“Risk currencies” bullish, despite “risk off” signals from stocks (AUDUSD, NZDUSD and USDCAD forecasts)

Intermediate
  • A breakdown in the correlation between the US Dollar and stock indices this week has seen the US currency weakening as global share averages have signalled a more vulnerable outlook.
  • Therefore, the major “risk currencies”; the Australian, New Zealand and Canadian Dollars have moved higher versus the US Dollar, as equities are looking more negative, which is counter to the usual, more recent relationship.
  • The further shift to more of a “risk off” theme has been driven by:
    • An ongoing surge in COVID-19 cases in Europe, growing hospitalisations, and harsher regional/ national lockdowns.
    • Fading hopes of a US economic COVID-19 package ahead of the early November US election
  • Here we take a technical analysis view of AUDUSD, NZDUSD and USDCAD for today and into late October/early November.

AUDUSD day trade outlook: Risks to the upside

A high-level consolidation Thursday just below our .7138/48 resistances capped at .7137, and whilst above .7067 support holding onto upside forces from Wednesday’s surge higher to reverse above the down trend line from mid-October and overcome .7115 resistance, to keep the threat to the upside for Friday.

Day trade setup

  • We see an upside bias for .7137/48; a break here aims for .7191/7203 and maybe towards key .7244.
  • But below .7067 opens risk down to .7017 and possibly key .7002.

AUDUSD intermediate-term outlook

The mid-October push above the key .7209/10 resistance area signalled an intermediate-term shift to a wider range, .7244 to .7002/00.

Upside risks: Above .7244 see an intermediate-term bull trend to aim for .7345, .7413, .7500 and .7677.

Downside risks: Below .7002/00 see an intermediate-term bear trend to aim for .7012/00, .6829 and .6773.

8 Hour AUDUSD Chart
8 Hour AUDUSD Chart

NZDUSD day trade outlook: Risks higher for key .6682/88 resistances

A high-level consolidation on Thursday, after Wednesday’s surge higher to reverse the downtrend line from mid-September and push above .6623 and .6646/53 resistances to just stall below key .6682/88 resistances, but to keep the threat higher for Friday.

Day trade setup

  • We see an upside bias for key .6682/88 resistances and .6712/17; a break here aims for .6742 and maybe .6775.
  • But below .6605/6599 opens risk down to .6549/43 and possibly towards .6508.

NZDUSD intermediate-term outlook

The push below key .6599/98 supports signalled an intermediate-term shift to a broader range seen as .6486 to .6682/88.

Downside risks: Below .6486 sets an intermediate-term bear trend to target .6382/79, .6079, .6000 and .5919/08.

Upside risks: Above .6682/88 sets an intermediate-term bull trend to target .6798, .6969/70 and maybe .7395/7400.

8 Hour NZDUSD Chart
8 Hour NZDUSD Chart

USDCAD day trade outlook: Threat lower 

A setback Thursday from 1.3178, below our 1.3204/09 resistances, to push below 1.3129 support to 1.3119, to sustain negative forces from the latter October sell-off from the 1.3204/09 resistance area, to push below our 1.3146/41 and 1.3096/83 supports to 1.3077, to keep the risk lower for Friday.

Day trade setup

  • We see a downside bias for 1.3119; a break here aims for 1.3077 and 1.3033 and maybe key 1.2990.
  • But above 1.3178 aims for 1.3204/09, which we would look to try to cap. Above opens risk up towards 1.3260/89.

USDCAD intermediate-term outlook

The April push below 1.3922 set an intermediate-term bear trend.

  • Downside risks: We see downside risk for 1.2990/1.2948, 1.2799 and 1.2550.
  • What changes this? Above 1.3418/20 shifts the intermediate-term outlook straight to bullish.
8 Hour USDCAD Chart
8 Hour USDCAD Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

Comment on this video

Your email address will not be published. Required fields are marked *


Latest Related News

Markets keep the party going, despite surging US COVID-19 cases

Macroeconomic/ geopolitical developments A fairly quiet week on the macroeconomic and geopolitical front, with the holiday shortened session in the US on Thursday and Friday because of Thanksgiving.The main development was on the US political side, as the Presidential transition of power has started properly, and although the Trump administration continues dispute the election result, they have allowed Biden’s team to start the transition. Also,… Continued

US Dollar stays weak as AUDUSD and USDCAD approach key levels

Dollar Index reaches final major support (DXY forecast)Euro breaks up (EURUSD forecast)Pound posts negative (GBPUSD forecast)Aussie reaches major monthly resistance (AUDUSD forecast)Dollar-CAD approaches its major support zone (USDCAD forecast) Continued

NZD leads “risk” currencies higher – NZDUSD, AUDUSD, and USDCAD forecasts

A solid consolidation tone since midweek, but November strength seen across the major “commodity” or “risk” currencies (the New Zealand, Australian and Canadian Dollars) remains intact.The “risk on” price action is still being assisted by:Pfizer, Moderna and Astra Zeneca/ Oxford COVID-19 vaccine hopesExtension of the Biden bounceMixed, but marginally positive economic data compared with consensusHere we look at the NZDUSD, AUDUSD and USDCAD charts and… Continued

AUDUSD Expects to See More Upside Activity – Elliott wave analysis

On the 4h chart of AUDUSD we can see market trading in a bullish price move, commonly named an impulse. An impulse is a five-wave move, that trades into the direction of the stronger trend (in our case this is to the upside). That said, we know that nothing moves in straight lines, which means that after an 1-2-3-4-5 move develops, a temporary A-B-C correction… Continued

“Risk on” mode reflected by “commodity currency” resilience

Macroeconomic/ geopolitical developments The announcement last Monday from Moderna that their COVID-19 vaccine produced very positive trial results sustained the prior “risk on” theme, evident after the similar announcement from Pfizer the Monday before. This “risk on” tone was further reinforced by another positive statement from the Astra Zeneca/ Oxford University trial in the week.On the US politics side, there is still a negative impact… Continued

Forex Brokers in your location


SIGN UP

72% of retail investor accounts lose money when trading CFDs with this provider.


SIGN UP

74-89% of retail investor accounts lose money when trading CFDs with this provider.


SIGN UP

75% of retail investor accounts lose money when trading CFDs with this provider.


SIGN UP

76.4% of retail investor accounts lose money when trading CFDs with this provider.