“Risk currencies” plunge (AUDUSD, NZDUSD and USDCAD forecasts)

Intermediate
  • The major “risk currencies”, the Australian, New Zealand and Canadian Dollars have sold off against the US Dollar, as global equities have plunged, renewing the correlation we would expected, which had to some extent broken down in October (as we looked at in our article here last week).
  • The still further aggressive shift to a “risk off” scenario is still being driven by:
    • An ongoing surge in COVID-19 cases, hospitalisations and deaths in Europe and the US
    • More forceful regional/ national lockdowns in Europe.
    • Practically no hope of a US economic COVID-19 package ahead of the US election next Tuesday
    • Concerns as to the aftermath of the US election and a potential lengthy process.
  • Here we look at AUDUSD, NZDUSD and USDCAD from a technical analysis perspective, for today and into early November.

AUDUSD day trade outlook: Intermediate -term bearish shift below .7002/00

Again, a sell-off on Thursday through .7035 and .7017 supports and to just prod at key .7002/00 (to 6999), to signal an intermediate-term shift to bearish, to reinforce Wednesday’s plunge down from our .7158 resistance, to renew bigger negative forces from the erratic breakdown from early September, to keep the threat to the downside for Friday.

Day trade setup

  • We see a downside bias for .6999 and .6959; a break here aims for .6920/18 and maybe even .6874.
  • But above .7076 opens risk up to .7109/10 and possibly .7158.

AUDUSD intermediate-term outlook

The late October push below the key .7002/00 support area signalled an intermediate-term shift to bearish.

  • Downside risks: We see an intermediate-term bear trend to aim for .6829 and .6773.
  • What changes this? Above .7244 see the intermediate-term bear trend switch straight to a bull trend.
8 Hour AUDUSD Chart
8 Hour AUDUSD Chart

NZDUSD day trade outlook: Threat to the downside

A probe lower Thursday below .6626 and .6605/6599 supports to .6594, to reinforce Wednesday’s sell-off through .6668/60, to further reject upside forces from last week’s push above key .6682/88 resistances (that shifted the intermediate-term view to bullish), to keep the threat lower for Friday.

Day trade setup

  • We see a downside bias for .6594; a break here aims for .6549/43 and maybe even .6508.
  • But above .6660 aims for .6689/90 and maybe opens risk up to .6724.

NZDUSD intermediate-term outlook

The late October push above .key .6682/88 resistances signalled an intermediate-term shift to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to target .6798, .6969/70 and maybe .7395/7400.
  • What changes this? Below .6486 sets an intermediate-term bear trend.
8 Hour NZDUSD Chart
8 Hour NZDUSD Chart

USDCAD day trade outlook: Surge keeps risks higher for key 1.3418/19

A Thursday spike higher above 1.3334/41 and 1.3381 resistances to 1.3390, to build on Wednesday’s surge higher and Tuesday’s bounce from 1.3138, sustaining positive pressures from Monday’s strong rally to reverse the down trend line from late September, to keep the risk higher for Friday.

Day trade setup

  • We see an upside bias for 1.3390; a break here maybe aims for key 1.3418/19, even towards 1.3460/83.
  • But below 1.3273 quickly opens risk down to 1.3231 and possibly towards 1.3141/38.

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

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

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