Forex Spider's Den GF Edition

The unemployment in Canada rose to 7.1 % and CAD weakened. On the contrary US NFP results came better than expected and Unemployment rate is steady which is another step towards the rate hike in December.

Technically,USDCAD and NZDUSD are showing positive correlation too which goes in alignment with my previous NZDUSD coverage (+100 pips after the analysis). USDCAD has been bought on dips and I expect the trend to continue. Currently we can see that USDCAD is showing regular bearish divergence in progress which might hint that the pair will retrace anytime soon. If that happens we might see a retrace to POC zone 1.3360-75 which could be used for another long positioning towards 1.3475 which is the target for this move. If we dont get any retrace watch out for 1.3430 strong breakout which might push the pair up to target point.

 

The NZDUSD has broken some bullish order blocks and surged upwards reaching 0.6790 zone. The move was initiated by a technical break of a previous order block just above inverted head and shoulders neckline. The move was rejected from the 0.6790 zone and we can spot head and shoulders pattern in progress.
We have 2 possible scenarios. POC is important here because the pair will either break or bounce. The POC zone (L4, 50.0, E89, ascending trend line) comes within 0.6595-0.6615 and only the break below 0.6690 will target lower 0.6560 and 0.6505 subsequently. If the pair bounces from POC we should watch for 0.6660 and 0.6690. Have in mind that 0.6690 will become the top of right shoulder so we could see some initial selling from that level. If you were following my webinars with Admiral Markets you know that we can use the top of the right shoulder as a confluence for short trades. Additionally our Sentiment Trader tool is telling us tat even lower time frames are indecisive now which confirms the twofold scenario further.

 

The BOE's MPC voted 8-1 to keep rates unchanged at 0.5 % and there was no surprise for the market. We know that UK policy is determined by UK inflation look, so even fundamentally the pair is still dovish.

Technically any pullbacks within POC zone 1.5180-1.5200 could be sold into as the pair is showing a strong hidden bearish divergence. Remember - hidden divergence hints that the main trend will continue so the bears are still in control. POC zone ( H3, hidden bearish divergence,61.8, bearish order block,near term pin bar rejection) should reject the price towards 1.5100 and 1.5030 target zone. If 1.5200 gets broken we should also pay attention to 1.5260 which is the ultimate resistance point for bears (H4,historical sellers).

 

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The GBPUSD has made another upside bullish swing and is currently in retracement towards POC.FED's meeting on Wednesday is the most important meeting this week and we might see huge volatility on Wednesday. We should focus on intraday setups now and we should manage the trades with Profit Stops. The GBPUSD has been more resilient than EURUSD so we might see some opposite correlation. Be sure to always check current correlation with Admiral Markets Supreme Edition tool.
Technically the pair has made a bullish swing after a bearish move and its getting close to POC zone. POC zone is 1.5090-1.5105 (Bullish order block, historical buyers, E89, 50.0) and the rejection might target 1.5150 and 1.5200. H3 camarilla weekly PP -1.5300 could be reached only on high volatility. However if the pair drops below L4 confluence 1.5055- it could create a breakout setup towards 1.5000 again

 

Please note that these moves should happen just before,during and after the actual announcement as well as during the conference itself. We expect HUGE volatility and risks are much higher than usual.

As I have already explained in the article and my last EURUSD analysis the EURUSD has been bi-directional without any clear trend except some range bound trading and selling on rallies. LastSession Recap webinar provided a 100 pip+ rejection as we saw the perfect drop from 1.1050 zone. Today we will witness a historical FOMC meeting where we could see the first change of rates since the end of 2008 and the first increase in official rates since mid 2006.
Technical levels have been very clear and today we should also pay attention to important zones/levels. As we can see in the chart the pair has been trapped within a slightly sloped upward channel with a mini channel inside it which has been broken to the downside. The pair is sitting at support while EMA89 is holding it from further upside. There are 2 scenarios which could happen JUST BEFORE, DURING and AFTER the announcement as well as during the conference itself. Please not that I expect HUGE volatility and that we might see a bi-directional movement again.
If EURUSD breaks 1.1060 to the upside we could see 1.1125 and 1.1240. The downside break below 1.0920 could expose 1.0850 and 1.0740. Intraday positioning is not advised this time. Markets are expecting 25 bps rate hike, and some guidance on step by step rate hikes in near future. But there are also other options such as: No rate hike, and no hint of rate hike in near future, 25 bps rate hike, but no future guidance of further rate hikes which are less likely but MAY happen. The volatility will probably fade pre FOMC and will resume just before the announcement.

 

The GBPUSD failed to make a sustained move higher after a good UK data which indicates that the bearish trend is intact and that there are interests to sell the pair on rallies. Technically the pair is in downtrend and we can see a bullish divergence at L4 camarilla DPP so we could see a retrace for next leg of selling. First POC is BR POC which stands for Breakout-Retest Point Of Confluence. 1,4955-65 is the zone which could reject the pair towards daily lows and ultimately towards L5 daily support - 1.4855.
If the pair proceeds higher than BR POC and we see a 4 hour close above L3 zone- 1.4965 we could see a retracement towards positional POC ( DPP.H3,E89,historical sellers) - 1.5015-35. Positional POC is used for intraday swings and if the price gets there another leg of selling should tank the pair towards 1.4955 and 1.4855.

 

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The AUDUSD has been preparing for a rally to the upside but bigger picture is showing that the pair shorts might come soon. As we know AUDUSD is hard commodity currency and is linked heavily to copper, bauxite, iron ore, gold, uranium, nickel and lead. Last night, during Asia session iron ore, copper and gold went up and spiked AUDUSD higher. Nevertheless, the pair is still in a downtrend and H3, 61.8, historical sellers are constituting POC zone 0.7200-10. If the pair rallies up, the POC could reject it towards the confluence target (L3,X cross) 0.7155. If the pair gets momentum below 0.7155 it should proceed towards 0.7130 and below 0.7090. 0.7155-50 is the first important support zone and if rejection happens we should observe the reaction in the zone.

 

The AUDJPY is heavily correlated to ASX200 and Nikkei indices and if you trade this pair pay attention to both indices as well as SP500 as it moves along with ASX200. I also advise that you should use correlation table all the time, especially if you trade multiple pairs.

Technically we can see that POC suggests a strong resistance in 87.35-45 zone. We can spot a confluence of WPP, E89, L3, and X cross. The pair could reject the zone and generally stay below 87.75 for a bearish outlook.The pair is targeting 87.20 zone and a strong H4 close below 87.18 or momentum break below could tank the pair towards 86.85-60. 86.60-85 zone is the zone where we see historical buyers so it might provide a support.

 

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The GBPUSD pair has been in a strong downtrend. However, profit taking, low liquidity, volatility and other "holiday" spices may turn the table. As I always advised, due to previously mentioned factors, holiday trading should be very limited.
Technically GBPUSD has made an inverted Head and Shoulders pattern and if it manages to stay above 1.4870 we could see 1.4950 and 1.5010 levels just after the holidays. L3, DPP, E89 are constituting a strong confluence and if it were normal trading conditions this could be almost perfect setup. But because of thin liquidity, bank holidays, low volatility it could change and make Inverted Head and Shoulder pattern invalid. I suspect that thin liquidity may lead to another 1.4870 test and below that we may see some stop grabs towards 1.4850 and 1.4820.

 

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The EURUSD has dropped heavily after surging up to 1.0950 zone. USD went strong in new 2016 and we can see a sell off in USD correlated pairs. Technically we have 2 POC's to watch for. POC (L3, trend line, 38.2 resistance) comes in 1.0855 zone while POC2 (H3, trend line, X cross) comes in 1.0905 zone and we can expect a rejection if the price gets within the zone.
However if the pair break 1.0785 with a strong momentum and H1/H4 close below it we could see 1.0720 where the pair might bounce. H4 time frame has been showing a mini uptrend after the pair broke through 1.0720 so fibs are placed accordingly. 61.8 and L5 mark the line of defense for bulls and potential bearish target.
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As I have stated many times in the articles and analysis the AUDJPY is heavily correlated with Chinese data. Bad Chinese data and equities drop. AJ drops too. It is called a positive correlation. Last night Caixin PMI printed out 50.2 vs 52.3 estimate. If you want to trade the pair which is correlated to Chinese markets its the AUDJPY.

Technically we can spot 2 POC. Currently the pair is accompanied by a bullish divergence which could spike the price up towards POC selling point. Watch for a possible rejection off the channel lows towards 85.20-40. If the pair retraces in the POC zone ( L4, bearish order block, near term sellers, channel top) it should drop towards 83.05 which is the target for the move. A deeper retracement could trigger at the channel top break and H1/H4 close above the channel top - 85.40 towards POC2 86.20-40 (L3, E89, historical sellers).

The target is 83.05 but pay attention to possible retracement after the channel bounce. If it doesn't happen it could be a direct drop.

 

The USDJPY has weakened making a bearish zig-zag and the weakness followed the World Bank report which cut Japan 2016 forecast growth. Against JPY, USD is losing the battle which I see as a risk off sentiment. Remember - Gold UP, Commodities prices down, Equities down - Yen strengthens as a result.
Technically the pair has made a bullish pin on H1 time frame and accompanied by a bullish divergence it could spike the price up towards 118.80-90 (50.0, previous triple top/historical sellers, E89) and the price could reject towards 118.15 and today's lows at 117.32. If the pair proceeds without rejection in the first POC zone 119.20-30 is the next zone for shorts (L3,61.8, bearish order block). If the pair proceeds below 117.32 without making any retracement, look for a momentum H1 candle break which will collect some stops towards 117.00 and 116.20.
Only above 119.70 the pair will be bullish and we can negate the bearish trend.

 

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The AUDUSD managed to recover after a big drop caused by equities, Chinese market and Yuan devaluation. As we know, Chinese markets correlate to AUD and a possible loss of competitiveness in Chinese export market is also negative for AUD.

Technically AUDUSD is sitting at POC 0.7005-15 (H3, DPP, 50.0) and it could reject towards 0.6950. The problem is that Equidistant channel is out of sync with price which is caused by a bullish divergence. That could spike the price up towards 0.7040 zone (H4,E89,78.6) and the price should reject towards 0.6950. In order for the price to follow with a bearish trend continuation, the pair should close below 0.6945 (L3 within EQ channel) and a close below should target 0.6911.

At this point it is important to see if the price rejects from POC and POC2 as it is still in a bearish trend.

 

USDCAD is very bullish and we can see a strong uptrend within the equidistant channel. The price is zig zagging making bullish patterns, but we definitely need to pay attention to technical levels and zones as the pair is very susceptible to OIL movements.

The first POC comes within 1.4180-4090 zone. As I already suggested on Session Recap webinars, +250 pips which the analysis was good for has already been made so the price is in retracement mode again. After making a new high in 1.4315 zone, the price is dropping towards first POC so we will either see a bounce or if the price breaks 1.4150 it should drop towards POC2 1.4080-90. So our focus is on POC first (EMA89, 50.0,historical buyers). ONLY if the price breaks 1.4340 with a huge momentum or we get 4h close above H4-1.4340 we should see 1.4500.

However if the pair drops to POC2 (88.6,historical buyers, T-89 pattern) it should stay above 1.4050 and bounce towards 1.4180 again. If it fails we should see a short breakout towards L4 1.3955.