Tuesday, October 21, 2014

USD-CAD Analysis (21 October 2014)

Fluctuating within the current position level 1.1283 the pair fighting to break 1.1406 resistance level. There is still plenty of room for upward movement as the MACD indicator in the monthly time frame still rising upward. We also knows that the current position level is near its lowest historical level and by technical instinct it should initiate upward movement to find its correction point ideally at 1.1758

However not to forget on the fundamental factors the USD has been struggling on economic challenges after that still going on since Ben Bernanke era. For the past 3 years since 2011 and even now the US economic data yield consistent data which is below the market forecast despite of the upbeat booming sentiment that we heard and read from the news. Major wars going on in some part of the middle east i.e. Lybia, Syria, Iraq, and some African countries also have some impact to the US Dollars prospect as the funding for the wars involved billions or maybe trillions of dollar debt incur by the US government.

Apart from that Canadian economy is performing better than the US. This is shown on the positive Canadian's economic data which consistently yields better result than forecasts for the past 3 years. In terms of interest rates comparison Canada (1.00%) vs US (0.25%) both economy have plenty of improvement needed. Historically the US Dollar out performed Canada was since 1992 until 2003 despite the US interest rates is relatively always lower than of the Canada as shown on the graph below but that dominance has shifted to the Canadian dollar since 2004 until presents.

As far as we know currently sitting near its lowest historical level the USD-CAD is trying to move up as least for correction but the fundamental challenges such as wars and poor economic data from the US could prevent the pair from its intended direction and possibly keep it moving sideways. Anything can happen and it depends on the sentiment of the big players for now.

Saturday, October 4, 2014

EUR-USD and USD-CAD Technical Analysis (4 Oct 2014)

MACD Settings:- First EMA = 12 | Second EMA = 26 | Signal EMA = 9
Stochastic Settings:- Period = 5 | Average Period Fast = 7 | Average Period Full =7
Bollinger Bands Settings:- Average = 20 | Standard Deviation = 2
Date: 10 Oct 2014
Time: 2:09 (AM) +8 GMT

The chart below shows the common 3 peak gradual downwards patterns that we usually find in the Forex market movement. The 4th peak indicate correction to test the old historical peak

The big-W formation is forming indicate strong upward sentiment especially at it's current level standing on the mid-pivot point the USD-CAD is aiming for the ideal resistance level at 1.2600

Saturday, February 15, 2014

GBP-USD Technical Analysis for Next Week (15 Feb 2014)

MACD Settings:- First EMA = 12 | Second EMA = 26 | Signal EMA = 9
Stochastic Settings:- Period = 5 | Average Period Fast = 7 | Average Period Full =7
Bollinger Bands Settings:- Average = 20 | Standard Deviation = 2
Date: 15 Feb 2014
Time: 4:44 PM (+8 GMT)

Technical.Indicators 4 Hourly Daily Weekly Monthly
MACD Up Up Up Up
Full Stochastic Up Up Down Up
Bollinger Bands N/A N/A N/A N/A
Chart Formation N/A N/A N/A N/A
Market Direction Up Up Up Up
Market Comments This is an obvious bullish for the Cable (GBP-USD) as you can see short-term to long-term indicators all showing upside except in the intermediate terms (weekly time frame) where there is contra direction between the MACD and Stochastic. In this case MACD most likely the winner and that will support further upsides.

The previous week 10 to 14 Feb 2014. The upside movement is the result of consistent economic data for the pound sterling. While on the other hands there is slight weakness in the dollars economic data.

Based on the economic calenders Forex Factory the GBP economic data still dominated the first 3 days of the week (Monday, Tuesday, Wednesday) and if there are all positives it could trigger another breakout to target the highest resistance at 1.69989.

Despite of the convincing direction of the technical indicators there are risks that we need to consider that could take the direction to reversal where correction is the most likely to first to take charge.

1. Sentiment indicators - This can be view by the open position ratios from various broker such as OANDA, DukasCopy, SaxoBank, Alpari, etc refer to Open Position Indicators. Based on the consensus from all brokers the crowds seems to prefer bearish at this time and as you can see at least 80% - 90% open position are selling.

2. The chart (Monthly time frame) is already reaching the most ideal position and correction is waiting to make ways at any moment of negative economic data.

3. What if the first 3 days of next week GBP data are weaker compare to the USD correction could make a massive free falls.