Technical Analysis by Admiral Markets

[Admiral Markets]

EURUSD PRE FOMC: CONSOLIDATION WITHIN THE BULLISH PENNANT



As I have already explained in my latest FXstreet article I don't expect a rate change on US cash rate and FOMC could be neutral on future rate hikes that will largely be subject to meeting the inflation objectives of the USFRB.

Technically EURUSD is showing a bullish pennant (EMA89, previous double top,WPP, L3) and we can CLEARLY see the consolidation within the pennant that suggests investors are waiting for FOMC decision. After the decision volatility should spike and EURUSD will move. There are 2 possible scenarios. Below 1.1055 EURUSD is berish targeting 1.1015 and 1.0985 zones. If the pair spikes above 1.1125 than we could see 1.1190 and 1.1250 subsequently. Whatever the decision will be we should watch the H1 chart and the break of the consolidation below or above the pennant.


“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

EURUSD huge momentum exposes further upside



This is what I like to see and this is when traders can make both pips and money trading momentum, breakouts and subsequently making positional trades. Yesterday FED neutral to dovish statement (more dovish though) sparked the upside momentum on the EURUSD pair and BOOM! The pair behaved as predicted via this analysis that was published before FOMC and after a perfect consolidation the pair broke all upside levels hitting the target.

What would EURUSD need to do for an encore? Obviously the pair is going towards magnetic 1.1375 level (Feb high + H4 camarilla WPP) where we could see some initial selling. 4h close above it will expose 1.1555 that could be next swing target. Positional trades could happen within 1.1260-50 zone (23.6, H3, inner trend line). Because we don't see any retracement on 4h time frame yet we can use historical price action that is repeating in now moment (see the chart). That's the beauty of Forex trading.



“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

AUDUSD Ascending Scallop gaining momentum



The AUDUSD is gaining its handle above 0.7500 level and the RBA stayed neutral on recent AUD strength.In my opinion its mainly USD weakness, but Commodities prices have improved the last few weeks - Iron Ore, Copper, Oil (LNG), Gold, and Bauxite and AUDUSD is linked to hard commodities.

The technical analysis is showing the ascending scallop formed on H1 chart and clear POC within 0.7560-75 zone (X-cross, WPP, 38.2, EMA89). Additionally there is an inner trend line that shows buying strength on pullbacks (red rectangles) Retracement within the zone is additionally supported by historical breakout point (blue rectangle) at 0.7590 so that level can also reject the price. The target is 0.7670 and 4h close above 0.7670 will target 0.7750.


“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

EURUSD Watch for 1.1055 if it doesn't spike up from POC



The EURUSD is standing at very important POC 1.1145-60. This is 4h support and POC ( T-89 ™, Inner Trend Line, Historical Bullish Order Block). If EURUSD wants to go up it should spike from POC else we might see a drop towards 1.1055 -a historical BPC pattern. On the chart we can easily identify POC with T-89 and the support EURUSD is currently standing at.If the pair rejects next level is 1.1220 then 1.1270 and 1.1340 but if the pair doesn't reject than 1.1055 is in sight with 1.1020 and 1.0980 as next levels.

So pay attention to bounce to the upside and if don't see the bounce than 1.1055 will be exposed.



“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

GBPUSD is close to important crossroads



Bad inflation data is weighting on the GBPUSD pair (0.3 % vs 0.4 % expected) and that could possibly mean no rate hike anytime soon and it caused a deeper retracement in the price. Technically we can see an uptrend on H4 time frame and the price is reaching deeper retracement zone and important crossroads.

POC (78.6, historical buyers, trend line) 1.4140-55 is important as the price could find now moment buyers that would spike the price up towards L4 1.4220. However only if the 4h candle closes above 1.4220 we could see 1.4350 again. POC is very close to the first leg of bearish M pattern too, so if 1.4115 is lost the price will go for another test of 1.4050 and 1.4000.




“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

GBPAUD is moving in opposite correlation to AUDUSD



Yesterday's AUDUSD analysis on Session Recap webinar has already been respected as AUDUSD moved +50 pips from POC also providing us with the cue where the GBPAUD may go. As you can see from the correlation table which is a part of Admiral Markets Supreme Edition AUDUSD and GBPAUD are moving in the opposite direction that is indicated by a strong negative index -92. As my Session Recap analysis predicted AUDUSD rejected straight from 0.7570 while GBPAUD continued north.

Technically there is still a scope for more upside on GBPAUD pair. After tanking that happened after Head and Shoulders breakout, V shaped reversal turned the pair to the upside.1.8820-40 is POC zone and the pair is trying to reach 1.8915. If H1/H4 candle closes above 1.8915 we should see 1.8950 and 1.9015 if 1.8950 breaks. Momentum in strong - as indicated by a Price Action zigzag + MACD above 0 so GBPAUD is in buy the dips mode and a potential breakout of H3 level.


“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

AUDJPY Bearish divergence could bring risk-off sentiment to the fore



Commodities and Equities prices have rebounded from their interim lows of Early February 2016, and it has resulted with strong gains across these markets. Clearly this has been a risk-on scenario, causing AJ to be bullish during this period as well. Equities are reaching key resistance levels and are showing signs of market fatigue by the End of this Quarter and Month. This shows that risk-off sentiment may come back to the fore, meaning it could be a nice setup for a short position on AJ.

Technically 86.15-30 zone (now moment sellers, WPP, 50.0) is POC, and the pair should ideally be contained below the zone and below the trend line (blue with red rectangles). If h4 confirms the shooting star we may see more downside for the pair. We also have a bullish T-89 but what we also see is giant bearish divergence that additionally confirms my opinion about fundamental and technical outlook. The price is at 85.90 at the moment of writing this analysis. Now what we could also see is a possible spike to POC (because of bullish T-89 and general uptrend) towards 86.15-30 zone (now moment sellers, WPP, 50.0) where we could see possible sellers. The first target is 85.65 and only a 4h close below (or strong H1 momentum) will target 85.17.

Have in mind that this is a counter trend analysis due to above mentioned factors + divergence and if the pair goes above 86.70 the bearish outlook will become invalid.




“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

AUDUSD might spike up at channel bottom



The AUD pair is heavily correlated to Iron ore as the world's largest iron ore exporter. Recently Iron ore price has spiked up and that happened after China announced huge infrastructure investments (they will import Iron ore heavily) so that might be good for AUD currency. The pair showed good numbers in the change in the number of new building approvals issued and worse result in retail sales. You can see it in the calendar.

Technically AUDUSD is in uptrend and H4 is showing a clear up channel. The POC comes within 0.7560-0.7580 (L4, 78.6) and if the pair proceeds towards POC the new wave of buyers should show up spiking the price towards 0.7620 and 0.7740. Only if price breaks 0.7740 the way towards 0.7805 will be open. However pay attention to 0.7510 as the 4h close below will negate bullish scenario.



“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

EURUSD PRE FOMC Consolidation



Today the most important event is FOMC minutes where FED will be providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates and future guidance of their economic policy. I personally expect dovish FED minutes because on last meeting chief Yellen implied that only 2 instead of 4 rate hikes would be appropriate for 2016. If the FED confirms and repeats the same outlook today,than they will probably explain it deeper so the minutes should be dovish. Currently I am ruling out April hike and I will be paying a close attention to ANY clue of next interest rate timing. But as with FED its never 100 % sure.

Technically EURUSD is consolidating after a nice move to the upside.As I have showed on previousSession Recap the EURUSD has rejected straight from 1.1330 POC zone reaching 1.1405 and that was good to fill our day with green pips before FOMC. Traders should pay attention to 1.1335 to the downside as the break below will expose 1.1300 and 1.1225. To the upside 1.1435 is the important resistance and the break above will expose 1.1450 and 1.1500. Dovish minutes should spark another rally (buying the dip or a direct bounce) in EURUSD but if the FED surprises us with a hawkish statement then I expect EURUSD to drop.



“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

GBPUSD trend line break suggests further downside



We have seen no specific trigger to GBPUSD huge drop as there has been no U.K. data to digest except for Services PMI. Recent BREXIT pools suggest the vote could go wither way as in the recent polls there are 43 % of those who support UK in EU while 41 % think that UK will be better without EU (Source:Financial times). So, fundamentally it seems that bearish bias is all over the GBPUSD market and technical analysis supports the bearish bias too.

1.4130 failed to hold the price substantially in the bullish zone and we can see that H4 important trend line has been broken. The trend line is also thrusting through the range bound zone (red rectangle) and that accounts for POC 1.4135-1.4170. Regular bullish divergence spiked up the price yesterday towards current POC and it seems that the retracement has lost its steam. At this point,the zone is rejecting the price and any pullbacks within the zone could be sold into if bearish trend is to persist. Next target should be 1.4037 and ONLY if we see a 4h close below 1.4000 the door for 1.3885 will be open.



“Original analysis is provided by Admiral Markets”