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Friday 22nd March:  Asian markets mixed on Fed sentiment.
Friday 22nd March: Asian markets mixed on Fed sentiment.

Friday 22nd March: Asian markets mixed on Fed sentiment.

March 22, 2019 15:33   ICMarkets   Market News  

Global Markets:

  • Asian Stock Markets : Nikkei up 0.09%, Shanghai Composite up 0.06%, Hang Seng down 0.18%, ASX up 0.45%
  • Commodities : Gold at $1310.65 (+0.26%), Silver at $15.53 (+0.58%), Brent Oil at $67.92 (+0.09%), WTI Oil at $59.99 (+0.02%)
  • Rates : US 10-year yield at 2.528, UK 10-year yield at 1.067, Germany 10-year yield at 0.047

News & Data:

  • (USD) Philly Fed Manufacturing Index 13.7 vs 4.6 expected
  • (GBP) MPC Asset Purchase Facility Votes 0-0-9 vs 0-0-9 expected
  • (GBP) Asset Purchase Facility 435B vs 435B expected
  • (GBP) Official Bank Rate 0.75% vs 0.75% expected
  • (GBP) MPC Official Bank Rate Votes 0-0-9 vs 0-0-9 expected
  • (GBP) Public Sector Net Borrowing -0.7B vs -0.3B expected
  • (GBP) Retail Sales m/m 0.40% vs -0.40% expected
  • (CHF) Libor Rate -0.75% vs -0.75% expected
  • EU To Start Probe Vs China Ceramics Companies – Handelsblatt

Markets Update:

Asian stock markets are mixed on Friday despite the overnight rally on Wall Street, as investors continued to digest the potential implications of the change in the U.S. Federal Reserve’s interest rate outlook. The central bank has indicated it no longer expects to raise interest rates this year as recent U.S. data has pointed to a slowdown in economic growth. This compares to the Federal Reserve’s December projections indicating two rate hikes this year.

Mainland Chinese markets reversed early losses, with the Shanghai Composite higher by 0.1%, and the Shenzhen Composite up by 0.4%. Japan’s Nikkei 225 slipped 0.1 percent, as shares of index heavyweight Fast Retailing fell more than 1 percent. The Topix index was slightly lower.

Hong Kong’s Hang Seng index shed earlier gains to fall 0.2 percent. Down under, the ASX 200 is advancing following the rally on Wall Street. All sectors, with the exception of gold miners, are in positive territory – it last traded higher by 0.5%.

The benchmark U.S. 10-year notes yield stood at 2.530 percent after having slipped to as low as 2.500 percent on Thursday, its lowest since early January last year. The dollar also jumped back, with its index against a basket of six major currencies rising to 96.327 from Wednesday’s 1-1/2-month low of 95.735.

Oil dipped but held near 2019 highs reached the previous day, supported by a broad risk-on mood, OPEC production cuts and U.S. sanctions on key producers Iran and Venezuela.

Upcoming Events:

  • 09:15 AM GMT – (EUR) French Flash Services PMI
  • 09:15 AM GMT – (EUR) French Flash Manufacturing PMI
  • 09:30 AM GMT – (EUR) German Flash Manufacturing PMI
  • 09:30 AM GMT – (EUR) German Flash Services PMI
  • 10:00 AM GMT – (EUR) Flash Manufacturing PMI
  • 10:00 AM GMT – (EUR) Flash Services PMI
  • 01:30 PM GMT – (CAD) CPI m/m
  • 01:30 PM GMT – (CAD) Core Retail Sales m/m
  • &more…

Full Article

Friday 22nd March: Greenback regains Fed-induced losses; 96.50 potentially on the radar.
Friday 22nd March: Greenback regains Fed-induced losses; 96.50 potentially on the radar.

Friday 22nd March: Greenback regains Fed-induced losses; 96.50 potentially on the radar.

March 22, 2019 13:33   ICMarkets   Market News  

EUR/USD:

The US dollar rebounded Thursday, reclaiming a large portion of Wednesday’s lost ground after the Federal Reserve jolted markets by abandoning all plans to raise interest rates this year.

The stronger dollar weighed on the EUR/USD market yesterday, defeating a number of key levels on the H4 timeframe and snapping a four-day bullish phase. Demand at 1.1335-1.1349 (along with merging 38.2% Fibonacci support at 1.1344) elbowed its way into the spotlight, serving as a floor to mildly pare losses into the close. Buyers have March’s opening level at 1.1373 to contend with as resistance as well as 1.14, whereas below the current demand 1.13 is in sight as the next viable support.

On a broader perspective, weekly flow displays room to press lower until shaking hands with 1.1119-1.1295: a notable demand area. Daily action, on the other hand, draws channel resistance-turned support (extended from the high 1.1569) into the mix, providing the aforementioned H4 demand an extra layer of support.

Areas of consideration:

Although the weekly timeframe suggests further selling is a possibility, daily price testing channel resistance-turned support simultaneously suggests a move as far north as resistance at 1.1485 could be in store (located 20 pips higher than weekly resistance at 1.1465 – the next upside target on the weekly timeframe).

The main interest on the H4 scale is the recent bounce from demand at 1.1335-1.1349, though traders need to acknowledge the fact resistance is in play on this chart at 1.1373: March’s opening level. In addition to this, traders also need to recognise there’s limited room to manoeuvre above 1.1373 as 1.14 is the next port of call for resistance.

On account of the above reading, the research team suggests holding fire at current price. A H4 close back above 1.14 may open up possible intraday buying opportunities, targeting January/February’s opening levels at 1.1445/48, shadowed by the weekly resistance at 1.1465. Traders are urged to wait for a retest of 1.14 before pulling the trigger. Further to this, integrating favourable risk/reward conditions into your trading decision is recommended. Aim for a least a 1:2 ratio to 1.1445 (may entail entry on the lower timeframes).

Today’s data points: French Flash Services PMI; French Flash Manufacturing PMI; German Flash Manufacturing PMI; German Flash Services PMI; EUR Flash Manufacturing PMI; EUR Flash Services PMI.

GBP/USD:

The British pound charged lower Thursday, marking its largest one-day fall this year. Amid growing concerns of a no-deal Brexit, sterling clocked lows north of key figure 1.30 on the H4 timeframe at 1.3003. As expected, yesterday’s BoE policy announcement delivered little as Brexit continues to tie the hands of policymakers. The decision to stand pat on rates at 0.75% came via a 9-0 vote with the MPC maintaining guidance.

From a technical standpoint, the main interest on the weekly timeframe is at supply drawn from 1.3472-1.3204. As highlighted in previous reports, although the area has been tested on a number of occasions since July 2018 (which could lead to the market eventually overthrowing the area for 1.3503), it would be rash to overlook the zone.

The daily picture saw yesterday’s candle rush through orders at trend line support (extended from the low 1.2373) into nearby demand plotted at 1.2968-1.3035. At this point it is unclear whether or not the current trend line support will survive.

A closer reading on the H4 timeframe has the market cycling above 1.31 in early Asia. This came after a modest rebound from just north of 1.30. In the event the buyers maintain a defence, possible selling is expected to emerge from 1.3146 (March 20 low – black arrow), followed closely by 1.32.

Areas of consideration:

According to our technical studies of the H4, daily and weekly timeframes, technical elements are mixed at the moment. Selling is emphasised on the weekly timeframe, though buyers are supported on the daily timeframe. H4 action also reveals limited confluence in terms of structure to base a trade from.

Therefore the research team have come to the conclusion this market may be best left on the back burner today.

Today’s data points: Limited.

AUD/USD:

Early trade witnessed AUD/USD bulls enter the fold, boosted by a better-than-expected Australian unemployment reading. A resurgence of USD bidding, however, swiftly put a stop to further upside, topping at 0.7168. H4 flow re-entered its ascending channel formation and tested channel support (etched from the low 0.7003), which, as you can see, is closely supported by the 0.71 handle and March’s opening level at 0.7101.

Although a number of swing traders likely have longs on the radar thanks to the aforementioned H4 support, the key observation on the higher timeframes is RESISTANCE. Channel resistance on the daily timeframe is seen in play (taken from the high 0.7295), while weekly price also crossed swords with trend line resistance (etched from the high 0.8135).

Areas of consideration:

Given the picture on the higher timeframes, buying from 0.71 is chancy to say the least.

To prove seller intent from the bigger picture, traders may elect to wait and see if the H4 candles can defeat 0.71 to the downside, opening up a possible run in the direction of Wednesday’s low 0.7056, followed by January’s opening level at 0.7042. A retest of 0.71 as resistance, following a break lower, is considered a strong sell signal given the overall technical picture (entry and stop-loss placement can be determined on the rejecting candle’s structure).

Today’s data points: Limited.

USD/JPY:

A broad-based USD recovery took shape Thursday, consequently lifting the USD/JPY to higher ground. Though the move was little to write home about, traders may recall Thursday’s briefing highlighted a potential long from the top edge of the H4 support area at 110.47-110.14, which happened to align with a 127.2% ABCD bullish pattern (black arrows) around 110.35. Well done to any of our readers who managed to jump aboard this move – the next upside target on the H4 scale falls in around 111 that also fuses with a 38.2% Fibonacci resistance set from the A-D leg (considered by many harmonic traders to be the first take-profit target).

Higher up on the curve, we see daily players lingering just north of support at 110.11 in the shape of a half-hearted bullish pin-bar pattern. Weekly flow, on the other hand, is currently haunting no man’s land. A few weeks back the market witnessed the pair top within striking distance of the 2018 yearly opening level at 112.65. Since then we’ve seen upside momentum decline.

Areas of consideration:

Should the H4 candles connect with 111 today, traders long the current H4 ABCD formation are urged to consider cashing in partial profits and reducing risk to breakeven. In the event we push for ground above 111, keep eyes on March’s opening level at 111.36 as the next take-profit target (shadowed closely by a 61.8% Fibonacci resistance at 111.44 set from the A-D leg – considered by many harmonic traders to be the second take-profit target).

Today’s data points: Limited.

USD/CAD:

USD/CAD action capitalised on broad USD strength Thursday, pulling the unit to weekly highs at an even 1.34.

As the response from the underside of 1.34 forced a retest of a local trend line resistance-turned support (extended from the high 1.3371) on the H4 timeframe, this may be interpreted as a bullish signal. A strong move off here which overcomes 1.34 to the upside has Quasimodo resistance at 1.3457 in sight, tailed closely by supply at 1.3496-1.3469. Note above 1.34, limited (fresh) supply is visible to left of the current price until reaching the aforesaid Quasimodo.

Structure on the weekly timeframe has price capped by the 2017 yearly opening level at 1.3434, with the next downside objective set at a trend line support (extended from the low 1.2421). On the other side of the spectrum, daily action indicates it may be poised to approach higher ground today/next week. The higher high sported on March 7th followed by a 50.0% retracement to 1.3265 which held firm, places the buyers in good stead to advance north.

Areas of consideration:

Should the current H4 candle close strongly off its local trend line resistance-turned support, a long trade (with entry and risk levels determined by the candle’s structure) could be an option, targeting 1.34 as the initial take-profit zone.

Although the path is reasonably free of resistance above 1.34 on the H4 timeframe towards 1.3457, it’s worth pointing out the 2017 yearly opening level mentioned above on the weekly timeframe at 1.3434 may hinder upside.

Today’s data points: Canadian CPI m/m, Core Retail Sales m/m, Common CPI y/y, Median CPI y/y, Retail Sales m/m and Trimmed CPI y/y.

USD/CHF:

Despite speculative interest establishing off 0.99 to the upside on the H4 timeframe (missing demand at 0.9872-0.9893 by a couple of pips), February’s opening level at 0.9939 proved stubborn resistance Thursday. Yesterday’s rejection, formed in the shape of a strong H4 bearish rotation candle, marked the pair’s eighth consecutive losing day since topping at 1.0012.

Despite the current weekly candle sporting losses of more than 1 per cent, further selling, according to weekly structure, is possible towards trend line support (pencilled in from the low 0.9187). Daily flow, aside from the 0.9905 Jan 28 low, also demonstrates potential to charge as far south as demand plotted at 0.9800-0.9845.

Areas of consideration:

Both weekly and daily timeframes portend a move beyond the noted H4 demand to 0.9845: the top edge of daily demand which happens to merge with the current weekly trend line support. This daily demand, therefore, is a valid zone worthy of the watch list for a potential long in the near future.

Intraday sellers may attempt to sell the breakout below the aforementioned H4 demand, targeting 0.9845. This, as put forward in yesterday’s briefing, offers less than 30 pips to play with, so traders are urged to consider risk/reward implications before pulling the trigger.

Today’s data points: Limited.

Dow Jones Industrial Average:

The Dow Jones Industrial Average (CFD) rose 281 points Thursday, or 1.10%. US equities rebounded firmly yesterday following the Federal Reserve announcing projections for interest rates this year were limited.

Powering higher by way of a bullish engulfing pattern, price action on the daily timeframe appears poised to approach a reasonably well grounded nearby supply coming in at 26536-26200. What’s also notable from a technical perspective is a weekly Quasimodo resistance parked a few points south of the aforementioned daily supply at 26182.

March’s opening level on the H4 timeframe at 25913, although serving as strong resistance Wednesday, was conquered Thursday. This, as you can probably see, draws focus to the 26114 Mar 19 high, shadowed closely by Quasimodo resistance at 26149. It’s also worth pointing out for channel traders that we have an ascending channel in motion as well (taken from the high 25758 and low at 25215).

Areas of consideration:

With room seen for the market to extend higher on all three timeframes from an intraday perspective, a retest play (black arrows) from 25913 is a possible scenario today, with a target objective set around 26149/26200 (range brings together the weekly Quasimodo resistance at 26182, the underside of the daily supply at 26200 and the H4 Quasimodo resistance at 26149).

Today’s data points: Limited.

XAU/USD (GOLD):

Bullion turned lower Thursday, strong-armed by a robust greenback across the board. Leaving February’s opening level at 1321.0 unopposed on the H4 timeframe, price action charged south and shook hands with channel support (etched from the low 1280.4). Buyers defended this angle going into the close, therefore mildly paring losses.

Reinforcing downside pressure yesterday was the 1321.3/1318.7 area on the daily timeframe: a 61.8% Fibonacci resistance and 127.2% Fibonacci ext. point. This area entered the radar following a lower low taking shape at 1281.0, breaking the 1302.4 Feb 14 low (black arrows).

The caveat to the lower low (and pullback) printed on the daily timeframe, however, is weekly structure. Note for three weeks the market has been engaging with a demand area at 1276.9-1298.5 (black arrow), pressuring the candles beyond its 2018 yearly opening level at 1302.5.

Areas of consideration:

In order to prove seller intent from current price, traders will likely be looking for a breakout below the current H4 channel support. Although this is valid, traders are urged to also consider 1302.5 on the weekly timeframe possibly offering support. With that being the case, it might be an idea to wait for a H4 break of 1302.5 along with the aforementioned H4 channel support. A retest to the underside of 1302.5 on the H4 timeframe, preferably in the shape of a H4 bearish candlestick signal (entry/risk can be defined according to this structure), would be considered a strong sell signal, steering towards an initial target of 1293.0ish (yellow H4 zone), followed by January’s opening level at 1282.2.

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Full Article


Thursday 21st March: Asian markets higher as Fed hits the brakes.
Thursday 21st March: Asian markets higher as Fed hits the brakes.

Thursday 21st March: Asian markets higher as Fed hits the brakes.

March 21, 2019 15:33   ICMarkets   Market News  

Global Markets:

  • Asian Stock Markets : Nikkei up 0.20%, Shanghai Composite up 0.35%, Hang Seng down 0.65%, ASX up 0.03%
  • Commodities : Gold at $1318.65 (+1.30%), Silver at $15.61 (+1.89%), Brent Oil at $68.53 (+0.04%), WTI Oil at $60.13 (-0.17%)
  • Rates : US 10-year yield at 2.526, UK 10-year yield at 1.146, Germany 10-year yield at 0.067

News & Data:

  • (AUD) Unemployment Rate 4.90% vs 5.00% expected
  • (AUD) Employment Change 4.6K vs 14.8K expected
  • (NZD) GDP q/q 0.60% vs 0.60% expected
  • (USD) Federal Funds Rate <2.50% vs <2.50% expected
  • (GBP) RPI y/y 2.50% vs 2.50% expected
  • (GBP) PPI Input m/m 0.60% vs 0.60% expected
  • (GBP) CPI y/y 1.90% vs 1.80% expected
  • China Commerce Ministry: USTR Lighthizer, Mnuchin Will Visit China On Mar 28-29
  • UK Labour Leader Corbyn To Travel To Brussels On Thursday To Discuss Alternative Brexit Plan With EU Leaders – Labour Party

Markets Update:

Asian stock markets are mostly higher on Thursday following the mixed cues overnight from Wall Street after the U.S. Federal Reserve left interest rates unchanged and also indicated it no longer expects to raise rates this year. However, gains are modest in most markets amid worries about U.S.-China trade talks and slowing global economic growth. The Japanese market is closed for a holiday.

The Australian market bucked the trend as investors also digested mixed Australian unemployment data for February. ASX 200 is flat, with the heavily weighted financial subindex declining more than 0.3 percent as bank shares sold off. Mainland Chinese shares gained, as the Shanghai composite advanced 0.35 percent and the Shenzhen component added 0.8 percent. In South Korea, the Kospi retraced some of its earlier gains but was still higher by 0.4 percent in afternoon trade as chipmaker SK Hynix saw its stock surge more than 6 percent.

The Fed’s comments dragged yields on benchmark U.S. Treasuries lower, with 10-year notes yielding 2.5245 percent compared with a U.S. close of 2.537 percent on Wednesday. The dollar continued to ease after falling on Wednesday, with a basket tracking the currency against major rivals edging down to 95.874. The greenback was down about 0.1 percent against the Japanese currency, buying 110.59 yen.

Global growth worries extended to commodity markets, where oil prices, which had jumped Wednesday on supply concerns, retreated. Declines in oil prices, however, are seen to be limited by efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to curb supply. Widely watched U.S. data also showed supplies were tightening.

Upcoming Events:

  • 09:30 AM GMT – (CHF) SNB Monetary Policy Assessment
  • 09:30 AM GMT – (CHF) Libor Rate
  • 10:00 AM GMT – (CHF) SNB Press Conference
  • 10:30 AM GMT – (GBP) Retail Sales m/m
  • 10:30 AM GMT – (GBP) Public Sector Net Borrowing
  • All Day – (EUR) EU Economic Summit
  • 01:00 PM GMT – (GBP) MPC Official Bank Rate Votes
  • 01:00 PM GMT – (GBP) Monetary Policy Summary
  • 01:00 PM GMT – (GBP) Official Bank Rate
  • 01:00 PM GMT – (GBP) Asset Purchase Facility
  • 01:00 PM GMT – (GBP) MPC Asset Purchase Facility Votes
  • 01:30 PM GMT – (USD) Philly Fed Manufacturing Index
  • &more… 

Full Article

Thursday 21st March: Sterling continues to be whipped around on Brexit headlines ahead of today’s BoE rate decision
Thursday 21st March: Sterling continues to be whipped around on Brexit headlines ahead of today’s BoE rate decision

Thursday 21st March: Sterling continues to be whipped around on Brexit headlines ahead of today’s BoE rate decision

March 21, 2019 13:03   ICMarkets   Market News  

EUR/USD:

The US Federal Reserve, as expected, kept interest rates unchanged at 2.25-2.50% Wednesday. The trajectory of rate hikes was also narrowed, with the central bank stating it will not hike interest rates this year amid a slowing economy. The US Treasury 10-year yield dropped to a 14-month low following the release, as well as the US dollar index exploring ground sub 96.00.

EUR/USD movement, in response to the Fed, overthrew March’s opening level on the H4 timeframe at 1.1373, followed by 1.14 and consequently brought January/February’s opening levels at 1.1445/48 into the mix, which, as you can see, was defended into the close.

Higher-timeframe flows show daily action swallowed channel resistance (extended from the high 1.1569) yesterday, potentially setting the stage for a run towards hefty resistance plotted at 1.1485. By the same token, weekly price is now poised to approach resistance coming in at 1.1465, following last week’s stronger-than-expected response out of demand at 1.1119-1.1295.

Areas of consideration:

Between the 1.15 handle on the H4 timeframe and weekly resistance at 1.1465 (daily resistance is housed within this range at 1.1485) is an area active sellers may inhabit. Should 1.15/1.1465 enter the fray sometime today, a short on the back of a H4 bearish candlestick signal is an option (entry/risk levels can be determined according to the candlestick’s structure), targeting 1.14 as an initial port of call.

Having seen the market conclude Wednesday closing above 1.14, a retest play at this number is also a consideration today. Upside targets from here fall in around January/February’s opening levels at 1.1445/48, shadowed by the weekly resistance at 1.1465.

Today’s data points: EU Economic Summit; Philly Fed Manufacturing Index.

GBP/USD:

Sterling continued to be whipped around on Brexit headlines Wednesday ahead of the EU summit today.

The British pound erased more than half a per cent vs. its US counterpart, reclaiming 1.32 (H4) to the downside in the process. Seeing 1.32 hold as resistance into the close, the unit could be gearing up for a test of a rather interesting base of H4 support (green) at 1.31/1.3133 (comprised of a 127.2% H4 AB=CD [black arrows] pattern at 1.3133, a 61.8% H4 Fibonacci support at 1.3121 and a round number at 1.31). It might also interest traders to note a daily trend line support (extended from the low 1.2373) merges close by the said H4 area.

Decorating the weekly timeframe, however, is a supply zone at 1.3472-1.3204. Although the area has been tested on a number of occasions since July 2018 (which could lead to the market eventually overthrowing the area for 1.3503), it would be rash to overlook the zone.

Areas of consideration:

Despite weekly price possibly eyeing lower levels, a bounce (at the very least) is expected to develop from the green H4 zone at 1.31/1.3133. For traders concerned weekly opposition may be too much to handle, despite having a nearby daily trend line supporting the zone, waiting for additional confirmation to form before pulling the trigger is an option (traders can base entry/risk parameters on their chosen confirmation technique).

In terms of take-profit targets, bearing in mind the approach to 1.31/1.3133 has yet to complete, the research team notes 1.32 as a logical resistance.

Today’s data points: UK Retail Sales m/m; UK Public Sector Net Borrowing; MPC Official Bank Rate Votes; BoE Monetary Policy Summary; BoE  Official Bank Rate Decision; UK Asset Purchase Facility; MPC Asset Purchase Facility Votes; Philly Fed Manufacturing Index.

AUD/USD:

AUD/USD bulls entered an offensive phase following Wednesday’s dovish Fed, subsequently stimulating a H4 break beyond 0.71 (and March’s opening level at 0.7101). Despite concluding trade up 0.39%, H4 price action ran into headwinds from channel resistance (taken from the high 0.7081), which may eventually call for a retest at 0.71 (and merging channel support [from the low 0.7003]). Interestingly, the current H4 channel resistance fuses closely with channel resistance on the daily timeframe (extended from the high 0.7295), as well as weekly trend line resistance (etched from the high 0.8135).

Areas of consideration:

Ultimately, the research team notes strong resistance present on the H4, daily and weekly timeframes. As such, a retest play off 0.71 today is difficult.

To prove seller intent, traders may elect to wait and see if the H4 candles can defeat 0.71 to the downside, opening up a possible run in the direction of yesterday’s low 0.7056, followed by January’s opening level at 0.7042. A retest of 0.71 as resistance, following a break lower, is considered a strong sell signal given the overall technical picture (entry and stop-loss placement can be determined on the rejecting candle’s structure).

Today’s data points: AUD Employment Change; AUD Unemployment Rate; Philly Fed Manufacturing Index.

USD/JPY:

Following the US Federal Reserve’s dovish note Wednesday, along with the central bank keeping interest rates unchanged (as expected), the US dollar ceded considerable ground against its Japanese counterpart, down 0.63% on the day.

Swallowing March’s opening level at 111.36 on the H4 timeframe as well as the round number 111, the candles put in a mild bottom just north of a support area coming in at 110.47-110.14 and an ABCD bullish pattern (black arrows) around 110.51. Further adding to this, the RSI indicator is seen displaying an oversold reading (green).

A few points beneath the current H4 support area lies a daily support level at 110.10, therefore a fakeout below the H4 zone could come to fruition. Weekly flow, on the other hand, is currently lingering in no man’s land. A few weeks back the market witnessed the pair top within striking distance of the 2018 yearly opening level at 112.65. Since then we’ve seen upside momentum deteriorate.

Areas of consideration:

Traders have the option of entering long from the top edge of the H4 support area at 110.47-110.14, knowing the trade factors in an ABCD completion point (black arrows) which could, by the way, stretch to test its 127.2% Fibonacci extension point at 110.35.

Waiting for additional technical confirmation at 110.47-110.14, either on the H4 timeframe or lower down (entry and stop-loss placement can then be determined on the confirming structure’s rules of engagement), is also something to consider given the threat of a potential fakeout to daily support at 110.11, and an overall lack of support from the higher timeframes.

Today’s data points: Philly Fed Manufacturing Index; Japanese banks are closed in observance of Vernal Equinox Day.

USD/CAD:

In recent sessions the USD/CAD staged a modest selloff, influenced by a dovish Fed message. 1.33 on the H4 timeframe is currently under attack, after yesterday’s push to lows at 1.3257 tripped a large portion of stop-loss orders from traders looking to fade the psychological mark. Assuming breakout selling is strong, additional downside may take shape today; ultimately targeting the support area at 1.3172-1.3208 (converges with round number 1.32). Why price action is unlikely to find support off the 1.3220 (yellow) zone is down to where we’re potentially heading on the weekly timeframe.

Fusing with the current H4 support area is a weekly trend line support (extended from the low 1.2421). Note on the daily timeframe, however, price has room to push beyond 1.32, targeting the 1.3112 Feb 25 low.

Areas of consideration:

On account of the above reading, two possible scenarios could take shape today/tomorrow:

  • H4 price extends yesterday’s losses and prints a decisive close beneath 1.33. With this coming to fruition, a retest play to the underside of here as resistance is a consideration, with the current H4 support area at 1.3172-1.3208 in place as the take-profit target.
  • A long from the H4 support area at 1.3172-1.3208 is high probability, according to its association with weekly structure: trend line support. An entry from 1.32 is an idea with a stop-loss order placed beneath the area’s limit: 1.3172.

Today’s data points: Philly Fed Manufacturing Index.

USD/CHF:

Focus shifted to the Federal Reserve Wednesday, with the central bank keeping interest rates unchanged, as anticipated. This, alongside its dovish message, sent the US dollar (along with US Treasury yields) southbound, consequently weighing on the USD/CHF.

Down 0.67% on the day, a number of key technical supports were taken out on the H4 timeframe following a retest to the underside of a trend line support-turned resistance (taken from the low 0.9716) and 1.0000 (parity). The move ultimately exposed 0.99 and, although missing the top edge of nearby demand at 0.9872-0.9893, was defended into the closing bell. Traders may also wish to acknowledge the RSI technical indicator is seen invading oversold territory.

Things on the weekly timeframe are relatively straightforward. Last week’s weekly candle concluded marginally beneath the 2016 yearly opening level at 1.0029 and gave rise to a possible downturn this week, and turn we have. Weekly flow now eyes trend line support (pencilled in from the low 0.9187) as its next downside target. A closer reading on the higher timeframes reveals yesterday’s action toppled notable daily support priced in at 0.9986 (now acting resistance) and perhaps cleared the runway to daily demand coming in at 0.9800-0.9845.

Areas of consideration:

H4 demand mentioned above at 0.9872-0.9893, the round number 0.99 and the RSI suggesting an oversold environment could lead to an attempted recovery today. Despite local confluence, weekly and daily timeframes both portend a move beyond the noted H4 structures to 0.9845: the top edge of daily demand which happens to merge with the current weekly trend line support. This demand, therefore, is a valid zone worthy of the watch list for a potential long in the near future.

Intraday sellers may attempt to sell the breakout below the aforementioned H4 demand, targeting 0.9845. This offers less than 30 pips to play with so traders are urged to consider risk/reward implications before pulling the trigger.

Today’s data points: Philly Fed Manufacturing Index; SNB Monetary Policy Assessment; CHF Libor Rate; SNB Press Conference.

Dow Jones Industrial Average:

The Dow Jones Industrial Average closed lower Wednesday following the Federal Reserve’s latest monetary-policy announcement. The Fed forecast no rate hikes in 2019, down from two hikes forecasted previous.

Technically speaking, the weekly timeframe has price action selling off just south of Quasimodo resistance at 26182. Aside from the 25213 March 4 low, limited support is visible on this scale until the 2018 yearly opening level at 24660 enters the mix. Support on the daily timeframe is seen at 25385 after the unit topped (in the shape of a bearish pin-bar formation) ahead of supply at 26536-26200.

March’s opening level on the H4 timeframe at 25913 served as strong resistance yesterday, forcing price action to lows at 25665. Downside support from current price has a minor Quasimodo formation at 25512 to target, followed by another more pronounced Quasimodo support at 25337 (aligns closely with daily support mentioned above at 25385).

Areas of consideration:

With room seen for the market to extend losses, a retest play at the underside of March’s opening level drawn from 25913 is certainly worth considering. Another area of interest is the H4 Quasimodo support at 25337, given its connection with daily support at 25385.

Conservative traders will likely seek additional confirmation at both of the above said levels before executing a trade. Employing the use of candlestick analysis is one option. An alternative to this is to drill down to the lower timeframes and trade local structure.

Today’s data points: Philly Fed Manufacturing Index.

XAU/USD (GOLD):

Underpinned by a waning greenback and US Treasury yields via a dovish Fed, Wednesday observed bullion catapult itself northbound wrapping up the day printing a fourth consecutive gain.

Thanks to yesterday’s movement, weekly flow is seen establishing ground above its 2018 yearly opening level at 1302.5. Continued buying from this angle has the 1346.7 Feb 18 high in sight, tailed closely by resistance at 1357.6. Buyers on the weekly timeframe may want to note potential resistance on the daily timeframe between 1321.3/1318.7: a 61.8% Fibonacci resistance and 127.2% Fibonacci ext. point.

Merging closely with the aforesaid Fibonacci values is February’s opening level at 1321.0 on the H4 timeframe and a nearby channel resistance (taken from the high 1311.3). It also worth pointing out the RSI indicator is seen nearing its overbought value.

Areas of consideration:

A response from 1321.0 on the H4 timeframe is expected, seeing it unites closely with daily Fibonacci resistances. A short from here with a stop-loss order plotted above the current H4 channel resistance is, therefore, worthy of attention.  Waiting for additional confirmation to come about before pulling the trigger is recommended, however, since a sell from here has opposition from weekly flow.

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 with regard to 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.

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Wednesday 20th March: Asian markets see-saw as Fed announcements awaited
Wednesday 20th March: Asian markets see-saw as Fed announcements awaited

Wednesday 20th March: Asian markets see-saw as Fed announcements awaited

March 20, 2019 15:33   ICMarkets   Market News  

Global Markets:

  • Asian Stock Markets : Nikkei up 0.12%, Shanghai Composite down 0.01%, Hang Seng down 0.24%, ASX down 0.32%
  • Commodities : Gold at $1303.85 (-0.20%), Silver at $15.33 (-0.29%), Brent Oil at $67.80 (+0.28%), WTI Oil at $59.31 (+0.03%)
  • Rates : US 10-year yield at 2.610, UK 10-year yield at 1.194, Germany 10-year yield at 0.110

News & Data:

  • (NZD) Current Account -3.26B vs -3.55B expected
  • (EUR) German ZEW Economic Sentiment -3.6 vs -11 expected
  • (GBP) Unemployment Rate 3.90% vs 4.00% expected
  • (GBP) Average Earnings Index 3m/y 3.40% vs 3.20% expected
  • (AUD) HPI q/q -2.40% vs -1.90% expected
  • BoJ Kuroda: Weakness Is Spreading In China’s Real Economy
  • Canada sees 20 percent jump in bond issuance as deficit climbs

Markets Update:

Asian stock markets are mostly lower on Wednesday following the lackluster cues overnight from Wall Street amid worries about U.S.-China trade talks, after a report by Bloomberg said U.S. negotiators are concerned that China is pushing back against American demands. Investors are also cautious as they look ahead to the U.S. Federal Reserve’s monetary policy decision due later in the day.

The Shanghai composite, Shenzhen composite and Shenzhen component all falling more than 1 percent by the morning session’s end. However, they subsequently recovered with the Shanghai Composite now trading flat. In Hong Kong, the Hang Seng index declined 0.2 percent. The Nikkei 225 in Japan recovered from its earlier slip to trade slightly higher in the afternoon, with shares of index heavyweight Fast Retailing advancing more than 0.6 percent, while the Topix index was fractionally higher. In Australia, the ASX 200 declined 0.3 percent.

Expectations of a more cautious Fed have dented the U.S. dollar, which has already been under pressure this year after Powell all but signaled a pause to the tightening cycle at the previous meeting. The dollar’s index against a basket of six major currencies hit 2 1/2-week low of 96.288 on Tuesday and last stood at 96.465. The British pound remained hostage to headlines on Brexit.

Oil prices held close to four-month highs on expectations that OPEC would continue production cuts through the end of the year and after data from the American Petroleum Institute (API) showed a surprise draw-down on crude inventories.

Upcoming Events:

  • 10:30 AM GMT – (GBP) CPI y/y
  • 10:30 AM GMT – (GBP) PPI Input m/m
  • 10:30 AM GMT – (GBP) RPI y/y
  • 07:00 PM GMT – (USD) FOMC Economic Projections
  • 07:00 PM GMT – (USD) FOMC Statement
  • 07:00 PM GMT – (USD) Federal Funds Rate
  • 07:30 PM GMT – (USD) FOMC Press Conference
  • 10:45 PM GMT – (NZD) GDP q/q
  • &more…

Full Article

Wednesday 20th March: FOMC takes centre stage; the central bank widely expected to keep policy unchanged.
Wednesday 20th March: FOMC takes centre stage; the central bank widely expected to keep policy unchanged.

Wednesday 20th March: FOMC takes centre stage; the central bank widely expected to keep policy unchanged.

March 20, 2019 13:53   ICMarkets   Market News  

EUR/USD:

Underpinned by a softer greenback, the EUR/USD extended gains for a third consecutive day Tuesday, up 0.13%. The buck is seemingly weaker on fears of a dovish Fed, with the central bank widely expected to keep policy unchanged today. Following a dovish U-turn at the beginning of the year, the Fed has put rate hikes on pause.

Establishing a fresh weekly high at 1.1361, the pair is seen within touching distance of daily channel resistance etched from the high 1.1569. Whether or not this barrier holds (in motion since the beginning of the year), though, is difficult to judge. This is due to the market trading from notable weekly demand coming in at 1.1119-1.1295, with scope to advance as far north as resistance at 1.1465.

A closer reading on the H4 timeframe has March’s opening level at 1.1373 as its next upside target, closely followed by 1.14. Beneath current price, as highlighted in Tuesday’s briefing, 1.13 is visible, which offered critical intraday support last week. It might also be of interest to some traders to note the RSI indicator is still chalking up a mild divergence reading (red line) just south of its overbought value.

Areas of consideration:

March’s opening level mentioned above on the H4 timeframe at 1.1373 is likely of interest to many traders this morning. Not only does it boast reasonably attractive history as a local support and resistance, it aligns closely with the current daily channel resistance. Despite this confluence, do remain cognizant of where we’re coming from on the weekly timeframe (demand). For that reason, waiting for a H4 bearish candlestick signal to form off 1.1373 before pulling the trigger is recommended. Not only will this pattern identify seller intent, it’ll also provide entry/risk levels to work with.

Today’s data points: FOMC Economic Projections; FOMC Statement; Federal Funds Rate Decision; FOMC Press Conference.

GBP/USD:

Latest employment data out of the UK Tuesday was largely upbeat. Unemployment ticked lower to 3.9%, better than the 4.0% expected, while wages rose more than anticipated, up by 3.4% in January. The claimant count change for February was the only disappointing figure, up 27.0K vs. expected 13.1k. In addition to this, sterling was again subject to Brexit headline risk, though remained within a relatively tight range between 1.33/1.32 visible on the H4 timeframe (note March’s opening level is also seen fixed within this consolidation at 1.3264).

In the event the market strives for higher ground and conquers 1.33, the 1.3379 March 13 high is in the firing range, closely shadowed by 1.34. A move under 1.32 sports a reasonably clear run towards February’s opening level at 1.3108, trailed by 1.31.

Weekly movement is, as underlined in Monday’s briefing, seen dipping its toes back into supply coming in at 1.3472-1.3204. In view of the number of times this area has been tested since July 2018, the supply’s foundation is likely weakened, giving rise to a possible advance towards the 2018 yearly opening level at 1.3503.

The picture on the daily timeframe reveals the market is trading beneath Quasimodo resistance at 1.3315. Nearby trend line support (taken from the low 1.2373) is the next downside target from current price, whereas a decisive break above 1.3315 places resistance at 1.3465 in the spotlight (not seen on the screen).

Areas of consideration:

Buying this market, given resistances seen on both the weekly and daily timeframes, may be a chancy move.

Selling, on the other hand, is interesting. A sell from 1.33, preferably on the break of 1.3264 (March’s opening level mentioned above at 1.3264) is an option, targeting 1.32 and beyond. The more conservative route, nonetheless, is still waiting for a close beneath 1.32 to come to fruition. This, followed up by a retest (entry and stop-loss orders can be placed according to the rejecting candle’s structure), has a strong chance of reaching 1.31.

Today’s data points: UK CPI y/y; UK PPI Input m/m; RPI y/y; FOMC Economic Projections; FOMC Statement; Federal Funds Rate Decision; FOMC Press Conference.

AUD/USD:

With the Australian dollar trading lower following RBA meeting minutes early Tuesday, the H4 candles eventually reclaimed 0.71 to the downside. The next stop on this timeframe is seen around 0.7079, a 50.0% support that fuses with channel support extended from the low 0.7003. Further to this (black arrows), a nice-looking AB=CD bullish pattern also completes around 0.7079 as well.

On more of a broader perspective, both weekly and daily flow exhibit scope to explore higher ground this week. Weekly action shows room to push as far north as its trend line resistance taken from the high 0.8135 and daily movement has space to advance towards channel resistance extended from the high 0.7295.

Areas of consideration:

Having seen higher-timeframe price action yet to connect with its respective resistances, a long from 0.7080ish today is an idea. Although housing limited confluence from the higher timeframes, local H4 confluence is strong, supporting at least a bounce towards 0.71. With a stop-loss order tucked 2 points beneath the 61.8% Fibonacci support value at 0.7070, an entry from 0.7080 boasts reasonable risk/reward.

Today’s data points: FOMC Economic Projections; FOMC Statement; Federal Funds Rate Decision; FOMC Press Conference.

USD/JPY:

Despite a weak USD bias Tuesday, the USD/JPY pair proved resilient, recovering a large portion of intraday losses and reclaiming March’s opening level at 111.36 on the H4 timeframe.

By and large, the technical structure remains largely unchanged. For that reason, much of the following report will echo similar beliefs put forward in Tuesday’s briefing.

With H4 action indicating it may want to push higher from 111.36 today, a rally towards 112 could be on the cards. Should the unit turn lower, however, this will likely draw price action in the direction of 111, which provided the market reasonably strong support of late.

In terms of where we stand on the higher timeframes, the pendulum remains swinging in favour of the buyers at the moment. As for structure on the weekly timeframe, pivotal resistance at 112.65 (the 2018 yearly opening level) is seen, potentially signifying the market has room to advance. The daily candles, however, have printed a series of higher highs and higher lows since bottoming at 104.65 at the beginning of the year. Recent selling found support around the 110.74 March 8 low and has thus far shown possibility to the upside, with resistance plotted at 112.33 on the radar, followed by trend line resistance extended from the high 114.23.

Areas of consideration:

According to the higher timeframes the buyers are in good form, with daily resistance at 112.33 in place as the first upside objective.

In spite of yesterday’s dip beneath 111.36 to H4 trend line support taken from the low 110.35, the number appears to be holding as we write. With this being the case, this may offer another chance to buy should a notable H4 bullish candlestick pattern emerge (entry/risk levels can be determined according to this structure).

Today’s data points: FOMC Economic Projections; FOMC Statement; Federal Funds Rate Decision; FOMC Press Conference.

USD/CAD:

In recent sessions, the USD/CAD washed through orders residing around the 1.33 handle applied to the H4 timeframe, testing lows at 1.3251. Despite this, time beneath 1.33 was short-lived. Leaving the 61.8% Fibonacci support value at 1.3248 open, the pair regained lost ground and ended the day marginally in the red by 0.12%, though firmly positioned back above 1.33.

Despite yesterday’s move chalking up a bullish pin-bar formation on the daily timeframe, technical structure has hefty resistance overhead at 1.3345. In addition to this, price action on the weekly timeframe shattered a two week bullish phase last week, following the pair crossing swords with its 2017 yearly opening level at 1.3434. Additional selling could come to fruition as the next support target does not enter the fight until trend line support (extended from the low 1.2421).

Areas of consideration:

As is seen on the H4 timeframe, the candles appear poised to approach resistance at 1.3357 (merging with a 50.0% resistance at 1.3361 and a supply zone [yellow] at 1.3371-1.3350). Coupled with yesterday’s substantial stop run beneath 1.33 (likely weakening buyers here), as well as where we’re positioned on the bigger picture (see above), opens up a possible sell from 1.3357ish today, according to our technical studies.

Overall, the zone of interest falls in at 1.3371/1.3345 today. This is the top edge of the current H4 supply in yellow and daily resistance level: a range of 26 pips. Stop-loss orders can be tucked above this area and entry can, should it agree with your own personal trading methodology, be taken from 1.3345, targeting 1.33 as the initial take-profit target: 45 pips distance (a near 1:2 risk/reward ratio).

Today’s data points: FOMC Economic Projections; FOMC Statement; Federal Funds Rate Decision; FOMC Press Conference.

USD/CHF:

The response from 1.0000 (parity) on the H4 timeframe was short-lived Monday, limited by a less-than-impressive 20-pip move. Broad-based USD selling weighed on the USD/CHF Tuesday, pressuring the pair beneath 1.0000 in early London hours, later bolstered by trend line support-turned resistance taken from the low 0.9716 (seen clearer on the H1 timeframe). A bearish wind could see March’s opening level at 0.9972 enter the mix. It might also be worth pencilling in we have an oversold/divergence RSI reading (green).

Breakout sellers sub 1.0000, although in profit, may run into headwinds today as daily price crossed swords with support coming in at 0.9986 yesterday (a level that boasts incredibly strong history [yellow]). Contrary to this, however, last week’s weekly candle concluded marginally beneath the 2016 yearly opening level at 1.0029. Having seen this level cap upside since May 2017 a move lower from here could take shape. The next area of interest to the downside is a trend line support extended from the low 0.9187.

Areas of consideration:

According to our technical reading, this market, for lack of a better word, is caught between a rock and a hard place. Although weekly price indicates possible selling, daily price suggests a move higher may be in store. Couple this with H4 action displaying limited space to manoeuvre: 1.0000 to the upside and 0.9972 seen lower down on the curve, opting to remain flat may be the better path to take today.

Today’s data points: FOMC Economic Projections; FOMC Statement; Federal Funds Rate Decision; FOMC Press Conference.

Dow Jones Industrial Average:

US equities closed mostly lower Tuesday, with the Dow Jones Industrial Average snapping a two-day winning streak, amid conflicting reports on US/China trade talks.

H4 action, as is visible from the chart, sold off south of a Quasimodo resistance at 26149, consequently overthrowing March’s opening level at 25913 and exposing support priced in at 25740. Traders may want to also acknowledge we have some demand immediately to the left of current price (green arrow) around 25776/25850.

In response to yesterday’s moves, daily flow chalked up a bearish pin-bar pattern just south of supply at 26536-26200. Should this entice further selling, the next area of interest falls in around 25385: the origin of the most recent up move from 25213. By the same token, weekly action topped just ahead of its Quasimodo resistance level at 26182 yesterday. Note this level is positioned just beneath the current daily supply.

Areas of consideration:

Traders will likely be on standby ahead of today’s Fed meet.

Technically speaking, H4 demand at 25776/25850 may force a retest to the underside of 25913. Whether this level will hold as resistance is difficult to judge. Although we do have a daily bearish candlestick signal, structure shows room for both weekly and daily flow to push higher, at least until the weekly Quasimodo resistance at 26182.

On account of the above, traders may be more inclined to sit tight and wait for a possible break above 25913 for a potential retest play, targeting yesterday’s high 26114, followed by H4 Quasimodo resistance at 26149.

Today’s data points: FOMC Economic Projections; FOMC Statement; Federal Funds Rate Decision; FOMC Press Conference.

XAU/USD (GOLD):

Despite gold XAU/USD advancing higher for a third consecutive day Tuesday, pretty much in lockstep with EUR/USD movement, structure is unchanged this morning.

Up 0.21% on the day, H4 reveals the candles are compressing within an ascending channel formation (low: 1280.4 high: 1311.3). Arguably, the price of gold could continue to rise within these limits until shaking hands with

February’s opening level at 1321.0.

On a wider perspective, demand on the weekly timeframe at 1276.5-1298.5 (black arrow) is seen holding this market higher, forcing bullion back above its 2018 yearly opening level at 1302.5. Meanwhile on the daily timeframe, the candles are capped by a 38.2% Fibonacci resistance value at 1305.9. This barrier, assuming it holds, has the support area at 1272.5-1261.5 in sight, which, as you can see, merges with a trend line support taken from the low 1160.3. Though do bear in mind for this area to be brought into the fight, a break of the current weekly demand zone will need to take shape.

Areas of consideration:

As weekly price attempts to reclaim 1302.5 from demand at 1276.5-1298.5, further buying within the current H4 ascending channel pattern is a possibility. At current price, though, this remains a challenging market to buy. Should a retest of the said channel support take form today, however, and print a H4 bullish candlestick pattern (traders have the option of entering and positioning stops based on the candlestick structure), this will likely entice buyers into the market.

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 with regard to 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

Full Article


Tuesday 19th March: Sterling consolidates ahead of UK job’s data.
Tuesday 19th March: Sterling consolidates ahead of UK job’s data.

Tuesday 19th March: Sterling consolidates ahead of UK job’s data.

March 19, 2019 13:33   ICMarkets   Market News  

EUR/USD:

EUR/USD bulls went on the offensive Monday, extending Friday’s rally. Up 0.10%, the pair is closing in on a daily channel resistance etched from the high 1.1569. Whether or not this barrier holds (in motion since the beginning of the year), though, is difficult to judge. This is due to where the market is trading from on the weekly timeframe: notable demand coming in at 1.1119-1.1295. On this scale, scope to advance as far north as resistance at 1.1465 is seen.

A closer reading on the H4 timeframe has March’s opening level at 1.1373 as its next upside target, closely followed by 1.14. Beneath current price, 1.13 is visible, which, as you can see, provided critical intraday support last week. It might also be of interest to some traders to note the RSI indicator is chalking up a mild divergence reading (red line) just south of its overbought value.

Areas of consideration:

March’s opening level mentioned above on the H4 timeframe at 1.1373 is likely of interest to many traders this morning. Not only does it boast reasonably attractive history as a local support and resistance, it aligns closely with the current daily channel resistance. Despite this confluence, do remain cognizant of where we’re coming from on the weekly timeframe (demand). For that reason, waiting for a H4 bearish candlestick signal to form off 1.1373 before pulling the trigger is recommended. Not only will this pattern identify seller intent, it’ll also provide entry/risk levels to work with.

Today’s data points: German ZEW Economic Sentiment.

GBP/USD:

Using a top-down approach this morning, weekly movement is, as underlined in Monday’s  briefing, seen dipping its toes back into supply coming in at 1.3472-1.3204. In view of the number of times this area has been tested since July 2018, the supply’s foundation is likely weakened, giving rise to a possible advance towards the 2018 yearly opening level at 1.3503.

The picture on the daily timeframe reveals the market is trading beneath Quasimodo resistance at 1.3315. Nearby trend line support (taken from the low 1.2373) is the next downside target from current price, whereas a decisive break above 1.3315 places resistance at 1.3465 in the spotlight (not seen on the screen).

1.33 on the H4 timeframe served as a strong ceiling Monday, with a robust selloff witnessed from the number in the early hours of London. Sellers absorbed March’s opening level nearby at 1.3264 and mustered enough strength to challenge 1.32, which, as is evident from the chart, was enthusiastically defended into the close.

In the event the pair continues to press for lower ground today/this week and overthrows 1.32, a reasonably clear run towards February’s opening level at 1.3108 is visible, shadowed closely by 1.31.

Areas of consideration:

Buying this market would, given resistances seen on both the weekly and daily timeframes, be a chancy move.

Selling, on the other hand, is interesting. A sell from March’s opening level mentioned above at 1.3264 is an option, targeting 1.32 and beyond. The more conservative route, nonetheless, would be to wait for a close beneath 1.32 to come to fruition. This, followed up by a retest (entry and stop-loss orders can be placed according to the rejecting candle’s structure), has a strong chance of reaching 1.31 (black arrows).

Today’s data points: UK Average Earnings Index 3m/y; UK Unemployment Rate; UK Claimant Count Change.

AUD/USD:

The Australian dollar kicked off the week on a strong footing, boosted by lower iron ore grades rallying to multi-year highs on Friday.

After clocking monthly highs at 0.7119 in early London, though, the AUD/USD failed to sustain its upside presence. The H4 candles settled for the day two pips north of 0.71, up 0.30%.

Another break of 0.71 has a reasonably clear run towards 0.72 on the H4 timeframe. H4 Supply marked with a green arrow at 0.7166-0.7142 could be problematic, however, given its association with the daily channel resistance extended from the high 0.7295 and the weekly trend line resistance taken from the high 0.8135. Note both higher-timeframe levels emphasise strength.

Areas of consideration:

Having seen strong resistance nearby on the higher timeframes, traders are urged to be wary of entering long above 0.71, particularly with a large stop-loss order, as daily sellers will likely enter the fray from the aforementioned channel resistance (around 0.7126ish).

Ultimately, the research team is looking for the higher-timeframe resistances to enter the fold. This – coupled with a strong push back beneath 0.71 on the H4 scale – is likely enough to ignite seller interest, particularly with a confirming round number support failure. This may come to fruition today since in early hours we have RBA Monetary Policy Meeting Minutes hitting the wires. If so, keep eyes on a possible retest to the underside of 0.71 (entry and stop-loss orders can be placed according to the rejecting candle’s structure).

Today’s data points: RBA Monetary Policy Meeting Minutes.

USD/JPY:

For those who read Monday’s briefing you may recall the piece underscoring a potential long from March’s opening level on the H4 timeframe at 111.36. H4 price, as you can see, touched gloves with this level in recent hours and sketched in a (mild) bullish pin-bar formation. A failure of 111.36, nonetheless, will likely draw the unit in the direction of 111, which provided the market reasonably strong support of late.

In terms of where we stand on the higher timeframes, the pendulum remains swinging in favour of the buyers at the moment. As for structure on the weekly timeframe, pivotal resistance at 112.65 (the 2018 yearly opening level) is seen, potentially signifying the market has room to advance. The daily candles, however, have printed a series of higher highs and higher lows since bottoming at 104.65 at the beginning of the year. Recent selling found support around the 110.74 March 8 low and has thus far shown possibility to the upside, with resistance plotted at 112.33 on the radar, followed by trend line resistance extended from the high 114.23.

Areas of consideration:

According to the higher timeframes the buyers are in good form, with daily resistance at 112.33 in place as the first upside objective.

Seeing H4 action test 111.36 and hold in the shape of a relatively nice-looking H4 bullish candlestick signal – entry and risk levels can be determined on the back of this structure – a rally towards 112 could be on the cards (red arrow) today.

Today’s data points: Limited.

USD/CAD:

For now, the H4 candles are encased between a resistance level at 1.3357 (merging with a 38.2% Fibonacci resistance value as well as a supply zone [yellow] at 1.3371-1.3350), and 1.33. Outside of this border, 1.34 as a resistance is in sight, whereas a move under 1.33, according to our technical studies, has a free run in the direction of 1.32. The space visible between 1.33 and 1.32 is clear. No doubt many technicians will be looking to sell a break of 1.33.

Shifting focus to the weekly timeframe, price action shattered a two week bullish phase last week, following the pair crossing swords with its 2017 yearly opening level at 1.3434. Additional selling could come to fruition this week as the next support target does not enter the fight until trend line support (extended from the low 1.2421).

Last Wednesday observed daily action nudge its way through support at 1.3345, and provide resistance Thursday and Friday, and also Monday as well. Note Friday’s session concluded by way of a clear-cut indecision candle, as did Monday’s segment. The 1.3112 Feb 25 low is in view should the unit push for lower ground, closely tailed by a reasonably well-rounded support at 1.3067.

Areas of consideration:

Conservative sellers may opt to wait and see if 1.33 is engulfed to the downside. A H4 close below this number that’s followed up with a retest (entry and stop levels can be defined according to the rejecting candle’s limits) is, given the picture on the higher timeframes, a high-probability sell, targeting 1.32.

Today’s data points: Limited.

USD/CHF:

Starved of support, the USD/CHF extended Friday’s losses Monday and tested key figure 1.0000 (parity) on the H4 timeframe. This level is a noted barrier and was emphasised in Monday’s briefing. 1.0000 finds additional support from a 61.8% Fibonacci value at 1.0001 and two merging trend line supports (1.0024/0.9716). As is evident from the H4 chart this morning, 1.0000 held firm with price trading at 1.0013 as of writing.

In regards to the bigger picture this morning, daily support at 0.9986 (a level that boasts incredibly strong history [yellow]) remains eyed. Traders may also recall the research team urging traders to pencil in a possible fakeout beyond 1.0000 into daily support before serious buyers stepped in. As of now, though, enough bids appear to be supporting the market.

Last week’s weekly candle concluded marginally beneath the 2016 yearly opening level at 1.0029. Having seen this level cap upside since May 2017 a move lower from here could take shape. The next area of interest to the downside is a trend line support extended from the low 0.9187.

Areas of consideration:

The first upside target for those long from 1.0000 is set around H4 resistance at 1.0029, followed by H4 resistance at 1.0053.

Aside from the current long in motion, the research sees little else to hang their hat on at the moment.

Today’s data points: Limited.

Dow Jones Industrial Average:

Up 0.25%, banks and tech sectors helped lead Wall Street higher Monday. Technically, the index could witness additional buying this week as weekly flow exhibits room to press as far north as Quasimodo resistance at 26182, with a break of this level having all-time highs at 26939 in sight.

Down a level, we can also see daily movement shows room to press higher. The next port of call on this timeframe falls in around supply coming in at 26536-26200. In conjunction with the higher timeframes, the H4 candles crossed above March’s opening level at 25913 yesterday and potentially set the stage for further buying today/this week towards Quasimodo resistance at 26149, tailed closely by the weekly Quasimodo resistance mentioned above at 26182.

Areas of consideration:

With sellers possibly cleared from March’s opening level at 25913 on the H4 timeframe, and both weekly and daily price demonstrating space to explore higher ground, entering long in this market is an option.

Conservative traders will likely be looking for a retest play to emerge off 25913 as support today. A decisive rejection off here not only confirms buyer intent, but it also provides a framework for entry and risk (using the open and low of the rejecting candle). For the more aggressive trader, nevertheless, they may already be long on the H4 close above 25913 with stop-loss orders tucked beneath the breakout candle’s tail (25848).

Irrespective of the entry technique, the H4 Quasimodo resistance at 26149 is the first take-profit target.

Today’s data points: Limited.

XAU/USD (GOLD):

Demand on the weekly timeframe at 1276.5-1298.5 (black arrow) is seen holding this market higher for the time being, forcing bullion back above its 2018 yearly opening level at 1302.5. Meanwhile on the daily timeframe, the candles are capped by a 38.2% Fibonacci resistance value at 1305.9. This barrier, assuming it holds this week, has the support area at 1272.5-1261.5 in sight, which, as you can see, merges with a trend line support (taken from the low 1160.3). Though do bear in mind for this area to be brought into the fight, a break of the current weekly demand zone will need to take shape.

A closer examination of things on the H4 timeframe shows the candles compressing within an ascending channel formation (low: 1280.4 high: 1311.3). This could, according to our technical reading on the H4 timeframe, continue to be respected until reaching February’s opening level at 1321.0.

Areas of consideration:

As weekly price attempts to reclaim 1302.5 from demand at 1276.5-1298.5, further buying within the current H4 ascending channel pattern is a possibility this week. At current price, though, this is a challenging market to buy. Should a retest of the said channel support take form today and print a H4 bullish candlestick pattern (traders can enter and position stops based on the candlestick structure), this will likely entice buyers into the market to test last Wednesday’s high 1311.3 as an initial target.

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