The Canadian dollar softened after a slowdown in April’s CPI growth. The US dollar is seeking support after it broke above December’s high at 1.2960. The pair is testing the origin of the previous bullish breakout at 1.2770 which also lies on the 30-day moving average. An oversold RSI in this congestion area prompted sellers to take some chips off the table. A rally back above 1.2900 may ease the selling pressure. On the downside, 1.2710 is a key support on the daily chart and its breach could lead to a bearish reversal.
EURGBP bounces off support
The pound retreated after Britain’s CPI growth in April fell short of expectations. A bullish MA cross on the daily chart foreshadows a potential acceleration to the upside after the euro rallied above this year’s high at 0.8500. The latest retracement saw solid buying interest near the daily support (0.8400) along the 30-day moving average. 0.8530 is the closest resistance and its breach would raise offers to the recent high at 0.8620. Otherwise, a deeper correction would bring the single currency to 0.8310.
USOIL seeks support
WTI weakens as US refiners raise their capacity use. A close above the daily resistance at 111.00 is a sign that the rally may resume after the bears covered their bets. As the price action hit the ceiling at 116.60, the RSI’s repeatedly overbought condition triggered a pullback. The bulls may see it as an opportunity to accumulate. 106.50 is the first level where bids could be expected. 98.50 is the critical floor to keep the recent rally valid. A bullish breakout could trigger a runaway rally towards this year’s high at 129.00.
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It is shaping up to be another volatile week for financial markets thanks to key economic reports from major economies and numerous speeches by Federal Reserve officials.
Global equities were tugged and pulled by inflation fears, rate hike expectations, and ongoing geopolitical risks. In the currency space, king dollar loosened its grip on the FX space allowing G10 majors to bounce while lingering below its 200-day Simple Moving Average.
Over the past few weeks our attention has been on king dollar but this afternoon the spotlight shines on minor and cross currency pairs. The minors are normally referring to non-USD forex currency pairs while crosses are pairs that do not contain the dollar as either the base or quote currency.
Although minors and crosses are slightly less popular than the majors and often experience more wild swings due to less liquidity in the markets, they still present trading opportunities. So, if you have had enough of the dollar and would like something different, check out the setups below!
GBPJPY wobbles above 160.00
After rallying the previous session, the GBPJPY looks tired and may be running on empty fumes. Prices remain bearish on the daily timeframe with the candlesticks trading within a negative channel. A breakdown below 160.00 could result in a steeper decline towards 157.50 and lower. Should 160.00 prove to be reliable support, an incline back towards 162.00 could be on the cards.
EUR/JPY ready to resume selloff?
The technical bounce on the EURJPY could be over if prices fail to push above 137.00. Bears still remain in some control with prices respecting a bearish channel on the daily charts. A decline back under the 50-day Simple Moving Average could trigger a selloff towards 134.50 and 133.00, respectively. If prices are able to break above 137.00, then a move towards 138.00 could become reality.
EUR/GBP choppy as ever
There is a lot going on with the EURGBP as bulls and bears battle it out. Prices remain as choppy as ever but the trend could turn negative if prices close below 0.8420. Sustained weakness below this level could result in a further decline towards 0.8380. If prices are able to bounce from 0.8420, the next key level of interest can be found at 0.8500.
EURAUD breakdown or bounce?
As the subtitle says, the EURAUD can either experience a technical bounce from 1.4900 or breakdown below this point to hit 1.4600. The trend looks bullish on the daily charts but prices are trading below the 100 and 200-day Simple Moving Average. Should 1.4900 prove to be reliable support, a move back towards 1.5300 could on the cards.
AUD/NZD higher highs and higher lows…
This currency pair remains firmly bullish on the daily timeframe. There have been consistently higher highs and higher lows while the MACD trades to the upside. A solid breakout and daily close above 1.1100 could encourage a move higher towards 1.1200. A daily close below 1.0750 could trigger a selloff towards 1.08200
As we can see in the H4 chart, the asset has formed a Harami reversal pattern close to the support area. At the moment, EURUSD is reversing in the form of a new ascending impulse. In this case, the upside target may be at 1.0600. However, an alternative scenario implies that the price may continue falling to reach 1.0445 without any pullbacks towards the resistance level.
USDJPY, “US Dollar vs Japanese Yen”
As we can see in the H4 chart, USDJPY has formed a Hammer pattern not far from the support area. At the moment, the asset is reversing in the form of a new ascending impulse. In this case, the upside target may be at 130.50. At the same time, an opposite scenario implies that the price may correct to rebound from 128.55 and then resume the uptrend.
EURGBP, “Euro vs Great Britain Pound”
As we can see in the H4 chart, after forming a Harami pattern near the support area, EURGBP is reversing in the form of a new rising impulse. In this case, the upside target may be the resistance level at 0.8550. Later, the market may test this level, break it, and then continue the ascending tendency. Still, there might be an alternative scenario, according to which the asset may correct to reach 0.8410 first and then resume trading upwards.
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.
EURUSD is taking a break after four days of recovering.
The major currency pair slowed down its recovery. The current quote for the instrument is 1.0508.
The statistics published by the US yesterday were quite confident. The Retail Sales added 0.9% m/m in April after gaining 1.4% m/m the month before and against the expected reading of 1.0% m/m. The Core Retail Sales showed 0.6% m/m, which is better than forecasted.
The Industrial Production gained 1.1% m/m last month, which is much better than the expected reading of 0.4% m/m, after expanding by 0.9% m/m in March. The Capacity Utilization Rate also improved, up to 79.0%.
However, the primary focus was on the speech to be delivered by the US Fed Chairman Jerome Powell. He said that the Fed was going to raise the rates until inflation started to fall. If it implies pushing the boundaries of the theoretical conception of neutrality, the Fed will do what is necessary without hesitation.
We remind you that the April CPI reading was 8.3%, while the target level is 2.0%. Earlier this month, the regulator raised the rate by 50 basis points, for the first time in 20 years. It was the second consecutive rate hike and the Fed is expected to raise the benchmark interest rate after every meeting until the end of 2022.
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 Consumer Price Index data (inflation rate) will be released today in Europe. Analysts expect the inflation rate to remain unchanged, which will mean a slowdown in inflation in the region. If the data is worse than expected it will be a positive factor for the European currency strengthening on expectations of faster monetary policy tightening.
From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is close to changing to bullish. The price has consolidated above the moving averages but has not broken through the priority change level. The MACD indicator has become positive, but buyer’s pressure remains high. Under such market conditions, it is possible to look for sell trades from the resistance level of 1.0587, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0491 or 1.0445, but only with short targets and confirmation.
Alternative scenario: if the price breaks out through the 1.0588 resistance level and fixes above, the uptrend will likely resume.
News feed for 2022.05.18:
– Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
– Eurozone ECB Financial Stability Review at 12:00 (GMT+3);
– US Building Permits (m/m) at 15:30 (GMT+3).
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2313
Prev Close: 1.2492
% chg. over the last day: +1.45%
The UK inflation rate reached 9.0% on an annualised basis. This is the highest recorded 12-month value since 1997. Monthly inflation increased by 2%. The Producer Price Index, which measures the rate of inflation between factories and plants, rose from 11.9% to 14% y/y. UK consumer prices are approaching a projected peak of 10.25%. The Bank of England needs to take action to suppress inflation. Analysts forecast more aggressive interest rate hikes at the next meetings.
On the hourly time frame, the GBP/USD currency pair trend changed to bullish. The MACD indicator became positive, and the buyers’ pressure remains high. Under such market conditions buy deals may be considered from the support level of 1.2343 or 1.2283, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2519, but with confirmation in the form of sellers’ initiative.
Alternative scenario: if the price breaks down through the 1.2200 support level and fixes below, the mid-term downtrend will likely be resumed.
News feed for 2022.05.18:
– UK Consumer Price Index (m/m) at 09:00 (GMT+3);
– UK Producer Price Index (m/m) at 09:00 (GMT+3).
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 129.14
Prev Close: 129.34
% chg. over the last day: +0.15%
Japan’s GDP fell by 0.2% for the quarter, but the data was better than analysts’ expectations of -1.0%. Japanese Economy Minister Yamagiwa believes the slowdown is due to rising commodity prices and supply-side constraints caused by the war in Ukraine and prolonged lockdowns in China. The industrial production rate showed a 0.3% increase last month. This is a significant decrease compared to the 2% growth a month earlier.
Trading recommendations
Support levels: 129.02, 127.29, 126.91, 126.00, 125.57
Resistance levels: 129.74, 130.12, 130.99
The medium-term trend on the USD/JPY currency has changed to bearish. The price has confidently broken through the priority change level and has consolidated below the moving averages. Despite the change in the trend on the hour timeframe, it is better to look for buy deals with the expectation of an uptrend continuation, since the Japanese Yen has no fundamental support. First of all, it is worth considering the support level of 129.02, but with confirmation. A resistance level of 130.12 may be considered for sell deals, but only with additional confirmation.
Alternative scenario: If the price fixes above 130.99, the uptrend will likely be resumed.
News feed for 2022.05.18:
– Japan GDP (q/q) at 02:50 (GMT+3);
– Japan Industrial Production (m/m) at 07:30 (GMT+3).
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2841
Prev Close: 1.2809
% chg. over the last day: -0.25%
Canada’s inflation data will be updated today. Analysts are forecasting a monthly inflation increase of 0.5%. If the forecasts are true, Canada’s annualised inflation rate will reach 7.2%, which will be a new multi-year record. Growth in consumer prices is usually accompanied by a strengthening of the national currency in anticipation of more aggressive monetary policy tightening by the central bank.
Trading recommendations
Support levels: 1.2808, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
The USD/CAD currency pair trend is bearish in terms of technical analysis. The MACD indicator is in the negative zone, but the bears’ pressure is decreasing, as there are signs of divergence. It is worth trading only with short targets because fundamentally both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions it is better to look for buy trades on the lower timeframes from the support level of 1.2808 or 1.2774, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2875 or 1.2904, but also better with confirmation and short targets.
Alternative scenario: if the price breaks through and consolidates above 1.3000, the uptrend will likely be resumed.
News feed for 2022.05.18:
– Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
The pound surged after the UK saw a jump in average earnings over the past three months. Solid bullish momentum above 1.2400 has prompted sellers to cover their positions, exacerbating volatility in the process. The daily resistance at 1.2640 coincides with the 30-day moving average and is an important supply zone. Its breach could pave the way for a bullish reversal in the weeks to come. In the meantime, an overbought RSI may cause a pullback as intraday buyers take profit. 1.2310 is the closest support.
USDJPY enters narrowing consolidation
The yen recouped some losses after Japan’s GDP growth beat expectations in Q1. The US dollar is taking a breather after a prolonged rally. The latest retreat has found support at 127.50 over the 30-day moving average. Medium-term sentiment would stay upbeat as long as the price remains above this demand zone. 130.80 from a previously faded rebound is a key resistance and a bullish breakout could resume the rally towards 133.00. 128.70 is the immediate support for the current consolidation.
XAUUSD tests critical floor
Gold inched higher as the US dollar index pulled back from a two-decade high. The price action has stabilised near January’s lows at 1790. A bullish RSI divergence indicates a loss of bearish momentum in this critical demand area, triggering a buy-the-dip behaviour. Sellers’ profit-taking could drive the precious metal higher. A bounce above 1858 may trigger an even broader short-covering. On the downside, a fall below 1790 would send the price into bearish territory with December’s lows (1750) as the next stop.
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GBPUSD is correcting within the bearish channel. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s upside border at 1.2365 and then resume moving downwards to reach 1.1945 Another signal in favour of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.2465. In this case, the pair may continue growing towards 1.2555.
XAUUSD, “Gold vs US Dollar”
XAUUSD has fixed above Tenkan-Sen and Kijun-Sen. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 1850.00 and then resume moving downwards to reach 1735.00. Another signal in favour of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1880.00. In this case, the pair may continue growing towards 1915.00.
USDCAD, “US Dollar vs Canadian Dollar”
USDCAD is no longer moving within the bullish channel. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 1.2875 and then resume moving downwards to reach 1.2595. Another signal in favour of a further downtrend will be a rebound from the rising channel’s downside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.3035. In this case, the pair may continue growing towards 1.3125.
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 Pound sterling continues recovering against the USD on Tuesday. The current quote for the instrument is 1.2458.
A short pause in the USD rally allows other traded currencies to reach stability or even recover a little bit. However, nothing really changes strategically.
Earlier today, the United Kingdom released the first of the two huge pieces of macroeconomic statistics planned for this week. First of all, the Unemployment Rate in the country was 3.7% in March after being 3.8% in February. The indicator wasn’t expected to change, so the actual reading might be considered positive. The Claimant Count Change showed -56.9K in April against the expected reading of -42.3K. The Average Earnings Index added 7.0% 3m/y after gaining 5.6% 3m/y the quarter before and against market expectations of 5.4% 3m/y.
The situation might be explained in the following way: in April, businesses and enterprises started feeling the negative external background, which only worsened the situation. However, they managed to save jobs and increase salaries adjusting for inflation. Probably, they might be able to hold this position for another quarter, but then the external pressure will come in full force. This, in turn, might lead to the disintegration of job and salary prospects.
The labour market, no matter how strong it may seem, didn’t completely recover after the pandemic – this process requires much time. one shouldn’t also forget about the Brexit issues – Northern Ireland turned out to be a sticking point in trade negotiations. In addition, interruptions in deliveries didn’t’ go anywhere. It appears that there are more complications than glimmers of hope and optimism right now. and that’s not good news for the Pound.
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.
More and more ECB representatives are inclined to raise the interest rate at the July meeting. At the same time, analysts are predicting that the ECB is likely to decide to end its stimulus program at its next meeting. The European currency has already started to strengthen a bit by this scenario, but it should be noted that by the summer the interest rate will be about 0.25% in Europe, while the US rate will be around 2%. This disbalance will cause EUR/USD quotes to decline in the mid-term.
From the technical point of view, the trend of the EUR/USD currency pair on the hourly time frame is still bearish. The MACD indicator became positive, the buyers began to show initiative, but it is weak. Under such market conditions, traders can look for sell deals from the resistance level of 1.0484, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0379, but only with short targets and confirmation.
Alternative scenario: if the price breaks out through the 1.0588 resistance level and fixes above, the uptrend will likely resume.
News feed for 2022.05.17:
– Eurozone Italian Consumer Price Index (m/m) at 12:00 (GMT+3);
– Eurozone GDP (q/q) at 12:00 (GMT+3);
– US FOMC Member Bullard Speaks at 15:00 (GMT+3);
– US Retail Sales (m/m) at 15:30 (GMT+3);
– US Industrial Production (m/m) at 16:15 (GMT+3);
– Eurozone ECB President Lagarde Speaks at 20:00 (GMT+3);
– US Fed Chair Powell Speaks at 21:00 (GMT+3);
– US FOMC Member Mester Speaks at 21:30 (GMT+3).
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2240
Prev Close: 1.2319
% chg. over the last day: +0.64%
The Governor of the Bank of England warned yesterday that “apocalyptic” food and energy prices are coming in Britain. The Bank of England said inflation is likely to peak at 10.25% in the last quarter of 2022. This will affect domestic demand and reduce activity and is likely to lead to an increase in unemployment. Also, Bailey added that raising the Bank of England’s interest rate is not enough to keep inflation within the target range. Michael Saunders of the Bank’s Monetary Policy Committee said that he believes a tighter monetary policy would do little to change the current level of inflation.
On the hourly time frame, the GBP/USD currency pair trend is still bearish. The MACD indicator became positive and there is a slight buying pressure. Under such market conditions, sell trades should be looked for from the resistance level of 1.2338, but with additional confirmation. For buy deals, traders may consider the level of 1.2283 or 1.2199, but only with additional confirmation in the form of a buyers’ initiative.
Alternative scenario: if the price breaks down through the 1.2450 resistance level and fixes above, the mid-term uptrend will likely be resumed.
News feed for 2022.05.17:
– UK Average Earnings Index (m/m) at 09:00 (GMT+3);
– UK Claimant Count Change (m/m) at 09:00 (GMT+3);
– UK Unemployment Rate (m/m) at 09:00 (GMT+3).
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 129.24
Prev Close: 129.15
% chg. over the last day: -0.07%
Deputy Governor of the Bank of Japan Amamiya says that he does not expect further increases in energy and commodity prices. If his assumption is correct, inflation in Japan will fall again, and as a result, the Bank of Japan will continue its soft monetary policy, which is negative for the Japanese Yen.
Trading recommendations
Support levels: 129.02, 126.91, 126.00, 125.57
Resistance levels: 129.74, 130.12, 130.99
The medium-term trend on the USD/JPY currency has changed to bearish. The price has confidently broken through the priority change level and is now trading between the moving averages. Despite the change in the trend on the hour timeframe, it is better to look for buy deals with the expectation of an uptrend continuation, since the Japanese Yen has no fundamental support. First of all, it is worth considering the support level of 129.02, but with confirmation. A resistance level of 129.74 may be considered for sell deals, but only with additional confirmation.
Alternative scenario: If the price fixes above 130.99, the uptrend will likely be resumed.
There is no news feed for today.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2915
Prev Close: 1.2846
% chg. over the last day: -0.54%
The Canadian dollar is a commodity currency and is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of the dollar index and oil prices. Oil prices added another 3% yesterday as OPEC is suppressing any production increases. In turn, Canada’s economic indicators are showing growth, which along with low unemployment will force the Bank of Canada to move to a more aggressive monetary policy. This situation, along with rising oil prices, will strengthen the Canadian dollar.
Trading recommendations
Support levels: 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
The USD/CAD currency pair trend has changed to bearish in terms of technical analysis. The price broke through the priority change level and consolidated below the moving averages. The MACD indicator has become negative, and the sellers’ pressure has increased. It is worth trading only with short targets because fundamentally both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions buy trades should be considered on the lower timeframes from the support level of 1.2774, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2875 or 1.2904, but also better with confirmation and short targets.
Alternative scenario: if the price breaks through and consolidates above 1.3000, the uptrend will likely be resumed.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
The XAGUSD pair hints at the development of a long correction wave b of the cycle degree.
Wave b, judging by the shape, is a primary triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ.
The final wave Ⓩ will be an intermediate triple zigzag (W)-(X)-(Y)-(X)-(Z). It seems that the formation of the actionary intermediate wave (Y) has recently come to an end. This took the form of a standard zigzag pattern.
Now we are observing the construction of the initial part of the intermediate intervening wave (X). This can also take the form of a minor zigzag A-B-C, as shown in the chart.
The end of the wave (X) is expected to reach 23.334. At that level, it will be at 50% of sub-wave (Y).
The alternative scenario indicates that the bearish primary wave Ⓩ could end in the form of a double zigzag (W)-(X)-(Y), and much earlier than expected in the main scenario.
Most likely, the market is now in the final part of the actionary wave (Y), or rather in its final minor sub-wave C.
It is likely that wave C will end in the form of a minute impulse near 19.733. At the indicated price point, primary wave Ⓩ will be equal to previous actionary wave Ⓨ.
Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com
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