As we can see in the H4 chart, after reaching 38.2% fibo, BTCUSD has started a new decline towards the low at 7675.00. if the price breaks it, the instrument may not only fall to reach mid-term 61.8% fibo at 7350.00, but also enter the post-correctional extension area between 138.2% and 161.8% fibo at 7373.00 and 7134.00 respectively. The resistance is the high at 8809.00.
In the H1 chart, the pair is steadily trading downwards to reach the low 7675.00.
ETHUSD, “Ethereum vs. US Dollar”
As we can see in the H4 chart, the correctional uptrend has reached 61.8% fibo; after testing the resistance, the pair has started a new decline along it. The closest downside target is the local low at 152.28. After breaking it, this decline may be heading towards mid-term 76.0% fibo at 148.60.
In the H1 chart, the instrument is forming a stable downtrend.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
On Thursday the 17th of October, trading on the euro closed up. The rally restarted in the European session over reports that EU leaders have approved a Brexit deal. This deal will now be voted on by the European and British parliaments with votes planned for Saturday. There are fears that the deal will get voted down in the UK parliament. These fears caused the pound to erase its daily gains. The euro has bolstered its position thanks to the EURGBP cross.
Day’s news:
11:00 Eurozone: current account (Aug).
13:00 UK: European Council summit on Brexit.
20:00 US: Baker Hughes US oil rig count.
Current situation:
The pair rose to the upper line of the channel just as expected. The increased appetite for risk saw the rate rise to 1.1140. The pair has now been consolidating for 22 hours. The market is now braced for some sharp movements. Brexit and the US-China trade deal remain at the forefront of traders’ minds.
The Democratic Unionist Party and Scottish National Party have both publicly announced their opposition to the deal, so markets are in for some turbulent times through the end of the month.
We reckon that the rise to 1.1140 is not the end of the upwards movement. We expect the pair to rise to 1.1163 followed by a correction to the trend line at 1.1110 as the bulls cash in on their long positions. It’s essential to keep an eye on the news. The future direction of the majors will be determined by the reaction to geopolitical developments rather than by technical analysis. However, analysis can help to identify entry and exit points. Today is Friday, so volatility should remain high until trading closes in Europe.
The single currency continued its growth relative to the greenback. EUR/USD quotes updated two-month highs. The trading tool found resistance at 1.11350. Round level 1.11000 is the immediate support. Today, investors will be focused on the summit of EU leaders. We also recommend that you keep track of up-to-date information regarding the settlement of the trade conflict between the US and China. The EUR/USD currency pair has the potential for further growth. Positions must be opened from key levels.
Pay attention to the speeches of FOMC representatives.
The price fixed above 50 MA and 100 MA, which signals the strength of buyers.
The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy EUR/USD.
The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates a bearish sentiment.
Trading recommendations
Support levels: 1.11000, 1.10850, 1.10550
Resistance levels: 1.11350, 1.11500, 1.11800
If the price consolidates above 1.11350, expect further growth toward 1.11600-1.11800.
Alternatively, the quotes could decrease toward 1.10700-1.10500.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.28255
Open: 1.28907
% chg. over the last day: +0.26
Day’s range: 1.28395 – 1.28909
52 wk range: 1.1959 – 1.3385
The GBP/USD currency pair continues to consolidate. Unidirectional trends are not observed. At the moment, the trading instrument is consolidating in the range 1.27800-1.29000. EU representatives and UK parliamentarians agreed on a deal on Brexit. This compromise avoids the hard Brexit scenario. Investors are waiting for the EU summit, at which lawmakers must approve this agreement. We recommend opening positions from key levels.
The Economic News Feed for 18.10.2019 is calm.
Indicators do not give accurate signals: the price is testing 50 MA.
The MACD histogram has approached the 0 mark.
The Stochastic Oscillator is in the oversold zone, the %K line crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.27800, 1.26500, 1.25300
Resistance levels: 1.29000, 1.29800
If the price consolidates above 1.29000, expect further growth toward 1.29800-1.30500.
Alternatively, expect a decrease toward 1.27000-1.26500.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.31997
Open: 1.31352
% chg. over the last day: -0.50
Day’s range: 1.31314 – 1.31448
52 wk range: 1.2727 – 1.3664
The USD/CAD currency pair again went down. The trading instrument has set new local lows. Looney is currently consolidating in the range 1.31300-1.31600. The technical picture signals a further fall in the USD/CAD quotes. The Canadian dollar is further supported by the positive dynamics of oil quotes. We recommend opening positions from key levels.
The Economic News Feed for 18.10.2019 is calm.
Indicators point to the strength of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.
The Stochastic Oscillator is near the overbought zone, the %K line crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.31300, 1.31000
Resistance levels: 1.31600, 1.31850, 1.32100
If the price consolidates below 1.31300, expect a further drop toward 1.31000-1.30800.
Alternatively, expect the quotes to grow toward 1.31900-1.32100.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 108.751
Open: 108.648
% chg. over the last day: -0.17
Day’s range: 108.516 – 108.685
52 wk range: 104.97 – 114.56
The USD/JPY currency pair continues to trade flat. Unidirectional trends are not observed. At the moment, the following key support and resistance levels can be identified: 108.450 and 108.900, respectively. In the near future, the technical correction of the USD/JPY quotes is not ruled out. Market participants expect up-to-date information regarding trade negotiations between Washington and Beijing. Positions must be opened from key levels.
The Economic News Feed for 18.10.2019 is calm.
Indicators do not give accurate signals: the price crossed 50 MA and 100 MA.
The MACD histogram has moved into the negative zone, which indicates the strength of sellers.
The Stochastic Oscillator is in the neutral zone, the %K line crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 108.450, 108.100, 107.850
Resistance levels: 108.900, 109.300, 109.600
If the price consolidates above 108.900, expect further growth toward 109.300-109.500.
Alternatively, expect them quotes to decrease toward 108.100-107.800.
Recent rotation in multiple foreign currencies hints at the fact that a new stage of the “Capital Shift” process is taking place and that skilled technical investors need to pay very close attention to how these currencies continue to react over the next 3 to 6+ months. In the recent past, most of the world’s foreign currencies were declining in value while the US Dollar continued to strengthen. In fact, we authored many research articles about these trends and how weakness in foreign currencies will drive new foreign investment into the US stock markets for two simple reasons; strength and security.
Now that a few of the world’s most mature economies, and some that may surprise you, are starting to change directions, we may be beginning a new stage of the “capital shift” process that may open up multiple new opportunities for skilled technical traders. As the old saying goes, “follow the money”. At this point, if our research team is correct about these price trend changes, following the money may mean opening our eyes to new investment opportunities across the Pacific and Atlantic – as well as very near to the US.
The first thing we want to highlight is our belief that the US Dollar and US stock market should continue to provide price strength and upward price opportunity – even throughout any price correction or contraction that our researchers may identify. Our predictive modeling systems have shown us what we believe to be an incredibly accurate prediction of future price activity over the next 3 to 5+ years.
Even though we are not going to share that research with you today, the one thing we want all of our followers to understand is that the US stock market, and likely the US Dollar, are poised to continue to see longer-term upward price growth over the next 3+ years. Yes, there may be a few price rotations/declines throughout this process and we need to be aware that price naturally attempts these types of rotations in an effort to provide future price support, price exploration and future price trends. The price must always attempt to establish new highs or lows throughout a trending process.
US DOLLAR
The US Dollar has been trending higher since early 2018. We believe the US Dollar will continue to push higher within the price channels we’ve drawn on this chart and, eventually, attempt to move to levels above 100 near the end of 2020 (or slightly after this date). We don’t believe anything will disrupt the continued strength of the US Dollar unless some major economic/credit crisis completely destroys the support of the global economic markets and takes everything down with it.
Our researchers believe the new shift in the “capital shift” process of global investing is centered around the concept that certain global currencies, as well as their associated stock markets and strategic stock sectors, may have reached a point where price is exceedingly below fair value and when one considers the fundamental economic strengths related to maturity, economic capabilities, geopolitical or proximity economic factors and future leadership/opportunity factors – investors are suddenly viewing these currencies and stock markets as “uniquely positioned for potential upside growth”. Thus, this change in perspective could drive a new upside price trend throughout a number of undervalued currencies as well as present a very real possibility that skilled technical traders may find real value and real opportunity by expanding their search criteria into assets related to these currencies.
One of the most basic elements of investing is understanding how supply-demand economic functions work and where the current “equilibrium” is at. The easiest way for us to try to explain this concept is to think of a very sought-after product (let us assume one ounce of gold) and the price of that gold as a measure of the price level in relation to demand. When the price of gold is very low, buyers rush into the market to buy up as much as they can afford because the perception is that gold prices should be higher (thus gold is undervalued). This means the equilibrium level is higher than the current price level of gold. When the price of gold is very high, buyers stay away from purchasing (or can’t purchase because it is too high) and the price will eventually begin to fall lower because demand is very low. This means the equilibrium level is lower than the current high price of gold.
Price always moves from above or below the equilibrium level to price levels on the opposite side of the equilibrium level. Think of the equilibrium level as the optimal price level where demand meets supply and where future expectations of price are minimized. This equilibrium level is where the price would be if we removed all the hype, fear, greed and speculation out of the market. The equilibrium level fluctuates as true fundamentals and true price exploration takes place across the supply-demand curve. Almost like the average temperature fluctuates throughout the seasons of the year.
When a shift in investor sentiment happens, much like a shift in seasons, price changes direction begins to rally of decline and this shift in trend changes the supply-demand equilibrium level as investors pile into or pull out of a market. Thus, if our researchers are correct and this change in the longer-term opportunity for selected currencies is a true longer-term capital shift, it may be a very early opportunity for investors to begin focusing on the opportunities that will become present in the near future.
Australian Dollar
The first currency we want to focus on is the Australian Dollar. Historically, the Australian Dollar has continued to trend lower over the past 18+ months and currently shows very little strength or opportunity to form a bottom. The lows near 0.67 may prove to become a future bottom in price, but the trend has not confirmed this yet and because of that, we believe weakness is still prevalent in price.
Canadian Dollar
The Canadian Dollar, on the other hand, has set up an intermediate price bottom in early 2019 and has continued to strengthen moderately over the past 10+ months. One thing that we want to point out about our research is that we believe currencies and nations that have strong economic ties and proximity advantages (being close to the US and having strong economic ties with the US) are very likely to perform well or begin to strengthen in the near future. Canada has a number of factors that may prove to be advantageous going forward. Strong economic ties with the US, a booming cannabis and resource market, strong agriculture exports and a very mature economy compared to other nations.
Euro
The Euro price chart continues to illustrate price weakness as future expectations of economic strength is very far off. The interesting facet related to the Euro is that a weakening Euro will eventually present a very clear opportunity for investors the instant the European-union enters any type of economic recovery or strength. Until that happens, we believe the continued price weakness will potentially drive the Euro lower – eventually attempting true parity with the US Dollar.
British Pound
The British Pound has recently rebounded to the upside with some level of ferocity. Of course, this 6+ week upside price rally does not make a new longer-term price trend yet – but we believe this upside price move may be related to the future BREXIT deal and renewed economic ties/trade with the US. In other words, investors may be shifting expectations and price levels into acceptance that the British Pound may become a very solid future investment assuming the BREXIT deal creates a renewed economic cooperation between Great Britain and the US.
Mexican Peso
Lastly, the Mexican Peso has recently started to base near 0.049 and may possibly attempt to move above longer-term resistance near 0.053 on renewed expectations of a stronger economy, stronger economic ties with the US and a post-US 2020 Presidential election rally. Currently, the bottom in the Peso occurred in 2017 near 0.04785. We believe the Peso could rally above 0.061 over the next 18+ months – resulting in an 18%+ upside price rally related to stronger US economic growth and stronger economic ties between the US and Mexico.
Concluding Thoughts:
These changed in direction in the Mexican Peso, Canadian Dollar and British Pound suggest that global investors may begin shifting capital into the strongest sectors and/or the value sectors of these countries attempting to capture a late 2020 price rally that may carry forward into the 2021 and beyond economic recovery that we expect to take place after the 2020 US Presidential elections.
Please keep in mind that quite a bit hinges of the outcome of the US Presidential elections in 2020. Just like we saw on election night in November 2016, global investors and global corporate leaders will react to any fear or opportunity related to who is expected to win the US elections in 2020. More taxes, more regulation, more uncertainty will immediately derail any attempted economic recovery that sets up over the next 10+ months. We need to watch how these currencies strengthen before the election, then become very cautious 2 to 3 weeks before the election takes place in 2020.
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As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.
NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research. It is provided for educational purposes only. Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed. Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.
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As we enter the weekly close, we want to take a look at the USD/JPY, especially with several Fed officials speaking today.
Over the last few days, we saw the latest Brexit developments and a truce in the trade conflict between the US and China result in an obvious risk-on market environment, pushing the USD/JPY into the region around 109.00 and given the recent price action further gains seem to have a higher likelihood than a sharper drop.
Still, even if we get to see a short-term push above 109.00, we don’t necessarily consider such a push to be sustainable. Because after the Fed restarted their asset purchases to prevent a cash crunch in money markets and planning to buy US Treasuries for the next 8.5 months at a pace of 60 billion USD per month, any hints from Fed officials in today’s speeches that the Fed is to consider extending that program if no improvement in regards to the “liquidity issue” is seen, the US dollar could see a new wave of selling.
That said, if we fail to sustainably recapture 109.00, another attempt to break back below 106.80/107.00 stays a serious possibility, even though the USD/JPY stays technically neutral on a daily time-frame between 106.80/107.00 and 108.50/109.00:
Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between August 31, 2018, to October 17, 2019). Accessed: October 17, 2019, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2014, the value of the USD/JPY increased by 13.7%, in 2015, it increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, meaning that after five years, it was up by 4.1%.
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Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
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The US dollar weakened against a basket of major currencies. The dollar index (#DX) closed yesterday’s trading session in the red zone (-0.40%). Mixed economic data from the US were published yesterday. Thus, building permits rose to 1.387M, while experts expected a value of 1.340M. However, the Philadelphia Fed manufacturing index counted to only 5.6 instead of the forecasted value of 7.3.
Markets are under pressure since today, the US authorities should announce the introduction of tariffs on more than 150 goods from the EU. Earlier, Washington also announced that from October 18, a 10% tariff on aircraft imported from the EU, as well as a 25% tariff on certain industrial and agricultural goods, would come into force.
The British pound rose significantly after British Prime Minister Boris Johnson and EU leaders agreed on a new Brexit deal. European Council President Donald Tusk said the agreement was now possible because both Ireland and the European Commission approved it. The agreement was reached thanks to Johnson’s compromise proposals that will help to avoid customs checks between Ireland and Northern Ireland and guarantee the unity of the EU customs area. Now the project should be approved by the British Parliament. Voting is scheduled for Saturday, October 19.
The “black gold” prices show positive dynamics. Currently, futures for the WTI crude oil are testing the $54.20 mark per barrel.
Market Indicators
Yesterday, there was the bullish sentiment in the US stock markets: #SPY (+0.29%), #DIA (+0.11%), #QQQ (+0.26%).
The 10-year US government bonds yield has risen again. At the moment, the indicator is at the level of 1.75-1.76%.
The Economic News Feed for 18.10.2019:
Today, the publication of important news is not expected. We recommend paying attention to the speech by the Bank of England Governor Carney and the FOMC representatives.
As we can see in the H4 chart, the ascending channel continues. By now, EURUSD has completed Harami reversal pattern close to the channel’s upside border. Later, after reversing, the price may form a new correction and then resume growing to reach 1.1111. However, one shouldn’t exclude a possibility that the price may continue falling towards 1.1010.
USDJPY, “US Dollar vs. Japanese Yen”
As we can see in the H4 chart, after forming Doji reversal pattern, USDJPY is trading close to the resistance level. Right now, the pair is reversing and may later continue falling to return to 108.46. After that, the instrument may reverse and then start a new ascending tendency to reach 109.14.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
AUDUSD is trading at 0.6783; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 0.6765 and then resume moving upwards to reach 0.6875. Another signal to confirm further ascending movement is the price’s rebounding from the support level. However, the scenario that implies further growth may be canceled if the price breaks the cloud’s downside border and fixes bolw0.6725. In this case, the pair may continue falling towards 0.6655. Still, the pair may yet form Head & Shoulders reversal pattern, that’s why after breaking 0.6720 the price may start this pattern with the predicted target at 0.6615.
NZDUSD, “New Zealand Dollar vs US Dollar”
NZDUSD is trading at 0.6288; the instrument is moving inside Ichimoku Cloud, thus indicating a sideways tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 0.6295 and then resume moving downwards to reach 0.6195. Another signal to confirm further descending movement is the price’s rebounding from the s rising channel’s downside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6345. In this case, the pair may continue growing towards 0.6435. After breaking the cloud’s downside border and fixing below 0.6255, the price may resume moving downwards.
USDCAD, “US Dollar vs Canadian Dollar”
USDCAD is trading at 1.3208; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s upside border at 1.3230 and then resume moving downwards to reach 1.3105. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 1.3275. In this case, the pair may continue growing towards 1.3365. After breaking Triangle’s downside border and fixing below 1.3160, the price may continue moving downwards.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The US dollar weakened against a basket of major currencies. The dollar index (#DX) closed yesterday’s trading session in the red zone (-0.29%). The US currency was under pressure due to weak statistics from the United States. Thus, core retail sales index decreased by 0.1%, while experts forecasted growth by 0.2%. Retail sales fell by 0.3% instead of the expected growth by 0.3%. Investors expect news regarding trade relations between the US and China.
Also, the Fed’s “Beige Book” was published yesterday, which is based on data of the twelve Federal Reserve Banks. According to the survey, economic activity has increased from slight to “modest” in 12 districts of the United States since early September. In general, it is expected that the economic recovery will continue. However, at the same time, businessmen expect a slowdown in growth over the next 6-12 months.
The British pound strengthened significantly against the US dollar after news published on Irish television that the Northern Irish Democratic Union Party had accepted the latest Brexit proposals. However, then, party leader Arlene Foster denied this information. We recommend following current information on this issue.
The “black gold” prices are declining. Currently, futures for the WTI crude oil are testing the $53.25 mark per barrel. At 18:00 (GMT+3:00), crude oil inventories will be published in the US.
Market Indicators
Yesterday, the bearish sentiment was observed in the US stock markets: #SPY (-0.16%), #DIA (-0.05%), #QQQ (-0.25%).
The 10-year US government bonds yield has risen again. At the moment, the indicator is at the level of 1.74-1.75%.
The Economic News Feed for 17.10.2019:
– Retail sales in the UK at 11:30 (GMT+3:00);
– Statistics on the real estate market in the US at 15:30 (GMT+3:00);
– Philadelphia Fed manufacturing index at 15:30 (GMT+3:00).
