Matt Simpson, CFTe, MSTA
CityIndex
MARKET SNAPSHOT:
CHARTS OF THE DAY:
AUDNZD: Swing high formed?
This trade was highlighted last week and whilst it may have taken a little longer than anticipated to show signs of weakness, I do have more confidence we will begin to see losses soon.
The Bearish Pinbar which formed last Tuesday was the first clue, as the high if the wick was a pivotal S/R level. Another clue was provided on Thursday with an inside bar which is also a high-test Doji, which was followed by a bearish candle on Friday.
This bearish close helped produced the Shooting Star reversal candle on the Weekly chart to suggest further losses.
At time of writing we are beneath the 50eMA and weekly pivot which may cap any gains. A retracement within this area may provide further opportunity to enter short and target 1.073.
How price reacts here is crucial as it is the monthly pivot and has held has support previously. Any break below this level opens up 1.056.
GBPJPY: Bullish Pinbar on Weekly suggests continued Gains
Please refer to Friday's post of GBPJPY for a bigger picture view.
We did see the bullish pinbar at the close of Friday to suggest a pivotal swing low and a return to the dominant bullish trend. However we closed the week at a resistance zone which (so far) has continued to do its job. So the preference is for a pullback before another leg higher to 169.80 and 172.
In the event we see losses below 165.80 then preference is for a retest of the bullish trendline around 165.00
BRENT: Targeting 110.50
Brent enjoyed its most bullish day since end of November and took full advantage of the USD weakness on Friday. WTI had indeed provided the heads-up of a pending bullish breakout above 108.50 and seems to be on target for 110.50.
However I do favour a pullback towards 108.50 support zone prior to another leg up.
A break below the support zone opens up the lower trendline around 106.50.
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Editors’ Picks
EUR/USD clings to daily gains above 1.0650
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GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
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Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.