December rate hike becomes more likely post-election and trade setups for the week ahead November 27, 2016

Rate hike talks have been on the table, but post-election results made it all the more likely. U.S. economic releases have continued to beat expectations for the past two weeks.

Hear are the highlights for October:

  • Pre-lim University of Michigan Consumer Sentiment reported 91.6 beating expectations of 87.4
  • Both Core and Retail Sales jumped to 0.8% beating the 0.5% expectations
  • Building Permits used to gauge future construction activity surged to 1.23M beating 1.19m expectations
  • Core Durable Goods continue to rise by 1.0% from 0.1% the previous month

Trump’s win and fiscal speech brings encouraging news for increased economic activity. this all makes the December rate hike more likely.

First bull run and exhaustion we observe is on the USDCAD pair. This pair already experienced its initial dip and recovery back to our weekly highs.

screenshot-at-nov-26-19-52-30
USDCAD 30-Minute

Despite temporarily holding up on the November 24th supply zone, this pair tested the 23.6 Fibonacci zone and held.

screenshot-at-nov-26-19-54-48
USDCAD 5-Minute

There are no apparent demand zones outside of the 5-minute timeframe. I expect these to be short-term levels that will hold up temporarily. Priced in, the U.S. Dollar might finally beginning off as the rate hike finally meets expectations. This pair is currently on my watchlist with further bull strength expected off the Fibonacci levels as there are two more weeks to go.

screenshot-at-nov-26-21-24-14
EURUSD 30-Minute

The EURUSD pair is currently ending the final “shoulder” in this heads and shoulders pattern. The last bounce on the neckline occurred two hours before market closed on Friday. Current trading plan is to short this pair as this pair crosses below the neckline.

screenshot-at-nov-26-21-48-22
AUDUSD 1-Hour

Most recent supply and demand zones plotted. Price already tested our supply zone on the 25th at 2 pm, but on first look it seems to have failed from a lack of strong downwards pressure. There are no major RBA economic releases coming up the next week minimizing the fundamental impacts affecting this pair so these technical levels are expected to be predictable.

Currently no chart setups on JPY pairs due to the oversold trending nature. Trade setups to come as short positions are covered and prices make temporary pullbacks.

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