Amana FS Daily Market Reports
EUR/USD: Euro Reaches 2-Month High Against Greenback as the 1.17 Resistance Breaks
The Euro vs US dollar pair spiked sharply higher in today’s trade, reaching a fresh 2-month high of 1.1776. The greenback has been the worst performer of the day so far, falling against all major counterparts in the last five trading hours as risk mood remains generally constructive. Traders should also note that all positive news may already be priced-in the greenback, and markets may now be shifting their focus to other longer-term headwinds for the greenback, such as the widening U.S. deficit.
The spike above the 1.17 resistance level could now suggest that further strength lies ahead for the pair, as the price is forming a fresh higher high on the daily chart. To the upside, the EUR/USD pair could face increased selling pressure at the June high of 1.1850.
The Euro seems now well supported above the 1.17 mark, with a plethora of resistance levels clustering around the 1.1720 level, arising from the August 28 high of 1.1733, and the upper and lower bounds of the broken 4-hour wedge pattern.
It’s also worth mentioning that a continued weakness in the greenback could trigger long unwinding and accelerate the up-move even further. The aggregate long US dollar market positioning slightly dropped to $20.3 billion, according to the previous week’s CoT report. As of 14:43 London time, the pair traded at 1.1756, up 0.75% in the last 24 trading hours.
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Bitcoin’s price has been trading sideways for almost two months against the US Dollar, and the price is trapped within a Triangle Chart Pattern. This narrow-range behavior suggests that a potential breakout could be happening soon. As of writing, the pair was trading at $6417, +1%, in the last 24 hours.
A Triangle Chart Pattern is formed when there are support and resistance lines that converge together to form a triangular shape. In BTC/USD, if we connect the two higher lows of August 14 and September 19, and the two lower highs at July 24 and September 4, we can form a triangle-like pattern.
Usually, with triangle patterns, the breakout direction is difficult to predict. Therefore, it is better to be ready for a breakout on either side. If the price breaches the upside, I think it could potentially rally towards the July 24 high of $8508. On the downside, a break to the support trend line might cause the price to go down towards the June 24 low of $5759.
Meanwhile, I will sit on the sideline and wait for the breakout confirmation on either side before entering any position.
Bitcoin Four-hour Chart
GBP/CAD: Sellers Eye August Low as Pair Approaches Important Daily Trendline Resistance
The British pound vs Canadian dollar pair (GBP/CAD) broke below a falling 4-hour trendline after facing heavy resistance at a falling daily trendline earlier this week. The pair is currently completing a pullback to the shorter-term trendline, which could form a potential short setup if the resistance shows to hold.
The levels that are important to watch to the upside are 1.7150, which is the daily trendline resistance, followed by the September 11 high of 1.7188. I maintain a bearish bias on the pair at those levels if the price manages to form a bearish reversal candlestick pattern. A break and daily close above the September high of 1.7188 would invalidate the short setup.
If the mentioned levels show to hold, sellers could aim at the September 12 low of 1.6919, followed by the August low of 1.6592 in the medium term. The bigger picture also suggests that the pair trades inside a healthy downtrend, after a successful break of a bearish head and shoulders pattern in July. As of 12:58, the pair traded at 1.7125.
Recently, the GBP/CAD pair hit a 300-pip profit target after a descending triangle break, as hinted in one of my previous updates on the pair.
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The U.S. Dollar has fallen to its lowest trading level against the Canadian Dollar since August 28th, as a combination of weakness in the greenback and strength in oil markets pushes the pair lower. The USD/CAD pair is testing the 1.2900 level, with the August 28th trading-low, at 1.2888, the key support region to watch on a continued decline lower.
WTI oil is holding above the $71.00 level after the EIA weekly report and bullish comments from Saudi officials, who preference oil at $80.00 per barrel. The U.S. Dollar Index has slipped to the downside, with a number of majors performing breakouts against the greenback.
Looking at the technicals for the USD/CAD pair, the June 6th trading low, at 1.2852 offers key support below the 1.2888 level. Further key support comes from the May 31st low, at 1.2816, with the bull flag trendline bottom coming in close to the actual 1.2800 level.
Key resistance for the USD/CAD pair on any turnaround higher from current levels is found at the recent swing-high, at 1.2933, and former key support turned resistance at 1.2975.
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Over the past two weeks, there have been further declines in Bitcoin Cash (BCH) vs. the US Dollar. Yesterday, the price printed a new 2018 low at $407 as traders seem to be giving up on the digital asset.
Technically, the BCH/USD longer-term trend remains bearish below trend-defining resistance at the September 2 high of $660. Also, the price is well below a declining 200-period (4HR) MA, suggesting that we’re still in a downtrend.
From a risk-reward ratio perspective, I prefer a sharper price correction before the next bearish down leg. If we draw Fibonacci retracement levels from the September 2 low of $660 down to yesterday’s low of $407, we can get the $504 to $564 range (38.2% to 61.8% Fibonacci levels). I suspect that bearish traders might consider this range as an opportunity to short BCH/USD, with their aims centered on the October 28 low of $364.
My bearish bias remains intact as long as the price trades below the September 2 high.
Over the last 48 hours, Ripple’s XRP price has skyrocketed against the US Dollar. The XRP/USD pair climbed from $0.270 to $0.337 (+21.6%) in less than 12 hours as traders responded to speculation surrounding the Ripple product (xRapid). Its total market capitalization now stands at $12.9 billion with an exchange-trading volume of $443 million according to Coinmarketcap.com.
In the 4-hour chart, the price remains in a bearish territory below the August 17 high of $0.374. Unless the price breaks this level, my bias is still with the bears. However, with the current positive price action, I wouldn’t be surprised if the price will breach the August 17 high in the next couple of days, especially now that the price crossed the 200-period (4HR) moving average. If the price successfully breaks this high, it could continue to trade higher challenging the August 1 high of $0.463.
Until the price breaks the August 17 high, I will remain on the sideline but will closely monitor the price.