Having Suggested the Markets Lacked Inspiration and that Risk Assets would Look to Chop Around in the Short

If I look cross-asset it feels like the bulls have just won a small battle here, with equities working fairly well, especially in the small end of town (the Russell 2000 closed +1.1%) while tech worked nicely (the NAS100 +1.2%), with cash volumes somewhat in line with the 30-day average.

I continue to look at the chart of the NAS100 and see a thing of beauty – Flip to the daily and see a bullish outside day reversal, although the weekly shows the pure rhythm and flow – it’s one where we’ll look back forget valuation, forget any traditional fundamentals and just hold the thing…less thinking, more profits.

The S&P500 lagged a touch (+0.6%), held back by financials (-0.5%) and health care (-0.4%), with the outperformance seen in tech, utilities, and consumer names. Everyone loves a spurious overlap of the current tape versus a key period in time, and this from Bloomberg makes me question if what we’re seeing is really a re-run of the move post-2009 – if this continues to track then equities have far more juice in the tank.

Lower equity volatility ahead?

Vols have been offered, with VIX pushing down 3.38 vols to 31.74%, while on the VIX futures (which is what our price is derived) we see a bearish outside day, and if we see follow-through selling we could see a re-run into 27%. When we consider that the daily implied S&P500 move (higher or lower) portrayed by the VIX index is 2%, then it feels that anecdotally that there are downside risks to the vol index.

Commodities are hot

Our flow in commodities has been strong, with gold getting a strong working over, notably in USD-terms (XAUUSD). We pushed into 1763, although the breakout is not as convincing as I would like to have seen and the 18 May highs are seemingly a tail barrier. It’s hard to be anything but long gold here, especially given the dynamics in the bond market, with 5- and 10-year breakevens (inflation expectations) rising 5bp (0.05%) a piece, and nominal Treasury yields up 1bp across the curve – this has resulted in ‘real’ yields moving lower, and at -79bp (on UST 5yr real) we’re not far from testing the March lows of -84bp.

Real rates are core to markets right now and if yields are going lower then gold will find buyers on weakness and equity will continue to trend.

It’s not just gold, but crude has caught a bid and our XTIUSD price (which basically tracks front-month futures) is not just testing the top of its range, but closing the 6 June gap at $41.05. Traders react to behaviour around gaps, it’s a science in trading, but a break here takes us to the 61.8% fibo and 200-Day MA ($44.18 and $45.47).

Copper is now +1.2% at $2.65p/lb – there seems to be a clear message we’re getting from the copper market because the moves I am seeing on the daily look bullish. As suggested yesterday, whatever copper is seeing is not shared by the bond market, which doesn’t seem to be buying the recovery play just yet, with yields unaffected and perhaps that is moving full circle into the risk sentiment.

The secret sauce

Consider this – Commodity prices higher, inflation expectations up (5yr breakevens +5bp at 1.12%, 5y5y forward B/E +4bp at 1.53%, 5y5y swap +4bp at 1.83%), high yield credit 2bp tighter, yet nominal bond yields unnerved. This is where I see the bulls winning a short-term battle.

FX moves – the USD sell-off resumes

We can’t leave out FX markets, because the USD is lower by 0.6%, and the dynamics mentioned above have resonated in a bid in risk FX. The lower USD would have fed back into commodity buying and again into lower real yield – it goes full circle. We’ve seen bullish key day reversals in CADJPY, AUDJPY, and EURJPY, so the move to sell JPY shows the bulls are back in the driving seat.

EURUSD stopped shy of printing a bullish outside day, as price failed to make a lower low, but did close firmly above Fridays high – a similar effect. The USDX (USD index) closed through the ST uptrend and we’ll watch for how Asia and EU trade the move – as follow-through will confirm a potential change in structure in the FX market and perhaps allow further USD selling.

For those running EUR or EU equity exposures do consider the key event risk on the docket is the EU PMI data. You can see expectations, and for the EUR to build on the move an upside surprise would clearly help.

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Chris Weston, Head of Global Research at Pepperstone.

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USD/JPY Price Forecast – US Dollar Continues to Hover Around 107.50

The US dollar has rallied a bit during the trading session only to give all of those gains back up on Wednesday as we simply have nowhere to be. This market has dance around the 107.50 level quite often, and it looks like we are going back into another one of those times where the market has nowhere to be. With the lack of news, it is very unlikely we get a big move unless it is a bit of a “knock on effect” from other markets.

USD/JPY Video 18.06.20

At this point, I continue to use this pair as an indicator for other Japanese yen related pairs. In other words, if it starts to drift lower than I might look to short another pair such as the AUD/JPY pair, CAD/JPY pair, and so on. Ultimately, I believe that this market will try to find its way forward, but it is not until we get an impulsive candlestick on a daily chart that I think it is worth bothering with.

The 200 day EMA and the 50 day EMA are sitting just above offering resistance but they are going sideways so I do not know that we are quite ready to break out to the upside but having said that the downside has been incredibly supportive as well. With that in mind, I think the market just chop back and forth and therefore unless you are a short-term back-and-forth type of trader, it is probably exceedingly difficult to put any money to work here.

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

USD/JPY Price Forecast – US Dollar Looking for Buyers Against Yen

The US dollar has cracked below the ¥107 level during the trading session on Thursday, as we continue to see a lot of negativity out there. After all, the Dow Jones Industrial Average futures are down about 900 points at the open, and this typically favors this pair falling due to the fact that the market starts looking for safety in the form of the Japanese yen. If we can continue the momentum, the next support level is closer to the 160 and level.

USD/JPY Video 12.06.20

On the other hand, if the market saved itself yet again, then it is likely that we will go looking towards the ¥107.50 level, and then after that go looking towards ¥108. Moving above the ¥108 level allows for the market to go looking towards ¥109, and of course followed by ¥110. I do not necessarily think that we are suddenly going to rally, but then again it is easy to say what we “should” and” should not do”, because quite frankly the markets have not been paying attention to any of that for a while.

With this being the case, I continue to use this pair more or less as a Japanese yen strength or weakness indicator, and not necessarily trade it directly. At this pair continues to fall hard, then it is possible to short other pairs that will give you a little bit more momentum like the AUD/JPY pair, NZD/JPY pair, CAD/JPY pair, and so forth. This pair is a little congested and noisy, which makes quite a bit of sense considered both currencies are thought of as “safety currency.”

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

Japanese Yen Tumbles as Risk Sentiment Rebounds

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This can be reflected on the USDJPY which is approaching the 112.00 level as of writing. A solid daily close above this point has the potential to trigger a move higher towards 113.00.

EURJPY bulls eyes 127.40

The EURJPY fulfills the prerequisites of a bullish trend on the daily charts as there have been consistently higher highs and higher lows. Prices are trading above the daily 20 SMA while the MACD has crossed to the upside. An intraday breakout above 126.50 will signal a move higher towards 127.40. If prices fail to keep above 126.50, then the EURJPY is seen sinking back towards 1250.00.

GBPJPY marches towards 147.00

Given how Brexit continues to pressure Sterling, the GBPJPY’s appreciation is clearly based around Yen weakness. A depreciating Japanese Yen should inspire bulls with enough inspiration to target 147.00 and 147.50.

CADJPY breaks above 84.00

The CADJPY is in the process of breaking above the 84.00 resistance level as of writing. With the Japanese Yen poised to weaken further amid the improving market mood, the CADJPY has scope to push higher. A daily close above 84.00 will open the doors towards 85.00 in the short to medium term.

AUDJPY gains momentum above 79.74

There is a classical breakout opportunity in play on the AUDJPY with prices trading above the 79.740 resistance as of writing. For as long as bulls can maintain control above this level, the AUDJPY is seen challenging 80.90 and possibly higher. Alternately, a move back below 79.740 will encourage a decline back towards the lower range of the bullish channel at 77.75

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

AUD Weakens Creating Two Nice Bearish Setups

There is a market rumor that apparently, RBA will lower interest rates in July and August (both 25bps). This was obviously perceived as a piece of negative information and AUD dropped like a rock almost on every pair. Thanks to this, we do have two interesting setups with this currency.

First one is the AUDJPY, where until yesterday, everything was looking great. We were in the ascending triangle pattern and the bullish flag, which was promoting an upswing. The price even broke the upper line of the flag but that breakout happened to be a fake one! After midnight, AUDJPY went down breaking the lower line of the triangle. That is an invitation to open a mid-term short position.

Another setup can be found on the AUDUSD, where recently, the price created a few nice trading patterns. First one was a small H&S formation, which started the most recent drop. After this, we got a descending triangle, which resulted in a further downswing. This allowed creating a right shoulder of the much bigger H&S formation. As for now, we are on the important support – a neckline but we see big chances for a bearish breakout here.

Last but not least is the CADJPY, where the price broke three important mid-term supports – two dynamic and a horizontal one. Today, we used the two of them as fresh resistances and the price created the shooting star candles. That creates a great bearish opportunity. The sell signal will be denied when the price will come back above the orange area.

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

CAD/JPY Confluence at POC Might Show Now Moment Buyers

Hi traders,

The CAD/JPY has formed a confluence at support. 82.55-65 could show up now moment buyers for the pair and spike the price up.

Bullish Bounce straight from the POC zone is targeting 83.00 and 83.20. However, in order for that to happen bulls need so bounce from the POC zone, with an hourly close above 82.70. That will point out fresh bullish momentum in the market. If we see a drop, then the price needs to stay above 82.30 else the pair will be back into a neutral territory. Watch for a possible bounce and or continuation above 82.70 if you are bullish.

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

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Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

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.

CAD/JPY T-89 Pattern Hints More Bullish Price Action

Hi traders,

The CAD/JPY has formed a T-89 pattern at W L3/ D H3 support so we might see a further upside continuation. T-89 is my proprietary pattern that marks the rejection off the important EMA.

POC zone 82.45-55 might see a bounce for the CAD/JPY towards 82.66 that is the first resistance. However, a close above will initiate a new wave of buyers and possible short sellers will cover providing bulls with additional momentum. Higher timeframes are also suggesting continuation to the upside. Next targets are 82.75 and 82.90. Ideally the pair should stay above 82.20 for the bulls to remain in control.

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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

Technical Outlook For USD/JPY, EUR/JPY, AUD/JPY & CAD/JPY: 17.01.2019

USD/JPY

USDJPY’s pullback from 109.10-20 is less likely to signal the pair’s weakness unless a sustained drop beneath three-week-old upward slanting trend-line, at 108.40 now, takes place on the four-hour chart. If the pair slip under the 108.40, the 107.70, the 107.00 and the 106.70 support-levels may gain sellers’ attention. Meanwhile, clear break of 109.20 enables the pair to aim for the 109.50 and the 110.00 resistances. In case prices manage to extend its up-moves past-110.00, the 110.25-30 seems crucial to watch as it holds the gate for the pair’s rally to 110.80 & 111.35-40 numbers to north.

EUR/JPY

Inability to cross the 124.85-125.15 region indicates brighter chances of the EURJPY’s another dip to 123.40, breaking which 122.50 could flash on Bears’ radars. Should prices continue trading southwards below 122.50, the 122.00, the 120.60 and the 120.00 might offer intermediate halts during its drop to 118.65. If at all the quote surpasses 125.15 on a daily closing basis, the 125.80, the 126.40 & 50-day SMA level of 127.20 can lure the buyers. Though, a descending trend-line stretched since late-September, at 127.70, may confine the pair’s rise beyond 127.20, if not then 200-day SMA level of 129.10 and the 130.00 round-figure could be targeted on long positions.

AUD/JPY

Not only more than a month old resistance-line, at 78.20, but the 78.50-70 area also challenges the AUDJPY’s upside, which if conquered opens the gate for the pair’s rise to 79.00 & 80.00. However, 50-day & 100-day SMA confluence, around 80.35-45, may limit the advances after 80.00, which if not respected can trigger the pair’s surge to 81.40 level, including 200-day SMA. Alternatively, the 77.55 & the 77.00 could hold the pair’s decline captive, breaking which 76.00 and the 75.20 might come forward as supports. Assuming the pair’s weakness below 75.20, the 74.40, the 72.40 and the 70.85 could become its next rests.

CAD/JPY

Unless breaking 82.40-55 resistance-zone, the CADJPY may fall short of aiming the 83.00, needless to mention about 50-day SMA level of 83.80 and the three-month long descending trend-line, at 84.00. Given the pair crosses 82.55 and the 84.00 barriers, the 200-day SMA level of 84.95 and the 85.20 might become Bulls’ favorites. On the downside, the 81.65 support-line break can fetch the quote to 81.00 and then to 80.60 prior to highlighting the 80.00 psychological magnet. Should prices slide beneath 80.00, the 79.60, the 78.50 and the 77.15 can appear in limelight.

EURUSD finally with a trading signal. BTC drops after the bounce from the neckline

The first occasion is on the EURUSD, where the price broke the mid-term down trendline and the horizontal resistance. Now, we can expect a small pullback but in general, the sentiment is positive and in the next few weeks, we should see a further upswing.

Bitcoin is having quite the opposite situation. Here, buyers had a chance for a rise after the price formed the inverse head and shoulders pattern. Today, the price definitely bounced from that line, which indicates the bullish failure. The road towards the 2900 USD seems open.

The last one is the CADJPY, where we do have a proper buy signal after the V shape reversal and a false breakout below the neckline of the H&S pattern. With today’s drop, the risk to reward ratio of this trade is getting better, which creates a good occasion for the swing traders.

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

Technical Checks For Important JPY Pairs: 28.12.2018

USD/JPY

Having failed to cross 111.35-40 horizontal-resistance, the USDJPY again dips beneath 200-day SMA and aims for the 109.80-75 rest-region. In case oversold RSI fall short of activating the pair’s U-turn around 109.75, the 109.30, the 109.00 and the 108.60 can act as intermediate halts before drawing market attention to the 108.10-107.75 support-zone. Alternatively, an upside clearance of 111.40 on a daily closing basis could quickly fuel the quote towards the 111.80 and the 100-day SMA level of 112.40. Moreover, pair’s successful rise beyond 112.40 enables it to confront the 113.15 and a downward slanting resistance-line near 113.80.

CAD/JPY

Even after trading near the lowest levels in nine-months, the CADJPY is yet to provide a weekly closing under 80.65-50 area that has been restricting the pair’s downturn since early 2017. If at all the Bears manage to conquer 80.50, the 80.00, the 79.60 and the 78.80 are likely following numbers to appear on the chart. Meanwhile, the 82.05-15 may continue limiting the pair’s near-term advances, breaking which 83.00 & 83.50 might lure the buyers. It should also be noted that the pair’s sustained up-move past-83.50 can flash the 84.30, the 84.70 and the 85.60 on Bulls’ radars.

CHF/JPY

CHFJPY struggles with 200-day SMA level of 112.40 in order to justify its strength in targeting the 112.80 and the 113.10, comprising 50-day SMA. Though, three-month old descending trend-line, at 113.85 now, may confine the pair’s up-moves after 113.10, if not then 114.00 and the 114.40 can grab the limelight. On the downside, the 111.55-35 seem immediate support for the pair, breaking which 111.00 and the 110.60 needs to be observed carefully. Given the pair’s extended south-run below 110.60, the 110.00, the 109.45 and the 108.60 may become sellers’ favorites.

Important JPY Pairs’ Technical Overview: 25.10.2018

USD/JPY

Repeated bounce off the two-month old ascending trend-line portrays the USDJPY’s strength but the pair needs to surpass 112.80-85 resistance-region in order to justify its capacity to conquer the 113.30 and the 113.55-60 levels to north. It should also be noted that the pair’s successful trading beyond 113.60 can escalate its recovery towards 114.05-10 and to the 114.55. Alternatively, pair’s dip below 112.00 support-line could take rest on 111.65-60, breaking which 111.00 & 110.70-65 may gain market attention. In case if sellers refrain to respect the 110.65 mark, the 110.30 & 109.80 might flash in their radars to target.

EUR/JPY

With the short-term descending trend-channel still being intact, the EURJPY can’t be termed strong unless clearing the 129.35 resistance, which if broken can stretch the upside to 130.45-50 prior to confronting the 130.65-70 barrier. Given the pair’s sustained advances past-130.70, there are multiple hurdles to clear between the 131.00 and the 131.30. On the downside, the 127.50 and the channel-support figure of 127.10, adjacent to 126.55-50 might keep limiting the pair’s immediate declines. If at all the quote drops beneath the 126.50, the 125.70, the 124.30 and the 124.85 could entertain the Bears.

CAD/JPY

CADJPY’s U-turn from 100-day SMA has to cross the 86.90 if it is to aim for 87.45-50 resistance-zone. Though, ability to rise above 87.50 could help prices to visit the 88.50 ahead of looking at the 89.20 and the 90.00 round-figure. Assuming the pair’s failure to hold recent uptick, the 100-day SMA level of 85.30, the 200-day SMA level of 85.00 and an upward slanting TL, at 84.80, may act as supports. However, a D1 close below 84.80 might not hesitate highlighting the 83.80 and the 83.20 numbers.

CHF/JPY

Even after closing below 200-day SMA, the CHFJPY is yet to close beneath the ascending support-line ranged from May lows, around 112.20, to mark itself weaker enough for visiting the 111.30 and the 110.60 supports. Should prices slide below 110.60, the 110.30, the 110.00 and the 109.50 may appear in limelight. Meanwhile, 200-day SMA level of 112.65 and the 113.15-25 area become strong resistances for the pair traders to watch during pullback, breaking which 113.85 and the 50-day SMA level of 114.35 can please the buyers. Let’s say the quote continue rising above 114.35, then the 115.00 and the 115.60 may pop-up in the Bulls’ list.

USDJPY aims for the monthly highs

The new week starts for us with the analysis of the USDJPY, where we do have a nice bullish setup. That is something new in October as the 10th month of the year is so far negative for this instrument and up to date, is bringing us a strong decline.

It seems that bad times are over though. First of all, in the previous week, price bounced from the long-term up trendline (green). In addition to that, USDJPY drew a bullish price formation – Inverse Head and Shoulders pattern (yellow). That formation is already active and actually, was activated today, when the price broke the neckline (upper black). Price closing a day above that life will be a confirmation of a positive sentiment on this instrument.

USD/JPY 4H Chart
USD/JPY 4H Chart

As for the target, well… first we should break the resistance on the 50% Fibonacci and later we should aim for the highs from the beginning of October. Chances that we will get there are quite high.

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

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.

 

USDJPY climbs above all major mid-term resistances

The last week was very eventful for the USDJPY. Apart from the technical analysis, positive sentiment was strengthened here by the rise of the global exchanges. In the last week, USDJPY broke three important resistances. In theory, that should be a strong buy signal. Let us see if the positive sentiment is still here.

First, let’s deal with those broken resistances that we mentioned above. First one was the neckline of the inverse head and shoulders pattern (red). The second one was the mid-term down trendline (orange). Those two, gave the price momentum to break the last one: upper line of the wedge pattern (green). After the breakout, the price formed a small rectangle pattern (yellow) and went higher – the proper buy signal as its finest.

USD/JPY 4H Chart
USD/JPY 4H Chart

Currently, the price is undergoing a small correction but it seems that everything is under control and we should see a further upswing. As long, as we stay above the yellow area, the current drop is just a small correction. Comeback below the yellow support, can potentially kill the demand here and be an invitation for the false breakout pattern, which can reverse the powers on the USDJPY. The second option is less likely to happen.

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

Technical Update For USD/CAD, EUR/CAD & CAD/JPY: 24.08.2018

USD/CAD

USDCAD’s another bounce off the 100-day SMA & seven-month old ascending trend-line indicates its readiness to confront the downward slanting TL stretched since late-June, at 1.3145. Should the pair registers a daily closing beyond 1.3145 barrier, the 1.3215 and the 1.3255 are likely intermediate halts that it could avail prior to aiming the 1.3385 mark. In case Bulls keep ruling the trade-sentiment past-1.3385, the 61.8% FE level of 1.3490 may prove its worth as strong resistance. Alternatively, the 1.2990-85 support-zone, comprising 100-day SMA & aforementioned trend-line, may restrict the pair’s near-term declines, failing to which can drag the quote to 1.2915 and the 200-day SMA level of 1.2840. Given the pair’s additional downturn beneath the 1.2840, the 1.2750-45 and the 1.2700 might please the sellers.

EUR/CAD

Even after recovering from 1.4800, the EURCAD might find it hard to remain strong for longer as the 1.5170-75 and the 1.5290 descending trend-line still stand tall to challenge the pair buyers. If prices rise above 1.5290, the 1.5320, the 1.5370 and the 1.5440 are expected consecutives hurdles that needs to be cleared in order to target the 1.5500 round-figure. Meanwhile, the 1.5050 and the 1.5025 support-line may limit the pair immediate drops, breaking which the 1.5000, the 1.4915 and the 1.4800 can witness market attention.

CAD/JPY

Having repeatedly defeated by the 200-day SMA, CADJPY again looks to question the strength of 85.55 SMA figure, which holds door for the pair’s advances towards 86.05 trend-line. However, pair’s successful trading above 86.05 can fuel it to the 86.75 and the 87.20 resistances. On the downside, the 84.70, the 84.25 and the 83.70 could continue troubling the pessimists, breaking which an ascending trend-line, at 83.10, might become crucial to observe. Assuming the pair’s extended south-run below 83.10, the 82.15 and the 81.35 may appear in the Bears’ radars.

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

The Japanese Yen Loses Its Safe-Haven Status as China-US Trade Conflict Intensifies, Global Stocks Slightly Lower

The dollar adds at the start of a new week, despite the weak employment growth in July report. The EURUSD pair is trading near the 6-weeks lows at 1.1550. Despite a poor number of jobs created, market participants felt that the Fed would maintain its commitment to the gradual tightening of the policy with two more hikes this year.

Nevertheless, the US market continues to attract investors’ interest. The strong company reporting pushes US stock indices back to the January highs. A year earlier, the rally of the indices was partially supported by the dollar weakening, but now the USD is experiencing an impressive demand. Global stocks trade slightly lower on Monday morning as trade war tensions weigh on markets.

In addition to data on the labor market, the demand for the dollar is also supported by the growing trade conflict between the US and China. China proposes to expand tariffs on US goods, including such sensitive sectors with a trading volume of $ 60 billion as liquefied natural gas and aircraft.

The consequences of the trade conflict between the US and China threaten to affect the growth of the entire region, which puts pressure on the yen as well. The Japanese currency, to some extent, loses its status of a protective currency having lost almost 6.5% to the dollar for the last 4 months as the trade conflicts have been intensifying.


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The British Pound fell below 1.30 on Friday and is now near this mark and near its annual lows.

Thus, the US currency demonstrates the strengthening of its largest competitors.

The EURUSD pair is trading at the low of the last three months. It is an important area of support, below which many orders are concentrated. A fall below 1.15 is capable of triggering an avalanche of stop orders and opening the way for a fairly rapid fall of the pair down to around 1.10, without encountering any serious technical support levels along the way.

This article was written by FxPro

Technical Checks For USD/CAD, EUR/CAD & CAD/JPY: 03.08.2018

USD/CAD

Absence of strong up-moves after the USDCAD’s recent U-turn isn’t a sign of its fresh south-run as 100-day SMA and support-line of short-term descending trend-channel, at 1.2965-60, still stand tall to limit the pair’s decline. In case if the pair refrains to respect the 1.2965-60 support-confluence, more than six-month old ascending trend-line, near 1.2920, followed by the 1.2900 round-figure, could challenge the sellers. Assuming that the quote closes beneath the 1.2900 mark on a D1 basis, then it can plunge to 1.2800 and the 1.2740 support-levels. On the upside, the 1.3040, the 1.3080 and the 50-day SMA level of 1.3110 seem immediate resistances for the pair to confront during its advances. Should prices rally beyond 1.3110, the 1.3160, the 1.3220 and the channel-resistance figure of 1.3235 may gain market attention.

EUR/CAD

Ever since the EURCAD slipped below 50-day SMA, it never climbed it back on the daily closing basis, which in-turn signal brighter chances for the pair’s further downturn to 1.5000 psychological magnet. However, an upward slanting trend-line, at 1.4950, could restrict the pair’s additional drop past-1.5000, if not then the 1.4855, the 1.4800 and the 1.4730-20 horizontal-region may appear in the Bears’ radar to target. Meanwhile, the 1.5145, the 1.5200 and the 1.5255, comprising 50-day SMA & 50% Fibonacci Retracement, are likely adjacent resistances that might question the pair’s recovery. Given the pair’s ability to surpass 1.5255 barrier, the 1.5315, the 1.5370 and the 100-day SMA level of 1.5420 can entertain the buyers prior to troubling them with 1.5510 resistance-line.

CAD/JPY

Not only 200-day SMA but upper-line of “Rising-Wedge” Bearish technical pattern also confines the CADJPY’s rise around 85.85 and the 86.05 respectively. As a result, pair’s profit-booking to 85.20 and the 85.00 formation support can’t be ignored. Though, break of 85.00 could confirm the bearish pattern and might quickly drag the quote to 50-day & 100-day SMA confluence region of 84.40-35, the 83.80 and the 83.50-45 consecutive rest-points. Alternatively, pair’s successful break of 86.05 negates the downturn signaling formation and may escalate the up-moves in direction to the 86.45 and the 87.00 nearby resistances. If the pair clears the 87.00 hurdle to north, it can jump to 87.75 and the 88.15-20 levels.