symmetric triangle pattern. The price is currently taking a rest on an important horizontal support but bulls need to be cautious as the breakout here can bring us a proper sell signal.
On the two instruments mentioned above we still have to wait for the signal. The same applies in the third hero of the day: USDJPY. Here, the price is still drawing the double bottom formation, mentioned in our previous analysis. We are getting closer to the neckline though. For the legitimate buying opportunity, we need to see the breakout of the yellow line first. Chances for that are increasing.
On Friday for example, we had a great weakening of the Dollar but on Monday, the price reversed, erasing almost all the losses from the day before. Luckily, we managed to find few setups, which may seem interesting to You.
First one is the USDJPY, which again, tested the long-term horizontal support around 105. That was the fourth test since March 2018 and another one, which resulted with the bounce. Currently, the price is creating a classic double bottom formation, which has a great chance to end with a major upswing. All we need for a proper buy signal is the breakout of the yellow neckline around 106.7
Next instrument is USDCAD, where the price was drawing a big ascending triangle pattern. That normally should end with a breakout to the upside but the price surprised and broke the lower line of this structure. In technical terms, that is a legitimate sell signal with the target on the 1.318.
Third occasion can be spotted on the Brent, where the price broke the lower line of the huge symmetric triangle pattern, then did the same with a medium triangle and most recently, tested the lower line of this formation as a closest resistance. Test was positive for the sellers as after the contact, price went significantly lower. Sentiment is definitely negative.
In few hours, we will find out who will the mid-term battle, hawks or doves. With this situation, there is no surprise that currently, on most of the instruments, we do have a sideways trend. Most of the assets are calmly waiting for a trigger.
First instrument of this kind is Oil, obviously strongly affected by the sentiment towards the USD. Since April to August, the price of Brent was stuck inside of the big symmetric triangle pattern. The beginning of August brought us a bearish breakout and now, we are having the symmetric triangle again. This time, this pattern is a bit smaller though. The way to trade it is simple: stronger USD will cause a breakout to the downside, so a sell signal and weaker USD, will cause a breakout to the upside, so a signal to go long.
When talking about Oil, we should mention the Canadian Dollar, which is one of the biggest commodities currencies. USDCAD is our next instrument and here we are also waiting for a bigger volatility. The price is forming a triangle too, but in this case this is an ascending one, so promoting a breakout to the upside. Everything can happen though, so we should also consider the breakout of the lower line of this pattern.
Last but not least is the EURUSD, where sellers are trying to gain control before the speech from the FED Chairman. The price is still locked inside of the sideways trend (rectangle) but the pressure to the downside rises. It looks that sellers are determined to set the new weekly lows ahead of the main event in the Jackson Hole.
Traders are waiting for the Jerome Powell to show the direction for the forthcoming months. Further easing? Probably yes but how big? Will he meet the President Trump’s expectations or no. Those questions are yet to be answered. For now, we have to wait but we still can spot three interesting setups on the market.
First one is the DXY, so a Dollar Index, which yesterday bounced from a crucial horizontal resistance. The bounce is shaped like a head and shoulders pattern, which definitely sounds interesting for the potential sellers. Going short now would be a bit premature though as the neckline is still intact. Only the price closing a day below the green line would be a good occasion to go short.
If we are talking about the Dollar, we should mention the USDJPY, which is also drawing a Head and Shoulders pattern. In this case it’s an inverse version of it and interestingly, it is promoting the strength of the USD. The place for a bounce is also promising – it is the long-term horizontal support. Here, we also have to wait for the breakout of the neckline first.
Now a sister currency pair, so EURJPY. In this case, we are dealing with the descending triangle pattern. The price is increasing the pressure on the horizontal support, which is making the breakout to the downside more probable. Price closing a day below the grey area will be a strong sell signal.
Obviously part of the blame goes on the weaker than expected CPI but just the part, as this is the data from yesterday and the initial reaction wasn’t so catastrophic. Anyways, sell signal for the Euro is definitely supported by the technical situation and on that field we will operate in today’s analysis.
First, EURUSD, where the price is breaking the lower line of the pennant formation (black). In this case, pennant is a trend continuation pattern and should end with a decline. The target for this movement is on the lows from the 1st of August and chances that we will get there are very high.
Bearish setup can be also spotted on the EURCAD. We warned you about this occasion few days ago. In the long-term, the price bounced from two important resistances. In the short-term. EURCAD broke the crucial support and is now using it as a closest resistance. The contact with the resistance looks promising for the sellers as we are experiencing a bounce. Current market conditions are promoting a further drop.
Last instrument is the Bitcoin, which few days ago broke the mid-term up trendline but failed to break the horizontal support on the 9400 USD (blue). That was used for a bounce and the comeback above the dynamic support. With that reversal, the sentiment on the Bitcoin is positive. By the way, BTC is lately being transformed into a kind of a safe haven asset, which has a potential to protect us from the global recession. Interesting concept, we will see how it will work out in the future.
In today’s analysis, we will focus on the EUR as we have a nice depreciation movement here caused by one of the ECB members. In his interview, Olli Rehn from European Central Bank said, the ECB “will announce a package of stimulus measures at its next policy meeting in September that should overshoot investors’ expectations.” That was enough for the Euro bears to increase their selling activities. EUR plunged.
We were expecting bigger movement on EURUSD on Wednesday. Everything thanks to the sideways trend locked inside of the triangle pattern. EURUSD decided to brake the lower line of this pattern, which was in line with those fundamental comments from the ECB official. Yesterday, we got a small flag and another leg down. Currently, the price paused but considering the general sentiment, we are anticipating a further slide here.
EURGBP was going up for the past 14 weeks in a row! Seems that the time for a correction has finally come. We do have a good place for that as we are on the long-term horizontal resistance. Sellers obviously got a boost from the comments from the ECB and they needed that as the situation on the GBP was not encouraging to purchase Sterling. Correction should aim the mid-term support around 0.91
Last one is EURCAD, where we do also have a good bearish setup. Few days ago, the price successfully tested the combination of horizontal and dynamic resistances. The price went down, giving us a sell signal. In addition to that, EURCAD is currently attacking a mid-term support around 1.477. Once the price will close a day below the yellow area, the sell signal will be triggered.
Every movement like this should eventually end with the breakout and that is what we are currently looking for.
First instrument in our analysis is the main pair – EURUSD. Here, the sideways trend is shaped like a descending triangle pattern. Normally, this kind of a formation should result with the breakout to the downside but this triangle is different as it was created after a rise, not a drop. In this case, both directions are opened and we just have to be patient. Breakout of the blue line will give us a signal to sell and the breakout of the red line will give us a signal to go long.
Situation on the EURAUD is a bit clearer. Here, we do have an ascending triangle, where we already had a breakout to the upside. Most recent sideways trend, tested the broken resistance as a closest support. Test, was positive for the buyers, which means that we should see the continuation of the upswing.
Last instrument in our review is the Bitcoin, which is also moving sideways. The price is locked inside of the symmetric triangle pattern. Breakout of the upper right line will be a signal to buy and the breakout of the lower blue line will be signal to go down.
To be honest with you, if the market is going down because of Argentina, it means that something is wrong with it. I mean that sentiment is very fragile and if such an irrelevant thing can hurt traders, the big – significant event, will kill them.
Gold is having a great time recently but we just reached a crucial resistance. This is a combination of a horizontal resistance and the dynamic one. Price getting there does not mean a reversal but definitely is a good place for at least a bearish correction. To go short, you will need much more than that, you will need an actual drop in the price first. As for now, buyers are winning here on every single timeframe.
Other important commodity – Brent Oil is going the opposite direction – down. The price broke the lower line of the symmetric triangle and the horizontal support on the 59.6 USD/bbl. Since the 7th of August, we do have a bearish correction but yes, this is just a correction. The price should not rise above the blue area and the it seems that we are currently waiting for another leg down.
Now, NZDUSD, where the price is coming back to the movement created by the interest rate cut, so a downswing. For few days, traders were correcting the initial drop but the down trendline got defended, showing the determination from the bearish side. As long as we stay below the red line and actually make lower lows and highs – the sentiment remains negative.
First instrument in this analysis will be the USDJPY, which at the beginning of August broke the long-term up trendline and the horizontal support on the 107. We are writing about this just now, because yesterday, price tested that area as a closest resistance. Test was positive for the sellers as the USDJPY bounced from that level and went lower. The sell signal is ON.
Next instrument is the GBPAUD, which started Wednesday with an impressive upswing. The reason for this comes from the New Zealand but we will explain that in the last paragraph. Rise on the GBPAUD was supported from the technical point of view as well. The price made a triple bottom formation on a long-term up trendline and then broke the neckline (red) and the mid-term down trendline (black). Currently, we do have a small stop on the horizontal resistance but the price should eventually break that area too.
The fundamental reason why GBPAUD went higher comes from the news important for the NZD. RBNZ surprisingly cut interest rate, which affected both currencies from Antipodes (AUD and NZD are highly correlated). NZDUSD crashed and went to the lowest levels since the beginning of 2016. Several more pips and we will be on the lowest levels since 2015 soon. The sentiment is definitely negative.
Rapid reversal on the EURUSD, huge drop on the SP500 and new long-term highs on the Gold. What a time to be alive!
EURUSD broke the horizontal support on the 1.111 but it was a false breakout! This kind of a price behavior is very often a strong signal to open an opposite position, in this case – buy. Traders followed that and the price created a beautiful V-shape reversal pattern. The buy signal is ON.
Breaks on the SP500 seems broken and sellers are effectively using this to make nice profits! In just few trading days, bears managed to break all important Fibonacci retracements of the June-July rise. Sellers should not get too comfortable though. SP500 made several V-shape reversals in the past few years, so it is definitely not impossible to do this again. Current sentiment remains negative though and it seems that buying is no longer an option.
Gold is moving from the false breakout to the false breakout. Latest was to the downside, so is promoting a further rise. Buy signal is ON and we need to think about a good place for a target. When looking on the daily chart, only one comes in mind – area around 1550 USD/oz. Chances that we will get there are very high.
Movements that we see on the chart right now are in the same time very technical, which is a great thing also for those traders that tend to ignore the news and put more attention to the dots and lines on the chart.
First instrument today is the EURUSD, which on Wednesday, broke the local horizontal support on the 1.111 (yellow). That breakout was a legitimate signal to go short. For the past several hours we do have an upswing though but this is a normal price action movement, which is the broken support being tested as a newest resistance. First contact with the yellow area is positive for the sellers as we can see the bounce. As long, as the price will stay below the yellow line, the sell signal will be present.
FED cutting rates was also a fuel for bigger movements on the SP500. Here, the price eventually chose to go down. The movement is also technical, as we do have a triple top formation and the breakout of the 23,6% Fibonacci. The movement towards the 38,2% is very probable.
Last one is the CHFJPY so a battle of safe heavens. Currently, JPY is winning. The price respected the down trendline and broke the lower line of the flag pattern. That is a beautiful bearish price action movement and should be continued in the nearest future.
Rates were cut yesterday and Dollar gained and stocks went down. Well, that’s just the market mechanics, buy the rumors and sell the facts, right? In today’s analysis we have three nice trading setups and two of them are with the USD.
First one is Gold, which finally made a movement coming from the technical setup from two weeks ago. On the 18th and 19th of July, the price made a false breakout above the horizontal resistance on the 1436 USD/oz. False breakout are usually good signals for a reversal and that started yesterday (with the fundamental help from the USD). The aim for this movement is 100 USD lower than the mentioned resistance but the demand is really strong, so sellers may have a problem to reach that area.
USD/CHF was mentioned by us at the beginning of this week. We said that the setup here is bullish, despite the weak start on Monday. We were right, the price did go higher and today at night reached the highest levels since the middle of June. The buy signal is definitely ON.
In our previous trading sniper videos we also mentioned the EURPLN, where we were bullish too. The price also moved in the direction that we anticipated. Setup here remains bullish and is even stronger after the EURPLN respected the broken neckline as a closest support.
Regardless of the final number, we can expect a higher volatility. For those excited about the big movements on the USD, we have two setups with the American Dollar in them.
First one is the USDCHF, where the price action is suggesting us an upswing. Pair bounced from the horizontal support on the 0.97 and created an inverse head and shoulders pattern. Last week finished with the breakout of the neckline and the mid-term down trendline. This week, started with the correction but it does not change the positive sentiment that was triggered on the last Thursday. As long as we are above the neckline, the buy signal is ON.
Next instrument is Brent Oil, where we are still waiting for a proper trading signal. The price is still locked in the symmetric triangle pattern. The way to trade this is pretty simple. You buy, when the price will break the upper line of the triangle and sell, when the price will break the lower line of this pattern. As for now, traders need to be patient.
Last instrument is an exotic pair – EURPLN. Setup here is quite similar to this one on the USDCHF. We do have an inverse head and shoulders pattern, with the neckline, which was already broken. Today, we do have a small drop but the bullish momentum is still very strong and the price should be aiming higher again in the nearest future.
Some traders prefer to avoid such market conditions and trade elsewhere. For those, we made this video. Today,3 occasions on the pairs without the USD.
First one is the AUDCAD, where the price is falling down sharply after two bearish price patterns. First, major one, is the flag, which is present in the proper downtrend and was giving us a hint, that this trend was about to be continued. The breakout happened after the price drew a second pattern – double top formation. Currently, we are close to mid-term lows, which can be a good occasion for taking some profits and, in consequence, reversal.
Second instrument is the EURAUD, where we can also witness the weakness of the Australian currency. Setup presented here is the Head and Shoulders pattern, with a false breakout to the downside. Movement south stopped on the long-term up trendline and since that, we do have a strong upswing. In my opinion, the positive sentiment should be continued.
CHFJPY is the last instrument in this analysis. Here, the price is creating the third bearish correction pattern in a row. We already had one flag and a pennant and now, we are having flag again. The sell signal will be created, when the price will break the lower line of the flag and horizontal support on the 109.1. Chances for that are quite high.
Apparently this one will be negative for the USD and we will be able to come back to the main trend seen throughout the June.
Dollar Index successfully defended the long-term up trendline as a closest resistance. That is a conformation of the sell signal, which was triggered, when the price broke this line on the 21st of June. I expect the price to drop towards the support on the 94.9
EURUSD successfully defended the neckline of the Inverse Head and Shoulders formation and the horizontal support on the 1.134. That confirms the buy signal from the 21st of June, which was triggered during the bullish breakout. You see how it all works out together?
Similar situation is happening on the USDJPY. Here, the price tested the lower line of the symmetric triangle and bounced from it creating a daily candle with a long head. Today, the price is creating a candle with a large bearish body, which shows us that traders agreed on the direction. The sell signal is ON.
Correction on the USD continues. It is still just a correction though. Not that it was unexpected as USD has serious troubles since the very beginning of the month so with such a heavy drop, chances for a correction were constantly increasing.
With the most recent rises, Dollar Index is testing the broken up trendline as a closest resistance. Test so far is positive for the sellers, as the price stays below that line. With the current momentum, the target remains on the orange area, slightly below 94.4
EURUSD also does not allow the USD to spread the wings. The main pair is above the neckline of the Inverse Head and Shoulders Pattern and above the horizontal support on the 1.133. As long as we stay above those two, the sentiment remains positive.
USDCHF managed to set new yearly lows and then bounced higher. For us, it is just a dead cat bounce and the price has no bigger chances for a major reversal…yet. USDCHF still stays below major dynamic and horizontal resistances so the outlook has to be pessimistic.
Great example of this we had today, when Treasury Secretary Mnuchin said that US-China deal is 90% ready. This and only this was enough for the major global indices to climb higher.
Fundamental help from Mr. Mnuchin came on DAX in a very appropriate place. DAX was testing the horizontal support and the lower line of the channel up formation. As we can see, test is bullish and looks like a good warm up before another attack on the new long-term highs.
Moment was also good for the FTSE. Thanks to the news from the White House, British index went higher breaking the upper line of the flag. That breakout was widely expected and of course gives us a legitimate buy signal.
Last but not least is the EURUSD, where we finally have a correction. USD is a bit stronger but that does not mean anything, just a normal take profit action. Technically, pair is testing the neckline of the Inverse Head and shoulders pattern. Price started to make higher highs and lows, which promotes further rise.