The dollar seems to be in a bad mood after Thanksgiving weekend and I do have a very personal announcement to make.
Last week after the OPEC meeting, oil prices tumbled to their five-year lows of around $65/barrel. Several forex market participants, along with most OPEC member nations, were counting on the oil cartel to reduce production by 5% or 1.5 million barrels per day. In doing so, oil supply could be limited, which would then put an upward pressure on prices. In a surprise move, the OPEC refrained from making any changes to their production target, as the cartel failed to reach an agreement.
Oil prices were up Monday and accordingly the reversely correlated US dollar was down apparently not only because of the oily shenanigans but also by rejection of the USD/JPY pair at market open on Sunday night after Japan was downgraded by Moody. Mr. Euro took this opportunity as he dances against the US dollar and jumped up. As I explained last week, a quantitative easing in the euro-zone is still very much on the table at least among the majority of investors. Probably more important than this though is that they will not move forward with it until their other current programs are fully matured have made their way through the ECB’s system. Some ECB members have mentioned that a QE will not occur if other programs balance sheet is back towards the early-2012 levels. Thursday could be seen as the big day, with the ECB announcement which could be a real risk to the strength of Mr. Euro. From a technical point of view, it’s all about that wedge.
On the daily dance floor the pair remains within the falling wedge though it’s now teasing its upper level while dancing below the Ichimoku cloud. So with Super Mario’s QE actualization coming up, I think it’s more about “when” we could see the reversal happen once the pair breaks above the falling wedge and moves towards the Ichimoku cloud. A break above the 38% Fibonacci level at 1.2930 could confirm the long term bullish outlook for 2015 which could bring the European currency back up to the 1.31 level against the US dollar. Otherwise, our bearish scenario which probably could happen before the reversal sees targets at 1.2260 and 1.2100 in extension.
i did promise a personal announcement and I am going to do it right now… I’m engaged! Not to another currency pair on the forex dance floor but to the real Mr. Aussie with the real Aussie accent so now I basically have have another diamond in addition to the Invest Diva diamond that I created for myself and for all my fellow responsible traders in our education course. Thanks for watching. Invest responsibly and I’ll see you next week.
Intraday Forex Technical Levels
AUD/USD 4-hour: Rebounding from the 23% Fibonacci level.
Invest Diva positioning: Short positions below 0.8415 with targets at 0.8318 and 0.8102 in extension.
Technical reasons why: The pair is rebounding from the 23% Fibonacci level and heading down to the resistance level at 0.8415 below the Ichimoku’s cloud. The RSI is moving down below the neutrality area.
Alternative Scenario: Above 0.8415 look for further upside towards 0.8528 and 0.8598.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.8318 | 0.8415 | 0.8528 |
| 0.8102 | 0.8598 |
NZD/USD 4-hour: Dropping.
Invest Diva positioning: Short positions below 0.7835 with targets at 0.7795 and 0.7746 in extension.
Technical reasons why: The pair broke below our bearish target and the 50% Fibonacci level as moving through the Ichimoku’s cloud. The RSI is falling from the neutrality area.
Alternative Scenario: Above 0.7835 look for further upside towards 0.7875 and 0.7924.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.7795 | 0.7835 | 0.7924 |
| 0.7746 | 0.7875 |
USD/CAD 4-hour: Rebounding.
Invest Diva positioning: Long positions above 1.1372 with targets at 1.1463 and 1.1570 in extension.
Technical reasons why: The pair reached out bearish target and the 38% Fibonacci level at 1.1317 and is now moving back to 23% Fibonacci level above the Ichimoku’s cloud. The RSI is above the neutrality area.
Alternative Scenario: Above 1.1372 look for further upside towards 1.1317 and 1.1272.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.1317 | 1.372 | 1.1570 |
| 1.1272 | 1.1463 |
USD/JPY 4-hour: Moving up.
Invest Diva positioning: Long positions above 118.86 with targets at 119.78 and 120.88 in extension.
Technical reasons why: The pair is rebounding from the Ichimoku’s cloud after forming a spinning top candlestick pattern, and is moving up. The RSI continues to move above the neutrality area.
Alternative Scenario: Below 118.86 look for further downside towards 117.50 and 116.56.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 117.50 | 118.86 | 120.88 |
| 116.56 | 119.78 |
GBP/USD 4-hour: Moving down to our bearish target.
Invest Diva positioning: Short positions below 1.5731 with targets at 1.5591 and 1.5481 in extension.
Technical reasons why: The pair failed to break above the 23% Fibonacci level and is moving down to the previous bottom at 1.5591 below the Ichimoku’s cloud. The RSI is moving down below the neutrality area.
Alternative Scenario: Above 1.5731 look for further upside towards 1.5817 and 1.5887.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.5591 | 1.5731 | 1.5887 |
| 1.5481 | 1.5817 |
USD/CHF 4-hour: Testing the key resistance level.
Invest Diva positioning: Short positions below 0.9726 with targets at 0.9649 and 0.9601 in extension.
Technical reasons why: The pair is testing the key resistance level at 0.9726 above the Ichimoku’s cloud. A broke above this level would give further uptrend. The RSI is about to reach the overbought zone.
Alternative Scenario: Above 0.9726 look for further upside towards 0.9770 and 0.9815.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.9649 | 0.9726 | 0.9815 |
| 0.9601 | 0.9770 |
Intraday Commodities Technical Levels
Dow Jones Intraday: key resistance at 17805.
Invest Diva positioning: Short positions below 17805 with targets at 17700 and 17650 in extension.
Alternative scenario: Above 17805 look for further upside with 17875 and 17915 as targets.
Gold spot Intraday: continuation of the rebound.
Invest Diva positioning: Long positions above 1185 with targets at 1224 and 1236 in extension.
Alternative scenario: Below 1185 look for further downside with 1169 and 1158.5 as targets.
Crude Oil Intraday: capped by a negative trend line.
Invest Diva positioning: Short positions below 69.7 with targets at 63.7 and 60.8 in extension.
Alternative scenario: Above 69.7 look for further upside with 71.8 and 73.3 as targets.
