USD/CAD Weakness to Persist as Bearish Series Takes Shape

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.

Image of daily change for vital currencies

USD/CAD Weakness to Persist as Bearish Series Takes Shape

Image of daily change for USDCADImage of Canda GDP

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

Image of USDCAD 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!

Image of DailyFX mercantile calendar

ADDITIONAL TRADING RESOURCES

Are we looking to urge your trade approach? Review a ‘Traits of a Successful Trader’ array on how to effectively use precedence along with other best practices that any merchant can follow.

Want to know what other banking pairs a DailyFX group is watching? Download and examination a Top Trading Opportunities for 2018.

— Written by David Song, Currency Analyst

Follow me on Twitter during @DavidJSong.

S&P 500 May Trade Higher Based on Sentiment

Samp;P 500 May Trade Higher Based on Sentiment

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

EUR/USD: Bullish Reversal in Play

EURUSD

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 Forecast: EIA Inventory Draw Fails To Boost Oil from Slump

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

Please supplement a outline for a image.

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:

Are we looking for longer-term research on Crude Oil and other popular markets? Our DailyFX Forecasts for Q2 have a territory for any primary currency, and we also offer an additional 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 popular and giveaway IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a over-abundance of useful trade 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 move a DailyFX Quarterly Forecasts and a Top Trading Opportunities, and a real-time news feedhas 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 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.

Communicate with Tyler and have your scream next by posting in a comments area. Feel giveaway to embody your marketplace views as well.

Discuss this marketplace with Tyler in a live webinar, FX Closing Bell, Weekdays Monday-Thursday during 3 pm ET.

Talk markets on chatter @ForexYell

USD/JPY: Net-Short Positions Up 18.9% Since Yesterday

USDJPY

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

FX Strategy: Pre-NFP Price Action Setups

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.

– If you’re looking for a authority on a FX market, we can help. To get a ground-up reason behind a Forex market, please click here to entrance a New to FX Trading Guide.

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

eurusd 4 hour chart

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

nzdusd weekly chart

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