Conditions for a weaker US dollar have been ripe, with calls for the RBA’s rate to have peaked at 4.1%, deteriorating data from China and ‘higher for longer’ calls for the Fed. And with that, we have seen some outlandish calls for the Aussie to fall to 50 and even 40c.
Perhaps those calls will turn out to be right. But the Aussie did not earn its name “the...
USD/CNH remains within an established uptrend on the daily chart, and the US02Y-CN02Y spread has reached a new cycle high to suggest upside pressure could be building on USD/CNH.
Prices have retraced and are now trying to build a base around the June highs. Bulls could seek dips around the cycle lows with a stop below 7.25 in anticipation of a move to 7.35, the...
Gold prices have held up well the past couple of days despite a stronger USD and yields. Although its established bearish trend looked overstretched around recent lows, after bears failed to drive prices materially beneath the June low.
We see the potential for the retracement continue higher over the near-term, but we'll be looking out for evidence of a swing...
AU wages came in weak, The RBA hinted that they think they're done tightening in the minutes, The PBOC cut rates (again) and a slew of data from China once again misses the mark. And all in a 30-minute period! I think we’re fast approaching a phase where bets will be on for another round of stimulus. The China A50 is holding its ground above 12,600 and AUD/USD has...
EUR/USD formed a bullish pinbar last week, and Friday's bullish range expansion formed part of a 3-day bullish reversal (morning star pattern). It appears an important swing low formed on Thursday, and any pullback towards Thursday's high will catch our bullish interest.
Prices are flirting with a break below 1.10 ahead of the European open, and perhaps we'll see...
Lat week we saw USD/CHF pull back from the 0.8800 area, after its rally stalled around 0.8800, the 50-day EMA and failed to rest the May low.
Prices have drifted higher during Monday's Asian session, but seemingly hesitant to break above the 2021 low. The bias remains bearish beneath last week's high and for a move to 0.8600.
Who knows, if US CPI comes in soft...
We suspect gold has printed an important swing low at $1925, and are now seeking a move towards the $1950 - $1953 zone.
The bullish engulfing candle on the 1-hour chart was accompanied with heavy trading volume to show demand around $1930. Yet the prior consolidation area has heavy volume around $1935, which means it is a potential level for support for dip...
Last week we saw AUD/JPY roll over nicely from a key resistance zone, yet its fast turnaround from the 200-day EMA now has a potential bullish breakout on our radar.
A bullish pinbar formed on Friday after prices fell through our bearish target before closing above the 100-day EMA, then breaking above the 50 and 20-day EMAs on Monday. Prices are holding around...
A 2-bar bearish reversal pattern has formed at a historical resistance zone just below 96. Prior breaks above it in June and September failed last year. On both occasions the market fell near the 91 area before retesting the resistance zone, and in October we saw prices accelerate lower.
What could trigger such a move this time around? Whilst nobody is expecting...
Last week the US dollar index (DXY) closed at a 15-month low and beneath 100 for the first time since April 2022. Yet subsequent price action has seen a lack of conviction form bears, allowing prices to form a double bottom just above the March 2022 high and close with a Spinning Top doji yesterday.
Given US yields are showing signs of stability (and hinting at...
AUD/USD pulled back for a second day on Monday thanks to weak data from China and rising geopolitical tensions as Russia have backed to of a key gain deal. Support was found around the weekly pivot point, RBA ‘pause’ high and 38.2% Fibonacci retracement level, and the subsequent rally suggests a swing low is in place.
The RBA minutes are due in ~2 hours, and...
The China A50 trades within a bearish channel on the daily chart, although we strongly suspect it wants to break out of it to the upside.
If you look at the steady stream of weak data coming out of China over the past few months, why is the China A50 not breaking to new lows? In fact, each time the market has pulled back to the 12,400 area since early June...
A strong 2-day rally this week suggests AUD/NZD has printed its swing low at 1.07266. Whilst NZ inflation data was stronger than expected in Q2 and saw AUD/ZD pull back to 1.0800, we suspect it is still lower from the prior reads to allow the RBNZ to hold rates steady with an economy already in a recession.
We therefore see today's retracement lower to 1.080 as...
We’ve become so accustomed to headlines of ‘peak inflation’ and falling input prices that some have been throwing the wonderful ‘deflation’ word around. And we think most would enjoy a bit of deflation, as that would result in lower interest rates. However, with commodity prices (particularly oil) being a key driver of inflation, a lot of the softness can be tied...
Commodities were broadly lower yesterday with the CRB index falling to a 4-day low. Geopolitical tensions are rising following Russia’s decision to back out of a key grain deal which allowed Ukraine to export grain through the Black Sea. Weak data from China and news that Libya will restart oil production also saw WTI fall for a second day.
What has caught our...
Gold futures have fallen nearly 9% since the May high, but there are signs that it is trying to form a base around $1900.Whilst the psychological round number has helped to play a part, it also coincides with a volume cluster in the rally at the beginning of March. We therefore see the potential for a minor bounce at a minimum from current levels whilst prices...
We outlined a bearish bias in a previous USD/CAD article which clearly did not play out, thanks to hawkish comments from Fed members, hawkish FOMC minutes and stronger economic data for the US. However, a strong Canadian employment report on Friday has now seen odds shift in favour of a 25bp BOC hike this week – and if that is to be coupled with a soft(er) than...
USD/JPY has delivered a decent trend for bulls so far this year, having risen 14% since the January low. Yet we have been fully aware that net-short exposure to yen futures has approached a historical extreme as USD/JPT prices rose towards 145.
Incidentally, 145 was the upper range of the liquidity gap we mentioned in a previous article which has now been...
