Good to see the Kiwi on a bit of tear (the white line on the currency strength indicator), but comes as no surprise given how oversold it was at the end of last week. We've been tracking the NZD/USD which has had a huge move higher overnight & broken through the VPOC on the daily chart and is now touching the 100 ma.
As we mentioned in yesterday's webinar although December price action can often seem erratic, it can nonetheless offer some great trading opportunities. And those of you who come along regularly to our webinars will know David & I are great fans of both the Kiwi and Aussie!
Kiwi Roaring Higher on the Currency Strength Indicator
The Kiwi (NZD) is roaring higher recently. This commodity currency shows strong momentum. The currency strength indicator highlights it clearly. NZD ranks at the top against majors. Traders spot bullish opportunities in NZD pairs.
CSI on Slower Timeframes
The currency strength indicator works across all timeframes. On...
Cable continues to remain very weak for the time being, and is now approaching the tipping point of a potential deeper move once we have a strong close below the psychological 1.50 price point, which is clearly marked on the weekly chart by the support and resistance indicator.
At the same time the VPOC (volume point of control) is also weighing heavily on the pair, and should the above level be breached then a further cluster of support awaits below in the 1.48 region. Any failure here will see cable move into a low volume node in the 1.46 region, last seen in March this year from which cable managed to stage a sustained recovery.
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Eurodollar Continues to Frustrate
Eurodollar continues to frustrate many traders. EUR/USD moves in tight ranges. Breakouts fail often. This choppy action creates false signals. Patience is tested daily.
Eurodollar continues to frustrate traders, and it's easy to see why. Since the failure to breach 1.1713 the pair has retreated back into the range of the VPOC (volume point of control) in the 1.1170 region where it continues to remain waterlogged.
With end of month and end of quarter position squaring we will have to wait to see whether eurodollar can finally break away from this region. From a technical perspective the heavy selling of 6 weeks ago is self evident with the extreme volume and deep upper wick to the candle telling their own story. Since then the pivots have helped to define the floor and ceiling of the congestion zone, and with volume now building on the VPOC histogram any move away is likely to be extreme and accompanied with strong participation.
The...
Aussie Finding Some Bullish Momentum
The Aussie is finding some bullish momentum recently. AUD pairs push higher. This reflects renewed buying interest. Commodity links and risk sentiment support the move. Traders spot opportunities in AUD crosses.
Of the three commodity dollars, namely the Aussie, Kiwi and Loonie it is perhaps the Aussie which finally appears to be showing signs of a potential reversal from its oversold state on the slower time frames of our currency strength indicatort (the blue line). And of the Aussie pairs it is perhaps the AUD/USD and AUD/CAD which appear the most interesting.
Starting With AUD/USD
Starting with the AUD/USD it was the failure in May to break through the resistance at 0.8160 which was the start of the its downards descent which saw the pair finally find some support at 0.6906 on the Friday before the Labor Day Holiday in the US. And whilst this level was tested once again last Monday, since then the AUD/USD has managed to...
Eurodollar Regains Its Bullish Mojo
Eurodollar regains its bullish mojo in recent sessions. Buying pressure returns. Price pushes higher with conviction. This shifts sentiment from bearish to optimistic on EUR/USD.
At last Thursday's ECB press conference, it was enough for Mario Draghi to hint at further QE for the eurodollar to sell off sharply, taking the pair from a high of 1.1243 to a low of 1.1087/96. This support platform was tested again on Friday as a degree of buying for the pair stepped in ahead of the Labor Day holiday in the US and Canada.
Starting The Week
And whilst the start of this week has seen relatively muted price action for eurodollar given Monday's holiday, the tone of this action has been overall bullish with each session threatening to take the pair through and away the volume point of control in the 1.1200 price region. This has materialised in today's trading session which has seen eurodollar move from a low of 1.1171...
Following longest fall since 2008 no surprise to see British pound and the 6B move higher in this morning's trading, on the back of profit taking and closure of US and Canadian markets for the Labor Day holiday.
From a VPA (volume price analysis) perspective the recent move lower has also been associated with falling volume suggesting the downwards pressure is, for now, running out of steam, with the platform of support at 1.5160 providing the reason for the pullback. Longer term, however, the outlook remains bearish for Cable, and should the 1.5160 price point fall to hold we may see a move towards 1.50 and even a possible re-test of the 1.46 region in due course.
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Pause in Cable’s Sharp Move Lower
A pause in cable’s sharp move lower offers breathing room. GBP/USD selling pressure eases temporarily. Price consolidates after the drop. This creates potential setups. Traders watch for continuation or reversal.
Last Tuesday's failure by cable to take out the 1.5818 resistance resulted in a down candle on high volume, which when it was combined with the previous day's bullish candle on very high volume gave us a two bar reversal (aka a shooting star), and the first signal that cable's preceding move away from the volume point of control region was likely to fail. This view was also validated by the volume accompanying the shooting star, and by a further clear signal of weakness to come.
Summary
Against this backdrop Wednesday's sharp 267 pip sell off in cable came as no surprise with the pair also moving firmly below the VPOC to close out at 1.5463 on the session.
The bearish sentiment was cable continued for the remainder of...
Interesting Divergence in the Majors
Interesting divergence in the majors often signals shifts. Currencies move differently despite shared factors. This reveals underlying weakness or strength. Traders watch for potential reversals or continuations. During yesterday's overall market volatility the forex market posted some very interesting and intriguing price action and candle patterns, particularly with regard to the major pairs.
Spotting Divergence with VPA
Volume price analysis (VPA) highlights divergence clearly. One major strengthens on high volume. Another weakens despite similar news. Quantum currency strength indicator ranks them relationally. Matrix shows cross-pair mismatches.
Practical Trading Insights
Divergence warns of changes. For example, USD strong but EUR/USD not falling—euro resilience. Or GBP lagging peers—pound vulnerability. Anna Coulling's VPA approach with Quantum tools spots these early for high-probability setups.
Interesting divergence in majors creates opportunities. Quantum indicators make relational analysis simple and reliable. Stay alert for these subtle but powerful signals.
As a general rule of thumb whenever the market becomes agitated and adopts a 'risk off' mood traders and investors...
CSI Highlights GBP Sell Off
The Currency Strength Indicator (CSI) highlights GBP sell off clearly. It ranks currencies by relative performance. GBP drops sharply in rankings. This signals heavy selling pressure. Traders see weakness early.
Ahead of the release of the Monetary Policy Minutes from the RBA, and tomorrow's CPI number for the UK, it's been interesting to see how the Aussie and British pound have been behaving in today's trading session. And of the two currencies it has been the British pound which has seen some heavy selling against both the USD and the Aussie.
The hourly chart of the CSI (currency strength indicator) highlighted the extent to which the British pound was overbought, and Cable's failure to take out the resistance at 1.5688 signaled the start of a reversal in fortune for the pair and a move lower of over 100 pips. And it has only been a combination of the VPOC at 1.5585 and support at 1.5578 that has prevented...
USD Looks Set to Move Higher
The USD looks set to move higher in recent sessions. Buying pressure builds steadily. This reflects renewed dollar strength. Traders watch for continuation across majors.
In the current media speculation surrounding the impact of the PBOC decision to revalue/devalue the yuan, particularly on how this may (or may not) affect the FED's decision about raising interest rates, it is easy to forget two things. First, the fundamental news releases which too will add their own layer of volatility, and second Greece, which today is back centre stage as the Greek parliament meets today in emergency session to ratify the latest bail out deal.
Key Releases
Today's key releases are primarily in the US with retail sales, core retail sales and the unemployment claims due. And of these it is the retail sales numbers which the market will be focused on primarily because they may give some guidance as to the FED's thinking about interest rates.
Meantime in this morning's...
