ActivTrades Webinar - London BREXIT Update: One month to Referendum

With one month left to the referendum in the UK that has to decide whether or not the country remains part of the European Union everyone on the market, especially the people trading the GBP pairs, are on edge and have many questions about the possible outcomes of this referendum and their consequences. I confess I am on edge and I have questions too.
 

Thankfully, the ActivTrades broker is organizing an online webinar, which will be led by professional trader Malte Kaub, who will go into detail about answering the most pressing questions about this event. What is the most likely scenario? How are the biggest traders positioned? Malte will share his insight straight from the leading traders in London.
 

The webinar will be held on 2nd June and you can learn more about it and register for it here>>> .
 

All ActivTrades webinars are free and open to the public.

AUD/USD Is About to Form a Double Bottom

It all depends on how today’s candlestick will close on the daily time frame and there are a few more hours until that happens. I think that there is a pretty big chance it will close as a double bottom indeed.

What is more, if we examine the RSI indicator we can see even without drawing any trendlines that there is a divergence between the two candlesticks that could form the potential double bottom.

That will be a very telling signal that the pair could change directions and we could see a move to the upside at least until it reaches 0.7250, which is a strong resistance level on the daily time frame. If the pair breaks above that level I think it will continue rising towards the next resistance at 0.7370.

Gold Could Not Break Above the Strong Monthly Support at 1280 – 1300

It has been four weeks since Gold began falling, the previous metal has fallen with almost $100 and at the moment it is at the strong support around 1200 that can be seen on the weekly time frame.

If we examine the monthly time frame we can conclude that the previous metal will continue falling at least until it reaches 1170 - 1160, which is another strong support level visible on this time frame.

If the pair succeeds in breaking below this zone of support (between 1200 and 1160) then the move to the downside will continue to 1050. On the other hand, if it cannot break below the support zone there will be a new move to the upside.

AUD/NZD Reached Strong Weekly Support and Bounced off of It

As we should have expected AUD/NZD reached the support at 1.06194, which is the red trendline you can see on the screenshot, for a fifth time for the past seven months and bounced off of it.

That, however, is no guarantee that a move to the upside is about to begin. The market has an unwritten rule that if a pair attempts to break above or below a certain level 2-3 times usually a reversal follows. This is not the case here though – AUD/NZD has tested this support (the trendline) five times now and it’s still trying to break below it.

If we look at the monthly time frame, the logical continuation of this movement is to the downside, not to the upside. In my opinion we should be prepared for a breakout after the next retracement. If that happens, I think the pair will continue falling towards the strong monthly support at 1.02160.

The Bank of Canada Kept the Interest Rate as It Is

The Bank of Canada announced today that it has decided not to change the interest rate and keep it at 0.50 and investors interpreted that as a good sign, which made all Canadian Dollar pairs start moving in favour of the Canadian currency.

When the news was announced USD/CAD fell with over 70 pips, which confirmed the trend reversal I have been expecting since yesterday.

EUR/CAD also fell with 90 pips and continues falling. I think the pair will keep moving to the downside, towards 1.4100 - 1.4050, which is a strong support level visible on the weekly time frame.

It is too early to say whether the pair will break below that level, because the monthly time frame is indicating a move to the upside, rather than to the downside. We will have to watch EUR/CAD carefully when it reaches that level.

EUR/USD Is Approaching the Diagonal Trendline that Has Formed Since 29th Nov 2015

There are less than 100 pips that remain until the pair reaches the diagonal trendline (the red line on the screenshot) and at this point there is little doubt that it will eventually go there.

If we examine the monthly time frame we will see that the pair has been consolidating around the middle line of the Bollinger Bands indicator, which can mean both an impending move to the upside, once the EUR/USD reaches that support, as well as a new move to the downside.

Future analysis of the pair depends on that trendline as well as the candlesticks that will form once it reaches that level. For now I intend to wait and see how it will behave without opening any new positions.

The USD/CAD Divergence Is Deepening which Means the Trend Will Reverse

Four highs during a divergence is a serious enough reason to think that the USD/CAD trend will reverse.

What is more, despite the slight move to the upside in the past five days (between 19th and 24th May) during which the pair formed said four new highs, there are multiple spinning top candlesticks on the daily time frame, which suggests that the trading volumes have been many times smaller than the ones at the beginning of the move to the upside on 3rd May.

All these factors are indications that a correction to the downside is about to begin.

On the chart you can see the important levels of support and resistance that formed while the pair climbed and I think the move to the downside will likely reach one of those levels. That said, in my opinion after the correction is over the pair will continue climbing at least until it reaches 1.3300, which is a strong resistance level visible on the weekly time frame.