Daily Market Reports | Amana Capital
Currency markets are heating up, and we have seen several bigger moves this week, that might influence the Swiss Franc (USD/CHF) in the next few days, as correlation analysis suggests that USD/CHF might catch up with developments in other Forex pairs.
As an example, GBPUSD is now clearly trading below its November low of 1.3052 and might be heading towards the May 2017 low of 1.2782. While, NZDUSD is down by more than 1% in today’s trading, and I suspect that as long as the price trades below last week’s high of 0.6860 that the price might reach the 0.64 level. More notably, today, the Dollar index (DXY) spiked to new 2018 high as the price took out stops above its June high. The dollar’s strength is also visible in metals markets where Gold, Silver, Copper, Palladium, and Platinum prices suffered greatly over the last few weeks.
This has so far not had a major impact on USD/CHF, but it might change in the next few days.
USDCHF Correlations – Sample: last 30-days, July 19, 2018
Swiss Franc (USD/CHF) Outlook
The May high of 1.0058, and November 2017 high of 1.0039, are firmly holding back the USDCHF, and on July 13 bullish traders staged an attack but failed as bears managed to push down the price below the May high before the end of the trading day. Eventually, the price skidded to 0.9927 a few days later. With the Dollar gaining more and more supporters, the USDCHF might attempt to once again take out the May high and its 2018 high of 1.0070.
On a break to a major high such as the 1.0070 level, traders will seek out the next prominent high, and today it is the 2016 high of 1.0343, with minor stops on the way such as the May 2017 high of 1.0100, and the March 2017 high of 1.0174. If the price indeed breakouts, only time will tell, but if it does I suspect traders will be using stop-loss orders below this week’s low of 0.9926 or higher depending on how the USDCHF looks like on a day of a breakout.
USDCHF Weekly Chart
(XAU/USD) Precious metal prices are dropping fast, and the yellow metal, Gold, has lost significantly in value against the US Dollar
After the price broke the December 2017 low of $1236 on Tuesday, further declines might be looming, with traders aiming for the July 2017 low of $1204.
At the time of writing, tntering short positions at the current level may not be favorable to sellers as the price might be at risk of a correction. I prefer to use the Fibonacci retracement tool to measure a possible correction and a potential entry level. If we draw Fibonacci retracement levels from the July 9 high of $1265 down to today’s low of $1217, we can get the $1236 to $1246 range (38.2% to 61.8% Fibonacci levels). I suspect that bearish traders might be interested in entering short positions in this Fibonacci range, aiming for the July 2017 low. The downward pressure will probably remain intact as long as the price trades below the July 9 high of $1265.
XAU/USD Four-hour Chart
BTC/USD: Bitcoin Bull Case Strengthens as MasterCard Wins Patent That Could Allow Bitcoin Transactions
(BTC/USD) Bitcoin’s price has broken the psychological level of $7000 against the USD for the first time in more than a month, following a bullish rally on Tuesday which tripped stops at the $6850 resistance level. Before this, Bitcoin had spent the last four weeks trading between $5747 and $6840.
The sudden increase in Bitcoin price might be attributed to the recent news about Mastercard, who won a patent to protect a method that would manage "fractional reserves of blockchain currency."
The trend is bullish, but I suspect that traders that are not long would like to see a price correction before buying. Drawing Fibonacci retracement levels from the July 12 low of $6091 up to yesterday’s high of $7592, we can get the $6668 to $7025 range (38.2% to 61.8% Fibonacci levels). I suspect that traders might be interested in buying Bitcoin in this Fibonacci range aiming for the June 3 high of $7788, as the risk/reward ratio is better here. However, if the price slips below the July 12 low of $6091, the bullish trend would be over, and this outlook would be negated.
BTCUSD Four-hour Chart
In the seven days, Stellar Lumens (XLM) gained around 67% against the US Dollar and currently trading at $0.309. Its total market capitalization now stands at $5.7 billion with a traded volume of $274 million in the past 24 hours.
Last week, Coinbase, the largest cryptocurrency exchange in the U.S., announced that they are considering to add five new cryptocurrencies to its platform: Cardano, Basic Attention Token, Stellar Lumens, Zcash, and 0x. After this announcement, these five digital assets surged by at least 30%, but Stellar had the highest return.
Coinbase said “These assets will require additional exploratory work, and we cannot guarantee they will be listed for trading. Furthermore, our listing process may result in some of these assets being listed solely for customers to buy and sell, without the ability to send or receive using a local wallet.”
Technically, XLM/USD’s trend remains extremely bullish. Yesterday, the price broke the June 3 high of $0.312, and I think that the price may continue to trade higher as long as it trades above the July 12 low of $0.18. A slight pullback in price around $0.26 may be viewed as an opportunity to long XLM/USD aiming for the May 13 high of $0.379.
XLMUSD Four-Hour Chart
- U.S. Dollar resumes move higher, WTI oil sheds earlier gains
- Loonie finds support around the 1.3160 level
The U.S Dollar continues to march higher against the Canadian Dollar on Thursday, as the greenback resumes its recent move higher, while oil prices retreat after staging a recovery from depressed levels on Wednesday.
The USD/CAD found strong support from the 1.3160 region on Wednesday, which is a key support zone I previously highlighted that the pair may gravitate back towards on a potential ascent towards the 1.3300 level.
Loonie bulls will now try to break above the current weekly high, at 1.3258, and make-a-run for the 1.3300 to 1.3310 resistance zone. Bulls may find also find resistance prior to the assault on the 1.3300 handle around the 1.3290 level. Moves above the 1.3310 level should find storng resistance from the 1.3380 level.
Key support on failure before the 1.3258 level is now found at the 1.3220 and 1.3200 levels, with the 1.3160 level now critical support before the 1.3123 level.
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- Greenback Testing Key 95.50 Zone
- Majors under heavy pressure against the greenback
The U.S Dollar Index is currently trading around the 95.50 mark, as Dollar bulls stage their latest attempt to negate the bearish double-top that lingered over the greenback this month. The U.S. Dollar has made major strides against a basket of top-tier currencies on Thursday, as the greenback recovers earlier losses.
Despite the strong run-higher today in the value of the greenback, U.S. Dollar bulls must now overcome the 95.53 level or risk putting in a bearish triple-top pattern. The first-attempt at moving above this key resistance area has so far failed.
Key resistance above the 95.53 level is found at the 96.20 and 96.50 levels, with the U.S. Dollar Index currently pushing the neckline of a large inverted head and shoulders pattern.
Pullbacks below the 95.50 level should find support around the 95.30 and 95.18 areas, however, it is worth reiterating that the U.S. Dollar may be on shaky-ground if we see a third technical rejection from current levels.
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