Monday, October 31, 2016

This Will Be a Very Eventful Week



Some weeks are relatively uneventful, others, however, are full to the brim with scheduled high impact news events that cause a lot of volatility on the market. The next five days are definitely part of the latter, not the former.

Here are the main events that we can expect to cause such major volatility this week:

Monday – on Monday we can expect the Bank of Japan Outlook Report, Policy Rate and Monetary Policy Statement.
Tuesday – on Tuesday there will be a BoJ Press Conference, as well as a speech by Bank of Canada Governor Stephen Poloz.
Wednesday – the main event on Wednesday is undoubtedly the FOMC statement and the Federal Funds Rate announcement.
Thursday – on Thursday will be announced the Bank of England Inflation Report, as well as the Official Bank Rate.
Friday – and finally on Friday we can expect the announcement of the US Change in the Non-farm Payrolls.

Friday, October 28, 2016

GBP/AUD Is Forming an Inverse Head and Shoulders Pattern




After the big drop of the GBP back on 7th October 2016, when the GBP fell drastically compared to all other currencies, we finally see attempts to begin returning to its old levels.

On the GBP/AUD daily time frame we can see a morning star bar which could be the first signal for an impending move to the upside. Also the RSI indicator is forming a divergence between the last two lows from 19th October and 26th October.


 On the four-hour time frame we can see a classic inverse head and shoulders pattern.

For me these signals are enough to expect a new move to the upside. If the inverse head and shoulders pattern reaches its limit then after a breakout above the neckline we can expect the pair to rise with about 300 pips.


USD/CAD Is Forming an Ascending Triangle




The USD/CAD situation hasn’t changed particularly during the past week – the pair continues forming a range slightly above the breakout of the resistance trendline (the red line), as you can see on the daily time frame screenshot.




However, on the four-hour time frame you can see a figure that resembles an ascending triangle. In order to be sure that it is one, however, it needs to reach the support trendline at least one more time, as it has reached its trendlines only three times.

All in all, I think that we could expect a new move to the upside, likely after a test of the trendchannel the pair broke above – which means that the trendline that served as a powerful resistance for five months will turn into a support.