Four potential trade setups are on my list for this week as Oil, Gold, USDJPY, and USDCAD are testing key levels. USDCAD on the Verge of Breakout USDCAD daily chart USDCAD is trading around the neckline for a head and shoulders top pattern. The head and shoulders formed after testing the major resistance level I mentioned earlier around 1.3850. The 50-day SMA also resides around the neckline of the pattern. Hence, a breakout below the neckline at 1.3500 would indicate further downside toward the next support level at 1.3225 level. The ideal target for the head and shoulders trade setup is near ..read more

I am watching these three pairs for possible trade setups. USDCHF at Range Ceiling USDCHF Daily chart USD strength has been broad, including against the CHF. However, the CHF has been more resilient than some other currencies like the comdolls, despite the high-interest rate differentials between these currencies and the CHF. This is clearly due to the dampened risk appetite we are witnessing in the markets. Having that in mind, any dollar weakness driven by fresh poor economic data may drive the USDCHF lower. Given that we have reached the top of the sideways range the pair has been trading i ..read more

The EURCAD completed a multi-month head and shoulders bottom a couple of weeks ago. Indeed the price extended higher following the initial breakout to record a high at 1.3570. Since then, the price has been correcting lower. Retested the neckline where it found support as expected. The price formed a long lower shadow Doji candle. Indicating strong rejection. That was followed by holding back above the short-term broken support level at 1.3365(rebounding back above a support level after the initial breakout is a positive sign). In this trade setup, I am looking for a retest of the most recent ..read more

Gold Weekly Technical Analysis Summary: 1675-1680 level is the key for the gold’s next short-term direction. Gold failed to hold below the 1675-1680 long-term support level. The price rallied last week to retest the 50-day SMA, just short of the falling trend line that started from the June high. RSI has hit near the overbought area. Reaching near overbought in a downtrend is a typical sell signal. The recent bullish rally could be a mere correction within a longer-term bearish trend. Yet, retreating back above the 1680 major level is a bit worrisome for the bulls. Having that in mind, it’s a ..read more

Despite losing some ground early last week, the U.S. dollar managed to regain bullish momentum to end the week higher against most major currencies except the Canadian dollar. EURUSD Weekly Analysis Weekly Yield Differential The chart below is the 2-year yield differential between the euro bonds and the U.S treasury bonds. The differential chart illustrates which bond yield is rising or falling faster than the other. A rise in euro bond yield faster than the U.S. bond yield result in a rise in the light blue line and vice versa. It’s useful to look at the differential as there is to a certain ..read more

AUDUSD daily chart AUDUSD reversed from the key juncture and confluence of multiple technical levels I mentioned in my prior chart analysis. The 200-days SMA and a main horizontal resistance area (shaded on the chart). The downside reversal has been significant but continues to maintain the same behavior of sharp upside and downside waves we have seen since point B. The breakout below the rising trend line and the trend structure of lower highs and lows is technically bearish. Thus we could see a retest of point 2 at 0.7170, then point B at 0.7106. Upside pullbacks face 0.7270-0.7290 as a key ..read more

USDCAD daily chart The technical bias has turned bullish as the price failed to hold below the 1.2500 resistance area. Around the 200-day simple moving average. 1.2600 resistance turned support now should limit any downside pullback, with the next target at 1.2775-1.2810 next resistance area. Above 1.2810, 1.2900 is the next potential resistance level. While below 1.2600, we may see a retest of 1.2500 support ..read more

GBPUSD daily chart The overall structure of lower highs starting from point B remains intact. That keeps the bearish trend started from point A in place. As the price attempts towards the long-term 200-day simple moving average a few weeks ago were rejected, placing a new lower swing high. Although we are trading in a bearish trend structure, upside pullbacks have been sharp and may continue to be so. Hence, If we see a bullish bounce with a break above 1.3510, we may retest the falling trend line for the descending channel again. The break below the shaded support region around 1.3500 is a ne ..read more

EURUSD daily chart The EURUSD maintained the bearish trend, extending the downside below the targets mentioned in the prior analysis post. The pair is trading below the 61.8 percent Fibonacci retracement for the overall bullish wave A-B. A few days ago, the price formed a dragonfly Doji bullish reversal candlestick at the 61.8 level, but failed to sustain the upside rebound and broke below the candle’s low yesterday. Indicating strong bearish momentum. Technically, the downside bias is dominant and may extend, approaching a potential support area around 1.1150. Short-term resistance levels tha ..read more

In my latest analysis post, I highlighted the area shaded in red -on the weekly chart- as a possible reversal zone, or at least an upside barrier for the USDJPY. Indeed, as we tested that region the price found resistance and retreated. USDJPY Weekly chart The shaded area is a confluence of significant horizontal resistance(multiple swing highs), and the 78.6 Fibonacci retracement for the overall A-B wave. In addition to the 2.0 extension level for the latest downside pullback 1-2 wave. RSI was overbought. The recent bullish wave was rejected twice in the lower time frame daily chart. The pric ..read more