Daily Market Forecast by Capital Trust Markets

[CapitalTrustMarkets]

Cable Eyes 1.6300 As Downward Slope Channel Looks Vulnerable

Market Sentiment: Bearish

Key Takeaways:


Cable continues to trade within the downward slope channel
Traders curiously waiting for the nonfarm payrolls
A bullish breakout would threaten the 1.6300 resistance area

GBP/USD tested and held off the critical trendline support once again on Thursday and continued to trade within the downward slope channel ahead of the Nonfarm Payrolls release. The long term bias remains bearish due to Lower Low in the ongoing downside move.

Technical Analysis

As of this writing, the pair is being traded around 1.6138. A support can be seen near 1.6111, the low of yesterday ahead of 1.6093, the lower trendline channel as demonstrated in the following four-hour chart.

On the upside, the pair is expected to face a huge hurdle near 1.6182, the confluence of 23.6% fib level as well as upper trendline channel. A break and four-hour close above the downward slope channel should spur a renewed buying interest, validating an upside rally towards the 1.6300 resistance area. It is however pertinent to mention here that we noticed a flaky upside break yesterday that consequently triggered many stops so caution is advised.

Nonfarm Payrolls

The US corporations added 215,000 new jobs in September as compared to 142,000 jobs in the month before, the average forecast of various economists say. The actual reading will be releases today in the US session by the Bureau of Economic Analysis. Generally speaking, better than expected nonfarm payrolls reading is considered positive for the US economy and consequently spurs bearish momentum in the price of cable and vice versa.

Trade Ideas

Keeping in view the overall technical and fundamental outlook, buying or selling the pair on a breakout through the downward slope channel appears to be a good strategy in short to medium term.

Another Interesting Read: Dollar Forming Bearish Pattern Ahead of Nonfarm Payrolls

 

[CapitalTrustMarkets]

USDCAD Looks Vulnerable Ahead Of Canada’s Employment News

Market Sentiment: Bullish

Key Takeaways:

1. USD/CAD looks set for another downside move
2. Canadian employment figure is due today
3. Bearish pin bar emerges on the four-hour timeframe

The US Dollar (USD) slid down against the Canadian Dollar (CAD) on Friday, dragging the price of USD/CAD to less than 1.1200 ahead of major job data. The short term bias however remains bullish due to Higher High in the ongoing bullish rally.

Technical Analysis

As of this writing, the pair is being traded around 1.1198. A hurdle may be seen near 1.1220, the high of the bearish pin bar as demonstrated in the following four-hour chart ahead of 1.1269, the high of the last major upside rally.

On the downside, the pair is expected to find a support around 1.1179, the 23.6% fib level ahead of 1.1171, the 55-Day Simple Moving Average (SMA) and then 1.1123, the 38.2% fib level. The bias will remain bullish as far as the 1.1080 support area is intact.

Canada Unemployment

The Canadian Economy added 20,000 new jobs in September as compared to the 11,000 decline in jobs during August, the median projection of different economists say. Generally speaking, higher unemployment level is considered negative for the Canadian economy thus a better than expected actual outcome will be seen as bearish for USD/CAD and vice versa.

Trade Ideas

Keeping in view the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy in short to medium term. A stop should however be placed at the high of the bearish pin bar as described above.

Another Interesting Read: EUR/USD Kicks Off Downside Move As Draghi Hints At QE

 

[CapitalTrustMarkets]

Market Sentiment: Bearish Key Takeaways: GBPUSD dips to the multi-month low ILO Une

Market Sentiment: Bearish

Key Takeaways:

• GBPUSD dips to the multi-month low
• ILO Unemployment Figure is due today
• Buyers waiting for bullish signs

The Great Britain Pound (GBP) fell broadly against the US Dollar (USD) yesterday, dragging the price of GBP/USD to less than 1.5900 for the first time in last 11 months. The long term bias remains bearish as far as the 1.6524 resistance area is intact.

Technical Analysis

As of this writing, the pair is being traded near 1.5908. A support can be noted around 1.5900, the psychological number ahead of 1.5853, the low of November 10.

On the upside, the pair is expected to face a hurdle near 1.6096, the intraday high of yesterday ahead of 1.6225, the high of the recent upside rally and then 1.6224, the high of the last major upside move as demonstrated in the above chart.

ILO Unemployment Rate

The International Labor Organization (ILO) is due to release the Britain’s unemployment report today. According to the median projection of different economists, the unemployment figure remained 6.1% in August (three-month reading) as compared to 6.2% in the previous reading. Generally speaking, lower unemployment level is considered negative for the economy thus a worse than expected actual outcome will be seen as bearish for cable and vice versa.

Trade Ideas

Considering the overall technical and fundamental outlook, buying the pair appears to be a good strategy if the price leaves a bullish pin bar or bullish engulfing candle on the daily chart, close to the above mentioned support areas.

Another Read: CADJPY Analysis By Alex

 

[CapitalTrustMarkets]

EURCAD Rallies As Triple Bottom Pattern Weighs

Market Sentiment: Bearish

Key Takeaways:

EURCAD increases broadly after the bullish breakout
Neckline breakout confirms the triple bottom pattern
Bulls look in firm control

The Euro (EUR) surged broadly against the Canadian Dollar (CAD) on Thursday, increasing the price of EURCAD to more than 1.4420 following the release of some key economic releases. The long term bias however still remains bearish due to Lower Low in the recent dip.

Technical Analysis

As of this writing, the pair is being traded around 1.4419. A hurdle can be noted around the current level that is the confluence of 100-Day Simple Moving Average (SMA) as well as 61.8% fib level ahead of 1.4558, the 76.4% fib level as demonstrated in the following chart.

On the downside, the pair is expected to find a support near 1.4368, the 50% fib level ahead of 1.4284—the confluence of 38.2% fib level as well as trendline support. The bias will remain bearish as far as the 1.4733 resistance area is intact.

Tripe Bottom Pattern

Not to mention that the EURCAD has already formed a classic triple bottom pattern on the daily chart whose neckline broke out recently. A breakout through the neckline is considered a confirmation signal about the validity of the triple bottom pattern.

Consumer Price Index

The Eurozone’s consumer price index remained 0.4% in September as compared to 0.1% in the month before, meeting the average forecast of analysts. The Year on Year (YoY) reading however remained 0.8%, up beating the average forecast and spurring renewed bullish momentum in the price of EURUSD.

Trade Ideas

Considering the overall technical and fundamental outlook, buying the pair on dips—around the trendline support area—appears to be a good strategy in short to medium term.

Another Interesting Read: Euro Area Inflation Might Trigger A Break In Euro

Prepared by Usman Ahmed, Chief Currency Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

Gold Eyes Trendline Resistance, Triple Bottom Neckline

Market Sentiment: Bearish

Key Takeaway:

Potential triple bottom price pattern emerges on the weekly chart
Trendline resistance being noted near $1310
$1180 remains key support area

The long term target of the precious metal remains $1310 following the emergence of bullish engulfing pattern as well as potential triple bottom price pattern on the weekly chart. The long term bias has turned to bearish due to Lower Low on the daily & weekly timeframes.

Technical Analysis

As of this writing, the yellow metal is being traded around $1231 an ounce. A hurdle can be noted near $1280, the 55-Day Simple Moving Average (SMA) on the weekly chart ahead of $1310, the trendline resistance as demonstrated in the following chart and then $1391, the neckline of the triple bottom pattern.

On the downside, the yellow metal may find support around the $1180-83 support area, a potential triple bottom price pattern on the weekly chart as well as major horizontal support. The bias will remain bearish as far as the $1340 resistance area is intact.

US Monetary Policy Outlook

Considering the recent spate of economic reports from the US labor market, it appears that the US Central Bank might go for the earlier than expected rate hike which would consequently incite a huge bullish rally in the US Dollar. The Central Bank is already about to finish off the whopping $85 billion monthly asset purchase program. The future monetary policy outlook might not be very encouraging for the gold bulls however China’s growth outlook also looks stable which could increase the demand of yellow metal from the Asian nation.

Trade Idea

In medium term, buying the yellow metal around the current levels can be a good option. The targets could be $1280 and $1310 while stop should be around $1180 as per technical analysis.

Another Interesting Read: USDJPY Faces Tough Resistance As Key Trendline Weighs

 

[CapitalTrustMarkets]

Gold Plunges Ahead of FOMC Minutes

Market Sentiment: Bullish
Key Takeaways:

• Gold plunges ahead of FOMC minutes
• Investors eye FOMC stance on future monetar policy outlook
• 1180 remains crucial support

The price of gold hit the 200-Day Simple Moving Average (SMA) yesterday before pulling back bellow the $1200 handle ahead of the Federal Open Market Committee (FOMC) minutes which could incite huge volatality in the price of gold. The sentiment has already turned bullish due to Higher High on the daily chart.

Technical Analysis

As of this writing, the precious metal is being traded around $1192. A support can be seen around the current level, the 50% fib support ahead of $1180, the horizontal support area and then the $1150-31 zone that’s the low of the previous week. A break and daily closing below the $1150 handle could incite a deeper correction towards the $1100 support area.

On the upside, the pair is expected to face a hurdle near $1200-1205, the confluence of psychological number as well as 200-Day SMA on the four-hour chart ahead of $1207, the 61.8% fib level as demonstrated in the above chart.

FOMC Minutes

The Federal Open Market Committee (FOMC) is due to release the minutes from the recent monetary policy meeting on Wednesday. Investors will be eyeing the remarks of FOMC officials very closely to gauge the future monetary policy outlook of the world’s largest economy. A hawkish view about the monetary policy could incite huge bearish momentum in the price of gold and vice versa.

Trade Idea

Considering the overall technical and fundamental outlook, buying the precious metal around the 1180 support area could be a good strategy in short to medium term. The trade should however be stopped out on a daily closing back below the 1180 support area.

Another Interesting Read: USDSGD Poised For Major Breakout As Singapore Inflation News Looms