FX Weekly Technical Outlook (10 to 14October 2016)
USD/CAD
The pair ended last week on a positive note as prices managed to overtake 1.3280 weekly resistance despite strong employment figures from Canada on Friday.
The pair fell to a low of 1.3185 following the release before to bounce strongly, reinforcing the positive outlook in the short-term. Consequently, as far as this low remain in place, another rally in the direction of 1.3400/1.3430 resistance zone remain highly possible during the week ahead.
In addition, Oil prices began to show some signs of weakness around $50 psychological resistance, which can give another push to USD/CAD.
Looking at the daily chart, the pair has been in a consolidation phase for more than 3weeks and we have seen on Friday a daily close above the 200daily moving average, signaling that bulls have potentially won the battle and overtook the control of this pair for the time being. In the meantime, the weekly RSI indicator crossed above its 50 neutrality zone while the candle close showed a strong bullish engulfing for the previous 2weeks.
To summarize, the pair is ready for a big rally in the coming days and only a close below 1.3185/50 support zone will cancel this positive view.
FX Weekly Technical Outlook (10 to 14October 2016)
AUD/USD
The Aussie retreated below 0.7590 daily support after the pair showed a potential head and shoulders reversal pattern. In addition, prices broke below the mentioned above support as it represent the neckline for this bearish formation. Therefore, prices should remain under pressure in the near-term and another wave lower should begin towards 0.7530 support.
In the opposite, the negative picture should remain unchanged as far as 0.7645 peak is in place.
To conclude, the Australian Dollar began to lose its bullish momentum and a confirmation for the negative signals given in the previous week is expected. Traders should focus on 0.7645 resistance as only a break above it will cancel any negative attempt.
FX Weekly Technical Outlook (10 to 14October 2016)
NZD/USD
The New Zealand Dollar was one of the worst performer in the recent days. Prices have confirmed the head and shoulders pattern shown in the 4hour chart, as the break below 0.7200 psychological support triggered a big sell-off in the kiwi.
For the week ahead, we expect the weakness to resume in this pair, however when looking at momentum indicators we can a clear oversold condition, which can lead to an upside correction in the short-term. This potential recovery can reach as high as 0.7220/45 zone before to find strong resistance for another extension lower in the direction of 0.7085 weekly support.
In the other side, the bearish outlook will remain strong as far as 0.7310/30 barrier is intact.
The Euro traded sharply lower yesterday after bears managed to send prices below the daily range that was located between 1.1250 resistance in the upside and 1.1120 support in the downside.
The single currency broke below 1.1100 handle, which is likely to clear the path for further weakness in the direction of 1.0950 support, meanwhile we can see some buyers around 1.1000 psychological support, therefore, a short-term correction cannot be ruled out in the coming hours.
As of now, 1.1100/20 zone turned resistance in the hourly chart, and prices should remain under pressure below it. Looking at the level of interests following the FOMC meeting minutes today, 1.1060/80 is seen as a major barrier and in case the pair manage to recover from yesterday’s losses then we expect the decline to resume from there.
The Sterling remain under pressure from a med-term perspective, however the pair has reached a key technical support yesterday around 1.2085, which represents the 61.8% retracement of the recent bounce from the flash crash low. Consequently, we may see some stabilization in the next days, in the meantime, as far as 1.2330 peak is in place, the downside risks will persist.
In the near-term, the focus should be on 1.2200 support level followed by 1.2165 in extension as a break below this zone will trigger another sell-off in the direction of 1.2085 low.
The pair continue to fight in the short-term as the lack of bullish momentum keep the outlook neutral in the hourly chart. In the same time, we can see that prices respect the higher lows structure that began from 1.3000 low and have already bounced from the 50% retracement related to that cycle yesterday. Therefore, another attempt to break above 1.3270/80 resistance zone is likely in the coming hours and only a daily close above this barrier will confirm that the short-term trend has turned from sideways to bullish.
In the daily chart, 1.3400 area remain a theoretical target for this pair in the coming days unless a daily close below 1.3130 support happens.
The pair has confirmed the bullish reversal signs showed in the previous week as prices succeeded to overtake 104.00 barrier today. Consequently, the focus shifted to 104.40 resistance as it represents a major resistance level seen from early September. Therefore, traders should focus on this level to confirm another extension to the upside that can reach as high as 105.60 area in the coming days.
In the opposite, any drop should be short-lived as far as 102.40 low is in place, and a re-test of 104.00 former resistance may see new buyers again.
To summarize, the daily trend turned bullish for the time being and we will wait for a clear break above 104.40 peak to confirm a new rally towards 105.60/106.00 area.
The Australian Dollar traded slightly higher on the back of profit taking that followed last week sell-off. Looking at the recent price action, the pair broke below a major support which stands at 0.7590 level, confirming a reversal in the near-term trend.
As of now, as far as prices keep trading below 0.7625/45 resistance zone, a re-test of 0.7530 support is likely followed by a drop in the direction of 0.7475 daily support.
Overall, the trend remains bullish in the daily chart, however the hourly chart is calling for further weakness in the pair and only a daily close above 0.7645 resistance will cancel the negative outlook.
The Kiwi still considered as one of the weakest currencies in the FX market since last week, the pair showed a clear head and shoulders pattern reversal pattern that has been confirmed with the break below 0.7200 handle.
Actually, the sentiment remains bearish below the mentioned above level, which turned resistance in the hourly and therefore, a continuation lower in the direction of 0.7000 psychological support is likely in the coming days. In the opposite, if the pair manage to bounce during the Asian session, then we will look for resistance around 0.7120/40 zone which represent the 50/61.8% retracement of the recent bounce from 0.7043 low to 0.7200 peak.
The yellow metal has lost its bullish momentum after prices broke below 1300 psychological support. For the time being, prices stabilized around 1250 hourly support (June low), however the negative momentum remain strong and is still calling for further weakness in the coming days.
Consequently, prices can take two different paths in the next hours, either a correction higher in the direction of 1260 barrier before to resume the decline, or a downside continuation which will be confirmed with a breakdown below 1250 support.
In both cases, another dip towards $1235 per ounce is expected as far as 1277 high is in place.
