Matt Simpson, CFTe, MSTA
CityIndex
UP NEXT:
GBP: Despite most attention being on Scottish Referendum today's CPI could bring further pressure to increase interest rates, regardless of the outcome. Taking into account that UK is only 2 of G7 nations to not have their growth forecast cut by OECD then we may see buying pressure if CPI comes in strongly above expectations.
EUR: German ZEW is a 'nice to know' indicator but I doubt it will make EURUSD move too much going into FED/FOMC meetings tomorrow.
CAD: The text to Poloz speech is released 15 mins before the listed time. BoE is in a neutral stance (as it has been for over 1 year) but any hawkish comments may see USDCAD edge lower from the highs. A more neutral or Dovish speech should help USDCAD up towards bullish targets mentioned below.
TECHNICAL ANALYSIS:
USDCAD: Potential Swing low has formed
Whilst USDCAD hovers near the recent highs it does still allow for another leg higher. H4 is close to completing a Bullish Engulfing candle on higher volume to suggest a swing low has established above the weekly pivot / 1.103 support zone.
Initial target is the 1.11 high then 1.1159.
We may see an initial run up to MR2 but if we see weakness around these levels it highlights potential for a lower high to form (and an eventual double/triple top).
A break below Weekly pivot confirms change in trend and targets 1.095.
USDJPY: Favours buy-the-dip strategy
Similar to USDCAD, there is a potential swing low near the recent highs. Due to the multi-timeframe momentum being bullish we have to assume another high until bearish divergences appear on multiple timeframes.
- As long as we remain above 106.95 the target remains 107.80
- A break below 106.95 targets 106.1
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