Daily Forex Technical Strategy (Fri 06 Dec)

Further potential USD weakness against GBP & EUR as NFP looms.

EUR/USD – Potential push up to test major descending resistance


click to enlarge chart

  • The pair has staged a break above the 1.1090 upper limit of the short-term neutrality range as per highlighted in our previous report (click here for a recap). Right now, it may continue the push up to test the next resistance 1.1160/1180 (18 Oct 2019 range top & the major descending resistance from 24 Sep 2018) with 1.1065 as the key short-term pivotal support.
  • However, a break with an hourly close below 1.1065 sees a slide back towards the minor range support of 1.0990.

GBP/USD – Bullish breakout but risk of a minor pull-back imminent



click to enlarge charts

  • The pair has staged a bullish breakout above the 1.2970 range resistance and rallied by 190 pips in the last 3 days. In the medium-term, the impulsive up move sequence of the uptrend phase from 03 Sep 2019 low of 1.1959 has resumed.
  • In the shorter-term, the hourly RSI oscillator has traced out a bearish divergence signal at overbought region which indicates that the on-going rally has reached at “overstretched” state where it may stage a pull-back.
  • Flip to a bullish bias in any pull-back with 1.2970 as the key short-term pivotal support for another potential upleg to target the next resistances at 1.3200/3240 and 1.3300 next. However, an hourly close below 1.2970 negates the bullish tone for a deeper pull-back towards the next support at 1.2970/2950.

USD/JPY – Gyrating at the Ascending Wedge support


click to enlarge chart

  • The pair has whipsawed around the bearish “Ascending Wedge” support and conflicting U.S-China trade related news flow has made matter worse as we approach a “less liquid/thinly traded environment” towards the last 3 weeks of 2019.
  • The conviction for a final push up towards the “Ascending Wedge” top/resistance at 110.00/15 as been reduced at this junction. Therefore, we prefer to turn neutral now between 109.00 and 108.30. Bears need to have an hourly close below 108.30 for a “clean break down” to target the next supports at 107.90 and 106.60 next.
  • On the flipside, a clearance with an hourly close above 109.00 allows the short-term bulls to be in control for a push up towards 109.70 and 110.00/15 next.

AUD/USD – Sideways below major descending channel resistance for now


click to enlarge chart

  • After the recent RBA monetary policy meeting on 03 Dec, the pair has been trapped within a minor “Symmetrical Triangle” range configuration below the 0.6845 major descending channel resistance from 03 Dec 2018 high.
  • Prefer to turn neutral now between 0.6870 (also the 61.8% Fibonacci retracement of the recent slide from 31 Oct high to 29 Nov 2019 low) and 0.6810. An hourly close below 0.6810 revives the short-term bearish tone for a slide to retest 0.6755 and even 0.6720 next.
  • On the flipside, a clearance with a daily close above 0.6870 validates a major bullish breakout for an assault towards 0.6900/6930 in the first step.

Charts are from eSignal


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.