Greg’s Weekly Analysis W/C 20th November 2017

AUDUSD:
Fundamentals: Economic data from Australia wasn’t stellar with wage growth not improving while the economy added only 3.7k jobs, unemployment rate ticked down to the 5.4% but didn’t manage to strengthen the aussie in fact quite the contrary. The aussie weakened despite the USDollar having session sell offs to its 94.00 support on the DXY. In the US CPI m/m came in mixed without having significant impact as the Tax Overhaul is what can save the dollar from weakening further along with a FED Funds rate hike in Dec.

Technicals: The aussie dollar declined further and although no daily candle patterns emerged the intra-days provided value retraces. The target and support is at the 0.7500 price level, any retraces would invite sellers to the market however if price suddenly drops to the 0.7500 price might reject and bulls could take over.

EURUSD:
Fundamentals: The ECB President held a speech at the regarding monetary policy at the European Banking Congress, the statement had a mixed outlook with bullish breadcrumbs as ECBs’ Draghi reiterated that inflation still remains subdued while pointing out that the eurozone economy is solid robust and resilient but not enough to remove accommodation earlier than end of next year. On the long term this mean that the USDollar should prevail however if the FED disappoints along with the tax plan being pushed back with no resolution we might as well see the euro above the 1.2000 price level.

Technicals: The much awaited euro retraces took place as anticipated but with a larger volatility and volume than expected. This pushed the euro to the highs of the major resistance and previous right shoulder on the daily H&S price formation. Price failed to close above the 1.18500 which lets us know that further downside remains feasible on confirmation of multiple timeframes.

GBPUSD:
Fundamentals: The CPI y/y on the pound came in at 3.0% despite at 3.1% expectation, this strengthens the BoE and Carneys’ outlook with inflation to peak at 3.2% which was the previous reading and then ease. If inflation keep falling it erase any hope for investors and the BoE to be able to tighten monetary policy putting the pound on a weaker course, especially against the US Dollar and its tightening cycle.

Technicals: From a technical standpoint the pound become untradeable as it bounces around a tight range between the 1.3100 and the 1.3200 price levels. If price breaks out and manages to confirm the direction by staying above or below any of these level we’ll be able to plan for buys or sells.

USDCAD:
Fundamentals: Since the BoC stated the their outlook does not involve gradual tightening of monetary policy the currency had no particular reason to strengthen, that said that has been hawkishly mixed as economic number either stay the same or improve without major declines. The rally on Oil could’ve helped the Canadian currency remain strong as well but by observing recent price action we can determine that the known correlation does not seem to respect the same way as 10 months ago. Nonetheless the USDollar will be in drivers seat if the FED hikes rates in Dec and the we get further developments on the TAX plan just after the 28th thanksgiving.

Technicals: Despite the pair having strong bullish sentiment the Canadian dollar kept the dollar from rallying and we could see a bullish biased range where almost each run was met with rejection. The ultimate value pullback remains at the 1.2600 based on the weekly and monthly timeframes, if price makes its way down there we’ll be able to take high probability buys based on confirmation of upside reversal.

NZDUSD:
Fundamentals: The NZD dollar has weakened back to its lows and beyond and we can see that even if the DXY is ranging and the RBNZ is less dovish than expected that pair still fails to show strength. Going forward retraces should be viewed as longer term sells until technical based on daily higher lows don’t confirm otherwise.

Technicals: At first the New Zealand currency strengthened based on new intra-day highs but this weeks price action erased hopes for a value retraces from the lows and off of support. A daily low has been established below the 0.6840 and this makes it impossible to have confidence in buying the pair, patience is needed until price finds major support which is confirmed by buyers, only then we can buy the pair keeping in mind limited targets to the upside. Based on how price action developed so far any retraces although being bullish will only serve the means to sell on the long term.

USDJPY:
Fundamentals: The USDollar sell off is much more reflected on the pair as the yen powers up and rallies based on stock market weakness. The long term divergence between the central banks the FED and BoJ remains but if the USD fails to pick up steam and equities weaken than the yen will see relief rallies and will see safe haven strength.

Technicals: The much awaited pullback on the yen pair has occurred at the last day of the week as price heavily sold off below the 112.00 price level. The highest probability and value area for price to reverse to the upside is between the 111.00 and the 110.00, once the daily timeframe decelerates and reject the support area with confirmation we’ll be able to position ourselves as what could be the biggest rally going into 2018.

FTSE:
The FTSE came down to its 50% -61% Fib pullback in what can be named a accelerated pullback. Price managed to sit around and reject the 7370 price level but we have yet to see if this remains to be supported and rice rallies. Either way a daily close above the 7400 would indicate higher prices.

DAX:
The DAX pulled back to its value price of the 12900 and showed strong support if price maintains to trade above that support level any intraday confirmation to the upside could result in a rally.

DOW:
The DOW is not phased by the large pullbacks of the equity markets as it barely sold of to the nearest support before showing buyers strength. A larger pullback is needed to plan for buy positions and more confirmation is needed on daily timeframes to have confidence in sells.

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