Daily Market Review – 14/04/2015




USDCHF Double Bottom | USDCHF Possible Rally

USDCHF recently made a reversal pattern visible on its 1-hour and 4-hour charts, indicating that an uptrend might take place. A double bottom formation can be seen and price just broke above the neckline around the .9750 minor psychological resistance.

Price is currently pulling back to the neckline, which might now hold as support. If that happens, USDCHF could resume its climb and carry on by around 300 pips, which is the same height as the chart pattern. However, if sellers take over, price might make a steeper drop to the previous lows at the .9500 major psychological support level.

The main event risk for this trade today is the US retail sales release, which could show a strong rebound in consumer spending. Headline retail sales could print a 1.1% gain while core retail sales could see a 0.7% uptick, enough to offset the losses seen in the previous month.

However, if the actual figures fall short of expectations, USDCHF could be in for more losses. After all, recent jobs figures have been disappointing and enough for the Greenback to return some of its gains. The path of least resistance is to the upside though, as risk aversion is also supportive of the safe-haven US dollar.



GBPUSD Pullback Play | Resistance at 1.4800

GBPUSD is on a steady downtrend but price seems to be finding support at the 1.4600 levels. Price is now making a correction to the Fibonacci retracement levels seen on the shorter-term time frames, with the 50% level lining up with a broken support area.

If the 1.4800 major psychological level holds as resistance, GBPUSD could resume its drop to the previous lows close to the 1.4550 minor psychological support or even create new ones if selling pressure is strong enough. Stochastic is already indicating overbought conditions on the 4-hour chart, confirming that pound bears are ready to push prices back down.

However, a move past the 1.4800 handle could mean that a reversal is underway. This should create a double bottom pattern on the same time frame and suggest that the downtrend is over. For now, the shorter-term EMA is moving below the longer-term EMA on the 4-hour chart, suggesting that the path of least resistance is to the downside.

Event risks for this trade include the UK CPI release, which might show no change in the headline and core figure. However, if actual figures come in short of expectations, GBPUSD could be in for more losses.



EBAY Shares To Resume Rally? | Support at Moving Average

EBAY shares look ready to resume the climb after retreating to the moving averages on the daily time frame. The stock has been in a continuous uptrend as risk appetite has lifted demand for US equities. However, the recently released NFP reading fell short of expectations and led to a bit of weakness last week.

For now, the moving averages are functioning as dynamic support zones, keeping the price afloat and the uptrend intact. In this case, EBAY shares could move back up to the previous highs around $61/share or perhaps make new highs.

On the other hand, if support at the moving averages breaks down, the stock could be in for more losses. Stochastic is moving up from the oversold region though, which means that buyers are regaining control and that bullish momentum could return.

In addition, the shorter-term moving average is still treading above the longer-term moving average, which means that the path of least resistance is to the upside. However, if a move lower takes place, EBAY stock could find support at the area of interest around $54/share.