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.

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.

NASDAQ at Highs but Watch for a Retracement

The US100 – NASDAQ has been trading in an upper range indicating a strong uptrend. This is the case partially to Yen getting weaker.

We can spot 2 POC zones. The first zone 13495-13600 is a shallow retracement, usually seen in strong trends. 38.2 Fib is making a confluence with W L4. On the other hand, we can see POC2 at 88.6/M L3 at 12794.Watch for rejections in any of the zones towards 14050 followed by 14109 and 14300. Breakout will happen above 14050. W H5 is 14366 which is the weekly target after a breakout.

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

Cheers and safe trading,

Nenad

 

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.

Gold Trades Lower Within A Narrow Trading Range

This high was hit after gold traded to a second low, or double bottom on the 30th and 31st of March. This follows the first low of the double bottom which occurred on March 8 when gold was traded to a low of $1673. The second low in the double bottom came in slightly above the former low at $1676.

Simply put, this shows that gold is still dominated by the bearish faction, with the bullish faction attempting to regain control now that we have had a higher low and a higher high than previous.

Today, gold futures basis the most active June contract gave up much of yesterday’s gains. Currently, June gold is fixed at $1736.50, a net decline of $11.10. Today’s close occurred just above the 21-day exponential moving average which is currently fixed at $1736 per ounce. Although gold has been trading sideways over the last eight trading days it is currently above the series of tops that occurred in mid-March. Our technical studies indicate that the selloff in gold which began at the beginning of January when gold was trading above $1940 concluded at the beginning of March. When the first lows of the double bottom occurred, that being said, momentum to the upside has been slow and tenuous at best but has the real potential to continue higher.

gold April 14

Resistance begins at gold’s 50-day moving average which is currently fixed at $1753.90, with the next level of resistance occurring at which is the 78% Fibonacci retracement. The data set used for this retracement begins at the new record high at $2088 and concludes at $1673, the first low of the double bottom we spoke about above.

Chairman Jerome Powell spoke virtually today at the economic club of Washington DC. He addressed the concern that many economists have about the ever-growing national debt that has been created from fiscal stimulus as well as the monetary policy of the Federal Reserve. In response to these concerns Chairman Powell said that “The U.S. federal budget is on an unsustainable path, meaning simply that the debt is growing meaningfully faster than the economy. The current level of debt is very sustainable. And there’s no question of our ability to service and issue that debt for the foreseeable future.”

Although he said that there is no question that the Federal Reserve and U.S. government could service and issue that debt for the foreseeable future the fact of the matter is that current estimates put our expenditures in 2021 at 1.25% of GDP. That being said, it will be hard to fathom exactly what steps will be necessary to service the current level of debt. Also, any major change in interest rates would make that debt even more difficult to service. Many such analysts, including myself, continue to believe that we have not even begun to deal with the economic fallout that will follow our mounting debt. While all are in agreement that the current U.S. budget is on an unsustainable path, real solutions are needed, and no viable solutions have been presented.

For more information on our service, simply use this link.

Wishing you, as always, good trading and good health,

Gary Wagner

US Equities Climb A “Wall Of Worry” To New Highs

Low volume rallies have become a standard of trending recently.  We see higher volume when volatility kicks in near areas of broad market volatility.  Otherwise, we see lower volume trending push the prices higher recently in a “melt-up” type of mode.

Two recent standout events confirm this type of trending and volatility phases of the markets: (1) the September 2020 to early November 2020 (pre-US Election) rotation in price; and (2) the recent February 2021 to late March 2021 sideways price rotation related to the FOMC meeting/comments.  Both of these events centered around external market components and prompted an extended period of price volatility related to uncertainty.  After these events passed, price fell back into a low volume rally mode for many months, where most of the actual price gains happened.

The following Daily QQQ chart highlights my observations related to this type of price activity.  We start in the pre-COVID-19 price rally from October 2019 to the peak near mid-February 2020.  It is easy to see the decreased volume activity while prices climbed more than 27%.  Then, the COVID-19 even sent volatility skyrocketing higher and prices collapsed by 30%.  This type of “Wall Of Worry” trending is common and presents a very clear opportunity for traders.

After the March 2020 bottom, prices began another low volume rally that lasted from April 2020 to August 2020 – totaling a substantial +45% gain.  Again, starting in mid November 2020 and ending in mid February 2021, the QQQ rallied over 15% in a low volume “melt-up” trend.

Currently, the volume has started to subside after the FOMC meeting/comments volatility and we are starting to see moderately strong upward price trending in the QQQ.  This suggests we have entered another “Wall Of Worry” trend which may continue for many weeks or months.

The following Weekly XLY, SPDR Consumer Discretionary ETF chart highlights how diverse this “Wall of Worry” trend really is.  It translates into other sectors with almost the same velocity as it does in the QQQ.  In this example, we can see the strong trending, highlighted by GREEN ARROWS, at the same time as the decreasing volume took place.  Each of these rally trends coincides with the QQQ trends.  The rally from April 2020 to August 2020 represented a +35% gain.  The rally from November 2020 to February 2021 represented a +21% gain.  The current rally attempt has already advanced over 17% higher and may continue to rally for many more weeks.

If there is no future disruption of this low volume trending, then we may expect to see the US stock market continue to move in this manner for many weeks or months to come.  These low-volume “Wall Of Worry” trends can be very profitable and can prompt big moves in sector ETFs.

Many traders continue to miss opportunities in these markets because of worry or concerns of a breakdown in the trend. Eventually, something will prompt a correction or breakdown of this rally trend.  But until that happens, traders need to be able to identify and profit from these strong low volume rallies as they present some of the lowest volatility price advances recently. Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for my FREE Trading Course here.

For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.

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

Enjoy the rest of the week!

Chris Vermeulen
Founder & Chief Market Strategist
www.TheTechnicalTraders.com

 

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.

A picture containing chartDescription automatically generated

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.

ChartDescription automatically generated

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

* * * * *

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.

 

Australian Dollar On The Rise

Gold traders are fighting to keep the bullish dream alive and they’re trying to create the right shoulder of the Inverse head and shoulders pattern. A breakout of the neckline can possibly bring serious bullish sentiment.

Silver bounced from a crucial support on the 24.8 USD/oz.

Brent oil broke the mid-term down trendline and is aiming higher.

The Dow Jones is in the third wedge pattern in a row. The previous two ended in an upswing.

The EURUSD climbed back above the 23.6% Fibonacci.

The GBPUSD wasted a great chance for an upswing and failed to break the neckline of the inversed head and shoulders pattern.

The AUDUSD on the other hand, is very close to activating the buy signal from its own inversed head and shoulders formation.

The USDCAD is locked in a tight rectangle below major down trendlines.

The GBPAUD is in a sweet long-term sell signal, after the price created a head and shoulders pattern at the end of the wedge. A breakout of the lower line of the wedge opens a way towards new mid-term lows.

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.

If you think our videos, analysis, and education can help you become a better trader, then you can ask your own questions via our form and we will answer them in the weekly live webinar every Tuesday.

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

 

Will The UK’s Post-Pandemic Recovery Provide Further Support For The Pound?

With the most recent GDP figures suggesting a strong post-pandemic recovery remains possible, it is not unreasonable to ask whether sterling does indeed retain the potential to trade higher.

Continued progress with Covid19 vaccinations

A key factor undermining sterling recently has been the concerns expressed over the AstraZeneca Covid19 vaccine, specifically whether restrictions on its use could cause the UK’s vaccination programme to slow, delaying the economic recovery. Recent losses do indeed look largely attributable to this story. But provided the UK public maintains confidence in the vaccine, no material impact on the pace of vaccinations should be felt; and with the Moderna vaccine now also in the UK’s arsenal, there appears no cause for anxiety that the timetable for ending lockdown restrictions will not be adhered to.

Strong recovery on-track, supported by savings-funded consumption

The UK economy is expected to bounce back rapidly once lockdown measures are finally removed, the IMF forecasting 2021/2022 growth of 5.3%/5.1%, compared to 4.4%/3.8% for the euro-zone and 6.4%/3.5% for the US. Better than expected data emerging so far this year suggests growth may be even stronger than this.  Two variables will be key signals of the possible potency of this recovery: the strength of the propensity to consume, potentially evidenced by the 12thApril reopening of non-essential retail premises; and the willingness to run down the excess savings stock built up during the pandemic to fund an excess level of consumption.

Estimated to be worth around £150bn, a run-down in savings towards pre-pandemic levels would certainly turbo-charge any economic recovery. The BoE expects only around 5% of this savings stock to be spent, a forecast predicated on rising unemployment necessitating higher precautionary savings to be maintained and on most of these savings having been accrued by retired and higher income households, with traditionally a lower marginal propensity to consume.  However, given that there will almost certainly be some element of a spending catch-up, on both goods and social activities, the suggestion is that a larger proportion of this savings stock will be spent, boosting economic activity, and potentially bringing forward a normalisation of fiscal and monetary policy.

A more supportive monetary policy

The direction of UK monetary policy has flipped this year. Negative interest rates are no longer seen and the next move in policy settings is now forecast to be a tightening.  Although current metrics are expected to remain on hold until at least Q4 2022, a stronger recovery could potentially see the need for monetary tightening to begin sooner as rising inflationary pressures demand a policy response.

Downside risks overplayed

Of course, negative factors remain. Other countries will eventually catch-up with the UK with Covid19 vaccinations, while UK lockdown measures are more restrictive than some other countries (for example, the US). The public finances remain weak, and concerns endure over the NI protocol and Scottish/Welsh independence movements. And longer term, the extent to which UK/EU trade is hindered by Brexit could also pull sterling lower.  However, a strong post-pandemic rebound should provide some offset to these negatives, while as the UK continues to sign trade deals with faster growing economies than the EU around the world, pivoting business towards these new partners could see trading volumes potentially rising higher than had Brexit not occurred.

Potential for upside gains remains

The assertion is that strong reasons for remaining positive on sterling continue, the current bout of weakness being seen as caused by short term uncertainties rather than anything more structural. The economic recovery remains on track and as this materialises so the pound will find further support. Add to this the fact sterling remains weak on an historical basis, then the potential for further upside gains appears to still be strong.

‘’This material is provided for informational purposes only and does not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Equiti Capital. This material is not, and is not intended to be, a “research report”, “investment research” or “independent research” as may be defined in applicable laws and regulations worldwide. Please see the full disclaimer here: https://www.equiticapital.co.uk/media/11057/disclaimer.pdf ’’

 

Google Impulsive Bullish Breakout Now Looking for Support at Fib Levels

The Alphabet stock (GOOG) made a strong bullish breakout above the triangle pattern. The breakout is taking place in a well established uptrend channel (green lines).

This article reviews whether the uptrend can continue higher or not. We also review key support and resistance levels plus potential targets.

Price Charts and Technical Analysis

Google 14.04.2021 daily chart

The GOOG stock triangle chart pattern completed an ABC (green) within a shallow wave 4 pullback.

Price action bounced at the 38.2% Fibonacci level and has already reached the -27.2% Fibonacci target. What can be expected next?

  1. No divergence pattern is visible so far. This means that the uptrend remains strong and impulsive, which is indicating that bulls remain in control.
  2. The current bullish price swing is part of a larger wave 3 (pink) of wave 3 (purple), which indicates that more upside is likely.
  3. A full uptrend is visible with a clear uptrend channel (green lines) and moving averages aligned with the 21 ema above the 144 ema and above the 233 and 610 emas.
  4. Considering the strong price push away from the 21 ema, it is likely that the Fibonacci levels of the most recent price swing will act as support and cause a bounce (green arrows) if a pullback occurs (orange arrows).
  5. The next targets are located at $2400, $2500, and $2600.

On the 4 hour chart, we can see multiple waves 3 already appear in the recent past. This is indicating a strong uptrend.

  1. Currently price is in a wave 3 (green). Price could continue higher within wave 3.
  2. Eventually now or later, a shallow pullback (orange arrows) could confirm the end of the wave 3 (green) and the start the wave 4 (green).
  3. The Fibonacci levels are expected to act as support for a bounce (green arrows).
  4. A break below the previous tops (green box) could place the current wave outlook on hold (orange circle) or invalidate it (red circle).
  5. A deeper retracement does not mean that the uptrend is over. Price action could still bounce at the 144 ema close.

Google 14.04.2021 daily 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.

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.

 

LiteForex Trader Receives A Prize In Dream Car Draw

LiteForex Dream Car Draw final took place in Nigeria

Contest winner drove off in a brand new Hyundai Tucson
On March 6, LiteForex held a live raffle draw as part of Nigeria Dream Car Draw. Innocent Osirim won Hyundai Tucson and received it a few days later at the award ceremony which took place in Lagos, Nigeria.

Lucky Dream Car Draw winner gets his prize

Innocent Osirim was taken aback when he saw his number coming from the raffle drum. After all, there were more than 9000 traders participating in the contest. It wasn’t until his name was written on the prize certificate that he could calm down and start celebrating.
Soon Hyundai Tucson was presented to the LiteForex client at an award ceremony in Lagos.
“Don’t miss the opportunity to trade with LiteForex,” said Mr Osirim before driving off in his brand new car.
At the ceremony, ten Nigerian partners of LiteForex received prizes as well. They got MacBooks Pro 13 as rewards for their loyalty and productive work.

At the moment, LiteForex is busy launching new contests, both regional and worldwide. Their greatest so far is LiteForex Dream Draw that is taking place right now with a prize fund of $350 000. The first prize of this contest is a $250 000 certificate for a dream house anywhere in the world.

Facts about LiteForex

LiteForex is an international Forex broker that has been providing services in the financial markets for more than 15 years. The broker has its own user-friendly trading platform and copy trading system which brings together traders from all over the world.
Floating spreads from 0 pips, 170+ trading instuments, free access to analytical materials from independent experts – and it’s only a fraction of what LiteForex has to offer.
With over 15 years of experience in the financial markets, LiteForex has won 16 international awards, including the Best Retail Trading Platform in MENA countries, Best Copy Trading Platform in Southeast Asia and Best ECN Broker in Africa from Global Brands magazine in 2020.

Gold Prices Surge As U.S Inflation Heats Up – What’s Next?

Gold prices surged on Tuesday from their lowest level in more than a week after a sharp rise in U.S inflation boosting the metal’s appeal as an inflation hedge.

The Consumer Price Index, which measures the change in what customers pay for goods and services such as groceries, clothing and gas, climbed 0.6% in March – it’s biggest monthly increase since August 2012. This report follows last week’s PPI data, which showed producer prices rose 4.2% annually, the fastest pace since September 2011.

The U.S government and Federal Reserve’s massive quantitative easing programs have started to draw criticism and raise concerns about the long-term risks of overspending and overstimulating the economy at such an aggressive pace.

Inflation will remain the hot topic this week with Federal Reserve Chair Jerome Powell speaking at the Economic Club of Washington on Wednesday.

So far, Jerome Powell has artfully dodged questions relating to the rapid rise in inflation, stating that any price acceleration will be temporary. But policy makers will have to address this problematic issue eventually before it snowballs into something they can no longer control.

Another macro event that has lend support to gold prices this week was news that U.S health officials’ have halted the use of Johnson & Johnson’s COVID-19 vaccine, due to blood clotting occurrences in a few recipients.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

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

OIL Range Expansion is a Possibility

Oil has been consolidating in a rectangle and we could see a move up before the price drops.

Since March 17 we have seen a consolidation in the oil price. We don’t know if the market is going to continue with any trend until the range is broken. At this point we should see a drop from 78.6-88.6 zone towards W L4 camarilla. However, the POC zone needs to be reached – 63.22-63.98. When the price gets there, I assume another drop is coming towards 57.52 which will be the target for the move. This will create another rectangle and possible range 50-65.

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

Cheers and safe trading,

Nenad

 

Ultimate Fintech Awards 2021: Time Is Running Out For Broker Nominations

Founders and organisers of the renowned iFX EXPO, Ultimate Fintech understands the sector. Now through the Ultimate Fintech Awards customers, partners and traders will decide the best brokers of 2021 through a public voting system.

With only a week to go until nominations end, we’ve answered your top questions on the Ultimate Fintech Awards.

#1 What Dates Are The Awards Running?

The awards began in February and will run until June 2021 with various stages leading up to the announcement of the winners. However, the time is ticking for your nominations:

  • Nomination Round: Open until 20 April 2021 – During the Nominations period, companies can apply by filling out the Nomination Form. Each brand can apply in up to 5 award categories.
  • Voting Round: 27 April – 25 May 2021 – During the Voting Round, the industry will be asked to cast their vote in the Ultimate Fintech Awards. Subscribed and logged in users will be able to cast one vote only so make your vote count!
  • Shortlist & Winner Announcements: 1 & 10 June 2021 – The first announcement will be on June 1 2021. This will reveal all the shortlisted brands that have made it to the top of every award category. A final list of winners will be announced on the 10th of June, showing one winner in each category.

#2 Why Nominate Your Broker?

  • Instil Trust in Traders – Traders look for recognised brands before they invest their money. Winning a business award provides a credible third-party endorsement so show other traders with onsite awards badges, blogs and social media updates.
  • Improved Employee Morale – When a company receives a prestigious award, everyone on the team feels better. They appreciate being recognised for their hard work.
  • Snag More PR Opportunities – Reinvigorate your marketing with news of your award, team and success.
  • Get More Business – Winning an Ultimate Fintech award can help boost your company’s profile. This increased awareness could mean more traders, IBs and investors. It can also boost your company recruitment drive.

Nominate your broker for up to 5 award categories here.

#3 What Award Categories Are There?

There are a range of awards to be won in specific categories of Global Awards, Regional Awards and Country Awards. As the name suggests, global awards will determine the winners on a global scale, while regional and country awards will go into more specific categories.

The Ultimate Fintech Awards drill down into specific and outstanding talent – from rising stars to established giants. They also recognise key areas of expertise such as customer service or trading platforms.

#4 Where Are The Winners Published?

Winners will be announced on the Ultimate Fintech website as well as entered in The Ultimate Fintech Leaders 2021 List. The Ultimate Fintech Leaders List is the industry index of the most pioneering companies, showcasing both the shortlisted and winning companies in each category, set to serve traders worldwide. Additionally, winners will be announced through the official Ultimate Fintech channels and newsletters, letting the entire B2B and B2C online trading industry know who took home the winning titles.

Awards are a great way to showcase your brand, platform, services and customer support but time is running out. Nominations are only open until April 20 so head over to the Ultimate Fintech website to nominate your broker!

Wobbly Wednesday? US Earnings Preview

The US government has ordered a pause to administering Johnson & Johnson’s Covid-19 vaccine. On a separate note, the US inflation figures came in higher than expected.

Still, the S&P 500 climbed 0.33% while the Nasdaq 100 advanced by 1.2%, with both indices boosted by the likes of Tesla, Nvidia, and Apple. The Dow Jones index however ended the latest cash session lower by 0.2%, which means we’ll have to wait a bit more before we can witness 34,000 Dow.

US equity futures are holding relatively steady as the next earnings season kicks off today.

The Wall Street 30 minis are trying to ease away from overbought territory, ready to relaunch higher when the next opportunity arises.

Banks first on the roll call

Financial heavyweights are first out of the earnings gates today:

  • JPMorgan
  • Goldman Sachs
  • Wells Fargo

Note that financial stocks have been the second-best performing sector on the S&P 500 so far this year, having climbed by 18.5% year-to-date as markets pin their hopes on the US economic recovery. However, according to FactSet, less than 50% of analysts have a Buy rating on financial stocks heading into the second quarter. Perhaps some of that pessimism stems from the looming tax hikes and tougher regulations under the current US administration.

Still, for the S&P 500 as a whole, this is set to be a bumper earnings season.

Markets would want to see whether some of these estimates, as gathered by FactSet, actually prove true:

  • Record high increase in EPS (earnings per share) estimates of 6%
  • Highest earnings growth in over 10 years of at least 28%

Already, about 60 S&P 500 companies have issued positive guidance for EPS and sales, with that 60 tally already being a record high. Such has been the optimism leading up to the earnings announcements.

“Ultimately, market participants will remain primed to the earnings outlook for the rest of the year, amid the expected economic recovery. Such corporate commentary could determine whether the S&P 500 should soar higher from current levels, even though a pullback from overbought levels appear warranted in the near future.”

Vaccine woes unlikely to dampen risk appetite … for now

Markets have been willing to ignore Johnson & Johnson’s vaccine pause for the time being, nothing the shots by J&J represent only 3.6% of the near-190 million shots delivered in the US so far. Also, the pause may be lifted in a matter of days.

“However, if such concerns escalate and become material enough to derail the economic recovery, that may trigger a pullback in risk assets.”

For Johnson & Johnson’s stock itself, should the 100-day simple moving average (SMA) hold steady as a support level, as it did back in early March, that could help its share price bounce back when its single-shot vaccines can be administered once more. The longer the wait, perhaps the stronger the weakening bias for the stock in the interim as shareholders patience wears thin.

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

AUD/USD Analysis, An Important Breakout Is Finally Here

The US Inflation data once again beat expectations and brings anxiety to the market, slacking the US Dollar index. DXY lost 0.28% yesterday and is down 0.12% today, while commodities like gold and silver are looking to rally. The Australian Dollar which is mainly correlated to Gold is on the main spot light.

US MoM inflation data as per March closed at 1.6% which is above the anticipated 1.5%, CPI YoY as per March closed at 0.3% above the anticipated 0.2%. Annual inflation rate in March exposed 2.6% which is far beyond the FED’s desired 2%. Hence, investors worry that the FED may reconsider the interest rates sooner than expected.

AUD/USD started the month positively, adding 1.06% to its value, as a currency correlated to the price of Gold and Gold is considered as an “inflation rescuer” for investors, it is fair to say that AUD/USD will continue gaining through the month. Australian Consumer sentiment index in April surged to 6.2% (previous 2.6%) as consumers tend to show confidence in the economic growth of Australia.

The bullish continuation of AUD/USD is confirmed by the breakout from the ending diagonal and the downtrend channel which the pair was following since February 25.

AUD/USD quote on Overbit

MACD remains bullish on the Aussie, whereas RSI is approaching an overbought zone and the pair is testing the 200MA as resistance. If the Aussie remains above the $0.76635, it will continue the uptrend and test resistances at $0.77685 and $0.78300.

 

Higher CPI Should Boost More Than Just Gold Prices

BTC futures hit a high of $62,000 before backing off slightly. As of 4 PM, EST BTC is trading at approximately $60,500. This marks the first close above $60,000 for Bitcoin futures, and I believe we will see $65,000 by week’s end.

Mponday main image

The consumer price index is set to be released tomorrow at 8:30 EST, and the expectations are mixed, but it would make complete sense if it continued to climb. January 2021, the U.S. CPI was at 262.231. February was the last month to be released, and it hit an all-time high in the index of 263.161. With the March numbers set to be released tomorrow, we could see a BTC price spike if it continues its current trend higher.

Monday main image #1

Usually, a higher CPI rate was good for gold, and it still is; however, I believe we will see more capital move into Bitcoin than into gold on inflationary fears. So, a spike in the Consumer Price Index tomorrow could quickly catapult Bitcoin futures towards $65,000.

As ETH follows moves in Bitcoin, expect a rise in Ether also, so traders who took our call last week to buy should remain long with stops at $1,900.

btc vs eth MONDAY CHART

Part 2: Higher CPI Should Boost More Than Just Gold Prices

BTC is trading at approximately $60,500. This marks the first close above $60,000 for Bitcoin futures, and I believe we will see $65,000 by week’s end.

-excerpt from previous article on 4/12/2021.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. 20 of the 21 indexes rose compared to the previous month, most notable energy of which gasoline saw a 9% rise. Combined there was a 0.6% increase in the month of March. This beat out the increases seen over the last six months and brought the CPI up to a 2.6% increase over March 2020.

Tuesday main

This number came in above estimates and we did see a rise in the price of gold and silver but also Bitcoin and Ethereum. It looks like we will indeed see $65,000 in BTC as today’s record high came in about $500 short of that at $64,450. Where will Bitcoin go to from here?

Tues chart #2

My prediction of a new record this month in April is that we will reach at minimum $69,600 this is based on Elliot Wave models and Fibonacci extensions. Although it has the potential to go even higher. In tandem to this we will see Ethereum trade to the prices I mentioned yesterday, today we saw an equal rise of about 5% on the day. The month of April will be big for Bitcoin.

tuesday chrt 1