Good morning team,

We are taking a look at crude oil this morning. Due to corona-virus restrictions and lockdowns coming back into play across the EU and UK the demand for crude oil will no doubt decrease. The recent rally in the USD will also weigh on global commodities. We are not expecting the same level of selling pressure seen during the previous covid-19 lockdowns when Crude oil dropped to 0, however, there is potential for some further downside here.

The fundamentals and technical align with this set up giving it the green light for a position.

Crude Oil – 1 Hour Charts

From a technical perspective, there is potentially a head and shoulders formation in play. On the shorter-term time frame, the market has also broken a bear flag structure suggesting further downside. We are waiting for a retest of the bear flag formation.

Trade Setup: SELL Market Execution – current price 39.53, stop loss 40.73 and take profit targets can be found at 37.43 (neckline), we will then wait to see if the market breaks lower.

Stop loss: 120 pips

Take profit: 210 pips

Contract size of 1 = $1 USD per pip (00.01) on Focus markets. Please check the specification, it will change depending on the provider.

Good afternoon guys,

We are placing this position now in anticipation of a negative result from the RBNZ at 12:00.

Fundamentally, there is potentially an interest rate divergence occurring between the RBA and RBNZ. The RBA has held firm and declined to take rates into the negative territory, whereas the RBNZ has opened to doors for negative rates in the future. With that in mind there is a potential opportunity on the AUDNZD depending on the interest rate statement from the RBNZ today.

AUDNZD – Daily Charts

The AUDNZD has moved back into a key structural zone at 1.0800. If the RBNZ adds fuel to the negative rates story the AUD may jump against the NZD and make its way towards the previous swing high resistance. On the other hand, if the RBNZ takes a more positive tone and suggests rates will remain on hold for a longer duration, the AUDNZD will be at risk of breaking through support towards the 1.0650 support level.

AUDNZD – 1 Hour Charts

We are aligning with the fundamentals as market consensus is negative rates will occur in NZ at some point in 2021.

Trade Setup: BUY Stop, entry price 1.0823, stop loss 1.0763 and take profit targets 1.0873-1.0920

Stop loss: 60 pips

Take profit: 50-97 pips

Be aware of a fake break above the bull flag formation.

Good afternoon team,

Finally, a nice move on the USD as expected. Gold broke down from the pennant formation and we will be looking to trade once an entry point is met.

Risk concerns are coming back into the forefront of the news as corona-virus cases increase across Europe and the UK. We are looking at second lockdown measaures coming into play, which will result in a higher demand for USD. Additinaly, a negative tone was taken by the FED Chairman Jerome Powell over night, which also added fuel on the USD safe haven rally.

Whilst the JPY is strong across the board, there is a technical pattern setting up on the USDJPY that is of interest.

USDJPY – Daily Charts

Double bottom formation with an indecision candle.

USDJPY 1 Hour Charts

Broken negative channel formation. The market has retraced to the key 61% FIB retracement zone. There is also a potential inverted head and shoulders formation in play.

Trade Setup: BUY Market Execution, current price 104.53, stop loss 104.13 and take profit targets 105.10-105.40

Stop loss: 40 pips

Take profit: 57-87 pips

Good morning team,

A false breakout to the upside on gold, unfortunately, took our stop loss. Over the past couple of days, the market has moved in a fairly whipsaw action leading into the FED announcements. The USDCAD has created a number of bullish candlestick formations and we will be looking to trade in the favour of the USD.

The market is widely expecting the FED to keep interest rates on hold at 0,25%, however, traders will be looking to the FOMC economic projections. The FED has committed to keeping interest rates low for the next several years. The main event will be the quarterly update on GDP, unemployment and inflation. The FED is expected to maintain their cautious approach, however FOMC members are potentially looking at upgrading their previous negative economic forecasts. Therefore we see the possibility of USD strength coming out of the announcements. This will be a tricky event to trade as the timing is between 4 am-4:30 am tomorrow morning.

USDCAD – Daily Charts

The daily charts have created a number of bullish candlestick formations. The wicks to the downside indicate buyers are stepping into the market. The 1.3140 support zone is a key zone as mentioned in the member’s email on Sunday.

USDCAD 4 Hour Charts

The USDCAD is potentially setting up a head and shoulders formation. The shoulder line can be found at 1.3135 and the neckline 1.3250. We are looking to buy the pair in anticipation of a break above the neckline towards the next resistance zone at 1.3315.

Trade Setup: BUY market execution, current price 1.3187, stop loss 1.3107 and take profit 1,3315. 

Stop loss: 80 pips

Take profit: 128 pips

Good afternoon Trading Floor,

This morning we have seen another impulsive move higher on the AUD following the recent RBA minutes release. The extension of stage four restrictions in Melbourne may force the hand of the RBA during the October meeting. The RBA stated they will maintain a highly accommodative setting as for as long as required. Suggesting a potential rate cut could be on the cards. However, the RBA has taken a firm stance to negative rates therefore there is potentially cap towards the downside on the AUD. There could be a 1 cut and done scenario in play leading into the October meeting.

Data from China has also given the AUD further strength as Retail Sales and Industrial Production data beat the forecast. Given Australia’s reliance on its largest trading partner, it comes as no surprise that the fifth straight month of increased industrial output and the first increase in retail trade since December 2019 fuelled today’s rally. With economic data continuing to improve across the globe the AUD remains in high demand.

AUDJPY – Daily Charts

We have been watching the bullish triangle formation for some time. The market has now retested the broken resistance level and is using that as a new support zone.

AUDJPY – 1 Hour Charts

Looking at the shorter-term time frame there are a number of bullish technical patterns. Firstly, the inverted head and shoulders formation. A break above the neckline will signal a move towards the 1.27% extension, possibly the 1.618% at 78.70. There has been an impulsive 5 wave structure higher followed by an ABC correction towards the key 38% fib retracement zone.

We are now looking to go long on the pair based on fundamental and technical analysis.

Trade Setup: BUY – Market execution, current price 77.31, stop loss 76.70 and take profit target 78.17 – 78.60

Stop loss: 61 pips

Take profit: 86 pips-129 pips

Move stop loss to open price once the market breaks above 77.70.

Good morning guys,

The DXY looks very bullish on all time frames. You can move the stop loss for the USDCHF to the open price.

RSI is signalling a bullish divergence and we have just seen a hammer candle on a key support level. The 5 wave structure lower that we have been tracking for some time appears to have completed. We are now expecting a rise in the USD over the coming weeks. We will be looking to reposition on the DXY at some point as well.

With that in mind, we could see metals take a fall due to the inverse correlation.

GOLD – Technical Analysis

We have seen a series of lower highs on the daily time frame. There has been a shooting star daily formation which is a bearish signal. Gold has also broken below the inclining channel support line. We will be looking to enter a sell position anticipating a move lower.

Trade Setup: SELL Market execution, current price 1945.0, stop loss 1970.0 and take profit targets 1900.0 and 1880.0.

Stop loss: 250 pips

Take profit: 450-650 pips

There is a very strong support zone around 1920-1910 that we need to be aware of.

Good evening team,

We have a busy economic calendar tonight. All eyes will be on the EUR as economic data is scattered throughout the evening.

Tonight one set up we are watching is on the USDCHF. Economic data in the US has improved over the past couple of weeks, this is given traders something to buy into. The USD appears to have formed a base (for the time being) against a number of currencies.

Todays set up is looking at the USDCHF.

There is a number of key structures on the 4-hour time frame that is of interest.

USDCHF – 4 Hour Charts

Firstly, the USDCHF is moving towards the 38% FIB retracement level at 0.9070. The 23% FIB retracement zone can be found at 0.9050. This provides a buy zone and we will be looking to build long positions here. The 38% FIB retracement will also be a retest of the broken negative trend line and a potential right shoulder. If the head and shoulders formation plays out we could see the USDCHF trading at 0.9250-0.9310.

Trade Setup: BUY LIMIT – Entry 0.9070, stop loss 0.9020 and take profit 0.9250.

Stop loss: 50 pips

Take profit: 180 pips

A technical setup here on the EURAUD.

September has already seen a spike in volatility meaning risk assets such as the AUD could see some weakness.

The EURAUD has broken to the upside of a bull flag formation suggesting we could see a continuation to the upside.

EURAUD – 1 Hour Charts

Trade Setup: BUY Market Execution, current price 1.6265, stop loss 1.6180 and take profit 1.6378-1.6440.

Stop loss: 85 pips

Take profit: 113-175 pips

Good afternoon team,

This weeks focus will be on the ECB meeting on Thursday. Expectations are that the ECB may jawbone the currency due to fears of the currency gaining to much strength in such a quick time frame. Jawboning is where the relevant party, generally a central bank, plays down the strength of the currency. Interest rates are expected to remain on hold, however traders will be looking to Christine Lagarde for future policy direction during her press conference. The FED in the US has already lowered their inflation targets, there is a possibility the ECB may follow them down the same path. With that in mind we may see a weaker EUR leading into the later stages of the week, therefore the USD could gain from the weakness. We will be looking to position on the EUR leading into the announcement.

 Technical Analysis

DXY Weekly Charts

There is a strong inclining trend line support.

DXY 4 Hour Charts

RSI is signalling a bullish divergence after a five wave structure lower. Based on Elliott Wave theory we may now see a three wave corrective structure higher.

1 Hour Charts

On the short term time frame we can see a potential inverted head and shoulders formation.

We are now looking to position in favor of the DXY anticipating a move above the neck line towards 93.90.

We are positioning two trades on this set up in case of a short term pull back towards support before another leg higher.

MT5 CODE: USDOLLAR

Trade Setup 1: BUY – Market execution, current price 9308 (focus markets), stop loss 9230 and take profit target 9390.

Stop loss: 78 pips

Take profit: 92 pips

Trade Setup 2: BUY LIMIT – Entry price 9250, stop loss 9200 and take profit 9390.

Stop loss: 50 pips

Take profit: 140 pips

If the market breaks above the 9330 level before activating the second trade please close out the pending order.