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Risk sentiment a bit better to start the week

al_dcdemo Posted 12 Feb.  in #Trader's blog #Support #Resistance #USD/CAD #Bounce #Jobs Report #Stock Markets #Risk Sentiment #D1 Chart
Risk sentiment has improved a bit since late Friday bounce in the stock markets. USD/CAD spiked 80 pips after weak jobs report on that day but gave it all back and is currently trading below the pivotal 1.26 level. 1.25 is the initial support and 1.27 the first stronger resistance.
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USD/CHF snaps back

al_dcdemo Posted 16 Nov.  in #Trader's blog #EUR/USD #USD/CHF #Bounce #Range Trading #Risk Sentiment #D1 Chart
USD/CHF bounced strongly off of October's resistance area near 0.985. Probably some range trading from here but the path of least resistance still seems to be to the upside in the medium term. As always, a lot depends on EUR/USD direction and risk sentiment.
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Aussie to continue its steady climb

al_dcdemo Posted 23 Feb. as Analysis on AUD/USD, Target: 0.7775, Date: 3rd of April, 12:00 GMT  in #Technical analysis #AUD/USD #Daily Chart #Bounce #Supply Zone #Weekly Chart #Technical Tools #Balanced Positioning #Relatively High Yield
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
Aussie's attempt to crack the strong supply zone between 0.77 and 0.785 in November has been deflected by the intersection of 2013 - 2016 trendline …
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al_dcdemo 18 Mar.

UPDATE 6: As widely expected, the FOMC hiked federal funds rate corridor by 0.25%. It was a "dovish hike", accompanied by caution on the part of the committee and the governor Janet Yellen. Despite that, the tightening cycle will continue at a gradual pace and market currently expects two more hikes this year. U.S. dollar sold off in response but I don't think the weakness will last. Lower-yielding currencies in particular seem vulnerable as the U.S. dollar bulls will inevitable return. However, the period of exceptionally low global interest rates may be drawing to an end.

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al_dcdemo 25 Mar.

UPDATE 7: The dollar recorded another mixed week. Its losses were the most pronounced against lower-yielding currencies while it ended the week higher against the commodity block. In other markets, oil fell as gold rose which may be indicative of traders adjusting for a somewhat weaker recovery and a shallower tightening path. U.S. Administration pulled back from its attempt to repeal Obamacare on Friday and said they will instead focus on tax reform. That adds some uncertainty and, likely, volatility to the quarter-end flow driven week ahead.

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al_dcdemo 28 Mar.

UPDATE 8: Major currencies started the week on a firm footing, particularly against the U.S. dollar. The reserve currency fell in response to Obamacare vote failure which means that the Administration will have more difficulties implementing its reforms. Euro trade above 200 DMA yesterday for a couple of hours before pulling back. Yen tested 110 around the same time but it too recovered to be back above 110.5. Pound rose to the highest (1.2615) since early February. More short-covering is expected as Article 50 gets triggered tomorrow. Commodity currencies look soggy.

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al_dcdemo 2 Apr.

UPDATE 9: The correction in the dollar that gained pace after the dovish hike by the Fed appears to have stalled, despite signs that U.S. Administration will have tough time enacting some of its promised reforms. U.S. dollar rose the most against euro and franc but recorded only modest gains compared to yen and antipodean dollars. Pound and Canadian dollar were holding its own, both finishing a tad higher. In the week ahead, FOMC Meeting Minutes may reveal some detail behind the March's decision. Most Fed officials have continued to be hawkish though.

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al_dcdemo 4 Apr.

UPDATE 10: RBA left cash rate at the record low of 1.5%, which was widely expected. The bank highlighted soft labour market, slow wage growth and low inflation. It urged lenders to step up reforms to address risks associated with high and rising levels of indebtedness. A dovish statement. Aussie dollar fell 20 pips immediately and another 20 pips in the first two hours after the release. 0.7550 (200 DMA, mid March consolidation) is the initial support before stronger one near 0.75 (100 DMA, March low). 0.7585 (March 28th low) is the first resistance.

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Will Aussie finally break to the upside?

al_dcdemo Posted 26 Jan. as Analysis on AUD/USD, Target: 0.7625, Date: 1st of March, 12:00 GMT  in #Technical analysis #AUD/USD #Daily Chart #Bounce #Supply Zone #Weekly Chart #Technical Tools #Balanced Positioning #Relatively High Yield
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart

Aussie's attempt to crack the strong supply zone between 0.77 and 0.785 has been deflected by the intersection of 2013 - 2016 trendline and 2011 - …
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al_dcdemo 11 Feb.

UPDATE 6: U.S dollar rose against most of the major currencies last week. It snapped the multi-week decline against euro, franc and New Zealand dollar. Gains were more modest against yen, Canadian dollar and pound. Australian dollar was the only major currency to record a narrow win. Unless Trump starts pushing in the direction of a weak dollar policy, and perhaps even, the dollar should strengthen against low-yielders over the medium term. That said, it will be difficult to meet many market participants' expectations of at least two rate hikes by Fed this year.

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al_dcdemo 18 Feb.

UPDATE 7: It was another week of relatively tight ranges. With exceptions of yen and maybe pound, major currencies ended the week pretty much where they started. There's still a lot of uncertainty regarding tax cuts and fiscal stimulus in the U.S. but inflation is on the rise and Fed rate hikes are on the way. One thing that keeps bulls cautious is the Administration's remarks about too strong a dollar and Trump's comments regarding a "level playing field for currencies". The other one is simply expectations of reflation with flows into riskier assets and currencies.

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al_dcdemo 25 Feb.

UPDATE 8: Indecision in markets continues. Major currencies mostly closed in the middle of their tight ranges. A mild risk-off has been notable with the yen buying gaining traction, in part due to French election hedging. Speculators are building longs in commodity currencies and covering shorts in low-yielders bar the euro. The main event in the week ahead is U.S. president Trump's speech to Congress, in which he is expected to announce his "phenomenal tax plan". Failure to meet market's expectations could see the dollar sell-off hard.

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al_dcdemo 28 Feb.

UPDATE 9: Major currencies opened the week on a similar note that they ended the last one. The U.S. dollar started on the back foot but stormed back later in the day. Month-end flows and some position-squaring ahead of the important Trump speech tomorrow could be in part responsible for this. Euro, yen, cable and Canadian dollar have seen the most activity while franc and antipodean dollars have traded in tighter ranges. AUD/USD rally looks like it's running out of steam but it may just be reaccumulation before another leg higher.

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al_dcdemo 1 Mar.

UPDATE 10: Australian GDP came in much better than expected as the country avoided a technical recession by a wide margin. Despite that, Aussie has been looking soggy. The reason for that is U.S. dollar strength as Fed speakers ramped up probability of a March hike yesterday. U.S. president Trump addressed the Congress overnight and, even though he didn't reveal much of the details on reforms, was quite constructive. The pair didn't quite retest levels below 0.75 last month but did top out near 0.7750 and is about to finish fairly close to the prediction target.

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USD/CAD to extend gains in June

al_dcdemo Posted 21 May as Analysis on USD/CAD, Target: 1.3275, Date: 1st of July, 12:00 GMT  in #Technical analysis #Oil #USD/CAD #Daily Chart #Bounce #Weekly Chart #Technical Tools #Blow Off Top #Net Long Positioning
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
Loonie started the year with a sharp rally and topped out near 76.4% retracement of the 2002 - 2007 downtrend. The reversal was even more impressiv…
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al_dcdemo 6 June

UPDATE 4: Friday's move after much weaker than expected NFP report might have been a bit overdone and the U.S. dollar started to retrace some of its losses in the Asian session. Aussie and Cable were the two that gave back the most with the latter selling off on renewed Brexit worries. There was little movement in the Euro and the Swissie while the Yen, the Loonie and the Kiwi gave back around 50 pips each. We won't have to wait for too long to see a reaction of European traders to the aforementioned report.

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al_dcdemo 10 June

UPDATE 5: We have seen some risk-off in the markets today with equity indices and JPY pairs lower. Yen, Swiss franc and U.S. dollar have been the preferred currencies. Latest Brexit poll showed Leave ahead (55% vs. 45%) and that prompted a 150 pip decline in Cable and a 200 pip fall in GBP/JPY. Commodity currencies have continued yesterday's pullback as did the oil while the gold remains supported. Canadian labour market data came in better than expected but the post-release dip was quickly bought into in the current environment.

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al_dcdemo 13 June

UPDATE 6: It may be too early to say but it seems like toppy action in oil may lead to a period of consolidation or a deeper correction. Inability of the Canadian dollar to rally on much better than expected labour market report is also telling. The pair found support at the 38.2% retracement of the 2011 - 2016 rally last week and posted a reversal pattern on Friday. The immediate resistance is 1.28 (2015 support/resistance line) before 1.2870 (50 DMA) and 1.30.

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al_dcdemo 24 June

UPDATE 7: In Thursday's UK EU referendum, 52% of Britons supported Leave and 48% Remain. Though not entirely unexpected, the result was surprising, particularly given that the last couple of opinion polls showed Remain ahead. The outcome sent jitters through capital markets and indeed currencies. Of 28 G7 currency pairs, GBP/JPY was the one with the biggest daily range - a whopping 2700 pips. Repercussions from this once-in-a-decade kind of event will likely be felt for weeks, if not months.

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al_dcdemo 29 June

UPDATE 8: After gaps lower of varying degrees on Monday and initial signs of a follow-through, it looked like we would see continuation moves this week. Instead, currency pairs started to retrace Friday's losses while only Cable made a new low before heading higher on improved risk sentiment. It is not clear when and how will Britain exit the E.U. but the fact that they're in no hurry to invoke Article 50 seems to provide some calm to the markets at the moment despite prolonged uncertainty.

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Swissie pares post-FOMC losses

al_dcdemo Posted 24 Mar.  in #Trader's blog #Support #Resistance #USD/CHF #Fomc Meeting #Bounce #D1 Chart
Swissie broke below 200 DMA last week, after FOMC left federal funds rate unchanged and released a dovish rate statement. Second day of selling failed to project past February low (~0.9660) and the pair bounced instead.
November - March channel bottom is supported by the broken 2003 - 2015 (down) trendline with the 2011- 2016 (up) trendline coming in from below. 200 DMA shall now act as a resistance.
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Did the BOJ do enough to support USD/JPY?

al_dcdemo Posted 31 Jan. as Analysis on USD/JPY, Target: 120.25, Date: 1st of March, 12:00 GMT  in #Technical analysis #Abenomics #USD/JPY #Daily Chart #Bounce #Short Squeeze #Support Zone #Weekly Chart #Technical Tools
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart

Strong 115.50 - 116 support zone has been holding since late 2014. 100 week SMA will lend it additional support, should that be required. 50 week …
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al_dcdemo 9 Feb.

UPDATE 4: Quiet start to the week turned into carnage soon after European session got underway, led by stock market falls. The selling continued in North American session and, after a small consolidation, overnight. The greatest beneficiary of safe haven flows has unsurprisingly been the yen, while the euro and the franc have also benefited. Gold rose to the highest in eight months. Cable and commodity currencies lost to various degrees, not least as a consequence of cross pair selling.

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al_dcdemo 10 Feb.

UPDATE 5: Yen strength has been one of the main stories this year. After unsuccessful attempt by the BOJ to stem its appreciation, yen buyers returned with force in February. The pair (USD/JPY) is down eight cents in the first eight trading days of the month. It has broken below strong 115.50 - 116.00 support (now resistance) at the start of the week, held near 100 week SMA (~115) for two days and then continued below 23.6% retracement of the 2011 - 2015 rally today. October 2014 high near 110 is the next major target.

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al_dcdemo 18 Feb.

UPDATE 6: FOMC Meeting Minutes, which were released yesterday evening, didn't provide us with anything new. Officials did acknowledge increased downside risks to inflation outlook stemming mostly from USD strength and oil weakness but didn't back away from rate hikes. Reaction to the release was muted. Price recorded a couple of small whipsaws before returning to what it was doing before - a pattern that is quite prevalent with these releases.

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al_dcdemo 19 Feb.

UPDATE 7: Following some stabilization in world stock and commodity markets and overall improvement in risk sentiment, volatility in major currency pairs fell. The pairs mostly end the week not very far (~100 pips) from their opening levels but the ranges are still decent (100 - 300 pips). Whether is this just a temporary calm remains to be seen as global macroeconomic landscape remains largely unchanged.

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al_dcdemo 27 Feb.

UPDATE 8: Friday provided everything that dollar bulls want. Mostly better than expected readings on growth, inflation, income, spending and sentiment were enough to send the dollar higher against most major currencies and showed that March hike cannot be ruled out. Yen lost about a cent on the day with the daily range worth half a cent more. The pair closed a hair below the high.

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Quiet start to the week

al_dcdemo Posted 25 Jan.  in #Trader's blog #China #GBP/JPY #Bounce #Risk Sentiment #D1 Chart #Macroeconomic Theme
Major currencies opened with gaps again but this time around with smallish ones in what appears to be the quietest open so far this year. Improvement in risk sentiment seemed to come after China managed to stabilize its currency and stock market.
Given the magnitude of the bounce in stocks, oil and risk sensitive currency pairs it seems that an interim bottom may be in place. However, all macroeconomic themes are still ongoing, so it may be too early to speak of a reversal.
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EUR/USD may pull back ahead of ECB and FOMC

al_dcdemo Posted 21 Nov. as Analysis on EUR/USD, Target: 1.0975, Date: 1st of January, 12:00 GMT  in #Technical analysis #EUR/USD #Breakdown #Bounce #Downtrend #Bearish Bias #Channel Line #Dip Buyers #Upward Sloping Channel #Divergent Monetary Policies
Monthly chart
The pair has been in downtrend since May 2014. After it broke below the longer-term trendline that supports lows of years 2005, 2010 and 2012, a series of important levels gave way, including 2012, 2010 and 2005 lows. The levels were falling like dominoes before the rout finally stalled near the declining channel-line drawn off 2008 and 2010 lows and the long term trendline that connects 1985 and 2000 lows.
Weekly chart
The low was put in place at 1.0462 after stops below 1.05 wer…
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al_dcdemo 4 Dec.

UPDATE 5: ECB cut the deposit rate to -0.30% (from -0.20%) and extended QE program to March 2017 (from September 2016) which was well short of expectations. Given the reaction it seems that the market might have been pricing in a cut to -0.40% and an expansion of QE. Long term trendline, which connects 1985, 2000 and 2015 lows, held once again. 450+ pip rally stalled ahead of 50 DMA and 50.0% retracement of the last downswing. We'll see what the Fed will do but parity party seems ever more elusive.

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al_dcdemo 11 Dec.

UPDATE 6: Euro rallied in the first part of the week and gained above 1.10 for the first time in a good month. The pair stalled between 200 DMA (currently ~1.1030) and 100 DMA (currently ~1.1060) and has been backing and filling since. 1.0850 - 1.0900 shall hold if the post-ECB upswing is to continue. 50 DMA (currently ~1.0950) shall cap it in the meantime. If not, then the momentum of the move may be stronger that it appears at the moment.

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al_dcdemo 14 Dec.

UPDATE 7: Current equilibrium level in the Euro appears to be just below the big figure (~1.0980), basically around the mid point of the three-day consolidation which resembles a symmetrical triangle. The bottom of the pattern is found near 1.0950 and the top around 1.1025. In slightly broader terms, there is a support at 1.0925 - 1.0950 and a resistance at 1.1030 - 1.1060. There's possibility of fake breakouts ahead of the FOMC. Though I'd say the risk is to the upside, at least until 76.4% retracement of the last D1 downswing (~1.1250) is hit.

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al_dcdemo 28 Dec.

UPDATE 8: This week is probably the lightest one for the year with regard to economic data and certainly the most holiday-packed. Lower-tier European data, released mainly on Wednesday, most likely won't have any impact. U.S. will publish CB Consumer Confidence, Unemployment Claims and Chicago PMI, which may contribute to some volatility in these thin conditions.

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al_dcdemo 29 Dec.

UPDATE 9: Last two weeks of a year are known to be the quietest in most markets. Low participation means low liquidity and usually low volatility. However, it's easier to move markets in such conditions and if someone decides to execute a big order, the move could be big too. That move is more often than not faded or at least retraced to a great extent as liquidity returns.

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Cable remains bought in the dips

al_dcdemo Updated 12 Nov.  in #Trader's blog #GBP/USD #Support #Resistance #Bounce #H1 Chart #Sell Off
Cable lost 370 pips in two and 470 in five days during the first week of November. Big 1.50 level held and we've since seen three consecutive days of gains so far, could be four at the end of the day. Decent labour market report underpinned the pair yesterday and excessive gains were corrected earlier today but the pair found demand into 1.5175.
Area near 1.5325 (61.8% retracement of last week's downswing, 50 DMA, 200 DMA) may prove to be a decent resistance, should the pair continue to rise. Fu…
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