Today is a federal election where 338 members will be added to Canada's parliamentary system in a turbulent race caught in a dead heat. Current prime minister, Justin Trudeau, and his liberal party are now one percentage point behind the conservatives in the election. This is causing some major volatility for the loonie in the wake of a strengthening dollar.
I think the USD has the potential to run away with all the momentum as uncertainty in the Canadian parliament election. Expectations of the Fed tapering this year are getting higher an higher as bond yields crumble to February levels and 1.32% this morning. Risk-on sentiment towards stocks and crypto are dwindling in the wake of fears of regulation and global uncertainty. When this starts happening, investors turn to safe spots like the USD. So, we could see an increase in demand for the dollar this week as FOMC economic projections will come out this Wednesday followed by Powell's testimony later in the week.
USDCAD on the 1D chart has been in a tug-of-war behavior for months now as the pair might have started to form a head and shoulders pattern if the dollar can't find any more strength on the day. It's not exactly a head and shoulders though as this second "shoulder" is noticeably significantly higher that the first; there are also higher lows on this timeframe that suggest a move higher. The pair might have good momentum may catch more momentum if price can close above the 1.28055 level (previous shoulder).
Hey everyone! Welcome to this week's forex forecast for the week ending September 10th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDJPY, EURUSD, GBPJPY & XAUUSD.
Price has been consolidating between 109-111 over the past couple of months, and we recently saw price bounce off the range's support back to the middle of the consolidation zone. Look out for a clear break above or below this structure to catch the new trend, following subsequent retests and rejections.
Huge moves rejecting the channel's top last week on E/U as price breaks below 1.18 and is now nearing the major key horizontal level 1.17. This level has been seen as major support over the past year or so, so look out for how price reacts to this level once we see price clearly enter. It's likely we could see the trend continue and price reaches the channel's bottom, before potentially retracing and making a move back towards 1.18.
Looking at the long-term trend on G/J price has recently touched and rejected off the previous high in this range at 156.0 and is now potentially making its move towards the downside. Currently, we have an ascending channel where price is actually at the bottom, and we're now waiting on clear confirmations whether price will break or respect this channel. If we see price break outside the channel, we'll likely see price continue the long-term trend and head towards the downside.
Price is once again back at the bullish order block at 1740, where financial institutions will push price towards before a reversal to take out traders who went long early, most likely at 1765. If we see price break below this zone, this area will become a breaker block, an area to go short off following subsequent retests and rejections.
The summer was a constant back-and-forth struggle in sentiment between the two currencies. Now that we are nearing the tail end of Q3, things have changed from a monetary standpoint. The Fed keeps flashing signals of potential tapering this year and making investors consider a sooner-than-expected rate hike.
Both countries have great GDP q/q's meaning that they are rebounding at a very fast rate compared to other countries. The thing to consider between these two powerhouses is whether investors expect a raise in rates. Canada's overnight stayed the same at 0.25% although this week's beat in jobs numbers could suggest that the Bank of Canada might be looking to hike sooner. Right now, it's tough to say, but the USD looks like the best contender for higher rates to come quicker now that analysts believe the first hike to come in 2022. Looking short term, CAD seems to have the upper hand, but in the next 6-12 months time, USD might have an advantage as the economy is handling the pandemic better than Canada with a 5.2% unemployment rate vs Canada's 7.1%.
USDCAD looks like it formed a head and shoulders pattern on the 1D chart which could be the start of a downtrend from a technical standpoint. The 50 and 200 DMAs lie below as well as a support level around 1.24841. However, if price can break out of its consolidation zone (above 1.26697ish range) we could get a higher move to the first shoulder around 1.28029.
Hey everyone! Welcome to this week's forex forecast for the week ending September 10th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at EURUSD, GBPUSD, GBPNZD & XAUUSD.
Price has closed off for the week in the bearish order block just underneath 1.19, and we're now waiting on further moves to take place, to establish whether price will either respect this zone and reverse or continue breaking higher from the descending channel it has just broken out of. Most retailers by this point have been stopped out who went short at the channel's top and are likely going to go long now; however financial institutions usually reverse once more and head back towards the original position.
Price is back once again at this 1.388 key horizontal level which has been seen as clear support and resistance over the past couple of weeks. I made a deep dive on this pair as price was forming the descending triangle, and now that price completed that pattern move, price is now once again back at this level and just under its resistance. If price manages to break higher, we should wait for a confirmation of a retest before going long.
Over the past couple of months, price has been consolidating around this breaker block between 1.96 - 1.98 and we're finally beginning to see a break out of this zone. Price is currently heading towards the previous resistance and new support level from the ascending triangle at 1.92, and liquidity is likely pulling price towards this level. There is an order below where price will likely head to swell to stop out retailers who will go long early before potentially reversing.
Price has closed off for the week just below the resistance in this consolidation zone I've been pointing out between 1800-1835. We're now waiting on clear confirmations whether price will either respect of break this level and if we see a break of this trend. If price closes above 1835, we'll likely see price head higher towards the liquidity void ant around 1890. If price does in fact respect this level and go below, we'll likely see further consolidation on this pair.
Today's NFP numbers were staggeringly poor relative to last month's actual and this month's expectation. This has led to the majors moving hard against the USD dips close to July lows. The unemployment rate, however, was able to decline from 5.4% to 5.2% and meet expectations.
We may continue to see a dollar sell-off in the short term as investors look at the bad NFP number. Although NFP was positive, it still was not anywhere near analysts expected it to be especially from last month's impressive number of jobs added. After taking a step back, unemployment was lower than last month and NFP was still positive; it is just at a slower rate than we were expecting this time around. More demand in the bond market is also negatively affecting the USD, so we might be seeing further downside in the short term.
GBPUSD on the 1D chart broke out of resistance and a falling long term trend line after NFP. This break, could send price higher to resistance around 1.39595 where there is a double top. New support formed around 1.38510.
EU looks promising as well, from a technical standpoint. Price is testing a previous high around 1.19046 on the daily chart and a break in this level could send the pair up to 1.19776.
UC broke under a rising trend line on the 1D chart and is coming down to support around 1.24784. Price is now back under its 50 and 200 Day moving averages and stuck in the consolidation zone again.
This week's news reported mostly good numbers so far for the USD as PMI beats expectations as well as unemployment claims. The dollar dipped as a result of this, and investors may be looking to more risk-on trades for the remainder of this week.
The dollar appears weaker on this news, however, it also looks like the better bet against certain pairs like AUDUSD and USDJPY. The USD struggles against CAD, the euro and the pound. I think this news is probably a potential short play on most of the major pairs, but we will also have to look to the end of the week tomorrow to see what the US unemployment rate will be along with NFP.
GU crossing above both the 50 and 200 DMA today while nearing a falling trend line on the 1D chart. A break above this level would be very bullish for the pair as the USD looks weaker with inflation concerns.
EURUSD on the 1D chart has already broken a falling trend line and crossed above its 50 DMA. The pair looks like it has a lot of momentum going into tomorrow, but it depends on whether the US can beat unemployment rate or not. A beat would probably mean bullishness for this pair as the Fed may start looking to taper earlier or raising rates sooner.
Although this pair has had a considerable run to the upside, the USD still looks stronger than the buck as the US is rebounding much quicker than Australia. But, this level of resistance here around .74200s is going to be a big decider in the pairs direction. A close above this level could mean a larger move to the upside.
Hey everyone! Welcome to this week's forex forecast for the week ending September 3rd, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at NZDCHF, GBPJPY, GBPNZD & XAUUSD.
Price is now sitting at the descending channel's top and traders are likely waiting on confirmation of either a rejection for a reversal towards the bottom, or price to break out, retest and continue heading higher. There is mixed retail sentiment at the moment, with 57% traders short currently, it's likely we could see price head higher to stop out traders early.
Price is currently consolidating near the channel's bottom and traders are now waiting on confirmations where price could be heading next. A close below the bottom could signify price possibly heading lower, and if price continues to stay inside the channel it's likely we could see price head towards the top in the long run.
Price is looking like it's going to exit the bullish breaker block and possibly head back down towards the key horizontal level around 1.92. If price does make a clear close outside the block, then this could likely happen. If price continues to stay inside, we could potentially see price make the next high again, and going long from this zone wouldn't be a bad idea.
Price is currently back inside the same zone we saw consolidation back in July between 1800 and 1835. A clear break above this level would suggest price is heading higher and if price does close below 1800, we could see price head back inside the channel again.
Financial authorities from around the world met up today in an all-day event where they will discuss monetary policy going forward. These closed-pressed meetings are eventually leaked to the public as officials are admitting to a higher-than-expected inflation on the USD. Esther George, Kansas City Fed president believes that it would be better to start tapering sooner than later. More talks of reducing the Fed's balance sheet is another thing being talked about.
We can expect volatility today in the forex market today and tomorrow as investors try to interpret these comments and stances toward monetary and fiscal policy in the US. 2022 seems like the year when the Fed will start taking action on tapering according to different analysts' expectations. Powell has been signaling to taper for quite some time now unlike the events of 2008 with Ben Bernanke who didn't give investors a warning, so this time, investors are able to adjust to the sentiment and expectations going into 2022. The dollar may start to see further strength going into next week too.
|USDCAD on the 1D chart is up today on a miss in GDP expectations. Price came back to a rising trend line before catching some support which seems like a strong level to keep price up. 1.24882 is additional support if price falls lower.|
USDJPY on the 1D chart came up to its 50 DMA after bouncing off a rising trend line paired with support at 109.600. More resistance hovers at 110.488 where there is a triple top. Should that level get broken, there is more resistance above at the highs of 111.600.
AU came all the way back up to resistance on the 1D chart around .72907 and is beginning to retrace. As the buck still seems weak compared to the USD, we might see a lower low after this to below the previous bottom, and price might touch support around .70236.
This week is going to be pretty quiet for Canada while the US's preliminary GDP, unemployment claims, and Powell speaks on Friday. In the last two trading days, USDCAD has topped out and dipped a little over 1% after touching to new highs. This week's USD news will most likely determine where the pair is going to move this week.
Judging the past couple of weeks in unemployment claims, I think the US will likely beat expectations again by a close margin or this week's number will be less than last week's. Early in the week, we might continue to see the pair fall lower, but once it hits a certain level, I think that the pair has a good chance of rebounding back to the upside. More volatility could be expected later on this week when Powell speaks and with the Jackson Hole Symposium on Thursday.
USDCAD on the 1D chart still looks bullish after touching new highs in the 1.29000s. Price had a big break out of its consolidation zone for the second time which could now serve as a new level of support. If price decides to come hit back to this level, I think there is some potential in playing the long side of this pair.
Here is the same pair on the 4H timeframe. There are eight straight red candles that are taking price nearer to support suggesting a strong short term downtrend. However, if price hits the 1.26503 level, it could bottom here and try working its way back up.
1.17 is a key horizontal level to look out for in E/U. We can see in the past 3 years that price has always either fell way below or pushed way higher once price has made a breakthrough from this level. Price is back at this level, and therefore we could expect a big push or pull to either direction over the next upcoming months.
Price is currently sitting at this key horizontal 1.17 level where we can see in the past has been seen as great support, price has been bouncing off this level, and heading higher. Price did recently reverse off this level but has made a retracement back down again - usually a sign of failed support.
There is a descending channel formed in the short-term, and price is currently at the bottom of the channel. We did see price bounce off a couple days ago, but price has since retraced the full move and is just above 1.17. Most traders are likely waiting on price to show further rejections and look to continue the trend, however I believe it's possible we will see price head lower, as we've just had a failed breakthrough attempt.
Looking at retail sentiment, as expected most traders are actually long on E/U and expecting price to push higher from here. We know most retailers are losers and therefore financial institutions are likely to be playing with their positions, and will likely push price lower to take out their trades.
Over the next week, we've got a few news events coming out for both the EUR and USD, some notable ones being USD's unemployment claims and PMI numbers for the Euro next week.
Macroeconomic data for the USD continues to disappoint, yet it's still strengthening against major currencies. After Tuesday's USD Retail Sales event, E/U still declined to the 1.17 level. This illogical behaviour of the greenback is explained by the growth of anti-risk sentiment in the market, and the dollar is the beneficiary of the current situation, despite some problems.
Data on the growth of US inflation was published on Sunday which also did not impress investors. The consumer price index has slowed down its growth, which has been observed over the past four months. The focus is on the tapering debate and whatever clues policymakers would provide on the timing for a tighter monetary policy.
Beyond this, there is an overall concern that the Delta variant will continue to cause major issues, as the world is seeing an increase in that infection rate, which has people worried about whether or not the economy is going to pick up locally as well as globally.