Euro Enters Correction Phase, Not for Much Longer

So, after making a new high at 1.2090, EUR/USD rebounded to get ready for a new ‘attack’. There’s a good deal of debate between the economists and the analysts regarding the next point for the second growth wave. There are pessimistic views pointing to 1.1600, which could be the end of the current correction phase, while the optimists say 1.1930 is enough to reach new highs later.

The greenback faces its major difficulty in the investors doubting that the Fed could raise the interest rate three times in 2018. While the Fed has already done this before and is not yet compromised with anything, this appears irrelevant for the market. Still, the market players point out that interest rate rise is probable, but, perhaps, only twice this year, and with a long pause.

Another issue for the greenback is inflation, although it is also quite unclear. The last available consumer price index growth reading is 2.2%, which is higher than the Fed target (2%). So, the index is growing, if not too fast, which is absolutely fine for the current season. All in all, the inflation is not a major obstacle for the Fed with regard to raising the interest rate.

The labor market is not such an obstacle either. Many say the conditions in the employment sector are getting tighter, but, overall, the sector is quite balanced and sustainable. The unemployment rate is at its low at 4.1%, and it could go well below to 3.8% or 3.7% this year, which is a great base for the current monetary policy in the US.

Last Friday, the Eurozone inflation came in, and it appeared to lag behind the expectations. Here’s what one should pay attention to.

Technically, EUR/USD is still uptrending in the mid-term. Upon reaching a few months’ high, the pair, naturally, entered the correction phase. While the price has not yet maintained above 1.2092, which is the current high, a new downward impulse can occur in the mid-term correction. A short-term ascending trend gave way to a descending one after the local resistance breakout at 1.2052. Currently, the price is headed towards the support at 1.1835. After this level has been reached, the trend may enter the projection channel and reach its support, with the primary target at 1.1540. The price may also well rebound at the current support, with a short-term target at the current resistance of 1.2175.

EUR/USD 4H Chart
EUR/USD 4H Chart

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Commodities still the main driver of the Australian dollar

The Australian dollar has rallied in the last 2 weeks from a low of US75c to around US76.60c against the greenback, defying analysts’ predictions that the currency would tumble if the US Federal Reserve stuck to their plan to hike rates further next year and if new tax legislation in the US was passed.

If the news is correct, the Fed is expected to lift interest rates next year a minimum of 3 times with a fourth hike also a distinct possibility which will put the US dollar interest rate and yield higher than the Australian dollar for the first time in almost 2 decades which you would think would generate huge interest in the US dollar at the expense of the Aussie

Also, A new tax legislation that was introduced by US President Donald Trump which envisions cutting the corporate tax rate to 20 percent among other things is sure to be signed into law this week by the US president after his own Republican party passed the tax bill through both the Senate and the house of representatives.

It is seen as the biggest tax change in a generation and if Republicans are to be believed, will put a rocket under the US economy as companies bring back their profits to the US which will generate significant demand for the US dollar.

So why is the Australian dollar remaining so resilient in the face of such pressure? Surely higher rates in the US, as well as a soaring demand for the greenback on the back of corporate tax cuts, should be negative for the Australian dollar?

Tax legislation and interest rates aside, if we look back over the last decade or so the main driver of the Australian dollar has been commodity prices such as copper, and Iron ore, Australia’s biggest export which has rallied over 25 percent in the last 2 months and further gains are expected.

So if you are listening out there, it may be a good strategy to keep an eye on commodity prices and although some external factors may influence the Aussie dollar the Iron ore price is going to be the one to watch out for.

This article was written by FIBO Group analyst Andrew Masters.

Technical Update For Important AUD Pairs: 20.12.2017

AUD/USD

Considering AUDUSD’s pullback from 0.7695–0.7700 horizontal-region, followed by its U-turn from 0.7635, the pair seems less likely to offer much trading opportunities unless clearing either the 0.7635 support or the 0.7700 resistance-mark. However, comparative strength of the USD indicates more downside of the pair, which in-turn indicates brighter chances of its drop to 0.7600 and then to the 0.7580 after conquering the 0.7635 rest-point. During the pair’s additional declines beneath 0.7580, the 0.7530 and the 0.7500 round-figure might please sellers. Alternatively, an upside break of 0.7700 could further escalate the pair’s recovery in direction to 0.7725-30 area, which if surpassed might enable Bulls to target 0.7770 and the 0.7800 resistances. In case of the quote’s sustained trading beyond 0.7800, the 0.7825, the 0.7860 and the 0.7900 may entertain follow-on buyers.

EUR/AUD

Even after bouncing off 50-day SMA level, the EURAUD couldn’t extend its up-moves beyond the 1.5480-85 resistance-zone and is presently witnessing downside pressure towards re-testing the said SMA level of 1.5350. Though, pair’s further south-run might find it hard to break five-month old ascending trend-line, at 1.5315, which if cleared could drag the prices to 1.5230 and then to the 100-day SMA level of 1.5155. Should the pair manage to surpass the 1.5485 on a daily closing basis, a fortnight long downward slanting TL, at 1.5600, seems crucial to watch, breaking which the 1.5685, the 1.5750 and the 1.5770 can reappear on the chart. If at all optimists continue propelling the pair beyond 1.5770, the 61.8% FE level of 1.5930 and the 1.6000 round-figure may gain their attention.

GBP/AUD

GBPAUD becomes another pair which seems failing to stretch it latest recovery and may revisit the important support. In this case, the 1.7350-60 horizontal-line and the 50-day SMA level of 1.7320 are likely immediate supports that could limit the pair’s near-term downside. Given the pair’s refrain to respect the 1.7320, chances of its plunge to 1.7230 and then to the 1.7170 can’t be denied. Meanwhile, the 1.7500 and the 1.7570 might entertain the buyers if prices take a U-turn, breaking which 1.7670 and the 1.7800 are likely following resistances to comeback. Moreover, pair’s successful trading above 1.7800 could help the Bulls aim for the 1.7910 and the 1.8000 mark ahead of looking at the 61.8% FE level of 1.8170.

AUD/CHF

AUDCHF’s recent uptick is less likely to cause a trend-channel unless the pair breaks three-month old descending trend-line resistance of 0.7640 but its visit to 0.7595 and the 100-day SMA level of 0.7610 can be expected. Should the pair closes above 0.7640, it becomes capable enough to challenge the 0.7685 and the 0.7720 resistance-levels. On the downside, 200-day SMA level of 0.7525 could keep restricting the pair’s decline, breaking which 0.7495 and the 0.7460 might act as buffers before dragging it to the 0.7430 horizontal-line. However, pair’s dip beneath 0.7430 can quickly fetch it to 0.7390 and then to the 0.7320 support-levels.

Cheers and Safe Trading,
Anil Panchal

Technical Update For AUD/USD, EUR/AUD & AUD/CAD: 03.11.2017

AUD/USD

With the support-turned-resistance line of 0.7730 restricting AUDUSD’s near-term upside, the pair seems declining to re-test recent low of 0.7625; however, break of an immediate ascending TL, at 0.7655 now, might act as a trigger for the pair’s drop. Should the quote extend its south-run beneath 0.7625, the 0.7600 round-figure and the 61.8% FE level of 0.7565 could appear on the chart. On the contrary, pair’s U-turn from 0.7655 can again propel prices towards 0.7700 and then to the 0.7730 horizontal-line, breaking which it can rise to a bit broader trend-line resistance of 0.7770. In case if buyers fuel the pair beyond 0.7770, the 0.7820 and the 0.7855 may become their favorite north-side numbers to watch.

EUR/AUD

euraud

EURAUD’s bounce from short-term ascending trend-line presently helps the pair to aim for the 1.5215 TL resistance, break of which could further escalate its recovery in direction to the 1.5235-40 horizontal-region. Given the upside momentum clears 1.5240 barrier, the 1.5280, the 1.5325 and the 1.5355 are likely consecutive levels that traders can target before looking at the October high of 1.5395 and the 1.5400 mark. Meanwhile, the 1.5120 could offer adjacent rest to the pair during its U-turn ahead of reigniting the importance of 1.5100 trend-line support, which if broken may activate the fresh selling wave aiming the 1.5070, the 1.5030 and then the 1.5000 psychological magnet. Moreover, pair’s sustained downturn below 1.5000 could well open the door for the 1.4945 and the 1.4900 supports.

AUD/CAD

audcad

Following its failure to surpass the 0.9905-10 resistance-confluence, the AUDCAD now tests the immediate “Rising-Wedge” Bearish formation support, at 0.9825, break of which can theoretically confirm its plunge below September low of 0.9680 by registering a figure around 0.9655-55. However, the 0.9800, the 0.9770 and the 0.9710 might become buffers for sellers to clear. Alternatively, 0.9860 seems nearby resistance for the pair to break in order to confront the 0.9905-10 zone, breaking which it can rally to 0.9925 and the 0.9960 resistances. If at all the buyers keep dominating the quote after 0.9960, chances of witnessing the 0.9975 and the 1.0000 mark can’t be denied.

Cheers and Safe Trading,
Anil Panchal

Technical Checks For Important AUD Pairs: 25.10.2017

AUD/USD

Having breached the 0.7750-40 horizontal-line, the AUDUSD seems all set to test the 200-day SMA level of 0.7690 prior to visiting the 0.7630 support-mark. However, the pair’s declines beneath 0.7630 may find it hard to clear nearly eleven-month old ascending trend-line, at 0.7560, which if broken could open the door for its plunge towards 0.7515 and the 0.7470 numbers. In case if the oversold RSI triggers the quote’s pullback from 0.7690, the 0.7740-50 area regains its importance, surpassing which it may rise to 0.7815 and the 0.7840 resistances. Should the pair successfully trades beyond 0.7840, the 0.7865 can act as a buffer before fueling prices to the 50-day SMA level of 0.7900.

EUR/AUD

euraud

Even if sluggish AU inflation numbers propelled the EURAUD to post fresh high in sixteen months, the surge is likely to be challenged by resistance-line of three-month-old ascending trend-channel, at 1.5310. As a result, the pair’s profit-booking to 1.5240 and then to 1.5170 become more likely. Given the pair stretches the downturn below 1.5170, the 1.5100, the 1.5070 and the 1.5030 can entertain sellers ahead of making them confront with 50-day SMA level of 1.4980. Alternatively, Bulls’ ability to register a daily close beyond 1.5310 channel-resistance could further strengthen their upward bias to target 61.8% FE level of 1.5420. Moreover, pair’s sustained the rally above 1.5420 might help it conquer the 1.5455-60 multiple resistance-zone, which in-turn could accelerate the upside momentum in a direction to 1.5530-40 region and then to the 1.5600 round-figure.

AUD/JPY

audjpy

With a two-month long ascending trend-line portraying brighter chances of the AUDJPY’s U-turn, the 88.20 and the 88.30-35 reacquire traders’ eye-share. Though, the pair’s consequent upside may only please buyers with 88.70 resistance-mark ahead of meeting the 88.95 trend-line barriers. Should the pair surpasses the 88.95 mark, also conquers the 89.00 – 89.05 zone, it can progress to 89.35 and the 89.70 resistances. Meanwhile, break of 87.75 TL support can result in additional weakness to the pair that may flash 87.60 and the 87.20 rest-points on the chart. Given the pair’s extended south-run beneath 87.20, it becomes vulnerable to test 86.50 support-mark.

AUD/CAD

audcad

While a downward slanting trend-line, stretched since early-May, again confining the AUDCAD’s upside, the pair is expected to re-test the 0.9755 and the 0.9710 supports ahead of resting around September lows of 0.9680. If the market sentiment keeps nurturing bears after 0.9680 breaks on a daily closing basis, the 61.8% FE level of 0.9575 may become a strong level to observe. On the upside, a daily close above 0.9815 can again try to beat the 0.9865 TL and aim for 100-day SMA level of 0.9900. If at all optimists favor the price-run to defeat 0.9900 round-figure, the 0.9960-65 can act as a buffer before shedding lights on 200-day SMA level, also the psychological magnet, of 1.0000.

Cheers and Safe Trading,
Anil Panchal

EUR Pairs Heavy or at Resistance

A Technical view of the market with the use of Harmonics Analysis

Ahead of Thursday’s ECB meeting and with a crisis brewing in Spanish Catalonia the EUR is trading heavy or at significant resistance in some crosses which are worth watching for bearish reversals.

EURUSD failed at the 50% retrace of the decline from the September high and is looking for another leg lower.  1.1668 is major support and a break below targets 1.1482 and potentially but less likely 1.13.

EUR/USD Daily Chart
EUR/USD Daily Chart

EURCHF is at important daily Fibonacci resistance. The 1.618 of 2016 high to low correction and where the rally from the February 2017 low is 0.618 of the sharp rally from the 2015 lows which is very common in corrections. Watching for a bearish reversal and pullback at 1.1550-1.16 zone. EURGBP has failed again at the 50% retrace of the decline from the August highs. Holding above 0.8743 keeps the bigger uptrend intact and this level is about to be retested.

EUR/CHF Daily Chart
EUR/CHF Daily Chart

EURAUD is testing the top of a long-term parallel channel and after a false break higher on 11 October the path of least resistance is likely lower and below 1.4927 is a bearish trigger and targets a return to the July lows next at 1.4416 and the 200 day MA.

EUR/AUD Daily Chart
EUR/AUD Daily Chart

EURNZD has reached harmonic pattern resistance at 1.6825-1.6937 and we are watching for a bearish reversal.  A daily close above 1.70 would be a bullish continuation and next target is 1.7208 and 1.7365.

EUR/NZD Daily Chart

The Australian Dollar is Ready to Fight off Sellers’ Attacks

It is quite possible that the Australian Dollar may resume falling in the nearest future. This might be true for both short and long-term, on the basis of the fundamental background. At the same time, the mid-term period, from a week to a month, looks very vague.

During the RBA meeting at the beginning of October, the regulator paid special attention to the Australian Dollar rate. It happens sometimes: the RBA authorities think that any strengthening of the national currency frustrates their efforts to boost the country’s economy. In some way, they are right, because the RBA doesn’t believe in an aggressive approach to its monetary policy and most of the time allows the economy to be regulated and controlled by itself. And sometimes the burst of the currency activity may really interfere.

This time, investors’ response to such comments was quite visible – they started selling the AUD/USD pair. The comments once again made investors doubt the Aussie’s stability in the future: when the Federal Reserve starts selling assets on its balance sheet, the US Department of the Treasury will launch the national debt increase program and the US Dollar will get stronger. It means that the Aussie may get under significant fundamental pressure in the middle of autumn regardless what the technical indicators show.

Not only its own statistics counts against the Aussie. The Chinese statistics matters as well, and the worse reports from China are, the more influence they have on the Australian currency. For instance, the latest reading of the Caixin/Markit Services PMI, which showed that the indicator decreased from 52.7 points in August to 50.6 points in September, although it was expected to expand up to 53.1 points.

The Services PMI is growing, but slower than before. The components of the report show that both new orders and employment rose at a slower pace. The statistics aren’t likely to have a great impact on the Chinese GDP in the third quarter but may provide a lot of causes for doubts and further analysis.

AUD/USD 4H Chart
AUD/USD 4H Chart

The technical picture of the AUD/USD pair is looking quite logical and balanced. After reversing, the instrument started falling slowly and reaching new lows. However, at the moment the price is trading close to the support level of the descending channel. One of the possible scenarios implies that the pair may be rebound from this level and start growing towards the resistance one at 0.7875. after breaking it, the instrument may continue rising to reach 0.8040.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

No Action From RBA & the US Fed Until 2018

  • It’s going to be a busy week with key data releases coming from Australia, the U.S., and Canada. Joining me today is James Hyerczyk from FXEmpire to provide his analysis.

Firstly James let’s start with Australia where the RBA meeting minutes will be released. Now if policymakers shift their tone into a more positive outlook, that’s going to provide support for the Aussie Dollar. However, a negative outlook would be bad news for the Australian Dollar.

So James, what outlook are you expecting?

James Hyerczyk:  I believe the RBA is going to remain cautious in this week’s minutes. I believe they still want to see a strong GDP and an improving labor market before they make their next interest rate hike and I don’t think it’s going to come until early 2018.

Quarterly GDP has to improve so we’re not going to get any reading on that until at least January. So I think the rest of this year they’re going to leave rate alone and then revisit the idea sometime in March.

Right now the numbers just don’t back a rate hike. And I don’t think they are going to succumb to the pressure of what the market is saying in terms of the value of the Australian Dollar or any pressure from the European Central Bank or the Fed as they continue to move towards tightening their monetary policy.

I think the RBA is going to stand firm in what they believe in and leave rates unchanged until at least March 2018.

  • And the U.S. Fed will also be announcing their interest rate decision. The market currently expects no change. Do you agree with this?

James Hyerczyk:  As far as the Fed’s concerned I don’t expect them to raise interest rates. That’s been telegraphed for a long time. I think the odds of a rate hike in September are about 1.4% according to the Fed Funds indicator.

Also, I don’t think they are going to raise in December although investors are sitting on the fence on that one at about 50%.

I do think the next rate hike is probably going to come in June 2018. I think the Fed is going to try to calm or markets or tighten a little bit using the trimming process of its balance sheet.

That in effect is a tightening process although it’s not as dramatic as a rate hike, it should help to tighten the policy and pull-out some of that loose, cheap money that has been floating around.

But this time, the numbers just don’t support a rate hike in September or December, or even March next year.

Now if we do get tax reform passed here in the U.S. then I think that is going to help improve the economy and it may move, or speed up the process of raising rates. And I think that maybe that is what the Fed wants to see.

Yellen has been talking about a combination of monetary policy and fiscal policy working together to drive the economy and help with the Fed’s decisions. And so far, it’s been all about monetary policy.

So once we get fiscal policy straightened out here in the United States that’ll probably help improve the inflation rate and move inflation closer to the Fed’s 2.0 percent target.

  • And Canada’s inflation is expected to come in at 1.5 percent, do you think the data will meet this and how do you expect the Loonie to react?

James Hyerczyk:  If inflation comes in as expected then I expect the market to remain neutral or we could see some profit-taking in the USD/CAD because it has dropped so much. And technically, it’s a little bit oversold.

So if we do see a stronger-than-expected inflation rate, then we may see signs of another rate hike coming. And that will put the Dollar/Canadian Dollar lower over the near-term.

But if it comes in steady as expected at 1.5 percent then we’re probably going to see a short-covering rally and that will give investors an opportunity or an excuse to book profits after a steep sell-off.

Thanks for joining us today James.

Australian Dollar Needs RBA’s Help

The Australian dollar finished the previous week off strongly against its US counterpart sitting at a 2 year high US8055c, which is making the RBA sit up and take notice, and if the currency goes much higher they may have no choice but to act.

In their latest interest rate decision on Tuesday, the RBA kept rates on hold at 1.5 percent which had been widely anticipated by the market so all ears were on the following statement from RBA governor Philip Lowe.

“The recent data have been consistent with the bank’s expectation that growth in the Australian economy will gradually pick up over the coming year,” Mr Lowe noted in his following monetary speech.

It seems as if the central bank governor is deluding himself because if we look at the statistics, inflation in Australia is currently running at 1.8 percent which is below the central bank’s target rate and a mile away from the upper level of the target inflation level of 3 percent.

At such levels, the Aussie dollar is beginning to have a detrimental effect on the export industry with further damage likely should the currency push any higher.

“Housing prices have been rising briskly in some markets, although there are signs that conditions are easing, especially in Sydney,” Mr Lowe also noted.

At least there was a bit of honesty here, the housing market in Australia is definitely cooling off which is good for the RBA because instead of lifting interest rates, they may, in fact, be able to cut them since the rise of the property market is not such a concern now.

With the Aussie dollar at such a high level supported by better than average interest rates in Australia compared to the rest of the world, as well as surging commodity prices the RBA needs to act.

Whichever way you look at it the only way the RBA is going to stop the rise of the Australian dollar is by cutting interest rates, which just may help push inflation into their target range and help bring the Australia dollar back down to a comfortable level.

This article was written by FIBO Group analyst Andrew Masters.

RBA, BoC & ECB Deliver Interest Rate Decisions

  • On Tuesday the RBA will announce their interest rate decision. Although the RBA has indicated it is in no hurry to move the benchmark cash rate from 1.5%, the accompanying announcement will be closely watched – what type of comments do you think we can expect from the central bank?

Macroeconomic data out of Australia has been relatively upbeat in recent weeks, with the only particularly disappointing figures being this morning’s Company Gross Operating Profits for the 2nd quarter, down 4.5%, reversing most of the 5.8% rise in the previous quarter.

With macroeconomic data out of China last week being on the positive side, China’s manufacturing sector seeing a pickup in activity, the RBA will likely continue to talk positively about the global economic outlook, whilst raising some concerns over the rising tension in the Korean Peninsula following the latest nuclear test that could unravel economic growth in the region should there be any military response.

Domestically, recent labour market data was a little weak, which will likely lead to some further cautious language in the statement, with wage growth continuing to be lackluster another issue faced by the RBA, with a negative outlook on the labour market likely to be taken as a further delay to any shift in monetary policy. But, the RBA will have to acknowledge solid growth through the 2nd quarter, which will be reflected in the 2nd quarter GDP numbers due out on Wednesday.

The RBA Holds Rates, Bringing the EUR and GBP into Focus

We would expect the RBA to continue to be wary of AUD appreciation, however, and the likely complications to the economic recovery, with the AUD sitting currently sitting just shy of $0.80 levels, pegged back by the current risk off sentiment in the market.

  • Shortly after Canada’s Balance of Trade is released, the Bank of Canada will also reveal whether they intend to change their interest rate. Although the market expects no change, how would you advise Loonie traders to position themselves?

There’s certainly plenty of debate over what to expect in this week’s Bank of Canada monetary policy decision, with the general consensus siding with rates to be unchanged for now. Things have certainly been bright for the Canadian economy, with the economy outpacing that of the U.S and there’s just cause for the Bank to make another move to reverse the rate cuts back in 2015.

Strong trade data suggests that the Bank may be able to accept some degree of loonie upside, with concerns over rising household debt likely to certainly make a case for a rate hike before the end of the year, with the central bank looking to peg back growth contributions from household debt and the housing sector.

While the markets may initially be disappointed should the Bank of Canada hold back on a move, the forward guidance will be key and ultimately, monetary policy divergence sits firmly in the hands of the Loonie, suggesting that further upward momentum is likely in the near-term.

  • Euro Area GDP 3rd estimate will be released on Thursday and will be followed by the interest rate announcement from the ECB. These are two events likely to have a big impact on the market – do you think Thursday will be a bullish or bearish day for the Euro?

From a GDP perspective, macroeconomic data released out of the Eurozone since the 2nd GDP estimate that can influence the 3rd estimate GDP numbers on Thursday included the Eurozone’s trade balance, the trade surplus widening at the end of the 2nd quarter, suggesting that the GDP numbers will at least be in line with 2nd estimates. With economic indicators continuing to show growth through the 3rd quarter, the 3rd estimate figures are likely to be EUR positive, posing the question to the ECB on whether they can continue to hold back on a shift in monetary policy.

The ECB monetary policy decision later in the day on Thursday is unlikely to catch the markets off guard, with few if any expecting the ECB to move on rates or begin tapering its asset purchase program, though the press conference that follows will almost certainly impact the EUR.

Recent guidance from members of the ECB has been that the ECB will likely refrain from unveiling any plans on a tapering to the asset purchase program, preferring to wait until the December gathering.

With time running out, it may be a tall order for Draghi to get through the press conference without having to disclose some views on the tapering, which will make for an interesting press conference, particularly with the growing concerns over EUR strength, the FED’s dovish stance continuing to peg back central banks who had been looking to begin making a policy shift.

I would expect the events to be bullish for the EUR, talk of positive momentum in the Eurozone economy and the knowledge of a likely imminent tapering to the asset purchasing program certainly positives for the EUR.

Is the Long-Term Buy Signal on the AUDUSD Still Present?

It has been a while when the AUDUSD triggered a major long-term buy signal on the weekly chart so let’s check if we still do have a positive sentiment here.

AUDUSD Weekly Chart
AUDUSD Weekly Chart

First buy signal was created as early as at the beginning of the year (January), when the price broke the black down trend line, connecting lower lows since the April 2013. Although it was a positive sign, the price failed to climb higher straight away. For the major fireworks, we had to wait till July. First of all, we broke the upper line of the symmetric triangle formation (red lines, which was developing on the chart since the beginning of 2015). After that, the price broke the horizontal resisatance around the 0.778 (two years highs) and using the newly created bullish momentum, the 23,6% Fibonacci. Those two are currently the closest supports. 23,6% Fibonacci was already tested few times and all were positive for buyers. Along with those horizontal supports, we do have a dynamic one – a mid-term up trendline (green).

So what is the situation here? Bullish. The price being above all major local supports is a strong buy signal and with this sentiment, we should not have any problems to make new yearly highs in the nearest future.

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

Technical Overview Of AUD/USD, EUR/AUD, AUD/JPY & AUD/CAD: 22.08.2017

AUD/USD

Having failed to clear 0.7950 horizontal-line, the AUDUSD seems now declining towards an upward slanting TL support of 0.7860. If the pair refrains to respect the trend-line figure, the 0.7840, the 0.7800 and the 0.7780 are likely following rests that it could avail before targeting the 0.7740 and the 0.7710 numbers towards south. In case if the price reverses from current levels, the 0.7930 and the 0.7950 could keep restricting near-term upside momentum, which if broken may accelerate the recovery in direction to 0.7990 and the 0.8000 psychological-mark. Moreover, pair’s successful trading beyond 0.8000 can enable buyers to aim the 0.8040, the 0.8065 and the 61.8% FE level of 0.8115 afterwards.

EUR/AUD

euraud

Unlike AUDUSD, which has been declining since yesterday, the EURAUD just witnessed a pullback from short-term ascending trend-channel resistance. As a result, the pair may further drop to 1.4900 round-figure ahead of looking at the channel-support number of 1.4850. However, a month-long TL, at 1.4795, could offer strong support to the quote if it negates the channel formation by breaking 1.4850. Given the pair’s extended southward trajectory after 1.4795, the 1.4770, the 1.4730 and the 1.4700 can please sellers. Alternatively, the 1.4955-60 and the 1.5000 psychological-magnet may try curbing the pair’s immediate advances, failing to which can fuel its up-moves in direction to 1.5040 and the July high around 1.5075.

AUD/JPY

audjpy

AUDJPY is another AUD pair which indicates further downside but two-month old ascending trend-line, at 85.80, followed by 85.45 horizontal-line, may challenge the Bears to re-think for their stand. Should the pair drops below 85.45, the 84.90-85 and the 84.50 may act as barriers during its plunge towards 84.30, the 84.00 and then to the 83.70 support-levels. Meanwhile, 86.70 and the downward slanting TL, at 87.00, are likely nearby resistances for traders to watch, breaking which the 87.45-50 horizontal-line comes into play. If prices clear 87.50, the 88.00 and the 88.30 can flash their radar.

AUD/CAD

audcad

Following its repeated defeats to surpass 100-day SMA, the AUDCAD dipped to nearly a month’s low on Tuesday; though, it still haven’t provided a closing break of 0.9920 support which holds the gate for quote’s additional downside towards 0.9870 and the ascending TL support of 0.9815. In case of the pair’s daily close below 0.9815, chances of witnessing the 0.9770 and the 0.9715-10 supports can’t be denied. On the upside, 0.9960 and the 1.0000 are expected adjacent resistances for the pair before it could again challenge the 100-day SMA level of 1.0035. Moreover, if the pair clears 1.0035 resistance, the 1.0100 and the 1.0160 are likely to gain attention.

Cheers and Safe Trading,
Anil Panchal

EURAUD with a Nice Technical Setup

That was definitely a very busy week on the markets. We had a combination of rich calendar, geopolitical tension and good technical situation on many instruments. This allowed to create many interesting setups on the charts. One of the best one in terms of the technical analysis is the EURAUD, where in August, we already climbed over 270 pips higher and still counting.

EURAUD 4H Chart
EURAUD 4H Chart

EURAUD respected the Price Action with a great accuracy. What we have here is an up trend, which started in April, when the price broke the down trendline (blue). The rise was sharp and in May, the anticipated correction started. It was shaped like a flag (black lines), so indicated a trend continuation, not a reversal. Before breaking the upper line of the flag, the price consolidated below the resistance, forming a sideways trend in a tight range. We were locked between the black dynamic resistance and the horizontal support on the 23,6% Fibonacci. Usually it is a very bullish sign. After few days, the breakout finally happened and the price climbed significantly higher triggering a long-term buy signal.

Signal was confirmed this night, when the price fell and tested the recent resistance as a closest support. Price action traders know that this happens often and is usually a good sign to go long. Bullish sentiment will be denied once the price will come back below the 23.6% which currently is less likely to happen.

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

EUR, AUD and JPY in Three Different Combinations

Today all eyes were on the Bank of England but traders who prefer more technical setups, without the interference from the fundamental side of the market should look on the following occasions. Today we have EUR, AUD and the JPY in three different combinations.

First one will be the EURAUD, which shows us that then EUR is much stronger and after breaking the 1.476 resistance the way for new local tops is opened. That breakout increased the momentum and now allows to break the upper line of the flag formation, which can be a very positive sign.

Next one will be the EURJPY, which is having a correction after the bullish breakout from the ascending triangle. We still have a potential to go lower in the short-term as the recent resistance was not tested yet as a closest support.

AUDJPY created two shooting stars in a row on a weekly chart. It also happened on a very important resistance. According to almost every book about the technical analysis that should be perceived as an extremely bearish sign and in this case we have no grounds to think otherwise.

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

Three Very Smooth Technical Setups for Wednesday: GBPJPY, EURJPY and EURAUD

Pressure on the USD remains high but on few pairs, American Dollar, is able to make small gains. Luckily for the trend followers, they are not significant and do not change much in the main flow of the money. Today we will analyse two pairs with the JPY where we see a high potential for an upswing and the EURAUD, which made another step for a full strong buy signal.

First GBPJPY, which today broke the upper line of the flag and in the same time triggered a mid-term buy signal. The potential target for this movement is around 147.7.

Second is the EURJPY, which used the ascending triangle to climb higher. After the breakout we have usual retracement, which should test the recent resistance as a closest support. That can be a great occasion for buyers.

Last one is the EURAUD, which created an iH&S and managed to break a horizontal neckline. Currently the closest aim is the upper line of the flag but I guess we should be able to climb much higher.

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