Vantage FX Chart of the Day

[Vantage FX]

Chart of the Day:
If you’ve been following the Vantage FX blog, then you will have seen the AUD/JPY chart of the day that we featured a few weeks ago.

“Zooming out to the daily and we can see that price smashed through the 100 SMA that we were watching last week, and looks like it is reaching for channel resistance. I have re-drawn the horizontal support/resistance line to take in the spikes and we now have a nice confluence of possible resistance from which to take trades from.”

AUD/JPY Daily:

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A clean rejection off channel resistance sees price now testing short term support. Was this bullish move just a counter-trend, flag pattern?

Do you see opportunity trading AUD/JPY?

 

[Vantage FX]

Chart of the Day:
With the SP500 falling off resistance, across the Atlantic the FTSE100 has seen similar weakness set in but a confluence of support has caught my eye.

FTSE100 Daily:

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The daily chart shows the clean bullish channel that UK stocks have been trading in over the last few months, respecting both the lower and upper bands of the range.

FTSE100 4 Hourly:

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Zooming into the 4 hour chart, we can see the potentially juicy area of support that formed at the daily range bottom.

Do you see opportunity going with or fading momentum in the FTSE100?

 

[Vantage FX]

Chart of the Day:
With last night’s other major piece of news being the interest rate decision out of Switzerland, the SNB left rates on hold and maintained the now hollow pledge of intervening when needed to possibly weaken a currency they still see as overvalued. Today’s chart of the day takes a deeper look at the Swissy.

USD/CHF Daily:

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The daily shows a juicy fake-out above resistance, before the USD squeeze and Draghi’s relative inaction sent price on a one way ticket toward major trend line support.

USD/CHF 4 Hourly:

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But it’s the 4 hour chart that I wanted to highlight, starting with the beautiful bounce off the 0.9817 level and look at why it stopped there. First of all we have seen the level tested both on the support and resistance sides, with the major reactions marked on the chart above.

But look at the candle above the arrow. Price didn’t just bounce off the level, price BOOSTED off the level. One of the most important aspects of determining the strength of support/resistance levels is in how hard price has moved off the level in the past. As you can see, buyers previously dominated this level and when price came back to re-test, combined with confluence, this was just too much not to bounce.

See how to Trade the Australian Employment Data in the Daily Market Update on the Vantage FX News Centre.

 

[Vantage FX]

Chart of the Day:
With the long USD trade obviously crowded and expectations way too focused on the Fed hiking in December rather than how hard each subsequent hike from them on will be, we have spoken about a USD squeeze being a possibility.

USD/JPY 4 Hourly:

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Compare where we were to where price sits now and we see the channel break out was followed by sideways consolidation. Again, breakouts never happen as clean as the textbook images show (broken record I know, but too important not to continue saying) and consolidation in the direction of the original trend is what we so often see following a break.

In the case of USD/JPY, we see price continued up, in the direction of the original trend, finding resistance at the previous swing high and subsequently dropping hard from there. A squeeze or a healthy pull-back into major news, depending if you were long or short I guess.

In which direction do you see the biggest Forex trading opportunity heading into the Fed decision?

 

[Vantage FX]

Chart of the Day:
I’ve read a few headlines and market notes highlighting last night’s bounce in the price of oil and whether this could signal some sort of bottom. Today’s chart of the day takes a look at a few charts and what market sentiment could mean for Commodity traders heading forward.

OIL 4 Hourly:

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First of all we take a look at the 4 hour chart, showing yesterday’s reportedly strong rally off lows. Strong rally off lows? It was ONE 4 hour, counter-trend candle that flew straight into resistance!

Come on guys…

OIL Daily:

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I included the daily chart here to highlight the major bearish trend line that price has tucked back in below, also showing the strong daily rally from a longer time frame view.

With short oil an already very crowded trade, taking a contrarian view does have its merit, but calling lows off these charts isn’t something I’m jumping out of my skin to do. Do you see opportunity buying oil?

 

[Vantage FX]

Chart of the Day:
It seems crazy as the Fed is hiking rates, making the free money that has been fuelling the stock market bull run for so long now more expensive, but the SP500 weekly chart is screaming rally.

SP500 Weekly:

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With no doubt a tonne of stops sitting above those clean highs and early shorts from the August fall getting nervous, I just can’t help but expect some sort of a clean out above those highs.

New highs in stocks on a Fed rate hike. Forget about every conventional, what should happen economics lesson you’ve ever learned. You’re a trader now.

Are you trading FOMC? Read more in the Daily Market Update on the Vantage FX News Centre.

 

[Vantage FX]

Chart of the Day:
Where did the Oil has bottomed stories go? In Tuesday’s FOMC Lead Up blog, we featured Oil as our chart of the day, questioning the sensationalised headlines on the back of what the charts are actually telling us.

OIL 4 Hourly:

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The 4 hour chart shows the long term daily trend line that we have been watching, being clearly re-activated as resistance again. 1 bullish daily candle does not signal a bottom!

Is the opportunity in trading forex or trading oil?

 

[Vantage FX]

Chart of the Day:
USD/CAD continues to be the best performing currency pair on the Vantage FX Market Watch, breaking decade old swing highs and refusing to let up.

USD/CAD Daily:

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Following the immediate post-Fed USD drop, the Dollar bulls stepped it up a gear and wrestled back control. This Dollar strength combined with lower oil prices has seen USD/CAD go parabolic.

With Canadian CPI numbers out tonight, do you see opportunity fading USD/CAD into resistance?

 

[Vantage FX]

Chart of the Day:
We continue our look at OIL in the first chart of the day for 2016, zooming into the 4 hour chart.

OIL 4 Hour:

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The 4 hour chart highlights the point I make about the bearish trend above, with price cleanly stepping down between both short and long term support/resistance levels.

Support break, re-test previous support as resistance, rinse and repeat.

Find more event risk trading on the Vantage FX News Centre.

 

[Vantage FX]

Chart of the Day:
Okay, that’s enough looking at what happened, let’s turn our attention to the future and where some trading opportunities might be. Today’s chart of the day takes a look at one of our favourite currency crosses, Pound/Yen!

GBP/JPY Weekly:

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Zooming out to the weekly on our GBP/JPY chart, we see the obvious bullish trend broken, retested and a continuation down. It gets interesting here, because this is the first level of major horizontal support that price has encountered since the change in trend. This level has been a key reaction point in the past, with the last huge bullish rip coming off it.

We’ll be watching for a reaction from here.

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On the Calendar Wednesday:
NZD GDT Price Index (-1.6% v 1.9% previously)
CNY Caixin Services PMI

EUR Italian Bank Holiday
GBP Services PMI

USD ADP Non-Farm Employment Change
CAD Trade Balance
USD Trade Balance
USD ISM Non-Manufacturing PMI
USD FOMC Meeting Minutes

Do you see opportunity trading GBP/JPY?