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February 23, 2017

BY FX Research Analyst Matthew Ashley

Another Rout Could be in the Wings for the AUDNZD

If you’re looking to side step some of the headline risk of the major crosses, the AUDNZD might be worth keeping half an eye on. Specifically, the pair has been quietly climbing over the past few weeks and this has left it in a rather precarious position. Indeed, the losses seen over the prior two sessions could extend rather significantly regardless of how high the AUD tracks against the greenback. Specifically, as is shown below, the pair has run into that robust zone of resistance around the 1.0753 handle and, once again, has failed to break through. Even on its own, this fact would tend to support the argument that we are going to see another near to medium-term downtrend take hold. However, given a number of other technical signals also reaching a consensus, rather than a brief dip, we could have another downtrend akin to the August-September rout on our hands. Notably, Wednesday’s candle is looking distinctly like a bearish shooting star which could be a bellwether of extensive losses yet to be realised. In addition to this, we have stochastics deep in overbought territory which is also severely capping upsides and generating selling pressure. What’s more, if we have another session of similar losses, the Parabolic SAR will almost certainly invert which will also be portentous of a fresh downtrend for the AUDNZD. Whilst a downtrend is looking fairly likely, the endpoint of the decline is somewhat less clear. However, we do have some clues as to where we are likely to encounter some strong support. Currently, the lowest point that the pair is expected to reach in the near to medium-term is around the 1.0415 handle. Primarily, this is because this point represents the intersection of the 78.6% Fibonacci level and the upside constraint of the old bearish channel. Although, we might see some support from the 100 day moving average.   Ultimately, we will just have to wait and see if the Kiwis or the Aussies are going to pull ahead in terms of the economic data as both have been having a bit of a mixed bag as of late. However, as a result of the lack of consensus in this fundamental data, we could see the above technicals play a larger role than is usual in determining the movements of this pair. As a result, monitor the pair closely, especially in the coming session. 

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February 23, 2017

BY FX Research Analyst Matthew Ashley

Intra-Day Technical Report

Thursday 23rd of February 2017 00:00 GMEUR/USD: BullishGBP/USD: BearishAUD/USD: Bullish USD/JPY: BearishGold: BullishCrude Oil: Bearish

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February 22, 2017

BY FX Research Analyst Matthew Ashley

Dollar Yen Ready to Consolidate and Move Slightly Higher

The Dollar-Yen should continue to consolidate moving forward which means further upsides could be on offer. Specifically, we have a bit of a loose pennant shaping up that should cap downside risk and a number of other technical readings are signalling that bullish momentum is tentatively returning.  As is shown below, the long-term uptrend seems to be intact and this is now forming the lower constraint of a pennant pattern. Confirming that this consolidation phase is beginning is the current ADX reading which has finally slid below 20 and, therefore, heralds an end to the recent slew of losses. As a result of this pattern taking hold, we should see buying pressure begin to build moving ahead and this could see the pair as high as the 115 handle once again. Indeed, we are already seeing a number of technical readings come forward which support some near-term bullishness for the Dollar-Yen. Firstly, and probably most obviously, the 100 day moving average has been propping up the pair and doesn’t look as though it is going relent anytime soon. Additionally, the parabolic SAR bias is bullish which will be helping to recruit buyers moving ahead. One of the less obvious signals of ongoing bullishness is the MACD oscillator. Specifically, the signal line crossover that occurred as the pair challenged the 100 day EMA is indicative of a change in momentum. This would typically infer that we are in little danger of the recent downtrend firing up again which significantly increases upside potential. As a result of all these technical readings, we should see the USDJPY ascend up to around the 115.16 level. Here, the 50.0% Fibonacci level will likely cap upsides and it could even encourage another reversal. However, it will pay to take another look at the technical bias as the pair approaches this point as we could instead see a breakout from the pennant and a subsequent uptrend. Ultimately, we can’t ignore the fundamental side of things and should keep half an eye on the economic news feed moving forward.  The only real news items to be aware of are on the US side of the equation and, of these results, only the Unemployment Claims and the Final Michigan Consumer Sentiment figures are worth monitoring closely. However, do watch out for any bombshells that could be dropped in Lockhart’s scheduled remarks, despite there only being a rather slim chance of him deviating from the Fed’s script. 

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February 22, 2017

BY FX Research Analyst Matthew Ashley

Intra-Day Technical Report

Wednesday 22nd of February 2017 00:00 GMEUR/USD: BearishGBP/USD: BullishAUD/USD: BullishUSD/JPY: BearishGold: BullishCrude Oil: Bearish

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February 21, 2017

BY FX Research Analyst Matthew Ashley

USDCHF ABC Wave Ready to get Back on Track

The Swissy seems to have found the turning point in its potential ABC wave slightly earlier than anticipated which could mean further downsides are on the way. At first, this might appear to be at odds with the pair’s behaviour over the past few sessions which could lead one to question whether or not the ABC wave is valid. Fortunately, there are a number of technical factors suggesting that the forecasted decline should take place. Firstly, let’s address the strong surges in buying pressure in the immediate wake of Thursday’s plunge. Typically, one could argue that this shows that the USDCHF still has some serious underlying bullish sentiment at work. However, what seems more likely in this context is that the pair simply took a slide too early in a knee-jerk response to the ongoing political turmoil in the US. These subsequent rallies are then an attempt to correct what, in hind sight, looks to have been a bit of an overreaction. Whilst the distinction is slight, it is important as this bullish price action probably has the momentum to bring the pair back to the 38.2% Fibonacci level but it is unlikely that we see gains extend further. Instead, a reversal should be seen as the USDCHF attempts to get back on track and complete that forecasted “C” leg. There are a number of technical signals that would support this outcome for the Swissy. Firstly, the Parabolic SAR is firmly bearish now and, therefore, we can expect losses to resume within a handful of sessions. Secondly, even if we do have further upside movement, stochastics will be pushed into overbought territory which could help the bears to wrest control of the pair back from the bulls once again. When this decline does finally resume, it is worth noting that it won’t take much to see the 12, 20, and 100 day moving averages move into a bearish configuration which could help to keep selling pressure high moving forward.  Ultimately, as has been discussed before, this downtrend should end around the 0.9784 mark as the final leg of the wave intersects the long-term ascending trend line. Whilst we will have to take a look closer to the time, given the relative robustness of the trend line it will be unlikely that we see losses go much beyond this point. Of course, there always remains the threat of a major fundamental upset which could exacerbate the pair’s tumble, especially as a result of the Franc’s safe haven status in the era of Trump. Therefore, keep an eye on the news and on your twitter feed. 

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February 21, 2017

BY FX Research Analyst Matthew Ashley

Intra-Day Technical Report

Tuesday 21st of February 2017 00:00 GMEUR/USD: BearishGBP/USD: BearishAUD/USD: BullishUSD/JPY: BullishGold: BullishCrude Oil: Bullish 

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February 20, 2017

BY FX Research Analyst Matthew Ashley

AUD Setting up for a Bullish Week

After a rather dicey week, it’s worth taking stock of what exactly happened to the AUD and what this could mean moving ahead. Additionally, we should look at what news is worth keeping an eye on in the wake of the drop in unemployment to 5.7% and also how this fits in with the technical forecast.  The Aussie Dollar was under heavy selling pressure straight out of the gate last week, sinking around 40 pips despite a lack of economic news. However, things soon turned around in the subsequent session, the pair surging strongly higher as the NAB Business Confidence and Westpac Consumer Sentiment figures came in at 10 and 2.3% respectively. However, despite building on this bullishness following the Flynn drama and Trump’s Press debacle, the AUD moderated and fell back to where it opened the week. This came as somewhat of a surprise given that the Australian Unemployment Rate had dropped to 5.7% during Friday’s session. Regardless, now that the pair has cooled off slightly, the result means that the AUDUSD should be well positioned to make another move higher which is largely reflected in the technical bias. Specifically, the AUD retains its strong bullish bias even though it appears to be slowing its ascent to a significant degree. Notably, the 12, 20, and 100 day moving averages are effectively as bullish as they can be with little chance of becoming bearish in the near-term. In addition, the Parabolic SAR and ADX readings are highly suggestive of the uptrend continuing moving ahead. However, the constant threat of becoming overbought is providing some resistance which could see this bullish phase slow substantially moving on and this is worth keeping in mind. As for what lies ahead in the news, the RBA will be in focus given that we have the monetary policy meeting minutes due to be posted and two speaking engagements from deputy governor Lowe. However, the Cash Earnings data will also be worth keeping a close eye on. This is predominantly because it could help to build on any positive sentiment still in the wings following the drop in the Unemployment rate that we saw last week. This being said, also monitor the US Existing Home Sales figures due around the same time as they could moderate the day’s performance. Ultimately, we could have quite a good week lying ahead of us for the Aussie Dollar if everything goes according to plan. However, as we live in the age of Trump, it may be best to keep half an eye on the white house just in case of any further political bombshells. 

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February 17, 2017

BY FX Research Analyst Matthew Ashley

Silver Ready to Rise but at a Reduced Pace

Silver could be about to slow or even end its rather impressive rally as it approaches a fairly strong zone of resistance. However, given the metal’s apparent immunity to the influence of the bears, it could continue to surge strongly higher instead. As a result, it’s worth taking a look at some of the technicals to see what’s next for silver. From a technical perspective, the long-term downtrend is very much in danger of being ended. A push significantly beyond the 18.00 handle would finally free silver from the confines of that relentless bearish trend line that made its presence felt so keenly early on in the piece. If the metal does escape to the upside, the resulting surge higher could be strong indeed.   Specifically, the EMA’s are about as bullish as you can get and this is mirrored by the parabolic SAR reading. The combined effect of these technicals could produce a sizable amount of support for the metal which could extend its recent trend as is. However, there is some evidence suggesting that the uptrend could moderate or even stall temporarily. Indeed, the intersection of the 78.6% Fibonacci level and the declining trend line could prove a rather formidable impasse for silver. However, what is more likely given the strong fundamental forces driving silver prices higher, is that the rally moderates slightly as it seeks to test the 19.00 handle. This moderation is supported by the stochastics and RSI readings on the daily chart. More precisely, whilst stochastics are already heavily overbought, the RSI still has some more room to manoeuvre which should leave the metal with some ability to climb higher. As a result, we should see more gains but not at the pace that has been seen recently. Ultimately, keep an eye on Trump as well as if there is anything able to cause a spike in market fear and therefore a spike in silver, it’s him. This being said, also keep an eye on any developments in the Brexit saga as we could start to see more details about the triggering of article 50 come out in the lead up to march.   

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February 17, 2017

BY FX Research Analyst Matthew Ashley

Intra-Day Technical Report

Friday 17th of February 2017 00:00 GMEUR/USD: BullishGBP/USD: BullishAUD/USD: BearishUSD/JPY: BearishGold: BullishCrude Oil: Bullish

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February 16, 2017

BY FX Research Analyst Matthew Ashley

What’s Next for the Loonie?

The Loonie is fast approaching a critical point where it must decide where exactly it wants to end up. On the one hand, it could finally break free of the ascending channel that has largely constrained its movements over the past months. On the other hand, a breakout from the near-term wedge could mean we see a rally back to the centre of this long-standing channel. As a result, it’s worth delving into some of the technicals to get a feel for what we can expect moving forward. First and foremost, it’s quite clear on the daily chart that the narrowing price action of the falling wedge should lead to a breakout in one direction or the other in the very near-term. As a result of this particular wedge, the pair should be predisposed to breaking out on the upside which would also respect the downside constraint of the long-term channel. Due to this coincidence, a rally is looking much more likely than a downside breakout from a technical perspective at least. Moreover, moving higher would, generally speaking, be in line with some of the other technical signals. Specifically, the MACD oscillator remains bullish and it wouldn’t take much in the way of buying pressure to invert the Parabolic SAR’s bias to follow suit. Additionally, both the RSI and stochastics are in neutral territory which means there is plenty of room to rally before fears that the Loonie is becoming overbought would arise. The main deterrent that could prevent the bulls from staging a comeback is the EMA bias. As shown above, the 12, 20, and 100 day moving averages are all in a highly bearish configuration which would tend to indicate losses are set to extend moving ahead. However, on the balance of things, there seems to be more evidence suggestive of a reversal back to the centre of the channel rather than a breakout from the lower constraint of this objectively robust structure.   On the fundamental front, despite the USD’s rather baffling response to yesterday’s strong data, the outlook for the US economy is looking firmer than it has in some time. Combined with optimism over Trump’s tax policy and the jump in probability for a US rate hike to 44% in March, the market should continue to move back to the greenback which would be in line with the technical forecast. Ultimately, keep an eye on this pair as the week draws to a close and early next week as there is likely to be at least one or two sessions remaining before a reversal is required. Furthermore, be alert for any update on that ‘phenomenal’ tax plan as it is likely to generate some waves.  

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February 16, 2017

BY FX Research Analyst Matthew Ashley

Intra-Day Technical Report

Thursday 16th of February 2017 00:00 GMEUR/USD: BearishGBP/USD: BearishAUD/USD: BearishUSD/JPY: BullishGold: BullishCrude Oil: Bearish

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February 15, 2017

BY FX Research Analyst Matthew Ashley

A Few Ups and Downs Coming Down the Line for the Kiwi Dollar

The Kiwi Dollar should be hitting a reversal point in the near future but this could simply be a set up for an even larger tumble in the weeks beyond. Specifically, a combination of technical signals are hinting that the recent downtrend may need to take a breather around the 0.7144 handle but a developing Gartley pattern could subsequently smack the pair significantly lower in the long-run.As is shown below, the Kiwi Dollar ultimately failed in its recent bid to push beyond the confines of the medium-term declining trend line. Consequently, it has been hammered by the recent resurgence of the greenback and has sunken back to support. However, this spate of losses could be about to reverse as a near-term bottom seems to have been found if the stochastics are anything to go by. Additionally, the bears seem to be having some difficulty breaking through the 38.2% Fibonacci level around the 0.7144 price. In part, this is due to the positioning of the 100 day EMA which is supplying some dynamic support around this level. However, the configuration of the 12, 20, and 100 day moving averages also reveals something else. Even with the recent slew of losses, the NZD retains an overall bullish bias. As a result, rather than seeing an unbroken slide all the way back to the long-term ascending trend line, we could instead see the pair have another rally in the near-term. If this occurs, the price action would form the majority of a fairly convincing Gartley pattern which could subsequently generate a rather sizable decline in the medium-term. This decline should end around the 0.7030 handle which represents the intersection of the final leg of the Gartley pattern and the long-term trend line. This level is likely to hold firm once again in the absence of some strong fundamentals and, if it does hold, a reversal should occur. Whether or not this push higher will have the support to break above the descending trend line is currently not clear but, given the narrowing of the pennant, it is not entirely impossible. Ultimately, keep an eye on this pair as there is plenty of movement on offer which should mean it’s an interesting few week of trading. Moreover, whilst the technical bias is looking fairly clear, don’t neglect the fundamental side of things, especially when the Kiwi Dollar reaches a potential turning point. 

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February 15, 2017

BY FX Research Analyst Matthew Ashley

Intra-Day Technical Report

Wednesday 15th of February 2017 00:00 GMTEUR/USD: BearishGBP/USD: BullishAUD/USD: BullishUSD/JPY: BullishGold: BearishUS Oil: Bearish

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February 14, 2017

BY FX Research Analyst Matthew Ashley

Some Big Swings Could be on the Way for the Swissy

The Swissy has an interesting set up developing which could lead to both some upside and downside trading opportunities over the coming weeks. In the near-term, gains could continue to be posted all the way back up to the 1.0187 handle. In the medium-term however, we could see the USDCHF sinking back to test the trend line around the 0.9789 mark. One of the key drivers of these moves is the development of a rather solid looking ABC wave. These waves have been seen for many crosses since the post-election rally and there is no real reason to suspect that the Swissy will be much different. Although, before we can be certain that this is indeed an ABC wave, we will have to see this pair move back to the 1.0187 mark. Fortunately, we have some evidence to suggest that this is likely to come to pass within the next few weeks. Firstly, the daily EMA’s are on the cusp of having a bullish crossover which typically denotes a shift in sentiment from bearish to bullish. Indeed, the parabolic SAR has already inverted to signal that bullish momentum is on the rise and should be carrying the pair higher. Moreover, now that the USDCHF has closed above the key 38.2% Fibonacci level, there should be little in its way. However, the brevity of this rally may be somewhat more pronounced than we would typically expect. This comes largely by virtue of the historical zone of resistance around the 1.0187 handle which should prove to be our reversal point. Whilst, yes, the pair has pushed beyond this price recently, the fact that it also coincides with the appropriate retracement for the B leg of the corrective wave should hinder attempts to break through again. Once this reversal has occurred, losses should extend back to around the 0.9789 level before the USDCHF reaches yet another impasse. At this level, some strong historical support will come into play as a result of the long-term ascending trend line. Interestingly, this point once again coincides with the appropriate retracement typical of the forecasted ABC wave which won’t go unnoticed by traders. Ultimately, whether or not this pattern eventuates is largely dependent on both US and Swiss economic data, alongside Trump’s day-to-day influence. However, due to the likely uptick in market fears as Brexit approaches, we can expect the Franc’s safe haven status to begin to drag the pair lower in the medium-term. Of course, this broadly fits with the technical analysis above and is worth keeping in mind. 

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February 14, 2017

BY FX Research Analyst Matthew Ashley

Intra-Day Technical Report

Tuesday 14th of February 2017 00:00 GMTEUR/USD: BearishGBP/USD: BullishAUD/USD: Bearish USD/JPY: BullishGold: BullishCrude Oil: Bullish

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