USDCAD broke trend line support at 1.1155/50

Daily Forecast - 30 October 2014

USDCAD Spot

USDCAD broke trend line support at 1.1155/50 which then acted as resistance for a move towards 1.1110/00 but we bottomed 8 pips early at 1.1118. A strong bounce hit 1.1223. Watch the 1.1220/25 area today as this is the key to direction. We should struggle here today but this looks like a bull flag so be ready to go with a break higher. This would be a positive short term signal & should target 1.1250/55. If we continue higher look for strong resistance at 1.1280/85 & a high for the day likely.

There is a good chance we will fail to beat 1.1220/25 which should trigger a move lower to 1.1180. If we continue lower look for support at 1.1160 but if we cannot bounce from here we could retest support at 1.1118/10. Exit shorts & try longs from here down to excellent short term support at 1.1090/080.

Bund December contract

Bund trading sideways as we unwind an overbought stochastic but we now look ready to head higher. Same levels apply for today with support at 150.27/23 then last week's low at 150.10/05. This held the downside perfectly yesterday, but longs here need stops below 149.95. A break lower today targets 149.80/75 then good support at 149.50/45. Try longs with stops below 149.30.

Holding above support at 150.27/23 is positive but today's main challenge is resistance & the 3 day high at 150.65/70. This held a move higher yesterday but a better chance of a break higher today. Shorts therefore need stops above 150.75. Be ready to go with a break higher towards 150.95/151.00. A break above 151.12 then required to keep the outlook positive & target 151.28/33.

Emini Dow Jones December contract

Emini Dow Jones continued higher as expected for a test of October highs at 17000/020 & topped exactly here at 16992. we should struggle here again today as we battle an overbought market. Any shorts however need stops above 17060. Be ready to go with a break higher to target 17090/17100 then 17140/150.

Immediate support at 16845/825 held the downside perfectly yesterday & could do so again today. However below here look for 16799/795 then a buying opportunity at 16760/750. Longs here need stops below 16700.

Nat Gas December contract

Natural Gas December hitting resistance at 3850/60 yesterday. Failure to hold above 3895 today risks a slide to support at 3770/60 which could hold the downside as the outlook turns more positive in the short term. However longs need stops below 3735 for a test of support at 3710/05. Try longs here looking for a low for the day but with stops below 3690.

Holding 3795 sees a retest of strong resistance at 3850/60. A good chance of a high for the day here again as we because overbought short term. However shorts need stops above 3880. Be ready to go with a break higher then using 3860 as support for a move towards 3900/05 & perhaps as far as strong resistance at 3925/35.