“Risk off” hits “risk currencies” – AUDUSD, NZDUSD and USDCAD forecasts

  • A significantly strong US Dollar theme has been seen over the past 24 hours across Forex markets as global financial markets shifted more notably to a “risk off” theme, with global stock indices plunging lower (particularly in Europe).
  • This has been driven by:
    • A surge in COVID-19 cases throughout Europe, mounting hospitalisations, leading to regional and national lockdowns.
    • Waning hopes of a US economic relief package ahead of the US election in early November
  • Here we look at the major risk currencies; the Australian, New Zealand and Canadian Dollars versus the US Dollar (AUDUSD, NZDUSD and USDCAD) from a technical analysis standpoint, for today and into the second half of October.

AUDUSD day trade outlook: Threat lower

A Thursday plunge through multiple supports, notably .7092 down to .7053, to reject upside pressures from the earlier October surge through key .7209/10 (to shift the intermediate-term bear trend to neutral), to shift the threat lower for Friday.

Day trade setup

  • We see a downside bias for .7053 and key .7002/7000; a break here maybe aims for .6959.
  • But above .7109 opens risk up to .7138/48 and possibly .7191/7203.

AUDUSD intermediate-term outlook

The mid-October push above the key .7209/10 resistance area signalled an intermediate-term shift to a wider range, .7345 to .7002/00.

  • Upside risks: Above .7345 see an intermediate-term bull trend to aim for .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

audusd chart

NZDUSD day trade outlook: Downside bias

A Thursday breakdown through .6603 support, to reject Wednesdays’ probe higher up to .6682 resistance, also rejecting positive forces from the whole erratic recovery from latter September (from just above the key support level at .6486, from .6508), to flip the bias lower for Friday.

Day trade setup

  • We see a downside bias for .6572 and .6543; a break here aims for .6508 and maybe key .6486.
  • But above .6609 opens risk up to .6653 and possibly .6682/88 resistances.

NZDUSD intermediate-term outlook

The push below key .6599/98 supports signalled an intermediate-term shift to a broader range seen as .6486 to .6798.

  • Downside risks: Below .6486 sets an intermediate-term bear trend to target .6382/79, .6079, .6000 and .5919/08.
  • Upside risks: Above .6798 sets an intermediate-term bull trend to target .6969/70 and maybe .7395/7400.

8 Hour NZDUSD Chart

nzdusd chart

USDCAD day trade outlook: Upside risks

A surge higher Thursday above 1.3181 and 1.3232 resistances to 1.3260 to reject the negative forces from the late September/ early October sell-off for a reversal of the up trend line from mid-September, to flip the risk higher for Friday.

Day trade setup

  • We see an upside bias for 1.3260 and 1.3289; a break here aims for 1.3341 and maybe key 1.3418/20.
  • But below 1.3189 opens risk down to 1.3141 and possibly 1.3096/83.

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

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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