USDCAD bear bias

  • A deeper correction than expected through support at 1.0872 and 1.0857 for a notable top and more bearish shift.
  • This leaves downside pressures now into month-end and threat for a move to 1.0795 support next.
  • Below here would further enhance the negative tone and aim for targets at 1.0733 and 1.0713/10.

WHAT CHANGES THIS?

  • Above 1.0910 eases bear risks; through 1.0950/55 signals a neutral tone, only shifting positive above 1.1000/05.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/USDCAD.pdf

2 Hour USDCAD Chart

 

 

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GBPUSD downside extension bias

  • A roll back lower already to the minimal bounce range from ahead of minor resistance at 1.6600/05 to leave the bias still lower into this weekend early September.
  • The previous push lower through the April swing low at 1.6555 leaves bear pressures intact for late August.
  • We see downside risks to the chart/ retrace targets at 1.6460/55.
  • Overshoot threat is now down to the 1.6252 low for 2014 into early September.

WHAT CHANGES THIS?

  • Above 1.6680 eases bear risks; through 1.6740 signals a neutral tone, only shifting positive above 1.6845.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/GBPUSD.pdf

 4 Hour GBPUSD Chart

Daily GBPUSD Chart

 

 

 

 

 

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EURUSD downside extension threat

  • A better Monday break lower, through our next downside target at the 61.8% retrace at 1.3230 to reinforce the bearish outside Friday pattern and downside risks into this week..
  • We see bear pressures this week whilst capped by minor resistance at 1.3300, and better barriers at 1.3350/60.
  • Moreover, we see late August potential to maybe aim for the 1.3105 swing low from September 2013.
  • Overshoot threat for early September is lower, for the 78.6% retrace of the 2013-14 rally at 1.3020.

WHAT CHANGES THIS?

  • Above 1.3300 eases bear risks; through 1.3416 signals a neutral tone, only shifting positive above 1.3445.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/EURUSD.pdf

4 Hour EURUSD Chart

Daily EURUSD Chart

 

 

 

 

 

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Key Fundamental Forex Events and Forecasts for the Coming Week

 

The following table lists the key economic data and other events that are due out during the week of August 25th – August 29th, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

 

Monday, August 25th

  • All Day GBP Bank Holiday
  • 9:00am EUR German Ifo Business Climate survey (107.1, > good for currency)
  • 3:00pm USD New Home Sales (426K, > good for currency)
  • 11:45pm NZD Trade Balance (-475M, > good for currency)

Tuesday, August 26th

  • 9:30am GBP BBA Mortgage Approvals (44.2K, > good for currency)
  • 1:30pm USD Core Durable Goods Orders (0.5%, > good for currency)
  • 1:30pmUSD Durable Goods Orders (7.4%, > good for currency)
  • 2:00pm USD S&P/CS Composite-20 HPI (8.2%, > good for currency)
  • 3:00pm USD CB Consumer Confidence survey (89.1, > good for currency)

Wednesday, August 27th

  • 2:30am AUD Construction Work Done (-0.4%, > good for currency)
  • 7:00am EUR GfK German Consumer Climate survey (8.9, > good for currency)
  • 3:30pm USD Crude Oil Inventories (last -4.5M, > good for currency)

Thursday, August 28th

  • 2:30am AUD Private Capital Expenditure (-0.8%, > good for currency)
  • All Day EUR German Preliminary CPI (0.0%, > good for currency)
  • 8:00am EUR Spanish Flash CPI (-0.2%, > good for currency)
  • 8:15am CHF Employment Level (4.21M, > good for currency)
  • 8:55am EUR German Unemployment Change (-6K, < good for currency)
  • 9:00am EUR M3 Money Supply (1.5%, < good for currency)
  • 9:00am EUR Private Loans (-1.5%, > good for currency)
  • Tentative EUR Italian 10-year Bond Auction (last average yield 2.60 percent, with a 1.5 bid to cover ratio, < yield and > ratio good for currency)
  • 11:00am GBP CBI Realized Sales (25, > good for currency)
  • 1:30pm CAD Current Account (-11.4B, > good for currency)
  • 1:30pm USD Preliminary GDP (3.9%, > good for currency)
  • 1:30pm USD Weekly Initial Jobless Claims (299K, < good for currency)
  • 3:00pm USD Pending Home Sales (0.6%, > good for currency)
  • 11:45pm NZD Building Consents (3.5%, > good for currency)

Friday, August 29th

  • 12:30am JPY Household Spending (-2.7%, > good for currency)
  • 12:30pm JPY Tokyo Core CPI (2.7%, > good for currency)
  • 12:50am JPY Preliminary Industrial Production (1.4%, > good for currency)
  • 12:50am JPY Retail Sales (-0.1%, > good for currency)
  • 2:00am NZD ANZ Business Confidence survey (39.7, > good for currency)
  • 7:00am EUR German Retail Sales (0.1%, > good for currency)
  • 7:00am GBP Nationwide HPI (0.0%, > good for currency)
  • 8:00am CHF KOF Economic Barometer (97.9, > good for currency)
  • Tentative GBP Preliminary Business Investment (2.1%, > good for currency)
  • 10:00am EUR CPI Flash Estimate (0.3%, > good for currency)
  • 10:00am EUR Core CPI Flash Estimate (0.8%, > good for currency)
  • 10:00am EUR Unemployment Rate (11.5%, < good for currency)
  • 1:30pm CAD GDP (0.3%, > good for currency)
  • 1:30pm CAD RMPI (0.7%, > good for currency)
  • 1:30pm USD Core PCE Price Index (0.1%, > good for currency)
  • 1:30pm USD Personal Spending (0.2%, > good for currency)
  • 2:45pm USD Chicago PMI (56.3, > good for currency)
  • 2:55pm USD Revised University of Michigan Consumer Sentiment survey (80.4, > good for currency)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Mildly Lower

Resistance:

Initial: 1.3294/99, 1.3305/08, 1.3318/24, 1.3332/35, 1.3344/53, 1.3366, 1.3376/89, 1.3398/1.3416, 1.3432/44, 1.3451, 1.3473/82, 1.3489/1.3524, 1.3538, 1.3546/88, 1.3597, 1.3602/15, 1.3621/31, 1.3639/50, 1.3663/76, 1.3682/86, 1.3685/1.3710, 1.3714/16, 1.3731/39, 1.3748, 1.3758/74, 1.3784/98, 1.3807, 1.3810/20, 1.3824, 1.3832/36, 1.3845/54, 1.3864, 1.3875/78, 1.3888/92, 1.3905/14, 1.3937, 1.3947, 1.3966/69, 1.3993/1.4000, 1.4246 and 1.4500/17.

Above: 1.4695 and 1.4939.

Support:

Initial: 1.3222/42, 1.3187/1.3206, 1.3172/77, 1.3161/65, 1.3126, 1.3093/1.3106, 1.3077, 1.3059/66 and 1.3047.

Below: 1.3000, 1.2904/98, 1.2837/79, 1.2821, 1.2795/1.2805, 1.2744/54, 1.2623/92, 1.2588/89, 1.2501/19, 1.2407/96, 1.2381/91, 1.2323/33, 1.2241/55, 1.2162, 1.2143, 1.2133, 1.204132 and 1.1938.

 

USDJPY: Mildly Higher

Resistance:

Initial: 104.07/19, 104.36, 104.63, 104.83/91, 105.18, 105.33 and 105.41/43.

Above: 107.18, 108.42, 110.39/47 and 111.60.

Support:

Initial: 103.91, 103.82, 103.73/75, 103.37/43, 103.30, 102.92/103.08, 102.57/82, 102.49/52, 102.33/40, 102.26, 102.13/14, 101.90/102.04, 101.60/83, 101.50/56, 101.42/43, 101.30/32, 101.08/27, 100.82/86, 100.75, 100.60/65, 100.38/48, 100.22, 100.00, 99.94, 99.66, 99.40, 99.25, 99.13/14, 99.00, 98.84/92, 98.63/72, 98.48/53, 98.28, 98.20, 98.08, 97.75/83, 97.49/63, 96.90/97.05, 96.81, 96.65/70, 96.55/56, 96.05, 95.79/80, and 95.44.

Below: 94.90/95.07, 94.87, 94.55, 94.19, 94.05, 93.76, 93.78 93.68, 93.50, 93.17, 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

 

GBPUSD: Lower

Resistance:

Initial: 1.6576/86, 1.6592, 1.6611/17, 1.6624, 1.6640/56, 1.6665/67, 1.6683, 1.6692/98, 1.6716/24, 1.6730/37, 1.6745, 1.6755, 1.6765/68, 1.6777, 1.6785, 1.6800/02, 1.6812, 1.6819/22, 1.6831/44, 1.6874/87, 1.6902/09, 1.6919/20, 1.6951, 1.6960, 1.6995, 1.7000, 1.7010, 1.7035, 1.7042/51, 1.7058/62, 1.7084, 1.7094/99, 1.7107, 1.7130, 1.7167, 1.7176/78 and 1.7190.

Above: 1.7440.

Support:

Initial: 1.6548, 1.6516, 1.6484, 1.6458/65, 1.6441, 1.6417/18,1.6400, 1.6394, 1.6380/83, 1.6376, 1.6348, 1.6336, 1.6298/1.6309, 1.6290, 1.6251/62, 1.6239/46, 1.6222/24, 1.6215/16, 1.6195/98, 1.6177, 1.6155, 1.6130/36, 1.6109/21, 1.6083/96, 1.6071/77, 1.6051/66, 1.6001/08, 1.5975/91, 1.5956/61, 1.5948, 1.5900/27, 1.5886/93, 1.5874/77, 1.5853, 1.5844, 1.5825, 1.5803/07, 1.5775/81, 1.5750, 1.5714/17, 1.5683/92, 1.5673, 1.5624/56, 1.5601/15, 1.5591, 1.5561/68, 1.5538/45 and 1.5514/16.

Below: 1.5498/99, 1.5476/79, 1.5458, 1.5434, 1.5427, 1.5403/21, 1.5313/92, 1.5304, 1.5293, 1.5260/62, 1.5237/39, 1.5208/23, 1.5198, 1.5173/87, 1.5164, 1.5152/57, 1.5130, 1.5123, 1.5101, 1.5092, 1.5081, 1.5072/75, 1.5026/32, 1.5013, 1.5007. 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4856, 1.4830, 1.4812 and 1.4785, 1.4345 and 1.4232.

 

AUDUSD: Mildly Higher

Resistance:

Initial: 0.9328/34, 0.9343/53, 0.9359/86, 0.9391/98, 0.9404/10, 0.9420/24, 0.9428/33, 0.9440/47, 0.9455/57, 0.9469 and 0.9483/86.

Above: 0.9500, 0.9524/27, 0.9536/42, 0.9571, 0.9585, 0.9592, 0.9620, 0.9640, 0.9664, 0.9676, 0.9689/96, 0.9710, 0.9732, 0.9757, 0.9791/94, 0.9841/96, 0.9900, 0.9925/83, 1.0000/18, 1.0052, 1.0099/1.0100, 1.0114/17, 1.0148/51, 1.0165/77 and 1.0181/82.

Support:

Initial: 0.9311, 0.9286/94, 0.9304, 0.9268/74, 0.9232/57, 0.9214/26, 0.9201/08, 0.9179/89, 0.9162/67, 0.9147, 0.9127/37, 0.9110/19, 0.9102, 0. 9072/79, 0.9061/66, 0.9054/57, 0.9042/48, 0.9041, 0.9035, 0.8994/0.9008, 0.8981/87, 0.8967/69, 0.8951/57, 0.8923/36, 0.8918, 0.8906/12, 0.8887/92, 0.8869, 0.8857/61, 0.8842/47, 0.8819/25, 0.8762/70, 0.8729, 0.8693, 0.8659, 0.8578 and 0.8512.

Below: 0.8066 and 0.7674.

 

USDCAD: Mildly Lower

Resistance:

Initial: 1.0945, 1.0954/59, 1.0962/66, 1.0982/1.1001, 1.1032/53, 1.1069/70, 1.1089, 1.1099, 1.1102/09, 1.1116/32, 1.1141, 1.1152, 1.1158, 1.1172/73, 1.1194, 1.1223 and 1.1277.

Above: 1.1723, 1.2985, 1.3007/14 and 1.3062.

Support:

Initial: 1.0934, 1.0925/28, 1.0915, 1.0903/09, 1.0894, 1.0873/86, 1.0852/57, 1.0849, 1.0839/40, 1.0820/21, 1.0813, 1.0793/96, 1.0742/85, 1.0736, 1.0726, 1.0717, 1.0702/09, 1.0693, 1.0668/79, 1.0646/60, 1.0619/29, 1.0608,1.0580/87, 1.0567/71, 1.0558/59, 1.0546, 1.0519/22, 1.0506, 1.0496/1.0502, 1.0471/87, 1.0459, 1.0441/44, 1.0414/18, 1.0401/04, 1.0390/92, 1.0379, 1.0355/68, 1.0333, 1.0324, 1.0309/12, 1.0283/1.0305, 1.0270/76, 1.0262, 1.0244/55, 1.0233/35, 1.0199/1.0226, 1.0172/82, 1.0165, 1.0151/56, 1.0148, 1.0128/42, 1.0103/05, 1.0081/99, 1.0050/56, 1.0029/34, 1.0018 and 1.0012.

Below: 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26, 0.9724/99, 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

 

NZDUSD: Mildly Lower

Resistance:

Initial: 0.8406, 0.8413, 0.8421/59, 0.8472/79, 0.8487/89, 0.8499, 0.8504/18, 0.8523/37, 0.8542/53, 0.8560/61, 0.8571/78, 0.8584/90, 0.8602/05, 0.8633/41, 0.8647/53, 0.8660/67, 0.8671/74, 0.8693/0.8700, 0.8712/18, 0.8734, 0.8744, 0.8764/77, 0.8789, 0.8792, 0.8821 and 0.8834.

Above: 0.8840.

Support:

Initial: 0.8376, 0.8359/66, 0.8322/53, 0.8302/16, 0.8291/95, 0.8285/87, 0.8280, 0.8271, 0.8263, 0.8250/55, 0.8221/41, 0.8204/14, 0.8195/97, 0.8186, 0.8171, 0.8160/63, 0.8147/53, 0.8114/37, 0.8100/09, 0.8078/82, 0.8049/60, 0.8030, 0.7989/0.8013, 0.7967, 0.7932, 0.7903/06, 0.7888, 0.7872, 0.7856/57, 0.7838/46, 0.7829, 0.7819 and 0.7804.

Below: 0.7795, 0.7783, 0.7760, 0.7751/58, 0.7731/34, 0.7705/23, 0.7697, 0.7681/86, 0.7605/76 and 0.7500/85.

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Cable downside extension bias

  • A very low level digestion Thursday of the push lower still capped by minor resistance at 1.6680 and ahead of better barriers at 1.6740 to leave bear pressures intact Friday and for latter August.
  • The Tuesday plunge through the 61.8% retrace of the 2014 up leg at 1.6610 opened downside risks to the April swing low at 1.6555.
  • Overshoot risk is still lower, maybe chart/ retrace targets at 1.6460/55.

WHAT CHANGES THIS?

  • Above 1.6740 eases bear risks; through 1.6845 signals a neutral tone, only shifting positive above 1.6895.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/GBPUSD.pdf

4 Hour GBPUSD Chart

Daily GBPUSD Chart

 

 

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Key Fundamental Forex Events for the Week of August 11th through August 15th

The following table lists the key economic data and other events that came out during the week of August 11th through August 15th, with release times displayed for the GMT time zone.

The list also indicates how much each release deviated from the market consensus forecast upon release, as well as what the affected major currency pair or pairs did after each event or set of events.

Monday, August 11th

  • 12:50am JPY Tertiary Industry Activity -0.1% versus 0.2% expected.  The currency fell.
  • 8:15am CHF Retail Sales 3.4% versus 0.7% expected.  The currency rose.
  • 8:15am USD FOMC Member Fischer said that, “As we continue to move forward in the aftermath of the global financial crisis and the Great Recession, policymakers around the world are dealing with new challenges that these historically important events have raised. In addition to the difficulties of assessing the relative importance of cyclical (short-term) versus structural (long-term) factors affecting the global economy, and in thinking about how to return to higher output and productivity growth, policymakers are focusing on the uses of monetary policy in attaining the dual goals of maximum employment and stable prices and in maintaining financial stability.“  The currency rose.
  • 1:15pm CAD Housing Starts 200K versus 194K expected.  The currency rose.

Tuesday, August 12th

  • 12:01am GBP BRC Retail Sales Monitor -0.3% versus last 6.11% expected.  The currency rose.
  • 2:30am AUD NAB Business Confidence 11 versus last 8 expected.  The currency was unchanged.
  • 2:30am AUD HPI 1.8% versus 1.1% expected.  The currency was unchanged.
  • 10:00am EUR German ZEW Economic Sentiment survey 8.6 versus 18.2 expected.  The currency rose.
  • 10:00am EUR EZ ZEW Economic Sentiment survey 23.7 versus 41.3 expected.  The currency fell.
  • 3:00pm USD JOLTS Job Openings 4.67M versus 4.74M expected.  The currency rose.

 Wednesday, August 13th

  • 3:34am CNY New Loans 385B versus 780B expected.
  • 6:30am CNY Industrial Production versus 9.1% expected.
  • 9:30am GBP Average Earnings Index -0.2% versus -0.1% expected.  The currency fell.
  • 9:30am GBP Claimant Count Change -33.6K versus -29.7K expected.  The currency fell.
  • 9:30am GBP Unemployment Rate 6.4% versus 6.4% expected.  The currency fell.
  • 10:30am GBP BOE Governor Carney said that, “Markets have been remarkably resilient to some of these geopolitical events and we’re only beginning to see the first advance signs of the middle through some of our major export markets such as Germany and the movements of some of the confidence indicators.”  The currency fell.
  • 10:30am GBP BOE Inflation Report noted that, “At its August meeting, the Committee noted that the central message of that guidance remained relevant: given the likely persistence of the headwinds weighing on the economy, when Bank Rate did begin to rise, it was expected to do so only gradually. Together with the legacy of the financial crisis and broader global forces, this meant that Bank Rate was expected to remain below average historical levels for some time to come. It remained the case, however, that the actual path for monetary policy, even after the first rise in Bank Rate, would remain dependent on economic conditions. In other words, the Committee’s guidance on the likely pace and extent of interest rate rises was an expectation, not a promise.”  The currency fell.
  • 1:30pm USD Core Retail Sales 0.1% versus 0.4% expected.  The currency rose.
  • 1:30pm USD Retail Sales 0.0% versus 0.2% expected.  The currency rose.
  • 11:45pm NZD Retail Sales 1.2% versus 1.0% expected.  The currency rose.

Thursday, August 14th

  • 12:50am JPY Core Machinery Orders 8.8% versus 15.5% expected.  The currency fell.
  • 2:00am AUD MI Inflation Expectations versus last 3.8% expected.  The currency rose.
  • 6:30am EUR French Preliminary GDP versus 0.1% expected.  The currency was unchanged.
  • 7:00am EUR German Preliminary GDP versus -0.1% expected.  The currency was unchanged.
  • 7:45am EUR French Preliminary Non-Farm Payrolls versus -0.1% expected.  The currency was unchanged.
  • 8:15am CHF PPI versus 0.0% expected.  The currency rose.
  • 9:00am EUR ECB Monthly Bulletin noted that, “The Governing Council sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term. In this context, the possible repercussions of heightened geopolitical risks and exchange rate developments will be monitored closely. Turning to the monetary analysis, data for June 2014 continue to point to subdued underlying growth in broad money (M3), with annual growth standing at 1.5% in June, compared with 1.0% in May. The growth of the narrow monetary aggregate M1 stood at 5.3% in June, up from 5.0% in May.”  The currency was unchanged.
  • 10:00am EUR Final CPI versus 0.4% expected.  The currency was unchanged.
  • 10:00am EUR Flash GDP versus 0.1% expected.  The currency was unchanged.
  • 1:30pm CAD NHPI versus 0.2% expected.  The currency rose.
  • 1:30pm USD Weekly Initial Jobless Claims versus 307K expected.  The currency fell.
  • 1:30pm USD Import Prices versus -0.2% expected.  The currency fell.

 Friday, August 15th

  • All Day EUR French Bank Holiday
  • All Day EUR Italian Bank Holiday
  • 9:30am GBP Second Estimate GDP 0.8% versus 0.8% expected.  The currency rose.
  • 1:30pm CAD Manufacturing Sales 0.6% versus 0.5% expected.  The currency rose.
  • 1:30pm USD PPI 0.1% versus 0.1% expected.  The currency fell.
  • 2:55pm USD Preliminary University of Michigan Consumer Sentiment survey has not yet been released, but 82.7 is expected. 

 Technical Recap for the Majors This Week

EURUSD:

Forecast: Mildly Higher
Actual: Mildly lower from a 1.3406 open to a 1.3388 close.

USDJPY:

Forecast: Mildly Lower
Actual: Mildly higher from a 102.10 open to a 102.55 close.

GBPUSD:

Forecast: Higher
Actual: Mildly lower from a 1.6772 open to a 1.6690 close.

AUDUSD:

Forecast: Higher
Actual: Mildly higher from a 0.9275 open to a 0.9322 close.

USDCAD:

Forecast: Mildly Lower
Actual: Mildly lower from a 1.0970 open to a 1.0895 close.

NZDUSD:

Forecast: Mildly Higher
Actual: Mildly higher from a 0.8462 open to a 0.8494 close.

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EURUSD bear extension risk

  • Yet another upside recovery rejection Thursday and despite the inside pattern, whilst below 1.3416 and the strong barriers at 1.3433/45, this leaves risk back to the cycle lows at 1.3337/3.
  • We see skewed Friday risk again for a break below here.
  • Moreover, we remain of the view that the latter July push below chart and retrace supports at 1.3400 and 1.3375 leaves bearish pressures into mid-August to aim for the 1.3295 spike low from Nov 2013.
  • Downside overshoot threat is still to the 61.8% retrace at 1.3230 and maybe the 1.3105 in August.

WHAT CHANGES THIS?

  • Above 1.3445 signals a neutral tone, only shifting positive above 1.3485/95.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/EURUSD.pdf

4 Hour EURUSD Chart

Daily EURUSD Chart

 

 

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Up until a month ago, Pound Sterling had been the greatest gift that a forex trader could ever hope for – a steadily appreciating trend for ten whole months. Yes, there was a hiccup or two along the way, but there were more than a thousand worth of pips to offset any losses you might have had shorting the Euro. But, as with the Perseid Meteor Shower this evening, shooting stars come, and they go. Eventually, the forces of nature will have their way. Balance will be achieved. Consequently, the Pound had to fall.

The fall from grace, however, has only amounted to just under 400 pips, nothing to carry on about like with Humpty Dumpty. At the moment, Sterling seems stunned and searching for a safety net to block its further fall. If there is someone to blame, then the culprit must surely be Mark Carney, the presiding head of the Bank of England. Central bankers have a terrible time controlling what comes out of their mouths, especially when they perceive that their actions may have out-performed their colleagues in other nations.

At a social gathering in June and, perhaps, after a liberal dosage of liquid refreshments, Mark displayed a bit more exuberance than the occasion might have merited. He hinted with a broad smile that interest rates in the UK might rise in 2014, well before 2015, as the market had expected. His policies had worked, despite a looming housing bubble. Others had not. He was the winner. A coronation was in order. But, hubris is its own karma. A fall was predictable, and without stellar economic releases, the Pound did fall.

As always, the question now is “What’s next?” To some extent, a portion of the fall has been due to the recent resurgence of the U.S. Dollar. It, too, has been on a meteoric rise of late, climbing to the high end of its tight range. That index’s range has been constrained between 79 and 81 since last September, but the greenback took off this past month, shattering all obstacles in its path.

As for the Pound, the market is the real culprit. Speculators had built in a series of interest rate increases that could never have happened. Softness in manufacturing and GDP growth estimates have revealed a weak underbelly that had yet to be exposed. The UK economy may actually be slowing down, rather than speeding up. No higher gears equates to no interest rate hikes, and then, “Pop! Goes the weasel.”

The Pound is hovering around 1.68 at the moment. Most analysts are expecting more down than up in the near term. The evidence for this conclusion is plentiful, as noted by the dashed green lines on the chart. First, Cable broke through the lower blue channel line and mean-value line of the Bollingers with ease. Second, it proceeded to drop through the Kumo Cloud and the 100-Day EMA, but tested that support before moving on.

Lastly, the Pound has now settled between the 38.2 and 50.0 Fibonacci lines of its last forceful upward trend, an area that is sometimes referred to as the “Correction Zone”. Pauses are common in this region. The result, after a bit of deliberation, is typically a demonstrative move in one direction or the other. There are no clues in the futures arena. Shorting the Pound is not gaining popularity. There may even be a hint of support for a rebound.

The 1.67 line of support is key. A bounce up might then form the second shoulder of an “H&S” pattern, which would bring 1.62 into the picture. Stay tuned.

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AUDUSD bearish extension bias

  • A better bounce effort than we had anticipated Wednesday, through minor, initial resistance at .9290, but the capped by a cluster of pivotal/ retrace/ trend barriers in the .9322/30 area we had flagged.
  • Whilst capped here, we see bias for a roll back lower to the range, for a move back to .9260 and maybe then more notable supports at .9240/30.
  • Moreover, the risk is still lower through, mid-August and we aim through .9230 for the key .9208/00 area this week.
  • Below here sets a bigger top for .9180 and .9080.

WHAT CHANGES THIS?

  • Above .9325 eases bear risks; through .9375 signals a neutral tone, only shifting positive above .9472.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/AUDUSD.pdf

4 Hour AUDUSD Chart

Daily AUDUSD Chart

 

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NZDUSD bearish extension threat intact

  • As expected, a new cycle low through .8422, just holding above the key .8402 level, still capped by the trend line from July at .8460 and solid chart resistances at .8495 and .8535
  • We still see bias for further downside pressures this week, with risk through the key June swing low at .8402 for a bigger topping structure.
  • This would then aim at the 61.8% retrace of the 2014 up move at .8350 and chart supports at .8280 and .8240.

WHAT CHANGES THIS?

  • .Above .8535 eases bear risks; through .8600 signals a neutral tone, only shifting positive above .8710.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/NZDUSD.pdf

4 Hour NZDUSD Chart

Daily NZDUSD Chart

 

 

 

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