Fundamental Analysis of USD/CHF for January 24, 2019
2019-01-24
USD/CHF has been quite volatile and corrective at the edge of 0.9950 area recently from where it is expected to move lower in the coming days. Amid the government shutdown in the US and downbeat economic reports, USD is expected to extend weakness against CHF in the coming days.
US economic growth is set to be affected by the longest government shutdown. Its negative impact will follow. The probability of recession in the US in the next 12 months is assessed at 20% like last month. The chance of recession in next two years is around 40%. According to Michael Morgan, the overheated economy in the US and unstable inflation rates alongside monetary policy tightening may undermine momentum in not-too-distant future. Recently US Existing Home Sales report was published with a decrease to 4.99M from the previous figure of 5.33M which was expected to be at 5.27M and HPI remained unchanged at 0.4% which was expected to decrease to 0.3%. Today US Unemployment Claims report is going to be published which is expected have a negative result of an increase to 219k from the previous figure of 213k, Flash Manufacturing PMI is expected to decrease to 53.5 from the previous figure of 53.8, Flash Services PMI is expected to decrease to 54.0 from the previous figure of 54.4, and CB Leading Index is expected to decrease to -0.1% from the previous value of 0.2%.
On the CHF side, recently Swiss National Bank Governor Andrea Maechler stated that negative interest rates and a readiness to intervene in the foreign currency markets are still needed to ward off a rise in the franc that would trigger deflation in Switzerland. SNB wants the Swiss currency to be weak. They have observed that when the Franc goes strong, inflation goes negative. SNB Officials agree that negative rates are difficult, but it is needed for the stability of the economy and their investment strategy recently worked very well, thus promising good economic prospects.
Meanwhile, CHF is currently quite optimistic amid the hawkish rhetoric of SNB officials whereas USD is struggling for gains amid the government shutdown which is increasing the economic slowdown risk day by day. In the future weaker USD is expected in the pair.
Now let us look at the technical view. The price is currently pushing lower after certain correction at the edge of 0.9950 area from where it is expected to push lower towards 0.9850 and later towards 0.9700 area in the future. As the price remains below 1.00 area with a daily close, the bearish bias is expected to continue.
SUPPORT: 0.9700, 0.9850
RESISTANCE: 0.9950, 1.00
BIAS: BEARISH
MOMENTUM: VOLATILE
Fundamental Analysis of USD/CAD for January 24, 2019
2019-01-24
USD/CAD is currently trading at the edge of 1.3350. The price is expected to climb higher in the coming days. Despite the ongoing government shutdown in the US and downbeat economic reports, USD has asserted strength over CAD recently. The pair is expected to lead to retain bullish momentum in the coming days.
US economic growth is set to be affected by the longest government shutdown. Its negative impact will follow. The probability of recession in the US in the next 12 months is assessed at 20% like last month. The chance of recession in next two years is around 40%. According to Michael Morgan, the overheated economy in the US and unstable inflation rates alongside monetary policy tightening may undermine momentum in not-too-distant future. Recently US Existing Home Sales report was published with a decrease to 4.99M from the previous figure of 5.33M which was expected to be at 5.27M and HPI remained unchanged at 0.4% which was expected to decrease to 0.3%.
On the other hand, recently Canada's Retail Sales report revealed a slump to -0.9% from the previous value of 0.2% which is worse than the pessimistic forecast for a -0.6% decrease. Core Retail Sales dropped to -0.6% from the previous value of -0.2% which was expected to be at -0.4%. Recently Bank of Canada Governor Stephen Poloz stated that Canada's economy is on a sound footing. However, lower oil prices which might hinder economic growth this year but not stop it. The Bank of Canada has recently downgraded the growth forecast of the domestic economy to 1.7% from the previous value of 2.1% which frustrated the market sentiment on CAD.
Meanwhile, both USD and CAD are struggling for gains amid the recently published economic reports. USD is more advantageous in light of slightly better economic data, while Canada cut its economic growth. As a result, investors favor USD as a safe haven asset. Nevertheless, both currencies are still quite vulnerable.
Now let us look at the technical view. The price is currently moving higher above 1.3350 area while also breaking above the dynamic level of 20 EMA. The MACD moving averages are also intersecting each other with a bullish indication which also supports the upcoming bullish momentum in the pair. As the price remains above 1.2850 area with a daily close, the bullish bias is expected to continue with a target towards 1.3500-1.3650 area in the coming days.
SUPPORT: 1.2850, 1.30, 1.3200
RESISTANCE: 1.3500, 1.3650
BIAS: BULLISH
MOMENTUM: VOLATILE
Technical analysis of USD/CAD for January 24, 2019
2019-01-24
The USD/CAD pair continues to move upwards from the level of 1.3299. Yesterday, the pair rose from the level of 1.3299 (the level of 1.3299 coincides with a ratio of 61.8% Fibonacci retracement) to a top around 1.3352. Today, the first support level is seen at 1.3299 followed by 1.3254, while daily resistance 1 is seen at 1.3377. According to the previous events, the USD/CHF pair is still moving between the levels of 1.3334 and 1.3405; for that we expect a range of 71 pips (1.3405 - 1.3334). On the one-hour chart, immediate resistance is seen at 1.3370, which coincides with the doublt top on the H1 chart. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The price is still above the moving average (100). Therefore, if the trend is able to break out through the first resistance level of 1.3370, we should see the pair climbing towards the daily resistance at 1.3405 to test it. It would also be wise to consider where to place stop loss; this should be set below the second support of 1.3254.
Technical analysis of USD/CHF for January 24, 2019
2019-01-24
The USD/CHF pair faced resistance at the level of 1.0031, while minor resistance is seen at 0.9987. Support is found at the levels of 0.9884 and 0.9819. Also, it should be noted that a daily pivot point has already set at the level of 0.9939. Equally important, the USD/CHF pair is still moving around the key level at 0.9939, which represents a daily pivot in the H1 time frame at the moment. Yesterday, the USD/CHF pair continued to move upwards from the level of 0.9939. The pair rose from the level of 0.9939(this level of 0.9939 coincides with the double bottom) to the top around 0.9987. In consequence, the USD/CHF pair broke resistance, which turned strong support at the level of 0.9884. The level of 0.9884 is expected to act as major support today. From this point, we expect the USD/CHF pair to continue moving in the bullish trend from the support level of 0.9884 towards the target level of 0.9987. If the pair succeeds in passing through the level of 0.9987, the market will indicate the bullish opportunity above the level of 0.9987 in order to reach the second target at 1.0031. However, if a breakout happens at the support level of 0.9819, then this scenario may be invalidated.
GBP/USD analysis for January 24, 2019
2019-01-24
As I expected, the GBP/USD pair traded higher and met my second yesterday's target at the price of 1.3085. GBP/USD lost its bullish trend and went into the overbought condition on the Stochastic oscillator, which is a warning for buyers at this stage. The Pitchfork median line served as good resistance, and GBP found sellers from that point. The trend is still bullish, but we need patience to wait for a downward correction. Support levels are set at the price of 1.3000 and at the price of 1.2975.
Trading recommendations for today: We closed GBP/USD on both long positions and took profit of 200 pips. We are now waiting for the GBP/USD pair to correct into our support levels (1.300-1.2975) and if there is a good rejection, we will be able to buy again.
Analysis of Gold for January 24, 2019
2019-01-24
As long as the support at the price of $1,276.00 is active, I am bullish on Gold. I found a failed test of the the Pitchfork median line, which is a sign for me that sellers are not strong. The buyers showed some interest in past few days and we got strong demand bars in the background. The trend is still bullish and Gold is trading inside of the longer- term upward Pitchfork channel. Only a breakout of the support $1,275.00 would change our bullish opinion on the market.
Trading recommendations for today: We are still long on Gold from the $1,284.45 and with the protective stop at $1,275.00.
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