Bearish Momentum Intensifying, Avoid Hasty Bottom Fishing

Commodity

Summary:

Gold continues to decline sharply from recent highs, dropping over $150. Significant bearish momentum suggests further downward movement in the short term.

SELL XAUUSD

EXP

TRADING

2617.66

Entry Price

2540.00

2653.00

2559.32 -13.37 -0.52%

0.0

Pips

Flat

2540.00

Exit Price

2617.66

Entry Price

2653.00

Fundamentals

In the preceding period, gold soared under the backdrop of geopolitical tensions and political uncertainty surrounding the U.S. election, climbing nearly to the $2,800 mark. Although the factors supporting long-term bullishness persist, the conclusion of the U.S. election and Israel's agreement to a ceasefire framework with Lebanon, which could lead to eased Middle Eastern tensions, have lowered gold's safe-haven demand. Consequently, investors opted to take profits, triggering a plunge in gold prices.

Additionally, with Trump's re-election and the Republicans nearly securing both chambers of Congress, their policies like tariffs and tax cuts might fuel inflationary pressures. Such conditions could complicate the Fed's anti-inflation efforts, leading the market to speculate that the Fed might slow down interest rate cuts. Trump's win encouraged traders to take profits. Last week, investors witnessed the largest single-week outflow from the world's biggest gold ETF—the SPDR Gold Trust—exceeding $1 billion, since July 2022. In the short term, both capital flow and fundamentals suggest a difficult road ahead for gold to regain bullish momentum.

Technical Analysis

Bearish Momentum Intensifying, Avoid Hasty Bottom Fishing_1

In the weekly chart, XAUUSD formed an Evening Star pattern, suggesting stronger bearish signals, and indicating the start of weekly retracements. Bearish Momentum Intensifying, Avoid Hasty Bottom Fishing_2

Bearish Momentum Intensifying, Avoid Hasty Bottom Fishing_2

In the 4H chart, XAUUSD depreciated significantly, falling below the support of nearly $2650. It plunged further to $2610 and suggested stronger bearish momentum, heading downward in the short-term. Thus, investors should take a look at the support of $2600 and consider the support near $2535 in the medium term.

Investors should buy with caution and focus on selling. Trying to sell when XAUUSD rebounds to $2630 by setting the target near $2535, with the stop-loss order placed above $2650.

Trading Recommendations

Trading direction: Sell

Entry price: 2630

Target price: 2540

Stop loss: 2653

Support: 2605/2535

Resistance: 2700/2750

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Adam

Forex

Summary:

On November 11, 2024, the AUD/USD pair is showing signs of a slight increase after touching an important support level. The recovery of the Australian Dollar (AUD) is supported by the dovish monetary policy of the US Federal Reserve (Fed) and positive signals from the Reserve Bank of Australia (RBA)...

BUY AUDUSD

Close Time

CLOSED

0.65750

Entry Price

0.65850

0.65600

0.64658 -0.00191 -0.29%

15.0

Pips

Loss

0.65600

Exit Price

0.65750

Entry Price

0.65850

On November 11, 2024, the AUD/USD pair was trading around 0.65717, with an intraday high of 0.65732 and a low of 0.65703. After a sharp decline in October, the AUD/USD found support at 0.6570, where it began to show signs of a slight recovery. This recovery was largely driven by expectations that the Fed would maintain its dovish monetary policy in the near term after the recent inflation report showed that price pressures in the US had cooled.

In addition, the Reserve Bank of Australia (RBA) kept interest rates unchanged at its recent meeting, but its tone was quite hawkish, emphasizing that the labor market remains tight and inflation is not yet fully under control. This has helped the Australian dollar maintain its upward momentum despite the continued uncertainty in the Chinese economy - Australia's largest trading partner.

Markets are now looking ahead to Australia’s employment report on November 14 for further information on the health of the economy, which will play a key role in shaping expectations for the RBA’s monetary policy in the coming period.

Market psychology

Investor sentiment on the AUD/USD pair is currently leaning positive after the price found strong support in the 0.6570 – 0.6580 zone. According to data from Forex Sentiment, around 60% of investors are holding long positions on the AUD/USD pair, indicating expectations that the recovery could continue in the short term.

The Fear and Greed Index shows that market sentiment is neutral, with investors not overly concerned about risks but not entirely optimistic about the pair's long-term prospects. Global economic uncertainty and geopolitical risks remain factors that keep market sentiment cautious.

Additionally, trading data shows that buying volumes have increased significantly in recent hours as the price has hit key support levels, further strengthening the belief that the uptrend could continue absent any major changes from the Fed or RBA.

Technical analysis

On the M15 chart of AUD/USD, the Bollinger Bands show that the current price is hovering near the lower band of the indicator at 0.65717, signaling that the market may have entered an oversold state in the short term.

AUD/USD Tăng Nhẹ: Liệu Xu Hướng Tăng Có Tiếp Tục?_1

The expanding Bollinger Bands indicate increased price volatility recently, with the middle band (0.65800) acting as important resistance if the price starts to correct upwards again. However, if the price fails to break above this resistance zone, the possibility of further declines is high.

Ichimoku Kinko Hyo also provides a positive signal as the price is currently above the Ichimoku Cloud (Kumo), indicating that the uptrend is still strong in the short term. The Tenkan-sen and Kijun-sen lines are both below the current price, further reinforcing the bullish signal. However, it should be noted that the front Ichimoku Cloud is quite thin, which warns that if the price falls below the support zone around 0.65650 – 0.65700, the downtrend may resume.

Stochastic is currently hovering around 20 on the M15 timeframe, indicating a short-term oversold signal and a possible recovery if the indicator turns around and rises above 30 in the coming hours.

Trading Recommendations

BUY trade recommendation based on technical signals suggesting a recovery from the recent downside correction as AUD/USD has found strong support at 0.65650 – 0.65700 and the Australian Dollar is supported by dovish monetary policy from the Fed and positive fundamentals from the RBA

Entry: Consider entering a BUY order around the current price of 0.65750 if price continues to hold above the important support zone around 0.65650 – 0.65700.

Take Profit: Set a target to take profit at the nearest resistance zone around 0.65850 or deeper at 0.65900 if the bullish momentum continues.

Stop Loss: Place stop loss below the important support level at 0.65600 to protect the position.

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

The USD/CHF pair is facing strong selling pressure as the US Dollar weakens amid market expectations that the US Federal Reserve (Fed) may slow down the pace of interest rate hikes. Meanwhile, the Swiss Franc (CHF) continues to be supported by its status as a safe haven asset amid global economic uncertainty...

SELL USDCHF

Close Time

CLOSED

0.87967

Entry Price

0.87800

0.88100

0.88730 +0.00135 +0.15%

13.3

Pips

Loss

0.87800

0.88100

Exit Price

0.87967

Entry Price

0.88100

On November 11, 2024, the USD/CHF pair was trading around 0.87967, with an intraday high of 0.88023 and a low of 0.87966. The market is being influenced by a number of fundamental factors, including the weakness of the US dollar on expectations that the Fed will slow down the pace of interest rate hikes at its upcoming meetings. The recent US inflation report showed that price pressures have cooled, leading investors to believe that the Fed may pause its monetary policy tightening cycle.

In contrast, the Swiss franc continues to maintain its position as one of the top safe haven assets in the foreign exchange market, especially when global economic uncertainty persists. The Swiss National Bank (SNB) maintains a prudent monetary policy with the aim of ensuring price stability and supporting the sustainable development of the Swiss economy. This has helped the CHF continue to attract capital flows from investors seeking safety.

Market psychology

The current market sentiment on the USD/CHF pair reflects concerns about the US Dollar’s near-term outlook. According to data from Forex Sentiment, over 55% of traders are short USD/CHF, indicating a belief that the downtrend will continue as the Fed is likely to slow its rate hikes and the CHF remains strong due to its safe-haven status.

The Fear and Greed Index shows that market sentiment is tilted towards fear as investors seek safety in safe-haven assets such as the CHF and gold. This further adds to the pressure on the USD as capital continues to flow out of risk assets such as stocks and cryptocurrencies.

Large investors are also adjusting their positions by selling the USD and moving to safer assets such as CHF and Swiss government bonds. This suggests that the downtrend in USD/CHF may continue unless there are positive changes in the US economy or a recovery in US bond yields.

Technical analysis

On the M15 chart of USD/CHF, we can see some important technical signals from indicators such as Bollinger Bands, Ichimoku Kinko Hyo and Stochastic.

USD/CHF Giảm Nhẹ: Xu Hướng Giảm Có Tiếp Tục?_1

Bollinger Bands show that the current price is hovering near the middle band of the indicator at 0.87967, signaling that the market is in a consolidation phase after the previous slight increase. The current Bollinger Bands are quite narrow, indicating low volatility and a high possibility of a breakout from the current price range if the trading volume increases in the coming hours.

Ichimoku Kinko Hyo also provides a negative signal as the price is currently below the Ichimoku Cloud (Kumo), indicating that the downtrend is still strong in the short term. The Tenkan-sen and Kijun-sen lines are both above the current price, further reinforcing the bearish signal. However, it should be noted that the Ichimoku Cloud ahead is quite dense, which warns that if the price fails to break below the support zone around 0.87850 – 0.87900, a slight upward correction is entirely possible.

Stochastic is currently hovering around 76.21 on the M15 timeframe, indicating a short-term overbought signal and a possible downside correction if the indicator turns lower below 70 in the coming hours.

Trading Recommendations

The SELL trade recommendation is based on technical signals that suggest a continuation of the downtrend after USD/CHF broke several key support levels and the CHF maintained its strength thanks to safe-haven demand from international investors amid prolonged global economic uncertainty.

Entry: Consider entering a SELL order around the current price of 0.87967 if price fails to break above the resistance at the 0.88023 – 0.88050 zone.

Take Profit: Set a target to take profit at the nearest support zone around 0.87800 or deeper at 0.87750 if the downtrend continues.

Stop Loss: Place stop loss above the important resistance level at 0.88100 to protect the position.

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Australian Dollar faces pressure from Trump’s tariff threats, weak Chinese data, and a cautious Fed. The outlook remains bearish, with the AUD/USD range between 0.6530 USD and 0.6630 USD.

SELL AUDUSD

Close Time

CLOSED

0.65800

Entry Price

0.65000

0.66300

0.64658 -0.00191 -0.29%

54.7

Pips

Profit

0.65000

0.65253

Exit Price

0.65800

Entry Price

0.66300

The Australian Dollar (AUD) faced renewed challenges in early trading this week, reflecting a broader negative sentiment surrounding global economic uncertainties. Despite a slight uptick against the US Dollar (USD) on Monday, the AUD remained vulnerable to multiple factors, including concerns over Donald Trump's proposed tariff hikes on Chinese goods and a disappointing set of Chinese economic data.

On the surface, the AUD's modest rally against the USD could be seen as a counter-reaction, with US markets closed for the Veteran’s Day Bank Holiday, limiting immediate trading volumes. However, a closer examination reveals deeper vulnerabilities. The US economic outlook is clouded by Trump’s fiscal policies, particularly the threat of escalating tariffs, which could exacerbate inflation risks and prompt a prolonged restrictive stance from the Federal Reserve. This scenario poses significant risks to the Australian Dollar, which is highly sensitive to global trade dynamics, especially with China, one of its largest trading partners.

In the face of economic turbulence, the US is still grappling with the potential return of former President Donald Trump to the White House. While Federal Reserve Chair Jerome Powell has publicly stated that the Fed will base its policy decisions on economic data rather than speculations about future government policies, analysts are closely monitoring the implications of Trump's proposed tariff increases. Morgan Stanley forecasts that the Trump administration will likely prioritize tariffs as a key element of its economic strategy, predicting a global imposition of 10% tariffs and a steep 60% tariff on Chinese goods.

Such a move could have far-reaching consequences, particularly for Australia, which is heavily reliant on trade with China. Should tariffs on Chinese goods rise, Australian exports, especially commodities like iron ore and coal, could face higher barriers to entry, dampening demand for the AUD. Additionally, analysts are concerned that Trump’s fiscal policies could spur higher inflation in the US, leading the Fed to maintain a more aggressive monetary policy stance. A stronger US Dollar resulting from such a policy would only further compound the challenges facing the AUD.

China’s economic struggles continue to weigh heavily on the Australian Dollar. This past weekend saw the release of underwhelming Consumer Price Index (CPI) data, with the index rising by just 0.3% year-over-year in October, falling short of expectations and marking a decline from the 0.4% increase in September. This marks the ninth consecutive month of consumer price inflation in China, but it also highlights the lowest rate since June, indicating a slowing pace of inflation.

In response to mounting economic challenges, China unveiled a 10 trillion Yuan debt package aimed at alleviating local government financing pressures and supporting economic growth. While this gesture provides some relief, it did not go as far as expected in delivering direct economic stimulus, leaving investor sentiment largely unimpressed. The lack of robust economic stimulus measures adds to concerns about demand for Australian exports, especially in sectors sensitive to Chinese economic growth.

At the same time, the Federal Reserve's monetary policy stance remains a key factor in the AUD/USD dynamic. Last week, the Fed lowered interest rates by 25 basis points, bringing the benchmark range to 4.50%-4.75%. Despite this easing move, Minneapolis Fed President Neel Kashkari reaffirmed that the central bank is not yet satisfied with the progress on inflation, indicating that future rate cuts are not a foregone conclusion.

Kashkari’s comments underscore the Fed’s commitment to achieving its inflation target of 2%, with further tightening likely if inflation remains persistent. This cautious outlook for inflation, coupled with the Fed’s data-dependent approach, suggests that the US Dollar could remain supported, further challenging the AUD. Should the Fed continue on a restrictive path, it could push the USD higher, amplifying the bearish pressure on the AUD/USD pair.

On the domestic front, Australia’s economic outlook is also in focus. The country’s 10-year government bond yield recently fell to 4.6%, mirroring the decline in US bond yields following the Fed’s rate cut. Meanwhile, the Reserve Bank of Australia (RBA) kept its interest rate unchanged at 4.35%, as expected. However, RBA Governor Philip Lowe emphasized that underlying inflation remains stubbornly high, with no clear indication of a return to the central bank’s target until 2026. This dovish outlook, combined with persistently high inflation, suggests that the RBA may not be able to ease rates in the near future, further dampening the AUD's appeal.

Technical Analysis

From a technical perspective, the AUD/USD pair continues to show bearish momentum. The pair recently broke through the key support level of 0.6632 USD, triggering a sharp downward movement toward the 0.6536 USD mark. If the price breaks below this level, the next target could be 0.6485 USD, further reinforcing the bearish trend.

A key resistance level remains at 0.6632 USD. Should the price manage to break back above this level, a potential correction could see the pair test the 0.6691 USD resistance. However, as long as the AUD/USD pair remains below 0.6632 USD, the bearish outlook remains intact, with the focus shifting toward the 0.6530 USD support level as a potential pivot.

TRADE RECOMMENDATION

SELL AUDUSD

ENTRY PRICE: 0.65800

STOP LOSS: 0.6630

TAKE PROFIT: 0.6500

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Pound Sterling remains under pressure against the US Dollar as investors await key economic data this week, including the UK labor market report and the US inflation figures.

SELL GBPUSD

EXP

PENDING

1.28900

Entry Price

1.27350

1.30000

1.26815 -0.00261 -0.21%

Pips

PENDING

1.27350

Exit Price

1.28900

Entry Price

1.30000

The Pound Sterling (GBP) faced notable weakness against the US Dollar (USD) in Monday’s London trading, dropping to near the 1.2900 level. This decline came as the US Dollar continued its Friday recovery, with a marked uptick in the US Dollar Index (DXY), which measures the currency’s strength against a basket of six major peers, climbing above 105.30. The market movements are largely driven by growing expectations of a shift in US fiscal policies and the anticipation of crucial economic reports this week, particularly the October US inflation data and UK labor market figures for the three months ending September.

The Greenback’s strength has been attributed to mounting expectations for increased investment and government spending in the United States, bolstered by speculation that the Republican Party will soon take control of both the Senate and the House of Representatives. Should this come to pass, it would pave the way for faster implementation of policies under the Trump administration, including higher import tariffs and tax cuts. While such changes would likely increase the US fiscal deficit, they could also contribute to inflationary pressures, prompting the Federal Reserve (Fed) to adopt a more restrictive stance on monetary policy.

However, despite this growing fiscal optimism, Fed Chair Jerome Powell tempered expectations of any imminent shift in the central bank’s policy framework. Last Thursday, the Fed reduced interest rates by 25 basis points to a target range of 4.50%-4.75%, underscoring its cautious approach to monetary easing. Powell’s remarks pushed back against the notion that fiscal changes would lead to an immediate tightening cycle.

This week, investors will closely monitor speeches from various Fed officials on Thursday, as well as the highly anticipated US Consumer Price Index (CPI) data for October, due for release on Wednesday. The CPI report is projected to show a slight acceleration in annual headline inflation, rising to 2.6% from 2.4% in September. Core inflation, which excludes food and energy prices, is also expected to show a steady increase of 3.3%. These data points will play a crucial role in shaping market expectations for the Fed’s actions in its December meeting.

The Pound Sterling is taking a more cautious stance on Monday, with its performance against major peers remaining muted as investors await the release of the UK’s labor market data for the three months ending September. The report, set for publication on Tuesday, is expected to provide valuable insights into the health of the UK economy and could have significant implications for the Bank of England’s (BoE) monetary policy decisions in the coming months.

Analysts are predicting that the UK unemployment rate has risen to 4.1% from 4.0% in the previous quarter, marking a slight uptick in joblessness. Of equal importance to investors will be the Average Earnings data, a key indicator of wage growth, which influences consumer spending and overall inflation. Higher wage growth has been a significant contributor to inflationary pressures, especially in the services sector, which is closely scrutinized by BoE officials when setting interest rates.

In particular, economists anticipate that Average Earnings Excluding Bonuses grew by 4.7% in the three months to September, slower than the previous reading of 4.9%. A softer pace of wage growth could strengthen market expectations for further interest rate cuts by the BoE, as it would signal a potential easing of inflationary pressures in the services sector. Conversely, higher wage growth figures would likely dampen expectations for cuts, as it would imply persistent inflationary risks.

The BoE made its most recent policy move last week, lowering interest rates by 25 basis points to 4.75%, in line with market expectations. In his accompanying remarks, BoE Governor Andrew Bailey suggested that the central bank would continue to take a measured approach to monetary easing, emphasizing the importance of bringing inflation down sustainably to its 2% target. The outcome of the labor market data will likely shape market expectations for the BoE’s December meeting, as further signs of economic cooling may prompt a more aggressive policy shift.

Technical Analysis

From a technical perspective, the GBP/USD currency pair has shown clear signs of bearish momentum. Following a failed attempt to breach the 1.3000 level last Friday, the pair has retreated and is now targeting the first key support at 1.2866. Should the price break through this level, the next significant target would be 1.2735, indicating further downward correction.

The bearish outlook remains intact, supported by the Exponential Moving Average (EMA) 50, which indicates a prevailing downtrend. A break and sustained move above 1.3000 would be required to negate this bearish bias and open the door for a potential bullish reversal. For now, traders will be watching the price action closely, with an expected range for today between 1.2830 (support) and 1.2990 (resistance).

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.2890

STOP LOSS: 1.3000

TAKE PROFIT: 1.2735

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices (XAU/USD) continue to fall for the second consecutive day as the U.S. Dollar (USD) remains bolstered by optimism around President-elect Donald Trump's proposed economic policies and anticipation of further U.S. rate hikes.

SELL XAUUSD

Close Time

CLOSED

2665.00

Entry Price

2400.00

2715.00

2559.32 -13.37 -0.52%

490.8

Pips

Profit

2400.00

2615.92

Exit Price

2665.00

Entry Price

2715.00

Gold prices (XAU/USD) slipped lower for the second consecutive day on Monday, as the U.S. Dollar's strength, driven by market optimism surrounding President-elect Donald Trump’s economic policies, continued to exert downward pressure on the precious metal. After closing the prior week with significant losses, gold is struggling to recover its footing amid a confluence of factors that favor the dollar over safe-haven assets like gold. These factors include expectations for less aggressive Federal Reserve rate cuts, elevated U.S. bond yields, and strong investor interest in U.S. equities.

The Trump administration’s expected economic approach, often dubbed “Trump trade optimism,” has buoyed the dollar, driving it close to a four-month high. Markets are betting on policies that favor fiscal stimulus, infrastructure spending, and trade protectionism, all of which tend to boost U.S. economic growth and inflation expectations. As a result, the dollar has become increasingly attractive to investors, undermining the demand for gold, which traditionally performs well when the dollar weakens.

Gold’s sensitivity to rising bond yields has further compounded its downward trajectory. With bond yields elevated in response to anticipated inflation, investors are showing preference for yield-bearing assets over gold, which does not offer a yield. Notably, Trump’s campaign pledge to impose a 10% tariff on all U.S. imports is expected to fuel inflationary pressures, which would restrict the Federal Reserve’s ability to cut rates aggressively—a situation that further supports high bond yields and reduces the allure of non-yielding assets like gold.

The Federal Reserve’s recent 25 basis point rate cut, combined with forward guidance indicating a cautious approach to further easing, also plays a pivotal role in gold’s outlook. While the market has priced in a 65% probability of another cut in December, the Fed has signaled it will only proceed with additional rate reductions if inflation remains persistently below its 2% target. This measured approach has fortified investor confidence in the dollar, given that a robust U.S. economy could limit the scope of rate cuts. Minneapolis Fed President Neel Kashkari’s recent comments emphasized that the Fed seeks more evidence of inflation reaching 2% before adjusting rates further, underlining a “wait-and-see” policy that strengthens the dollar at gold’s expense.

Investors are approaching this week with caution as key economic data releases and Fed communications loom. Scheduled for release on Wednesday, the U.S. Consumer Price Index (CPI) is a critical inflation metric that could influence the Fed’s stance on rates. Subsequent data on the Producer Price Index (PPI) and retail sales, set for Thursday and Friday respectively, are also expected to provide insights into inflation trends and consumer spending, shaping investor expectations for future Fed actions.

Market participants are additionally focused on comments from several Federal Reserve officials, including Fed Chair Jerome Powell, who is slated to speak later in the week. These speeches are likely to offer further guidance on the rate-cut outlook and could spur volatility in both the dollar and gold. The potential for hawkish remarks, suggesting a more restrained approach to future rate cuts, could reinforce dollar strength and maintain the pressure on gold.

The broader context of Trump’s trade policies adds another layer to the narrative. By promoting protectionist measures, the Trump administration risks exacerbating global trade tensions, which could disrupt global markets. If implemented, these policies could lead to restrictive trade practices worldwide, negatively impacting economic growth but potentially lending some support to gold as a safe-haven asset. However, any potential gold rally may be short-lived, as robust dollar sentiment would likely counterbalance such support.

Technical Analysis

From a technical standpoint, gold's decline appears set to continue, with bears maintaining control over the market. On Monday, gold successfully tested the $2,675.00 level, closing below it during the first four-hour session of the day—a bearish sign that suggests further downside potential. This move positions gold for a potential test of the $2,640.00 mark as the next support level ,then potentially test $2,400.

Technical indicators, including the 50-day Exponential Moving Average (EMA), apply sustained negative pressure on gold, bolstering bearish sentiment. This trend is likely to persist unless gold breaks above the $2,696.85 threshold, which would signal a potential shift back towards a bullish outlook and suggest that the current downward correction may be over. However, in the absence of a decisive break above this resistance level, gold remains poised for continued weakness in the coming sessions.

The anticipated trading range for today places support at $2,650.00 and resistance at $2,685.00, with the prevailing forecast biased towards a bearish trend.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 2665

STOP LOSS: 2715

TAKE PROFIT: 2400

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

The market is under pressure from economic fundamentals, including a weakening Canadian Dollar (CAD) due to lower oil prices and a steady rise in the Swiss Franc (CHF). The downtrend could continue if technical indicators confirm sell signals...

SELL CADCHF

Close Time

CLOSED

0.62852

Entry Price

0.62700

0.63000

0.63328 +0.00049 +0.08%

14.8

Pips

Loss

0.62700

0.63105

Exit Price

0.62852

Entry Price

0.63000

On November 8, 2024, the CAD/CHF pair was trading around 0.62852, with an intraday high of 0.62868 and a low of 0.62823. The CAD’s weakness was largely driven by a sharp drop in crude oil prices, one of Canada’s main exports, on concerns about slowing global demand. At the same time, the CHF has maintained its status as one of the top safe-haven assets amid global economic uncertainty, especially as investors seek stability in haven assets like the Franc.

In addition, the Swiss National Bank (SNB) has maintained a cautious monetary policy with negative interest rates, but the strength of the Swiss economy has helped the CHF maintain its strength against other currencies. This has put pressure on the CAD/CHF pair as the contrast in economic outlooks between the two countries becomes more pronounced.

Market psychology

The current market sentiment on the CAD/CHF pair shows pessimism about the outlook for the CAD in the short term. According to data from Forex Sentiment, more than 60% of investors are shorting the pair, indicating a belief that the downtrend will continue as oil prices show no signs of recovery and the Canadian economy faces many challenges.

The Fear and Greed Index shows that market sentiment is tilted towards fear as investors seek safety in safe-haven assets such as the CHF and gold. This adds to pressure on the CAD as capital continues to flow out of risk assets such as stocks and commodity currencies.

Large investors are also adjusting their positions by selling off the CAD and moving into safer assets such as CHF and Swiss government bonds. This suggests that the CAD/CHF downtrend may continue unless there are positive changes in the Canadian economy or a recovery in oil prices.

Technical analysis

On the M15 chart of CAD/CHF, we can see some important technical signals from indicators such as Bollinger Bands, Ichimoku Kinko Hyo and Stochastic.

Bollinger Bands show that the current price is hovering near the middle band of the indicator at 0.62852, signaling that the market is in a consolidation phase after the previous sharp decline. The current Bollinger Bands are quite narrow, indicating low volatility and a high possibility of a breakout from the current price range if the trading volume increases in the coming hours.

Ichimoku Kinko Hyo also provides a negative signal as the price is currently below the Ichimoku cloud, indicating that the downtrend is still strong in the short term. The Tenkan-sen and Kijun-sen lines are both above the current price, further reinforcing the bearish signal. However, it should be noted that the front Ichimoku cloud is quite thin, which warns that if the price fails to break below the support zone around 0.62770 – 0.62800, a slight upward correction is entirely possible.

Stochastic is currently hovering around 89.45 on the M15 timeframe, indicating a short-term overbought signal and a possible downside correction if the indicator turns lower below 80 in the coming hours.

Trading Recommendations

Based on technical analysis and current market situation:

Entry: Consider entering a SELL order around the current price of 0.62852 if price fails to break above the resistance at the 0.62900 – 0.62950 zone.

Take Profit: Set a target to take profit at the nearest support zone around 0.62700 or deeper at 0.62650 if the downtrend continues.

Stop Loss: Place stop loss above the important resistance level at around 0.63000 to protect the position.

Risk Warnings and Disclaimers

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Risk Disclosure