Key To Markets - Discussions

[KeyToMarketsUK]

Gold: Bullish break looms

Gold rose 0.40% in Asia trade made a high at $1283.80. It has a resistance seems at $1287 it’s 50MA and $1291 a parallel resistance.

We still expect the price will give a bullish break through the symmetrical triangle. In our yesterday’s morning focus article (KTM BLOG), we forecast the same. Since a month the price action rejected at 50DMA. If propels above $1291 the price will extend the rally to $1295/1296. A strong close above $1296 could open to $1300, $1306 and $1310 levels.

It has been making higher lows and higher high patterns. The $1291 is the key to our bullish break.

Supports: $1275, $1270 and $1265/1263. Additional potential support finds at $1260.

Support base finds between $1263-1260.

View: Our stop loss remains at 1259 for the bullish forecast. Buy the dip.

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[KeyToMarketsUK]

Weekly (Nov19-25) FX overview

This week’s Central banks Governor speeches (ECB,RBA, FOMC and SNB) and Monetary Policy meeting minutes (RBA, FOMC and ECB) are the key drivers. We are still watching this week on Brexit headlines and US tax reforms.

Last week kiwi dollar was down nearly 2% and the Aussie down more than a percent against the USD. The cross NZDUSD closed below the parallel support 0.6817 and made a weekly low at 0.6780. We are not too bearish; still, believe limited downside risk available. The price has been moving the South for seven straight sessions. We believe the cross likely to find a temporary support this week. Last Friday’s low 0.6780 coincides with the 100.0fe on the four-hour chart below this 0.6740 exists. The 61.8% finds at 0.6660 (0.6100-0.7557 rally). Weekly potential resistance seems at 0.6850 and 0.6900, already capped at 0.7000. We spotted a positive divergence on the daily chart.

The Aussie dollar nearly re-tested our target range 0.7550/0.7515. The price has made a low at 0.7535 last week. The weekly 100MA finds at 0.7540 and the earlier weekly swing low finds at 0.7530. Additional support finds at the round number 0.75 and 50.0%% fib reaction at 0.7470 coincides with the ascending trendline. Near-term capped between 0.7625-0.7640. The RSI is nearly oversold and the oscillator remains bearish to a higher low. We expect the weekly support between 0.7530-0.7470 likely to hold. The 61.8% fib reaction finds at 0.7530 (Dec 2016 low – Sep 2017 high) last week we held.

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[KeyToMarketsUK]

EURUSD: Europe political risk will weigh over the euro in the near term

The brand new week started with a political uncertainty shifted the EURUSD trend lower again. Europe political risk will weigh over the euro in the near term. The talks on forming Merkel’s next government collapsed, indicated the difficulties in forming a government.

This week’s Central banks Governor speech (ECB, RBA, FOMC and SNB) and Monetary Policy meeting minutes (RBA, FOMC and ECB) are the key drivers. Our primary focus remains on the FOMC and the ECB minutes.

The US Tax reforms likely to add upside risk to the USD in the near term, we still believe limited headroom available. For the common currency recent appreciation led by the economic growth. The other week the European Commission raised its outlook for the EU. The EC outlook and the German Prelim GDP q/q basis pushed the euro higher last week. German economic growth continues at a high rate.
ECB Governor Draghi speech and the ECB Monetary Policy meeting minutes are the key drivers to the common currency this week.

Data review:

German 3Q GDP up 0.8% vs 0.6%
Germany October CPI was unchanged compared to the previous month
GDP rose by 0.6% in both the EA and the EU during the 3Q
ZEW Indicator of Economic Sentiment for Germany in November 2017 rose by 4.2 points to 30.9
Industrial production down by 0.6% in EA and down by 0.5% in EU
EA international trade in goods surplus €26.4 bn €3.1 bn surplus for EU
Annual inflation down to 1.4% in the EA and down to 1.7% in the EU

Data preview:

PMIs (Thu), the FOMC meeting minutes (Wed) and ECB minutes (Thu) are the key things to watch. Any clues regarding the reduction in the asset purchases were measured bullish euro this week.

TECHNICAL VIEW​

The past two weeks the euro was stronger against the USD. As we forecast in our last week’s weekly article the price action rebounded to the major resistance levels. Weekly potential resistances seems between 1.1860 and 1.1900. A break above the early August high 1.1910 could opens to 1.1980 and 1.20/1.2030.

Ahead of the minutes (FOMC and ECB) it has a potential support finds between 1.1715 and 1.1685. The neckline finds between 1.1670-1.1660. A move below the neckline again could retrace further to 1.1620 and 1.1600 initially.

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[KeyToMarketsUK]

Wednesday Morning FX thoughts. GBPJPY: ABC correction remains.

The Aussie and Kiwi dollar were the winners 0.40% and 0.30% in Tuesday session. The euro/X retraced nearly 0.3% each against commodity currencies. The US dollar declined against the most traded currencies, especially commodity currencies rebounded marginally.

Asia Morning News:

Financial Times reported, “EU and UK aim to strike Brexit divorce deal within 3 weeks”.
New Zealand saw a net gain of 70,700 migrants for the year ended October 2017, with 131,600 migrant arrivals and 61,000 migrant departures, Stats NZ said today.
Data review:

RBA minutes revealed, “headline and trimmed mean inflation had both been 1.8% over the year to the September quarter, broadly in line with the Bank’s expectations”. The RBA said, GDP growth had been stronger than expected. RBA’s Lowe said, “the next move in interest rates will be up”.
The Aussie dollar rebounds from a five-month low, high made at 0.7590.

Canada wholesale sales declined 1.2% to $62.0 billion in September, the second decline of 2017. CAD marginally lowers as NAFTA headline risk remains.
The Global Dairy Trade fell 3.4%. The US dollar weakness helped the kiwi to rebound from the 161.8 fe levels.
US Existing-home sales increased in October to 5.48 million

What’s on today?

Europe: UK 2018 Budget

A well-received budget postures an upside risk to the GBP. If OBR (Independent office for budget Responsibility) lower its GDP growth forecast the GBP offers downside risk in the near term.

US: Unemployment claims, Durable Goods orders and FOMC meeting minutes.

FX SNAPSHOT:
AUDUSD, NZDUSD and USDJPY are trading at support levels. We still believe a minor recovery in Aussie and Kiwi dollars. USDJPY spotted with an inverse H&S pattern on H1 chart. Earlier we forecast a bullish reaction in Aussie and Kiwi against the USD.

Now we shifted our focus to USDJPY and NZDCAD. Ahead of the FOMC meeting minutes we advise buying the dip favors the intra-week trend. For NZDCAD we spotted an inverse H&S pattern on the H1 chart. The positive divergence on the daily chart likely to push the price to the 20MA at least if settles above 0.8760. For a medium-term purpose, the cross has a potential support finds between 0.8550-0.8500.

Gold: We forecast a bullish reaction last Thursday and Friday, it has rebounded and retraced. We still believe a bullish reaction.

EURUSD: Ahead of the minutes (FOMC and ECB) it has a potential support finds between 1.1715 and 1.1685. The neckline finds between 1.1670-1.1660. A move below the neckline again could retrace further to 1.1620 and 1.1600 initially. Potential resistances seem between 1.1860 and 1.1900. A break above the early August high 1.1910 could open to 1.1980 and 1.20/1.2030.

GBPUSD: It has been consolidating in a symmetrical triangle. Potential resistance seems between 1.3320-1.3340 above this 1.3380/1.3400 and 1.3440 possible. Supports zone finds at 1.3170-1.3150 below this 1.31/1.3090 and 1.3030 exists.

AUDUSD: Weekly support zone finds between 0.7530-0.7470. The 61.8% fib reaction finds at 0.7530 (Dec 2016 low – Sep 2017 high) last week we held.

NZDUSD: We believe the cross likely to find a temporary support this week. Last Friday’s low 0.6780 coincides with the 100.0fe on the four-hour chart below this 0.6740 exists. The 61.8% finds at 0.6660 (0.6100-0.7557 rally). Weekly potential resistance seems at 0.6850 and 0.6900, already capped at 0.7000. We spotted a positive divergence on the daily chart.

JPY crosses:
USDJPY: Weekly trading range remains between 111.80 and 112.80 it’s 50MA. Potential support supports finds between 111.65-111.45. It’s 161.8fe finds at 111.30 (buyers sl). We forecast a bullish reaction before retrace deeper. A corrective rally might confirm the right-hand shoulder on the daily.

GBPJPY: The cross has been facing stiff resistance at 20&50MA junction. Market participants focus on today’s UK 2018 budget proposal. A well-received budget postures an upside risk to the GBP. If OBR (Independent office for budget Responsibility) lower its GDP growth forecast the GBP offers downside risk in the near term.

Recent price action remains in a descending wedge pattern (H4) and descending triangle (Daily). Intraday resistance seems between 149.20 and 149.50. If propels above 149.50 could open to 150.00 and 150.30 initially.
Near-term potential supports finds between 146.95-146.80. The 100MA’s finds between 147-146.65. A move 100MA needed to complete the ABC pattern target 146.00. Alternatively a daily close above 150/150.30 could open to 151.30 and 151.90 Nov 01 high.

Last week the cross printed an inverse H&S pattern (H1) but failed to break the neckline. This week again we spotted the same pattern (below chart), still developing the right shoulder.

Brent: Oil price manages to hold the 20MA firmly made a minor base at $61. The near-term resistance zone remains between 62.80 and 63.20.

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[KeyToMarketsUK]

FX snapshots post-FOMC minutes. DXY down against the G10 and EM.

After cautious FOMC minutes the dollar index down nearly 0.80% against the G10 and EM too. The October 31-November 1, 2017 meeting minutes revealed that concerns about inflation were widely discussed.
USD down more than a percent against JPY, CHF, ZAR, down nearly a percent against TRY and HUF and against CAD down 0.60%. Majors EURUSD rose 0.70% and the cable rose 0.6% on a verge of a bullish break. The Kiwi dollar rose 0.80% and Aussie rose 0.5% against the USD.
In the commodity space Gold and Silver rose more than a percent. Crude oil too rose more than a percent.

Key Takeaways:
· Many participants judged that the economy was operating at or above full employment and anticipated that the labor market would tighten somewhat further in the near term, as GDP was expected to grow at a pace exceeding that of potential output.
· Many participants judged that much of the recent softness in core inflation reflected temporary or idiosyncratic factors and that inflation would begin to rise once the influence of these factors began to wane.
· Many participants observed that there was some likelihood that inflation might remain below 2 percent for longer than they currently expected
· Many participants observed, that continued low readings on inflation, which had occurred even as the labor market tightened
· Many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term
· Staff continued to project that inflation would reach the Committee’s 2 percent objective in 2019
· Staff continued to project that real GDP would expand at a modestly faster pace than potential output through 2019
· The probability of an increase at the December meeting rose to about 85 percent by the end of the intermeeting period.
· GDP was expected to rise at a solid pace in the fourth quarter of this year

FX SNAPSHOTS

EURUSD*climbs above all MAs. Earlier swing high seems at 1.1860-1.1880-1.1990.Our bullish view remains. On the four hour chart, we spotted a bullish pattern, neckline breakout not yet available. (Please read the full story on our
Keytomarkets blog)
GBPUSD*previous swing high seems at 1.3320-1.3340 above this 1.3380 100EMA (weekly)
AUDUSD*spotted with a double bottom and rebounds to five-day high. Resistance seems at 0.7640 it’s 20MA. Our*bullish view remains
NZDUSD*extends the rally on the third straight session. Post-FOMC minutes the cross re-tested the 20MA knocking the two-month descending trendline. Already gave an upside side through two-weeks descending trendline.*The positive divergence*pushing the price slightly higher
Gold*gave an upside break through the symmetrical triangle. Our*bullish view remains. Parallel resistance seems between 1296-1297$
USDJPY*fell below all the MAs. The 50.0% fib reaction finds at 111.00. Our yesterday’s bullish view failed. A move below 111 needed to retrace further to re-test the 100MA (weekly) 110.30/110.0 and 109.60 20MA (monthly)
USDCHF*re-tested the 50MA finds at 0.9820. Earlier breakout levels finds at 0.9770
USDCAD*re-tested the 100EMA, parallel support finds at 1.2660 below this 50DMA exists at 1.2580
USDZAR*monthly gains are pared, low made at 13.80. Immediate support finds at 13.75 it’s 50MA and 20MA (monthly)
USDMXN*slips below 50MA low made at 18.60. Immediate support finds at 18.55-18.50 it’s 200MAs exists

Charts of the day: GBPUSD, AUDUSD and NZDUSD

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[KeyToMarketsUK]

Friday morning FX thoughts. Quiet to the weekend.

EUR was the winner on Thursday session rose 0.30% against most traded currencies. We believe the political risk has limited impact to the euro in the near term. Following FOMC minutes the dollar index further softens across the board. The October 31-November 1, 2017 meeting minutes revealed that concerns about inflation were widely discussed. Overnight developments have been muted echoed Thanksgiving.

European PMIs were strong. ECB minutes said, “premature to set an end date for net purchases”. We remain bullish in euro, especially against the cross currencies in terms of risk-reward. EURUSD was up 0.30% from Wednesday’s close extending its recovering to Nov 15 high.

UK GDP estimated to have increased by 0.4% between Quarter 2 (Apr to June) and Quarter 3 (July to Sept) 2017, unrevised from the preliminary estimate of GDP. UK retail sales picked up in the year to November following a significant dip in October. The pound was down 0.20% against the USD and the cross currencies too. The GBPJPY extended the weakness on the third straight session, re-tested Monday’s low.

New Zealand Retail sales rose 0.2%. The Kiwi dollar outperformed against the USD for the fourth straight session, consolidating at 20MA. Our bullish view remains in the medium term and take profit needed in the last week’s buying trade. NZDCAD was the winner yesterday rose 0.30%. We advised a buying trade on Wednesday, currently trading at big levels.

The Aussie dollar extended the gains in third straight session pause the rally at 20MA and facing resistance at two-month descending trendline. Friday’s trading resistance seems at 0.7650 above this 0.7690 exists. AUDNZD again rejected at 20MA for the fifth straight session.

Canada September Retail sales edged up 0.1% to $49.1 B. CAD was down 0.40% against the EUR followed by AUD and NZD 0.3% each. USDCAD managed to hold the parallel support, rose 0.20%.

The Yen muted on Thursday session. USDJPY held the 50.0% fib reaction. The EURJPY rose 0.25% managed to hold the 100MA again. GBPJPY extended the weakness on the third straight session, re-tested Monday’s low. CADJPY weaken further and slip below 200WEMA. 200MAs in focus.

Gold price remains in a consolidation phase after break above the symmetrical triangle. We advised a buying trade last week at $1282.

Oil price extended the gains marginally compared to Wednesday’s close. Next week’s meeting in focus.

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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[KeyToMarketsUK]

Brent: Downside risk remains ahead of Nov 30, OPEC meeting

• OPEC meeting (Thu, Nov 30) in Vienna looms
• Post-May 25th OPEC meeting Brent oil fell nearly 20%
• Our main focus remains on Russia’s view

We are closely-watching the price action in Crude oil and Canadian dollar as OPEC meeting (Thu, Nov 30) in Vienna looms. After the OPEC’s May 2017 meeting oil price down rapidly. Ahead of this week’s OPEC meeting risk is elevated in oil-related currencies.

We consider this event has a potential to raise the volatility in oil and oil-related currencies (USDCAD,USDMXN and USDNOK). Our main focus remains on Russia’s view in the OPEC meeting. The oil price action cast on Russia’s take on 1.8 million barrel per day production cut in 2018. Market participants are expecting a positive note from Russia. In case if the outcome fell short of market expectations we expect the price action will repeat the post- May OPEC meeting action. Besides Saudi Arabia have hinted their intend the production cuts.

Hedge funds reduced bullish bets ahead of the OPEC meeting. Brent is trading its highest in two-years made a high at $64.50 (KTM target was $65). It has been moving to the North for six consecutive months. In the 2H 2017, the price has been considerable run-up nearly 40% (July low- Nov high).

Bloomberg reported, “Hedge funds cut their Brent net-long position — the difference between bets on a price increase and wagers on a drop — by 2.1 percent to 526,240 contracts in the week ended Nov. 21, according to data from ICE Futures Europe. Shorts fell 4.2 percent, while longs declined 2.3 percent”.

Before rebound to $63.50 last week the price has re-tested the 20MA twice and made a support base between $61.10-$60.95. Post-May 25th OPEC meeting Brent oil fell nearly 20% (54.55-44.23). By taking May 2017 OPEC meeting into consideration we forecast 20% drop in prices in case of no rollover.

Initial resistance zone seems between $65-$66.50 above this $69.60 May 2015 high exists. In case of a rollover we forecast a 10% rally.
We are heading to the year-end and we believe the price action remains between $70-$50. Weekly potential support finds at $60-$59.50.
Fib reactions: Daily 100.0fe seems at $67.30 and weekly 161.8fe seems at $68.30.

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[KeyToMarketsUK]

EURUSD: Subject to upside risk. 78.6 fib reaction in focus

• EURUSD rejected at 78.6 fib reaction (1.2090-1.1550) and weakened 0.25%in yesterday’s session. We still believe the trend remain bullish.
• We expect the economic data from Europe remains positive. This week’s focus remains on EA November Flash CPI release (Thu) and US Core PCE inflation (Thu). Last week’s PMIs were helping the euro the push higher. German business confidence added fuel to the bulls.
• The recent price action was well supported on the back of strong economic data. EUR bulls continue to hope for a grand coalition in Germany.
  

Data Review:

• France Manufacturing PMI increases to 57.5 vs 56.1 in October. 79 month high
• France Services PMI increases to 60.2 vs 57.3 in October. 78 month high
• Germany Manufacturing PMI increases to 62.5 vs 60.6 in October. 81 month high
• Germany Services PMI increases to 54.9 vs 54.7 in October. 2 month high
• EZ Manufacturing PMI increases to 60.8 vs 58.8 in October. 81 month high
• EZ Services PMI increases to 56.2 vs 55.0 in October. 6 month high
• Ifo Business Climate Index rose to a new record high of 117.5

Data Preview:

Tue, Nov 28
M3 Money Supply forecast 5.1% vs 5.1%

Wed, Nov 29
Germany Headline inflation likely to increase to 1.7% yoy basis

Thu, Nov 30
Second release of the 3Q GDP growth figures for France, Italy and Spain

EA Nov Flash CPI release. We project the inflation to re-accelerate by 0.1% to 1.5% y/y basis

Fri, Dec 1
Final Manufacturing PMIs from Spain, Italy, France , Germany and EA

FX overview​

Bullish in EURUSD was our high conviction call last week. The price has rebounded to 1.1965 but has failed to rally further.

We advised buying EURUSD twice in our last week’s daily articles. The price action gave an upside break but rejected at 78.6 fib reaction (Mon).

We still believe weekly trading range remains between 1.1700-1.2000/1.2030. A move above 1.1970 could open to 1.2000/1.2030 initially.

Potential supports finds at 1.1830/1.1800 and 1.1770 additional support finds at 1.1700.

The EUR crosses are offering better risk-reward ratio. We are bullish in EURAUD, EURCAD, and EURCHF.

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[KeyToMarketsUK]

GBPUSD: Support is moving gradually higher to 1.3220

The pound was the star on Tuesday session. On the NY trade GBP reverses across the board on Brexit progress. EURGBP fell 0.80% found support at a parallel support at 0.8840.

Sterling surged 0.70% against CAD, 0.60% against JPY,CHF and NZD. After a last week’s clear upside break the cable is consolidating above the trading range, rose 0.30%.

Financial Times reported, Britain agreed to pay 100 billion euros to the EU to break the EU break-up fee, but the goal is to pay only half the scale. The Sterling was reversed in NY trade after the biggest complication was removed to a Brexit divorce settlement.

FX overview​

GBPUSD: Resistance 1.3400/1.3420 it’s 61.8 fib reaction (Sep-Oct fall).

The pound bulls are gearing up after the news, but spikes paused at 100EMA (weekly), 1.3380. If propels above the 61.8 fib reaction could open to 1.3480/1.3500. We are closely watching GBP in Wednesday’s Asia trade to catch the sudden spikes if available.

Support finds at 1.3280 and 1.3220. Support is moving gradually higher to 1.3220 from 1.3020.

In light of the higher low pattern (H4) we expect a bullish reaction.

View: sl 1.3220 targets 1.3500 and 1.3540

GBP crosses technical overview coming……Please check our KTM blog in Europe session.

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[KeyToMarketsUK]

AUD and NZD FX overview

The kiwi dollar drifts 0.60% against the most-traded currencies after the NZ November business confidence index falls to the lowest level since early 2009.

ANZ reported A net 39% of businesses are pessimistic about the year ahead. In response to the business confidence data the kiwi dollar beating hard against the USD erases this week’s earlier gains.

Besides, the Aussie dollar supported by the China data rose 0.20% against most-traded currencies. The cross currency AUDNZD rose 0.60% climbs back above 20&50MA.

• China November official manufacturing PMI 51.8 forecast 51.4 vs 51.6.
• China’s official non-manufacturing PMI for November 54.8 vs 54.3.

FX overview​

AUDUSD: Before retracing to 0.7550 (Wednesday low) it was rejected at 20MA. The daily RSI appears bullish and the oscillator remains bullish.

Support : 0.0.7550, 0.7530 mid-November 2017 low and 0.7500. The near-term price action remains between 0.7330 it’s 100MA (weekly)-0.7650 it’s 50MA (weekly). Resistance seems at 0.7590/0.7600, 0.7650 and 0.7700.

AUDNZD: The cross manages to hold the 20MA (weekly) and exceeding the descending trendline. Resistances seems at 1.1100, 1.1150/1.1170 and 1.1220. Supports moved to 1.1030, 1.1000 and 1.0940. We believe the strength likely to sack between 1.1140-1.1165.

GBPAUD: The Aussie dollar dominated the pound strength after the China PMI data, pause the cross rally at 200EA (weekly). Near-term potential resistance seems between 1.7760 and 1.7800 Sep 2016 high and it’s 50.0fib reaction (May 2016 high -Oct 2016 low). Additional weekly resistance seems at 1.7920 it’s 100.0fe weekly.

EURAUD: The cross has been moving higher for four consecutive months facing resistance at 200MA (month) seems at 1.5700 above this 1.5830 earlier swing high (Jan 2014 high) exists. Further strength will be available if settles above Jan 2014 high for 1.5950 it’s 80.0 fib reaction (August 2015- Feb 2017 low) and 1.6000 it’s 100.0fe (weekly). Near-term, potential resistance seems between 1.5700 and 1.5830.

EURNZD: The cross fails to erase the earlier weekly high seems at 1.7400. A move above 1.7400 needed to strengthen further for 1.7700 and 1.7800 in the medium term. Near-term potential l support finds at 1.7100-1.7080.

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[KeyToMarketsUK]

EURJPY: On a verge of another bullish break

The price action gave an upside break through the descending wedge on the daily chart (below chart). It has a potential resistance seems between 134.40-134.50 a move above this could open for 135.00 and 135.70 in the near term.

A weekly close above 134.50 strengthens our bullish forecast. In this case, 135.70 is the gateway to 137.80 and 141.00 (medium term) a parallel resistance, coincides with 78.6 fib reaction (149.75-109.55 fall below chart). The daily oscillator appears a bullish pattern (above chart).

Supports finds at 132.20, 132.60 and 131.70.

We have been advising bulling reactions on EUR crosses especially EURAUD, EURCHF and EURCAD.

EURAUD: Trading tad below key resistance seems at 1.5830

EURCAD: The price action gave an upside break above 1.5280 could extend the rally further to 1.5550. We forecast a bullish break this Monday in our daily Forex article.

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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​

 

[KeyToMarketsUK]

USDCHF update 1: Cautious on the downside.

Friday’s closing FX snapshot:

• USDCHF Retested the 100MA, remains in the falling channel
• USDCAD: Near-term top already in placed
• GBPUSD: Rejected at the supply zone (1.3530-1.3570)
• NZDUSD: Held the parallel sup @0.6815
• EURGBP: Held the ascending trendline
• EURJPY: Triple top at 61.8 fib reaction
• Brent: Break the symmetrical triangle
• Gold: Held the ascending trendline

USDCHF trade idea​

• 9735-0.9700 is the key level to watch
• The 61.8% fib reaction finds at 0.9660

Before retracing to the 50.0 fib reaction the price was spotted with a double top on the monthly, triple top on the weekly and daily charts.

Consecutive four and seven weeks (below chart) where the longest streak recorded ever since the Swiss National Bank removed a 3-year old cap of 1.20 francs per euro on January 15, 2015.

• Between mid-Dec 2016 and Jan 2017 the cross fell 4.6% for seven consecutive weeks.
• Between May 2015 and June 2016 the cross fell 4.1% for four consecutive weeks.

Last week’s price action was painted red again for the fourth consecutive week down nearly 2.8%. Considering the above two corrections (in terms of %) minimum there is a chance of further 1.2% correction (equals to 0.9640). There are multiple support layers available below 0.9735 worth to watch.

♥Friday’s low coincided with 50.0 fib reaction ( 0.9420-1.0037 rally),20MA (weekly),100MA (daily) and re-tested an interesting trendline(daily chart). The daily RSI propelling down and the oscillator remains bullish.

Weekly support zone remains between 0.9735 and 0.9700 it’s 200W(ema). Additional support finds at 0.9680 it’s 100.0fe daily and 0.9660 it’s 61.8% fib reaction. Monthly support finds at 0.9620/0.9600 below this could open to 0.9550 it’s 80.0 fib reaction (Sep-Oct rally) and 0.9520/0.9500 a parallel support zone.

Trade: Ahead of this week’s NFP data (Fri) we believe the price likely to hold between 0.9700-0.9660 levels if 0.9735 fails to hold. In this zone, we forecast a change in the near-term direction for 0.9770, 0.9830 initially and in the extreme case 0.9880 possible. To limit the risk use, stop loss below 0.9600.

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

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below
​

 

[KeyToMarketsUK]

EURUSD: Expansion to continue

• ECB normalisation should provide further support to EURUSD
• Our model projecting EURUSD likely to extend the rally in 2018 aswell
• Weekly momentum cast on US tax reform

Data Review:

• October Germany index of import prices rose by 0.6
• M3 decreased to 5.0% in October 2017, from 5.2% in September
• German consumer climate stable at 10.7
• November German CPI expected to increase by 0.3%
• EA annual inflation up to 1.5% in November 2017 from October 1.4%
• EA Sentix December investor confidence index returns 2.9 points to 31.7

Data preview:

German economic data in focus

Technical view​

Consistent European growth and increasing political stability attract inflows to the EURUSD. Before retraced to 1.1800 the price was rejected at 78.63 fib reaction but the higher low pattern remains. Near-term support gradually moved to 1.1800 from 1.1700.

Ahead of Friday’s NFP data supports finds at 1.1800, 1.1750 and 1.1700. Additional support finds at 1.1670-1.1660.

Yesterday in European session the price re-tested the rising channel. We retain our last week’s bullish trade using stop loss below 1.1660 targets 1.2000/1.2030 and 1.2090.

A weekly close above 1.2100 could open to 1.2160, 1.2300 and 1.2400 in the medium term.

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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[KeyToMarketsUK]

Wednesday morning FX thoughts. Chart of the day: AUDCAD

AUDUSD and the NZDUSD rallied on strong Aussie retail sales, RBA and the hawkish RBNZ statement on Tuesday. The pound dented as Brexit talks stall. The US dollar rose against MXN 0.85%, CHF 0.30%,CAD 0.20%, EUR 0.35% and GBP 0.30%.

Commodities were beaten down. Gold retested the support level again down 0.85%, low 1260.50. Copper nearly completed the bearish H&S pattern target down 4.50% . CAD marginally down against AUD and NZD, but a rebound will come today (Wed).

What’s on today?

Aussie GDP for Sep quarter (11.30AEDT):
For the 3Q we forecast 0.7% growth. The Australian 2Q economy grew strongly by 0.8% up from Q1 0.3% .

2Q growth led by Household final consumption expenditure increased 0.7% and government final consumption expenditure increased 1.2%.Exports of goods and services rose 2.7% for the quarter.

A big uptick could expect if GDP printed above 0.7%. Our main focus remains on AUDNZD and AUDCAD. Both favors sell on rallies.

Boc Rate statement (10.00 ET)
On Wednesday, December 6, 2017, the Bank of Canada will announce its decision on the target for the overnight rate. A press release will provide a brief explanation of the decision.

It is widely expected the Bank of Canada to be on hold 1.0% policy interest rate. The market is pricing another hike post-March/April 2018. The BoC will retain the Positive outlook on the domestic economy. Besides BoE policy settings the CAD expose headline risk to NAFTA.

Our near-term bearish focus remains on AUDCAD, USDCAD and NZDCAD.

Chart of the day: AUDCAD. 0.9600 and even 0.9550 possible. Please read the full analysis on our KTM blog.

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

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​

 

[KeyToMarketsUK]

Thursday morning FX thoughts. Charts of the day AUDUSD and EURUSD.

Highlights:

The Aussie dollar slide after weak 3Q GDP in Asia session, A/$ and AUDNZD down 0.60% The Economy grows 0.6 percent in the September quarter, forecast 0.7%. Household consumption was weak at 0.1 per cent.

The pound continues to dent as Brexit talks stalls. The cable down 0.60%, GBPJPY down more than a percent.

The Euro rose modestly, Germany Factory orders increased by 0.5%.

Swiss November CPI fell by 0.1%.

The US dollar strengthen against CAD 0.90%,ZAR 0.60% and CHF 0.30%. Private sector employment increased by 190,000 jobs from October to November. Nonfarm business sector labor productivity increased 3.0 percent during the third quarter of 2017.

As widely expected, the Bank of Canada maintained its target for the overnight at 1.0%. The BoC continues to see “ongoing* – albeit diminishing – slack in the labour market”. The CAD down range between 0.40%-1.20%.

The kiwi dollar erased earlier intraday gains against the USD after Fonterra cuts its milk price forecast. co.nz reported, Dairy market volatility has seen Fonterra drop its payout forecast for the 2017-18 season by 35 cents to $6.40 per kilogram of milksolids (MS). NZD rose 0.90% against the CAD and rose 0.30% against CHF.

The safe heaven JPY was the winner on Wednesday session, rose between 0.30-1.20%.

What’s on today?

Asia: Australia Trade Balance

Europe: Germany IP, EA Revised GDP q/q

US: Unemployment claims

FX snapshot:

• AUDUSD re-tested the ascending trendline
• NZDUSD fails to handle 20DMA again
• USDJPY re-tested 100DEMA
• Brent breach the symmetrical triangle, 61<60.10
• EURUSD trading slightly below 20MA<[email protected]
• EURJYP against failed at the higher end of the rectangle, focus to lower of the pattern
• GBPJPY spotted with a double top, focus on 20&50DMA @149.40-149.30
• Copper after a steep of fall 4.30% (Tue) rose modestly 0.30% on Wednesday
• Gold manages to hold the support zone again finds between $1260-$1255
• Bitcoin climbs above 13K$
  

Chart of the day:

AUDSUD in Asia session: Intraday range remains between 0.7530/0.7490-0.7630/0.7650. The daily RSI trending up and the oscillator remains bullish.

EURUSD in Europe session: Intraday support finds at 1.1780-1.1760 it’s 50MA. Buying the dip favors the trend.

We are also watching Gold and Silver closely. Ahead of NFP (Fri) the Gold price consolidating at the lower end of the channel. Last week Silver gave a breakdown, Gold will follow soon. A move below $1255 needed to forecast to $1230.

Silver has a parallel support finds at $15.60 and $15.30. At this point, we expect a near-term trend reversal into early 2018.

Have a question? Let us help!

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[KeyToMarketsUK]

FX technical overview ahead of NFP.

Today’s job report and next week’s Fed meeting is going to be the near-term game changer in some of the FX pairs like AUDUSD and NZDUSD. Market participants are widely expecting a third-rate hike next week and it was priced in completely. Today’s job report outcome, unlike to change the Fed rate path.

ADP employment report: Private sector employment increased by 190,000 jobs from October to November, slightly above market expectations.

We expect November nonfarm payroll employment to increase 180,000, economists expect 200,00. The September employment fell to 18,000 but in October bounce back to 261,000. Before the impact of Hurricanes Irma and Harvey, this year’s average in August was 176,000.

Our main focus remains on average hourly earnings, we forecast 0.30% m/m basis and 2.7% Y/Y basis. The Unemployment rate likely to remain at 4.1%.

FOMC minutes revealed, Many participants judged that the economy was operating at or above full employment and anticipated that the labor market would tighten somewhat further in the near term, as GDP was expected to grow at a pace exceeding that of potential output.

FX overview​

We are closely watching EURUSD and USDJPY in the FX markets. In commodities, we are watching Silver and Gold. Prior to Gold sell-off (Thu), Silver has given a break down on Tuesday. In our yesterday’s Forex-Daily article we forecast gold breakdown.

USDJPY:

Resistance: 113.50, 113.90/114.00 it’s 100 fe and 114.35/ 114.50 earlier double top

Support: 112.80 it’s 50MA, 112.00 (Monday low) and 111.60 (Oct 16 low)

The daily RSI and oscillator appear bullish. In case of encouraging average hourly earnings, we could expect 114.00 and 114.35 by the end of the day. Alternatively, 112.30/112.00 and 111.70 is an open target.

EURUSD:

Support: 1.1750 it’s 50MA, 1.1695 and 1.1660/1.1640

Resistance: 1.1800, 1.1860/1.1880 and 1.1910 August 02 high

The daily RSI propelling down and the oscillator remains bearish. Our last week’s buy trade sl remains below 1.1640. If average hourly earnings surprise to the downside, there is a scope to develop an inverse H&S pattern on the daily chart, could open to 1.2000 and 1.2050.

Gold and Silver:

Silver re-tested the parallel support finds between $15.60 Dec 20, 2016, low below this $15.30-15.00 exists. The daily RSI is oversold but the oscillator remains bearish. The long-term trendline remains at $14.40.

Resistance seems at 16.10, 16.60 and 17.00

We believe downside risk for Silver is limited in the near term.

Gold also re-tested the parallel support finds at 1242 Oct 07, 2016 low) Thursday’s low point was 1243.85. Below this 1232 earlier weekly swing high and coincides with 200MA (weekly). The long-term ascending trendline finds at 1205 coincides with earlier weekly swing low. Additional support finds at $1199.

Resistance seems at 1255.00, 1260.00, 1270

In case of upbeat average hourly earnings, we could expect $1210.00 ABC pattern target.

The daily RSI nearly oversold and the oscillator remains bearish.

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

Have a question? Let us help!

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below​

 

[KeyToMarketsUK]

Weekly Preview (Dec11-15). The US Fed, SNB, BoE and ECB meet to decide on monetary po

Weekly Preview:

The US Fed, SNB, BoE and ECB meet to decide on monetary policy.

Our focus over the week ahead will be the US FOMC, ECB and BoE policy decisions.

Dec 13, FOMC policy meeting
It is widely expected that a third-rate hike for 2017 is coming to the Yellen’s last FOMC press conference. The December 2017 rate hike was priced in fully. We expect only the Fed is expected to hike this week. Market participants are closely watching for future rate hike path. Currently FX market is expecting three rate hikes in 2018. A bullish market reaction could expect if four hikes are projected.

Dec 14, ECB’s monetary policy meeting and Press conference following the Governing Council meeting of the ECB
After the decision to extend until the end of September 2018, we expect in December meeting the ECB unlike to make any changes to its policy view and forward guidance.

Dec 14, BoE’s Monetary policy summary
After the Bank of England delivered its first bank rate hike to 0.5% from 0.25% for the first time over a decade, we expect in December meeting the BoE will keep the Bank rate at low levels for some time. In case if BoE follows Bank of Canada’s September surprise hike a bullish GBP reaction nearly 1.5% could expected against the most traded currencies.

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

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​

 

[KeyToMarketsUK]

EURGBP: Stalls at resistance zone

This week’s economic data, BoE policy meeting and the European Council meeting (Dec 14-15) likely to raise the GBP volatility than usual.

The US Fed, SNB, BoE and ECB meet to decide on monetary policy. Our focus over the week ahead will be the US FOMC, ECB and BoE policy decisions.

Dec 14, BoE’s Monetary policy summary
After the Bank of England delivered its first bank rate hike to 0.5% from 0.25% for the first time over a decade, we expect in December meeting the BoE will keep the Bank rate at low levels for some time. In case if the BoE follows the Bank of Canada’s September surprise hike a bullish GBP reaction nearly 1.5% could expect against the most traded currencies.

Data review:

UK Construction PMI picked up from 50.8 in October to 53.1 in November. Construction output rises at fastest pace for five months, led by housing
UK Services PMI Construction output rises at the fastest pace for five months, led by housing. Service sector growth eases in November
October IP was remained flat at 0.0%

Data Preview:

We forecast the November CPI y/y basis remains at 3.0%, unemployment rate likely to remain at 4.3% and the average earnings index 3m/y likely to climb to 2.5%.

TECHNICAL VIEW​

The cross rebounds nearly 1.7% from last Frida’s dramatic fall below 0.8700. As we forecast in our last week’s weekly forex article, the cross re-tested the 61.8% fib reaction and rebounded to our first target. Our buying trade was advised based on the RSI positive divergence, now daily oscillator turns to bullish. We requested the followers to take profit. If propels above 0.8900 could open to 0.8950 and 0.8980

Parallel resistance zone 0.8840-0.8880
Support zone 0.8770-0.8750

Weekly trading range 0.9000 and 0.8620

Ahead of multiple economic events and BoE policy meeting our view remains flat as of now. We will analyse the technical view again after today’s CPI data.

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

What is your Technical View?

Do you have a different idea? Please leave us a comment and get an answer from our professional analysts.​

 

[KeyToMarketsUK]

AUDNZD: Trade idea and medium term overview

The cross manages to hold the near-term potential support zone finds between 1.1850-1.1820 it’s 200MAs. The parallel support/earlier swing low finds at 1.1825 Sep 21 low and 1.1830 Sep 29 low.

The daily RSI nearly oversold and the fib reaction 50.0 coincides with the 1.1825 levels (below chart).

Resistance 1.0900, 1.0950 and 1.0990/1.1004

Additional support 1.0760 earlier bullish break level

From Oct high 1.1290 the cross has retraced nearly 5% and down for seven trading weeks out of eight.

As shown on the below weekly chart, consecutive four and five weeks were the longest falling streaks recorded mostly, range between 2.8%-5.50% approximately.

Medium support 1.0825-1.0760 and the 61.8 fib reaction finds at 1.0720.

Trade: Buying zone 1.0850-1.0800 sl below 1.0760 targets 1.0950 and 1.1020.

EURAUD: likely to hold the parallel support zone​

INTRADAY VIEW

Before retracing to 1.5500 in today’s Asian session the cross was rejected at a parallel resistance 1.5700 (R3 below chart). Near-term potential supports finds between 1.5485 and 1.5460. For the first time in a month, the price action is settling below 20DMA currently trading on a verge of a trading range breakdown. The ABC pattern pointing 1.5400, will achieve only if settles below 1.5460.

The 200MAs on the H4 chart finds between 1.5460 and 1.5420. The RSI and oscillator (H4) are nearly oversold, we believe in an Intraday trading purpose the price action likely to hold the support zone (1.5485-1.5460). In this case, 1.5560 and 1.5600 are the open targets. To limit the risk use sl below 1.5400.

Intra-week additional support finds at 1.5400.


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

What is your Technical View?

Do you have a different idea? Please leave us a comment and get an answer from our professional analysts​

 

[KeyToMarketsUK]

Thursday FX snapshots. FOMC review and ECB in focus

As expected the FOMC raised the funds rate and the median dots in the Summary of Economic projections continued to show 3 rate hikes in 2018.

The USD surrenders across the board. As we forecast in our Weekly preview article published on Monday (Dec 11) “A bullish market reaction could expect if four hikes are projected”. Lack of an extra mile factor pressured the dollar bulls.

The FOMC statement revealed “labor market has continued to strengthen and that economic activity has been rising at a solid rate”.

In the press conference, Yellen said Inflation has been running under 2 percent. Most of my colleagues and I do believe that it’s being held down by transitory factors, but there is work undone there, in the sense we need to see it move up and line with our objective.

The “bitmap” median forecast shows that the Fed will raise interest rates three times in 2018.

Post FOMC statement, NZD and AUD were the winners and we forecast the same last week before NFP.

USDJPY: The price action re-tested an ascending trendline and 14DMA. The daily RSI is propelling down and the oscillator remains bearish.

Support: 112.30, 112.00 and 111.65

Resistance: 112.85/113.00, 113.30 and 113.75

EURUSD: We still believe there is a scope to develop an inverse H&S pattern on the daily chart, could open to 1.2000 and 1.2050 by the end of the Dec 2017 while it holds 1.1660.

Risk event: ECB policy meeting

After the decision to extend until the end of September 2018, we expect in December meeting the ECB unlike to make any changes to its policy view and forward guidance.

Support: 1.1800, 1.1760 and 1.1710

Resistance: 1.1860/1.1880, 1.1910 and 1.1960

The daily oscillator turns bullish.

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

What is your Technical View?

Do you have a different idea? Please leave us a comment and get an answer from our professional analysts.​