Selling Pressure Is Strengthening

Central Bank

Forex

Summary:

The AUDUSD is facing renewed selling pressure, dropping below 0.6500 during the European session on Tuesday. The uncertainty surrounding consumer confidence data from Westpac Banking Corporation, concerns over the Chinese economy, declining commodity prices, and the ongoing strength of the U.S. dollar are exerting significant pressure on the Australian dollar.

SELL AUDUSD

EXP

TRADING

0.65449

Entry Price

0.63630

0.66980

0.64695 -0.00154 -0.24%

0.0

Pips

Flat

0.63630

Exit Price

0.65449

Entry Price

0.66980

Fundamentals

The AUDUSD faced selling pressure for the third consecutive day on Tuesday, retreating to below the mid-0.6500 range during the early European session. Factors such as uncertainty surrounding consumer confidence data from Westpac Banking Corporation, concerns over the Chinese economy, declining commodity prices, and the persistent strength of the U.S. dollar have exerted significant pressure on the Australian dollar.

Data from Westpac Banking Corporation indicates a robust rebound in Australian consumer confidence for November, with the Westpac-Melbourne Institute Consumer Confidence Index rising by 5.3% MoM to reach 94.6. This marks a 14.4% increase from the mid-year low, leaving it just 5.4 points below the neutral level of 100.

The primary driver of this improvement is the enhanced optimism regarding the short-term economic outlook. The index measuring "economic outlook for the next 12 months" surged by 8.7% to 100.9, marking the first optimistic reading (above 100) since the recovery following the COVID-19 pandemic. Additionally, personal financial confidence has also strengthened, with the index for "household finances over the next 12 months" increasing by 4.4% to 104.1. Meanwhile, the unemployment expectations index fell by 7.2% to 120.5, indicating that confidence in the labor market has reached its highest level since April 2023.

In November, we observed three significant trends in consumer confidence. Firstly, prior to the Reserve Bank of Australia's (RBA) interest rate decision, early surveys indicated a consumer confidence index of 99.7, reflecting a notable sense of optimism. Secondly, the consumer confidence index remained unaffected by the RBA's decision to maintain interest rates. Lastly, following the announcement of the U.S. election results, there was a sharp decline in the consumer confidence index, with an average of 91.1 in the latter half of the survey. This indicates that the final reading for November exhibited an unusually wide fluctuation range of ±5%, suggesting a degree of uncertainty.

Furthermore, given China's pivotal role as Australia's largest trading partner, any economic changes in China will have a significant impact on the performance of the Australian dollar.

On Monday, data revealed that China's Consumer Price Index (CPI) increased by only 0.3% in October, falling short of the anticipated 0.4% and slightly declining from September's 0.4%. The core CPI, which excludes food and energy prices, saw a modest rise from 0.1% to 0.2%, indicating weak underlying inflation momentum. The month-on-month CPI decreased by 0.3%, further suggesting sluggish domestic demand. Since March of last year, China's CPI growth has hovered around zero, raising concerns about a prolonged deflationary trend and lackluster domestic consumption. From January to October, the CPI has cumulatively increased by just 0.3%, significantly below the government's annual target of 3%. These figures underscore the stagnation in consumer activity and insufficient demand to drive price increases.

Meanwhile, China's Producer Price Index (PPI) fell more than expected, declining from -2.8% to -2.9% YoY, marking 25 consecutive months of negative growth, which exceeded the market's forecast of -2.5%. This indicates ongoing price pressures within the production sector.

For the Australian dollar, this week is also pivotal as Australia is set to release third-quarter wage statistics and overall employment data, which are crucial for assessing the RBA's future monetary policy decisions. Additionally, RBA Governor Michele Bullock's participation in the regulatory group may provide new insights into the RBA's perspective on inflation and economic demand.

Technical Analysis

The AUDUSD is showing a mild bullish momentum in the 1D timeframe, which is diminishing as the market has breached the short-term support level of 0.6551. Meanwhile, the decline in the relative strength index indicates that new selling pressure is emerging. A further drop below 0.6511 would reinstate the downtrend that commenced from 0.6941.

On the upside, a rebound that surpasses 0.6687 would target the 61.8% retracement level of 0.6777, corresponding to the range between 0.6941 and 0.6511.

Trading Recommendations

Trading Direction: Sell

Entry Price: 0.6595

Target Price: 0.6363

Stop Loss: 0.6698

Deadline: November 27, 2024 23:55:00

Support: 0.6510, 0.6490, 0.6436

Resistance: 0.6600, 0.6630, 0.6650

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 12, 2024 at 8:20 PM, the EUR/USD currency pair was trading at 1.0625. After a sharp decline, the pair is showing signs of a slight recovery thanks to the support from the CCI indicator and the accumulation trend on the Bollinger Bands...

BUY EURUSD

Close Time

CLOSED

1.06252

Entry Price

1.06550

1.06000

1.05475 -0.00160 -0.15%

25.2

Pips

Loss

1.06000

1.05998

Exit Price

1.06252

Entry Price

1.06550

On November 12, 2024, EUR/USD was trading at 1.0625, with signs of consolidation around strong support. The recent decline in the EUR was mainly due to slower-than-expected economic growth in the Eurozone and pressure from the strengthening of the USD. However, the USD is now starting to come under pressure due to uncertainty in the US Federal Reserve's (Fed) policy and complex geopolitical factors, causing investors to consider switching to the EUR.

In addition, the European Central Bank (ECB) has signaled that it will maintain a stable monetary policy to support the economy, which helps to strengthen confidence in the EUR in the medium and long term. At the same time, the inflation index in Europe is gradually stabilizing, creating favorable conditions for businesses and investors. These factors have contributed to creating a positive sentiment towards the EUR, supporting the short-term BUY trend in the EUR/USD pair.

Market psychology

The current market sentiment is cautious for the USD as investors are concerned about the possibility that the Fed may slow down the pace of interest rate hikes due to signs of slowing US economic growth. Recent data on the US domestic employment situation and consumption have shown weakness, leading to expectations that the Fed will take a more cautious stance in the coming period. This has reduced the attractiveness of the USD and prompted investors to consider shifting capital to safer assets, including the EUR.

In addition, the unstable geopolitical situation in key regions of the world, especially in the Middle East, also contributed to the increased uncertainty in the market, adding momentum to the trend of turning to the EUR as a safe haven. Combined with the stable economic outlook in Europe, this created a favorable sentiment for the BUY trend in EUR/USD.

Technical analysis

The EUR/USD 15-minute chart shows positive signals for a short-term uptrend. The CCI is currently at 66.21, indicating bullish momentum as the CCI moves out of the oversold zone. If the CCI continues this trend, it will reinforce the BUY trend as buying pressure starts to return to the market.

The Bollinger Bands chart shows that EUR/USD is hovering near the middle band, with the upper and lower bands narrowing, signaling that the market is in a consolidation phase. If the price breaks above the middle band and is likely to reach the upper band, this will be a positive signal for the next rally. The narrowing Bollinger Bands are also an indicator that more volatility may be coming in the near future, and if the price can break above the resistance at 1.0650, the uptrend could be activated.

The Ichimoku indicator shows that the price is trying to break above the Kumo cloud, with the Tenkan-Sen line crossing above the Kijun-Sen line, a signal that the uptrend is forming. If EUR/USD can break above the cloud and stay above it, it will be a key signal supporting a short-term rally.

Trading Recommendations

Based on technical signals and economic factors, investors can consider the following trading strategies:

Entry: Buy at 1.0625 if price stays above the Bollinger Bands average.

Take Profit: Set target profit at 1.0655, near important resistance level.

Stop Loss: Place stop loss at 1.0600 to protect capital in case of market reversal.

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

On November 12, 2024 at 8:20 PM, the CAD/CHF currency pair was trading around 0.6317. The current development shows that the CAD is still maintaining its strength thanks to the support of positive economic data in Canada, despite the recent decline in oil prices...

BUY CADCHF

EXP

EXPIRED

0.63170

Entry Price

0.63350

0.63000

0.63331 +0.00052 +0.08%

Pips

EXPIRED

0.63000

0.63295

Exit Price

0.63170

Entry Price

0.63350

On November 12, 2024, the CAD/CHF pair was trading around 0.6317, reflecting the stable trend of the CAD despite the slight decline in crude oil prices. Currently, WTI oil prices are around $68/barrel, down about 5% from last week, but the CAD is still supported by the strength of the Canadian economy. As a major oil exporter, Canada has been under pressure from the decline in oil prices, but other economic data has helped to mitigate this negative impact. The recent report showed that Canada's third-quarter GDP growth reached 2.5%, which was lower than the expectation of 3%, but still showed that the country's economy is expanding in the current difficult conditions. In addition, the Canadian labor market continues to improve with the unemployment rate remaining stable at 5.6%, increasing investor confidence in the CAD.

Meanwhile, Switzerland is experiencing a period of economic stability with a conservative monetary policy from the Swiss National Bank (SNB). Although the Swiss economy is less volatile, the lack of a strong CHF indicates that investors are looking to markets with higher potential returns such as the CAD. These factors have created a positive environment for the CAD/CHF pair, increasing the expectation of a BUY trend.

Market psychology

Current market sentiment favors a BUY CAD/CHF trend as investors look forward to a strong economic recovery from Canada. Canadian macroeconomic indicators such as consumer confidence and business confidence have improved significantly in recent months, with the business confidence index reaching 58 points, up from the 6-month average of 52 points. This shows that businesses and investors are confident in the growth potential of the Canadian economy, despite the volatility in the energy market.

In addition, the decline in oil prices has affected the Canadian economy, but the impact has not been as severe as expected, thanks to the stability of domestic consumption and demand for non-oil exports. Meanwhile, the CHF tends to be negatively affected by the lack of monetary policy changes from the SNB. Investors are shifting capital flows to higher-yielding assets, while the CHF remains stable without strong growth momentum. This increases the demand for CAD/CHF, supporting the growth trend of this currency pair.

Technical analysis

On the 15-minute chart of CAD/CHF, technical indicators are all showing positive signals for the BUY trend. The Stochastic (5,3,3) indicator is currently at 80.71, near overbought levels, however the %K line is still above the %D line, indicating that the uptrend still has momentum and there are no signs of a strong reversal. If the %K line continues to stay above the %D line, this will reinforce the buy signal for this currency pair, with the possibility that the price may continue to move higher in the short term.

The Bollinger Bands chart on the M15 timeframe shows that the bands are showing signs of narrowing, reflecting the decrease in volatility after a bearish cycle. The current price is oscillating around the Bollinger Bands' average line, and if the price can break above the middle band, it is likely to continue towards the upper band, indicating a potential bullish trend. The narrowing Bollinger Bands are also a signal of increased volatility, if the price breaks above the important resistance level at 0.6330, a strong bullish trend is likely.

According to the Ichimoku indicator, the Tenkan-Sen line has crossed above the Kijun-Sen line and is moving upwards, a signal that the uptrend is forming and could continue. The Kumo cloud is currently showing green above, reinforcing the short-term uptrend. If the price can hold above the cloud, this will be a positive signal supporting the decision to buy CAD/CHF.

Trading Recommendations

With positive signals from technical analysis and support from the macroeconomic backdrop, a short-term trading strategy for CAD/CHF could include:

Entry: Buy at 0.6317 if price continues to hold above the moving average.

Take Profit: Set target profit at 0.6335, where there is an important short-term resistance level.

Stop Loss: Place stop loss at 0.6300 to protect capital in case of market reversal.

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

As at September, the unemployment rate in the UK surged to 4.3% over the past three months, while the growth rate of average earnings exceeded expectations. Following the release of disappointing employment data, the GBPUSD fell below 1.2800.

SELL GBPUSD

EXP

TRADING

1.28150

Entry Price

1.25700

1.30500

1.26835 -0.00241 -0.19%

0.0

Pips

Flat

1.25700

Exit Price

1.28150

Entry Price

1.30500