Indices Start a New Month With a Drop

Gold is still holding above the 1760 USD/oz support.

The Dow Jones bounced from the upper line of the symmetric triangle pattern.

The DAX is aiming for the lower line of the rectangle formation.

The EURUSD is back inside the wedge formation, sentiment is back to negative.

The USDCAD bounced from the lower line of the wedge formation.

The EURCAD bounced after Friday’s heavy drop.

The NZDCHF broke the lower line of the rectangle pattern and then tested it as a closest resistance.

The GBPNZD broke from the sideways trend to the upside. This perfectly shows the recent negative sentiment towards the New Zealand’s currency.

The USDHUF tested the broken supports as closest resistances. When the price stays below the resistance levels, a strong sell signal will emerge.

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

Weekly Forex Commentary March 14, 2021

EUR/USD ranges this week severely diminish due to problems within the EUR universe. EUR/JPY remains light years overbought while EUR/NZD and EUR/CAD maintain oversold conditions. EUR/CAD broke its 5 year average at 1.4955 and trades ranges from 1.4955 to 1.4547 then 1.4427. EUR/GBP is oversold however it trades between 0.8740 to 0.8414 to the 5 and 10 year average. EUR/USD cross pairs will determine EUR fate this week to direction. 

GBP/NZD from this week’s close at 1.9374  sits on supports at 1.9330 and 1.9246. Last week vitals from 1.9318 to 1.9188 and the week prior 1.9318 to 1.9176. GBP/AUD from its close at 1.7927 contains resistance at 1.7934 then 1.8134 and last week 1.8130 to 1.7905 then 1.7885 to 1.8130. Both are problem pairs entering into the new week.

Week 7 to massively overbought JPY cross pairs. For the month, NZD/JPY rose 100 pips, barely 200 for AUD/JPY and EUR/JPY, 400 for GBP/JPY and a rare day for 400 pips to CAD/JPY. CAD/JPY beat USD/CAD by 100 pips as USD/CAD traded 300 pips. traditionally, USD/CAD always trades wider ranges than CAD/JPY as CAD/JPY is the follow pair to USD/CAD.

USD/CHF and USD/JPY begin the week deeply overbought while USD/CAD is severely oversold. The strategy this week is long USD/CAD, short CAD/JPY and refrain from trading laggard currencies, USD/CHF and USD/JPY. For problem pair USD/JPY lower must break the 5 year average at 108.98 then 106.43. Above at 109.00’s and 110 is maximum to USD/JPY averages dating to 1999. 

While GBP/JPY and GBP/CHF are overbought, GBP/CAD matches EUR/CAD to oversold and GBP/NZD and GBP/AUD as problem pairs. GBP/USD like EUR/USD is hostage to its cross pairs for direction. 

AUD/CAD and NZD/CAD both broke below vital points at 0.9737 and 0.9073. With NZD/CAD’s break lower, NZD/USD’s close at 0.7173 sits 53 pips above its vital break at 0.7120. Overbought NZD/JPY and NZD/CHF will assist NZD/USD’s eventual break at 0.7120. Then AUD, GBP and EUR slide further. 

AUD/USD big break lower is located at 0.7641. AUD achieves this challenge by breaks lower at 0.7716 and 0.7679. 

Gold remain inside 1815 to 1642. DXY 91.43 Vs 92.78 and 89.95 below. The 2 year yield broke above reported 0.1511 to trade 2 points higher to 0.1711. The 10 year yield at its 1.625 close, trades inside its wide ranges from 1.3305 to 1.8448. 

Respectfully readers, I work extraordinarily hard consistently over 17 years to write the most accurate levels, entries and targets, to bring the most accurate data and market concepts. Don’t believe my words as all is documented here.

GBP/JPY Vs GBP/USD and USD/JPY – March 6th, 2021

GBP/USD last week fell 236 pips from 1.4015 to 1.3776 while overbought GBP/JPY rose 257 pips from 148.14 to 150.71.

Known since the 1930’s, the Japanese pegged GBP/JPY to UK Gold for not only economic viability but the first incursion to the western world of finance. The standard to hold GBP/JPY to the UK held throughout Bretton Woods. Upon the 1972 free float, GBP/JPY became attached permanently with high +90% correlations to GBP/USD.

All JPY cross pairs followed with high and positive correlations as AUD/USD and AUD/JPY, NZD/USD and NZD/JPY, EUR/USD and EUR/JPY while USD/CAD and CAD/JPY became polar opposites as both permanently correlate negatively. USD/CHF and CHF/JPY traditionally also hold opposite correlations.

The Japanese offered not only a double trade but GBP/JPY and GBP/USD as the same exact currency pairs. The same principle holds true for EUR/JPY and EUR/USD, AUD/USD and AUD/JPY and NZD/USD and NZD/JPY. The double trade is permanent for USD/CAD and CAD/JPY.

Why JPY cross pairs remain overbought into week 6 amd not falling with counterpart currencies is the USD/JPY problem to correlations. While GBP/USD correctly correlates to GBP/JPY at +94%, GBP/JPY also not correctly correlates to USD/JPY at +83%. A further problem exists as GBP/USD correlates to USD/JPY at +46 %. All correlations are not only running positive but this situation is the exact same for AUD/JPY, NZD/JPY, EUR/JPY, CAD/JPY and explains why prices remain high and overbought.

Positive correlations are the result of exchange rate prices and relationships to moving averages since correlations are found within the context of averages. USD/JPY trades above vital 105.70,  GBP/USD above 1.3697 and GBP/JPY above 144.80. Correlations are positive because prices trade above respective high / low averages.

Required to assist GBP/JPY to drop is GBP/USD breaks 1.3697 or USD/JPY trades below 105.70. GBP/JPY then decides to fully correlate to USD/JPY or GBP/USD. GBP/JPY in every instant follows GBP/USD as the 91 year correlation and order of currency markets.

Current GBP/JPY trades 1156 pips above GBP/USD and 2506 pips below GBP/CAD. GBP/JPY larger range from GBP/USD becomes 144.08 and 1.5564. GBP/JPY above is located the 14 year average at 155.38 and the 10 year at 148.36.

Prior to the 2016 interest rate changes by the central banks, the market order to currency pair arrangement existed as GBP/USD, GBP/JPY, GBP/CHF then GBP/CAD.

The new order is arranged as GBP/CHF, GBP/USD, GBP/JPY then GBP/CAD and seen as GBP/CHF 1.2855, GBP/USD 1.3820, GBP/JPY 149.86 or 1.4986 then GBP/CAD 1.7292. Much daylight exists for GBP/JPY to trade freely between GBP/USD and GBP/CAD yet 250 pips traded last week from a distance of 1100 and 2500 pips between exchange rates.

Why GBP/CHF and all currency  pairs arranged as Other Currency / CHF dropped from contention as support is due to the uniqueness to the SNB’s interest rate system. Libor is miles from actual interest rates as first comes Saron, Call Money rates and the most vital Debt Register Claims.

JPY cross pairs overall contain downside moves from GBP/JPY at 300 pips and 200 for AUD/JPY and NZD/JPY.

USD/JPY for the week is not only light years overbought but the 5 year average is located at 109.01. A good target is found at 106.65.

GBP/JPY big break lower is located at the 10 year average at 148.38. A break then GBP/JPY trades 146.00’s easily.

GBP/USD this week opens between 1.3768 and 1.3840. Below 1.3768 challenges most vital 1.3697, above 1.3840 then GBP/USD travels much higher.

GBP/CHF and GBP/CAD run good and positive correlations at +93% and +96 % for GBP/CAD. For GBP/NZD and GBP/AUD remain problems as correlations run negative at -43% and -64% for GBP/AUD.

GBP/JPY

Included are GBP/JPY moving averages from 5 day to 253 days. The averages are perfect and derived from the ECB. The first number is the day average followed by trading days then the average.

A 20 day average is actually 15 days, a 50 day average is actually 36 days. Trading day averages to factor perfectly start at the beginning of every year then the numbers increase as days trade. A 50 day average is most stable as it only trades 36 to 50 days.

A 5 day average begins Monday at 2 days, then 3 for Tuesday and Wednesday and 4 for Thursday. A full 5 day average only trades on Fridays.

5 Day     5             149.2391

10 Day  9             149.1325

20 Day  15           148.3808

50 Day  36           145.2691

100 Day               71           142.5398

200 Day               143       139.9417

253 Day               180       139.1231

As GBP/JPY trades lower then the averages drop.

Targets

Targets are not only known miles ahead but targets stack to watch trades unfold.

Current targets: 149.7549, 149.8496, 149.5086, 148.1852, 146.0887, 143.7901, 143.0356.

The ECB and most central banks factor exchange rates to 6 decimal places and 4 for USD/JPY and JPY cross pairs and I follow the ECB exactly.

Weekly Commentary – EUR, USD and GBP

EUR/USD 1.2061, AUD/USD 0.7657 and USD/CAD 1.2783 decide future and current direction to all 28 currency pairs. EUR/USD and AUD/USD breaks then much lower or much higher. USD/CAD breaks 1.2783 then much higher or a failure to break then much lower.

JPY cross pairs remain overbought and reveal EUR/USD and AUD/USD will eventually break lower and USD/CAD breaks higher. GBP and NZD will then follow lower.

Not a driver to market prices this week are the typical alarm bells written by market writers with specialization in marketing rather than expertise in markets, trading and market prices. Elections, Covid, lockdowns, vaccines, central bank meetings, yields, month-end, Fed, Powell and the Mars rover landing failed to move market prices. Not at the time of release nor in subsequent trade days did prices move except to the degree intended from the start of the day or week.

A market price will achieve its destination by mathematical certainty without regard to outside events yet professional alarm bell ringers are surprised at a rise in yields, no movements to NFP and central bank meetings and to a price that fails to respond to their sounding of the bells in the market square.

NFP and fed meetings barely moved EUR/USD 20 pips in each of the last 6 and 8 months. Whistleblowers month-end and rebalance will be heard this week. Meanwhile, monthly averages haven’t changed in many months and a rebalance nor month-end changes to prices fails to exist as price fail to move enough to require changes to averages.

DXY monthly averages remain inside 89.95 to 91.43, Gold 1815 -1642. EUR/USD traded 1.1900’s -1.2200 in February, 1.2000’s to 1.2300’s in January. The 2 year yield traded 0.11 to 0.23 in the past 9 months. The S&P’s traded 300 points from 3900 to 3600 for February, 200 points for January. WTI traded 10 points in February from 51.00 to 61, and 6 Points for January.

Our professional alarm bell ringers are long on whistles but short on market competency. A Necessary yet least favored aspect to market prices, trades, and economics is the requirement to run and enter data for a clear picture of entries and exits and to understand the economic condition. But market prices and profits were never nor will ever be the ultimate goal to reporting.

The Week

The ultimate revelation to a cautious market this week is found in GBP/AUD and GBP/NZD. GBP/AUD at 1.8059 resides inside vital range points from 1.7885 to 1.8130 and GBP/NZD at 1.9318 to 1.9176. Both GBP/AUD and GBP/NZD from oversold last week drifted higher directly into a neutral zone for this week.

EUR/AUD and EUR/NZD however are deeply oversold and contains the ability to travel higher while GBP/AUD and GBP/NZD remain stuck in neutrality.

EUR/USD led the charge higher for non USD pairs upon the break of the 5 year average at 1.1300’s last July and is in the position to take down GBP, NZD and all non USD pairs. GBP/USD must break 1.3600’s and NZD/USD 0.7100’s to assist in a wholesale trend change.

Deeply oversold USD/CHF at 0.9084 broke higher from 0.9001, CAD/ZAR trades above 11.86 and USD/CAD is on the verge of a break higher at 1.2783.

GBP/USD retains slightly overbought status while next highest exchange rate GBP/JPY is deeply overbought and next lowest GBP/CHF also opens the week in richter scale overbought. Same situation exits for EUR/USD, AUD/USD and NZD/USD as EUR/CHF and EUR/JPY are both overbought. NZD/CAD and AUD/CAD offer no assistance as leaders to NZD/USD and AUD/USD direction as both sit in neutrality.

EUR/GBP challenges 0.8732 on a break of 0.8573 or a drift to 0.8400;s. EUR/GBP traded to exactly 0.8728 Friday then lower to close at 0.8655.

DXY remains in a 89.95 to 91.43 range and a break higher at 91.43 challenges 92.78.

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

Weekly Round Up – February 21st, 2021

AUD/USD broke its long standing and much written line at 0.7821 and traded 57 pips to 0.7877. Above 0.7821, AUD/USD ranges between 0.7821 to the 10 year average at 0.8305 or 484 pips. Below 0.7821, AUD/USD trades 0.7821 to 0.7308 or 513 pips. Below 0.7821 exists 0.7605.

DXY last week maintained its 148 pip range between 89.95 to 91.43. Above 91.43 next targets 92.78 in a 135 pip range.

GBP as written in the last post maintains deep overbought status across all GBP pairs except GBP/NZD. Watch 1.9136 this week for best moves.

EUR/USD opens in fairly perfect neutrality however ranges continue to compress. Problem pair EUR/JPY and all JPY cross pairs maintain deeply overbought status for week 4. EUR/CAD, EUR/NZD and EUR/AUD open the week massive oversold. EUR/CAD and EUR/AUD will provide the best moves.

Stand clear EUR/CHF as AUD/CHF and NZD/CHF will provide better movements.

NZD/USD 0.7267 then 0.7356 Vs 0.7267 and 0.7990. NZD/CAD is overbought while NZD/JPY heading into week 4 maintains richter scale overbought status.

Overall, NZD/USD traded 200 pips from 0.7100’s to 0.7300’s for the past 2 months and provided support to GBP and AUD to allow both to move higher. Explains the divergence seen in EUR/NZD Vs GBP/NZD this week.

USD/JPY watch 104.97 and USD/CAD 1.2587 Vs 1.2826.

 

 

USD Weakness at Key Levels

USDCAD, for example, is creating a descending triangle and has tried to break support at $1.26.

If we zoom out to the weekly chart we can see many key levels below and a long way to fall especially if the price of crude oil increases and helps the Canadian Dollar.

We see a similar situation with AUDUSD.

Regarding USDJPY we see that the bearish trend which ran most of last year, has been broken.

We also note that price action is at a key level of resistance just above 105.5 yen with many key levels above.

Looking at the current GBP strength, we see runaway trends against weaker currencies and some opportunities as well with stronger currencies.

For example, GBPNZD is forming a rising wedge consolidation pattern which can often signal a bearish reversal so we will keep an eye on that.

Next week we will take a look at the meteoric rise of Platinum and we see that price action is in a small pullback this morning so let’s keep an eye on that.

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

GBP/NZD is at the Crossroads

The GBP/NZD is at the crossroads and the price will move either to the upside or bounce lower below resistance.

The POC zone is 1.8840-50 and we should see the price moving up as the price is still technically in uptrend. If we see a bounce, targets will be 1.8915, 1.8950 and 1.9011. However, a close below D L3 1.8840 will possibly target 1.8804 and 1.8744. As the price is at its final support, my bias is to the upside.

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

Cheers and safe trading,

Nenad

 

New Zealand Dollar Finally Recovers

In today’s Trading Sniper video, we will focus on the strength of the New Zealand Dollar. NZD is coming back to life after rather unsuccessful past few weeks. All this is happening rather without any support from the fundamentals. We did not have any important news from the New Zealand economy, actually if so, then negative as New Zealand stock exchange is halted for the third day following the cyber attack. Currency does not care about that though and the buyers are continuing the shopping time.

We will start with the NZDUSD, where the pair is climbing higher after the bullish breakout of the upper line of the flag. That gives us a buy signal with a potential target on the long-term down trendline. Chances that we will get there are pretty high.

Now GBPNZD, where the price is going lower after creating the head and shoulders pattern. We already broke the up trendline and the neckline of this formation. Sentiment is negative and the price should go as low as to 38,2% Fibonacci.

EURNZD is having pretty much the same situation. We also have a head and shoulders pattern with the already broken neckline. After the breakout, the price fell sharply and is currently aiming the mid-term up trendline. It looks like we will get there pretty soon.

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

GBP/NZD Massive Bullish Wave 3 Seems Unstoppable

The GBP/NZD made a very strong breakout and bullish impulse above the 21 ema zone. The current consolidation pattern will probably be a base for multiple higher highs.

Price Charts and Technical Analysis

GBP/NZD 1 hour chart

The GBP/NZD bullish momentum is strong. More than 20 candlesticks have not retraced back to the 21 ema zone (see green diamonds). This means that the impulse is probably a wave 3 (orange). And that any pullback is likely a wave 4. This is only invalidated if price retraces below the top of wave 1 (red x). In fact, multiple waves 3-4-5 could be remaining.

The next target is aiming at the 2.03-2.0325 zone. A bearish pullback could take place as the new high creates divergence. But a pullback is expected to retest the support zone (purple box) and use it for another bullish bounce and uptrend continuation.

GBP/NZD 15 minute chart

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

Good trading,

Chris Svorcik

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

 

GBP/NZD Ascending Wedge Pattern Favours Bull Breakout

The GBP/NZD made a double top pattern… but the bulls seem ready to smash through the resistance and continue with the uptrend.

Price Charts and Technical Analysis

GBP/NZD 4 hour chart

The GBP/NZD retested the 21 ema support zone after reaching the wizz 6 target. But price action made a clear bounce and retested the Wizz 6 zone again. Although the GN failed to break the resistance zone, the bulls are buying at higher support levels (purple line). This indicates that the buying pressure will probably overcome the resistance at the double top (green arrows), which also looks like an ascending wedge chart pattern.

The GBP/NZD remains bullish as long as price stays above the Wizz 5 support zone. In that case, a wave 4 (purple) still remains likely. But a break below the support makes the bullish outlook unlikely (red x), especially if price breaks below the 144 ema (2x red x).

GBP/NZD 4 hour chart

Good trading,

Chris Svorcik

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

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

Daily Forex Briefing 29/07/2020

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

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

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

EUR/USD awaits the FOMC inside of a pennant.

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

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

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

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

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

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

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

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

Bulletproof Setups before the FOMC

Wednesday is all about the FOMC and many traders are anticipating some fireworks. Definitely, if you seek volatility, Dollar is a place to go right now but if not and you are very tight towards the risk, then try to avoid the USD at all costs. As always, we got you covered in both cases. In todays analysis, we prepared a pair with the American Dollar and two pairs without. Enjoy!

During crucial macro events, technical analysis does not always work, so you need to have this healthy skepticism towards using technicals before possible crazy movements. If you are still willing to trust the lines and dots, then we have a great setup on the AUDUSD. Todays price managed to break strong horizontal resistance on the 0.717. In theory, that gives a proper buy signal and as long as we are above, the sentiment is positive.

Now something for those who would like to avoid the USD today. EURCHF is creating a large double top formation and precisely speaking, we are in the process of finishing the second top. When we will look a little closer, you will see that the price also created a bearish flag formation and most recently, broke its lower line. From the technical point of view, movement towards the horizontal support and the neckline seems inevitable.

And now GBPNZD, where we have something for long-term position traders. Pair is currently bouncing from the ultra-important long-term up trendline. GBPNZD is doing that with a double bottom formation, which can be spotted on the daily chart and is totally confirmed by the divergence of various oscillators, like MACD and RSI. Future for this instrument looks pretty bright.

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

Major Resistances Are Broken – Time To Go Up

For the financial markets this is a great news, which is triggering an appreciation of the Sterling along with the rises on major exchanges. On many pairs with the GBP we do have fresh buy signals but one of the most interesting one, can be found on the GBP/NZD.

GBP/NZD with today’s upswing made two important steps for a buy signal. First of all, the price bounced from a crucial support on the 1.99. In addition to that, the price broke the upper line of the flag formation, which was with us since the middle of October. Once the daily candlestick will close above the upper blue line, the buy signal will be triggered.

EUR/USD is the second instrument in this analysis and we mentioned this pair yesterday. We said that the breakout of the neckline and the downtrend line should bring us a buy signal. This is precisely what happened and Friday gives us a beautiful bullish candle, which confirms the positive sentiment on the main pair.

Last one is also the old friend from the previous analysis – NZD/USD. The price was on the major downtrend line, which was a great occasion for a bearish taking profit action. We said that that price action traders, before placing an order, usually wait for a reaction and confirmation and that is a wise thing to do. Kiwi did not bounce from the resistance and broke this crucial down trendline instead. In theory, that is a start of a new up trend and a nice occasion to go long.

This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory

GBP/NZD is Bullish as POC Bounce is Imminent

Dear Traders,

The GBP/NZD has formed a bullish Zig Zag with a very clear POC zone. 1.9600-10 is the zone where we might expect a bounce.

A 4h close above WH3 camarilla pivot 1.9632 is needed for a continuation to the upside. If it happens, the interim target will be 1.9663 followed 1.9747 and eventually 1.9827. We can see multiple confluence points straight at the POC including bullish tweezers, Ma cross and BB bounce. As long as the price is kept above 1.9400, bullish trend is not jeopardized.

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

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

The Trade “War and Peace” Edition

Treasure Secretary Steve Mnuchin ‘We were about 90% of the way’ on China trade deal and there’s a ‘path to complete this’ While President Trump wars of a “Plan -B” and not the Ed Wood variety, but rather that China could face billion in tariffs if trade positives don’t come out of Osaka.

The market is unreactive to these types of headlines given that Trump has continued to adopt a ‘good cop/bad cop’ strategy, with Treasury Secretary Steven Mnuchin. Instead, market participants are content to wait for Saturday meeting to unfold where the proof will be in the pudding or perhaps dinner. Unlike the Buenos Aires dinner and tango show, a harmonious photo op could go a long way to soothing investors’ concerns at the market open on Monday.

The element of doubt?

Expectations are shallow that a trade deal will happen this weekend and it seems the best that can be hoped for is that both sides will agree to keep talking. But indeed, the prospects for a deal, maybe not this weekend but eventually, are much better when they were in late April when low-level negotiators probably ruffled Trump and Xi’s feather taking talks to significant league levels without their involvement. Now with two months to prepare and resolve points of disagreement, logic suggests this weened this should go well.

We should probably though logic to the wind when dealing with this unpredictable US administration as when it has come to US trade policy it’s bee only been erratic, but it’s the forward-looking randomness that speaks volumes about the US administration bizarreness.

From the trader’s chair into the weekend

It’s more likely than not the much-ballyhooed G-20 meeting ends up as a non-event. A decision to keep negotiating would mean little to my long-term view other than to slow the eventuality of a US-China cold war. China will continue to reduce its dependency on the US consumer and capital markets over the years to come. But as far as this weekend is concerned if there any risk premium left in the market after Mnuchin 90-10 remarks I would be selling it as if there is “the elephant in the room” this weekend in Osaka, it’s a baby one at best.

Markets

I don’t think there should be any debate about the Fed dovish pivot despite James Bullard tempering the markets overzealousness about the scale of the Fed easing while simultaneously slightly deflating equity market party balloons; the feds will remain reactive to market conditions for the remainder of the year. So, and while the markets could be responsive to incoming data, the July signalling is definite.

The Feds have had nearly 20 chances to walk down markets July expectation. (pre-post-FOMC,) Historically if they felt the messaging was wrong. Especially the market’s reaction to the post FOMC Statement, they would ratchet up Fed speak to align market expectations better. But all Bullard and Powell have done is walked back a 50 bps to 25 bps for July, which was the outlier anyway in most rate cut scenarios. Which then begs the question why would the FOMC want to set the market up for a drubbing.? The market has it right, and the Fed will be there to ride to the rescue.

Oil Markets

The eye-catching draws that showed up on in the API report were confirmed by the more conclusive EIA data overnight. Front-month WTI rallied over 1% in reaction to the enormous drop in weekly EIA US crude oil inventories, notching a near 3.5 % bounce on the day. In fact, since tanking to $50.60 on June 5, the contract has rallied just over 18%!!

But back to back weekly inventory draws which went beyond the markets wildest expectations, should put to rest lingering doubts about the broader health of the economy, as this data does suggest a boisterous start to the driving season.

But peeling the onion back on the EIA report, not only did the US ring up the most significant inventory decline since September 2016, but record exports led it. This data also diminishes demand-side concerns from a global perspective. So, based on this data, we could be in for a protracted run of inventory draws which could be incredibly bullish for the second half of the year.

And sure, we did think the fire at the PES facility last week has an impact, but we are talking about some staggering drops, the export and gasoline data speaks volumes alone.

Gold Markets

Exciting dynamics in yesterday gold market flush which was reportedly triggered by fast money accounts who surmised the speculative length was long enough that the markets were prone to a correction. But a funny thing happened on the way to $1400 as that the long-term strategic buyer remained firm and according to my intel even yesterday’s meltdown produced a day of net buying, suggesting demand remains stable. And while I don’t see a great risk-reward ahead of G-20 to go all in but given the tail risk uncertainties the market is not adequately positioned for, it makes sense to have some Gold in the portfolio but do y leave some room of the floor to add more bullion below $1400. We don’t have a definitive take profit exhaustion target, but my quants and I fully agree it lies somewhere between 1450 and 1475, with the truth probably lies somewhere in the middle.

Currency Market

Euro
Chairman Powell and St Louis Fed President Bullard followed up with comments that tempered the market’s enthusiasm to sell Dollar but with the ECB unlikely to follow through with QE, suggests the Fed out doves the ECB over the short term. And while I want to go long EURUSD, I’m holding off until the end of the week, and if we close above the 200 dma, I think it’s a clear signal we push higher. Looking to buy on Monday if that is the case with a stop below. EURUSD 1.1300

GBP
I think we continue to trade whipsaw headline madness but do expect the market to look for opportunities to hedge for worst-case scenarios which will limit GBP appeal despite the demands weaker USD bias.

NZD
The Kiwi rallied on the “dovish” hold but with the NZD TWI printing higher so unless we get an unlikely favourable outcome from G-20 I think Governor Orr will wax as dove as can be to force the NZD lower as the RNBZ does rely on the Kiwi to do the heavy lifter in time of global economic despair
I’m short on the TWI view, but I got in too early and should have waited until Monday as the support remain thick likely due to optimism over G-20. So, looking to buy on dips and I think that will be the market strategy ahead of G-20.

Asia Currency

I’m primarily focusing on the INR with higher oil prices and increasing trade friction with the US, which will wane on the INR yield appeal.

I don’t have time but will try to include in my views along with CNH -IDR and MYR after the Fix as we remain on “Yuan Yuatch.”

Crypto

I have some nefarious and currency war/Gold related themes that could explain the recent froth, which certainly has gone well beyond the Facebook pump, but I will try to cover in detail later. However, feel free to reach out and tell me to remove my tinfoil hat.

This article was written by Stephen Innes, Managing Partner at Vanguard Markets LLC

GBP/NZD Needs to Break 1.9159 for Bearish Continuation

Dear Traders,

The GBP/NZD is bearish and we can see the POC zone just below the ATR top projection. Watch for POC and bearish continuation below.

1.9272-1.9286 is the zone where fresh sellers should appear if the price gets within. We can see a big confluence consisting of an inner trend line, order block, camarilla pivots and Bollinger bands. Targets are 1.9185 and 1.9159. If the price breaks below then 1.9118-27 zone is the final target. Only above 1.9330 the pair will be bullish and the intraday trend will change. Have in mind that any Brexit news might change the price dramatically.

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

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Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

GBP/NZD Bullish Bounce From the Lower POC Zone Targets 1.9360

Dear Traders,

The GBP/NZD dropped towards the lower confluence zone that is also supported by historical levels of support and bounced. If 1.9260 holds, the uptrend will continue

1.9270-1.9300 is the zone where we might expect the bounce. Targets are 1.9317, 1.9141 and 1.9360. If 1.9360 breaks, next target is 1.9400. However, bullish bounce also depends on the Brexit news. All GBP crosses are heavily dependent on Brexit developments and out of the blue news could easily spike the price up or down. However, the GBP/NZD has been more resilient than the GBP/USD, so we might see a bounce towards 1.9360 as the deeper retracement levels has already been reached.

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

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Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

GBP/NZD POC Zone 1.9240-60 is Good For Fresh Buyers

Dear Traders,

The GBP/NZD could easily proceed with uptrend if 1.9412 is broken. Fresh buyers might appear if the price bounces off the POC zone–>

1.9240-60 is the POC zone. A rounded bottom that has been formed on the GBP/NZD H1 time frame provides buying opportunities on a dip. A bounce from the POC zone targets 1.9396 and 1.9424. If 1.0424 breaks then 1.9485 is next. Bullish trend looks pretty solid but the price is at W H5 now so it could provide a healthy retracement towards the POC zone.

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

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

GBP/NZD Rejection Off the POC Zone Targets Sub 1.8730

Hi traders,

The GBP/NZD correction might come to a stall as the price is making a U-turn within the important POC zone.

1.8819-20 is an important zone where we can see a confluence of price action and historical sellers. If the price manages to sustain bearish momentum that has been piggybacked from higher timeframes we might see 1.8750, 1.8730 and eventually 1.8710. However, only a strong close below 1.8700 will provide bears with more strength where the target is 1.8652. For bears to dominate it is vital that the price makes a lower high-lower low pattern on H1 timeframe.

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

Join Elite CurrenSea’s Forex Live Education in upcoming months.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea