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DXY is at a turning point as we speak. The index has been moving gradually up and it closed the day at the resistance @ 92.40. The price, although still trading at or slightly below the resistance, it is looking very bullish. With the weekly momentum starting to point to the upside, I would expect DXY to break up above 92.60 and print higher from there. Looking at weekly charts, the current level is a major support zone tested back in May 2016, August 2015, May 2015. Every time the price reversed back up launching major trend up. It is likely the same scenario will play out this time around. There is also momentum and price divergence visible on weekly charts, which is always a reliable indication of the trend swing. Firm daily close above 92.60 is needed to confirm this outlook
Cable retraced after reaching another high. The pair closed the day at 1.3210. It will be a big day for GBP tomorrow with BOE interest rates announcement. The rates will not change but BOE might talk up the growth, given bullish sentiment among other central banks and recent strong CPI data. If this is the case, Cable is likely to reverse uptrend fairly quickly and print new highs once again. Im bullish here but I would like to see a bit deeper correction towards 1.3030 support first. Weekly momentum points to the upside and supports bullish outlook.
Cable was a big gainer today. The pair rallied and closed the day at the new high for the 2017 ( 1.3285 ). Strong CPI numbers released today provided confidence and the Brexit worries seem to be long gone. The break of the resistance suggests more gains to come. Short term corrections to the support at 1.3030 are likely and should be treated as an opportunity to buy GBPUSD. Weekly momentum is pointing to the upside and supports higher prices to come.
Cable had a strong week. The pair recovered all summer losses and closed today’s session at 1.3160. Support now moves to 1.30 and the resistance lies at 1.3250. I expect cable to continue with the current uptrend, although a retracement back down to the support at 1.30 is likely. The pair had 6 straight days of gains and moved 300 pips during this period.
EURUSD was untouched today by any data. Investors are waiting for ECB to either make it or break it with the stimulus news. Draghi is expected to finally make a move to start to taper huge balance sheet he ( and others ) accumulated over the last few years. The fact the EUR is holding up the gain suggests; the market is rather positive and expects ECB to finally take the step.
Big disappointment from USDJPY. The pair caught risk on sentiment and collapsed down. It is now trading at the support 108.50. US Yields collapsed on the back of the hurricane and worries that it will affect data. Investors also less and less believe in FED’s hikes this year. If USDJPY continues lower and breaks the support more firmly, more downside is likely. For bullish scenarios, the price must climb back up above 109.50, anything less is bearish
Aussie still shows no much action. The pair is trading between 0.8000-0.7860 with no obvious signs of either direction. After the last look at COT my bias is to the downside given the possibility of bearish reversal is clearly painted in speculative COT positions in. Weekly momentum is mixed and gives no additional clues.
EURUSD dropped to expected support at 1.1805 and recovered some of yesterday’s losses closing the day at 1.1905. If today’s low was the support we were looking for, the pair is likely to catch some buying and rally upwards again. As long as the price closed above 1.18, it must be assumed bullish. Only the firm daily close below 1.18 would invalidate bullish outlook. Weekly momentum has been flat with no valid signals given.
USDJPY had another strong day after the reversal pin yesterday. The pair broke through the resistance and closed the day highest in many days at 110.25. This is bullish confirmation and what’s needed now is the retracement back down to the recent support at 109.60. Weekly momentum is clearly pointing up after being oversold and supports higher prices. US Yields are also trading near the support after forming a pin bar. The reversal will push USDJPY higher. I have placed buy limit order at 109.60
DXY after breaking the support, recovered all losses and closed the day high than the open. This is another pin bar suggesting the reversal but more confirmation is needed. As of now DXY hit our resistance we suggested yesterday and this level might find sellers again driving the price back down. As long as we trade and close below 93.30, the index must be assumed bearish.
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