USDCAD TECHS: Trend Needlee Points South
- RES 4: 1.4140 High Nov 5 and a key resistance
- RES 3: 1.4051 High Nov 28
- RES 2: 1.3954 20-day EMA
- RES 1: 1.3872 High Dec 10
- PRICE: 1.3763 @ 08:06 GMT Dec 12
- SUP 1: 1.3757 Low Dec 11
- SUP 2: 1.3727 Low Sep17
- SUP 3: 1.3682 76.4% retracement of the Jun 16 - Nov 6 bull cycle
- SUP 4: 1.3637 Low Jul 25
A bear theme in USDCAD remains intact, reinforced by this week’s extension lower. The move down maintains the current bearish price sequence of lower lows and lower highs and signals scope for a continuation towards 1.3727 next, the Sep 17 low. Initial firm resistance to watch is 1.3936, the 20-day EMA. Short-term gains would be considered corrective and would allow an oversold condition to unwind.
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AUDNZD: Westpac Eye Tactical Trading Ops, But Ultimately Expect Rally Extension
In the wake of the Oct ’13 high holding in AUD/NZD, Westpac note that the trans-Tasman cross has “sustained a break above 1.1500 decade-old resistance, and the longer it does so, the more we are inclined to remain bullish”.
- They write “fundamentals on both sides back the case for a longer-term range reset, to around 1.15-1.20 for the year ahead. Yield spreads at 13-year lows reflect solid Australian economic momentum and a subdued NZ economy yet to witness the fruits of the large easing cycle”.
- Still, Westpac are “open to some tactical trading over the next few weeks given the cross is extremely stretched according to momentum indicators. Below 1.1525, and certainly below 1.1500, could invite a tactical short, while a dip to 1.1400 may be an opportunity to reverse and enter fresh longs. Australian jobs data tomorrow could be a catalyst”.
AUDUSD TECHS: Testing Resistance At The 50-Day EMA
- RES 4: 0.6707 High Sep 17 and a bull trigger
- RES 3: 0.6661 2.0% 10-dma Envelope
- RES 2: 0.6644 76.4% retracement of the Sep-Oct bear leg
- RES 1: 0.6537/0.6618 50-day EMA / High Oct 29
- PRICE: 0.6536 @ 08:02 GMT Nov 12
- SUP 1: 0.6459 Low Nov 5
- SUP 2: 0.6440 Low Oct 14 and key support
- SUP 3: 0.6415 Low Aug 21 / 22 and a bear trigger
- SUP 4: 0.6373 Low Jun 23
AUDUSD is holding on to this week’s gains. For now, recent strength appears corrective, however, the pair has pierced an important short-term resistance at 0.6536, the 50-day EMA. A clear break of this average would strengthen a bullish case and signal scope for a stronger recovery, potentially towards 0.6618, the Oct 29 high. For bears, a resumption of weakness would refocus attention on the next key support at 0.6440, the Oct 14 low.
GILTS: Opening Calls
Gilt calls, 93.76/93.81.
