After spending a few days in Shanghai, China, I’m finally back to NYC! So good to be back and I sure did miss you. I attended a couple of forex industry events and met with a number of our international business counterparts over there.
Overall both a tiring and exiting trip; but most exciting part of it was winning the award for Best Financial media provider at the Shanghai forex expo. We are pretty ecstatic about it here in Invest Diva!!
• Back to the markets, the Australian dollar (AKA Mr. Aussie) didn’t take the Sydney café siege news well and has been dropping against his forex counterparts since the market open. An armed gunman took customers and staff of a cafe in central Sydney hostage on Monday morning in Australia. Prime minister Tony Abbott has said the gunman has political motivations.
“This is a very disturbing incident.” He said in a statement, “ It is profoundly shocking that innocent people should be held hostage by an armed person claiming political motivation.”
Another event that had an impact on Mr. Aussie was the sharp downgrade of the fiscal outlook of the Land Down Under by its conservative government. They said that slumping global commodity prices and political opposition to proposed austerity measures have taken a heavy toll on what just a few years ago was one of the world’s strongest economies.
We have a hot economic minutes release out of the Reserve Bank of Australia (RBA) tomorrow and we could expect even more declines in the AUD/USD pair if Governor Glenn Stevens talks more about intervention. Also don’t forget that Australia’s trading buddy, China’s Purchasing Manager Index (PMI) may also drag on the Aussie as manufacturing activity is expected to contract in December.
On the daily dance floor, the AUD/USD pair remains below the Ichimoku cloud and the break below the support level at 1.83 seems to have open doors for more drops towards the 2010 low of 0.808. If the fundamentals continue to look gloomy for Mr. Aussie, we could even see more drops towards the low levels of 2009 at 0.77.
Intraday Forex Technical Levels
EUR/USD 4-hour: Failed to break above 38% Fibonacci level.
Invest Diva positioning: Long positions above 1.2428 with targets at 1.2474 and 1.2544 in extension.
Technical reasons why: The pair remains above our pivot level and above the Ichimoku’s cloud. Although it failed to break above the 23% Fibonacci level. From here we could look for a formation of a Triple Top chart pattern which brings the pair back to 1.2474. The RSI is rebounding from the neutrality area.
Alternative Scenario: A break below 1.2428 would confirm a Double Top reversal pattern which brings us back to further downside towards 1.2387 and 1.2246.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.2387 | 1.2428 | 1.2544 |
| 1.2246 | 1.2474 |
GBP/USD 4-hour: Dropping.
Invest Diva positioning: Short positions below 1.5631 with targets at 1.5562 and 1.5474 in extension.
Technical reasons why: The pair failed to break above a key resistance level and 23% Fibonacci level at 1.5709, and is moving down towards our pivot level at 1.5631 as entering the Ichimoku’s cloud. The RSI is heading down from the neutrality area.
Alternative Scenario: Above 1.5709 look for further upside toward 1.5800.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.5562 | 1.5709 | 1.5800 |
| 1.5474 | 1.5631 |
USD/CHF 4-hour: Failed to enter Ichimoku’s cloud.
Invest Diva positioning: Short positions below 0.9659 with targets at 0.9610 and 0.9561 in extension.
Technical reasons why: The pair continues to drop from the previous top below the Ichimoku’s cloud. The RSI is rebounding from the neutrality area.
Alternative Scenario: Above 0.9659 look for further upside towards 0.9719 and 0.9816.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.9610 | 0.9659 | 0.9719 |
| 0.9561 | 0.9816 |
USD/CAD 4-hour: Moving up.
Invest Diva positioning: Long positions above 1.1570 with targets at 1.1667 and 1.1791 in extension.
Technical reasons why: The pair is on an overall uptrend above the Ichimoku’s cloud, and just broke above a resistance level at 1.1570. The RSI is above the neutrality area.
Alternative Scenario: Below 1.1570 look for further downside towards 1.1500 and 1.1401.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.1500 | 1.1570 | 1.1791 |
| 1.1401 | 1.1667 |
USD/JPY 4-hour: Broke below pivot level.
Invest Diva positioning: Short positions below 118.45 with targets at 117.21 and 115.48 in extension.
Technical reasons why: The pair broke below the pivot level at 118.45 and heading down to our bearish target at 117.21 below the Ichimoku’s cloud. The RSI is moving below the neutrality area. Also Market sentiment of one of the largest international brokers shows that 60% of traders are long the pair and the combination of the technicals and current sentiment gives a further bearish bias.
Alternative Scenario: Above 118.45 look for further upside towards 119.78 and 120.88.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 117.21 | 118.45 | 120.88 |
| 115.48 | 119.78 |
NZD/USD 4-hour: Moving down within Ichimoku’s cloud.
Invest Diva positioning: Short positions above 0.7747 with targets at 0.7694 and 0.7607 in extension.
Technical reasons why: The pair has been moving down within the Ichimoku’s cloud after breaking below the key support level and 50% Fibonacci level at 0.7790. The RSI is below the neutrality area.
Alternative Scenario: Above 0.7747 look for further upside towards 0.7790 and 0.7834.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.7607 | 0.7747 | 0.7790 |
| 0.7694 | 0.7834 |
