Dollar Tries a Reversal. Indices Still Hold Up High

Fear&Greed Index points towards a bearish movement.

Put/Call Ratio as well.

Gold still in positive territory despite the recent drop.

Dax settles above 13800.

SP500 bounces from the 3780.

Dollar tries a reversal.

EURUSD touches the long-term up trendline.

EURJPY breaks and settles above a major horizontal resistance.

AUDJPY finally breaks the neckline of the iH&S formation.

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

EUR/JPY: Long-Term Elliott Wave Analysis for Trading Year 2021

The EUR/JPY monthly chart is building a lengthy contracting triangle chart pattern. But the pattern seems to be running out of space.

A breakout will therefore probably take place in 2021. Let’s review the wave and chart patterns.

Price Charts and Technical Analysis

EUR/JPY 07.01.2021 Monthly chart

The EUR/JPY has possibly completed an ABCDE (pink) triangle pattern at the most recent low. The 5 wave structure could break both ways:

  • If we follow the wave patterns mentioned in the chart, then a bullish breakout has better odds (green arrows).
  • A break above the long-term moving averages and resistance trend line would confirm that breakout.
  • A break below the 21 ema zone could indicate a pullback to test the support trend line. A bullish bounce (blue arrow) is still possible.
  • A bearish breakout below the support trend line indicates an opposite triangle breakout (orange dotted arrows).

Of course, there is always the chance that a triangle pattern could become extended. The wave C might prove to be unfinished. For now, the triangle pattern is reaching a point where a breakout is becoming more likely.

It is important to keep an eye on chart patterns on lower time frames once the breakout occurs. The appearance of reversal or continuation chart patterns could indicate whether the breakout has a chance of success. Or whether it will turn into a failed breakout pattern.

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.

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

Good trading,
Chris Svorcik

Are We One Step Closer to a Major Correction?

Gold advances higher after the breakout from the flag formation.

Brent with a potential double top formation.

Nasdaq escaped from the rising wedge pattern.

DAX bounced from the horizontal resistance again and it is starting to look ugly.

EURUSD with a triple top formation.

EURJPY drawing a possible false breakout pattern. Major sell signal on the horizon.

EURNZD going lower after the price broke the lower line of the flag and later tested it as a resistance.

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

Great Occasions on The JPY

The Santa rally is here; indices are skyrocketing with the DAX finally hitting all time highs. Pretty remarkable if you ask me but in today’s analysis I will focus on the Japanese Yen, which is part of three very interesting setups.

Let’s start  what I believe is the best pair, the EURJPY. Here, we definitely have a positive sentiment, which originally started with the inverse head and shoulders pattern in Q4. After the price broke the neckline, we got a very nice upswing followed by a flat correction shaped like a rectangle. Yesterday, the price broke the upper line of the resistance and today, for the first time since August, it’s trading above the major horizontal resistance of 126.7. Once the price closes above this resistance, we’ll get a proper buy signal.

Now the AUDJPY, where the price is preparing for a major buy signal. First of all, the AUDJPY broke the crucial long-term down trendline, connecting lower highs since 2014. Furthermore, the price created an inverse head and shoulders pattern and the price is currently trying to break the neckline. A breakout from that resistance level would trigger a proper long-term buy signal.

Finally the USDJPY, a combination of two weak currencies, which leads to a sideways. Recently, the price bounced from a combination of dynamic and horizontal resistances. If the price stays below those resistances, there’s no buy signal. We will however see a buy signal if one of two scenarios plays out; either if the price manages to close the day above the two resistance levels, or a if there’s a breakout of the mid-term dynamic support connecting higher lows since mid December. As for now, we’ll wait, the signal will most likely come soon.

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

EUR/JPY Bullish Outlook at 125 Support or Above 126.25

The EUR/JPY is testing the previous top at 127. Price action did confirm the previous expected bullish bounce at the 50% Fib.

Now, the uptrend has reached a pivotal moment: will the uptrend be able to continue above the top? Or will a larger bearish pullback take control?

Price Charts and Technical Analysis

EUR/JPY 21.12.2020 daily chart

The EUR/JPY has a better chance of continuing with the uptrend for the moment. Mainly because of:

  1. Te bullish break above the resistance trend lines (dotted orange)
  2. The strong push above and away from the 21 ema zone
  3. The wave patterns suggest a completed ABC (grey) correction within wave 4 (orange)

The key decision zone is the 21 ema high and low. A bullish bounce would indicate that an uptrend continuation (green arrows) is probable

A bearish breakout, however, indicates a deeper retracement (red arrows). In that case, the immediate wave 123 (grey) pattern failed but the larger uptrend remains intact (blue arrows) via an expanded wave 4 (orange 4’).

On the 4 hour chart, price action bounced at the resistance of the Wizz 8 level and previous top. This could indicate an ABC (black) pattern within wave 4 (pink).

A bearish breakout could drop towards the Fibonacci targets around 124.50-125-125.50, where a bullish bounce is expected (green arrow).

An immediate bullish breakout (blue arrows) could take place if price action turns around and breaks above the local resistance zone.

EUR/JPY 21.12.2020 4 hour chart

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

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

 

 

Indices and Commodities Climb Higher

Commodities are enjoying the weaker USD and advancing higher.

Indices also going up, not disturbed even by new lockdowns.

EURUSD is about to test crucial horizontal resistance.

EURJPY in a sideways trend below 126.7.

AUDJPY with an inverse head and shoulder and breakout of a long-term down trendline.

USDCAD still near lows after the breakout of major horizontal support.

GBPCHF with a breakout of the lower line of the triangle.

EURAUD with a possible false bearish breakout from the rectangle.

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

EUR/JPY Bulls are Waiting in the Ambush

The EUR/JPY is ranging but there is a possibility that the price will bounce. Watch for the POC zone or break higher.

At this point we can see that the price is rejecting D H3 and the lower trend line. We could see a bounce towards the D H5/W H5 128.92. However if we see a retracement, watch for 126.70. There, buyers might be waiting to spike the price up. The final target is 128.92. A break below 126.60 and bears are taking control.

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

Cheers and safe trading,

Nenad

 

EUR/JPY Descending Channel Formed

The EURJPY has come to the top of the channel. Descending channel could tank the price.

124.46-56 is the POC zone. We can see the channel top making a confluence with D H5 camarilla pivot. If the price drops 126.28, 126.17 are targets. The break below 126.17 should target 125.96 and 125.85. A close above the channel will possibly invalidate the bearish setup. Selling at the top is my favourite scenario here.

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

Commodities Up, Dollar Down Ahead of The NFP

Gold tests 1850 USD/oz resistance

Oil breaks the upper line of the flag and aims higher

American Indices keeping close to the all-time highs

European Indices, on the other hand, performing slightly worse

Dollar Index going deeper again

EURUSD continuing a great upswing

EURJPY testing important horizontal resistance. Double top possible

AUDJPY bounces from the neckline to test important horizontal support

USDCAD continues the downswing after breaking crucial horizontal support

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

Correction on Gold and Oil Accelerates

Gold accelerates with a bullish reversal. One horizontal and one dynamic resistance are broken, time to test the 1850 USD/oz.

Brent and WTI go lower but still inside the flag.

Nasdaq continues the upswing.

DAX bounces from the lower line of the channel up.

SP500 bounces from the horizontal support.

Dollar Index collapses.

EURUSD aims significantly higher.

EURJPY surges after the Inverse Head and Shoulders pattern.

USDCAD goes deeper after breaking crucial long-term horizontal support.

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

EUR/JPY Decision Zone at 50% Fib at 123.40

The EUR/JPY has reached a decisive support zone. The break or bounce moment will offer traders an interesting spot for trade setups.

This article reviews the potential breakouts, wave patterns, and chart patterns.

Price Charts and Technical Analysis

EUR/JPY daily chart

The EUR/JPY is testing the resistance trend lines and 21 ema zone:

  • A bullish breakout confirms the uptrend in wave 1 or 3 (purple).
  • A deeper bearish pullback could indicate a wave 1-2 (purple).

A bullish break is expected to develop as follows:

  • It could see a break, pullback and continuation pattern.
  • A bullish daily candlestick should confirm the bullish break.
  • This is valid as long as the bullish candle appears in about the next 5 trading days (the HMA 20 should remain above the 21 ema high).

A bearish pullback could see two variations:

  • A test and bounce at the 144 ema for a wave 1-2 (purple).
  • A bearish breakout (red dotted arrow) which invalidates (red circle) this wave pattern but not the entire uptrend because the 50% and 61.8% Fib remain support

On the 4 hour chart, price action has reached the last support zone if the current pullback is a wave 4 (blue). A deeper bearish breakout (yellow circle) indicates a wave 1-2 pattern instead. A full break below the bottom (red circle) invalidates the bullish outlook.

However, if price action manages to:

  • Break above the 21 ema zone.
  • And break above the resistance trend line.
  • Then the EUR/JPY would confirm the development wave 5 to the upside.

EUR/JPY 4 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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

 

 

Dollar and Stock Markets Mature for a Correction

DAX makes contact with the first important resistance

SP500 corrects massive upswing from Monday

CAC stays above the major support after the false bearish breakout

Dollar Index goes lower after the head and shoulders pattern

EURUSD tests the first crucial horizontal resistance

USDCHF on the other hand, tests important support

EURJPY reverses higher after the false bearish breakout from the rectangle

Gold on the way to test the 1906 USD/oz

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

New Week Starts With Bearish Stocks and Bullish Yen

DAX and CAC start the new week on the back foot

Nasdaq drops below 23,6% Fibonacci and uses it as a resistance

SP500 is in a slightly better position and buyers are still above crucial supports

EURUSD consolidates below dynamic resistance

GBPUSD bounces from the important horizontal resistance

USDJPY continues heavy drop after the bearish breakout from the triangle

EURJPY bounces from the neckline of a very handsome H&S pattern

CHFJPY also has a H&S pattern but the price is currently above crucial support so a further drop is not so certain

GBPJPY breaks long-term dynamic support which changes the sentiment into a negative one

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

Markets Tries to Recover After FED’s Disappointment

Indices drop sharply but try to catch first horizontal supports in order to recover

Nasdaq looks very promising on its 23,6% Fibonacci.

Brent goes up after the bullish escape from the small triangle.

USDJPY with a proper sell signal coming from the triangle.

EURUSD with a head and shoulders pattern, defending the neckline as we speak.

EURJPY creates a head and shoulders pattern on the major, long-term down trendline. That look extremely bearish.

AUDNZD defending crucial horizontal support.

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

EUR/JPY Price is Getting into the Buying Zone

The EUR/JPY is getting close to the POC zone. The zone is making a confluence of pivot points and 88.6 fib retracement. We could see a bounce.

125.30-40 zone is a possible bouncing spot for the EUR/JPY. We can also see the Bollinger Bands support close to the zone. If we see that W L3 holds than bulls might have a fresh wave up. Targets are 125.65, 126.07 and 126.62. However, a break below 124.83 might lead the price to 124.25, W L4 support.

The Analysis has been done with the CAMMACD.Core

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

 

Yen Softens Despite Rising US-China Tensions

In a move that likely to strain US-China relations even further, Beijing slapped sanctions on U.S. officials in response to similar measures enforced by Washington. Despite this, market sentiment remains optimistic with investors keeping a close eye on negotiations over the next coronavirus stimulus package in the US.

With hopes for additional U.S fiscal supporting risk sentiment, safe-haven currencies like the Japanese Yen and even Dollar have struggled to shine despite mounting tensions between the two largest economies in the world.

USDJPY eyes 106.50

Over the past two weeks, the USDJPY has found comfort within a 150-pip range with support at 105.00 and resistance around 106.50.

Given how both the Dollar and Yen are fundamentally bearish, this could be a slow grind higher or lower. Looking at the technical picture, prices remain bearish on the daily chart as the candlesticks are trading below the 20 Simple Moving Average while the MACD trades to the downside. If 106.50 proves to be reliable resistance, prices could end up declining back towards the 105.00 support.

Alternatively, a breakout above 106.50 may open the gates towards 107.50.

EURJPY remains in an uptrend

A picture is worth a thousand words…

Looking at the EURJPY on the daily charts, prices are firmly bullish as there have been consistently higher highs and higher lows.

The currency pair is finding comfort above the 20 Simple Moving Average while the MACD also points to the upside. A solid breakout above 125.50 will confirm the bullish trend with the new higher low around 124.00. The next key point of interest in such a scenario will be found around 127.00. On the other hand, if 125.50 proves to be a tough nut to crack, prices could sink back towards 123.00.

GBPJPY breakout setup in play

It has been the same story with the GBPJPY over the past two weeks as the currency traded within 110 pip range. All eyes will be on the support at 137.90 and resistance at 139.00.

A decisive breakdown and daily close below 137.90 should pave a path towards 135.00. Alternatively, a breakout above 139.00 may inspire a move back towards 141.00.

Open your FXTM account today


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.

Daily Forex Briefing 29/07/2020

In today’s Daily Briefing, we found those amazing setups we thought you’d find interesting!

EUR/PLN bouncing from a crucial support on the 4,4.

Brent with a possible false bearish breakout and an upswing but still below important resistance.

EUR/USD awaits the FOMC inside of a pennant.

USD/JPY is getting ready to test the 106 as a resistance.

EUR/CHF bouncing from the upper line of the flag.

GBP/NZD with a major, long-term buy signal.

EUR/JPY finishing a big inverse head and shoulders pattern.

EUR/NZD with a double bottom formation but still below important resistance.

SP500 drawing a head and shoulders pattern but buyers have an appetite for an upswing.

CAC in a slightly worse position but still fighting on a major up trendline.

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

EUR/JPY Bullish Bounce and Cup with Handle Pattern

The EUR/JPY has formed a cup with handle pattern and we might expect further continuation to the upside.

A retracement towards the POC zone 121.65-75 could be used for a possible entry. Bulls are waiting for a new push above D H3 camarilla pivot. The price is bullish but also in a retracement mode. 122.00 is important support so the pair could also bounce from it too. Targets are 122.46, 122.70 and if bullish momentum persists – 123.09.

The Analysis has been done with the CAMMACD.Core and Sit Systems

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

 

Yen Under Fire as Risk Appetite Improves

The Yen has already lost ground against major currencies over the past 36 hours, with the most noticeable losses versus the Euro and Swedish Krona. As investors place their hopes in an economic recovery fueled by unprecedented central bank support and handsome fiscal stimulus packages, the Yen and other safe-haven assets may remain in the direct firing line.

EURJPY finds comfort above 121.00

The EURJPY remains in an uptrend on the daily charts with support at 121.00. An intraday breakout above 122.00 should encourage an incline towards 122.80 and 123.70. Should 121.00 proves to be an unreliable support, the currency pair may retest 119.70.

USDJPY remains in 100 pip range

A breakout opportunity is forming on the USDJPY with a weakening Yen potentially pushing prices towards the 108.00 resistance. A solid breakout above this point may open the doors towards 109.40 and 110.20. If prices end up tumbling below 107.00, expect the USDJPY to challenge 105.90.

GBPJPY approaches 135.00

It has been the same story for the GBPJPY for the past three weeks. Prices remain in a wide 340 pip range with support at 131.600 and resistance at 135.00. A solid close above the 135.00 could trigger a sharp move towards 137.00. Lagging indicators like the 20 and 50 SMA in addition to the MACD are in line with the bullish setup.

AUDJPY slips after RBA decision

We some weakness in the Australian Dollar after the Reserve Bank of Australia left interest rates unchanged at 0.25%. The AUDJPY may weaken towards 72.80 in the short term if an intraday breakdown below 74.40 is achieved. Alternatively, a softer Yen could provide enough support for the currency pair to test 76.50.

Commodity spotlight – Gold

Since we are discussing safe-haven assets, it does not hurt to speak about Gold which is just over $16 away from the $1800 level.

The precious metal may struggle to push higher in the near term amid the improving mood with the next key level of interest around $1765.

Open your FXTM account today


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.

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.

(Read Our Pepperstone Review)