Ichimoku cloud analysis: GBP/USD, USD/CHF, NZD/USD

GBP/USD, “Great Britain Pound vs US Dollar”

The pair is growing in a bullish channel. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the signal lines of the indicator at 1.2155 is expected, followed by growth to 1.2890. An additional signal confirming the growth will be a bounce off the lower border of the bullish channel. The scenario can be canceled by a breakaway of the lower border of the Cloud and securing under 1.1805, which will mean further falling to 1.1710.

USD/CHF, “US Dollar vs Swiss Franc”

The currency pair has left the borders of the Double Bottom pattern. The instrument is going under the Ichimoku Cloud, which suggests a downtrend. A test of the lower border of the Cloud at 0.9410 is expected, followed by falling to 0.9085. An additional signal confirming the decline will be a bounce off the lower border of the Triangle pattern. The scenario can be canceled by a breakaway of the upper border of the Cloud and securing above 0.9505, which will mean further growth to 0.9610.

NZD/USD, “New Zealand Dollar vs US Dollar”

The currency pair has secured above the resistance level. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the Tenkan-Sen line of the indicator at 0.6310 is expected, followed by growth to 0.6655. An additional signal confirming the growth will be a bounce off the lower border of the bullish channel. The scenario can be canceled by a breakaway of the lower border of the Cloud and securing under 0.6105, which will mean further falling to 0.6005.

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(Giles Coghlan LLB, Lth, MA – HYCM)

This week was all about the Fed and the latest incoming US data. On Wednesday Powell addressed markets and signposted a slower path of interest rates ahead. This sent the dollar lower, stocks higher, and supported precious metals. On Thursday the latest US CORE PCE print showed a mixed inflationary picture which slowed the move. Chinese stocks were buoyed in the first half of the week on hopes that China would pivot away from its Covid-Zero policy and could gain on further positive re-opening moves.

Other key events from the past week

China: Covid pivot hope, Nov 28: China’s stocks enjoyed a firm bounce this week as optimism grows about a pivot away from China’s Covid-Zero policy. If this sentiment is combined with good data watch out for a potential sharp upside
S&P500: Powell speaks!, Nov 30: The hotly awaited speech from Powell did not disappoint markets. Powell sent stocks and gold higher by signaling a slowdown in the pace of interest rates ahead, but was the message really ‘new’?
USD: US Core PCE, Nov 24: Inflation in the US is showing signs of staying high. The Core PCE price index was revised higher for September to 5.2% and the Price Index was too to 6.3%. Too soon to say Inflation has peaked just yet.

Key events for the coming week

China 50: China PMI’s, Dec 05: The China 50 pulled sharply away from 1200 on optimism around a pivot from China over its Covid-Zero policy. Any signs of a pick-up in China’s economy could boost the China 50 further next week unless the move is overdone now.
Stronger seasonals approach for copper: Platinum’s seasonals are stunning around this time of the year.
CAD: Interest Rate decision, Dec 07: Will the BoC shows more willingness to start thinking about slowing the path of interest rates like it did in October’s meeting? USDCAD is worth watching closely in case it does.

Read Can central banks go bankrupt? The perils of high-interest rates after QE

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