Month: May 2018

CANADIAN DOLLAR TALKING POINTS

The Canadian dollar is behind underneath vigour as updates to a Gross Domestic Product (GDP) news moderate a opinion for growth, and USD/CAD stands during risk of confronting operation firm prices over a residue of a week as marketplace participants coddle a timing of a subsequent Bank of Canada (BoC) rate-hike. Nevertheless, new cost movement suggests a debility will insist as USD/CAD triggers a uninformed array of reduce highs lows, with a span now during for a incomparable improvement as a BoC alters a opinion for financial policy.

USD/CAD Weakness to Persist as Bearish Series Takes Shape

The 1.3% enlargement in Canada’s enlargement rate might keep a BoC on a sidelines during a subsequent assembly on Jul 11 as a figure falls brief of expectations, and a executive bank might continue to validate a wait-and-see proceed for financial process as officials oath to ‘to consider a economy’s attraction to seductiveness rate movements and a enlargement of mercantile capacity.’

Keep in mind, a uninformed projections from Governor Stephen Poloz and Co. might fuel conjecture for another rate-hike in 2018 as ‘higher seductiveness rates will be warranted to keep acceleration nearby target,’ and a BoC might sounds some-more hawkish in a second-half of a year as ‘inflation in Canada has been tighten to a 2 per cent aim and will expected be a bit aloft in a near tenure than foresee in April.’

In turn, a new change in executive bank tongue might continue to boost a seductiveness of a Canadian dollar, with USD/CAD now during risk of giving behind a allege from a prior month amid a unsuccessful try to exam a 2018-high (1.3125).

USD/CAD Daily Chart

• Near-term opinion for USD/CAD stays capped by a Fibonacci overlie around 1.2980 (61.8% retracement) to 1.3030 (50% expansion), with a span during risk for a incomparable improvement generally as it triggers a uninformed array of reduce highs lows, while a Relative Strength Index (RSI) continues to lane a bearish arrangement from progressing this year.
• Need a break/close next 1.2830 (38.2% retracement) to open adult a Fibonacci overlie around 1.2720 (38.2% retracement) to 1.2770 (38.2% expansion).
• Next segment of seductiveness comes in around 1.2620 (50% retracement) followed by a overlie around 1.2440 (23.6% expansion) to 1.2510 (78.6% retracement), that sits only underneath a April-low (1.2527).

Interested in carrying a broader contention on stream marketplace themes? Sign adult and join DailyFX Currency Analyst David Song LIVE for an event to plead intensity trade setups!

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— Written by David Song, Currency Analyst

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Traders Remain Net-Short given May 3

US 500: Retail merchant information shows 39.8% of traders are net-long with a ratio of traders brief to prolonged during 1.52 to 1. In fact, traders have remained net-short given May 03 when US 500 traded nearby 2634.13; cost has changed 2.9% aloft given then. The series of traders net-long is 2.1% aloft than yesterday and 3.2% aloft from final week, while a series of traders net-short is 4.8% aloft than yesterday and 10.1% aloft from final week.

SP Trades with Bullish Bias

We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests US 500 prices might continue to rise. Traders are serve net-short than yesterday and final week, and a multiple of stream view and new changes gives us a stronger US 500-bullish contrarian trade bias.

— Written by Abdullah AlAmoudi, DailyFX Research

Short Trades are Up By 20% Overnight

EURUSD: Retail merchant information shows 52.5% of traders are net-long with a ratio of traders prolonged to brief during 1.1 to 1. In fact, traders have remained net-long given Apr 30 when EURUSD traded nearby 1.21294; cost has changed 3.7% reduce given then. The series of traders net-long is 12.7% reduce than yesterday and 16.2% reduce from final week, while a series of traders net-short is 20.2% aloft than yesterday and 18.6% aloft from final week.

EUR May Reverse Higher

We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests EURUSD prices might continue to fall. Yet traders are reduction net-long than yesterday and compared with final week. Recent changes in view advise that a stream EURUSD cost trend might shortly retreat aloft notwithstanding a fact traders sojourn net-long.

— Written by Abdullah AlAmoudi, DailyFX Research

Crude Oil Price Forecast Talking Points:

• The ONE Thing: WTI continues to stutter on an comprehensive and relations basement after OPEC headlines about increasing prolongation align with risk-aversion on uninformed US tariffs. The WTI-Brent widespread has blown out to three-year extremes with Aug contracts display a $10/bbl spread. The bonus of WTI has widened on impassioned US production.
• Thursday’s EIA Crude Oil Inventory Report showed a warn draw,but record prolongation and bottlenecks stole a uncover in preference of short-term bears.
• WTI Crude Oil Technical Analysis Strategy: A pull-back is in play with insurgency favored between $68.50-70.15 per barrel.
• Access a new Crude Oil Fundamental Forecast here

Key Technical Levels For WTI Crude Oil:

Resistance: $68.50-70.15 per tub – 38.2-61.8% retracement of 9.65% decrease from final week’s high

Spot: $67.11/bbl

Support: $65.80-$64.33 per tub – May 28 low 61.8% Fib prolongation from Wednesday’s high

WTI-Brent Spread Blows Out On Record US Production

Data source: DoE, Bloomberg

WTI wanton oil is set to trade reduce than expected in destiny months opposite a tellurian benchmark Brent. Particularly, when we demeanour during a Aug WTI-August Brent widespread between futures contracts, you’ll see a $10 widespread as displayed on a draft above in blue. The orange line is displaying a boost in US production, that is during record levels.

Crude is reduce by 5% over a final five days on factors that extend over OPEC.

The mixed factors holding Crude Oil lower

Crude continues to unemployment on a handful of factors: Things were going so good for wanton bulls until OPEC spoke up. Many investors would contend OPEC simply supposing what a marketplace indispensable for tightening signs in a earthy marketplace was extreme. Tightening is visualized by looking during a reward a near-dated agreement we a futures marketplace receives relations to a after antiquated contract, and a reward was attack ancestral levels.

OPEC came out and pronounced they’d expected supplement supply to a market, that creates clarity after Iran sanctions and a miss of supply from Venezuela and Angola led to astonishing tightness. However, a oil marketplace is also traffic with a strengthening dollar that lifted a general cost of WTI crude. However, it’s expected too early to contend a late-cycle mercantile bang that typically aligns with rising oil is over.

Technical opinion for WTI crude: pierce toward $62/bbl in view

After descending from a rising wedge, WTI wanton now is creation an guileless pierce lowr that could take a span toward $62/bbl, that was a focus seen progressing this year.

As mentioned above, traders see Brent trade during a top reward to WTI given 2015 after a extended build of US inventories as reported by a weekly EIA Inventory Report. Given a reward that Brent is now enjoying, OPEC apparently had a indispensable incentive to roll-back formerly hold prolongation curbs that might expostulate a whole bend lower.

Unlock a Q2 18 forecast to learn what will expostulate trends for Crude Oil in a flighty Q2

Recommended Reading: 4 Effective Trading Indicators Every Trader Should Know

More for Your Trading:

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If you’re looking for educational information, a New to FX guide is there to assistance new(er) traders while a Traits of Successful Traders research is built to assistance whet a ability set by focusing on risk and trade management.

—Written by Tyler Yell, CMT

Tyler Yell is a Chartered Market Technician. Tyler provides Technical research that is powered by elemental factors on key markets as good as trading educational resources. Read some-more of Tyler’s Technical reports via his bio page.

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52% Of Traders Are Net-Long

USDJPY: Retail merchant information shows 52.0% of traders are net-long with a ratio of traders prolonged to brief during 1.08 to 1. In fact, traders have remained net-long given May 23 when USDJPY traded nearby 109.258; cost has changed 0.5% reduce given then. The series of traders net-long is 2.3% reduce than yesterday and 7.0% aloft from final week, while a series of traders net-short is 18.9% aloft than yesterday and 6.8% aloft from final week.

USDJPY Trades With Mixed Bias

We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests USDJPY prices might continue to fall. Positioning is reduction net-long than yesterday though some-more net-long from final week. The multiple of stream view and new changes gives us a serve churned USDJPY trade bias.

— Written by Abdullah AlAmoudi, DailyFX Research

In this webinar, we looked during price action setups forward of tomorrow’s recover of US Non-Farm Payroll numbers for a month of May. Tomorrow’s NFP news is accented with a integrate of additional equipment of interest, as Spain appears to be headed for a no certainty opinion for Prime Minister Mariano Rajoy; and a subject of trade tariffs came adult again currently when a United States announced that steel and aluminum tariffs will be levied on Canada, Mexico and a EU.

Talking Points:

– If you’re looking to urge your trade approach, a Traits of Successful Traders investigate could help. This is formed on investigate subsequent from tangible formula from genuine traders, and this is accessible to any merchant totally free-of-charge.

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If you’d like to pointer adult for a webinars, we horde an eventuality on Tuesday and Thursday, any of that can be accessed from a next links:

Tuesday: Tuesday, 1PM ET

Thursday: Thursday 1PM ET

US Dollar Pullback Continues as Rate Expectations Soften

As a knock-on outcome of a theatrics in European politics, rate expectations have started to get pushed-out around a US and a Federal Reserve. While a travel in a integrate of weeks during a bank’s Jun assembly is still high probability, a awaiting of a sum of 4 hikes this year out of a Fed looks utterly a bit some-more questionable, with contingency as of this morning down to 27%. This has helped a US Dollar to continue pulling back after a unsuccessful try during 95.00 progressing in a week; and as we saw on shorter-term charts, there’s a box to be done for short-side strategies in a US Dollar. Coming into this week, we had set adult AUD/USD and NZD/USD for that scenario, and with those markets display varying degrees of development, we continued to demeanour to a offset proceed around a US Dollar as we proceed tomorrow’s NFP report.

EUR/USD Testing Key Resistance

The dump in EUR/USD was quick and violent, and when we re-encountered this pivotal support territory on a approach down, this was a small speed strike that helped to delayed a pierce over a integrate of days. But – this turn had played out utterly a bit in a latter-third of final year with countless inflections, and earlier this morning, prices bounced adult to this territory to find a bit of resistance. This area runs from 1.1685-1.1736, as organisation by a integrate of longer-term Fibonacci levels, and this area can assistance to justify short-side plays. If prices do not stay next 1.1750, another intensity area of insurgency exists from 1.1821-1.1855, and this could also be an area to theatre short-side plays should a stream territory of insurgency not hold.

EUR/USD Four-Hour Chart: Finds Resistance during a Familiar Area

Chart prepared by James Stanley

GBP/USD Holds a Lows, For Now

An component of support finally started to uncover in Cable (GBP/USD), and this is a area that we’ve been following that runs from 1.3269-1.3321. The past integrate of days have seen prices organisation within this zone, and a span has jostled behind towards a 1.3300 area. Nonetheless, sellers have remained active, and given how oversold a span was entrance into this week, we could be saying some-more of a short-squeeze than an tangible bullish move. This highlights a same territory of intensity insurgency that we were looking during progressing in a week around 1.3400, and this is something that could be helped by Non-Farm Payrolls tomorrow. If we see a breeze of USD-weakness, this could assistance to poke GBP/USD a bit-higher, and if we do see lower-high insurgency set-in during or around that 1.3400-zone, a doorway opens for short-side setups.

USD/CHF Continues to Turn Lower

We had looked during the short-side of USD/CHF on Tuesday as a bearish-USD play, and that pierce has continued to uncover guarantee as Franc-strength has slanted a span deeper next a relation level. This keeps a short-side of USD/CHF of seductiveness as prolonged as prices sojourn next 1.0000, and longer-term targets could be destined towards a feeder area of intensity support around a .9700-handle.

USD/CAD With a Heavy Two Days of Volatility

Yesterday’s BoC helped to pierce on a clever Canadian Dollar, and afterwards today’s tariff speak helped to retreat that move. We looked during a awaiting of personification reversals, focusing on CAD strength and looking to blur this morning’s headline-driven pop. As prolonged as prices sojourn next 1.3000, short-side swings sojourn an appealing option.

USD/JPY Becomes Messy

The span continues to lure a support territory that we’ve been following that runs from 108.62-109.19. Shorter-term price action shows a lacking response from bears, however, and this creates a short-side of a span a bit reduction attractive. The prolonged side of a span isn’t all too appealing either, as bulls have been incompetent to pull a span with most conspicuous strength over a past week. This could, however, be used to bottom into other trades, vocalization to a intensity for short-side EUR/JPY and GBP/JPY scenarios.

NZD/USD for Short-USD Strategies

This was the second span we were following for USD-weakness this week, mostly looking to a longer-term operation that stays in a pair. This was a adored span for USD-strength in Apr as we looked to play a short-side of that range. With that bearish thesis now priced-in, we started to follow a prolonged side for USD debility as one of a FX Setups for this week. With a span now trade behind above a .7000 level, that thesis stays viable. We looked during a integrate of opposite ways of operative with this move.

NZD/USD Weekly Chart: Prices Bounce From Range Support

Chart prepared by James Stanley

To review more:

Are we looking for longer-term research on a U.S. Dollar? Our DailyFX Forecasts for Q1 have a territory for any vital currency, and we also offer a engorgement of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay adult with near-term positioning around a IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a engorgement of tools, indicators and resources to assistance traders. For those looking for trade ideas, a IG Client Sentiment shows a positioning of sell traders with tangible live trades and positions. Our trading guides pierce a DailyFX Quarterly Forecasts and a Top Trading Opportunities; and a real-time news feed has intra-day interactions from a DailyFX team. And if you’re looking for real-time analysis, a DailyFX Webinars offer countless sessions any week in that we can see how and because we’re looking during what we’re looking at.

If you’re looking for educational information, a New to FX guide is there to assistance new(er) traders while a Traits of Successful Traders research is built to assistance whet a ability set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX