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Aussie to consolidate around 0.75 in July

al_dcdemo Posted 22 June as Analysis on AUD/USD, Target: 0.7575, Date: 1st of August, 12:00 GMT  in #Technical analysis #AUD/USD #Daily Chart #Triangle Pattern #Supply Zone #Weekly Chart #Technical Tools #Net Short 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 has been trying to crack the strong supply zone between 0.77 and 0.785 for more than a year. A series of lower highs is noted as the pair onl…
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al_dcdemo 23 July

UPDATE 7: U.S. dollar ended another week of underperformance, falling against all major currencies bar the British pound. Euro confirmed break above 1.1450 to trade to the highest since mid 2015. Mirroring its cousin, Swiss franc closed the week below 0.95. Yen was bought down to 111. Canadian dollar extended its rally to approach 1.25. Australian dollar broke above 38.2% retracement of the 2014 - 2016 downswing. New Zealand dollar closed the week near 0.7450, just below the 50.0% retracement of the 2014 - 2015 decline. Momentum suggests further losses for the dollar in the week ahead.

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al_dcdemo 24 July

UPDATE 8: A mixed start to the week saw yen, pound, Canadian dollar and Australian dollar extend gains while euro, franc and New Zealand dollar are lagging. Data-wise, it's a quiet one until Wednesday when Australia publishes inflation data, U.K. releases preliminary GDP and FOMC concludes its meeting. U.S. reports durable goods orders on Thursday and GDP on Friday. Unless FOMC pulls a surprise, neither of these events has the potential change the current macroeconomic landscape. U.S. politics seems a more likely source from where some kind of a twist may come.

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al_dcdemo 27 July

UPDATE 9: Yesterday's reaction to the latest FOMC statement was quite strong for a meeting without press conference. The statement didn't uncover anything new but clearly the market was expecting something more hawkish. The committee indicated that it will begin with balance sheet adjustment "relatively soon". The language on inflation, however, has deteriorated a bit and that was probably the main reason the market sold the dollar. While balance sheet adjustment is now virtually a done deal, we may see further hikes in federal funds rate only if inflation picks up.

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al_dcdemo 31 July

UPDATE 10: Last week was an interesting one. Major currencies traded to fresh highs against the U.S. dollar. The single exception was Swiss franc which sold off strongly against all those currencies, including the dollar. Two cent and a half surge from sub 0.95 to above 0.97 might well have had SNB backing. There's nothing on the calendar for the week ahead that has the potential to reverse the current U.S. dollar weakness. Perhaps a concerted dovish effort from RBA and BOE could put a dent into this trend but most likely not for too long.

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al_dcdemo 1 Aug.

UPDATE 11: In line with expectations, RBA once again held cash rate on the record low of 1.5%. The statement from governor Lowe was longer than usual, though the message didn't differ much from the previous one. There was a whole new paragraph dedicated to Australian dollar and how its strength would not benefit the economy. The pair dropped about 20 pips instantly and then squeezed higher but wasn't able to overcome overnight high. Sellers stepped back in and the pair is currently trading just below 0.80. The big figure could serve as a decent bull/bear line in sand.

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Aussie to move above 0.75 in June

al_dcdemo Posted 27 May as Analysis on AUD/USD, Target: 0.7575, Date: 3rd of July, 12:00 GMT  in #Technical analysis #AUD/USD #Daily Chart #Correction #Supply Zone #Weekly Chart #Technical Tools #Net Long 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 has been trying to crack the strong supply zone between 0.77 and 0.785 for more than a year. A series of lower highs is noted as the pair onl…
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al_dcdemo 15 June

UPDATE 7: The FOMC was unexpectedly hawkish yesterday. They hiked federal funds rate by 25 basis points, as anticipated, and outlined strategy for reducing their balance sheet. FOMC chair Yellen told reporters that the balance sheet adjustment could begin "relatively soon". Just a couple of hours before the FOMC decision, both inflation and retail sales reports came in weak and markets sold U.S. dollar on speculation that the FOMC will postpone hiking until data improves. The dollar recovered and followed through today.

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al_dcdemo 24 June

UPDATE 8: Currency markets were relatively sedate this week. Major pairs traded in 100-pip ranges with exception of Cable whose range exceeded 200 pips. With no big events on the agenda until September, it's possible that we'll be seeing somewhat slower activity throughout the summer. That said, there's always opportunity in at least some pairs and timeframes, and we must always expect the unexpected. Central bank speakers will continue to dominate in the week ahead and markets will be positioning for their next moves in the coming weeks.

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al_dcdemo 27 June

UPDATE 9: It's a quiet week with regard to Australian economic data. Chinese Manufacturing PMI and Non-Manufacturing PMI on Friday will probably confirm lacklustre activity in the world's second largest economy. That may keep upticks in the pair contained. The pair has been carving out a triangle-like pattern for more than two years. 0.75 has served as a mid-point and an axis around which volatility is compressing. Whatever direction the pattern will resolve to, it could make for a nice breakout trade in the second half of the year.

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al_dcdemo 3 July

UPDATE 10: There was some Australian economic data released overnight. AIG Manufacturing Index, MI Inflation Gauge and ANZ Job Advertisements came in better than expected/previous while Building Approvals lagged. Caixin Manufacturing PMI from China ticked back to into expansion. All this failed to lift the tone in the Aussie which appears to have entered a correction phase after six consecutive days of gains during which it traded to 2016 - 2017 trendline near 0.7725. June high at 0.7635 may prove to be the first stronger support ahead of 0.76.

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al_dcdemo 4 July

UPDATE 11: The RBA once again left cash rate unchanged at the record low of 1.5%. Accompanying statement was not as upbeat as the previous one. The bank highlighted quite a few concerns, including subdued consumption growth stemming from slow growth in real wages and high levels of household debt. Aussie was immediately marked down about 50 pips and further 40 pips in the following hours. There appears to be little chart based support until 0.75 - 0.7550. In the event of a pullback, 0.7625 - 0.7650 looks like a good sell zone.

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Aussie to see some further downside in May

al_dcdemo Posted 29 Apr. as Analysis on AUD/USD, Target: 0.7425, Date: 1st of June, 12:00 GMT  in #Technical analysis #AUD/USD #Daily Chart #Correction #Supply Zone #Weekly Chart #Technical Tools #Net Long 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 has been trying to crack the strong supply zone between 0.77 and 0.785 for more than a year. A series of lower highs is noted as the pair onl…
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al_dcdemo 14 May

UPDATE 5: Widely expected result of the French presidental election spurred a pullback in euro and franc and, to a lesser extent, yen. U.S. dollar indisputably won the week, rising against all G10 currencies. Weaker than expected inflation and retail sales reports on Friday led to some profit taking but June rate hike expectations hardly budged. Some further reaction to the reports is possible in the days ahead. Following a neutral BOE QIR, U.K. data will be closely watched next week. Australian labour force report and Canadian inflation and retail sales are also at the top of the list.

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al_dcdemo 21 May

UPDATE 6: In what was its worst week of the year, U.S. dollar lost ground against every G10 currency. Already soft start to the week after last Friday's inflation and retail sales reports was exacerbated by the political drama in the U.S. that has further shaken traders' confidence that the Administration will be able to deliver on its stimulus promises in due time. The biggest winners were euro and franc with Canadian dollar and pound not far behind. U.S. dollar index fell to the levels not seen since the U.S. election and closed the week near the low.

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al_dcdemo 25 May

UPDATE 7: As expected, FOMC meeting minutes didn't reveal anything particularly new. Weak Q1 GDP was dismissed in favour of strong employment growth. There was some caution regarding inflation by some members but was not a baseline view. The committee also discussed balance sheet reduction which could be seen as a hawkish development. Minutes are basically data two weeks old and the market responded with U.S. dollar selling. It is Fed speakers and how they will shape expectations for a June hike that the market is focused on.

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al_dcdemo 29 May

UPDATE 8: Last week was a relief for the dollar as it managed to rise, albeit marginally, against euro, franc, yen, and Australian dollar. Pound sold off after election polls showed PM May lost some support. Canadian dollar capitalized on oil strength, even though OPEC didn't go out on a limb this time around. New Zealand dollar continued its snap-back after bottoming near 0.685. European flash CPI and U.S. NFP report will be two events that the market will closely watch this week. Both have the potential to shape upcoming ECB and Fed decisions.

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al_dcdemo 30 May

UPDATE 9: Commodity currencies are back in favour after some hard time at the start of May. Loonie and Kiwi both pulled from their cycle-lows while Aussie was bought up ahead of the trendline that connects January and December 2016 lows. Much depends on the Fed and their tightening pace as BOC, RBA and RBNZ are likely to delay their hikes for as much as possible. Each of the three pairs is trading in a well established consolidaton pattern and it will take either a broad fundamental catalyst or some idiosyncratic risk to break that.

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Aussie to continue bumping into resistance

al_dcdemo Posted 30 Mar. as Analysis on AUD/USD, Target: 0.7675, Date: 1st of May, 12:00 GMT  in #Technical analysis #AUD/USD #Catalyst #Daily Chart #Supply Zone #Weekly Chart #Technical Tools #Net Long 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 15 Apr.

UPDATE 5: U.S. dollar ended the week lower against all major currencies. What we are seeing could be a beginning of a complete reversal of the Trump trade. Expectations of a big fiscal stimulus have been greatly dampened in recent weeks. Inflation and retail sales reports both came weak on Friday. Having said that, the Fed is likely to continue to normalize monetary policy, and it may pay to buy any dollar dip at some later point. Price action in the week ahead could well be dominated by flows ahead of the first round of the French presidental election.

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al_dcdemo 17 Apr.

UPDATE 6: Better than expected Chinese data, that was released overnight, hasn't seen a great impact but it did contribute to a slightly better risk sentiment. Australian and New Zealand dollars remain in a near-term uptrend while yen put in at least a temporary top. A quiet European session is the most likely scenario with main financial centers closed for Easter Monday. Some more activity is possible in N.A. session but many participants will prefer not to involve until tomorrow. That does not rule out a surprise move though.

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al_dcdemo 23 Apr.

UPDATE 7: U.S. dollar recorded a mixed last week. It rose against yen, Canadian dollar and Australian dollar but fell against euro, franc, sterling and New Zealand dollar. The moves didn't have a lot to do with the U.S. itself but happened against a backdrop of unwinding of the Trump trade. Focus will be on Europe in the week ahead with French election 1st round results to start with and then ECB meeting on Thursday. Advance version of the U.S. GDP on Friday will be an important data point to watch while the BOJ is not likely to stray from its course.

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al_dcdemo 26 Apr.

UPDATE 8: Australian quarterly inflation indicators came in mostly weaker than expected overnight, though Trimmed Mean measure ticked up. Aussie fell just over 30 pips in response. The pair lost similar amount in yesterday's trading, not helped by a decline in gold. The fall stalled just ahead of 0.75 level which, together with 0.7475, forms a support band in the current range. The range itself is straddling the 2011 - 2017 support/resistance line. The upper band of the range is found at 0.7580 - 0.7610 and is reinforced by 50 DMA.

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al_dcdemo 30 Apr.

UPDATE 9: The story from the last week continued this week. The dollar declined against European currencies and appreciated against yen and commodity currencies. Market-friendly result of the first round of the French election didn't impact this dynamic, even though better risk sentiment usually means weaker euro and franc, and stronger Aussie and Kiwi. Looking ahead, FOMC meeting may not leave us any wiser next week. After weak U.S. Q1 GDP, NFP report seems more important. Of course, all eyes will be on French election polls to see whether Le Pen could gain any ground.

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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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Aussie testing the long term trendline

al_dcdemo Posted 30 Dec. as Analysis on AUD/USD, Target: 0.7225, Date: 1st of February, 12:00 GMT  in #Technical analysis #AUD/USD #Daily Chart #Supply Zone #Weekly Chart #Technical Tools #Balanced Positioning #Relatively High Yield #Trendline Area
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 strong supply zone between 0.77 and 0.785 was deflected by the intersection of 2013 - 2016 trendline and 2011 - 2016 suppo…
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al_dcdemo 16 Jan.

UPDATE 5: Major currency pairs opened with gaps. The U.S. dollar generally opened higher, up 10 to 35 pips. The exception is the yen, which gapped about 10 pips higher, in a risk-off fashion. The outlier is the pound which opened 180 pips lower after the prospect of a hard Brexit came again to the fore over the weekend. It's a calendar-heavy week ahead, which features central bank meetings from the ECB and the BOC plus speeches from Carney, May and Yellen and other Fed officials. We'll see whether the U.S. dollar correction will continue or the bullish trend will reassert itself.

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al_dcdemo 21 Jan.

UPDATE 6: U.S. dollar generally moved lower against the major currencies this week. The exceptions were the yen, which was sold on rising U.S. bond yields, and the Canadian dollar which went down on BOC Poloz's remark that a rate cut remains on the table. The best performer was the pound, which rallied after May's soothing rhetoric on what was previously viewed as a "hard" Brexit. Donald Trump officially became the 45th president of the United States on Friday. The first of his actions will be the market's focus in the week ahead.

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al_dcdemo 23 Jan.

UPDATE 7: Sentiment from the last week continues as the U.S. dollar starts the week on the back foot. What started as a normal pullback appears to be morphing into a medium-term correction. Three rate hikes this year, as some Fed officials have been touting, seem a bit far-fetched. I'm thinking two at the most which may be closer to what majority of market participants expect. Losses against the yen and the pound are the most pronounced today but the dollar has started to claim back some ground it had lost during the Asian session.

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al_dcdemo 28 Jan.

UPDATE 8: It was a lacklustre week for the U.S. dollar but the corrective momentum appears to have run out of steam, particularly against the euro, the franc and the yen. Commodity currencies generally performed better but the Australian dollar is finding it diffucult to sustain gains above 0.75. The pound regained 100 DMA for the first time since the Brexit vote. Next week will be a big one with three central bank meetings (Fed, BOJ, BOE) and plenty of U.S. data, including Nonfarm Payrolls. Trump's actions will remain closely monitored.

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al_dcdemo 30 Jan.

UPDATE 9: U.S. president Trump issued an executive order on immigration late on Friday (early Saturday in Europe). The order led to some chaos in airports in the United States and overseas, and prompted protests and legal action. The dollar gapped lower at the open and continued to trade south in the first part of the Asian session. The impact was most visible in the risk sensitive yen while the antipodean dollars were barely moved due to Chinese Lunar New Year holidays. The pound rose about 60 pips but stalled ahead of the big figure at 1.26.

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EUR/USD to remain bullish

al_dcdemo Posted 30 Apr. as Analysis on EUR/USD, Target: 1.1486, Date: 1st of June, 12:00 GMT  in #Technical analysis #Euro #Bullish #EUR/USD #Bounce #South #Channel Line #Supply Zone #Strong Momentum #Data Dependence
Monthly chart:
After it closed the year of 2014 below 200 month SMA, the pair continued its journey to the South with increased momentum. Big support levels (1.20 level, then 2012, 2010 and 2005 lows) fell like dominoes. 61.8% retracement of the 2000 to 2008 uptrend held for some time in January and February, but it too gave way. After busting September 2003 low at 1.0761, the decline stopped near declining channel-line (drawn off 2008 and 2010 lows), but not before run on stops below 1.05 level…
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al_dcdemo 3 May

UPDATE 2: There are a couple of important economic releases next week. ISM Non-Manufacturing PMI on Tuesday will provide latest insight into US business climate. ADP Non-Farm Employment Change on Wednesday will be watched closely for general indications regarding employment. And Non-Farm Employment Change on Friday, which has the potential to reaffirm or reverse current USD weakening trend. Previous resistance 1.1000 - 1.1050 should now offer decent initial support.

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al_dcdemo 10 May

UPDATE 3: The pair started the week a bit on a back foot but on Tuesday it reversed sharply, after dipping into strong support (previous range resistance) in 1.1035 - 1.1100 band. It proceeded higher from there to just below 1.14 on Thursday when profit taking in expectation of two big risk events (UK election, NFP) sent it back down to 1.1250. On Friday it fell further and closed the week few ticks above 1.12. Doji-like weekly candle signals indecision, but we will have to wait till next week for clues about further direction.

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al_dcdemo 11 May

UPDATE 4: There are not a lot of market moving events from Europe: Eurogroup Meetings on Monday, German Prelim GDP q/q on Wednesday. (Core) Retail Sales, PPI, Unemployment Claims and Prelim UoM Consumer Sentiment will provide latest read on US economy. Initial support is seen in 1.1035 - 1.1100 band before 20 and 50 DMA. Resistance: 1.14 then 1.145 before 1.1490 - 1.1530.

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al_dcdemo 17 May

UPDATE 5: Euro was the best performer among major pairs in the past week (percentage-wise). It gained just shy of 250 pips, while weekly range was almost 350 pips. It started the week on the back foot, but that changed on Tuesday when strong reversal from the lows near 1.11 signaled that the uptrend is about to resume. That was confirmed on Wednesday after another 150 pip surge on weak US retail sales report. The pair followed through with higher highs on both Thursday and Friday, closing near the high.

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al_dcdemo 18 May

UPDATE 6: The week ahead could prove to be volatile due to both fundamental and technical factors. We have German ZEW Economic Sentiment, European PMIs, German Ifo Business Climate and three speeches from ECB President Draghi from Europe, plus FOMC Meeting Minutes, inflation report and few other market moving events from the US. Technically, the pair appears poised to break above 1.15 in the days/weeks ahead with the potential up to 38.2% retracement (of the May 2014 to March 2015 decline) at 1.1810 and 2010 low at 1.1875.

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