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.

Good afternoon team,

Stop losses on the NZDCAD and NZDUSD can be moved to their open price.

We are revisiting the USDCHF as the set up is still ticking the boxes both technically and fundamentally. We now have a slightly better entry point. US unemployment and Non Farm Payroll is tonight which is a high impact event. The data will be released at 10:30pm. Expect volatility on all USD pairs. This is setting up to be a very important data release.

If you haven’t watched today’s members webinar you can catch up below. There are some very interesting charts setting up.

USDCHF – Technical Analysis

4 Hour Charts

The break of the negative trend line is still providing support which is a positive sign for long positions.

Trade Setup: BUY Market execution, current price 0.9100, stop loss 0.9055 and take profit target 0.9220.

Stop loss: 45 pips

Take profit: 120 pips.

If the market breaks back through the inclining trend line support, we will close out the position.

Manage your own risk, when the trade moves into a profit of 20 pips take your stop loss to the open price.

Good afternoon team,

We are looking to take a short position on the NZDCAD due to a number of technical factors.

Technical Breakdown

NZDCAD Monthly Charts

Descending channel is providing resistance. August’s monthly candle opened and closed inside the month previous creating an inside bar, when found at resistance reversals can occur.

NZDCAD Daily Charts

There has been a shooting star/ inverted hammer candle at a key resistance zone suggesting sellers are stepping into the market.

NZDCAD 4 Hour Charts

There has been a trend line breakdown followed by a retest on the 1 hour time frame. There is also a potential head and shoulders formation in play on the shorter term time frames.

Trade Setup: SELL Market Execution, current price 0.8830, stop loss 0.8861 and take profit target 0.8780.

Stop loss: 31 pips

Take profit: 50 pips

Keep in mind…

NZDCAD 15 Min Charts

The NZDCAD could be setting up for a head and shoulders formation. The left shoulder line can be found at 0.8850 which is also the 23% fib retracement. If the market pushes higher towards that zone, that will be an optimal entry point for a second position. 

Good morning team,

Unlucky yesterday with gold, gold dropped 300 pips but unfortunately did not make it to our entry point. You can now close out the pending order.

Today we are taking a look at the USDCHF. Last night the USD rallied due to the ADP employment change showing an increase of 428k, however this did fall below the estimate of 950k. The US labor market will remain in focus for the remainder of the week as we see the next round on initial jobless claims tonight followed by the unemployment and non farm payroll data tomorrow night.

On the risk front, Pompeo has announced new restrictions on the movement of Chinese diplomats in the US. The Secretary of State has retaliated against senior Chinese officials, “for years the Chinese Communist party has imposed significant barriers on American diplomats working inside the PRC”. The tit for tat relationship may continue leading into the US Election campaign.

We know the SMART money has positioned long on the DXY (USD) therefore it is a matter of time before the selling pressure ends. Check our latest feature “Market Sentiment Positioning” for more information.

Market Sentiment Positioning

USDCHF – 1 Hour Charts

There has been a negative trend line breakout followed by a retest of the broken trend line.

Trade Setup: BUY Market execution, current price 0.9109, stop loss 0.9052 and take profit 0.9195.

Stop loss: 57

Take Profit: 86

Manage risk by moving your stop loss to the open price when you are in a profit. IF the market breaks below the trend line support it will indicate further downside so we will close the position.

Good evening team,

We have a pretty busy economic calendar in the second half of the week. We will most likely have an active couple of trading days.

Profit taking has been seen on the short side of the USD after another leg lower to end the month of August. EURUSD, AUDUSD and NZDUSD all edging lower leading into the US session. There are mounting concerns regarding a second outbreak of Covid-19 across Europe. The Covid-19 pandemic appears to be easing across the Sun Belt in the US after two disastrous months. Whether the outbreak picks up again after the upcoming Labor Day long weekend and the resumption of school is yet to be seen.

There is complete insanity in the US stock market which is disconnected from the economic conditions. The US has still failed to agree to the second stimulus package yet US indices continue to rally in anticipation of the agreement.

Recent developments from the FED suggest their focus is shifting away from a specific inflation target towards an average. Additionally, their focus is to achieve maximum employment putting weight on the US labor market.

With that in mind, this week’s data release from the US is especially important, starting tonight with the US ADP employment change at 10:15pm. The US is forecasting roughly 950k people returning to work from a 167k the month previous. The big announcement will be seen on Friday with the unemployment rate and US non-farm payrolls taking center stage. The US is forecasting unemployment to decrease from 10.2% to 9.8% with 1.4million new jobs created in the NFP. Markets may begin to price in a strong results coming from the US meaning gold prices could suffer leading into Fridays announcement.

GOLD – 1 Hour Charts

Golds chart is looking very messy with some whipsaw action last week. The metal finally broke to the upside of the pennant formation, well done members who traded the structure breakout. Due to the inverse correlation between GOLD and the USD we will be looking to take a sell position from the right shoulder level.

Trade Setup: SELL LIMIT – Entry price 1975, stop loss 1987 and take profit 1943.

Stop loss: 120 pips

Take profit: 320 pips

I would highly recommend watching gold during the announcement if possible.

The set up becomes invalid if the market breaks above the shoulder line.

Good morning team,

The risk on environment continues with the US stock market printing another record high. Looking at the rest of the market especially in Europe, there appears to be a divergence as the French market is clearly lagging behind. This morning the ASX has had a strong open following Wall Streets lead. Moving into the European open later this evening it is likely the European Indices will also follow suit.

FRA40 (CAC)- Technical Analysis

The daily time frame is showing a potential bullish pennant formation.

4 Hour Charts

On the 4 hour charts we have seen a reversal Doji candle on a key support zone. This has resulted in a move higher when witnessed previously.

Trade Setup: BUY Market Execution, current price on focus markets 4940, stop loss 4840 and take profit left to run but targeting the 5138-5226 levels. 

Stop loss: 100 pips

Contract sizing: 1 contract = $10 USD per pip. 100 pip stop loss = $1000 USD risk.

Contract size of 0.1 = $1USD per pip. 100 pip stop loss = $100 USD risk

Contract size of 0.2 = $2 USD per pip. 100 pip stop loss = $200 USD risk.

If the market breaks to the downside of the pennant formation we will close out the position.