Articles

Global Markets:

• Asian Stock Markets : Nikkei down 0.36%, Shanghai Composite up 0.17%, Hang Seng up 1.22%, ASX up 0.40%
• Commodities : Gold at $1513.45 (-0.06%), Silver at $17.88 (-0.62%), Brent Oil at $68.02 (+0.15%), WTI Oil at $61.80 (+0.19%)
• Rates : US 10-year yield at 1.900, UK 10-year yield at 0.770, Germany 10-year yield at -0.245

News & Data:

• (JPY) Retail Sales y/y -2.10% vs -1.70% expected
• (JPY) Prelim Industrial Production m/m -0.90% vs -1.10% expected
• (JPY) Unemployment Rate 2.20% vs 2.40% expected
• (JPY) Tokyo Core CPI y/y 0.80% vs 0.60% expected
• (USD) Unemployment Claims 222K vs 222K expected
• Japan’s output, retail sales fall, signaling economic strains
• China treads warily on US trade deal text to keep other partners on side

Markets Update:

Asian stock markets are mostly higher on Friday following the record highs overnight on Wall Street amid optimism over the likely signing of a phase one U.S.-China trade deal in January and as online retail giant Amazon.com said the holiday season was “record-breaking”.

The Australian market, which resumed trading after a two-day holiday, is modestly higher following the record highs on Wall Street. Mainland Chinese stocks gave up early gains by the afternoon, with the Shanghai composite up 0.2% while the Shenzhen component lost 0.1%. Japan’s Nikkei 225 was lower by 0.4% as shares of index heavyweight Fast Retailing fell over 2% while the Topix index added 0.1%.

Both oil and gold held on to their recent gains. Brent crude, the global benchmark, extended gains into a fourth session, hitting $68.09 per barrel, the highest since mid-September. The rally in oil and gold boosted commodity-linked currencies in the past 24 hours with the New Zealand dollar up 0.6% and the Australian dollar up 0.3%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.435 after seeing earlier highs above 97.6 yesterday.

Upcoming Events:

• 09:00 AM GMT – (CHF) Credit Suisse Economic Expectations
• 09:00 AM GMT – (EUR) ECB Economic Bulletin
• 09:30 AM GMT – (GBP) High Street Lending
• 03:30 PM GMT – (USD) Natural Gas Storage
• 04:00 PM GMT – (USD) Crude Oil Inventories

Global Markets:

• Asian Stock Markets : Nikkei down 0.76%, Shanghai Composite up 1.16%, Hang Seng up 0.58%, ASX down 0.25%
• Commodities : Gold at $1516.75 (-0.09%), Silver at $17.94 (-0.03%), Brent Oil at $67.03 (+0.24%), WTI Oil at $61.79 (+0.11%)
• Rates : US 10-year yield at 1.886, UK 10-year yield at 0.755, Germany 10-year yield at -0.233

News & Data:

• (CHF) Credit Suisse Economic Expectations 12.5 vs -3.9 previous
• (USD) Natural Gas Storage -161B vs -145B expected
• (USD) Crude Oil Inventories -5.5M vs -1.7M expected

Markets Update:

Asian stock markets are mostly lower on Monday, the last trading of 2019 for some markets in the region, following the lackluster cues from Wall Street Friday and in the absence of fresh catalysts. Nevertheless, an agreement between the U.S. and China on a phase one trade deal has helped lift some of the uncertainty hanging over the markets. Trading volume continued to remain thin ahead of the New Year holidays.

Mainland Chinese stocks were higher by their close, following their Monday fall. Both the Shanghai Composite and the Shenzhen Component indices were trading higher by 1.2%. Hong Kong’s Hang Seng index gained 0.6%. Japan’s Nikkei stock index finished its last trading day of the year down 0.76%. The index gained 18.2% in 2019 after dropping 12.8% last year.

Oil also gained on Friday, with prices posting their fourth consecutive weekly gain to steady around their highest in three months. Oil’s gains followed news of U.S. air strikes in Iraq and Syria against Kataib Hezbollah, an Iran-backed militia group. Oil prices were also supported by a bigger-than-expected decline in crude inventories in the United States, the world’s biggest fuel consumer.

Gold also continued its run-up, boosted by a weak dollar, after posting its best week in more than four months on Friday amid thin trading volumes.

Upcoming Events:

Monday, December 30, 2019

• 02:45 PM GMT – (USD) Chicago PMI

Tuesday, December 31, 2019

• 01:00 AM GMT – (CNY) Manufacturing PMI
• 01:00 AM GMT – (CNY) Non-Manufacturing PMI
• 03:00 PM GMT – (USD) CB Consumer Confidence

Thursday, January 02, 2020

• 01:45 AM GMT – (CNY) Caixin Manufacturing PMI
• 09:30 AM GMT – (GBP) Final Manufacturing PMI

Friday, January 03, 2020

• 03:00 PM GMT – (USD) ISM Manufacturing PMI
• 04:00 PM GMT – (USD) Crude Oil Inventories
• 07:00 PM GMT – (USD) FOMC Meeting Minutes
• 08:30 PM GMT – (USD) FOMC Member Kaplan Speaks
• Tentative – (USD) Treasury Currency Report
• &More…

Dear Traders,

Please find our updated trading schedule for the Christmas, Boxing Day and New Year’s Day holidays below. All times mentioned in GMT +2.

Liquidity over the holidays is expected to be particularly thin so please take the necessary precautions to ensure you are not affected by increased volatility, spreads and intermittent pricing.

We will have staff to assist you throughout the holiday period whenever the market is open. Please be aware that deposits and withdrawals will be delayed when there is a bank holiday. Online funding methods such as credit/debit card, PayPal, Neteller, Skrill etc. will still be processed instantly.

Tel: +61 (0)2 8014 4280
Email: support@icmarkets.com
Live Chat: Click Here

We would like to take this opportunity to thank you for your business over the last year. 2019 has been a year of growth and change for IC Markets as we endeavor to bring you the best trading conditions and client experience possible.

We wish for an enjoyable holiday season and a prosperous 2020 for you and your family.

Forex Pairs:

(more…)

Global Markets:

• Asian Stock Markets : Nikkei up 0.02%, Shanghai Composite down 1.40%, Hang Seng up 0.07%, ASX down 0.46%
• Commodities : Gold at $1488.55 (+0.52%), Silver at $17.39 (+0.98%), Brent Oil at $65.94 (-0.30%), WTI Oil at $60.20 (-0.40%)
• Rates : US 10-year yield at 1.903, UK 10-year yield at 0.781, Germany 10-year yield at -0.261

News & Data:

• (USD) Personal Spending m/m 0.40% vs 0.40% expected
• (USD) Core PCE Price Index m/m 0.10% vs 0.10% expected
• (GBP) Parliament Brexit Vote Pass vs previous
• (USD) Final GDP q/q 2.10% vs 2.10% expected
• (CAD) Retail Sales m/m -1.20% vs 0.50% expected
• (CAD) Core Retail Sales m/m -0.50% vs 0.20% expected
• (GBP) Final GDP q/q 0.40% vs 0.30% expected
• (GBP) Current Account -15.9B vs -15.7B expected
• China slams Washington’s new defense act
• In 2020, 2% Looks Like the New 3% for the World’s Benchmark Rate

CFTC Positioning Data:

• EUR short 66K vs 68K short last week. Shorts trimmed by 2K
• GBP short 6K vs 23K short last week. Shorts trimmed by 17K
• JPY short 42K vs 44K short last week. Shorts trimmed by 2k
• CHF short 11K vs 21K short last week. Shorts trimmed by 10K
• AUD short 47k vs 37K short last week. Shorts increased by 10K
• NZD short 8K vs 25K short last week. Shorts trimmed by 17K
• CAD long 11k vs 21K long last week. Longs trimmed by 10K.

Markets Update:

Asian stock markets are mostly lower on Monday despite the record closing highs on Wall Street Friday amid continued optimism that the U.S. and China have reached an agreement on phase one trade deal, which has eliminated considerable uncertainty for the markets. Trading volumes are subdued in Asian markets ahead of the Christmas holiday break later this week.

China said on Monday it would lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year as it looks to boost imports amid a slowing economy and a trade war with the United States.

Mainland Chinese stocks fell as the Shanghai composite was down 1.4%, while the Shenzhen composite tumbled 1.8%. Hong Kong’s Hang Seng index was lower by 0.1%. Japan’s Nikkei 225 was flat, and the Topix index fell 0.2%. Australia’s S&P/ASX 200 was down 0.5%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.653, retreating from a high of 97.758 last week. The only major data this week is the U.S. personal consumption expenditure (PCE) deflator for November, due on Friday.

Upcoming Events:

Monday, December 23, 2019

• 01:30 PM GMT – (CAD) GDP m/m
• 01:30 PM GMT – (USD) Core Durable Goods Orders m/m
• 01:30 PM GMT – (USD) Durable Goods Orders m/m
• Tentative – (USD) Treasury Currency Report

Friday, December 27, 2019

• 04:00 PM GMT – (USD) Crude Oil Inventories
• &more…

Global Markets:

• Asian Stock Markets : Nikkei up 1.01%, Shanghai Composite up 0.05%, Hang Seng up 0.28%, ASX up 0.24%
• Commodities : Gold at $1466.25 (-0.44%), Silver at $17.01 (-0.57%), Brent Oil at $61.26 (+1.27%), WTI Oil at $56.06 (+1.61%)
• Rates : US 10-year yield at 1.810, UK 10-year yield at 0.697, Germany 10-year yield at -0.359

News & Data:

• (CNY) Caixin Manufacturing PMI 51.8 vs 51.5 expected
• (AUD) Company Operating Profits q/q -0.80% vs 1.00% expected
• (AUD) Building Approvals m/m -8.10% vs -1.00% expected
• (CNY) Non-Manufacturing PMI 54.4 vs 53.1 expected
• (CNY) Manufacturing PMI 50.2 vs 49.5 expected
• (CAD) RMPI m/m -1.90% vs -1.90% expected
• (CAD) GDP m/m 0.10% vs 0.10% expected
• (EUR) CPI Flash Estimate y/y 1.00% vs 0.80% expected
• Germany Pulls Back from Recent Overt Criticism Of ECB
• AU Job Ads slide further in November

Markets Update:

Asian stock markets are mostly higher on Monday as official data released over the weekend showed that China’s factory activity returned to growth in November for the first time in seven months.

A private survey of Chinese factory activity in November, released on Monday, also came in stronger than expected. The data helped offset worries that tensions between the U.S. and China over Hong Kong could impact the ongoing trade talks. Meanwhile, China’s Global Times reported that China wants the U.S. to remove existing tariffs on Chinese goods as part of a phase one trade deal.

Japanese stocks led gains among major markets in the region, with the Nikkei 225 adding 1% in afternoon trade, as shares of index heavyweight and robot maker Fanuc gained 1.5%. The Topix index also rose 0.9%. Mainland Chinese stocks rose by the afternoon, with the Shanghai composite gaining 0.1%. Hong Kong’s Hang Seng index also rose 0.3%. Shares in Australia also edged higher as the S&P/ASX 200 gained 0.2%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.323 after spiking to levels above 98.4 late last week.

Oil prices bounced back a tad after a big slump on Friday on record high U.S. crude production. The market drew support from expectations that OPEC and its allies are likely to extend existing oil output cuts when they meet this week , with non-OPEC oil producer Russia supporting Saudi Arabia’s push for stable oil prices amid the listing of state oil giant Saudi Aramco.

Upcoming Events:

Monday, December 02, 2019

• 08:15 AM GMT – (EUR) Spanish Manufacturing PMI
• 09:30 AM GMT – (GBP) Final Manufacturing PMI
• 02:00 PM GMT – (EUR) ECB President Lagarde Speaks
• 03:00 PM GMT – (USD) ISM Manufacturing PMI

Tuesday, December 03, 2019

• 12:30 AM GMT – (AUD) Current Account
• 03:30 AM GMT – (AUD) Cash Rate
• 03:30 AM GMT – (AUD) RBA Rate Statement

Wednesday, December 04, 2019

• 12:30 AM GMT – (AUD) GDP q/q
• 01:45 AM GMT – (CNY) Caixin Services PMI
• 09:30 AM GMT – (GBP) Final Services PMI
• 01:15 PM GMT – (USD) ADP Non-Farm Employment Change
• 03:00 PM GMT – (CAD) BOC Rate Statement
• 03:00 PM GMT – (CAD) Overnight Rate
• 03:00 PM GMT – (USD) ISM Non-Manufacturing PMI
• 03:30 PM GMT – (USD) Crude Oil Inventories

Thursday, December 05, 2019

• 12:00 AM GMT – (NZD) RBNZ Gov Orr Speaks
• 12:30 AM GMT – (AUD) Retail Sales m/m
• 12:30 AM GMT – (AUD) Trade Balance
• All Day – (All) OPEC Meetings
• 01:30 PM GMT – (CAD) Trade Balance

Friday, December 06, 2019

• All Day – (All) OPEC-JMMC Meetings
• 01:30 PM GMT – (CAD) Employment Change
• 01:30 PM GMT – (CAD) Unemployment Rate
• 01:30 PM GMT – (USD) Average Hourly Earnings m/m
• 01:30 PM GMT – (USD) Non-Farm Employment Change
• 01:30 PM GMT – (USD) Unemployment Rate
• 03:00 PM GMT – (USD) Prelim UoM Consumer Sentiment
• &more…

Key risk events today:

Australia Building Approvals m/m; Australia Company Operating Profits q/q; Caixin Manufacturing PMI; US ISM Manufacturing PMI.

EUR/USD:

Weekly gain/loss: -0.02%

Weekly close: 1.1015

Weekly perspective:

Longer-term flow continues to echo a bearish vibe, languishing south of a long-standing resistance area at 1.1119-1.1295. Since the beginning of November 2018, the pair has also remained compressed within a descending channel, formed from a high set at 1.1569 and a low of 1.1109.

Further selling going forward has the lower boundary of the descending channel to target, which happens to merge closely with the 2016 yearly opening level at 1.0873.

Concerning trend direction, the primary downtrend has been in motion since topping in early 2018 at 1.2555.

Daily perspective:

Last week’s price action was somewhat docile, confined to a narrow range of 50 points just south of the 50-day SMA (blue – 1.1039). Aside from the 1.0989 November 14 low possibly providing a ‘floor’, support is limited on this scale until reaching demand at 1.0851-1.0950 (holds the 2016 yearly opening level at 1.0873 within its lower boundary).

Upside hurdles beyond the aforementioned 50-day SMA can be seen at resistance drawn from 1.1072, followed by the 200-day SMA (orange – 1.1164). Note the longer-term moving average has been pointing south since June 2018.

H4 perspective:

Friday had Europe’s shared currency a shade higher against the buck, recording a session low at 1.0981 and highs of 1.1028. On the data front, annual Eurozone inflation rose 1.0% in November 2019, up from 0.7% in October.

Technically, the 1.0989/1.10 support zone remains in motion, consisting of the key figure 1.10, September’s opening level at 1.0989 and a 61.8% Fibonacci retracement at 1.0994. Indicator-based traders may also wish to note the relative strength index (RSI) ended the week marginally north of the 50.0 value.

1.0989/1.10 is likely a watched area for longs, given its historical significance (black arrows). The problem, however, is the lack of higher-timeframe support, as well as the constant threat of a fakeout through the 1.10 level, which occurred Friday (whipsaws are common viewing around psychological levels).

Areas of consideration:

An extension higher from 1.0989/1.10 on the H4 is a possibility this week, targeting H4 resistance located at 1.1055 as the initial take-profit zone. The fact H4 action took out the local high at 1.1025 Friday is a sign of buyer intent from the said H4 support zone. Therefore, a retest at 1.0989/1.10 (blue arrows) is certainly something to watch for today/early week.

A decisive close beneath 1.0989, on the other hand, opens the door to an intraday bearish theme, targeting H4 Quasimodo support at 1.0957 as the initial downside take-profit area. Keep in mind, weekly price suggests the 2016 yearly opening level at 1.0873 could eventually make an appearance, so keeping a portion of any short position open is an option here.

GBP/USD:

Weekly gain/loss: +0.76%

Weekly close: 1.2927

Weekly perspective:

The technical landscape on the weekly timeframe continues to support further upside in GBP/USD, exhibiting a bullish flag (typically considered a continuation pattern) forming just north of the 2019 yearly opening level 1.2739. A decisive push out of the said flagging formation may lead to the unit crossing swords with supply at 1.3472-1.3204, and long-term trend line resistance, etched from the high 1.5930.

Regarding the immediate trend, the market faces a downward trajectory from 1.4376, with a break of the 1.1904 low (labelled potential support) confirming the larger downtrend from 1.7191.

Daily perspective:

Since mid-October, candle action has been carving out a consolidation between a resistance area plotted at 1.3019-1.2975 and a well-placed support level at 1.2769. Beyond this range, Quasimodo resistance lies at 1.3102, whereas south of 1.2769, the 200-day SMA (orange – 1.2697) and 50-day SMA (blue – 1.2715) offer support. In addition, the 50-day SMA is seen marginally crossing above the 200-day SMA, often referred to as a ‘Golden Cross’.

H4 perspective:

Intraday movement observed buyers toughen their grip Friday, rebounding from lows of 1.2879 to a session high of 1.2942. The move took place amid a retreat in the US dollar across the board. 1.29 retains its spot as support, while resistance falls in at November’s opening level fixed from 1.2938 that converges closely with a local trend line resistance, extended from the high 1.2984.

Areas of consideration:

Longer term, additional upside is likely in store. Bullish flags, particularly formed on higher timeframes, are known for accuracy. Clearance of the upper edge of the daily range at 1.3019 and Quasimodo resistance at 1.3102 adds confidence the current weekly bullish flag is likely headed for higher ground.

Shorter term, nevertheless, entering long on the back of a H4 close formed above 1.2938 is certainly an idea worth exploring, with an initial upside objective set at 1.2975 (the lower edge of the current daily resistance area), followed by 1.30. Conservative traders may opt to wait for a retest at 1.2938 following the close higher; this helps avoid any whipsaws and, if the retest forms by way of a bullish candlestick pattern, provides entry/risk levels to work with.

AUD/USD:

Weekly gain/loss: -0.31%

Weekly close: 0.6760

Weekly perspective:

The Australian dollar yielded ground to the buck for a fourth successive session last week, hauling weekly price deeper into its current range between 0.6894/0.6677 (light grey). With a primary downtrend in play since early 2018, breaching the lower edge of the said range is likely, with the next support target not visible until around 0.6359.

Daily perspective:

In terms of the daily timeframe, price continues to explore ground beneath the 50-day SMA (blue – 0.6805). Although support may develop around the 0.6728ish region, traders likely have their crosshairs fixed on support pencilled in from 0.6677.

H4 perspective:

Since retesting the underside of 0.68, a slow grind lower has taken form. October’s opening level at 0.6750 represents the next downside target on the H4 timeframe, closely shadowed by Quasimodo support at 0.6751. September’s opening level at 0.6724 is also in sight, as well as the 0.67 handle.

Indicator-based traders may also to wish to note a consolidation phase is seen on the relative strength index (RSI), just south of the 50.0 mid-way value.

Areas of consideration:

From a technical perspective, sellers appear to have the upper hand right now. For any traders who remain short the retest at 0.68 (a noted move to watch for in previous reports) likely have October’s opening level at 0.6750 set as their initial take-profit zone.

A break of 0.6750 confirms the downside bias, and opens the door for additional intraday shorts, with 0.6724 eyed as the next possible support.

USD/JPY:

Weekly gain/loss: +0.79%

Weekly close: 109.48

Weekly perspective:

USD/JPY bulls entered an offensive phase over the course of last week, adding more than 85 points and pencilling in a near-full-bodied bullish candle.

Structurally, however, resistance is now in play, based on a 127.2% Fibonacci ext. point at 109.56 (taken from the low 104.44). Plotted close by is another layer of resistance formed at 109.68, the 2019 yearly opening level. Also sited nearby is trend line resistance, extended from the high 114.23.

In regards to the market’s primary trend, the pair has been entrenched within a range since March 2017, spanning 115.50/105.35.

Daily perspective:

In conjunction with weekly standing, price action on the daily timeframe is touching gloves with a ‘cradle point’ of a recently broken ascending wedge, formed from the low 104.44. This is likely viewed as a critical threshold, which given its alignment with weekly resistance, could entice strong selling this week. The next downside target on this scale can be found at the 200-day SMA (orange – 108.91).

H4 perspective:

In recent sessions, intraday action reached fresh six-month highs at 109.67, before spinning lower and settling in modestly positive territory. Quasimodo resistance at 109.74 is the next key technical level in sight, with the 109 handle denoting possible support.

109.74 is a favoured level, due to its connection with the current higher-timeframe resistances, and also a potential H4 ABCD correction (blue arrows) at 109.80.

Areas of consideration:

According to longer-term structure, this could be an ideal time to begin thinking about selling this market, with protective stop-loss orders positioned above weekly trend line resistance (114.23). As for take-profit targets, the 200-day SMA plotted on the daily timeframe offers a logical base for an initial target.

Traders who require more of a precise entry, H4 Quasimodo resistance at 109.74 offers a reasonably stable platform. Again, though, protective stop-loss orders can be placed above the noted weekly trend line resistance.

USD/CAD:

Weekly gain/loss: -0.17%

Weekly close: 1.3274

Weekly perspective:

Despite the prior week’s strong ascent, last week’s movement saw volatility diminish considerably, ranging no more than 60 points. The key technical observation on the weekly timeframe consists of a trend line support, extended from the low 1.2061, tops around 1.3342, the 2017 yearly opening level at 1.3434 and a trend line resistance, taken from the peak at 1.3661.

Overall, the immediate trend faces north since bottoming in September 2017, though this move could also be considered a deep pullback in a larger downtrend from the 1.4689 peak in early January 2016.

Daily perspective:

Recent action on the daily timeframe remains encased within a bullish flag pattern (red lines), following price breaking above the 200-day SMA (orange – 1.3277). A breakout above the said bull flag has the 61.8% Fibonacci retracement ratio at 1.3357 to target, as well as nearby resistance plotted at 1.3382. Flag failure, on the other hand, could draw in a retest at the 50-day SMA (blue – 1.3216).

H4 perspective:

Friday’s intraday movement, based on the H4 timeframe, once again, encountered resistance around the 1.33 neighbourhood, bolstered by nearby resistance in the shape of September’s opening level at 1.3314, and a 127.2% Fibonacci ext. point at 1.3311.

Medium-term flow also remains compressing within the confines of an ascending channel, taken from the low/high of 1.3042/1.3268. With Friday concluding at the lower edge of this channel, support around October’s opening level at 1.3239, followed by the 1.32 handle, are barriers certainly worthy of note this week.

WTI prices also turned sharply lower Friday, despite a lack of immediate fundamental catalysts at the time. On the data front, Canadian GDP expanded at an annualised rate of 1.3% y/y in Q3, higher than the expected rate of 1.2%. The m/m and q/q rates of expansion fell in line with expectations at 0.1% and 0.3%, respectively.

Areas of consideration:

Entering long at the current H4 channel support is, of course, an option, though the barrier lacks confluence, both locally and on the higher timeframes. Waiting for additional candlestick confirmation to form before pulling the trigger is, therefore, worth considering (entry/risk can be set according to this structure).

A decisive H4 close below the current H4 channel support may entice sellers, though is considered a chancy short, as the position, almost immediately, must contend with the lower edge of the current daily bullish flag.

The H4 Quasimodo resistance at 1.3361 is also likely of interest to many traders for potential shorts, knowing it fits between daily resistance at 1.3382 and the 61.8% Fibonacci retracement ratio at 1.3357.

USD/CHF:

Weekly gain/loss: +0.25%

Weekly close: 0.9996

Weekly perspective:

Early October witnessed the beginning of a two-month long consolidation within the walls of a supply zone at 1.0014-0.9892. A week prior to this, however, a penetration to the outer edge of the supply area’s limit was seen, possibly tripping a portion of buy stops and weakening sellers. Therefore, the recent push higher should not really come as a surprise.

Further buying this week has Quasimodo resistance at 1.0124 in sight, followed by resistance at 1.0240 and trend line support-turned resistance, extended from the low 0.9187.

According to the primary trend, price also reflects a slightly bullish tone.

Daily perspective:

As evident from the daily timeframe, recent buying absorbed both the 50-day SMA (blue – 0.9928) and 200-day SMA (orange – 0.9947). Traders may also want to acknowledge that since mid-September, the unit has been busy carving out a consolidation between support around the 0.9845ish region (green) and a resistance area coming in at 1.0010/0.9986. Note the week concluded by way of a shooting star pattern (considered a bearish signal) that pierced the upper zone of the aforesaid range.

H4 perspective:

Trading volume increased exponentially going into Friday’s US session, sending USD/CHF through orders at 1.0000 (parity) to resistance in the shape of a Fibonacci extension point at 1.0015, and then back beneath 1.0000. The amount of buy stops this move triggered was likely enormous, both from traders short 1.0000 and those attempting to buy the breakout higher.

Although mild bearish divergence is seen on the relative strength index (RSI – red line), this is treacherous ground for shorts. Granted, the buy stops triggered will likely play a key factor in professional money selling this market, though this is never a guarantee.

Areas of consideration:

Knowing weekly supply at 1.0014-0.9892 is weak, conservative sellers will likely want to see 0.9960 taken out before committing funds to a position. Scope for a push to 0.99 beneath here is certainly a possibility, according to the H4 timeframe. However, the two said SMAs on the daily timeframe may cause support.

A decisive close back above 1.0000 this week may also prompt additional buying. Ultimately, though, a daily close above 1.0010/0.9986 is required before strong buyers likely jump onboard. As such, longs above 1.0000 could also be an option this week.

Dow Jones Industrial Average:

Weekly gain/loss: +0.76%

Weekly close: 28074

Weekly perspective:

Despite a brief spell in negative territory the week prior, the index struck fresh records for a fourth successive week, clocking highs of 28174.

Support at 27335, along with trend line support etched from the high 26670. remains a key focal point on the weekly timeframe this week.

Daily perspective:

Local demand at 27474-27647, sited a few points north of the said weekly support levels, held price action higher on November 20. Aside from this zone, there is really is no other support structure visible on this scale.

H4 perspective:

US Stocks fell broadly lower Friday, a day after the Thanksgiving holiday that left the market slightly below its record highs. The Dow Jones Industrial Average erased 112.59 points, or 0.40%; the S&P 500 lost 12.65 points, or 0.40% and the tech-heavy Nasdaq 100 declined 41.02 points, or 0.49%.

H4 support remains in place in the shape of a trend line support, extended from the low 25710, which was brought into motion by the week’s close.

Areas of consideration:

With the trend continuing to form higher peaks, this remains a buyers’ market.

The current H4 trend line support offers a potential platform for buyers, though given trend lines are open to whipsaws, traders may opt to entering on the back of additional candlestick confirmation. Not only does this help identify buyer intent, it also provides traders entry and risk levels.

A break of the current trend line support, however, may lead to a run towards H4 support coming in at 27713. A H4 close south of the said trend line, therefore, may also be viewed as a bearish signal, particularly if the broken trend line is retested as resistance in the shape of a bearish candlestick signal.

XAU/USD (GOLD):

Weekly gain/loss: +0.12%

Weekly close: 1463.6

Weekly perspective:

Last week was reasonably noneventful, with candle action maintaining a position south of a notable resistance area at 1487.9-1470.2. Further rejection off the underside of 1487.9-1470.2 potentially sets the long-term stage for a move towards two layers of support at 1392.0 and 1417.8.

Daily perspective:

With respect to daily activity, action remains hovering north of a support area coming in at 1448.9-1419.9. Note this area aligns closely with a 38.2% Fibonacci retracement ratio at 1448.5 and is further bolstered by the completion of a three-drive pattern – black arrows.

Upside from this area, nonetheless, is limited by a channel resistance, pencilled in from the high 1557.1, closely shadowed by the 50-day SMA (blue – 1485.6).

H4 perspective:

In light of Friday’s sizable move higher, the ascending wedge pattern (1445.5), which broke to the downside November 21, is struggling. The light at the end of the tunnel, however, may be the recent formation of a H4 ABCD bearish correction (blue arrows) at 1465.5, which converges with a 50.0% retracement at 1464.5. This may be enough to entice additional sellers into the market. Failure of this pattern, however, will likely lead to a retest at October opening level at 1472.8.

Areas of consideration:

Traders confident in the H4 ABCD pattern may look to enter short on the back of this formation, targeting the top edge of the daily support area at 1448.9 as the initial downside base. Conservative stop-loss placement is seen above October’s opening level at 1472.8.

The accuracy, completeness and timeliness of the information contained on this site cannot be guaranteed. IC Markets does not warranty, guarantee or make any representations, or assume any liability regarding financial results based on the use of the information in the site.

News, views, opinions, recommendations and other information obtained from sources outside of www.icmarkets.com.au, used in this site are believed to be reliable, but we cannot guarantee their accuracy or completeness. All such information is subject to change at any time without notice. IC Markets assumes no responsibility for the content of any linked site.

The fact that such links may exist does not indicate approval or endorsement of any material contained on any linked site. IC Markets is not liable for any harm caused by the transmission, through accessing the services or information on this site, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user’s software, hardware, data or property.

Key risk events today:

EUR CPI Flash Estimate y/y; Canada GDP m/m.

EUR/USD:

(Italics – previous analysis).

The US Thanksgiving holiday witnessed thin trade Thursday. On the data front, however, headline German CPI for November missed expectations for a pick-up to 1.3%, and the pace remained unchanged at 1.1%, missing estimates for a rise to 1.3% y/y. The m/m release fell deeper than expected, falling 0.8% vs. 0.6% expectations.

Technically, the 1.0989/1.10 zone based on the H4 timeframe remains in view, consisting of the key figure 1.10, September’s opening level at 1.0989 and a 61.8% Fibonacci retracement at 1.0994. While many traders are likely looking to enter long from this zone, higher-timeframe structure displays limited support.

According to the weekly timeframe, price continues to reflect a bearish tone south of long-standing resistance area at 1.1119-1.1295. Further selling has the lower boundary of a weekly descending channel to target (extended from the low 1.1109), merging closely with the 2016 yearly opening level at 1.0873. Also, concerning trend direction, the primary downtrend has been in motion since topping in early 2018 at 1.2555. 

A closer reading of price action on the daily timeframe has the candles trading below both the 200/50-day SMAs (1.1164/1.1039). Aside from the 1.0989 November 14 low, support is limited on this scale until reaching demand at 1.0851-1.0950. Note the said demand base holds the 2016 yearly opening level at 1.0873 within its lower boundary.

Areas of consideration:

Outlook unchanged due to lacklustre movement.

A move higher from 1.0989/1.10 is a possibility. The lack of higher-timeframe support is a concern, however. For that reason, traders may opt to wait and see if the unit can take out the local high at 1.1025 before considering longs (blue arrows) at 1.10ish.

An alternative approach might be to simply wait for additional candlestick confirmation out of 1.10, such as a hammer candlestick formation or a bullish engulfing pattern (entry/risk can be defined according to the selected candlestick pattern).

A decisive close beneath 1.0989 opens the door to an intraday bearish theme, targeting H4 Quasimodo support at 1.0957 as the initial downside take-profit area. Keep in mind, weekly price suggests the 2016 yearly opening level at 1.0873 could eventually make an appearance, so keeping a portion of the position open is an option here.

GBP/USD:

(Italics – previous analysis).

In recent trading, GBP/USD caught a fresh bid on the back of YouGov’s MPR model forecasting a solid win for the Conservatives in the December election. The result sent the pair to highs of 1.2951, though with market action entering a subdued phase due to the Thanksgiving Day holiday in the US yesterday, price action retraced and is seen holding just north of 1.29.

The technical landscape on the weekly timeframe continues to support further upside in GBP/USD, exhibiting a bullish flag (typically considered a continuation pattern) forming just north of the 2019 yearly opening level 1.2739. A decisive push out of the said flagging formation may lead to the unit crossing swords with supply at 1.3472-1.3204 and long-term trend line resistance etched from the high 1.5930.

On the daily timeframe, since mid-October, candle action has been carving out a consolidation between a resistance area plotted at 1.3019-1.2975 and a well-placed support level at 1.2769. Beyond this range, Quasimodo resistance lies at 1.3102, whereas south of 1.2769, the 200-day SMA (orange – 1.2697) and 50-day SMA (blue – 1.2714) offer support and are, at the time of writing, seen marginally crossing each other (sometimes referred to as a ‘Golden Cross’). Traders may also want to acknowledge the unit trades near the upper edge of the said range, shaped by way of a shooting star candlestick formation (considered a bearish signal at peaks).

Across the page on the H4 timeframe, price continues to trade rangebound between resistance at 1.2967 and the 1.28 handle (grey). Within the range falls the 1.29 handle and November’s opening level at 1.2938. Outside of the consolidation, the key figure 1.30 is in sight, along with an interesting area of support in green comprised of weekly support (2019 yearly opening level) and daily support at 1.2739 and 1.2769, respectively. As of current price, trade is taking place within the upper boundary of the current range, specifically testing the 1.29 handle as support.

Areas of consideration:

Longer term, additional upside is likely in store. Bullish flags, particularly formed on the higher timeframes, are known for accuracy. Clearance of the daily Quasimodo resistance level at 1.3102 could provide a filter for traders looking to enter long-term positions in this market. A daily close above 1.3102, for example, confirms bullish intent out of the weekly pattern.

Shorter term, nevertheless, entering long at current price faces resistance not only from November’s opening level at 1.2938, but also the upper boundary of the current H4 range (1.2967), as well as the key figure 1.30.

AUD/USD:

(Italics – previous analysis).

In terms of recent data, private capital expenditure (Q3) in Australia declined more than expected (-0.2% vs. exp 0.0%), while geopolitical tensions increased after US President Trump signed the Hong Kong Bill. Overall, though, AUD/USD concluded Thursday mostly unmoved due to the Thanksgiving Day holiday in the US thinning trade.

AUD/USD movement maintains its weaker tone below the 0.68 handle, with H4 trend line resistance, extended from the high 0.6913, withstanding a number of upside attempts. October’s opening level at 0.6750 represents the next downside target on the H4 timeframe, closely shadowed by September’s opening level at 0.6724 and then the 0.67 handle.

With respect to higher-timeframe action, limited change is seen. Weekly price remains trading mid-range between 0.6894/0.6677 (light grey). With a primary downtrend in play since early 2018, breaking through the lower edge of the said range is likely, with the next support target not visible until around 0.6359.

In terms of the daily timeframe, price continues to explore ground beneath the 50-day SMA (blue – 0.6805). Although support may develop around the 0.6728ish region, traders likely have their crosshairs fixed on support pencilled in from 0.6677.

Areas of consideration:

Outlook unchanged due to lacklustre movement.

From a technical perspective, sellers appear to have the upper hand right now. For any traders who remain short the retest at 0.68 (a noted move to watch for in previous reports) likely have October’s opening level at 0.6750 set as their initial take-profit zone.

USD/JPY:

(Italics – previous analysis).

Thanks to the Thanksgiving holiday in the US, Thursday observed limited movement. With that being the case, much of the following outlook will echo thoughts put forward in yesterday’s analysis.

Weekly price is seen shaking hands with a 127.2% Fibonacci ext. point at 109.56 (taken from the low 104.44), closely shadowed by a nearby resistance at 109.68, the 2019 yearly opening level. In conjunction with weekly standing, price action on the daily timeframe is touching gloves with the ‘cradle point’ of a recently broken ascending wedge, formed from the low 104.44.

In terms of the H4 timeframe, we can see we recently formed a higher peak at 109.60, breaking the Nov. 7 previous higher peak at 109.48. Quasimodo resistance at 109.74 is the next key technical level in sight, with the 109 handle denoting possible support.

Areas of consideration:

Outlook unchanged due to lacklustre movement.

Despite the recent wave of buying, H4 Quasimodo resistance highlighted above at 109.74 is likely a key level for sellers, given its connection to weekly and daily structure. What’s also notable from a harmonic perspective is the H4 ABCD bearish pattern (blue arrows) at 109.08. A H4 bearish candle formed from 109.74, therefore, would likely be considered a key signal to selling this market and targeting the 109 region as the initial take-profit barrier.

USD/CAD:

(Italics – previous analysis).

According to Statistics Canada Thursday, the current account deficit (on a seasonally adjusted basis) widened by $3.1 billion to $9.9 billion in the third quarter, following a reduction of $10.1 billion in the second quarter. The overall deficit on trade in goods and services rose by $2.4 billion, on a higher goods deficit.

Technically, USD/CAD action wrapped up Thursday unchanged, though did manage to clock a session high of 1.3299 amid US holiday-thinned trade. As a result of this, price action on the daily timeframe chalked up a shooting star formation, but given its position (encased within a daily bullish flag – red lines) it’s likely to be ignored. A breakout above the said bull flag has the 61.8% daily Fibonacci retracement ratio at 1.3357 to target, as well as nearby daily resistance plotted at 1.3382.

Medium-term flow based on H4 movement remains compressing within the confines of an ascending channel, taken from the low/high of 1.3042/1.3268. Upside resistance rests at the 1.33 handle, closely trailed by September’s opening level at 1.3314 and a 127.2% Fibonacci ext. point at 1.3311. Beneath the said channel support, support falls in around October’s opening level at 1.3239, followed by the 1.32 handle.

With respect to the weekly timeframe, price chalked up a healthy bullish candle last week. Adding more than 75 points, the unit has tops around 1.3342 in sight, closely followed by the 2017 yearly opening level at 1.3434 and trend line resistance taken from the peak at 1.3661. Overall, the immediate trend faces north since bottoming in September 2017, though this move could also be considered a deep pullback in a larger downtrend from the 1.4689 peak in early January 2016.

Areas of consideration:

Outlook unchanged due to lacklustre movement.

Entering long at the current H4 channel support is, of course, an option, though the barrier lacks confluence, both locally and on the higher timeframes. Waiting for additional candlestick confirmation to form before pulling the trigger is, therefore, certainly worth considering (entry/risk can be set according to this structure).

The H4 Quasimodo resistance at 1.3361 is also still likely of interest to many traders for potential shorts, knowing it fits between daily resistance at 1.3382 and the 61.8% Fibonacci retracement ratio at 1.3357.

USD/CHF:

(Italics – previous analysis).

USD/CHF prices ended largely unchanged Thursday. Holiday-thinned trade out of the US kept the pair contained within its prior daily range between 1.0000/0.9967.

Weekly price action continues to trade within the upper confines of supply at 1.0014-0.9892. As highlighted in previous reports, the beginning of October witnessed a penetration to the outer edge of the supply area’s limit, possibly tripping a portion of buy stops and weakening sellers. An upside move out of the said supply may draw in Quasimodo resistance at 1.0124, while downside has the 2018 yearly opening level at 0.9744 in sight. According to the primary trend, price also reflects a slightly bullish tone; however, do remain aware we have been rangebound since the later part of 2015 (0.9444/1.0240).

As evident from the daily timeframe, recent buying absorbed both the 50-day SMA (blue – 0.9928) and 200-day SMA (orange – 0.9947). Traders may also want to acknowledge that since mid-September, the unit has been busy carving out a consolidation between support around the 0.9845ish region (green) and a resistance area coming in at 1.0010/0.9986. Note price is seen toying with upper edge of the said range, as we write.

1.0000 (parity), based on the H4 timeframe, remains in motion as sturdy resistance, further confirmed by the relative strength index (RSI) producing bearish divergence (red line). Not only is the level stationed within weekly supply at 1.0014-0.9892, it merges closely with a three-drive H4 pattern (pink arrows) and also inhabits the daily resistance area at 1.0010/0.9986. Well done to any readers who managed to fade 1.0000; the next downside target from this region falls in around October’s opening level at 0.9977.

Areas of consideration:

Outlook unchanged due to lacklustre movement.

Well done to any readers who managed to jump onboard 1.0000; the initial take-profit target, as highlighted above, falls in at 0.9977. A decisive push through 0.9977 potentially unlocks downside to the 200-day SMA on the daily timeframe around 0.9947.

XAU/USD (GOLD):

(Italics – previous analysis).

Markets entered a subdued phase Thursday, largely due to US banks closing in observance of Thanksgiving Day.

Traders who remain short this market based on the breakout lower from the H4 ascending wedge pattern (1445.5) still likely have eyes on the top edge of a daily support area coming in at 1448.9-1419.9 (aligns closely with a 38.2% Fibonacci retracement ratio at 1448.5 and is further bolstered by the completion of a three-drive pattern – black arrows) as an initial target. The next port of call falls in around 1437.7, the H4 ascending wedge take-profit target (measured by taking the size of the base and applying the value to the breakout point [black arrows]).

From the weekly timeframe, the candles remain languishing south of a notable resistance area at 1487.9-1470.2. Further rejection off the underside of 1487.9-1470.2 potentially sets the long-term stage for a move towards two layers of support at 1392.0 and 1417.8.

Areas of consideration:

Outlook unchanged due to lacklustre movement.

Bullion is likely to shake hands with at least the top edge of the current daily support area at 1448.9, considered the first take-profit target out of the noted H4 ascending wedge. This is an ideal location to consider reducing risk to breakeven and liquidating a portion of the position.

The accuracy, completeness and timeliness of the information contained on this site cannot be guaranteed. IC Markets does not warranty, guarantee or make any representations, or assume any liability regarding financial results based on the use of the information in the site.

News, views, opinions, recommendations and other information obtained from sources outside of www.icmarkets.com.au, used in this site are believed to be reliable, but we cannot guarantee their accuracy or completeness. All such information is subject to change at any time without notice. IC Markets assumes no responsibility for the content of any linked site.

The fact that such links may exist does not indicate approval or endorsement of any material contained on any linked site. IC Markets is not liable for any harm caused by the transmission, through accessing the services or information on this site, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user’s software, hardware, data or property.