EUR/USD – Price Bottom vs. Rising Wedge (based on forexminute article)
This week, traders are putting in a price bottom for EUR/USD and trying to build momentum from it.
The 1H chart shows that last week, the market found support at 1.3512.
This week, the market held above this low, and have been putting in
higher highs and higher lows. Traders faded USD after the FOMC event risk and EUR/USD pushed to 1.36, before stalling. Price action has cleared above the moving averages, signaling a bullish reversal. The 1H RSI has been holding above 40, but the inability to push above 70 shows that the new bullish momentum is still weak.
Rising wedge scenario: If price fails to push above 1.36 and
falls below 1.3560, and below the rising trendline seen in the 1H chart,
there would be a break down of a rising wedge. This would signal a
bearish continuation towards at least the 1.35 handle and 1.3476 low on
Note that a bullish divergence with the RSI has formed in the daily chart. With
momentum building in the 1H chart, we can anticipate a bullish
correction towards at least the 1.3676 pivot. A break above 1.37 at this
point could revive the bullish outlook and open up the 2014 highs at
1.3966 and 1.3993.However, if the rising wedge pattern scenario develops in the 1H chart,
then we should look for 1.3476. Below 1.3476, look for Nov. 2013
AUD/USD edges higher after Fed statement (based on investing article)
The Australian dollar edged higher against its U.S. counterpart on
Thursday, as demand for the greenback weakened after the Federal Reserve
indicated that interest rates will remain low for a considerable time
after the bank’s asset purchase program ends.
hit 0.9419 during late Asian trade, the pair's highest since June 13;
the pair subsequently consolidated at 0.9423, adding 0.19%.
The pair was likely to find support at 0.9323, Wednesday's low and resistance at 0.9461, the high of April 10.
the conclusion of its two-day meeting on Wednesday, the Fed cut its
bond purchases by another $10 billion a month, to $35 billion, saying
there was "sufficient underlying strength" in the U.S. economy to
Despite this, the Fed also lowered its forecast
for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0%
previously, due to "unexpected contractions" in the first quarter as a
result of the unusually harsh winter. The central bank still
acknowledged a broad improvement in the labor market.
The Fed said
it expects the federal-funds rate, currently close to zero, to reach
1.2% by the end of next year and 2.5% by the end of 2016, a slightly
faster rate of tightening than formerly expected.
The Aussie was higher against the New Zealand dollar, with AUD/NZD rising 0.26% to 1.0799.
Thursday, official data showed that New Zealand's gross domestic
product rose by 1% in the first quarter, compared to expectations for an
expansion of 1.2%. For the fourth quarter of 2013, New Zealand's GDP
was revised up to an expansion of 1% from a previously estimated growth
rate of 0.9%.
Later in the day, the U.S. was to publish the weekly
report on initial jobless claims as well as a report on manufacturing
activity in the Philadelphia region.
USD/CAD Awaiting Reversal Signal Near Range-Bottom (based on dailyfx article)
As noted in yesterday’s candlesticks report the June FOMC Meeting offered the potential for significant US Dollar volatility. The resulting price action has negated a Gravestone Doji on the daily for USD/CADwhich
had suggested at a potential shift in sentiment for the pair. With
bullish reversal signals now absent, doubt is cast over the possibility
of a bounce. At the same time the range-bottom may offer some support to
the Loonie and leave limited scope for further declines.
USD/CAD: Awaiting Bullish Signal Near Range-Bottom
An examination of the four hour chart similarly
reveals a notable absence of bullish signals, despite the pair pushing
on noteworthy support at 108.15.
US Dollar Bulls Gored by Dovish Yellen, EUR/USD Surges
There was sufficient evidence to believe that, even
though US economic data has been slumping of recent, if the Federal
Reserve came out with optimistic enough June economic projections, the US Dollar
could rally. Instead of the running of the bulls starting a month
early, Fed Chair Janet Yellen came out and gored US Dollar bulls.
volatility came back to life momentarily - EURUSD traded in a 51-pip
range in the 10-minutes following the release of the June projections
and the policy statement - the tone for US Dollar weakness wasn't really
set until Chair Yellen hammered home the idea that there was no
technical mechanism in place to determine when interest rates would
This is a significant
dovish shift, irrespective of the slightly more optimistic Fed economic
projections. Several months earlier, Chair Yellen suggested that the first rate hikes would come six months after QE3 ended;
saying that there is no set timetable and that there is significant
uncertainty around the path of economy walks back any clear horizon for a
tighter Fed monetary policy.
The US Dollar has taken a significant beating in the hours since Chair Yellen's remarks, and has broken down through significant levels versus the British Pound and the Euro. Perhaps most interesting is USDJPY
right now as it flirts with the 'BoJ trendline' from April 2013. See
the video above for the technical outlooks, and click the link below for
rationale on buying the British Pound.
USD/CAD: Is Bullish Bias Breaking Down?
While we remained above 1.08 my USD/CAD
bias was for a resumption of the weekly bullish trend. However recent
price action developments bring this into question and for a
Stocks pushed to new highs in early trading Thursday as the so-called "Yellen bounce" continues after yesterday's Federal Reserve meeting.
EUR/USD consolidates near a fresh high of 1.3643
EUR/USD consolidates near a fresh high of 1.3643, having stalled at the
strong resistance level but maintaining the positive mood amid the
general dollar weakness.Key quotes"Short term pullbacks found buyers in the 1.3610 level, now immediate short term support.""The
hourly chart shows indicators bouncing higher above their midlines,
after correcting overbought readings, while 20 SMA extended its bullish
slope and 100 one aims to cross 200 to the upside, all of which supports
further gains." "In the 4 hours chart technical readings
present a mild bullish tone, with indicators advancing above their
midlines albeit losing some of the upward strength.""A price
acceleration above mentioned high may lead to a test of 1.3680,
Fibonacci resistance, while above it stops may get triggered and
therefore result in a stronger upward move."
USD/CAD is trading at 1.0820, down -0.14% on the day, having posted a daily high at 1.0844 and low at 1.0806.USD/CAD
is pressing lower again through the consolidation and congestion in the
30 pip range from the handle. Looking ahead, Canada's CPI for May is
released along with April retail sales. RBS strategists explained that
after base effects helped boost headline inflation in April, they see
the risks favouring a slightly weaker than consensus result in May.
“Either way, the June statement indicated the Bank of Canada appears
fully committed to looking through near-term inflation pressure amid a
still tepid growth outlook. The sales impact of the late Easter may lead
to a boost in April Canadian retail sales. While USD/CAD has tested the
2014 lows, short term interest rate support has moved in favour of the
USD over the past few weeks. (see chart in attached pdf) The positive
carry environment, and still negative CAD positioning, may keep the CAD
supported but we are cautious on chasing CAD gains further from current
levels, particularly as rate differentials have moved against it. We are
neutral on at current levels, with a medium-term bias to sell CAD”.USD/CAD LevelsWith
spot trading at 1.0820, we can see next resistance ahead at 1.0830
(Hourly 20 EMA), 1.0833 (Yesterday's Low), 1.0835 (Daily Open), (Monthly
Low) and 1.0835 (Weekly Low). Support below can be found at 1.0814
(Weekly Classic S1), 1.0813 (Daily Classic S1), 1.0806 (Daily Low),
1.0790 (Daily Classic S2) and 1.0777 (Daily 200 SMA).
A parabolic move is a term that defines something that moves straight
up. After the FOMC decision yesterday, XAUUSD has been on a bullish
Trading the News: Canada Consumer Price Index (based on dailyfx article)
Despite expectations of seeing a 0.6% rebound in Canada Retail Sales,
the Consumer Price Index (CPI) may play a greater role in driving the
USD/CAD as the Bank of Canada (BoC) retains a rather dovish tone for
What’s Expected:Why Is This Event Important:
A further pickup in core price growth may encourage the BoC to adopt a
more hawkish tone for monetary policy, and we may see Governor Stephen
Poloz continue to talk down bets for a rate cut should the data print
curb the threat for disinflation.The pickup in wage growth paired with the ongoing recovery in private
sector activity may limit the downside risk for inflation, and a strong
CPI print may generate fresh monthly lows in the USD/CAD as market
participants scale back bets of seeing lower borrowing costs in Canada.However, firms may offer discounted prices amid the slowdown in economic
activity along with the downturn in private sector spending, and a
weaker-than-expected inflation print may spur a near-term correction in
the USD/CAD as it raises the risk for a rate cut.
How To Trade This Event Risk
Bullish CAD Trade: Core Inflation Rises 1.5% or Greater