EUR/USD Bullish Continuation Potential Above 1.035

EUR/USD Technical Outlook: Bullish Above 1.035

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EUR/USD Extends Gains as US Celebrates the Thanksgiving Holiday

EUR/USD bulls are pushing higher after the FOMC meeting minutes revealed the Fed’s intention to decelerate the pace of rate hikes. While monetary policy and recession risks remain the primary drivers of geopolitical risks, a move above 1.0350 suggests that the pair may continue to rise.

As a weaker Dollar and falling yields continues to support Euro appreciation, the absence of US liquidity has resulted in lower trade volume which could contribute to larger than expected price moves.

With the major currency pair on track for its second month of gains, additional buying pressure has driven price action into a significant zone of technical resistance.

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On the weekly chart below, a firm rebound from the September low and a break of prior trendline resistance drove EUR/USD back above parity 1.000 which remains as longer-term support. The move was then accelerated in the first week of November which drove prices to another key zone at the 2017 low at 1.035.

But, following last week’s attempt to break through 1.045, a rejection of the upper wick and a weekly close at around 1.032 highlighted the importance of this zone.

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EUR/USD Weekly Chart

Chart  Description automatically generated

Chart prepared by Tammy Da Costa using TradingView

While the daily timeframe illustrates the pair’s determination to rise back to 1.046, the November high provides additional resistance at 1.048 with a move higher opening the door for the 50-week MA (moving average) at 1.057.

EUR/USD Daily Chart

Chart, histogram  Description automatically generated

Chart prepared by Tammy Da Costa using TradingView

However, as event risk picks up again next week, Euro depreciation or the renewal of USD strength could drive EUR/USD back towards the weekly open at 1.032 which may bring the weekly low back into play at 1.022.




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily -3% -4% -3%
Weekly 7% -1% 2%

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

EUR/JPY Breaks Horizontal Resistance, Eyeing Triangle Breakout

KEY POINTS:

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EUR/JPY OUTLOOK

EUR/JPY rallied to the upside yesterday finally breaking above horizontal resistance and creating a new higher high. The pair has also broken above the 100-day MA now testing the top of the triangle pattern currently in play.

Price Action on the pair remains interesting as the daily timeframe remains bearish while the overall trend on the 4H is bearish as well. This provides the potential for a few different scenarios to play out over the coming days.

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Fundamentals over the short to medium term support an upside break at this stage given the rate hike path being followed by the European Central Bank compared to the Bank of Japan’s insistence on keeping rates low as wage growth lags inflation. No policy changes are expected from the Bank of Japan until Governor Kuroda’s term ends in April.

EUR/JPY Four-Hour Chart – November 23, 2022

image1.png

Source: TradingView

On the four-hour chart above the triangle pattern is clearly visible while the pair has continually printed higher highs and higher lows. The overall picture on the 4H timeframe still remains bearish however which indicates a downside breakout cannot be ruled out at this point.

We are trading at the top of the triangle pattern at present with the apex of the triangle drawing closer. A breakout remains imminent with a break and candle close above the 146.00 level likely to result in an upside rally with resistance areas around the 147.00 and 148.00 handles respectively.

An alternative play for the pair could see a break and candle close below the ascending lower trendline which could push the pair toward support at 144.33 or lower toward the 142.50 area. These potential breakouts require traders to remain nimble with both breakouts still a possibility.

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BEARISH IG CLIENT SENTIMENT

IG Client Sentiment Data (IGCS) shows that retail traders are currently short on EUR/JPY with 68% of traders currently holding short positions. At DailyFX we typically take a contrarian view to crowd sentiment but due to recent changes in long and short positioning, we arrive at a short-term upside bias.

Written by: Zain Vawda, Market Writer for DailyFX.com

Contact and follow Zain on Twitter: @zvawda

GBP/USD Breakout Nears as Highs and Lows Compress

GBP/USD – Prices, Charts, and Analysis

  • Short-term lower highs and higher lows are set to collide.
  • Retail positioning is finely balanced.

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Cable (GBP/USD) is currently making a short-term bullish pennant formation that suggests that the pair are set to continue the recent move higher. The formation, formed by a series of lower highs and higher lows, usually occurs during a strong uptrend and this can be seen on the daily GBP/USD chart with the sharp move higher from the multi-decade low print at 1.0355 made on September 26. The recent period of consolidation adds to the formation’s credibility, and with the apex of the symmetrical triangle very close, a breakout is seen as likely.

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If the pattern plays out, then the first level to watch is the November high at 1.2029, followed by the 200-day sma, currently at 1.2205, followed by horizontal resistance off the August 1 and August 10 double-high at 1.2292. In the event of a break lower, negating the bullish pennant, support starts at 1.1740 and is followed by 1.1650.

For all market-moving data releases and economic events see the DailyFX Calendar.

GBP/USD Daily Price Chart – November 22, 2022

image1.png

Chart via TradingView

Retail Traders are Undecided

{{SENTIMENT|GBPUSD}}

Retail trader data show 47.82% of traders are net-long with the ratio of traders short to long at 1.09 to 1.The number of traders net-long is 3.31% higher than yesterday and 6.69% higher from last week, while the number of traders net-short is 2.96% lower than yesterday and 7.35% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse lower despite the fact traders remain net short.

What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

US Dollar May Rise Against the Chinese Yuan, but USD/CNH First Needs to Find Support

US Dollar, Chinese Yuan, USD/CNH – Analyst Pick

  • The US Dollar might have overcorrected against the Chinese Yuan of late
  • Soft Chinese industrial production, retail sales underscore economic woes
  • However, from a technical standpoint, USD/CNH still hasn’t found support

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Chinese Yuan Remains Vulnerable to Slowing Global Growth

The US Dollar has been taking a dive against the Chinese Yuan of late. This is leaving USD/CNH heading for its third weekly decline if losses hold until Friday. That would be the worst losing streak since April 2021. On top of this, the pair is down about 4 percent this month, the most since the pair began trading in 2012. Is this the pair’s turning point? Or has USD/CNH overcorrected?

On Tuesday, China released a couple of key economic metrics for October. These included fixed asset investments, industrial production and retail sales. In the image below, all of them disappointed compared to economists’ expectations. In particular, retail sales fell 0.5% y/y versus 1% seen. These were not great and continued to show that certain corners of the country are struggling.

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China is a heavily outward-facing economy due to key trading relationships with the rest of the world. As forecasted in my top trading opportunity for the fourth quarter, “as global growth slows (which is the likely scenario going forward), the Chinese Yuan could continue running into trouble.” Perhaps some of this was reflected in Tuesday’s set of data.

For my Q4 top trading opportunity, I used a multiple linear regression model to estimate that USD/CNH might aim towards 7.15 in the coming months. This is based on control variables such as Chinese exports, CPI, retail sales, G20 real GDP and more. Given the latest downturn in USD/CNH, the price dropped below this level. As such, it may be that a turn higher becomes the increasingly likelier outcome down the road.

Chinese Industrial Output and Retail Sales Disappoint for October

Chinese Industrial Output and Retail Sales Disappoint for October

Data Source – DailyFX Economic Calendar

USD/CNH Technical Analysis

Unlike the fundamentals, it might be too soon to call a bullish reversal for USD/CNH from a technical standpoint. The pair has confirmed a breakout under the August rising trendline, which is quite bearish. Prices are fast approaching the early October low at 7.0128 without clear signs of slowing, or a support level reinforcing. The 100-day Simple Moving Average is also nearing. The latter may reinstate the dominant upside focus. Until a clear bullish technical signal is made present, the fundamentals may have to step aside for the time being.

Daily Chart

USD/CNH Technical Analysis

Chart Created in TradingView

— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

To contact Daniel, follow him on Twitter:@ddubrovskyFX

Dow Jones Divergence from Nasdaq Brings Relative Value into View. Will DJIA Win?

Dow Jones, Nasdaq, DJIA, NDX, DM1, NQ1, Federal Reserve, US CPI – Talking Points

  • The Dow Jones and Nasdaq are on similar but different paths
  • A relative value perspective could see an opening on the back of US CPI
  • The Fed are tackling price pressures. Is the DJIA/NDX ratio stretched?

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The Dow Jones Index (DJI) and Nasdaq (NDX) have been under pressure since the Federal Reserve woke up to an inflation problem that might have been brewing for more than 20 years.

In late 1996, former Fed Chair Alan Greenspan made his infamous “irrational exuberance” observation about the frothiness in the tech sector.

Many observers seemed to have forgotten that he backed away from that perspective in 1997 and the Nasdaq boomed to new heights until 2000. In any case, many commentators believe that the modern era of the so-called “Fed put” was born then.

The asymmetric bias of central banks toward looser policy than what is otherwise necessary is a debate for another time.

At the outset of the pandemic in 2020, governments and central banks around the world rushed to put measures in place to support their respective economies and indeed, society.

The result of this tsunami of stimulus that was added to the global economy enabled capital to flood into all sorts of risk assets that would normally struggle to get funding. The mainstreaming of the Special Purpose Acquisition Company (SPAC) might best represent this episode of “exuberance”.

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Equity markets also enjoyed a deluge of investor appetite. Companies that rely on debt and fresh rounds of capital raising thrived in this environment. A large percentage of technology companies might fall into this category.

Since the Fed acknowledged that the inflation genie is out of the bottle, an aggressive tightening of monetary policy has unfolded in 2022. This has seen equity market indices descend from their peaks.

The Nasdaq (NDX) could remain vulnerable to the continuing tightening of financial conditions. The Dow Jones Industrial Average (DJIA) might not be as exposed as the technology-laden Nasdaq.

If this is to hold, then trading a long DJIA/short NDX relative value position might best express this view. The ratio of DJIA divided by NDX just moved back above 3 this week. During the pandemic, it visited an all-time low of 2.14 in November 2021.

LONG-TERM DJIA/NDX RATIO

Source; Bloomberg, DailyFX

While the ratio has already moved up significantly, it might go toward, and possibly above, its long-term average of 5.31 (1995-2022). The 3-year average prior to the pandemic is 3.6 (2017-2020).

While the Fed has made it clear that tight monetary conditions are needed for the foreseeable future to rein in inflation, any material change to this outlook will undermine the prospects for this position.

This article has been written before US CPI data and this number might provide an opportunity.

PANDEMIC DJIA/NDX RATIO, 2020 – 2022

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

AUD/USD Eyeing a Potential Triangle Breakout

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AUD/USD OUTLOOK

The Australian Dollar enjoyed a significant rally to close out last week, recovering five days of losses against the greenback. The rally was helped by broad-base dollar weakness as markets start to price in the potential of a 50bp hike from the US Federal Reserve at its December meeting. Adding a further positive for the China sensitive Aussie Dollar is the continuing rumors of covid protocols being relaxed in China which has helped market sentiment improve.

On the data front we had Chinese inflation numbers as well as credit growth data for October out this morning. Chinese CPI showed signs of cooling, adding to fears that markets are ignoring the fundamental data in favor of rumors regarding the potential reopening in China. The main risk event remains the US CPI numbers. This could derail a potential triangle breakout should the US CPI come in hotter than expected. Market consensus has inflation showing a slowdown with YoY Core Inflation estimated to come in at 6.5% and the YoY inflation rate at 8%, a decline of 0.2%. We do have a cluster of Fed speakers this week which could add to the volatility and alter the rate hike expectations for December’s meeting.

Most Read: Understanding Inflation and its Global Impact

AUD/USD Daily Chart – November 9, 2022

Chart  Description automatically generated

Source: TradingView

On the daily chart above the triangle pattern is clearly visible while the pair has continually printed higher highs and higher lows since the YTD low printed on October 10. The two key levels to watch here are 0.6525 (50-SMA) as well as the 0.6300 areas with a rejection or bounce of these levels providing a potential range trading opportunity.

A clean breakout of the triangle pattern remains the smarter play as it could trigger a potential 200-pip rally in the direction of the breakout. An upside breakout looks more likely at this stage, with a clean break above the 0.65250 area potentially leading price toward the 100-SMA which lines up with resistance around the 0.6700. Yesterday’s daily candle threatened a breakout but closed back inside the triangle pattern, with a break and close needed to signal bullish momentum.

Most Read: Trading Breakouts and Pullbacks

An alternative play for the pair in the short-term could be a range trade should the pair reject the top of the triangle pattern which could see pullback toward the 0.63000 area before buyers show interest again.

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USD/CAD AUD/USD & Gold Technical Trade Setups

Short-term Trade Outlook: Technical Setups on USD/CAD, AUD/USD & Gold

  • USD/CAD breaking below key pivot zone- initial support objective in view
  • AUD/USD now testing key confluent resistance- breakout potential
  • Gold breakout underway – initial resistance objectives in view

An update on technical setups we’ve been tracking in the Canadian Dollar, Australian Dollar and Gold. These are the targets and invalidation levels that matter heading into the close of the week. Review my latest Strategy Webinar for an in-depth breakdown of these technical setups and more.

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Canadian Dollar Price Chart – USD/CAD 240min

image1.png

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Notes: In last month’s Canadian Dollar Short-term Outlook, I noted that USD/CAD, “responded to technical resistance and the focus is on this pullback within the broader uptrend. From at trading standpoint, rallies should be limited to the weekly open (1.3870) IF price is heading lower on this stretch- look for a larger reaction on a test of the 1.35-handle with a breakout of the October range to offer further guidance here.” Price registered a high at 1.3854 in the following day with the subsequent reversal breaking below support this week the 23.6% Fibonacci retracement of the 2021 rally / May 2019 high-week close and the October lows around 1.3495-1.3515.

The focus is on initial support at the 100% extension of the yearly October decline at 1.3326 with subsequent support objective eyed at 1.3224/30– look for a larger reaction there IF reached. Weekly open resistance stands at 1.3525 backed by the November open at 1.3624. Ultimately a breakout of this descending pitchfork is needed to mark resumption of the broader uptrend.

Bottom line: A break below key support at the October range lows threatens a larger correction in USD/CAD. From a trading standpoint, look to reduce portions of short-exposure / lower protective stops on test of 1.3326. Rallies should be limited to the monthly open IF price is heading lower on this stretch. Review my latest USD/CAD Weekly Price Outlook for a closer look at the longer-term Canadian Dollar technical trade levels.

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Australian Dollar Price Chart – AUD/USD 240min

image2.png

Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview

In last week’s Australian Dollar Short-term Outlook, I noted that Aussie was testing the “last line of defense” at the October trendline- that level held with AUD/USD reversing sharply higher to mark the largest single-day advance since November of 2011. The rally extended into the weekly open with price now testing confluent resistance at the 38.2% retracement of the August decline / October highs at 6539/47– looking for a reaction here with a daily close above needed to keep the immediate long-bias viable.

Initial support rests with the monthly open at 6397 with broader bullish invalidation at the 61.8% retracement at 6315. A topside breach from here keeps the focus on the 100% extension of the advance at 6624 backed by the 2008 low-week close / 2019 low at 6660/70 and the 61.8% retracement at 6767.

Bottom line: Aussie has extended into confluent resistance. From at trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to the monthly open IF price is indeed heading higher on this stretch. Review my latest Australian Dollar Weekly Forecast for a closer look at the longer-term technical trade levels.

Gold Price Chart – XAU/USD Daily

image3.png

Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

In last month’s Gold Short-term Technical Outlook I noted that the gold recovery was approaching a key pivot zone and that, “Ultimately, a breach / close above confluent Fibonacci resistance at 1682/86 is needed to suggest a larger reversal may be underway with such a scenario exposing the August low-day close / 61.8% retracement at 1729/34– look for a larger reaction there IF reached.” XAU/USD ripped through resistance today with the rally now within striking distance of the September / October highs around the 1682/86 objective.

Bottom line: A breakout of yearly trend resistance threatens a broader recovery in gold prices in the days ahead. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch towards 1729/34 IF reached – ultimately a breach above the 38.2% retracement / January low-week close at 1788/91 would be needed to suggest a larger trend reversal is underway. Review my latest Gold Weekly Forecast to take a closer look at the longer-term XAU/USD technical trade levels.

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-Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

NZD/USD Outlook Mired by Failure to Clear October Opening Range

NZD/USD trades near the weekly high (0.5770) as the US Dollar weakens against all of its major counterparts, but the exchange rate may struggle to retain the advance from earlier this month if it fails to clear the opening range for October.

At the same time, the update to the US Personal Consumption Expenditure (PCE) Price Index may drag on NZD/USD as the core rate, the Federal Reserve’s preferred gauge for inflation, is expected to increase to 5.2% in September from 4.9% per annum the month prior, and evidence of persistent price growth may curb the recent recovery in the exchange rate as Chairman Jerome Powell and Co. pursue a restrictive policy.

NZD/USD Rate Daily Chart

Source: Trading View

NZD/USD may attempt to test the 50-Day SMA (0.5879) for the first time since August if it clear the monthly high (0.5814), with a move above the moving average opening up the Fibonacci overlap around 0.5900 (78.6% retracement) to 0.5930 (78.6% expansion).

However, NZD/USD may continue to track the negative slope in the moving average amid the lack of momentum to close above the overlap around 0.5740 (78.6% retracement) to 0.5790 (61.8% retracement), and the exchange rate may struggle to retain the advance from earlier this month if it fails to clear the October high (0.5814).

In turn, NZD/USD may range bound conditions, with a move below 0.5640 (161.8% expansion) bringing the yearly low (0.5512) back on the radar.

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USD/MXN Stuck in Horizontal Channel, Breakout Could Spark Next Big Move

MEXICAN PESO TRADING SETUP:

  • USD/MXN has been moving steadily within the confines of a horizontal channel since the beginning of the month
  • A breakout, however, could be just round the corner
  • The end of price action consolidation could pave the way for the next big move in the dollar/peso exchange rate

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Most Read: US Dollar Consolidation Continues as USD/JPY Breaks Above 150

Since the beginning of the month, USD/MXN (U.S. dollar – Mexican Peso) has moved steadily within the confines of a horizontal channel, ricocheting between its upper and lower boundary as seen in the chart below, a sign of indecision in the forex market. Despite this price action behavior, I would steer clear of range trading strategies as exotic pairs tends to be more unpredictable and volatile than major and minor FX crosses.

However, this does not mean there are no opportunities; in fact, an attractive setup may be developing for traders who are patient enough to wait for the right time. In the coming days, high-impact events on the U.S. economic calendar, such as the October PMI survey or the third-quarter GDP report, are likely to fuel elevated volatility, leading to wild swings in the exchange rate, which may create a window to consider breakout strategies.

Focusing on the 2-hour chart, there are two key zones worth keeping an eye on in the near-term on USD/MXN: support at 19.95 and resistance at 20.15. Personally, I would not look to play a bounce between these two regions, but rather a decisive breach of that interval on the assumption that it could trigger a strong and meaningful move in the direction of the breakout. Although it is impossible to predict the future with certainty, two potential scenarios could unfold once consolidation comes to an end.

If technical resistance at 20.15 is cleared on higher volume, USD/MXN could gather bullish momentum and go on to challenge 20.28, followed by 20.45. On further strength, the focus shifts to the September high near 20.58. On the other hand, if support at 19.95 is pierced on downside in a convincing manner, also on higher trading volume, prices could slide towards 19.84, followed by 19.75, the September swing low.

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USD/MXN TECHNICAL CHART

Chart  Description automatically generated

USD/MXN Chart Prepared Using TradingView

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—Written by Diego Colman, Market Strategist for DailyFX

GBP/USD, USD/CAD & S&P 500 Technical Trade Setups

Short-term Trade Outlook: Technical Setups on GBP/USD, USD/CAD & S&P 500

  • GBP/USD range breakout pending – to determine outlook for correction off record lows
  • USD/CAD reversal off uptrend resistance threatens test of uptrend support
  • S&P 500 rebounds off key support- recovery levels in focus to offer reset

An update on technical setups we’ve been tracking in the British Pound, Canadian Dollar and the S&P 500. These are the targets and invalidation levels that matter heading into the close of the week. Review my latest Strategy Webinar for an in-depth breakdown of these technical setups and more.

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British Pound Price Chart – GBPS/USD 240min

image1.png

Chart Prepared by Michael Boutros, Technical Strategist; GBP/USD on Tradingview

Notes: In my last British Pound Short-term Outlook I noted that, “Sterling has set the weekly & monthly opening-range just below resistance at 1.1414/80– look for the breakout. From a trading standpoint, losses should be limited to 1.1120 IF price is heading higher on this stretch.” The setup remains unchanged with the weekly range re-enforcing the significance of a breakout of the 1.1120-1.1480 range for guidance in the days ahead. Ultimately, a topside breach may offer more favorable opportunities closer to downtrend resistance with a break / close below the October range-lows needed to mark resumption of the broader downtrend towards 1.0923 and the low-day close at 1.0679.

Bottom line: Looking for a breakout here for guidance with the threat for a larger recovery while within this near-term formation. A topside breach would threaten a larger recovery towards 1.1630/50 and 1.1843– both levels of interest for possible topside exhaustion IF reached. Keep in mind that a downside break of this pitchfork could likely fuel another accelerated sell-off – stay nimble here. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD technical trade levels.

British Pound Trader Sentiment – GBP/USD Price Chart

image2.png

  • A summary of IG Client Sentiment shows traders are net-long the British Pound – the ratio stands at +1.22 (54.94% of traders are long) – typically weak bearish reading
  • Long positions are 2.10% higher than yesterday and 7.56% higher from last week
  • Short positions are 0.12% higher than yesterday and 11.14% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias from a sentiment standpoint.




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 2% -4% -1%
Weekly 11% -4% 4%

Canadian Dollar Price Chart – USD/CAD 120min

image3.png

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Notes: Earlier this week, I highlighted a key resistance range in USD/CAD at 1.3812/55– a region defined by the 1.618% extension, the objective October monthly open and the April 2020 low. Price continues to trade within the confines of this newly-identified descending pitchfork formation with key support steady at 1.3632/51. A break below this threshold would threaten a larger correction within the confines of the broader uptrend with such a scenario exposing 1.3502/15– look for a larger reaction there IF reached for guidance. Ultimately, a topside breach / daily close above 1.3944/71 is needed to mark resumption towards subsequent resistance objectives into the 1.41-handle and beyond.

Bottom line: USD/CAD has responded to technical uptrend resistance and the threat remains for a corrective pullback while below 1.3812/55. A larger pullback here may offer more favorable opportunities closer to trend support with a topside breach needed to fuel the next leg higher in the US Dollar. Review my latest USD/CAD Weekly Price Outlook for a closer look at the longer-term Canadian Dollar technical trade levels.

S&P 500 Price Chart – SPX500 Daily

Chart Prepared by Michael Boutros, Technical Strategist; SPX500 on Tradingview

Notes: In last week’s S&P 500 Short-term Technical Outlook I highlighted the threat for a larger recovery in the index after rebounding off key technical support at 3482-3501– a region defined by the 50% retracement of the 2020 advance and the 1.618% Fibonacci extension. Price rebounded more than 7.8% off the lows with the advance faltering just above targeted resistance at the objective 2021 yearly open at 3734. Initial support now rests at 3660/64 with near-term bullish invalidation steady at 3590/96– a break / close below this threshold is needed to mark resumption of the broader downtrend towards 3482-3506 and the February 2020 high at 3397. Topside resistance eyed at 3810 and 3906/08– both represent areas of interest for possible topside exhaustion /price infection IF reached.

Bottom line: The S&P 500 rebound is maturing and while the focus remains constructive within this ascending formation, I’m on the lookout for possible exhaustion closer to downtrend resistance IF reached. Ultimately, a break below 3590 needed to fuel the next leg lower in the index. Review my last S&P 500 Weekly Technical Forecast for a closer look at the longer-term SPX 500 technical trade levels.

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-Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex