GBP/USD makes for a really interesting short setup.
It saw a strong rally and eventual false break / mini blow off top above the December high, before a sharp reversal lower on Monday. It fell back beneath the December high, and a rising wedge (bearish reversal during a down move) stalled at the 50% retracement level, just beneath the December high.
- The wedge...
At the end of January we highlighted the potential for USD/CAD to retrace back to its 50% level and print a swing low. It worked out well - although the 1.36 target did not arrive as soon as hoped. Still, it reached that key level on Wednesday - and it is a level that remains of interest.
Not only did prices fail to close above the 1.36 handle and weekly R2...
We have a huge risk event in the coming hours; US PCE inflation. Should it come in softer than expected, risk is likely to pick up as this is how it has behaved pretty much every time inflation has come in soft. Conversely, a hot inflation report could dent risk - but we suspect not to such a large degree.
Fed members have been very vocal about maintaining...
USD/JPY fell for five consecutive days by Monday's close, which was its worst 5-day run in three months. Yet two daily closed beneath the lower Keltner band and RSI (2) reaching oversold indicated that mean reversion higher was due.
Hotter-than-expected US inflation data confirmed our suspicions, and a bullish day broke the 5-day bearish sequence and confirmed a...
Crude oil has been grinding higher since the December low, but after a 4-week period of choppy trade momentum has turned higher.
Whilst $80 has been a tough level to crack in recent week, we suspect a breakout is now on the cards
- 200-day MA has provided dynamic support
- Falling wedge into 200-day MA
- Bullish range expansion out of the falling wedge
- RSI...
A potential swing trade short has presented itself on the daily chart.
DXY failed to closed above 103 and formed an inverted hammer on the daily chart, and its upper wick met resistance at the 38.2% Fibonacci level. Daily trading volumes also declined whilst prices rose gradually, against the prior (and more aggressive) leg lower. This suggest the -day rise is...
The 1-hout chart shows that prices broken above Wednesdays high before retracing back into a support cluster, which includes the 10-day EMA and daily pivot point. Momentum looks like it wants to turn higher from here, although traders should always be on guard for the 'false move' around the UK/European opens before the 'real move' gets underway. Given the bullish...
The daily chart shows a nice bullish trend on the daily chart. A minor retracement has occurred at the cycle highs, although Thursday's bullish hammer found support at the 100-day EMA, 38.2% Fibonacci level and prior swing high.
RSI (2) is confirming the trend and RSI (14) is above 50 to show bullish momentum of the past three weeks.
Given the bullish trend...
The Aussie rose for a seventh day, which is statistically quite rate. That stat alone suggests the bullish sequence is in need of a break, and the technical might just agree.
A wide bearish pinbar formed around the 100 and 200-day EMAs whilst RSI(2) was overbought. From here, bears could seek to fade into retracements within Thursday's pinbar and initially...
A downtrend has formed on USD/CNH since it failed to retest the 2022 high in September. Since then, a lower high, aggressive selloff and a bearish continuation pattern (rising wedge) has formed on the daily chart. The rising wedge projects a downside target towards the cycle lows ~7.1.
If the yuan continues to depreciated (lower USD/CNH), it could prompt other...
A double top formed this month around a 50% retracement level on the daily charts ahead of its latest pullback. And it is interesting to note that the market tends to react around the 50% level.
The double top could actually be part of a 3-wave retracement, and that retracement could be nearing completion.
We saw a strong rally into the January high, hence the...
Momentum has clearly been in favour of bears over the past week for WTI traders, but given it has fallen over 10% from the January high it could be argued the move is oversold (at least over the near term).
A doji formed on Monday to show bears are losing their grip, and the fact it is forming a base above the 2023 open price and $72 handle adds to the case for...
AUD/JPY is holding above its 100-day EMA, and so far it looks like the spike lower last Thursday will be left unchallenged.
This is more of an interesting observation than anything else, but... since July AUD/JPY has printed a prominent spike / higher low every 40 - 47 days. If that pattern is to hold, is suggests the next trough could land at the end of May /...
Gold futures saw a false break of $2060 on Wednesday, before momentum turned lower and sent prices back beneath the weekly and monthly pivot points. Those pivots have since turned into resistance, before gold saw a trendline break.
As RSI (2) is oversold and prices have found support at the 10-dy EMA and daily S1 pivot, bulls could seek a near-term swing long...
The ASX 200 cash market rose for a second day, although the SPI 200 futures closed flat with a potential bullish pinbar on the daily chart. The 1-hour chart also shows a potential bull flag, which projects a target around 7640 (or the Feb 2nd overnight VPOC - volume point of control).
For today, bulls could seek pullbacks towards 7580 - 7587 (overnight VPOC) in...
The core bias remains for a move up to $77, but as price action during the current rally on the 1-hour chart is choppy and has stalled near resistance, we're looking for a dip lower to around $73.
Also note that the weekly and monthly pivot points are hovering above the 10/20-day EMAs, which adds conviction that an interim top may be about to form.
The Japanese yen may have weakened following the BOJ’s latest ‘non decision’ regarding monetary policy, but markets clearly weren’t surprised enough for it to extend its bearish moves today. Not a single xxx/JPY pair managed to break above its cycle highs, and momentum is now turning lower on these pairs to show a strengthening of the yen.
But what has caught...
Trading conditions have been choppy over the past week and a half for currency traders whilst the US dollar index has remained trapped between its 50 and 20-day EMAs. But USD/JPY shows the most promise for a breakout, which we suspect could be to the upside.
A false break below 147 last week suggests the corrective low could be in, and a 3-day bullish reversal...
