USD/JPY Forex Technical Analysis – Downside Momentum Sets Up Move into 108.407, Followed by 108.230

The Dollar/Yen is trading at its lowest level since March 25 on Thursday as U.S. bond yields pulled back from last month’s surge with investors buying the Federal Reserve’s arguments that interest rates can stay low.

At 09:36 GMT, the USD/JPY is trading 108.737, down 0.197 or -0.18%.

U.S. Treasury yields are drifting lower on Thursday morning, ahead of the release of weekly jobless claims and monthly retail sales data, dragging down the U.S. Dollar.

Meanwhile, investors are positioning themselves ahead of the U.S. weekly jobless claims and March retail sales reports that could offer further clarity as to the strength of the U.S. economic recovery.

The initial jobless claims report is expected to show another 710,000 claims were filed for the first time during the week-ended April 10. March retail sales are also set to come out at 12:30 GMT and are expected to have jumped 6.1%, versus a 3% decline in February.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 108.407 will change the main trend to down. A move through 110.966 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through 109.961 will change the minor trend to up.

The main range is 111.715 to 102.593. Its retracement zone at 108.230 to 107.154 is the primary downside target and potential support. This zone is also controlling the near-term direction of the Forex pair.

The short-term range is 108.407 to 110.966. The USD/JPY is trading on the weak side of its retracement zone at 109.385 to 109.687, making it a resistance area.

Daily Swing Chart Technical Forecast

Look for a bearish tone on Thursday as long as the USD/JPY remains under 109.385.

Bearish Scenario

A sustained move under 109.385 will indicate the presence of sellers. The first downside target is the main bottom at 108.407. Taking out this level will change the main trend to down with 108.230 to 107.154 the next likely target zone. Look for buyers on the first test of this area.

Bullish Scenario

If the intraday momentum shifts to the upside then look for a possible rally into 109.385. Sellers are likely to come in on the first test of this level. Overcoming it will likely trigger a move into 109.687.

Side Notes

With today’s reports, it’s important that you trade the reaction in the Treasury yields and not the headline numbers.

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

Appeal for Gold Bounces Up Amid Weaker Dollar

The bullion asset recorded impressive gains at the fourth trading session of the week with global investors awaiting further signals on the U.S economy as the greenback traded near its three-week lows, further boosted gold bugs in breaking above $1745 an ounce.

Historically the U.S dollar, normally moves inversely to the yellow metal, giving gold bugs enough gas to take hold of the metal’s market momentarily with appetite for the safe-haven currency diminishing day by day.

Consequently, triggering more upsides for gold prices are recent comments coming from Fed Chairman Jerome Powell that major risks include another spike in COVID-19 caseloads and perhaps resistant strains that might prove difficult to cure.

However, U.S economic recovery remains on course thanks to rising consumer optimism, as monetary officials added that the United States is on track for faster growth and better employment readings in the coming months.

Such macros might limit the precious metals, on the bias that investors will shun non-yielding investments thereby putting gold bugs on a herculean mission breaking above $1,800 price level, despite the weakening dollar. partly because investors have pushed in record levels towards the crypto-verse as the flagship crypto and other altcoins stay bullish.

Gold bulls have built a baseline around the $1730 pivot zone, suggesting that the bullion asset might stay within the current range, as the appetite for risk broadens with the greenback’s pullback and plunging Treasury yields.

That being said, the precious metal has lost much of its appeal this year compared to 2020 with price actions deteriorating in favor of gold bears rather than gold bugs, still, deep corrections of gold prices are viewed as buying opportunities.

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

AUD/USD Daily Forecast – Test Of Resistance At 0.7750

AUD/USD Video 15.04.21.

Australian Dollar Continues To Move Higher Against U.S. Dollar

AUD/USD is currently trying to settle above the resistance at 0.7750 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to the test of the nearest support level at 91.50. A move below the support at 91.50 will open the way to the test of the next support at 91.30 which will be bullish for AUD/USD.

Today, Australia reported that Unemployment Rate declined from 5.8% in February to 5.6% in March compared to analyst consensus of 5.7%. Employment Change report indicated that employment increased by 70,700 in March compared to analyst consensus which called for growth of 35,000. Stronger-than-expected reports provided additional support to the Australian dollar.

Foreign exchange market traders will soon have a chance to take a look at the latest employment reports from the U.S. Analysts expect that Initial Jobless Claims declined from 744,000 to 700,000 while Continuing Jobless Claims decreased from 3.73 million to 3.7 million.

Traders will also focus on the latest Retail Sales data from the U.S. Retail Sales are projected to grow by 5.9% month-over-month in March due to the positive impact of the new round of economic stimulus.

Technical Analysis

aud usd april 15 2021

AUD/USD managed to settle above the resistance at 0.7720 and is trying to settle above the next resistance level at 0.7750.

In case this attempt is successful, AUD/USD will head towards the resistance at 0.7775. A move above this level will open the way to the test of the resistance at 0.7800. If AUD/USD manages to settle above this level, it will move towards the resistance at 0.7820.

On the support side, the previous resistance at 0.7720 will likely serve as the first support level for AUD/USD. If AUD/USD declines below this level, it will head towards the next support which is located at 0.7700. A move below the support at 0.7700 will open the way to the test of the support at the 50 EMA at 0.7680.

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

GBP/USD Range Reaches Decisive Moment for Bear or Bull Break

The GBP/USD is showing a lengthy bearish reversal since the end of February 2021. More recently, price action has bounced at the previous bottom (blue box) creating a double bottom.

The GBP/USD is now stuck between support and resistance but a breakout could offer the needed clarification. Let’s review.

Price Charts and Technical Analysis

GBP/USD 15.04.2021 4 hour chart

The GBP/USD seems to have completed a bearish 5 wave pattern (purple). This could be part of a larger bearish ABC pattern (red).

  1. Currently price action is probably in a bullish wave C (purple), which could complete the wave B (red) of a larger ABC (red).
  2. The double bottom could have completed the wave c (pink) of wave B (purple).
  3. A bullish breakout (green arrows) above the resistance trend line (orange) and long-term moving averages would confirm this analysis.
  4. The main upside targets are the previous tops (red boxes).
  5. A bearish bounce at the resistance (orange arrows) could end the wave B (red) and start the wave C (red),
  6. A bearish push could retest the support line (green) and bounce (blue arrow).
  7. A bearish breakout below the support (green) could indicate a downtrend (red arrows). In that case, price action could be completing a bearish 123 (black) and the bullish correction is invalidated.

On the 1 hour chart, blue SWAT candles indicate a bullish trend. But a breakout remains key for confirming any upside:

  1. A push above wizz 4 level with strong price action could confirm the breakout (green arrows).
  2. The bullish break could confirm the wave 3 (green) of 3 (grey) within the larger wave C (pink) of the 4 hour chart.
  3. A bearish breakout (red arrow), however, indicates that the upside was not a wave 1-2 but an ABC (orange) pattern.

GBP/USD 15.04.2021 1 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.

EUR/USD Daily Forecast – Test Of Resistance At 1.1990

EUR/USD Video 15.04.21.

Euro Tries To Gain More Ground Against U.S. Dollar

EUR/USD is trying to settle above the resistance at 1.1990 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index failed to get to the test of the nearest support level at 91.50 but remained close to this level. If the U.S. Dollar Index declines below 91.50, it will head towards the next support at 91.30 which will be bullish for EUR/USD.

Yesterday, EU reported that Euro Area Industrial Production declined by 1% month-over-month in February compared to analyst consensus which called for a decline of 1.1%. On a year-over-year basis, Industrial Production decreased by 1.6%.

Today, foreign exchange market traders will focus on the economic data from the U.S. and developments in U.S. government bond markets. Currently, Treasury yields are moving lower, which is bearish for the U.S. dollar.

It should be noted that the yield of 10-year Treasuries has failed to settle below the important support level at 1.61% but remains close to this level. If the yield of 10-year Treasuries moves below this level, U.S. dollar will find itself under more pressure.

Technical Analysis

eur usd april 15 2021

EUR/USD continues its attempts to settle above the nearest resistance level at 1.1990. This resistance level has been tested during yesterday’s trading session and proved its strength.

In case EUR/USD manages to settle above the resistance at 1.1990, it will head towards the next resistance at 1.2025. A successful test of the resistance at 1.2025 will open the way to the test of the resistance at 1.2040. If EUR/USD gets above this level, it will move towards the next resistance level at 1.2060.

On the support side, the nearest support level for EUR/USD is located at 1.1965. If EUR/USD declines below this level, it will head towards the next support at the 50 EMA at 1.1930.

A move below the 50 EMA will push EUR/USD towards the support at 1.1900. In case EUR/USD settles below this level, it will head towards the support at the 20 EMA at 1.1890.

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

Canadian Dollar Flexes Muscles

The GBPJPY is in a triple top formation and a divergence on MACD and RSI. There’s a very promising short but before that happens sellers need to break the neckline of this pattern.

The AUDCAD broke the neckline of the inverted head and shoulders formation and later tested it as a closest support.

The EURCAD bounced off a crucial horizontal resistance with two shooting stars. That’s usually very pessimistic.

The Canadian Dollar Index is in a false breakout from the head and shoulders formation. That is promising for the CAD.

The USDCAD bounced off long-term down trendlines and broke the lower line of the rectangle.

The USDJPY is possibly in a very dangerous bearish reversal.

The AUDUSD denied the long-term sell signal and is aiming lower.

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

GBP/USD Daily Forecast – Resistance At 1.3780 Stays Strong

GBP/USD Video 15.04.21.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance at 1.3780 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index did not manage to get to the test of the support at 91.50 and rebounded closer to the resistance at the 50 EMA at 91.80. In case the U.S. Dollar Index manages to get back above the 50 EMA, it will head towards the resistance at the 92 level which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from the U.S. Initial Jobless Claims report is expected to indicate that 700,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.73 million to 3.7 million.

Retail Sales report is expected to show that Retail Sales increased by 5.9% month-over-month in March after declining by 3% in February. The report may have a material impact on the dynamics of the U.S. dollar as it will show how U.S. consumers reacted to the new round of economic stimulus. Analysts also expect that Industrial Production increased by 2.8% month-over-month in March while Manufacturing Production grew by 4%.

Technical Analysis

gbp usd april 15 2021

GBP/USD has recently made another attempt to settle above the resistance at 1.3780 but failed to develop sufficient upside momentum and pulled back. The nearest support level for GBP/USD is located at 1.3745.

In case GBP/USD declines below this level, it will move towards the next support at 1.3710. A successful test of the support at 1.3710 will open the way to the test of the support at 1.3665.

On the upside, GBP/USD needs to settle above the resistance at 1.3780 to continue its rebound. If GBP/USD manages to settle above 1.3780, it will head towards the 50 EMA at 1.3800.

A successful test of the 50 EMA level will push GBP/USD towards the resistance at 1.3835. If GBP/USD moves above the 50 EMA, it will head towards the next resistance at 1.3865.

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

AUD/USD Forex Technical Analysis – Strengthens Over .7728, Weakens Under .7690

The Australian Dollar is trading lower Thursday, giving back earlier gains after touching a three-week top as upbeat data suggested the Australian economy had grown strongly last quarter. Prices began to retreat on the notion, however, that a stronger labor market would bring the Reserve Bank (RBA) closer to raising interest rates.

At 05:56 GMT, the AUD/USD is trading .7719, down 0.0004 or -0.05%.

The Aussie received a boost shortly after the release of a quarterly report showing 70,700 jobs were added in March, twice the market forecast, while unemployment dropped to a one-year low at 5.6%.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at .7745 will signal a resumption of the uptrend. The main trend changes to down on a move through .7586.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is the primary upside target. Sellers could come in on the first test of this zone. This area is also controlling the near-term direction of the AUD/USD.

The short-term range is .7849 to .7532. The AUD/USD is currently trading inside its retracement zone at .7690 to .7728.

The minor range is .7532 to .7745. Its 50% level at .7638 is potential support.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at .7728.

Bullish Scenario

A sustained move over .7728 will indicate the presence of buyers. Taking out the intraday high at .7745 should trigger a surge into the main retracement zone at .7770 to .7826. Look for sellers on the first test of this zone. Taking out .7826 could trigger the start of an acceleration to the upside.

Bearish Scenario

A sustained move under .7728 will signal the presence of sellers. The first downside target is .7690. Since the main trend is up, buyers are likely to come in following a test of this level.

Taking out .7690 could trigger an acceleration into the minor 50% level at .7638.

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

April 15th 2021: 91.60 Daily Support Makes an Entrance on the US Dollar Index

Charts provided by Trading View

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

March carved out a third consecutive loss, extending the 2021 retracement slide by 2.8 percent. Recent underperformance, as you can see, pulled EUR/USD into the upper range of demand at 1.1857-1.1352.

April’s 2.8 percent rebound from the aforesaid demand thus far shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Dollar action navigated to three-week troughs on Wednesday. Interestingly, though, the US dollar index (ticker: DXY) shook hands with 91.60 support.

EUR/USD, following Tuesday’s one-sided advance north of the 200-day simple moving average (currently circling 1.1896), crossed swords with resistance at 1.1966 Wednesday. Follow-through upside here shines the technical spotlight on resistance at 1.2058.

Despite the 2021 retracement slide, trend studies reveal the pair has been higher since early 2020.

RSI analysis has the value hovering within striking distance of resistance at 60.30. This follows a trendline resistance breach last week (taken from the peak 75.97) as well as a bullish failure swing.

H4 timeframe:

Quasimodo resistance at 1.1937 stepped aside in recent trading (now potential support) and unlocked upside towards resistance at 1.1990. Upstream, interesting supply resides at 1.2101-1.2059 (sits on top of daily resistance at 1.2058).

H1 timeframe:

Supply from 1.1956-1.1935 had its upper side penetrated on Wednesday, with subsequent movement retesting the zone as demand and holding. 1.20 is seen as potential resistance on the H1 chart, with additional bullish flow targeting resistance at 1.2026 (previous Quasimodo support).

Modest RSI bearish divergence materialised around overbought space. The value currently circles the 60.00 region.

Observed levels:

The 1.20 figure based on the H1 and H4 resistance from 1.1990 forms potential confluence to be mindful of.

A H1 close north of 1.20, however, unbolts a possible bullish scenario, targeting H1 resistance at 1.2026, followed by H4 supply at 1.2101-1.2059 and daily resistance at 1.2058.

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

February finished considerably off best levels, establishing what many candlestick fans call a shooting star pattern—a bearish signal found at peaks. What’s interesting was February also came within striking distance of trendline resistance (prior support – 0.4776 high), sheltered under supply from 0.8303-0.8082.

March subsequently erased 1.5% over the Month and probed February’s lows. Follow-through selling shines light on demand at 0.7029-0.6664 (prior supply).

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

The Australian dollar outperformed against a broadly softer US dollar on Wednesday, adding more than 1 percent on the session and concluding at tops. Following a period of indecision around the 0.7563 February low, aided by a 1.272% Fib extension at 0.7545, recent enthusiasm elbowed resistance into the spotlight at 0.7817.

Trend studies reveal the unit has been higher since early 2020.

Momentum, as measured by the RSI oscillator, climbed the 50.00 centreline after discovering a floor off channel support, taken from the low 43.70.

H4 timeframe:

Trendline resistance, extended from the high 0.8007, as well as supply at 0.7696-0.7715, came under fire yesterday. Quasimodo resistance at 0.7800, therefore, deserves notice as the next potential ceiling, closely stationed by demand-turned supply from 0.7848-0.7867.

H1 timeframe:

Supply at 0.7747-0.7734 made an entrance amid US hours on Wednesday, following a decisive advance through 0.77 offers. Price action traders will note this movement established a demand area at 0.7679-0.7695

North of 0.7747-0.7734, the path appears relatively clear to 0.78.

Resistance at 80.85, plotted within overbought space on the RSI oscillator, welcomed the value as price tested supply. As you can see, noted resistance has so far held form, with the value on course to potentially exit overbought territory (considered a bearish signal).

Observed levels:

Scope to advance on the daily timeframe until resistance at 0.7817 places a question mark on H1 supply at 0.7747-0.7734. This, coupled with H4 action overthrowing supply at 0.7696-0.7715, highlights a bullish market for the time being.

A retest of the H4 supply-turned demand at 0.7696-0.7715 may entice dip-buyers, particularly if H1 greets 0.77.

USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Following January’s bullish engulfing candle and February’s outperformance, March concluded up by 3.9 percent and marginally cut through descending resistance, etched from the high 118.66.

April, currently down 1.6 percent, is seen retesting the breached descending resistance, movement that may eventually entice bullish flow. With respect to long-term upside targets, supply at 126.10-122.66 calls for attention.

Daily timeframe:

Partly modified from previous analysis.

The greenback eked out modest losses against the Japanese yen Wednesday, consequently extending downside for a third consecutive session.

Despite supply at 110.94-110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support questions further selling. Consequently, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows, however, shows demand coming in at 107.58-106.85 alongside trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00, and recently dipped a toe under the 50.00 centreline. This implies momentum remains to the downside for the time being.

H4 timeframe:

As noted in previous writing, supply at 109.97-109.72 stood firm in early trade this week. Thanks to continued weakness, this brings light to a Fib cluster between 108.44 and 108.66 (blue), glued to the upper side of demand at 108.31-108.50 (note the area also holds lows highlighted on the daily scale around 108.36).

H1 timeframe:

Early hours on Wednesday dropped through 109 support and pencilled in lows a few pips ahead of demand at 108.60-108.71 (shares a connection with the H4 Fib cluster at 108.44-108.66). Subsequent action observed a 109 retest, which held as resistance.

RSI movement rebounded from oversold space, following the formation of an AB=CD pattern (black arrows). This led the value back to the 50.00 centreline, which formed resistance and informed traders that momentum faces southbound.

Observed levels:

Partly modified from previous analysis.

Having noted the monthly timeframe testing descending resistance-turned possible support, any selling may be short-lived. As such, overtaking lows around 108.36 on the daily scale, according to chart studies, is unlikely.

In light of where we’re coming from on the monthly timeframe, H1 demand at 108.60-108.71 is likely on the radar for traders, an area plotted just north of H4 demand at 108.31-108.50 (and shares space with the H4 Fib cluster at 108.44-108.66).

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

The pendulum swung in favour of buyers following December’s 2.5 percent advance, stirring major trendline resistance (2.1161).

February followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018. Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower in subsequent months would generally be viewed as a bearish signal.

Despite the trendline breach, primary trend structure has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way (April high 2018).

Daily timeframe:

Largely unchanged from previous analysis.

Sterling against the US dollar gathered traction Wednesday, though ended the session considerably off session peaks.

The technical arrangement present on the daily chart remains unchanged. Quasimodo support at 1.3609 is seen, a level connected with a 1.272% Fib expansion at 1.3617, as well as 1.618% and 1.272% Fib extension levels at 1.3614 and 1.3607, respectively.

With reference to trend, GBP/USD has been trending higher since early 2020.

The RSI failed to find grip north of the 50.00 centreline last week, though at the same time is reluctant to explore levels south of 40.00.

H4 timeframe:

Largely unchanged from previous analysis.

Action out of the H4 chart remains focussed on support at 1.3680, as well as trendline support-turned resistance, taken from the low 1.3670.

Additional areas to be cognisant of are 1.3852 resistance and Quasimodo support mentioned above on the daily timeframe at 1.3609.

H1 timeframe:

The 1.38 figure, surrounded by a 1.272% Fib expansion at 1.3809 and a 50.0% retracement level at 1.3793, delivered resistance on Wednesday and guided the currency pair back to 1.3750 support.

External levels to be aware of on the H1 scale are the 100-period simple moving average at 1.3740, and a demand-turned supply base residing at 1.3853-1.3869, sharing chart space with a number of Fib studies between 1.3870 and 1.3847.

Interestingly, RSI flow greeted trendline support, taken from the low 27.58, following an earlier rejection from overbought terrain.

Observed levels:

With higher timeframe levels showing limited support and resistance nearby, GBP/USD traders are likely monitoring 1.3750 support on the H1, along with 1.3809-1.3793 resistance.

Another area likely on the technical radar is H1 supply at 1.3853-1.3869. Not only does this base align with numerous Fib levels, the area also joins H4 resistance at 1.3852.

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

U.S. Dollar Index (DX) Futures Technical Analysis – In Position to Challenge Main Bottom at 91.290

The U.S. Dollar hit its lowest level since March 18 late in the session on Wednesday as Treasury yields bounced off their intraday highs, holding just below multi-month levels reached earlier in the month. Reduced demand for the safe-haven currency also weighed on the greenback.

At 20:28 GMT, June U.S. Dollar Index futures are trading 92.645, down 0.200 or -0.22%.

In other news, the U.S. economy grew faster in the early spring and more companies sought to hire new workers, a Federal Reserve survey showed, but inflation also picked up and companies faced an array of shortages that are hindering production.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on March 31.

The main trend will change to down on a move through the nearest swing bottom at 91.290.

The minor trend is also down. This confirms the shift in momentum. A new minor top was formed at 92.365. A trade through this level will change the minor trend to up.

The short-term range is 89.655 to 93.470. Its retracement zone at 91.555 to 91.100 is the primary downside target. Inside this zone is the main bottom at 91.290, making it a valid target.

The main range 94.590 to 89.155. Its retracement zone at 91.870 to 92.510 is potential resistance. It is also controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index early Thursday is likely to be determined by trader reaction to 91.555.

Bullish Scenario

A sustained move over 91.555 will indicate the presence of buyers. The first upside target is 91.870. Taking out this level could trigger an acceleration into 92.365.

Bearish Scenario

A sustained move under 91.555 will signal the presence of sellers. This could trigger a break into the main bottom at 91.290, followed by the short-term Fibonacci level at 91.100. This is a potential trigger point for an acceleration to the downside with 90.620 the first target.

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

USD/CAD Daily Forecast – Another Test Of Support At 1.2525

USD/CAD Video 14.04.21.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2525 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the 50 EMA at 91.80 and is moving towards the support at 91.50. In case the U.S. Dollar Index manages to get to the test of this level, USD/CAD will find itself under more pressure.

Today, foreign exchange market traders followed the developments in commodity markets which moved higher and provided support to commodity-related currencies like Canadian dollar.

WTI oil gained strong upside momentum after Iran stated that it would enrich uranium up to 60% purity because of the recent attack on its nuclear facility. Currently, WTI oil is trying to settle above the $63 level. If this attempt is successful, Canadian dollar may get more support.

Meanwhile, Treasury yields moved higher, providing some support to the U.S. dollar. However, this support was not sufficient enough to offset the impact of strong commodity markets so USD/CAD moved lower.

Technical Analysis

usd cad april 14 2021

USD to CAD managed to get below the support at 1.2550 and is trying to settle below the next support level which is located at 1.2525. This support level has been tested several times in recent trading sessions and proved its strength.

In case USD to CAD declines below the support at 1.2525, it will gain downside momentum and head towards the next support level at 1.2500. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.

If USD to CAD settles below the support at 1.2500, it will move towards the next support at 1.2470. A successful test of the support at 1.2470 will open the way to the test of the support at 1.2450.

On the upside, the previous support at 1.2550 will likely serve as the first resistance level for USD to CAD. A move above this level will lead to a test of the resistance at the 20 EMA at 1.2560. If USD to CAD gets above the 20 EMA, it will move towards the next resistance which is located near the 50 EMA at 1.2590.

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

Does Gold Want to Move Lower?

The yellow metal has climbed, but only with lacklustre energy. If the USD Index is not rising, then gold should really be shooting up and breaking new monthly highs, but it isn’t. Readers have been asking what’s happening and some have been concerned with gold’s apparent strength. So, let’s break it down.

History tends to rhyme and what happened before, will – to some degree – happen again. Gold is not immune to this concept, and the current implications are bearish.

Let’s jump right into the charts for details.

Graphical user interface, chartDescription automatically generated

Gold topped right at its triangle-vertex-based reversal, just like it did in mid-March and in early January (please note the points that are marked on the above chart for confirmation – they are described in red). That happened on Thursday (Apr. 8), and since that time gold has continued to move lower.

Gold invalidated the breakout above its mid-March highs, proving that what we saw was nothing more than just an ABC (zigzag) correction within a bigger downswing. The moves that follow such corrections are likely to be similar to the moves that precede it. In this case, the move that preceded the correction was the 2021 decline of over $150. This means that another $150+ decline could have just begun.

It might appear bullish that gold rallied yesterday (Apr. 13), but it only appears this way until one compares this rally with what happened in the USD Index during the same time. Paying attention to today’s (Apr. 14) pre-market price moves further emphasizes the fake nature of yesterday’s rally in gold.

The point is not that gold rallied, but that it hasn’t rallied enough.

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During yesterday’s session, the USD Index moved to new monthly lows and this decline continued in today’s pre-market trading. Consequently, if gold was at least reacting to the USD’s movement “normally”, it should move to new monthly highs. If gold “wanted” to rally, it would have likely exploded to the upside. But what happened instead? Gold moved higher only somewhat yesterday – not to new monthly highs – and in today’s pre-market trading it’s actually slightly lower.

This tells us that gold “wants” to move lower now.

The USD Index moved lower, and it can move even lower on a very short-term basis, perhaps to the 50% Fibonacci retracement based on the entire 2021 rally, and the previous lows. And what would be the likely effect on gold? Based on what we saw yesterday, and what we see so far today, it seems that gold will likely ignore this decline in the USD Index, while waiting for the latter to finally show strength – so that it (gold) could decline.

After all, gold has already topped right at its triangle-vertex-based reversal point . Consequently, it’s no wonder that it now continues to trade sideways, waiting for a trigger to move much lower.

Moreover, please note that the recent zigzag makes the situation similar (approximately symmetrical) to what we saw about a year ago – between April and early June. Once gold breaks to new yearly lows, one could view this as a breakdown below the neckline of a major head and shoulders pattern where the April 2020 – June 2020 and the recent consolidations are the shoulders of the pattern. Based on such a pattern, gold would be likely to slide profoundly, probably well below $1,500. And the relative performance of gold vs. the USD Index tells us that such a short-term breakdown (to new yearly lows) is a likely outcome in the following weeks.

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Gold stocks also failed to rally to new monthly highs, and they seem to be forming a relatively broad topping pattern, just as they did in mid-March and at the beginning of the year.

The sell signal from the Stochastic indicator as well as the fact that miners failed to invalidate the breakdown below their broad head-and-shoulders pattern points to a bearish outlook for the following weeks (and perhaps months).

All in all, the outlook for the precious metals market remains bearish and the recent rally didn’t change anything.

Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Sunshine Profits: Effective Investment through Diligence & Care

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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

USD/JPY Price Forecast – US Dollar Looking for Buyers

The US dollar has fallen initially against the Japanese yen during the trading session on Wednesday but looks as if it is finding a little bit of support exactly where you would expect it based upon previous trading action.

USD/JPY Video 15.04.21

After all, we have seen a lot of noise in this general vicinity, so it does make a certain amount of sense that traders would come back in and try to pick it up “on the cheap.” The market had gotten way ahead of itself, so a pullback to this area of consolidation made the most sense, and now it looks as if we may be able to start taking off again. If that is going to be the case, I believe that we will probably revisit the highs sooner rather than later.

Regardless of what happens next, I am not willing to sell this market, because quite frankly it is far too bullish from a longer-term standpoint. Ultimately, I think this is a market that will find its way back to the ¥111 level, possibly even all the way to the ¥110 level. Interest rate differentials between the two countries continue to be a major factor, so that cannot be stressed enough in this scenario. After the big move that we had previously seen, it does make quite a bit of sense that we would continue to see a lot of noise, but ultimately, I do think we are in a scenario that the market needed to calm down and find a little bit of stability, which is something that I think has happened over the last couple of weeks.

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

GBP/USD Price Forecast – British Pound Continues to Find Same Level

The British pound has rallied a bit during the trading session on Wednesday to break above the 50 day EMA, only to turn around and give that right back up almost immediately. By doing so, it has formed a less than enthusiastic candlestick, making this a very unlikely scenario for a sudden break out. This does not mean that I think the market is going to fall apart, rather I think we have a lot of work to do before we get to the upside again. Having said that, if we were to break above the top of the candlestick from the trading session on Wednesday, that could be a very good sign.

GBP/USD Video 15.04.21

If we were to break down below the lows from earlier this week, that opens up the possibility and the high likelihood of a move down to the 1.35 handle. That is an area that is a large, round, psychologically significant figure, and also features the 200 day EMA. With that in mind, I would be very interested in buying down at that level, assuming that we get there and of course get a bit of a bounce. If we do not get that bounce, then I would be a little bit more suspicious.

Whether or not the US dollar can climb against other currencies seems to be an open-ended question, and depending on who you listen to, the answers very wildly. As for myself, I think what we are going to see is more choppiness than anything else, making it yet another headache inducing couple of months in some of these pairs. I suspect the British pound will probably be one of them.

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

GBP/JPY Price Forecast – British Pound Still Under Pressure

The British pound has initially tried to rally during the trading session on Wednesday but gave back the gains after we crossed above the psychologically important ¥150 level. This is an area that I believe will continue to be important, but I will admit that the most recent price action has not been overly impressive. While anticipating a pullback after a couple of moves higher is not a huge stretch of the imagination, the reality is that we have seen attempts to rally this market for days in a row, all of which have been beaten back rather severely.

GBP/JPY Video 15.04.21

I do not necessarily think that we are going to see some type of massive meltdown, but we are clearly not ready to take off to the upside. If we break down below the 50 day EMA, then we could see this pair drop down to the ¥145 level. While that may sound a bit drastic, the reality is that it would not be that out of the question, considering just how parabolic the pair had gotten. It would represent a nice pullback but not necessarily some type of trend change. In that scenario, I think a lot of longer-term traders would be very interested in this pair at the ¥145 level.

On the other hand, we could break above the highs of the last several sessions, opening up the gateway to the ¥152.50 level. From a longer-term perspective, this makes more sense, but it is worth noting that the momentum has certainly slowed in this pair, which is quite often what you see right before some type of corrective phase.

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

EUR/USD Price Forecast – Euro Running Into Resistance

The Euro has rallied a bit during the trading session on Wednesday to reach towards the 1.20 level. That is an area that has seen significant resistance as of late and will be a serious challenge for the Euro bulls. If they can overtake that area, then it would be a very healthy and positive sign for the Euro. The question here is whether or not this has been a significant rally, or have we just simply seeing a correction? There is a lot going on in the world right now, and of course that has attracted the attention of Forex traders in both directions. With that being the case, I think what we are seeing here is a potential selling opportunity, but I need to see the market pull back just a bit.

EUR/USD Video 15.04.21

However, if we were to take off above the 1.20 level, then I believe it opens up the possibility of a move to the 1.22 level. We have seen significant selling in that area, but one thing that I cannot help but notice is that when you look at longer-term charts, the Euro, the Aussie, and the New Zealand dollar are all showing hesitation at these elevated levels. The question begs whether or not we are going to see continued US dollar strength later this year?

While we have certainly seen a bit of a “risk on” type of attitude from traders, the question that keeps popping up in my mind is whether or not the United States will be given currency strength due to coronavirus vaccinations and just a simple matter of the US being stronger than other nations? I am currently looking for a selling opportunity but do not quite see it.

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

AUD/USD Price Forecast – Australian Dollar Breaks 50 Day EMA

The Aussie dollar has broken above the 50 day EMA during trading on Wednesday to clear the 50 day EMA, something it has not been able to do for quite some time. Having said that, when you look at the longer-term charts there are still a lot of concerns just above and quite frankly there are some bearish signals coming out of the Chinese equity markets. If that is going to pick up steam, that will certainly work against the value of the Aussie sooner or later. Because of this, I do think that you need to be very cautious about buying this pair based upon this sudden move.

AUD/USD Video 15.04.21

It is worth noting that there has been a shooting star for both February and March in this market, and that does suggest that there could be some trouble ahead. That being said, I think what we are looking at here is a scenario where traders are trying to discern whether or not there is a catalyst to finally break above the 0.80 level above. That is massive resistance on the monthly charts, so it should be paid close attention to. Ultimately, when you see a couple of shooting stars in a row on the monthly chart, you should take notice and realize it does not happen that often.

Do not get me wrong, I am not expecting the Australian dollar to completely fall apart, but I think a pullback, bigger than the one that we have seen, is a very real possibility at this point. Obviously, you will want to scale into a position to the downside. However, if we break above the 0.78 level then I think we will make another run at the 0.80 level. I would expect more noise.

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

EUR/USD Mid-Session Technical Analysis for April 14, 2021

The Euro is trading slightly higher on Wednesday after giving back most of its earlier gains. The common currency is being supported by a weaker U.S. Dollar that was pressured by a drop in Treasury yields following Tuesday’s U.S. consumer inflation report.

The report showed that inflation came in stronger than expected, but investors weren’t rattled enough to send yields higher, suggesting that they expected the news. Furthermore, the Fed has been telling us that we should expect a “transitory” rise in inflation.

At 11:45 GMT, the EUR/USD is trading 1.1957, up 0.0008 or +0.07%. This was down from an intraday high of 1.1973.

In other news, Euro Zone industrial output declined as expected in February after expansion in January, dampening prospects for economic growth in the first quarter after a solid end to 2020 for manufacturers.

Additionally, Euro Zone government bond yields fell on Wednesday, tracking their U.S. counterparts lower, after solid demand for a Treasury auction in the United States underpinned bond markets.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1989 will change the main trend to up. Taking out the next main top at 1.1990 will indicate the buying is getting stronger.

A move through 1.1704 will signal a resumption of the downtrend. This is highly unlikely, but the EUR/USD is up 10 sessions from its last main bottom, which puts it inside the window of time for a closing price reversal top.

The minor trend is up. It changed to up earlier today when buyers took out 1.1947. This confirmed the shift in momentum.

The main range is 1.1603 to 1.1249. The EUR/USD is currently testing its retracement zone at 1.1976 to 1.1888. This zone is controlling the near-term direction of the Forex pair.

The short-term range is 1.2243 to 1.1704. Its retracement zone at 1.1974 to 1.2037 is the primary upside target and potential resistance area.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD is likely to be determined by trader reaction to 1.1976.

Bullish Scenario

A sustained move over 1.1976 will indicate the presence of buyers. The first targets are 1.1989 and 1.1990. Taking out the latter could drive the EUR/USD into 1.2037. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1976 will signal the presence of sellers. If this move creates enough downside momentum then look for a possible break into the main Fibonacci level at 1.1888. This is a potential trigger point for an acceleration to the downside.

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

EUR/USD, GBP/USD Analysis & Setups 14 – 16 Apr 2021

The EUR/USD bullish wave 5 has reached the first target zone at 1.1975. But an extension for one more higher high is possible if price action bounces at the shallow Fibs near 1.1937-50. The GBP/USD remains stuck between the moving averages but a bullish breakout could occur if a triangle chart pattern emerges.

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EUR/USD & GBP/USD Overview

The EUR/USD bullish breakout could aim for the 1.20-1.2025 Fib target zone. This is where the 5 wave pattern of wave A could be completed.

The GBP/USD bullish bounce or breakout could aim as high as 1.39, which is the previous top and resistance zone.

Check out the video below for the full analysis and trade plans on 14 – 16 April 2021:

EUR/USD, GBP/USD technical analysis: patterns, trends, key S&R levels

  • Explanation of potential trade ideas both up and down
  • Beginner friendly, explaining concepts in more detail

EUR/USD & GBP/USD Video

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

Good trading,

Chris Svorcik
CTA

 

GBP/USD Analysis, These Charts Suggest That Pound Is Bullish

Pound gains as the US dollar shrinks on fears of an inflation hike. While the economic data from the rest of the world is considered positive, investors watch the economic data from the US closely as positive data, growing debt, surging inflation alarm investors on interest rate change by the FED.

Despite the lower GDP announced yesterday, higher than expected manufacturing production gives confidence on the economic recovery of the UK. New Coronavirus cases in the UK sank amid several harsh measures taken by the Government, the average number of daily new Covid-19 cases reached August 2020’s lows, while the daily new cases in the US grew and vaccines were questioned for their effectiveness.

Source: Worldometers.info

With the Covid-19 becoming less weighted, the UK can now completely focus on the full recovery.

GBP/USD daily chart suggests that the British pound could enter into another bullish cycle soon as the pair hits the lower threshold of the ascending parallel channel.

GBP/USD quote on Overbit

Both indicators RSI and MACD are bullish on a daily chart and the pair has a strong support from MA100.

Double bottom pattern on the 4H GBP/USD chart also suggests that the pair should continue the uptrend.

GBP/USD quote on Overbit

The first resistance to test lies at £1.38660 which is a decisive level where a local dynamic resistance is located. If the resistance withholds, GBP may retrace to £1.36550, though if GBP is able to break the £1.38660, we might witness another bullish run and tests of resistances at £1.39885 and £1.41780.

Bullish continuation of the Pound will be supported by a weaker Dollar. Not only the inflation hikes but the growing tension between the US and China may weaken the US Dollar Index.