Bulls Bring EURUSD Bounce, EURJPY Resistance


Euro Price Analysis Talking Points:

  • The Euro has shown resilience in the aftermath of last week’s ECB rate decision. Despite the bank’s dovish tone, the currency continues to exhibit strength against both USD and the Japanese Yen.
  • Can Euro sellers come back to make a mark? EURJPY may be better position for such a theme, while a continuation of USD-weakness may continue to help provide bid support behind EURUSD.

Euro Strength Through a Series of Risks

It’s been a bizarre if not unexpected two-week stretch for the single currency. Going into the last full week of May, European Parliamentary elections threatened to create a bit of worry, and despite a bent of nationalism that showed through many of those electorates, the European currency remained fairly calm in the aftermath. And then last week brought an ECB rate decision in which the bank took on a familiar dovish tone, appearing uneasy with recent trends towards inflation and economic growth. But, similarly, bears failed to capitalize and prices have continued to trend-higher. This speaks to the fact that this pessimism around Europe isn’t necessarily a ‘new’ thing while matters in the US have begun to shift of recent.

Last week saw FOMC Chair Jerome Powell take on a dovish tone in a set of remarks, and this furthered a theme of USD-weakness that outmatched any selling that might’ve shown in the Euro. Those Powell comments also helped to firm US equity prices, and as the risk trade has come back in full bloom after a rocky month of May, themes of Yen-strength have also taken a back seat.

This leads to a fairly interesting backdrop around the Euro. For traders looking at bearish Euro themes, EURJPY may hold some attraction as prices are testing a key area of resistance. And that theme of risk aversion/bearish Euro prognostications appears to align very well with themes of Yen-strength, thereby making EURJPY as a viable candidate. On the other side of the argument, for those looking at Euro strength, whether as a short-term retracement or a longer-term reversal, EURUSD may be a bit more attractive given the recent trend that’s priced-in. Below, I look into each of those pairs.

EURUSD Tests Two-Month-Highs as USD-Weakness Takes Control

Last week’s run of selling in the US Dollar was rather pronounced, and this comes in stark contrast to the way the currency had traded for much of the prior eight months since bottoming out in September of last year. That generally strong US Dollar to go along with a generally weak Euro was a theme that currency traders were really able to sink their teeth into last summer, and that theme of weakness in EURUSD showed up again in September as discussions between Brussels and Rome started to grow contentious around the Italian budget.

But, through it all, sellers continued to show significant trepidation around support. Even as the European Central Bank announced a fresh round of QE in April, just a few months after announcing an ‘exit’ from stimulus, EURUSD posed a muted bearish breakdown. Sellers were unable to encroach below the 1.1100 handle, and a number of bear traps built in the month-and-a-half that’s followed.

But now that USD weakness is coming into the equation, EURUSD has bucked the recent bearish trend to push up to fresh two-month-highs. The past week has provided a number of interesting clues around topside themes in the pair, including last week’s quick test of support at a key zone on the chart that runs from 1.1187-1.1212.

EURUSD Four-Hour Price Chart

eurusd eur/usd four hour price chart

Chart prepared by James Stanley

At this point, EURUSD is battling at a key area of resistance, and this was looked at last week ahead of the bullish move. This takes place around the 1.1325 area and helped to mark the April swing highs. A bit higher on the chart presents another area of resistance potential around the 1.1400-handle, after which longer-term, prior range resistance comes into play from the 1.1448-1.1500 area on the chart.

EURUSD Daily Price Chart

eurusd eur/usd daily price chart

Chart prepared by James Stanley

EURJPY Holds Fibonacci Resistance

It’s already been a topsy-turvy type of year in EURJPY, which came into 2019 screaming lower as Q4 themes of risk aversion remained. The first quarter of this year was marked by recovery from that swoon, but sellers came back into play in mid-April and have controlled the matter for much of the time since.

So far in June, prices have bounced as the risk trade has come back into favor. Current resistance is showing in EURJPY around 123.10, which is the 23.6% Fibonacci retracement of the 2008-2012 major move. This price was in-play in late-2016 and early-2017, helping to set resistance turned support as the trend flipped.

EURJPY Weekly Price Chart

eurjpy eur/jpy weekly price chart

Chart prepared by James Stanley

This longer-term Fibonacci level in EURJPY is confluent with another level of interest, as the 50% marker of the 2019 major move is just a pip away. A hold of resistance here keeps the door open for themes of bearish continuation, looking for a move towards 122.00 followed by a push towards prior support around 120.85.

EURJPY Daily Price Chart

eurjpy eur/jpy price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX





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EURUSD, AUDUSD, USDTRY Weekly Outlook


Currency VolatilityEURUSD, AUDUSD, USDTRY Talking Points

  • EURUSD Risk Reversals Highest Since Beginning of 2018
  • AUD Vols Firmer Ahead of Key Jobs Report

Top 10 most volatile currency pairs and how to trade them

1D and 1W Implied Volatility

Currency Volatility: EURUSD, AUDUSD, USDTRY Weekly Outlook

Source: Thomson Reuters, DailyFX

Currency Volatility: EURUSD, AUDUSD, USDTRY Weekly Outlook

Source: Thomson Reuters, DailyFX

FX Volatility Muted

Despite the raft of key US data releases in the form of US CPI, Retail sales and U. of Michigan Sentiment figures, implied vols across the G10 FX complex are relatively muted. That said, implied vols in the antipodeans are slightly firmer with AUD traders placing close attention to the latest jobs report, in which another rise in the unemployment rate could support the case of another RBA rate cut in the near-term.

VIX Spike Needed to Spur Currency Volatility

EURUSD: Softening US data and rising prospects of an imminent rate cut from the Federal Reserve has seen option traders become the most bullish on the Euro since the beginning of 2018 with EURUSD reclaiming 1.13. Risk reversals have moved further into positive territory suggesting that demand for Euro calls is higher than puts. However, given that implied vols in the Euro are heading lower, this implies that any gains would most likely be gradual as opposed to a sharp rally. Alongside this, sizeable vanilla options around 1.1300-1.1360 could see price action somewhat muted in the absence of a fresh fundamental catalyst.

Currency Volatility: EURUSD, AUDUSD, USDTRY Weekly Outlook

USDTRY: Eyes will be on the upcoming Turkish Central Bank rate decision, where the central bank is expected to maintain interest rates at current levels as authorities continue to fight steep inflation. While inflation on a yearly basis has dropped from 25% to 18.7%, the CBRT is expected to maintain its tightening bias in order to keep inflation from spiking again. Consequently, while implied volatility in the Turkish Lira has eased alongside buyers of topside protection.

Currency Volatility: EURUSD, AUDUSD, USDTRY Weekly Outlook

For a more in-depth analysis on FX, check out the Q2 FX Forecast

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX





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XAU Plummets from Yearly Highs- Bulls Eye Support


Gold prices have shed nearly 2% from the fresh yearly highs registered last week and we’re on the lookout for support on this pullback. These are the updated targets and invalidation levels that matter on the XAU/USD charts. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

New to Gold Trading? Get started with this Free How to Trade Gold -Beginners Guide

Gold Daily Price Chart (XAU/USD)

Gold Price Chart - XAU vs USD Daily - GLD Outlook

Technical Outlook: In my latest Gold Price Outlook we noted that the breakout was testing initial resistance at 1328/29 – “A topside breach of this resistance barrier would keep the focus on subsequent objectives at the yearly high-day close at 1337 and the high-close at 1341 – look for a bigger reaction there If reached.” A topside break of the yearly-high close saw price register a high at the 2018 high-day close at 1348 before pulling back.

Interim support rests at the 38.2% retracement of the yearly range at 1316 with broader bullish invalidation steady at 1302. Daily resistance at the new high-day close at 1340 with a breach / close above 1348 needed to fuel the next leg higher targeting the 2016 high-close at 1366.

Why does the average trader lose? Avoid these Mistakes in your trading

Gold 120min Price Chart (XAU/USD)

Gold Price Chart - XAU vs USD 120min Chart - GLD Outlook

Notes: A closer look at price action shows Gold trading within the confines of a near-term descending pitchfork formation extending off the monthly highs. Price is holding median-line support in early US trade – look for initial resistance at 1328 backed by 1334– both areas of interest for possible exhaustion. Interim support rests at 1316 backed by 1302/03 – look for a stronger reaction there IF reached.

Learn how to Trade with Confidence in our Free Trading Guide

Bottom line: The Gold breakout risks a larger pullback for now while below 1341and we’re looking for a low nearby. From a trading standpoint, look for downside exhaustion on a final wash-out towards the lower parallels for possible entries. Ultimately a breach above 1341 / the yearly opening-range high is needed to validate resumption of the broader uptrend. Review our latest Gold 2Q forecasts for a longer-term look at the technical picture for XAU/USD prices.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Gold Trader Sentiment

Gold Trader Sentiment - XAU/USD Positioning - GLD Price Chart

  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +1.21 (54.7% of traders are long) – weak bearishreading
  • Long positions are5.0% higher than yesterday and 12.8% lower from last week
  • Short positions are2.0% higher than yesterday and 25.6% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger Gold-bearish contrarian trading bias from a sentiment standpoint.

See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!

Active Trade Setups

– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex





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Crude Oil Price Test of Downtrend May Determine USDCAD’s Next Move


Crude Oil Price Talking Points:

  • USDCAD prices have been under pressure throughout June, mirroring weakness in the DXY Index amid rising Fed rate cut odds.
  • Recent crude oil price gains may be tied to relaxed tensions after the Mexico tariffs were “suspended indefinitely”; little reason otherwise.
  • Recent changes in retail trader positioning suggest that both USDCAD and crude oil prices are susceptible to further losses – an unusual set of circumstances.

Looking for longer-term forecasts on Oil prices? Check out the DailyFX Trading Guides.

Crude oil prices have traded marginally higher throughout June, with prices trading in a 7.7% range over the first six-plus trading days of the month. With the OPEC+ production cut extension looking like it may not continue past the end of the month, fresh global oversupply concerns are weighing down crude oil prices at a time when slowing global growth concerns are rising.

The broad turn in market sentiment midweek last week may be the main reason for the crude oil price rally – more so than any reason specifically attributable to energy markets themselves.

With Fed Chair Jerome Powell signaling the FOMC’s willingness to introduce lower interest rates to stave off the impact of the US-led trade wars, risk appetite rebounded broadly led by higher US equities and a weaker US Dollar. In turn, crude oil prices were able to stabilize around the 23.6% retracement of the 2018 high/low range at 50.49.

Crude Oil Technical Analysis: Daily Price Chart (September 2018 to June 2019) (Chart 1)

oil price, oil technical analysis, oil chart, oil price forecast, oil price chart

But the rally over the past few days doesn’t mean that crude oil prices are out of the woods just yet. In our last update on May 29, we noted that “a bearish bias is appropriate until crude oil prices return back above the daily 8-EMA.”

As it were, crude oil prices have stayed below the daily 8-EMA since then, as they have closed every session since May 22. It thus still holds that until the daily 8-EMA is cleared out (currently at 54.00) it’s too soon to say that the crude oil price rebound is anything more than a correction.

IG Client Sentiment Index: Crude Oil Price Forecast (June 11, 2019) (Chart 2)

oil price, oil technical analysis, igcs, ig client sentiment index, igcs oil

Crude oil: Retail trader data shows 72.9% of traders are net-long with the ratio of traders long to short at 2.69 to 1. In fact, traders have remained net-long since May 22 when crude oil traded near 6263.8; price has moved 14.2% lower since then. The number of traders net-long is 8.6% higher than yesterday and 2.6% higher from last week, while the number of traders net-short is 4.9% higher than yesterday and 4.2% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests crude oil prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger crude oil contrarian trading bias.

USDCAD Technical Analysis: Daily Price Chart (September 2018 to June 2019) (Chart 3)

usdcad price, usdcad technical analysis, usdcad chart, usdcad price forecast, usdcad price chart

Amid all of the US Dollar selling pressure in June, USDCAD prices have plunged through key technical support. The break below 1.3377 would constituted a break of the consolidation as well as a break of the uptrend from February, March, and April 2019 swing lows. The gain in crude oil prices over the past week has been a significant factor weighing down USDCAD.

It’s clear then why crude oil price’s test of its daily 8-EMA is so crucial for USDCAD: if crude oil prices break higher, the likelihood increases of USDCAD continuing lower through the mid-March swing low of 1.3251 goes up; if crude oil prices stay below the daily 8-EMA, then the odds increase of USDCAD rebounding to the 1.3327/47 area (38.2% retracement of 2018 high/low range, uptrend from February, March, and April 2019 swing lows, and daily 8-EMA).

IG Client Sentiment Index: USDCAD Price Forecast (June 11, 2019) (Chart 4)

igcs, ig client sentiment index, igcs usdcad, usdcad price chart, usdcad price forecast, usdcad technical analysis

USDCAD: Retail trader data shows 54.0% of traders are net-long with the ratio of traders long to short at 1.17 to 1. The number of traders net-long is 15.0% higher than yesterday and 67.8% higher from last week, while the number of traders net-short is 11.7% higher than yesterday and 26.9% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDCAD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDCAD-bearish contrarian trading bias.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail at cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

View our long-term forecasts with the DailyFX Trading Guides





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Japanese Yen Drops, GBP Briefly Above 1.27, NOK Outperforms


MARKET DEVELOPMENT – Japanese Yen Drops, GBP Briefly Above 1.27, NOK Outperforms

DailyFX Q2 2019 FX Trading Forecasts

GBP: Today’s jobs report had been encouraging across the board with wages picking up, while the unemployment rate remained at a 44yr low. Consequently, GBPUSD pushed above 1.27, while EURGBP briefly broke below. While the firmer UK jobs data emboldens the recent hawkish commentary from BoE members, the fact remains the same in that the BoE are largely on the side-lines until Brexit clarity is found. As such, focus on Sterling will remain on who the next PM will be and how that will be impact the Brexit outlook. As it stands, the case for a 2019 rate hike remains doubtful.

NOK: One central bank that will continue its normalisation in interest rates is the Norges Bank. Softer than expected CPI pushed the NOK lower against the USD and EUR, however, volatile components (food prices, airplane tickets) had been the notable drags on inflation, which in turn is unlikely to derail the Norges Bank from raising rates next week. Alongside this, the latest regional network survey had been firmer, having highlighted that growth over the past 3-months had been the highest since Q3 2012, thus not only providing a green light for next weeks rate increase but also raises the potential that the central could perhaps raise its tightening path. This will also depend on how they see the impact of slowing global growth feeding into the domestic economy, which has been resilient thus far.

JPY: The Japanese Yen is softer across the board, with the exception of the New Zealand Dollar as increased risk appetite keeps equity markets bid. Alongside this, with US 10yr yields basing out around 2.06%, now trading at 2.17%, USDJPY has continued to edge higher towards 109.00.

Japanese Yen Drops, GBP Briefly Above 1.27, NOK Outperforms - US Market Open

Source: DailyFX, Thomson Reuters

DailyFX Economic Calendar: – North American Releases

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IG Client Sentiment

Japanese Yen Drops, GBP Briefly Above 1.27, NOK Outperforms - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. EURUSD Price Outlook Cloudy – ECB’s Rehn Talks Rate Cuts and More QE” by Nick Cawley, Market Analyst
  2. Currency Volatility: EURUSD, AUDUSD, USDTRY Weekly Outlook” by Justin McQueen, Market Analyst
  3. GBPUSD, AUDUSD, Gold, and More – Technical Outlook” by Paul Robinson, Currency Strategist
  4. Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX





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US Dollar Price Outlook in EUR/USD, GBP/USD, AUD/USD and USD/CAD


US Dollar Price Outlook Talking Points:

  • The US Dollar is holding at an area of key support after last week’s aggressive sell-off.
  • With USD price action holding at a big support level, the door could open for reversal setups in a couple of markets of interest. If, on the other hand, the bearish theme in USD continues, pairs like EURUSD or, perhaps even GBPUSD can be of interest.
  • DailyFX Forecasts are published on a variety of currencies such as Gold, the US Dollar or the Euro and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

US Dollar Holds Key Confluent Support

It’s been a wild start to June across global markets, and with US equities making a strong topside push back towards the highs, the US Dollar is grasping at support on a key area of the chart. We looked into this area yesterday as the USD had intersected with the 200 Day Moving Average at a key Fibonacci level on Friday of last week. Thus far, that area around 96.50 has helped to hold the lows in the Greenback after an aggressive push from bears last week. The big question is whether this support can hold – and for FX traders there are a number of setups of interest for either scenario.

US Dollar Daily Price Chart: June Sell-Off Meets Key Confluent Support

us dollar usd price chart

Chart prepared by James Stanley

EURUSD Presses Towards Two-Month-Highs

While the Euro isn’t likely a currency that many traders harbor long-term bullish biases around, on a near-term basis, matters may be a bit different. To be sure, there are a plethora of potential risks around the Euro-Zone, both political and economic in nature. But, these risks have been known for quite some time and for much of the last year, sellers have been in-control of price action in the single currency.

But what happens in a market when anyone who is willing to be and wants to be short already is? If there’s no one left to sell and only those holding short positions, at some point some of those shorts are going to want to close, which requires hitting the bid. And the simple act of prices moving higher could then encourage others to hit the bid, either to close existing shorts or to trigger fresh longs in a reversal strategy. This is where short squeezes come from, and this may be the scenario around the Euro at the moment.

In EURUSD, the down-trend was fairly clear through much of May. Prices appeared very reticent to test through the 1.1100 handle, however, and that bearish trepidation has given way to bullish short-term themes. As looked at in this week’s FX Setups, continued pullback in the US Dollar can allow for a larger retracement in EURUSD, perhaps to the prior zone of range resistance that runs from 1.1448-1.1500.

EURUSD Four-Hour Price Chart

eurusd eur/usd price chart

Chart prepared by James Stanley

GBPUSD Tests Key Resistance, Prior Support

A similar albeit less pronounced theme has shown in GBPUSD, where sellers really made their mark last month. The pair was oversold for a large part of the period and similar to EURUSD, didn’t begin to bounce until the June open appeared.

In a contrast to the EURUSD setup above, the bounce thus far in GBPUSD has been milder. Prices remain around a key area on the chart that had previously functioned as support, taken from a batch of Fibonacci levels that runs from 1.2671-1.2721. If buyers are able to grab control over the next couple of days, which could be indicated by another short-term higher-high above the Friday swing at 1.2763, the door may soon open for topside strategies, looking for an eventual push towards the confluent zone around the 1.2900 handle.

GBPUSD Four-Hour Price Chart

gbpusd price chart

Chart prepared by James Stanley

AUDUSD Holds Key Resistance

On the long-side of the US Dollar, AUDUSD may retain some interest. I had looked at the pair in this week’s FX Setups as one of the more attractive backdrops for a return of USD strength, and the resistance zone investigated has thus far held the highs fairly well.

Current support is showing around a swing support area from last week in the .6950-.6960 area, but after a day of tests, support appears to be slipping. A push below opens the door for a re-test of the .6900 area after which a re-test of the five-month-low around .6860 becomes attractive.

AUDUSD Four-Hour Price Chart

audusd price chart

Chart prepared by James Stanley

USDCAD Grasps for Support at Two-Month-Lows

Echoing that theme of USD-weakness last week was USDCAD, which put in a very pronounced downside move after having set a fresh high in the week prior. It was a stark change-of-pace for USDCAD price action, and this theme saw prices shed more than 300 pips as bears posed a direct-push down to a key support level, taking out a key trend-line in the process.

USDCAD Weekly Price Chart

usdcad usd cad price chart

Chart prepared by James Stanley

That support has since held after being tested throughout yesterday and again this morning. But buyers, at this point, have shown little ability to bring a topside push, as sellers came right back in after a 30-pip bounce yesterday. A break-below this key support level could open the door for a run down to the March lows, taken from around the Fibonacci level at 1.3132.

USDCAD Eight-Hour Price Chart

usdcad usd cad price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX





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GBPUSD, AUDUSD, Gold, and More


The U.S. Dollar Index (DXY) is sitting on a significant threshold of support that could make or break the Dollar for the foreseeable future. AUDUSD remains a targeted pair for lower prices, chart could be setting up for a short soon. GBPUSD is trying to forge a bottoming pattern on long-term trend support, may set longs up for a shot higher. Gold is ricocheting off resistance, no big surprise given its significance.

Technical Highlights:

  • Dollar Index (DXY) at confluence of support
  • AUDUSD short set-up may mature soon
  • GBPUSD inverse H&S pattern in the works
  • Gold bangs it heads up against major resistance

Fresh Q2 Forecasts are out for major markets and currencies. Check them out on the DailyFX Trading Guides page.

Dollar Index (DXY) at confluence of support

The US Dollar Index (DXY), as discussed yesterday, is at a big spot on the charts. The trend-line (underside of longer-term wedge) is in conjunction with the 200-day, creating a strong line of support. Hold and the choppy upward trend since last year will remain intact, fold below and it could be enough to set off a chain of selling.

US Dollar Index (DXY) Daily Chart (t-line/200-day)

GBPUSD, AUDUSD, Gold, and More - Technical Outlook

Find out where our analysts see USD heading in the coming weeks based on both fundamental and technical factors – Q2 USD Forecast

AUDUSD short set-up may mature soon

AUDUSD broke a big-picture descending wedge a few weeks back, which sets the stage for lower prices. In the near-term we have seen a retest of the wedge-break and in the process of retesting a bear-flag/channel is forming. A successful retest of the longer-term formation and break of the underside trend-line of the short-term pattern could set shorts up nicely in the days ahead.

AUDUSD Daily Chart (testing bottom of wedge)

GBPUSD, AUDUSD, Gold, and More - Technical Outlook

AUDUSD 4-hr Chart (bear-flag/channel)

GBPUSD, AUDUSD, Gold, and More - Technical Outlook

GBPUSD inverse H&S pattern in the works

GBPUSD recently tagged an important trend-line dating back to the October 2016 flash-crash low, and with that it has thus far held. Developing on top of this trend-line is a short-term inverse head-and-shoulders (H&S) pattern. A break above the neckline (12763) will validate the pattern and should set into motion upside momentum.

Further contracting of price could alternatively lead to a wedge, which could also set into motion an upside breakout, or result in a move back to the 2016 trend-line. The bottom line is that the backdrop of long-term support suggests we see an upside breakout, but we need to first wait for validation as a downside failure can’t be ruled out.

GBPUSD Daily Chart (above big trend-line)

GBPUSD, AUDUSD, Gold, and More - Technical Outlook

GBPUSD 4-hr Chart (inverse head-and-shoulders)

GBPUSD, AUDUSD, Gold, and More - Technical Outlook

Find out where our analysts see the Pound heading in the coming weeks based on both fundamental and technical factors – Q2 GBP Forecast

Gold bangs it heads up against major resistance

Gold ran up into the major resistance zone everyone has been focused on, and on its first attempt to trade through it was rejected. Nothing new here for gold to look good then suddenly not as longer-term range conditions persist. As long as the 1340s up to 1375 remain in place gold will find it hard to trade higher. A failed rally from here, resulting in a lower-high, may set up for another swing lower.

Gold Daily Chart (turned off long-term resistance)

GBPUSD, AUDUSD, Gold, and More - Technical Outlook

Find out where our analysts see gold heading in the coming weeks based on both fundamental and technical factors – Q2 Gold Forecast

Resources for Forex & CFD Traders

Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX





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EURUSD Price Outlook Cloudy – ECB’s Rehn Talks Rate Cuts and More QE


EURUSD Price, Chart and Analysis:

  • ECB primed to intervene if economic weakness continues.
  • EURUSD unable to break higher, despite US dollar weakness.

Q2 2019 EUR Forecast and USD Top Trading Opportunities

Keep up to date with all key economic data and event releases via the DailyFX Economic Calendar

Bank of Finland governor and ECB governing council member Olli Rehn is back out on the wires Tuesday reiterating that the ECB stands ready to act, using all tools available, to counter the ongoing economic weakness and stubbornly low inflation in the Euro-Zone. Rehn, a candidate for the upcoming ECB President’s role, said that the central bank is ‘determined to act and stands ready to adjust all of its instruments, as appropriate’. He also noted that ‘external risks to the Euro-Area won’t fade in the near future’.

These instruments include stronger forward guidance, cutting interest rates further, potential changes to bank reserve rates and re-starting quantitative easing (QE). The ECB ended the last QE program at the end of 2018 and a swift re-introduction of the program would highlight the lack of effect the four-year, EUR2.6 trillion+ bond buying program has had on the economy. Growth remains tepid, while inflation expectations are near record lows.

EURUSD price action is currently predicated on US dollar more, more than Euro strength. Post last Thursday’s ECB meeting – where the governing council officially push rates lower for longer – EURUSD touched a peak just under 1.1350 before fading back to its current quote around 1.1318. The pair traded at a 2019 high of 1.1571 on January 10 before sliding lower over the course of 2019. EURUSD remains in overbought territory, using the CCI indicator, and its upside is currently blocked by the 200-day moving average, a long-term indicator that has held firm all the way back to May 2018.

EURUSD Price – Bulls Clash with Technical Resistance

EURUSD Daily Price Chart (October 2018 – June 11, 2019)

EURUSD Price Outlook Cloudy - ECB's Rehn Talks Rate Cuts and More QE

Retail traders are 43.8% net-long EURUSD according to the latest IG Client Sentiment Data, a bullish contrarian indicator. However recent daily and weekly positional changes give us a mixed trading bias.

We run several Trader Sentiment Webinars every week explaining how to use IG client sentiment data and positioning when looking at a trade set-up. Access the DailyFX Webinar Calendar to get all the times and links for a wide range of webinars.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on EURUSD – bullish or bearish? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.





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DAX 30 & CAC 40 Techical Outlook Generally Positive


DAX 30/CAC 40 Technical Highlights

  • DAX has resistance ahead, but year high may be here soon
  • CAC lagging behind, if Europe rally stalls it is set up to lead lower

Check out the DailyFX Q2 Trading Forecasts to find out where our team of analysts see the Euro, DAX, and other markets are headed in the coming weeks.

DAX has resistance ahead, but year high may be here soon

The DAX 30 posted an impressive bottom last week and has been in rally mode most of the time since. The first point of resistance, the upper parallel off the May 3 high, proved to be of little impact. The German benchmark is now trying to gear up and reclaim the broken trend-line off the December low.

Continued strength beyond the broken trend-line will have resistance around the 12310-mark in play, which is effectively a failed attempt to trade into the May 6 gap. A small pullback or pause around there may be in the works and a good thing for those looking to play for a gap-fill and move to the highest levels of the year.

The May 6 gap-fill will also constitute trade to the yearly high at 12412 on a closing basis. A move beyond 12435 is needed for a fresh intra-day yearly high.

For now, the benefit of the doubt is with the long-side as short-term momentum continues to remain favorable for higher prices. Should we see a sudden, swift turnabout in momentum then a reassessment will be needed.

DAX 30 Daily Chart (resistance to watch)

DAX 30 & CAC 40 Techical Outlook Generally Positive

CAC lagging behind, if Europe rally stalls it is set up to lead lower

The CAC 40 is trading towards its first level of resistance at 5450 since breaking the trend-line since April. Shortly beyond the May 17 peak is the May 6 gap from 5489 up to 5548, followed by the year high at 5601. The CAC is lagging behind the DAX, and as such if Europe turns down with force it is set up to lead lower. For now, the trading bias is higher until such price action suggests we need to switch gears.

CAC 40 Daily Chart (levels to watch)

DAX 30 & CAC 40 Techical Outlook Generally Positive

Want to learn more about trading the DAX? Check out ‘How to Trade the DAX’, and join me weekly for technical updates in the Indices and Commodities webinar.

Forex & CFD Trader Resources

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX





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Crude Oil Price Outlook – OPEC Support Confronts Technical Resistance


Crude Oil Price Chart and Analysis:

  • OPEC still trying to get Russia to commit to ongoing production cuts.
  • Technical set-up remains a negative bias.

The Brand New DailyFX Q2 2019 Trading Forecast and Guides are Available to Download Now!!

How to Trade Oil: Crude Oil Trading Strategies & Tips.

Crude Oil Needs a Fresh Driver

Crude oil opens within Monday’s $2 range and is likely to remain constrained in the short-term as OPEC continues to discuss extending the current production cuts. While most members are said to be onboard, Russia is still considering supporting cuts that have been in place since the start of the year and while they recognise the risks of over-production, energy minister Novak said that Russia would look at how events develop through June before committing to a further extension.

While the cessation of trade hostilities between Mexico and the US gave oil a small bid, the ongoing clash between the US and China will begin to ramp up in the next couple of weeks when additional tariffs will be introduced by the US. Global growth currently remains weak and further hostilities between two of the world’s largest economies will press down on oil.

The latest daily chart shows oil little changed but with a negative bias. Crude remains below the important 200-day moving average, while the 20-day ma has just fallen through the longer-term ma, highlighting current bearish momentum. There is little in the way of support to stop crude re-testing the 50% Fibonacci retracement level at $60.63/bbl. before the June 5, multi-month, low comes into focus. Crude has moved out of oversold territory, after hitting extremes in late May and earlier this month. To the upside, $63.50/bbl. before a tight zone between $64.90/bbl. and $65.80/bbl.

WTI vs Brent: Top 5 Differences Between WTI and Brent Crude Oil

Crude Oil Daily Price Chart (June 2018 – June 11, 2019)

Crude Oil Price Outlook - OPEC Support Confronts Technical Resistance

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on crude oil – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.





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