Despite a fair bit of USD sensitive news released over the last 24 hours the USD index remains range bound within a Flag pattern. It does have a ‘Bull Flag’ look to it but there are no guarantees of any particular directional move just yet. This has created choppy conditions on a number of USD based pairs but some cross pairs have shown decent trends. Tonight’s USD CPI will be keenly watched tonight to see if it triggers any USD breakout.
USDX 4hr: still range bound. See my post from yesterday concerning future resistance levels. Tonight’s USD CPI data might be the trigger event to jolt this index into some action. Weak CPI just might get folk thinking US rates will stay lower for longer and, thus, trigger a sell off here. Conversely, a strong CPI print might trigger a bullish breakout.
EURX daily: the bullish breakout continues BUT there is resistance from the daily 200 EMA above current price:
FX: there is a lot of high impact data today: CNY PMI, BoJ Monthly Report, EUR French & German Manufacturing PMI, GBP Retail Sales, CAD Wholesale Sales, USD CPI, Unemployment Claims & Philly Fed Manufacturing Index. USD CPI will be a key focus as their is concern about low inflation and this may give some insight into that situation for the US.
TC Signals: The E/J has given 170 pips and the EUR/GBP was choppy and closed for -15. As luck would have it I left the E/J
E/J: the new TC signal has given up to 170 pips. Anyone still in last week’s triangle breakout would now be up 500 pips!
EUR/GBP: this is choppy around the key S/R level of 0.80 which isn’t too surprising. Price is also just below a major channel trend line and this is one reason I suggested for possibly waiting on this TC signal to see if it could trigger a channel breakout. I’m continuing to watch this level for reactionary movement but there isn’t anything too conclusive just yet. I’m not expecting to see much action here until after tonight’s batch of high impact EUR and GBP data :
E/G 4hr: choppy around the 0.80 and daily 200 EMA (green line):
E/G weekly: this pair is testing a major trend line. Any breakout would be bullish:
E/U: still above the 1.25 level and pushing up against a 5 month-duration trend line. Thus, any break and hold above this would have to be seen as bullish:
A/U: is now back below the 0.865 level as falling ore prices continue to weigh on market sentiment. Any increasing USD strength would be further bad news here and get the previous ‘Bear Flag’ trade idea happening again
A/J: choppy as both the AUD and JPY weaken:
Cable: this is trying to carve out a ‘Double Bottom’ but the 61.8% fib from the last bull run is proving to be be new and strong resistance. Retail Sales data tonight, if upbeat, might be a catalyst to get this pair moving higher though :
G/U 4hr: the 61.8% fib is clear resistance:
G/U weekly: traders….. ignore the power of the 61.8% fib at your peril. Can Retail Sales do the trick here though? If not, I still think a visit to the 1.53 area near the bottom trend line could evolve:
Kiwi: this has been struggling so far this week following some weak NZD data BUT it is still managing to hold up and out from the bullish wedge breakout and above the monthly pivot. I’m seeing a bullish ‘inverse H&S’ starting to form up here with a ‘neck line’ just under the 0.80 level. I had previously stated that a close and hold above 0.80 would be bullish and thus I’ll be on the lookout for that possibility:
U/J: this has drifted higher and broken up and out from the trading channel. My limit 110 order is looking rather unlikely now :-). I do wonder. though, if the USD eventually turns south whether this will continue north?
GBP/JPY: the real ‘quiet achiever’ of the cross pairs. This is now pushing up against a weekly chart trend line and any break and hold above this trend line would suggest more continuation. This pair has been bullish, though, since the break and hold above 179, a point I have labored here ad nauseum. It is trading just under 185 and this whole number level, along with any channel breakout, might offer a technical trade entry point. Traders need to note that this pair has only retraced to just over 50% of the 2007-2011 collapse and so their is scope to head to the 61.8% fib up near 200. Any positive GBP Retail Sales result tonight would help support a long trade here and is worth monitoring.
Loonie choppy ahead of key USD and CAD data. A bullish channel breakout would suggest continuation though:
Silver: very choppy either side of the daily 200 EMA:
Gold: what a wild ride! Check out the 30 min chart! This is still holding above the S/R level of $1,180 for now though:
Gold 30 min: very choppy and this might be the ‘new normal’ until after the Nov 30 Swiss referendum.
Gold 4hr: $1,180 support holding for now:
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