8 Apr 2015

4 SET-UPS I AM LOOKING AT BEFORE THE FOMC

GBP/USD DAILY

A lot of consolidation in the markets at the moment, however a lot of pairs are currently at the verge of breaking. I will be honest with you - the ''so much worse'' than expected NFP figure coupled with the fact that today's FOMC minutes are from middle of March (remember the previous Fed interest rate decision???) and overall dollar overbought condition, leaves me quite bearish on the greenback today.

If the sterling can manage to close above the major psychological level at 1.5000 it would trigger the symmetrical triangle scenario, which case I would be taking a small long position and aiming at the 61.8% breakout target at 1.5180 a level which coincides with the former high from the March Fed rate decision and the falling trendline resistance from the last year.

A second target (100%) at 1.5230 would also be viable as the pair may be working on a larger triangle.

Of course we also have to look at the other possibility - more hawkish minutes may trigger a bearish pennant scenario, however, I would only start looking at selling the pair with a close below 1.4700 level. A break below this level would open up a way till the next major support around 1.4250 level.

USD/CAD DAILY

The same as Oil - the pair is currently sitting at the crossroads, and as I said before I feel bit more dollar bearish.

An upside break for USOil above 54.00, would most likely trigger aggressive CAD buying and that would mean a downside break on USD/CAD. A breakout from this range should trigger a move towards it's rising trendline and I would aim at 100% breakout target at 1.1920.

A failure to close below 1.2350 may take the rate up towards the range resistance around 1.2800, however, I would prefer an upside break before establishing any new long positions.


XAG/USD DAILY

Silver has formed a nice bullish pennant after breaking the falling trendline from the start of the year. In cas of an upside break I will be taking a small long position and will target the yearly highs (major former support - now resistance) at 18.50.

I don't have absolutely no bearish bias for the pair at the moment.

XAU/USD DAILY

Gold is also sitting at important levels. I am looking at the bullish ''inverse head and shoulders'' scenario. In case of a break of the neckline at 1,225 I will be taking a small long position and aim at the 100% breakout target at around 1,305 as this level also coincides with the former highs back in Janluary.

The price is also current testing the broken rising trendline from last August as the new resistance. A failure to break to the upside would coincide with my longer term bearish view and I would be aiming at 1,100 level.

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