Daily Technical Analysis 26 Jan 2017



Today's Risk Events

Wednesday 1 Feb

1:00am CNY Manufacturing PMI
PMI is expected to come out at 51.2 vs 52.8 prior. Anything less than 50 suggests contraction. There should be no surprises here. Chinese PMI should stay in line with expectations. Australian Dollar is most likely to be affected by this report
9:30am GBP Manufacturing PMI
Expected to come out at 55.9, slightly lower from previous 56.1. This figure has been clearly trending up in the recent months. There is no indication that this would change now. Unfortunately, all positive figures from UK have been overshadowed by Brexit news. As manufacturing is only small part of UK economy, this report is unlikely to have impact on GBP anyway.
7:00pm USD FOMC Statement
FED’S officials will announce interest rate decision. There is no change expected. FED WATCH indicated 4% probability of the hike at this meeting. Market will focus on the tone to gauge if the FED is still on track to deliver 4 hikes in 2017. According to the FED WATCH, this is less and less probable.

EURUSD

Intraday

Daily

Weekly

Weekly Bias: BULLISH
Daily Momentum: BEARISH
Intraday: BEARISH REVERSAL FORMED AND FAILED
Signals: NO

Notes: EURUSD moved aggressively up after an excellent macro data this morning and following comments from Trump’s trade chief, Peter Navarro, who accused Germany of taking advantage of the US and its European counterparts by keeping the euro “grossly undervalued.” This seems like we will have to deal with the unknown factor called TRUMP for some time. Technically the trade setup was correct and according to the trading plan. I will be looking to re-enter this market to the downside again. It looks like this market is taking on the resistance at 1.0825. Lets see what it will when it gets there. Don’t forget NFP this Friday

GBPUSD

Intraday

Daily

Weekly

Weekly Bias: BULLISH
Daily Momentum: BULLISH
Intraday: BULLISH
Signals: NO

Notes: Cable, as expected touched the support at 1.2420 and advanced higher driven mostly by USD weakness. GBPUSD closed the day at 1.2580 and it looks like it will attempt 1.2750 before any correction. Weekly momentum suggests more upside for now. I will be looking for shorts around 1.2750, given reversal pattern is present.

USDJPY

Intraday

Daily

Weekly

Weekly Bias: BULLISH
Daily Momentum: BULLISH
Intraday: DOUBLE BOTTOM FORMED
Signals: NO

Notes: USDJPY printed nice triple bottom at 112 zone. If it holds, this area could be a final stop before USDJPY turns back up again. The price action is very choppy with large trading ranges. Its difficult to apply the rules of Momentum Reversal strategy in these conditions. I would like to see some range trading for a while around this level and more upside to follow. If the 112 is broken to the downside and retested, short could be an option too. My bias remains to the upside.

AUDUSD

Intraday

Daily

Weekly

Weekly Bias: BULLISH 
Daily Momentum: BEARISH
Intraday: MOMENTUM IS NOW OVERBOUGHT. LOOK OUT FOR BEARISH REVERSAL
Signals: NO

Notes: Aussie pushed up and tested the resistance at 0.7610.If this level is broken to the upside, this market has potential to climb towards 0.7740 before collapsing again. As the weekly momentum is overbought, I will be looking for bearish reversal pattern around this level. There is none formed yet.

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