Indices and USD Climb Higher

DAX aims higher after the breakout of the upper line of the flag

CAC is getting closer to the upper line of the triangle

SP500 avoids the drop after the bearish head and shoulders pattern

Gold drops and aims long-term up trendline

EUR/USD is about to test a combination of crucial supports

AUD/NZD makes contact with important horizontal level

CAD/CHF breaks the upper line of the ascending triangle pattern and aims higher

AUD/JPY with a very similar situation

Triangle Formation Will Show You the Direction

In today’s trading sniper I would like to show you the power of triangle patterns and I will do it using rather exotic currency pairs. Triangles, especially ascending and descending ones are super powerful formations, which can be a reliable and trustworthy friend of every technical trader.

First instrument is the CADCHF, where we have a beautiful ascending triangle pattern. This is promoting a breakout to the upside and it is happening as we speak. Since today, the price couldn’t break the 0.693 resistance. The first day of September brings us an attack and in consequence a breakout which leads to a mid-term buy signal.

An example how effective an ascending triangle can be is seen on the AUDJPY chart, where the ascending triangle has been present since June. Last week, the price finally broke the 76.6 resistance, which brought us a legitimate buy signal. Sentiment here is definitely positive.

Triangles can work both ways, the two previous examples were of ascending triangles with a horizontal resistance and now I will show you the descending version of this pattern – with a horizontal support. It can be spotted on the EURNOK, where the price is going lower since the end of March. A recent breakout of the lower line of the triangle gives us a proper sell signal. Sentiment here is negative.

For a look at all of today’s economic events, check out our economic calendar.

Great Setups with Canadian Dollar

Tuesday brings us significant weakness of the Canadian Dollar, which is quite surprising as this movement has no clear fundamental background. Usually technical analysis cooperates with fundamentals but this time, the movement is almost entirely technical, at least from my point of view.

Let’s start with the EURCAD, where the common currency is moving higher, testing an absolutely crucial horizontal resistance level. I mentioned this resistance in one of my previous short videos. The 1.544 level on the EURCAD was an upper border of the sideways trend, present here since April. The price closing the day above the yellow line will be a super strong, long-term buy signal.

Next up is the CADCHF, which we also mentioned recently. The price here is in a full pessimistic mode after the bearish breakout from the flag and bearish breakout from the descending triangle pattern. The CADCHF closing the day below the lower line of the triangle will bring us a proper sell signal.

Lastly, I will mention the USDCAD, which was about to create the right shoulder of the head and shoulders pattern but the weakness of the CAD delayed those plans. Currently, the right shoulder is being transferred into a small inverse head and shoulder with the price testing the neckline as we speak. The price closing above the 1.362 level, can give us a 90-pips-buy-signal.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500, DAX, CAD/CHF Technical Analysis: Triangle Favors the Sellers

In our analysis on Friday we mentioned an interesting symmetric triangle pattern that emerged on the charts of both the DAX and the SP500. Back then, we were inside of those patterns, waiting for a breakout, which in theory was about to show us a proper direction. The breakouts did happen and, in both cases, were to the downside, which is rather negative information for stock traders.

Let’s start with the DAX, which indeed broke the lower line of the tringle on Friday but it did not cause a huge reversal on Monday. Actually, we are starting the new week positively and the price is trying to move a little higher however, I wouldn’t get too optimistic. From a technical point of view this is no more than a broken support being tested as a closest resistance. As long as the price stays below the resistance, sentiment is negative. Only a comeback to the inside of the triangle would be a strong buy signal.

The same thing is happening on the SP500 but let’s say that buyers are less enthusiastic about this rise. Well, maybe it’s because Americans are still asleep. Nevertheless, as long as the price stays below the lower line of the triangle, sentiment is negative.

About the triangle, I would like to show you the CADCHF pair. On the pair’s chart you can see how reliable the triangles are. In February, we had a breakout to the downside, followed by a huge slide. Then a correction (flag), which ended on two important Fibonacci resistances. In the middle of June, the price broke the lower line of the flag, which reopened a sell signal for us, that sell signal had originated when breaking from the triangle mentioned above. Sentiment here is negative.

For a look at all of today’s economic events, check out our economic calendar.

Three long-term Forex occasions. EURJPY, AUDJPY and CADCHF

Traders are slowly getting bored with the Coronavirus. In financial media, this topic is mentioned less frequently and slowly, the attention of the market participants is being shifted towards the other information. This allowed to perform a bullish correction on the indices and a bearish one on safe heavens. Today, we will show you long-term situation on the three currency pairs, where we could spot interesting trading opportunities.

First one is the EURJPY, where the recent pursuit to safe heavens increased the appetite for Yen and triggered a negative sentiment. It all started with the bounce from the 122.8 and the upper line of the wedge. Wedge is a trend continuation pattern, so it was naturally promoting the breakout to the downside. It happened on the 24th of February and after that, the price created a small rectangle. This rectangle is promoting a further slide and this is our current outlook on this instrument.

Similar setup can be found on the AUDJPY, where the price also bounced from the horizontal resistance and later broke the lower line of the correction pattern. In this case, it was a flag. What is different is the price movement after the breakout. On AUDJPY the price dropped like a rock, without a pause like on the EURJPY. Well, Australian Dollar is simply much weaker right now. Today, the price tries to initiate the correction but we are not convinced about the durability of this movement.

Last week was absolutely crucial for the CADCHF and you need to look on the weekly chart to understand why. After few weeks of a decline, the price eventually broke the lower line of the massive symmetric triangle pattern. In theory, that can start a new long-term down trend on this instrument. As long as we stay below the triangle, the sentiment remains negative.

Technical Checks For USDCAD, GBP, JPY & CHF: 30.01.2019

USD/CAD

Following its failure to surpass the 1.3370-75 resistance-region, the USDCAD again aims to test the two-month old support-line of 1.3200. Should the pair slips beneath the 1.3200 mark, the 1.3160 and the 1.3125 are likely following numbers to please sellers before flashing 1.3100 on the chart. On the upside, the 1.3280 can limit the pair’s immediate upside prior to highlighting the 1.3370-75 area. In case prices rally beyond 1.3375, the 1.3425 and the 1.3445 seem buffers during its rise to 1.3485-90 horizontal-resistance.

GBP/CAD

GBPCAD’s another reversal from 1.7475-90 resistance-zone signal brighter chances of its pullback to the 38.2% Fibonacci retracement level of 1.7285, breaking which 1.7170 and the 200-day SMA level of 1.7125 can grab the limelight. Given the pair’s refrain to respect the 1.7125, the 1.7060 and the 1.7000 may flash on the Bears’ radar. If at all the pair registers a daily closing past-1.7490 then its surge to 1.7580 and to the 1.7665-70 can’t be denied. During the pair’s sustained advances above 1.7670, the 1.7760 and the 1.7800 may attract market attention.

CAD/JPY

Even if short-term ascending trend-channel portrays the CADJPY strength, the pair needs to overcome the 82.90 horizontal-resistance in order to accelerate its up moves to the 83.40 resistance, including channel’s upper-line. However, the 83.70-80 region and the 84.25 could confine the pair’s north-run past-83.40. Meanwhile, the 82.20 and the channel-support of 82.00 might limit the pair’s adjacent declines, breaking which 81.30 and the 81.00 could come forward as supports. Should the pair continue trading southwards under 81.00, it can target the 80.60 and the 80.00 rest-points.

CAD/CHF

Observing a month-long ascending trend-line, the CADCHF now runs towards 200-day SMA level of 0.7550 ahead of looking at the 0.7580 and a bit broader resistance-line of 0.7600. Assuming the pair’s successful break of 0.7600, the 0.7680 and the 0.7720 may become Bulls’ favorites. Alternatively, a daily closing beneath the 0.7470 support-line highlights the importance of 50-day SMA level of 0.7420 and the 0.7370 levels. Additionally, the 0.7335 and the 0.7300 may appear as quote if the 0.7370 fall short of restricting the pair’s downside.

Technical Overview USD, EUR, AUD & CAD: 24.01.2019

USD/CHF

USDCHF’s pullback from 0.9935 can’t be considered as a sign of its strength unless the pair clears 1.0005-10 horizontal-region on a daily closing basis, which in-turn highlights the importance of 50-day SMA level of 0.9920 and 0.9900, including 200-day SMA as immediate supports. However, pair’s declines past-0.9900 might not hesitate recalling the 0.9860 and the 0.9800 on chart. In case prices rally beyond 1.0010, the 1.0040 and the 1.0085 could quickly appear as quote. Additionally, pair’s successful rise above 1.0085 can flash 1.0130 on buyers’ radar.

EUR/CHF

Unlike USDCHF, the EURCHF bounces off the near-term support-line, at 1.1270 now, which in-turn highlights the importance of 1.1315 and the 1.1355-60 resistance-region. Given the pair’s sustained rally after 1.1360, the 1.1390, the 1.1405 and the 1.1435 are likely consecutive resistances to gain market attention. Meanwhile, break of 1.1270 could trigger the pair’s dip to 1.1240 and then to 1.1210 whereas the 1.1190 and the 1.1180 might entertain sellers then after.

AUD/CHF

Failure to clearly cross the 50-day SMA seem dragging the AUDCHF to 0.7030 support, breaking which 0.6960 and the 0.6930 can offer intermediate halts during its drop to 0.6880-70 area. If at all the pair keep trading southwards under 0.6870, the early-month low of 0.6675 may become Bears’ favorite. Alternatively, 50-day SMA level of 0.7130 may restrict the pair’s adjacent rise prior to escalating its recovery to 0.7190 and the 200-day SMA level of 0.7240. Though, eight-month old resistance-line, at 0.7325, could challenge the Bulls past-0.7240, if not then 0.7400 might please them.

CAD/CHF

CADCHF still follows the “Rising Wedge” break indicating the pair’s slump to 0.7340-45 support-zone but 0.7415 & 0.7375 can act as buffers. Should prices slid below 0.7340, the 0.7300, the 0.7245 and the 0.7175 may be aimed if holding short positions. On the upside, 0.7490 and the 0.7515 could confine the pair’s immediate rise. Given the pair’s ability to surpass the 0.7515 barrier, the 0.7550 and the 0.7585 may lure the optimists.

Technical Update For USD/CHF, EUR/CHF, CHF/JPY & CAD/CHF: 05.12.2018

USD/CHF

With nearly 100-pip range between 1.0010-05 and 0.9920-15 aptly limiting the USDCHF moves, the pair is presently expected to revisit the 0.9950 rest-point ahead of testing the 0.9915 range-support for one more time. However, pair’s drop beneath the 0.9915 can quickly fetch it to 0.9885 and the 0.9860 marks ahead of highlighting the 0.9845 as a support. Meanwhile, an upside clearance of 1.0010 could propel the quote to 1.0050 and then to the 1.0080 resistances whereas pair’s successful trading beyond 1.0080 enables it to aim for 1.0100 and the 1.0130 numbers to north.

EUR/CHF

Failure to surpass a month-long descending trend-line again drags the EURCHF to 1.1300-1.1295 support-zone, which if broken may further weaken it towards 1.1270 & 1.1260. Though, sellers’ refrain to respect the 1.1260 might not hesitate flashing 61.8% FE level of 1.1225 on the chart. Alternatively, aforementioned TL can keep restricting the pair’s near-term advances at 1.1345, breaking which the 1.1360, the 1.1400 and another resistance-line around 1.1415 may play their roles of resistances. Given the pair’s ability to cross 1.1415 barrier, it can then rise to 1.1435 & 1.1470 figures.

CHF/JPY

CHFJPY’s bounce off the 113.00-112.95 rest-region can help it target the 113.50 and the 113.75 resistances but the 113.95-114.00 may challenge buyers afterwards. Assuming the pair’s sustained rally above 114.00, the 114.20, the 114.40 and the 61.8% FE level of 114.60 could entertain Bulls. If at all prices slide below 112.95, an ascending support-line stretched since late-October might confine additional downturn at 112.70, if not then 112.40 & 112.10 could become Bears’ favorites. Moreover, pair’s extended declines past-112.10 opens the door for its plunge to 111.85 & 111.50.

CAD/CHF

Even if 0.7580-85 acts as a strong resistance-area for the CADCHF, pair’s downside may find it hard to last longer than 0.7470-65. In case the quote dips beneath 0.7465, the 0.7440, the 0.7415 and the 0.7395 can appear on pessimists radars. On the contrary, 0.7555 may cap the pair’s immediate recovery before diverting market attention to 0.7580-85. Should the pair crosses 0.7585 hurdle, the 0.7625 and the 0.7645 are likely following numbers to grab limelight.

EURUSD tests the broken support as a resistance. Potentially huge movement on the CADCHF. Correction on Oil?

EURUSD is currently testing the broken 1.13 psychological support as a closest resistance. This movement is quite typical for the forex market and is a normal type of a price action. The first contact with the resistance resulted with a bounce but it looks like buyers will try one more time. The general sentiment remains negative.

CADCHF is in a small triangle inside of a bigger one. So we are in the worst place to trade – middle of the giant sideways trend. We are in a bad place now but we can be in an awesome place soon. The breakout of the lower line of the smaller triangle will give us a proper sell signal. We are very close to see this.

WTI Oil, just wow. The price dropped like a rock. Now we are on the last important support. This is the 61.8% Fibonacci and the resistance from the end of 2016 and the beginning of 2017. The sentiment is negative but we should get at least a small bounce there, normal taking profit action, nothing serious.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Technical Outlook For USD/CHF, EUR/CHF, AUD/CHF & CAD/CHF: 04.10.2018

USD/CHF

Break of three-month old descending trend-line, also encompassing 100-day SMA, signal brighter chances for the USDCHF’s further upside towards 0.9945-50 multiple resistance area. However, a bit broader downward slanting TL, at 1.0000 psychological magnet, can confine the pair’s advances past-0.9950, if not then 1.0040 & 1.0070 may gain traders’ attention. In case the quote continue rising beyond 1.0070, the 1.0100 & 1.0170 could entertain the Bulls. Alternatively, the 0.9865-55 resistance-turned-support region might become important support if the pair take a U-turn from present levels, breaking which 0.9820 & 0.9790-80 seem crucial to observe. Assuming the pair’s extended downturn below 0.9780, the 200-day SMA level of 0.9730 & 0.9700 round-figure could flash in the Bears’ radar to target.

EUR/CHF

Alike USDCHF, the EURCHF also cleared immediate resistance-line and may rise in direction to few more north-side barriers, namely the 1.1450 and the 100-day SMA level of 1.1480. Given the pair’s ability to close above 1.1480, the 1.1560 & 200-day SMA level of 1.1610 might play their roles. Meanwhile, there are multiple supports between the 1.1325 and 1.1315, which if broken could drag prices to 1.1220 & 1.1180 levels. Should there be additional weakness on the pair’s part beneath 1.1180, the 61.8% FE level of 1.1100 might become sellers’ favorite.

AUD/CHF

Failure to surpass 50-day SMA portrayed the AUDCHF’s weakness that currently fetches it to 0.6980 and then to the 0.6950 supports. If the pair keep trading southwards below 0.6950, the 0.6900 and the 0.6870 can offer intermediate halts during its plunge to 61.8% FE level of 0.6765. On contrary, the 0.7065 and the 50-day SMA level of 0.7125 are likely immediate resistances that the pair needs to surpass in order to justify its short-term strength. Though, the 0.7200 becomes the only number that can please buyers above 0.7125 as four-month old descending TL, at 0.7240, might disappoint optimists afterwards.

CAD/CHF

With the 0.7705-15 horizontal-resistance still unbroken, not to forget about overbought RSI, the CADCHF is expected to re-test the 0.7670, the 0.7625 and the 0.7600 rest-points but 100-day & 200-day SMA confluence, around 0.7550-60, could limit its following declines. In case the pair refrains to respect the 0.7550, the 0.7500 and the 0.7425 may mark their presence on the chart. Given the pair’s ability to close beyond 0.7715, its rise to 0.7740 & 0.7770 can become imminent whereas a year-long resistance-line, at 0.7810, may restrict the advances then after. If at all the quote rallies above 0.7810, the 0.7865, the 0.7910 & 0.7960 are likely consecutive resistances to grab limelight.

Important CHF Pairs’ Technical Update: 19.09.2018

USD/CHF

A month old descending trend-line, at 0.9685, is likely to challenge the USDCHF’s short-covering moves from 0.9600, if not then the pair’s rise to 0.9710 and the 200-day SMA level of 0.9740 seem imminent. However, the 0.9780-90 area could restrict the pair’s upside past-0.9740, failing to which might propel prices to 0.9850-55 and the 0.9900 resistance-levels. Meanwhile, the 0.9600 and a downward slanting support-line, at 0.9580 now, can limit the quote’s immediate declines. In case the pair refrains to respect 0.9580 mark, the 0.9560, the 0.9520 and the 0.9430 are expected following supports to observe.

EUR/CHF

EURCHF is also heading towards the five-week long resistance-line mark of 1.1315, which if broken could escalate the pair’s recovery to 1.1360 and the 1.1400 numbers to north whereas 1.1415 and the 1.1455 might question the buyers’ strength afterwards. Assuming the pair’s successful trading beyond 1.1455, the 1.1500 and the 1.1555-60 may gain market attention. If the aforementioned TL pushes the pair downwards, the 1.1260 and the 1.1220 can come-back on the chart. Also, pair’s extended south-run below 1.1220 may make the 1.1180 and the 61.8% FE level of 1.1110 as sellers’ favorites.

GBP/CHF

Unlike previous two CHF pairs, the GBPCHF has one more barrier, namely the 50-day SMA level of 1.2800, to surpass before confronting the decisive trend-line, viz.1.2840. If at all the pair manage to clear the 1.2840 hurdle on a daily closing basis, the 1.2900, the 1.2980 and the 1.3000 may offer intermediate halts during its rise to 200-day SMA level of 1.3025. Alternatively, the 1.2600 and the 1.2550 cab be considered as adjacent rests if the pair takes U-turn from present levels, breaking which 1.2470-60 horizontal-area comes into play. Should Bears continue ruling momentum beneath 1.2460, the 1.2350, the 1.2265 and the 1.2215 may flash in their radars to target.

CAD/CHF

Break of nearby TL can’t be taken as a sign of CADCHF’s strength as another resistance-line, at 0.7500, and the 0.7515-20 zone, are still standing tall to threaten the Bulls. Given the prices keep advancing above 0.7520, the 0.7565, the 0.7585 and the 0.7600 can be aimed if holding long position. On the downside, the 0.7435, the 0.7400 and an ascending support-line, around 0.7375, could curb the quote’s immediate declines. Though, pair’s drop below 0.7375 has to conquer recent low near 0.7310 in order to test the 61.8% FE level of 0.7280.

Technical Overview of Important CAD Pairs: 12.09.2018

USD/CAD

Following its inability to sustain the U-turn from 100-day SMA, USDCAD re-tests the same SMA figure of 1.3040, breaking which 1.3000 and 1.2960 can offer intermediate halts during the pair’s drop to 1.2925 trend-line number. Should CAD optimists refrain to respect the 1.2925 mark, the quote could visit 200-day SMA level of 1.2860 and the 1.2800 rest-points. On the upside, 50-day SMA level of 1.3090 and 1.3110 may entertain short-term buyers before challenging them with 1.3180 resistance. Moreover, pair’s successful trading above 1.3180 might witness 1.3220 and the 1.3260-70 as strong barriers to north.

GBP/CAD

Not only reversal from 1.7160-70 but dip beneath the short-term ascending trend-line also highlights the importance of 1.6965-55 support-zone for GBPCAD traders. Given the pair continue declining past-1.6955, the 1.6840 and the 1.6750 might try disappointing the Bears, if not then 1.6660 and the 1.6590 could gain market attention. In case the pair witnesses short-covering from present levels, the 1.7090 is likely a buffer before shifting investors’ eyes back to 1.7160-70 area. Assuming that pair’s rally beyond 1.7160-70, the 1.7230 and the 1.7290-1.7300 can appear in the Bulls’ radar to target.

CAD/JPY

CADJPY again confronts the 200-day SMA level of 85.40, which if broken on a daily closing basis could propel prices to the 86.00 and to the 86.50 trend-line. If the quote keep marching north above 86.50, the 86.80 and the 87.10 might be aimed while holding long positions. Alternatively, 100-day SMA level of 84.80 may serve as nearby support for the pair if it gets defeated by the said SMA but the 83.80 and an upward slanting TL, at 83.50, could threaten the pessimists then after. It should also be noted that the pair’s D1 close below 83.50 can make it vulnerable enough to test 83.00 and the 82.40 levels.

CAD/CHF

While 0.7465 confines the CADCHF’s upside, the 0.7435, the 0.7410 and the 0.7395-90 may mark their presence on the chart. Though, pair’s extended south-run beneath 0.7390 opens the door for its fall to the 0.7355, the 0.7310 and then the 61.8% FE level of 0.7270. Meanwhile, pair’s rise above 0.7465 can have multiple resistances to break in order to justify its strength, namely 0.7480 TL, the 0.7515-20 horizontal-zone and the 0.7535 TL. Let’s say 0.7535 can’t restrict the pair’s advances then 0.7570 and the 0.7600 become crucial to watch.

USD/CAD Daily Price Forecast – Fading NAFTA Optimism Pressures Canadian Loonie.

The USD/CAD pair failed to capitalize on the weekly bullish gap and was now seen consolidating in a range, just above mid-1.3000s. The pair broke to the upside last Friday and reached a fresh weekly high at 1.3087. Price was holding near the highs, with a bullish tone, consolidating important daily gains. From the weekly low the pair raised almost 200 pips.

The move to the upside followed comments from Canadian negotiator Freeland who said “we’re not there yet” regarding the trade deal with the US and Mexico. PM Trudeau added that a “no deal” on NAFTA was better than a bad one. Also, the pair moved higher on the back of a stronger US dollar which gained momentum amid risk aversion market sentiment. Meanwhile, US President Donald Trump on Saturday threatened to exclude Canada from a new NAFTA agreement after the recent US-Canada trade negotiations ended without any agreement. Trump also warned the Congress not to interfere with these negotiations or he would simply terminate the trilateral NAFTA pact altogether.

Exit From NAFTA Looks Highly Likely For Canada

While Canadian Prime minister is ready for NAFTA exit instead of agreeing to a bad deal, Loonie struggles to come to terms on NAFTA proceedings which kept weighing on the Canadian Dollar at the start of a new trading week. The pair touched an intraday high level of 1.3077, albeit struggled to gain any follow-through traction despite a combination of supporting factors. A modest US Dollar uptick, coupled with a mildly negative tone around crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, did little to inspire the bulls and eventually led to a subdued/range-bounce price action through the early European session earlier today.

Moreover, traders also seemed reluctant to place any aggressive bets amid holiday-thinned liquidity conditions on the back of a bank holiday, both in the US and Canada. Moving ahead, this week’s important macro releases scheduled at the beginning of a new month, including the keenly watched US non-farm payrolls data, and the latest BoC monetary policy update on Wednesday will play a key role in determining the pair’s next leg of directional move.

Despite last week’s strong up-move, the pair remains within a short-term descending trend-channel held over the past two months or so. Hence, it would be prudent to wait for a decisive move beyond the channel resistance, currently near the 1.3100 handles, before placing any major bets in Greenback’s favor. On the flip side, a slide back below the key 1.30 psychological mark would reinforce the trend-channel and turn the pair vulnerable to head back towards challenging the 1.2900 handle support.

 

USDCAD defends the long-term up trendline

Last week was great for the USD. Dollar Index made new long-term highs and the EURUSD broke important supports. On almost all instruments with the USD, we can find interesting setups. Today, we present you the USDCAD, where the buy signal is still relatively fresh.

It seems like this pair is coming back to the uptrend, after being in a deeper correction since the end of June. Our positive view on the USDCAD is based on the few factors. First one is the long-term up trendline, which supports higher lows and highs since the beginning of February (green). At the beginning of August, the price bounced again, which confirms the uptrend in 2018. The second factor is the flag (blue lines). This is a trend continuation pattern, so we should see the breakout of the upper line soon. Last but not least is the breakout of the horizontal resistance on the 1.31 (red). The price being above that line is a confirmation of the positive sentiment.

USD/CAD Daily Chart
USD/CAD Daily Chart

With this setup, in the next few weeks, we should see the further upswing. All we need for a legitimate trigger is the daily candlestick closing above the blue line, which can happen as soon as today.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Important CAD Pairs’ Technical Outlook: 09.08.2018

USD/CAD

Although 50-day & 100-day SMA has been restricting the USDCAD moves since last fortnight, the 1.2960-55 support-confluence, comprising 100-day SMA & an ascending TL, could keep indicating the pair’s upside with 1.3060 being immediate resistances to tackle before confronting the 50-day SMA level of 1.3115. Given the pair’s ability to close beyond the 1.3115, the 1.3190 and the downward slanting trend-line, at 1.3215, seem crucial to watch as they hold the door for the quote’s rally towards the 1.3265, the 1.3340 and the 1.3385 resistances. In case the pair dips beneath the 1.2960 on a daily closing basis, the 1.2900, the 1.2865 and the 1.2800 can mark their presence on the chart ahead of highlighting the 1.2730 and the 1.2625 rest-points.

EUR/CAD

Although 50-day & 100-day SMA has been restricting the USDCAD moves since last fortnight, the 1.2960-55 support-confluence, comprising 100-day SMA & an ascending TL, could keep indicating the pair’s upside with 1.3060 being immediate resistances to tackle before confronting the 50-day SMA level of 1.3115. Given the pair’s ability to close beyond the 1.3115, the 1.3190 and the downward slanting trend-line, at 1.3215, seem crucial to watch as they hold the door for the quote’s rally towards the 1.3265, the 1.3340 and the 1.3385 resistances. In case the pair dips beneath the 1.2960 on a daily closing basis, the 1.2900, the 1.2865 and the 1.2800 can mark their presence on the chart ahead of highlighting the 1.2730 and the 1.2625 rest-points.

NZD/CAD

Even after testing the lowest levels of 2018, mainly due to RBNZ’s dovish statement, the NZDCAD still has to close beneath the five-year old upward slanting trend-line, at 0.8640, on a weekly closing basis in order to stretch its downturn to 0.8580 and the 0.8510 supports. Should prices continue declining beneath the 0.8510, the 0.8430 and the 0.8350 can flash in the Bears’ radar. Alternatively, the 0.8730, the 0.8820 and the 0.8850 can act as adjacent resistances for the pair, breaking which the 0.8980 and the 0.9000 might play their role of upside hurdle. If the pair manage to surpass the 0.9000 mark, the 0.9100-0.9110 resistance-area, including the 200-week SMA level & descending TL, can be targeted if holding long positions.

CAD/CHF

Unless breaking the seven-week long ascending trend-line, at 0.7600 now, chances of the CADCHF’s pullback to 0.7650 and then to the 0.7665 can’t be denied; though, recent high of 0.7675, ascending TL figure of 0.7685 and the 61.8% FE level of 0.7700 could check the pair’s strength afterwards. Assuming the pair’s rise above 0.7700, the 0.7735 and the 0.7765 can become buyers favorite. Meanwhile, a downside break of 0.7600 can drag the quote to the 0.7585 and the 0.7560 supports prior to increasing the importance of 0.7500 round-figure. Also, pair’s plunge past-0.7500 can avail the 0.7460, the 0.7425 and the 0.7390 rest-points during further weakness.

Will the USD/CAD Bulls Hold Their Nerve?

Any signs of recovery were hammered on July 20 when the pairing fell 140 pips on news that Canada’s May retail sales had shot up 2%, rather than the forecast 1.1%. Recent comments by US President Donald Trump about his disdain for domestic interest rate hikes have also put pressure on the US Dollar.

But are we seeing an end to the USD/CAD upward momentum, or is this simply a slight pullback before the chart begins moving north again? The answer will likely be determined more by what Mr. Trump and the US is doing, rather than anything happening in Canada. That’s not a dig at Canada, more a reflection of the importance of the US dollar to all world markets.

The Canadian dollar, steady as she goes

The Canadians are widely seen as being dependable folk, and their currency is also regarded as one of the world’s most stable, traded by long-term investors and intraday traders in large numbers. Interest has increased locally because residents now benefit from using brokers with $1 million protection offered by the Canadian Investor Protection Fund (CIPF), which pays out if a broker goes belly up.

Because the Canadian dollar is the fifth most commonly held currency, it usually does not show the sort of hair-raising price volatility that befalls smaller currencies. But that’s not to say traders can’t take advantage. Intraday corrections come thick and fast on the back of regular scheduled economic news announcements, just like the Retail Sales one on Friday, July 20. This is a monthly statistic, along with Labour Force Survey (Canada’s employment figures), Consumer Price Index and Industrial Price Index. Traders also eagerly await the quarterly Gross Domestic Product figures.

But it’s commodity prices that have a huge impact on the Canadian dollar. The country relies heavily on its natural resources of oil, lumber and natural gas, and exports much of this abroad. This means that not only is foreign demand a pressure factor, but also the price of crude oil itself. When the price of crude slumped from US$105 to US$45 in 2014/15, Canada’s economy took a hit, sending it into a downturn for the first time in years. It’s often said that commodity prices, especially oil, have a greater influence on the Canadian dollar than economic news, and it’s no great surprise given the country’s reliance on its natural resources. Oil prices rise since the beginning of 2018 which helped the Canadain dollar to remain strong versus the greenback and other currencies. As long as oil prices rise, the Canadian dollar might be a correct position.

For the long-term investor, most of these volatility factors (economic news and the price of crude oil, for example) can be exploited by riding on the back of a long-term trend. But as we’ve seen, in a currency pairing like USD/CAD it takes two to tango. And when you’re dance partner is the US, it tends to take the lead.

USD volatility, the Trump effect

The US dollar is subject to volatility like any other currency, with changes to supply and demand, commodity prices and regular economic data all pushing or pulling the price up or down. As the most traded currency in the world, second-guessing which way the USD will go has become an art form. But now there is a new factor influencing the currency’s fortunes, and it’s one that is becoming rather hard to predict.

Step forward Donald Trump, the US President whose habit of speaking his mind often has ripple effects in the markets. While his imposition of trade tariffs with the European Union, Canada and China buoyed sentiment, the currency dropped when he openly questioned the Fed’s policy of interest rate hikes, suggesting it was keeping the dollar too high. Mr. Trump wants a lower dollar, making it cheaper for the US to do business abroad. And if there’s one thing we’ve come to learn about Mr. Trump, it’s that he likes to get what he wants.

USD/CAD long or short?

With all this variance and the unpredictability of looming trade wars, Brexit and maybe a currency war, too, how can you call what the future movement of the USD/CAD pairing will be? You can certainly look at our own financial market forecasts and analysis, but your willingness to jump in might be influenced by your desire to try to cash in on short-term movements or to hang in there for the long term.

As we’ve seen, the long-term trend for USD/CAD is bullish. The USD has been consistently strong, while the Canadian dollar less so. If you believe Mr. Trump won’t have any influence on the Federal Reserve’s decision making on interest rates, which he really shouldn’t as its meant to be impartial to political interference, then interest rates will continue on an upward curve, which in turn will keep the US dollar high. However, even Mr. Trump talking about interest rates has brought a dollar price correction, and any hint that the Fed might actually shift policy might make the dollar price fall further.

What is clear is that the Canadian economy is going through a purple patch. While retail sales are up, so too is inflation, with the figure at a six-year high of 2.5% in June, fuelled by increasing gas costs. What that means is the possibility of another increase in interest rates, which would drive up the Canadian dollar, and potentially drive down the USD/CAD, but only if the US dollar continues to weaken.

So, with all things considered, and without a crystal ball to give you the answer, the best bet might well be to follow the long-term trend and go long on USD/CAD. But intraday traders can lick their lips at short-term volatility, so long as they’re on the right side of any correction. Following Mr. Trump on Twitter now seems as important as watching out for key financial news, and it’s probably a lot more entertaining.

Technical Update For USD/CAD, EUR/CAD, NZD/CAD & CAD/CHF: 26.07.2018

USD/CAD

USDCAD’s dip beneath the 50-day SMA & four-month old horizontal-region can’t be termed as strong Bearish signal as 100-day SMA level of 1.2955, an upward slanting TL stretched since early-February, at 1.2890, and the 1.2805 figure comprising 200-day SMA, still stand tall to challenge sellers. In case if the pair closes below 1.2805 on D1 basis, it can then aim for 1.2740 and the 1.2700 support-levels. On the upside, the 1.3045-50 horizontal-line and the 50-day SMA level of 1.3090 could try limiting the pair’s near-term advances, breaking which the 1.3110, the 1.3160 and the 1.3210 might offer intermediate halts before highlighting the 1.3270 trend-line barrier. Should the 1.3270 fails to disappoint buyers, the 1.3320-30 and the 1.3385 may appear in their radar to target.

EUR/CAD

Given the EURCAD’s daily closing below 50-day SMA, the 1.5200 is likely to appear on the chart but the 1.5140-50 region can confine the pair’s additional declines. Though, pair’s sustained downturn past-1.5140 can avail the 1.5060 and the 1.5000 mark as buffers prior to diverting market attention to recent low of 1.4915. If at all the quote closes above 50-day SMA level of 1.5290, it can revisit the 1.5320 and the 1.5360 resistances ahead of pushing bulls to aim for the 1.5440, the 1.5470 and the 1.5515 trend-line. Moreover, pair’s successful trading beyond 1.5515 may not hesitate questioning the strength of the 1.5580, the 1.5640 and the 1.5710 resistances.

NZD/CAD

Having reversed from resistance-line of short-term descending triangle formation, the NZDCAD seems all set to re-test the 0.8875-70 horizontal-support, which if fail to restrict the pair’s south-run can drag it to 0.8860 and the 0.8830 rest-points. Also, pair’s refrain to respect the 0.8830 mark can make it vulnerable to plunge towards 61.8% FE level of 0.8770. Alternatively, the 0.8915 and the 0.8950 can please counter-trend traders during the pair’s U-turn but the aforementioned TL, at 0.8960, may tame its further advances. However, break of  0.8960 could theoretically confirm the pair’s rise to the 0.9100 number with the 0.9000 and the 0.9065 being intermediate stops.

CAD/CHF

Unless clearing the 200-day SMA level of 0.7615 on a daily closing basis, the CADCHF can’t be termed strong enough to aim for the 0.7665 resistance, breaking which 0.7700-0.7705 becomes crucial to watch. In case the pair conquers the 0.7705 hurdle,  the 0.7740, the 0.7765 and the 0.7805 might lure the buyers. Meanwhile, inability to surpass the 0.7615 may reprint 0.7585 on the chart while immediate ascending TL figure of 0.7535 can restrict the pair’s following downside. Assuming that the prices drop below 0.7535, then the 0.7510, the 0.7445 trend-line number and the 0.7400 may please the Bears.

Technical Checks For Important CAD Pairs: 18.07.2018

USD/CAD

Even after clearing the 1.3215-20 resistance-region, USDCAD needs to conquer the 1.3260-65 horizontal-area in order to extend its recovery towards the 1.3300 and the 1.3340 resistances. Though, pair’s ability to surpass the 1.3340 can escalate its north-run in direction to the June high of 1.3385 and then to the 61.8% FE level of 1.3460. In case the quote fails to cross the 1.3265 immediate barrier, it can revisit the 1.3220-15 zone, breaking which 1.3160 and an upward slanting TL, at 1.3125, may confine the pair’s following declines. It should also be noted that the pair’s additional downturn beneath the 1.3125 can drag it to the 1.3060, the 1.3030 and to the 1.3000 psychological magnet.

GBP/CAD

While USDCAD has another resistance to break after clearing an intermediate hurdle, the GBPCAD’s recent break of ascending trend-line can’t be termed as a sign of its plunge unless closing below the 1.7160 TL-mark on a daily basis. If the pair closes below 1.7160, the 1.7050 and the 1.7000 are likely supports that it could avail before testing the 1.6860 and the 1.6750 rest-points. On the upside, a D1 close beyond 1.7320 can trigger the pair’s recovery to the 1.7400, the 1.7460 and the 1.7550 resistances. However, pair’s break of 1.7550 may find it hard to confront the four-month old descending TL, at 1.7600, adjacent to the 100-day SMA level of 1.7635.

NZD/CAD

NZDCAD seems preparing itself to reach the 50-day SMA level of 0.8995 for one more time with 0.8965 acting as a halt during its rise. Should the pair rallies above 0.8995, the 0.9030 and the 0.9100 can please the buyers prior to challenging them with 100-day SMA level of 0.9130. Alternatively, the 0.8925 and the 0.8875 may entertain short-term sellers but the 0.8840 level, comprising seven-month long ascending TL, could limit the pair’s further weakness. Given the Bears’ refrain to respect the 0.8840 support, the 0.8800 and the 0.8780 might appear in their radar to target.

CAD/CHF

Following its break of four-week old ascending trend-line, the CADCHF is expected to re-test the 0.7530 horizontal-line, which if can’t stop the pair’s drop can register the 0.7500 and the 0.7470 numbers on the chart. Moreover, pair’s extended downside below 0.7470 could have 0.7425 as a buffer  ahead of highlighting the 0.7390 for traders. Meanwhile, 0.7580 and the 0.7600 can provide near-term cap to the prices before the 0.7620 resistance-line. In case the pair crosses 0.7620 line, the 0.7665 and the 0.7700 might become Bulls’ favorites.

Reversal on the USDCHF?

The new week starts for the USD on the back foot. The Greenback is loosing almost on every front. First troubles we could have seen already on Friday, so Today we do have a continuation of the movements that happened at the end of the last week.

One of the most technical setups can be seen on the USDCHF, where Friday ended with a bearish shooting star pattern. The place, where this pattern is present is not random as it is a long-term horizontal resistance (orange). In the smaller time frames, that shooting star is additionally shaped like the head and shoulders formation, which strengtheners the sell signal. Another bearish factor here can be the false breakout of the green horizontal resistance but for that, we need to see the USDCHF to decline slightly more than now. If You are still not convinced to go short, you can wait for the breakout of the long-term up trendline. Price closing below the black line will be a super strong sell signal.

USDCHF Daily Chart
USDCHF Daily Chart

As for now, the green support holds, which is a short-term positive factor but in my opinion, that area should be broken soon and sellers will finally have an occasion to make some money on this instrument.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Strong sell on the JPY, Silver tries a reversal

Silver tries to create a double bottom formation but for this, we need to see the price closing above the resistance on the 16.15 USD/oz. That would also create another hammer on the daily weekly chart.

USDJPY broke all major resistances along with the long-term down trendline. That is a strong buy signal, especially for long-term investors.

CADCHF is having an interesting price action setup, where the price bounced from the 38,2% Fibonacci and broke the lower line of the wedge. We also had a help from the BoC. Despite that, today the price goes a bit higher. The sell signal is still on the table though.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis