Forex Spider's Den GF Edition

USDJPY has tanked breaking important patterns and supports clearly showing risk-off sentiment. Purely risk off sentiment across markets is the cause for Yen to appreciate against the G10 currencies.Many carry trades involving cheap credit from Japan are invested across foreign markets, and during risk-off, many of those trades are reversed and repatriated back into Yen, causing demand for Yen.

Technically USDJPY still has the room to fall down. As we can see on the chart, bear pennant has been broken to the downside making USDJPY hit L5 weekly CAM support. Pullbacks within POC zone 113.90-114.10 could be used for another short selling. The zone shows strong confluence selling at the Bearish pennant breakout and we should see institutional selling again if the price retraces.

However if the price breaks now moment double bottom -110.98 it should proceed to 110.06 previous weekly high.

 

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We have heard many times before "Buy the dips, sell the rips". Recently we had some USD gains and there were some rumours that OPEC may cut production, so Oil price went up. If OPEC cuts production traders should go long all equities with both CAD and RUB currency crosses.Remember Oil is connected to CAD and RUB. Because USA and Canadian markets are on holiday we are not seeing some big price movements at this moment.
Technically USDCAD is showing multiple patterns suggesting that selling on rallies is the option. At the top price has failed to break the neckline of inverted Head and Shoulders. It dropped heavily making a correction with the successful break of inverted head and shoulders at the bottom. The backwind of Inverted Head and Shoulders made a Bear flag variant pattern and 1.3885-1.3900 looks like a good place to short. POC (38.2, H3, EMA89, H3, DPP) should hold the price and in the case of positional POC sell the target is 1.3780. Any breakout below 1.3780 targets 1.3710. We should pay attention to current price around 1.3820 as it shows a potential inverted head and shoulders in progress which if realized could spike the price UP towards our POC for a subsequent sell.

 

GBPUSD is currently around 1.4276 but I expect a bounce. Good Claimant Count Change numbers ( the first indication of the employment situation ) along with good Unemployment numbers could spike the price up towards POC 1.4385-95 (EMA89, L4, 50.0, historical breakout). There is also a bullish divergence that is aligned with good fundamental numbers.

If we get a bounce towards POC, we should see now moment sellers towards 1.4350 and 1.4275 again. Only the break below 1.4250 would tank the price down towards 1.4200 but it is hardly to happen now due to divergence and L5 weekly camarilla PP.

 

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As we know AUDUSD is a hard commodity currency.Basically, when its risk-on environment, commodities prices tend to increase, and traders go long AUD due to that factor. When commodities prices go up, Stock Markets go up and there is demand for positive swaps on AUD pairs currently as opposed to JPY (JPY weakened today). AUD bounce has also been stimulated by the PBOC, Oil and RBA. Oil is connected to commodity currencies so it gave AUD additional boost.
Technically AUDUSD is showing a possible breakout and positional trading. The pair is slowly grinding up in an ascending channel towards important levels. If the price retraces to 0.7130-40 POC (50.0, WPP, EMA89) we might see another bounce towards 0.7212. The price is currently 0.7191 so we might even see a direct test of 0.7212 before any retracement.
If the price closes above the channel and makes a breakout above the channel and H4 confluence (0.7215), next level should be 0.7267. So pay attention to any retracement towards POC for long setups or a breakout as stated above.

 

I have explained it many times during webinars- AUDJPY is a great pair to trade in correlation with equities. Today we have a risk off sentiment as 29 of the 30 Germany DAX companies are down in price. That is reflecting on Yen pairs. Basically, when its risk-on environment, commodities prices tend to increase, and traders go long AUD due to that factor. When commodities prices go up, stock Markets go up and there is demand for positive swaps on AUD pairs currently as opposed to JPY. When its a risk-off environment, usually the opposite occurs, and as a result, the JPY appreciates as foreign flows from Japan are repatriated back to their local currency.
AUDJPY is going down. There are 2 possible scenarios. POC positional trade or Breakout trade. POC comes in 80.90-81.00 zone (H3, DPP, trend line, EMA89) coupled with now moment sellers should reject the price if we see a retracement. However if there is no retracement a momentum break or h1/h4 close below 80.00 should tank the pair down to its target and that is 79.60

 

Fear of Brexit has weakened the GBPUSD tanking the pair below 2010 lows and getting close to 2009 historical lows. As I have shown in the previous GBPUSD coverage the pair successfully broke through 1.4050 dropping and hitting our projected target. All this turmoil had a positive effect for EURGBP cross as we could have witnessed a strong bounce upwards.
The pair has reached 0.7927 that is EMA89 on Monthly chart. This is strong resistance and by dropping to H4 time frame, we can see a bearish divergence formed slighlty above H5 camarilla pivot point. The price is currently 0.7907 and it might be due for a correction. If divergence is successful the pair should drop towards 0.7830 and 0.7780-0.7800 that is a POC for possibly another long trade (H3,EMA89,61.8,inner trend line). A rejection off POC targets 0.7830 and 0.7900 respectively,
So at this point we should be focused on a possible correction and rejection from current levels.

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Negative CPI numbers fueled another drop in exchange rate. Bad CPI German and France data should be counteracted by ECB and bad CPI should be discussed on next ECB meeting so we could possibly expect a further guidance on ECB policy. Any announcement about further policy steps will have a strong impact on the currency.

At this moment the EURUSD is technically aligned with fundamentals and that means sell the rallies is the option. POC comes in 1.0970-90 zone (H3,DPP, EMA89, 50.0) that is supported by the break of Rising Wedge - bearish pattern. If the price gets to POC we could expect another drop towards 1.0890 and 1.0850. Currently we see a bullish divergence that could give us a retracement for new shorts but additionally we should also watch 1.0850. If the price doesn't get to POC we need to pay attention to any 4-hour close below the 1.0850 level as the price should target 1.0820 and 1.0780 after the break of 1.0850.

 

EURAUD shows a good trend and we might align both technical and fundamental reasoning behind it. EUR is under a QE programme and is accepted as a safe heaven despite the European turmoil whilst AUD is currently in risk on phase, gaining some ground recently.
That explains EURAUD shorts and we can try to capture the move. 1.5070-80 could reject the price (current price 1.5021) towards 1.4985 and the break of 1.4985 targets 1.4910 - L5 camarilla WPP. It is a shallow retracement but we can see a regular bullish divergence playing out so we could eventually might see another 1.5070-80 retest before next leg down. However, If we see no retracement than be prepared for the break of today's lows (direct drop) at 1.4985.
Positional sell trades are always best if taken at higher price levels so we can see a strong POC (50.0, EMA89, running triangle breakout, L3) in 1.5200-20 zone so IF the pair retraces within POC, the price should be rejected. Pay attention to correlation with EURUSD as it has been very strong (+78) so EURAUD is moving the same direction as EURUSD, the only difference is that EURAUD is much more faster than EURAUD, thus the range of the pair is wider.

 

An unexpected jump in Crude Oil inventories (It influences the price of petroleum products that affects both growth and inflation) had a small impact on USDCAD yesterday as gains were limited and the pair continued to tank during US session.

The USDCAD is technically bearish and we can see a strong POC at 1.3465-80 (H4, X cross, EMA89, the channel top) that we can use for possible short trades. However the price is showing sellers in now moment (green rectangle) and we could see an immediate rejection towards 1.3390. If that doesn't happen eyes should be on POC. The pair is initially targeting 1.3390 and a strong momentum or H1/H4 close below 1.3365 will target 1.3320-10, the channel bottom and L5 confluence zone.

 

The EURUSD is focused on ECB meeting this week on Thursday where investors will re-assess ECB further policy but until then we need to analyze the possible intraday movement of the most traded Forex pair. After good NFP but bad wages data on Friday the EURUSD spiked to 1.1040 region after the rejection from 1.0920.
Today the pair has initially been sold but the overall trend is bullish. H1 shows a cup with handle pattern where handle is formed in upper half of the cup. POC for positional trades is 1.0925-50 but only above 1.0955 the pair can gain upside momentum towards 1.1040. Point A is the right cup lip and it serves as the breakout point whereas point B is the handle low confluence. Only above 1.1040 the price will open the door for 1.1150.

 

As presumed the ECB decision made a hectic movement on Forex and Equities. The ECB decided to cut main refinance rate to 0.0% while markets expected 0.05% + deposit rate was cut to -0.40% vs 0.40% expected. Four new Targeted longer-term refinancing operations (TLTROs) have been announced with QE shift to €80bn Initially EURUSD has been sold to 1.0820 but when Draghi stated there will be no rate cuts Algos stepped in, equities were sold and that created a huge move up in the EURUSD towards 1.1115. Equities have a strong correlation to Forex as explained in our webinars and it can cause massive whipsaws in price action.

Technically the EURUSD is possibly showing a MASTER candle on Daily time frame and it marks clear support and resistance levels. EURUSD is looking bullish now with 1.1115 as resistance and 1.0820 as support. The daily candle serve as the best indicator of interim support and resistance where levels are clearly defined by price action in now moment,Any spike and daily close above 1.1115 will aim for 1.1215 and 1.1376 while a daily close below 1.0820 would aim for 1.0770 and 1.0700. Adding to EURUSD bullishness we see a failed bearish pennant on daily but watch for daily close above or below the master candle for next direction. My current guess it will be bullish.

 

GBPUSD ascending scallop on H4 time frame suggests further bullish continuation. If we drill down to H1 time frame we will see a solid uptrend where GBPUSD has been bought on pullbacks. The first POC (L3, 38.2, triple top breakout) comes within 1.4315-25 zone and the pair could reject towards 1.4440. A 4h close above 1.4420 (H3 cam PP) would signal a continuation towards 1.4550. POC2 (EMA89, L4, 50.0, trend line) comes within 1.4260-80 zone and the deeper pullback below 1.4310 could target POC2. If POC2 zone is reached GBPUSD will still be bullish targeting 1.4420-40 and above ant only the real close below a Fakeout candle at 1.4115 would initiate sellers for another break below 1.4000.

However 1.4550 is the interim resistance and should the pair reach it we could see now momentum sellers and the price could reject from it.

 

GBPUSD ascending scallop on H4 time frame suggests further bullish continuation. If we drill down to H1 time frame we will see a solid uptrend where GBPUSD has been bought on pullbacks. The first POC (L3, 38.2, triple top breakout) comes within 1.4315-25 zone and the pair could reject towards 1.4440. A 4h close above 1.4420 (H3 cam PP) would signal a continuation towards 1.4550. POC2 (EMA89, L4, 50.0, trend line) comes within 1.4260-80 zone and the deeper pullback below 1.4310 could target POC2. If POC2 zone is reached GBPUSD will still be bullish targeting 1.4420-40 and above ant only the real close below a Fakeout candle at 1.4115 would initiate sellers for another break below 1.4000.
However 1.4550 is the interim resistance and should the pair reach it we could see now momentum sellers and the price could reject from it.

 

As we could see, after yesterday's webinar USDJPY dropped like a stone from POC giving us more then 140 pips of a profit. The setup was based on a running triangle and general 114.00 rejections and straight after the webinar we had a trade that is more than 140 pips in profit now. But that's not all. Traders should pay attention to L4 breakout as 4h close or H1 momentum below could tank the price further down to 112.20 all the way to 111.55. If the price rejects off 112.50-60 zone watch for a retest of 113.20-35 zone (L3, doube trend line, EMA89) that could give us another shorting opportunity. MACD momentum is very strong so L4 breakout is possible too but only if we see a valid H1/H4 close.

 

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The AUDUSD is gaining its handle above 0.7500 level and the RBA stayed neutral on recent AUD strength.In my opinion its mainly USD weakness, but Commodities prices have improved the last few weeks - Iron Ore, Copper, Oil (LNG), Gold, and Bauxite and AUDUSD is linked to hard commodities.
The technical analysis is showing the ascending scallop formed on H1 chart and clear POC within 0.7560-75 zone (X-cross, WPP, 38.2, EMA89). Additionally there is an inner trend line that shows buying strength on pullbacks (red rectangles) Retracement within the zone is additionally supported by historical breakout point (blue rectangle) at 0.7590 so that level can also reject the price. The target is 0.7670 and 4h close above 0.7670 will target 0.7750. In my opinion its mainly USD weakness, but Commodities prices have improved the last few weeks, Iron Ore, Copper, Oil (LNG), Gold, Bauxite, etc.

 

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