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Old Jun 1, 2017, 3:14am   #33
 
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USDCAD: CAD shorts were pared for the third consecutive week from record shorts.

KeyToMarketsUK started this thread Symmetrical triangle breakout visible.
Erases a month falling channel.

USDCAD snaps the 3-month winning formula fell more than a percent for the month of May, but remains above 20MA (monthly). Earlier USDCAD rejected at 61.8% (1.4690-1.2460 fall) as the CAD bearish sentiment eases slightly.

FUNDAMENTAL NEWS


Recent Canada economic data is encouraging and Bank of Canada being more positive on the domestic growth outlook.

BOC said “The Canadian economy’s adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment”.

According to Nomura, “CAD has been supported by the BoC being more positive on the domestic growth outlook”.

Deutsche Bank: We continue to expect the BoC to hike just once this year, most likely in Q4.

But Morgan Stanley has a contrarian view, “Stable BoC policy and limited developments in oil markets failing to provide a directional short-term catalyst”.

In a research note to clients, Dara Blume Strategist at Morgan Stanley said “We argue that headwinds to Canadian output growth and continued labor market slack will keep inflation low, forcing the BoC to stay on hold while the output gap closes by mid-2018 on the BoC’s estimates”.

Data Review:

Canada March GDP increased 0.5%, following no change in February.
Current account deficit (on a seasonally adjusted basis) widened by $2.3B in the Q1 to $14.1B, as the goods balance moved from a surplus to a deficit.

Upcoming risk events:

Fri, June 02

Trade Balance

Besides, we got May ADP employment (June 01) and Non- Farm Payrolls (June 02).

US May ADP employment is forecast for 180k.

TECHNICAL VIEW

Last week, the price hold the parallel support available at 1.3387 rebounds above 1.35. The price has been rejected at 50DMA for four trading session out of five. On Wednesday session, high made at 1.3520 rejected at parallel resistance seems at 1.3540 above this 1.3590/1.3600 exists.

Click the image to open in full size.

Over near term, the price has the support zone remains between 1.3450/1.3430 below this 1.3387-1.3350 and 1.3260-1.3250 exists.

According to Nicholas Weng a Strategist at Deutsche Bank, “CAD shorts were pared for the third consecutive week from record shorts”.

In the four hour chart, the price gave an upside breakout through the symmetrical triangle and erased a month falling channel .The price likely to cap between 1.3560-1.3600 levels.

Click the image to open in full size.

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Old Jun 2, 2017, 5:25am   #34
 
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Risk reward favors short EURGBP

KeyToMarketsUK started this thread
FUNDAMENTAL VIEW


UK politics has taken the center stage this week, with opinion polls showing Theresa May could lose the majority. Renewed Brexit concerns and latest polls reveal Theresa May landslide victory might not possible, are the two factors drag the pound recently.

According to Nomura analysts (June 01), “In the event of a Labour victory, we think the pound would at first head lower, as increased uncertainty would lead to reduced inflows. However, as austerity would be removed and “softer Brexit” hopes would return higher real yields may offset this and GBP would be higher”.

Besides, EUR was fully priced for ECB’s forward guidance in its June meeting scheduled next week.

TECHNICAL VIEW


The cross spotted with a double top but consolidating above the five-month trendline. The cross rallied for two consecutive weeks, printed the strongest monthly gains in six months. Over near, resistance zone remains between 0.8750-0.8785 March high and 50.0% of Oct-Dec fall above this 0.8850 Jan high exists.

Alternatively, support finds at 0.8680 and 0.8650 below this downside risk open for 0.8600 and 0.8570/0.8550. Trend reversal occurs below 0.8500 for 0.8350/0.8330 levels.

According to analysts at Barclays, “Markets are too positive EUR and have turned too negative GBP; risk reward favors short EURGBP”.

Click the image to open in full size.

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Old Jun 6, 2017, 5:25am   #35
 
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Brent: Potential support finds at 48.50 and 47.70.

KeyToMarketsUK started this thread
FUNDAMENTAL NEWS


Oil price fell nearly a percent on Monday session on the diplomatic clash between Qatar and three Arab allies. Following the OPEC meeting (May 25) oil slumps more than 10% from May high.
Before retracing a percent on Monday session, Oil price rose nearly 1.5% led by tensions in the Middle East. A political rupture raises the price volatility but manages to remain above Friday low.

According to JBC Energy analysts said in a note, "While we would not want to read too much into this in terms of looming trouble for OPEC, the fact that Qatar's stance towards Iran is a key element in this issue does make for a potentially more complicated setup at future meetings should the issue not have been resolved in due time".

For the week ending to May 30, the CFTC) said on Friday “Hedge funds raised bullish wagers on U.S. crude oil for the second straight week to a near one-month high”. The data showed, “Money managers raised their combined futures and options position in New York and London by 17,555 contracts to 239,049” reported by Reuters.

TECHNICAL VIEWS


The weakness in recent prices coupled with the scale of growth in US drilling activity. As we forecast in our last article, the price tested our potential support finds at 48.50, low made at 48.60 and spotted with a positive divergence on the four-hour chart. Brent oil price retraces more than 70% (46.32-54.55 rally) likely to place a bottom between 48.50 and 47.80 levels.

Click the image to open in full size.

We forecast a rebound to 49.30 and 49.50 in a day or two as the hourly oscillator remain bullish. The bulls must propel above 49.80/50.00 to escape further correction, in this case 50.40/50.60 and 51 are highly likely. Alternatively, fails at 48.50 additional support finds between 48.10-47.90.

Click the image to open in full size.

We forecast an inverted H&S pattern on the daily RSI.

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Old Jun 7, 2017, 4:15am   #36
 
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Commodity trades

KeyToMarketsUK started this thread
  • Brent oil erased the two-week falling channel.
  • Symmetrical triangle breakout visible and spotted with a triple bottom..
  • We forecast a rebound for 49.50 but price exceeds.
  • Gold and Silver finally succeeded to meet our targets.

Oil price edge upward more than 2% on Tuesday session and spotted with a trip bottom on the daily chart. On our yesterday’s article, we forecast a rebound for 49.30 and 49.50 but the price made a high at 49.96.

Readers can remind our forecast post-OPEC meeting for 48.60$, low made at 48.59$ and again updated “Wait for a dip to buy”.

Before further up move, the price likely to consolidate between 50 and 48.50 levels to capture buying interest.

Click the image to open in full size.

The bulls must propel above 50.00 to escape further correction, in this case, 50.40/50.60 and 51 are highly likely. Alternatively, fails at 48.50 additional support finds between 48.10-47.90.

We forecast an inverted H&S pattern on the daily RSI.

For a trading perspective, support finds at 49.20, 48.80 and 48.50. Alternatively, resistance seems at 50.00, 50.40 and 51$. Yesterday’s breakout was an initial sign of renewed interest, but we still need to wait for bullish confirmation to confirm the bottom.

Gold price finally succeeded to meet our target at 1295$ recorded at 1220$ odd levels. The price witness a clear five-year trendline breakout but a weekly close above the same need to confirm further headroom.

The immediate resistance seems at April high above this 1300$ mark exists. A weekly close above 1300$ confirms the continuation of the bullish trend in the coming weeks for 1315 and 1319 initially and next in line 1324, 1337$ and 1352$.

Alternatively, support finds at 1287, 1280 and 1273. As the hourly RSI and oscillator are exhausted and appears overbought a healthy correction needed to accelerate upward momentum again.

Click the image to open in full size.

If we look into the Silver, finally succeeded to complete our target at 17.70$ recorded at 16.80$ odd levels. The price made a high at 17.75 (June 06) facing resistance at 200WMA and 50MA (monthly) above this 17.90 50WMA exists.

Further headroom available for 18.30,18.50 and 19$ if propels above 18$.

Potential support finds between 17.30 and 16.90 levels.

Click the image to open in full size.

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Old Jun 8, 2017, 4:14am   #37
 
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EUR technical view against JPY and USD ahead of ECB meeting

KeyToMarketsUK started this thread Wednesday’s EUR depreciation might fully priced the inflation downgrade forecast.
ECB sounds less dovish and more symmetric forward guidance.
EURUSD failed to overcome 1.1285 resistance.
EURJPY got two bullish indicators along with the multiple bearish themes.

FUNDAMENTAL NEWS


Market participants focus on today’s (June 08) ECB meeting expecting to change its wording, growth and inflation forecast.

We expect that ECB sounds less dovish and more symmetric forward guidance. ECB likely to upgrade its economic assessment and acknowledge that risks to the growth outlook have moved from the downside to broadly balanced. We guess Wednesday’s EUR depreciation might fully priced the inflation downgrade forecast.

If the ECB evade changing its forward guidance today, further EUR deprecation is possible.

TECHNICAL VIEW

EURUSD rejected at 1.1300 moved lower but rebound from parallel support on Wednesday session.

The EURUSD manages to hold the parallel support finds at 1.1200 rounded, low made at 1.1204 and rebound sharply to 1.1280.
Since four straight sessions, EURUSD failed to overcome 1.1285 resistance and draft the trading range between 1.1200 and 1.1285. The last five trading sessions price action reveals, upside risk is weakening and a downturn possible. The daily RSI and oscillator remain bearish, appears upside risk is limited.


Initial support finds at 1.1220/1.1200 below this 1.1160 and 1.11/1.1075 next in line. Alternatively settles above 1.1300, set of resistance levels next in line are 1.1330, 1.1360 and 1.14. We expect spikes would not be sustainable and likely to give up some of the gains over near term.

Click the image to open in full size.

Ahead of the ECB (June 08) and Fed meeting (June 15), we forecast the price likely to cap between 1.13/1.1360 or 1.14/1.1430 levels.

Readers can remind, we have been recommending “buying EUR on dips” still remains the same strategy.

EURJPY:
Societe Generale: The BOJ will hold the line and keep policy easy enough for long enough for us to see significantly higher levels in EUR/JPY in due course.

The cross has been consolidating in a narrow range between 125.80 and 122.50 for four weeks. Before retrace to 122.50, the cross spotted with a double top on the weekly chart and rejected twice at 200WEMA.

Over near term 121.70 and 121.20 are the potential supports next in line. Alternatively, to regain the bullish momentum back the cross must close above 124.50 on a daily basis to aim for 125.20/125.40 and 125.80. Over medium term the cross has potential resistance seems between 125.80 and 126 above this 126.20/126.40 exists.

The daily RSI making lower high appears limited upside risk. Symmetrical triangle breakdown spotted on the daily chart, if settles below 122.50 distribution pattern likely to be confirmed.

Click the image to open in full size.

The other week (May 29) fall brought the cross below the five-weeks ascending trendline (four-hour) and Tuesday’s (June 06) fall brought the cross below symmetrical triangle on the daily chart.

Along with the multiple bearish themes, we got two bullish indicators on the four-hour chart. RSI and oscillator remain bullish.

Click the image to open in full size.

Multiple technical factors deliver “limited upside risk” theme.

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Old Jun 9, 2017, 6:24am   #38
 
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The June central bank actions likely to soften the EURUSD uptrend over near term.

KeyToMarketsUK started this thread EUR has been sliding after ECB meeting and extends the losses on Friday early trade, down 0.15% low made at 1.1196 (9:20 AM, AEST). EUR active into UK general election results in early Asia trade against GBP.

ECB review:

As expected ECB left its monetary policy settings unchanged on Thursday (June 08). ECB fell short to meet market’s hawkish expectations.

The ECB kept policy rates and its QE program unchanged but changed forward guidance on interest rates now expected to “remain at present” levels for an extended period.

Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases to run until the end of Dec 2017, or beyond, if needed, until we see a sustained adjustment in inflation.

Key takeaways:

  • Last monetary policy meeting confirms a stronger momentum in the euro area economy.
  • The risks to the growth outlook are now broadly balanced.
  • ECB lowering its inflation projection, for 2018 was lowered to 1.3% from 1.6% previously, while the forecast for 2019 was revised down by 0.1pp to 1.6% bringing it even further away from the 2% target.
  • The outlook for GDP growth was revised upward to 9% in 2017, by 1.8% in 2018 and by 1.7% in 2019.

Comments post ECB policy decision:
Danske Bank:

We still expect the ECB to continue its QE program next year but to reduce its purchases to EUR40bn per month starting from January 2018 and continuing for at least six months. In our view, it is still premature to discuss rate hikes from the ECB.

Barclays (Antonio Garcia Pascual and Philippe Gudin) :

We expect an extension of QE into 2018 but also reduction of its pace to €3540bn in H1 18 and €1520 in H2 18, as well as two 10bp hikes in the deposit rate, in Q2 18 and Q4 18. In other words, we expect both QE and negative deposit rates to still be in place throughout 2018, even if at less accommodative levels than in 2017.

TECHNICAL VIEW


Following ECB meeting EUR down below 1.12 but manage to close at1.1214. Lowering inflation projection and lack of rate hike clues pressure the EUR on Thursday session.

The upside momentum has stalled since five straight sessions, EURUSD failed to overcome 1.1285 resistance. Recent price action reveals upside risk is weakening and a downturn possible. The daily RSI and oscillator remain bearish, appears upside risk is limited.

Initial support finds at 1.1170 below this 1.1120/1.11 and 1.1075 next in line.

Click the image to open in full size.

Today on Asia session EURUSD down 0.25% low made at 1.1180 trading tad below 20DMA. Alternatively resistance seems at 1.1220, 1.1240 and 1.1285.

The upcoming Fed meeting outcome likely to drive the price lower again. The June central bank actions likely to soften the EURUSD trend over near term.



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Old Jun 12, 2017, 2:54am   #39
 
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GBPUSD: Additional pressure likely to be added this week, room for further fall.

KeyToMarketsUK started this thread UK general election raises GBP volatility, cable drafted bearish outlook.
Surprise UK election results set in the reality could soften the BREXIT outcome.
The cable manages to hold 100MA but settled below 20&50DMA.

The astonishing UK election results raise near-term GBP volatility. The election outcome brings forward challenges for the Brexit negotiation and GBP as well with downside bias as political uncertainty dominated the theme.

What’s on this week?

Tue, June 13

CPI YoY Basis

Barclays:


We forecast headline and core inflation to increase to 2.9% y/y (consensus: 2.7%) and 2.5% y/y (consensus: 2.3%), respectively, in May.

Wed, June 14

April labor data

Barclays:

We and consensus forecast the unemployment rate to remain unchanged at 4.6%. Average weekly earnings picking up to 2.5% 3m/y (consensus: 2.4%), although core average earnings are likely to moderate slightly to 1.9% 3m/y (consensus: 2.0%).

Thu, June 15

May Retail Sales

Barclays:

Retail sales are likely to drop 0.5% m/m in May.

In U.S, June FOMC (Thu, June 15 AEST) is the another key trigger for GBPUSD.

Barclays:

At the June FOMC meeting, we expect the Fed to raise the target range for the federal funds rate 25bp, to 1.0-1.25%.

Michael Gapen at Barclays, Given our expectation of a rate hike in June and balance sheet runoff in September, we find it unlikely that the Fed will deliver a dovish message on the outlook.

TECHNICAL VIEW


We saw the initial move lower in GBP following results outcome and the medium GBP forecast casts on PM’s stance on BREXIT.

The cable manages to hold the 100DMA 1.2618 on Friday session, made a low at 1.2634 and closed at 1.2740. Today (June 12) on Asia session the cable rose 0.20% (11:00 AM AEST) high made at 1.2747.

Over near-term support, zone remains between 1.2620/1.2600 and 1.2575 its 200DMA. Ahead of the key economic events, additional pressure will be added below 200MA as a result GBP likely to fall further to 1.2520/1.2500 and 1.2460 levels.

In our earlier article “we forecast 1.2620” cable made a low at 1.2634, now wait for a rise to enter another sell trade.

Click the image to open in full size.

Over the medium term, April 18th (election was announced) low 1.2516 likely to act as a pivotal (1.2500 rounded) below this 1.2440 (50.0% of the 1.1824-1.3047 rally) and 1.2360 exists. Currently, the cable is trading at 1.2740 still trading higher than a pre-election announcement, a room for further correction is highly likely.

Click the image to open in full size.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

What is your Technical View?

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Old Jun 13, 2017, 2:18am   #40
 
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BRENT : A daily close above 48.30 needed to throw a near term bullish projections.

KeyToMarketsUK started this thread The price respects the nine-month ascending daily trendline.
The daily RSI making a higher low and the oscillator appear bullish.
Trading range remains between 44-55 over medium term.

The recent diplomatic clash between Qatar and its neighbors could limit the Brent trading range between 46 and 49.50/50 over the near term and 44-55 over medium term.

Oil price rose 1.70% rapidly on Monday session (June 12) during Europe trading time, high made at 48.89 but erased the spikes gradually by the end of the day and closed with marginal losses.

FUNDAMENTAL NEWS


Signs of inventory declines in U.S, a supply disruption in Nigeria and news that Saudi Arabia will limit volumes of crude to some Asian buyers in July (Reuters) are the key drivers lifted the oil price on Monday session.

By the end of the session, Brent closed with 0.2% losses from day high fell nearly 2% as news from EIA drag the price down.

According to the EIA monthly drilling productivity report, Oil production from seven major U.S. shale plays is predicted to rise by 127,000 barrels a day to 5.475 million barrels a day in July from the previous month.

The Wall Street Journal reported, Qatar’s energy minister said Sunday the country remains committed to limiting its oil output through March 2018 under an agreement with other big oil producers, despite the severing of its diplomatic relations with OPEC allies Saudi Arabia and the United Arab Emirates.

Reuters reported Speculators raise U.S crude oil net longs-CFTC

Speculators raised its combined futures and options position in NY and London by 3,160 contracts to 242,208 for the week to June 06, CFTC said on Friday.



TECHNICAL VIEW


The price respects the nine-month ascending daily trendline made a low at 47.16 and rebounds. The daily RSI making a higher low and the oscillator appear bullish.

Click the image to open in full size.

Earlier the price erases the two weeks descending trendline. On yesterday session, the price gave a breakout through the inverted H&S pattern. Earlier breakout (trendline) and the latest developments suggest downtrend is easing.

Click the image to open in full size.

Support level finds at 47.60, 47.10/47 and 46.30/46.00. Additional selling pressure arises below May low, next in line are 45.70, 45 and 44.50.

A daily close above 48.30 needed to throw an initial bullish forecast. In this case, 48.90/49, 49.60 and 50$ are highly likely, extreme case 50.40/50.60 is expected.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

What is your Technical View?
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