Chart of the Day

[Mysticforex 13]

USD/CAD has formed a clear triple top with lower highs suggesting that upward momentum is no longer there. The 1.2800 level remains the operative resistance to the topside while 1.2000 is most immediate near term support.

[stefcio2002 10]

USD/CAD has formed a clear triple top with lower highs suggesting that upward momentum is no longer there. The 1.2800 level remains the operative resistance to the topside while 1.2000 is most immediate near term support.

 

Yes, on the daily it is in a consolidation triangle, but my support is a little bit higher around 1,236. And as it is as triangle, my resistance trend line is decreasing. But yes, the upward momentum is gone for now.

[Mysticforex 13]

GBP/USD Still Aiming for 1.56

 

 

The rally in the British pound on Friday was halted by surprisingly weak consumer spending numbers. Despite the decline in the unemployment rate and an increase in wages, retail sales fell 0.3% at the start the year. January is typically a softer month for spending and so excluding auto and gas purchases, retail sales dropped 0.7%. Earlier this week we learned that CPI dropped by the largest margin ever but even with today’s weaker report, we still believe that the Bank of England is on track to raise rates towards the end of the year. More importantly, we believe that the latest pullback in sterling represents an opportunity to buy GBP/USD at a lower level. There are not many U.K. economic reports scheduled for release next week, which means the performance of sterling will hinge upon the market’s appetite for U.S. dollars and euro. Just remember that the overall outlook for the U.K. remains positive so if there is a rally in EUR/GBP, chances are, it may not last.

 

The currency pair remains in an uptrend and within the two upper Bollinger Bands. Support is at the 23.6% Fibonacci retracement of the 2007 to 2009 decline near 1.5330. Resistance is not until 1.56.

Edited February 23, 2015 by Mysticforex

[Mysticforex 13]

EUR/USD – Time for a Breakout

 

 

Taking look at the daily chart, the consolidative triangle pattern is clear. If the EUR/USD breaks the top of the triangle, the next stop should be 1.1645, a former support turned resistance level. If it breaks the downside and takes out 1.1275, the next area of support is at the 11 year low of 1.11.

[stefcio2002 10]

EUR/USD – Time for a Breakout

 

 

Taking look at the daily chart, the consolidative triangle pattern is clear. If the EUR/USD breaks the top of the triangle, the next stop should be 1.1645, a former support turned resistance level. If it breaks the downside and takes out 1.1275, the next area of support is at the 11 year low of 1.11.

 

Definitely consolidating. For me it is a range and not a triangle,but this i secondary. Ths point is to wait for the pair to exit the consolidation figure.

[Mysticforex 13]

Peak GBP/CAD?

 

 

The flameout at the key 1.9500 level suggests that GBP/CAD may have set a near term top. The pair finds its first support near the 1.9000 level while only a move through the 1.9600 figure reestablishes the uptrend.

[Mysticforex 13]

Can USD/JPY take out 12000 ?

 

 

 

Today's hotter than expected CPI data and strongest wage growth since 2008, put a relentless bid into the dollar today reversing its weakness of yesterday as traders once again began to price in the prospect of possible June rate hike. USD/JPY which just yesterday looked like it was going to dive lower, climbed steadily throughout the day and ended up on the day's highs as markets once again turned bullish on dollars. Tomorrow this rally could extend further if the US GDP data surprises to the upside. The market is expecting the number to print at 2.1% versus 2.6% the quarter prior but the data shows a 2.5% growth rate it would only add to the pressure for Fed to begin normalization and would easily push USD/JPY back through the 120.00 figure. Technically USD/JPY continues to make higher lows which is bullish, but it is also constrained by lower highs on the upside which means that a break and hold above the 120.00 mark will be crucial to reestablishing the upward trend

[Mysticforex 13]

Taking a look at the daily chart of GBP/USD, there is an upward sloping channel that points to a recovery in the currency. While sterling tested the bottom of the channel on Friday, it is likely to bounce off that level and make a run for resistance near 1.56.

[Mysticforex 13]

AUD/USD Breakout ?

 

 

The Australian dollar is prime for a breakout and we’ve got the perfect catalyst tonight with the Reserve Bank of Australia’s monetary policy announcement. The Australian dollar traded lower on Monday, signaling that investors are positioning for a rate cut and even though 18 out of the 29 economists surveyed by Bloomberg also expect the RBA to ease, a rate cut is not a done deal. There has been just as much improvement as deterioration in Australia’s economy. For example, while the labor market weakened, private capital expenditures plunged and manufacturing activity in the month February contracted at its fastest pace since July 2013. We feel that there hasn’t been enough broad based deterioration to warrant back-to-back easing. China’s decision to lower interest rates in reaction to weaker economic reports makes the RBA’s decision even more complicated.

[Mysticforex 13]

Technically USD/JPY continues to travel the path of volatility compression as it makes a series of higher lows and lower highs that signal a breakout one way or the other. A move above 120.00 opens the way for a run through 121.00 while a break below 118.00 could put it on a path to test the 116.00 double bottom.

[Mysticforex 13]

Technically the AUD/NZD has found a sound double bottom at the 1.0300 level and only a break below 1.0250 would signal a potential drive lower towards parity. Meanwhile a break above the 1.0600 figure would negate the bearish bias in the pair

[Mysticforex 13]

How Low Will EURO Go?

One of the worst performing major currency pairs this year is the EUR/USD. Since Jan 1, the euro lost approximately 10% of its value against the U.S. dollar and is now trading at an 11 year low. Despite the improvements in Eurozone data including this morning’s German industrial production report, the EUR/USD has been hit hard by reality that the ECB will begin buying bonds on Monday at a time when the Fed is preparing to raise rates. The EUR/USD could remain under pressure as rate hike expectations build into the March 18th FOMC meeting. A weaker euro is good for Europe in the long run but the widening divergence in monetary policy expectations could force the currency pair down to its September 2003 low of 1.0765 before there is any stabilization. As expectations for Fed tightening continues to build, we could even see a move down to 1.05 and with only Eurozone industrial production and the German trade balance scheduled for release next week, the path of least resistance for the EUR/USD should be downwards.

Taking a look at the monthly chart of the currency, the EUR/USD has blown past all Fibonacci support levels including levels drawn from the launch of the euro. The September 2003 low is important because it was support back in 1991. If this level is broken, the 1991 swing low of 1.06 should be the next key level to watch. The 61.8% Fibonacci retracement of the 2000 to 2008 rally near 1.12 is resistance. The downtrend would only be negated on move back above this level.

[Mysticforex 13]

[ATTACH][/ATTACH]Five days have past without a rally in EUR/GBP and further losses are likely. The European Central Bank just started buying bonds today as part of its EUR 1.1 trillion program to stimulate the Eurozone economy at a time when the Bank of England is preparing to raise interest rates.

We have to turn to the monthly chart of EUR/GBP to find key levels since there is no major support until 70 cents. As for resistance, the currency pair just broke below the 61.8% Fibonacci retracement of the 2000 to 2008 rally at 0.7260. This former support is now resistance and its importance is reinforced by the fact that the currency pair also topped out at this level back in 2003.

[Mysticforex 13]

Technically the pair has found support at the 7200 several times and that figure now represents very strong base and a break there would be a significant fracture that could push it to the .7000 level. The upside meanwhile is capped by .7500.

[Mysticforex 13]

Taking a look at daily chart, the next level of resistance is at 89 the 50% Fibonacci retracements of the December to February decline. Then above that will be the big psychological resistance of 90. As long as NZD/JPY holds today’s low of 87.25, the turn is intact otherwise the currency pair could slide down to the 23.6% of 86.45.

[Mysticforex 13]

USD/CAD came within whisker of testing the multi year highs only to recede from the 1.2800 level yesterday but markets are clearly concerned about the state of Canadian economy which has been badly battered by the decline in energy prices. With oil prices slipping once again to $46/bbl crude continues to weigh on the loonie. But tomorrow's Canadian labor data may hurt the currency as well. The market is expecting a decline of -3.5K from 35K gain the month prior, but if the results are even worse than expected the BOC will have to reconsider its moratorium on further easing and that could push USD/CAD to fresh highs.

[Mysticforex 13]

Will GBP/USD Hit 1.45? Investors sold sterlings aggressively this past week, driving the currency to its weakest level against the U.S. dollar since May 2010. We are continually surprised by the sell-off in the currency because economic data and BoE speak still point to tightening by the central bank this year. However yields have fallen and sterling is being hit almost just as hard as the euro.

[Mysticforex 13]

Will Oil Drive USD/CAD to 1.30? One of the biggest stories today was the sharp decline in oil prices. WTI Crude dropped 2.25% to $43.83, its lowest level since March 2009. Canada is a major oil producer and extremely sensitive to the price of crude. The last time we heard from the central bank, they signaled that rates would not be lowered again this year but if crude prices fall below $40 a barrel, they may have to reconsider their position. We will learn more about Canada’s inflation situation later this week but lower prices will drive down inflation expectations across the globe so even if CPI increases in February like economists expect, it could fall again in the coming months. This possibility could weigh heavily on the loonie, especially if oil continues to fall and that dynamic could drive USD/CAD to 1.30.

[Mysticforex 13]

Technically CAD/JPY has developed a clear double top at the 96.00 level and that distribution now signals a break lower towards a test of the 92.00 double bottom.

[Mysticforex 13]

, USD/JPY has fallen out of the buy zone which I measure using Bollinger Bands. 120 is still a key potential support level but below that the levels to watch are 119 and 118.15. Resistance is at the 7 year high of 122.02.

[Mysticforex 13]

Technically the pair is now in a broad 1.0500-1.1000 range and is likely to remain within those bounds for the foreseeable future.

[Mysticforex 13]

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Seeing 11050 as resistance now.

[Mysticforex 13]

Technically, AUD/NZD is at a record low so the next level of support will be a psychological one at 1.10. There is near term resistance at 1.03, a former breakout level. If the currency pair trades above that level in a meaningful way, the next stop should be 1.04 with the “key” resistance at the March high of 1.0530.

[Mysticforex 13]

The fierce rally in EUR/GBP has taken many traders by surprise. The EZ economy, plagued by political problems, deflation and QE has clearly been weaker than the UK economy whose growth was on par with US. However over the past several days the pair has done nothing but climb higher as a squeeze caught many late shorts scrambling to cover. Part of the reason for the rise has been the relative weakness in the pound as tepid inflation readings and weak wage growth have traders pushing rate hike expectations to 2016. Yet the BoE insists that the prospect of a rate hike is greater than that of a cut and the underlying UK economy continues to produce. This week the market is poised to see the Retail Sales data which is expected to rebound form a negative reading last month. A positive bump in the consumer spending could reignite demand for cable and send EUR/GBP back to its recent lows.

[Mysticforex 13]

Will 1.50 GBP/USD Cap Hold?

In each of the last 5 trading days GBP/USD either tested or came close to testing the 1.50 level. Its inability to break above this price indicates how significant this resistance level really is. Despite today’s increase in loans for house purchases, recent data disappointments and dovish comments from BOE officials have kept the currency under pressure. Now the retail sales report will decide whether the currency pair breaks below 1.48 or moves above 1.50. Consumer spending is extremely important especially since the Bank of England is obsessed with wage growth.