Technical Analysis

Technical analysis of forex, commodities and precious metals with trade signals where applicable.

USDJPY, Gold – Monthly Trading Plan, May 2016

USDJPY, Gold – Monthly Trading Plan, May 2016

Technical Analysis
The yen and gold have been unrelenting in their trends since the start of this year. However, we expect to see these trends nearing their end and a modest pull back is on the cards. USDJPY (106.4): April has been a bearish month for USDJPY although in comparison to February's price action, April's declines were moderately lesser in comparison. Price action in USDJPY is seeing the major support at 105.29 - 104 level fast approaching. The monthly candlestick pattern closed in a near marubozu type of a candlestick pattern which is a trend continuation pattern and comes after March's near doji close. The monthly Stochastics however points to a lower low being printed, against the higher low, which is a hidden bullish divergence, when comparing the lower low formed in early 2014 at 101.35, c...
Weekly Trade Idea (01/02/16) – GBPJPY on the rebound

Weekly Trade Idea (01/02/16) – GBPJPY on the rebound

Technical Analysis
GBPJPY is looking ripe for a reversal following the weekly candlestick pattern near the 170 - 165 price level. The Yen weakened last week on the BoJ's surprise policy decision to cut interest rates to the negative. The British Pound which has been trading weak since the past month and a half is looking to retrace some of the declines. The week ahead will see market influencing economic releases, starting with China's PMI numbers, which if disappoints could see the Yen strengthen yet again, pushing GBPJPY down to 170 levels. In the event of an upside surprise, GBPJPY remains capped near the weekly trend line noted below keeping price action ranging sideways. From the UK, this week marks PMI numbers and BoE monetary policy decisions. Of these, the PMI's from the UK are likely to influence
German DAX – Mind the weekly double bottom

German DAX – Mind the weekly double bottom

Technical Analysis
From the update on German DAX a few weeks ago, the index which was trading at 10009 managed to turn around from the lows to close last Friday at 10188.4. The equity index was supported by the fact that the ECB had signaled its willingness to expand the sovereign bond purchases. Although nothing was confirmed, the fact that the option is now on the table has been supportive for the German DAX Index. It remains to be seen if indeed the ECB will expand its balance sheet and of course, it all depends on how the Eurozone data continues henceforth. So far, the markets were surprised with a pickup in the Eurozone GDP which increased to 0.4% for the second quarter, beating estimates. However, inflationary pressures remain to the downside especially in light of Crude Oil prices being forecasted...
German DAX could soon turn bearish

German DAX could soon turn bearish

Technical Analysis
The German DAX along with major world equity indices plunged the last week. For the week, the German benchmark index fell -9.35% after enjoying a strong first half of the year. The DAX index gained a total of 30.69% from the start of the year rallying from the yearly open at 9719 to test the highs of 12416 largely fuelled by the ECB's quantitative easing program. The rally continued on until April which was when the index started to post lower highs. To date, the DAX has wiped out -18% of the total gains made this year and looks poised for further downside in the near term. Since this year, the DAX has formed a strong inverse correlation to the EURUSD and the highs and the lows in both the currencies coincided strongly. With the view that the DAX could push lower in the near term outlo...
NOK/SEK to see parity soon?

NOK/SEK to see parity soon?

Technical Analysis
The Norwegian Krone posted a second straight week of losses against the Swedish Krone after the currency pair traded sideways for close to nine weeks. The declines for past week saw the NOKSEK fell by -1.77% while posting a combined decline of -3.69% over the past two weeks. Prices closed at 1.0190 as of Friday and the price action in NOKSEK is starting to show increasing possibility that the currency pair might reach parity soon. On a fundamental level, the decline in the Norwegian Krone comes amidst a renewed slump in Global crude oil prices. The NOK has been closely tracking the declines to the Crude Oil prices and the first chart below shows the weekly comparison between the NOKSEK and the NYMEX Crude Oil futures. While the Norwegian Krone briefly managed to lead Crude oil price...