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Daily Technical Analysis by Kate Curtis from Trader's Way

Forex Analysis by Kate Curtis of Trader's Way . Kate Curtis updates the outlook and analysis daily in this sub-forum.
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GBPNZD Range Setup (Aug 22, 2017)

Postby katetrades » Tue Aug 22, 2017 3:10 am

GBPNZD has recently bounced off the top of its range at the 1.7900 major psychological level and is making its way to the bottom at 1.7400. If this holds as support, another bounce back to the resistance could take place.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside, which means that the support is more likely to hold than to break. These moving averages could also hold as near-term inflection points.

Stochastic is pulling up to show a return in buying pressure as well, which signals that bulls could push price back up for another test of resistance.

UK Rightmove HPI printed a 0.9% drop in price levels versus the earlier 0.1% uptick. Only the CBI industrial orders expectations report is due today and a dip from 10 to 8 is eyed.

In New Zealand, credit card spending ticked up by 7.2%, slower than the earlier 8.3% gain. There are no reports due from New Zealand for the rest of the day, leaving the Kiwi at the mercy of market sentiment.

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More volatility for this pair could be seen later in the week with the release of the UK preliminary GDP and the Jackson Hole Symposium. New Zealand also has its trade balance lined up on Thursday's early Asian session.

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EURUSD Short-Term Range (Aug 23, 2017)

Postby katetrades » Wed Aug 23, 2017 4:36 am

EURUSD has been moving inside a range visible on its 1-hour time frame, finding support at the 1.1700 mark and resistance at 1.1800. Price is currently hovering around the mid-channel area of interest and could be due for a move back to support.

The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. However, these moving averages are also holding as dynamic support for the time being and may be enough to push price back to the top of the range. Stochastic is on its way up to indicate that buyers are in control of price action for now.

The spotlight is on ECB Governor Draghi's upcoming speech in the Jackson Hole Symposium as many are counting on him to share more details on tapering asset purchases. However, the latest ECB statement revealed that policymakers aren't keen on giving more clues on their next moves just yet.

Meanwhile, the dollar has gained some support from safe-haven flows as the tensions with North Korea are resurfacing. The joint military exercises between the US and South Korea aren't being viewed favorably by Pyongyang so there are concerns that this could prompt missile action from Kim Jong Un.

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Euro zone data turned out weaker than expected so far this week as the German ZEW economic sentiment index fell from 17.5 to 10 versus the 14.8 consensus while the region's index dropped from 35.6 to 29.3. Flash manufacturing and services PMIs are due and strong reports could allow the shared currency to rebound.

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AUDNZD Potential Correction (Aug 24, 2017)

Postby katetrades » Thu Aug 24, 2017 7:13 am

AUDNZD has been trending higher but is recently testing a ceiling at the top of its ascending channel visible on the 4-hour time frame. Price could be due for a correction to the channel support and applying the Fib tool shows the potential inflection points.

The 61.8% Fib is closest to the channel support at the 1.0850 minor psychological level and the 100 SMA, which could hold as dynamic support. This short-term moving average is above the longer-term 200 SMA to signal that the path of least resistance is to the upside.

However, stochastic is turning lower to show that profit-taking is likely to happen soon. In that case, the resistance is likely to hold and might provide an opportunity for a countertrend play.

The Kiwi was weighed down by the release of the New Zealand Treasury's pre-election update, which contained downgrades on growth forecasts and a less upbeat view on employment and wages. New Zealand's trade balance is up for release next and a narrower deficit of 200 million NZD is eyed compared to the earlier 242 million NZD shortfall, likely indicating a pickup in export activity.

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Meanwhile, the Aussie has been able to stay afloat on the lack of negative updates from the Land Down Under. The comdoll has also drawn support from a rebound in iron ore prices after the commodity rebounded off technical support levels. There are no major reports lined up from both Australia and New Zealand until the end of the week, though, so profit-taking or consolidation could ensue.

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EURCAD Bearish Channel (Aug 25, 2017)

Postby katetrades » Fri Aug 25, 2017 3:53 am

EURCAD is trending lower and is moving inside a short-term descending channel visible on the 1-hour chart. Price just bounced off the resistance and is making its way back to support at the 1.4700 handle.

The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside, which means that the downtrend is more likely to continue than to reverse. In addition, the 100 SMA appears to be holding as dynamic resistance while the 200 SMA is close to the channel resistance, adding an extra layer of resistance.

Stochastic is on the move up, though, so there may be some bullish pressure left in play. In that case, another test of the channel resistance could take place before more bears push for the trend to resume.

There have been no major reports from the euro zone in the previous trading sessions, leaving traders to price in their expectations for ECB head Draghi's speech in Jackson Hole. According to a source from the ECB, policymakers aren't ready to share more details on their next policy moves just yet, which suggests that there could be room for disappointment during the event.

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As for the Canadian dollar, the currency has been able to hold on to its gains despite the dip in crude oil. Hurricane Harvey is projected hit Texas on Friday so refineries are ramping up output to prepare for likely shutdowns when the storm hits. This could keep supply elevated throughout next week, possibly leading crude oil to retreat.

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NZDJPY Support Turned Resistance (Aug 28, 2017)

Postby katetrades » Mon Aug 28, 2017 2:52 am

NZDJPY recently broke below support at the 79.50 minor psychological level then dipped to the 78.50 mark. Price pulled up from there and applying the Fibonacci retracement tool on the latest swing high and low on the 1-hour time frame shows that the 61.8% level lines up with the broken support.

The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In fact, the 100 SMA already seems to be holding as dynamic resistance at the moment since it lines up with the 50% Fib. A larger pullback could last until the 200 SMA just past 79.50.

Stochastic is on the move down so the pair might follow suit, but the oscillator also seems to be turning higher to suggest that Kiwi bulls aren't giving in so easily.

Economic data from Japan turned out mixed last week, with the national core CPI advancing from 0.4% to 0.5% and the Tokyo core CPI beating expectations by posting a 0.4% gain. The services producer price index, however, came in short of expectations with a 0.6% gain versus the 0.8% consensus.

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Japan is set to print its household spending report and unemployment rate on Tuesday. Retail sales and preliminary industrial production data are also lined up for the week. There are no major reports from New Zealand so market sentiment could be responsible for directing Kiwi price action.

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EURCAD Inverse Head and Shoulders (Aug 29, 2017)

Postby katetrades » Tue Aug 29, 2017 8:54 am

EURCAD seems ready to go for a move higher as it formed an inverse head and shoulders pattern on its daily time frame. Price has yet to break past the neckline at the 1.5000 major psychological level before confirming the potential long-term climb. The chart pattern is approximately 500 pips tall so the resulting rally could be of the same size.

The 100 SMA is safely above the longer-term 200 SMA so the path of least resistance is to the upside. The 100 SMA also recently held as dynamic support and might continue to do so in the event of another pullback. Stochastic hasn't quite reached oversold levels on the daily time frame yet but the oscillator is already pulling up to signal a return in bullish momentum.

Crude oil has tumbled nearly 3% at the start of the week as investors are worrying about a potential buildup in supply while refineries in Texas are shut down due to Hurricane Harvey. The tropical storm is expected to move to Louisiana later in the week and might lead to temporary closures in processing facilities there as well.

Medium-tier data from the euro zone has been weaker than expected so far this week but traders appear optimistic that the ECB is moving closer to tapering its asset purchase program sooner or later. The German GfK consumer climate index is due later today and no change from the 10.8 reading is eyed.

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Also due today are the French consumer spending and preliminary GDP numbers, and upbeat results could give the euro another boost. As for the Canadian dollar, the RMPI and IPPI could prove to be short-term catalysts if they come in significantly stronger or weaker than expected.

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EURCAD Double Top (Sep 05, 2017)

Postby katetrades » Tue Sep 05, 2017 2:57 am

EURCAD could be in for a selloff as the pair formed a double top classic reversal pattern and broke below the neckline at the 1.4750 minor psychological level. Price is pulling up to this broken support level, which might now hold as resistance.

The 100 SMA is still above the longer-term 200 SMA, though, so the path of least resistance might still to the upside. However, the gap between the moving averages is narrowing to signal a potential downward crossover and pickup in selling pressure. Stochastic is on the move up to signal that buyers still have the upper hand until the oscillator reaches the overbought level and turns lower.

Data from the euro zone has been mixed so far this week, with the Spanish unemployment change falling short of estimates and the Sentix investor confidence index turning out higher than consensus. Canadian banks were closed for the holiday on Monday so the Loonie has taken its cue from crude oil prices and market sentiment.

Both the ECB and the BOC have monetary policy statements lined up this week so there could be room for a lot of volatility for this pair. These central banks are among the more hawkish ones so expectations are running high for comments on tapering for the ECB and another potential hike from the BOC.

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Disappointment from either central bank could mean big moves for this pair. There have been talks of potential ECB jawboning as the shared currency has been advancing against its peers in the past weeks while the Loonie could stay sensitive to overall risk sentiment and crude oil action.

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AUDNZD Short-Term Triangle (Sep 11, 2017)

Postby katetrades » Mon Sep 11, 2017 2:15 am

AUDNZD has been moving sideways recently with higher lows and lower highs creating a symmetrical triangle pattern on its 1-hour time frame. Price has just bounced off support and could be due for a test of resistance again.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This suggests that an upside break is more likely to occur than a break lower, although it's also worth noting that the gap between the moving averages is narrowing to show a slowdown in bullish momentum.

Stochastic is turning higher to indicate that bulls could stay in control until the oscillator reaches overbought levels. The chart pattern is approximately a hundred pips tall so the resulting breakout could be of the same size.

The main event risks for the Aussie this week is Australia's jobs report, which might show a 19.2K gain in hiring versus the earlier 27.9K increase. Stronger than expected results could lead to an improvement in the 5.6% jobless rate and more gains for the Aussie.

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Meanwhile, the Kiwi has medium-tier reports like the FPI and Business NZ manufacturing index on the docket. China is also set to print its industrial production, retail sales, and fixed asset investment figures due this week and these could be catalysts for additional volatility as well.

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EURUSD Double Top (Sep 12, 2017)

Postby katetrades » Tue Sep 12, 2017 9:03 am

EURUSD appears to be tired from its climb as the pair is forming a double top reversal pattern on its 4-hour time frame. Price failed in its last two attempts to break past the 1.2070 area and is on its way to testing the neckline at the 1.1850 minor psychological support.

A break below the neckline support could confirm the potential selloff, which might last by around 200 pips or the same height as the chart formation. However, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is still to the upside. In addition, the moving averages are close to the neckline, adding strength to support.

Stochastic is pointing down to indicate that sellers are in control of EURUSD price action, but the oscillator is closing in on the oversold level to signal that profit-taking might happen soon.

The dollar has been able to recover against most of its peers at the start of the week, thanks to strong stock market performance and easing geopolitical concerns. The US government has dialed down on its proposed sanctions on North Korea, lowering the chances of another retaliation from the hermit nation. Apart from that, news that Hurricane Irma is weakening has also been positive for the US markets.

Data from the euro zone has been stronger than expected as Italian industrial production ticked 0.1% higher instead of posting the projected 0.5% decline. French final non-farm payrolls for Q2 and the Italian quarterly unemployment rate are lined up next. Only the NFIB Small Business Index and JOLTS job openings are due from the US today.

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Keep in mind, however, that the ECB is currently undergoing tapering expectations for either October or December even after Governor Draghi tried to downplay the idea in their statement last week. Meanwhile, Fed rate hike expectations for this month are running low but the idea of starting the balance sheet runoff could still keep the dollar supported.

By Kate Curtis from Trader's Way
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AUDNZD Resistance Turned Support (Sep 13, 2017)

Postby katetrades » Wed Sep 13, 2017 6:17 am

AUDNZD has sold off in the past couple of days but the uptrend remains intact. Price is moving inside an ascending channel formation on its 4-hour time frame and is currently testing support at the 1.1000 major psychological level.

This coincides with a former resistance level that might hold as a floor from here. It also lines up with the 100 SMA, which is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. Stochastic is indicating oversold conditions, which means that sellers are exhausted and ready to let buyers take over.

There have been no major reports out of New Zealand, leaving traders to react to polls leading up to next week's elections. The Kiwi enjoyed a boost from a poll indicating that the Green Party might not have enough votes to be represented in Parliament. This could ease some political uncertainty as it would leave the National Party to secure majority of the seats and avert a coalition government.

Meanwhile, Australia has its jobs report due later on this week and might report a 17.5K gain in hiring. This would be lower than the earlier 27.9K increase but still enough to keep the unemployment rate steady at 5.6%. Stronger than expected data could support hopes that the RBA could switch to a more hawkish bias in their next policy announcements.

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China is also set to print a number of top-tier reports on Thursday, namely industrial production, retail sales, and fixed asset investment. A rebound in the first two figures is eyed but fixed asset investment could lag from 8.3% to 8.2%.

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