The USDCAD moves higher and away from 200 day MA

Break of 200 day MA did not see the expected momentum lower

The USDCAD has moved higher and away from the 200 day moving average at 1.2500. The price traded above and below that moving average over the last 7 or 8 hours with little downside momentum. That was a bit of a disappointment (the price could not get to the June 22 low of 1.34854).  With stocks opening higher but giving up gains, there has been a counter move back higher and away from that MA level.

Break of 200 day MA did not see the expected momentum lower_

Having said that, the pair still needs to get and stay above the 50% retracement of the range since the June 9 low. That level comes in at 1.35146.  On more upside momentum the underside of the broken trend line (see green numbered circles) comes in at 1.35327.  

Traders looking for a move higher on the 200 day disappointment, will now look for the 200 day moving average to hold support at the 1.3500 level.  



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USDJPY extended the trading range for the week yesterday but not by much

54 pips to 61 pips for the trading range for the week. The trading range for the day is only 22 pips

Yesterday I commented on the narrow trading range for the USDJPY over the last 5-6 trading days. The range was only 54 pips. The price did extend that range but only to 61 pips.  Big deal.  

54 pips to 61 pips for the trading range for the week. The trading range for the day is only 22 pips_

The chart above shows the trading range for a weekly bar going back to August 2017. The current trading range of 61 pips was equal to the February low. Going back to August 2017 have only been 5 trading weeks where the ranges were less than 61 pips. That's not a lot of weeks. Do we get an extension before the end of the week?

Drilling down to the hourly chart, the ups and downs today make it seem difficult to see any sort of momentum run. The low price today reached down to 107.175 the high price has extended up to 107.29. That is only 22 pips on the day.

Technically, the price is currently below the 100 and 200 hour moving averages (blue and green lines in the chart below). Bearish. The price also tried to move above the broken 38.2% retracement at 107.359 only to fail. Bearish. The price is currently trading around the lows from Monday and Tuesday at the 107.239 – 25 area. Stay below would be more bearish.

The next target comes in at 107.112. That is the 50% retracement of the move up from the June 23 low. Get below that level would not only extend the trading range but could lead to further downside probing with the 107.00 level followed by the 61.8% retracement at 106.866 as potential targets going forward. It's not all that much but it's a step in the non-trend direction.

USDJPY on the hourly chart
Spoiling that bearish party would be a move back above the 107.25 level and then the 38.2% retracement at 107.359. Doing so and were back in the meat of the non-trending range.



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ForexLive European FX news wrap: Currencies little changed; US jobless claims next

Forex news from the European trading session - 9 July 2020

Markets:


  • GBP leads, JPY lags on the day

  • European equities mixed; E-minis up 0.1%

  • US 10-year yields down 1.3 bps to 0.651%

  • Gold flat at $1,808

  • WTI down 0.3% to $40.78

  • Bitcoin down 0.3% to $9,401


EOD 09-07
It was a largely quiet session once again, with investors awaiting Wall Street for further direction later today alongside the next round of US weekly jobless claims.

The risk mood was more tepid as we see European stocks trade more mixed and US futures kept close to flat levels for the most part. That gave very little for currencies to work with during the session as overall changes stay more muted.

The pound is slightly higher with cable hovering around 1.2630-50 levels for the most part but other dollar pairs are little changed as trading ranges stayed more modest.

EUR/USD began the session higher at 1.1360-70 before slipping to a low of 1.1316 but is now keeping near unchanged on the day. AUD/USD and NZD/USD tried to test resistance at 0.7000 and 0.6580-85 respectively but those levels held firm.

USD/CAD is keeping a little lower but support from the 200-day moving average at 1.3500 is also holding for now, leading to little change in general during the session.

The only relevant news were Tokyo and Hong Kong recording their biggest one-day rise in virus cases and it will be interesting to see how that pairs up with the latest updates from the US later today; and how the market will digest the headlines in the session ahead




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USDJPY stuck in a 54 pip trading range

Nearly 6 days with the price stuck in 54 pip trading range

The EURUSD is stuck in a 33 pip trading range today (see post here). The USDJPY has a 54 pip trading range BUT it for the last 5+ trading days (working on the 6th day).  Now that is now trending. 

Nearly 6 days with the price stuck in 54 pip trading range


The high of the range comes in at 107.78. The low comes in at 107.24.  In between is the converging 100 and 200 hour MAs at 107.50-52.  Non-trending dyanamics in play.  

Non trending can beget non trending.  That is sellers can lean against the high like they did yesterday and buyers can lean against the low like they did yesterday as well.  They may also lead to moves around technical levels in between like the 100 and 200 hour MA.  There have been swings away from the 100 hour MA over the last few days(follow the blue line and see the swings around that MA line).  

Non trending will also lead to a break at some point too (like a spring higher or lower).  Let's face it.... the non trend is because the "market" does not have a firm conviction one way or the other.  At some point, it will grab onto something that leads to something more than 54 pips.  

As a result, respect the range. Expect to see reasons to sell or buy at the extremes, but look for those breaks and runs too.  We ain't going to stay on lock down forever.  

PS the 100 day MA at 107.745 helped to stall the rally yesterday.   Keep that level in mind on the upside.  The price has stayed below the 100 day MA since the failed break on July 1.  On the downside, getting below the 50% of the range since June 23 comes in at 107.112 and would be a greater tilt to the downside technically. 



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ForexLive European FX news wrap: Gold breaks $1,800

Forex news from the European trading session - 8 July 2020

Markets:


  • Major currencies little changed

  • European equities lower; E-minis up 0.1%

  • US 10-year yields up 0.8 bps to 0.648%

  • Gold up 0.4% to $1,802.40

  • WTI up 0.1% to $40.65

  • Bitcoin up 0.4% to $9,292


EOD 08-07
It was a largely quiet session as the market is finding little conviction on how to proceed following the mixed past two days to start the week.

Equities showed little poise in general, with European stocks keeping slightly lower following the late drop in US indices from trading yesterday. US futures kept close to flat levels throughout and that is leaving investors little to work with on the session.

As such, major currencies didn't do a whole lot and remains trapped within narrow ranges for the most part. EUR/USD ranged around 1.1270-90 while AUD/USD hovered around 0.6930-40 levels in European morning trade, failing to find any real momentum.

The only notable move is in the commodities space with gold rising back above $1,800 for the first time since November 2011. Silver is also enjoying a hot day, rising by more than 1% to around $18.50 going into North American trading.

All eyes will turn back towards Wall Street later today and how investors will digest the latest round of coronavirus data from the US. Will the jitters start showing today or will dip buyers win out again as they have done time and time again?




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Risk mood not hinting at much ahead of North American trading

US futures keep close to flat levels while European stocks are softer

E-minis 08-07

DAX

After a back and forth last two days, the risk mood today is looking rather tepid for the most part with investors looking towards Wall Street for more direction.

US futures briefly erased earlier losses but are back close to flat levels and a little lower on the day now with European equities seeing softer tones for the most part, following the late drop in the US cash market from trading yesterday.

Major currencies are continuing to keep in very narrow ranges as such, with less than 0.1% change observed across dollar pairs at the moment:

WCRS 08-07

Looking ahead, we'll get another barrage of coronavirus headlines from the US and it'll be interesting to see if this is where the market starts to feel some of the jitters from the escalating health situation across the US.



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USDCAD tries to hang above the 100 hour MA

100 hour MA at 1.3564

The USDCAD stalled at an upward sloping trend line at the Asian session low and then moved above a downward sloping trend line. The combination has helped to tilt the bias back to the upside. The sellers turn to buyers.

100 hour MA at 1.3564

The move higher eventually extended back above its 100 hour moving average at 1.35643. The price has consolidated around that moving average over the last 8 or so hours trading. Stay above keeps the buyers more in control with the 200 hour moving average 1.3604 as the next topside target. The buyers are making a play back into the space between the hourly moving averages.

Fundamentally, the Ivey purchasing managers index for June came in much higher than the May release at 58.2 vs. 39.1 last month. The sharp increase has not helped the loonie as it continues to consolidate above its 100 hour moving average.



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USDJPY stalls against the 100 day MA

USDJPY backs off from key MA

The USDJPY tried to extend below the low from yesterday in the Asian session but got nowhere. The subsequent rally gained upside momentum after breaking back above its 200 hour moving average (green line currently at 107.459), and then its 100 hour moving average (blue line currently at 107.503). Sellers turned buyers and the early European session saw the price extend higher.

USDJPY backs off from key MA

That run to the upside, however, had a limit. That limit was the high from yesterday at 107.766 followed closely by the 100 day moving average at 107.74 (see blue over laid line marked D1 in the chart above). 

The stall against that level has led to a rotation back lower as traders ponder the up and down action and the next move.  The 100 and 200 hour MAs below (blue and green lines at 107.50 and 107.459) area now support. 100 day MA is resistance above at 107.784. 

Traders are trading and being guided by the technical levels   The sellers had their way yesterday.  The buyers have wrestled the control back today. However, there are limits in each direction.  



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EURUSD retraces earlier declines. Resistance at last week's highs.

Sessions low stalled near 100 hour moving average

The EURUSD after an earlier bounce in the Asian session, fell below the old high from last week at 1.1302 and continued the probe to the downside until reaching its 100 hour moving average (blue line in the chart below). 

Sessions low stalled near 100 hour moving average_

Traders did take the price below that moving average line but could not extend toward the next target at the 200 hour moving average  (green line in the chart above). The last 3 hours have seen the price rebound back to the upside. The pair has retraced around 50% of the move down today, but remains below the high from last week at 1.1302. That is the next topside resistance. Traders seem to be leaning against that level as what was support is now resistance (but look for more upside momentum if it's broken).

SUMMARY: The buyers took a shot to the upside yesterday, but the rally stalled (the high stalled just ahead of the June 23 high).  Today's shift back below the high from last week, changes the tune.   However, there are technical levels which are helping to define the range with the 100 hour MA as support below, and the high from last week as resistance above.



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USD/JPY gradually creeps higher, approaches the 100-day moving average

USD/JPY pushes to a session high of 107.79 currently

USD/JPY D1 07-07

The pair is having a very polarising start to the week, tracking lower yesterday amid a weaker dollar before reversing course in trading today to push just above the highs yesterday and close to a test of the 100-day MA (red line) @ 107.81 currently.

The move higher comes on the back of a stronger dollar, with the yen struggling to benefit from the softer risk mood in the market in European trading thus far.

So far, the pair is still largely caught in between levels around 107.00 to 108.00 with Treasury yields falling back in place after false breakout at the beginning of June.

But recent upside momentum has seen a lower ceiling, with the 100-day MA proving to be where sellers are making their stand. That will be a key technical level to watch today as well with price action now closing in on the level.

Generally speaking, USD/JPY remains very much a "dead" pair in my view considering that it actually largely mirrors the movement in Treasury yields - which isn't really a good or strong indicator of market sentiment these days.

But a break of key technical levels could spark some momentum flow in the pair so that might be one to watch out with consideration to other yen pairs in general.

GBP/JPY is one to watch with upside being limited by its own 100-day moving average (now @ 134.12) as of late, but is starting to track above that in trading today.

The pair is also seen holding above its 100-hour moving average @ 134.11 so buyers are hoping to keep a more solid upside momentum there.



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