Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Forex Trading - Will USD/CHF Rally Above 0.9200?

Currencies / Forex Trading Aug 27, 2014 - 11:40 AM GMT

By: Nadia_Simmons

Currencies

Earlier today, the U.S. Commerce Department showed that total durable goods orders (with transportation items) rose by 22.6% last month, well above expectations for an increase of 7.5%. Despie this bullish data, core durable goods orders (wihout volatile transportation items) declined by 0.8% in July, missing forecasts for a 0.5% gain. As a result, the U.S. dollar moved lower against major currency pairs. Did this drop change the USD/CHF outlook?


In our opinion, the following forex trading positions are justified - summary:

EUR/USD: none
GBP/USD: none
USD/JPY: none
USD/CAD: none
USD/CHF: none
AUD/USD: none

EUR/USD

                                     
The medium-term picture hasn’t changed as EUR/USD is still trading slightly below the strong support zone created by the 38.2% and 61.8% Fibonacci retracement levels. Therefore, what we wrote yesterday is up-to-date:

(…) This is a strong bearish signal, which suggests further deterioration and a drop to around 1.3104-1.3109, were the 70.7% Fibonacci retracement meets the September low. (…) although the RSI declined to its lowest level since July 2012 (while the CCI and Stochastic Oscillator are oversold) suggesting a pause or corrective upswing, we should keep in mind that as long as there is no invalidation of the breakdown below the green area, another attempt to move lower can’t be ruled out.

Did the very short-term picture change? Let’s check.

From this perspective, we see that EUR/USD moved lower and hit a fresh multi-month low. Although the pair rebounded in the following ours, the exchange rate still remains well below the previously-broken lower border of the declining wedge and also under the orange gap (reinforced by the 61.8% Fibonacci retracement and the 100% Fibonacci price projections). All the above provides us with bearish implications and means that as long as there is no invalidation of the breakdown below these levels, another downswing is quite likely. If this is the case, the initial downside target for currency bears will be 112.8% Fibonacci price projections (based on the May and July highs and the June low) around 1.3146. Nevertheless, we should keep in mind that all indicators are oversold and very close to generate buy signals, which suggests that the space for further might be limited and a corrective upswing is just around the corner.

Very short-term outlook: mixed
Short-term outlook: mixed
MT outlook: mixed
LT outlook: bearish

Trading position (short-term): In our opinion no positions are justified from the risk/reward perspective at the moment.

USD/CHF

The medium-term outlook hasn’t changed much as USD/CHF still remains above the reviously-broken 38.2% Fibonacci retracement (based on the entire May 2013-March 2014 decline) and the recent highs. Today, we’ll focus on the very short-term changes.

The first thing that catches the eye on the daily chart is a breakout above the upper line of the purple trend channel. This is a strong bullish signal, which suggests further improvement and an increase to the next Fibonacci extension around 0.9216. Nevertheless, we should keep in mind that the RSI approached the level of 70, while the CCI and Stochastic Oscillator are overbought and very close to generate sell signals. Additionally, the recent upswing took the pair to the 173.2% Fibonacci extension (which serves as a strong resistance) and the size of the move corresponds to the height of the blue declining trend channel, which may reduce a buying pressure. What does it mean for USD/CHF? If the pair closes the day above its major support line, we’ll read today’s earlier decline as a verification of the breakout. In this case, the exchange rate will move higher and currency bulls will likely realize their pro-growth scenario. On the other hand, if the pair invalidates the breakout, it will be a strong bearish signal, which will trigger further deterioration and a drop to at least 0.9081, where the previously-broken upper line of the declining blue trend channel is.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed with bullish bias
LT outlook: bearish

Trading position (short-term): In our opinion no positions are justified from the risk/reward perspective at the moment.

AUD/USD

Although the medium-term picture has deteriorated in the previous week as AUD/USD declined below the long-term green line, currency bulls are trying to invalidate the breakdown and come back above the key support/resistance line. Will they succeed? Let’s move on to the daily chart and look for clues about the next move.

On Friday, we wrote the following:

(…) the exchange rate rebounded sharply and came back to slightly below the orange resistance zone (…) If this area holds, we’ll see another downswing and a test of the strength of the green support line (or even the recent low).

Looking at the daily chart, we see that the situation developed in line with the above-mentioned scenario and AUD/USD slipped to our downside target. Despite this move, the green support line withstood the selling pressure and the pair rebounded. As you see on the above chart, the exchange rate is trading in the short-term triangle. In our opinion, as long as there is no breakout above the upper line of the formation (or a successful breakdown below the lower border) another sizable move is not likely to be seen. What could happen if currency bulls win? If the exchange rate breaks above the orange resistance line, we may see an increase to at least the brown declining resistance line (which is currently reinforced by the 76.4% and 78.6% Fibonacci retracements). On the other hand, if currency bears show their claws and push the pair below the green support line, we’ll see a test of the strength of the red support line (currently around 0.9220).

Very short-term outlook: mixed
Short-term outlook: mixed
MT outlook: mixed
LT outlook: bearish

Trading position (short-term): In our opinion no positions are justified from the risk/reward perspective at the moment.

Thank you.

Nadia Simmons

Sunshine Profits‘ Contributing Author

Oil Investment Updates
Oil Trading Alerts

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’ reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules