Daily Market Review – 19/05/2015

Apple Stock Surge Likely After Monday’s Wall Street Rally!



USDCAD Triangle Breakout | Potential Retest of Triangle Resistance

USDCAD had been trading inside a descending triangle chart pattern on the 4-hour time frame before breaking above resistance. Price could head higher by around 350 pips, which is the same height as the chart pattern.

Before that happens though, price could pull back for a potential retest of the triangle resistance at 1.2050 minor psychological level. Stochastic is already moving down from the overbought zone, suggesting that sellers are taking control of price action for now.

Event risks for this trade setup today include the release of building permits and housing starts data from the US. Also lined up today is a testimony by BOC Governor Poloz who might confirm that the Canadian economy isn’t in need of further rate cuts. Hawkish remarks from the central bank head could renew demand for the Loonie and push for a move towards the triangle support at the 1.1950 minor psychological level.

A bigger potential market-mover for this pair is the release of the FOMC minutes in tomorrow’s US trading session. Recall that the Fed sounded more cautious in their recent statement when they downgraded growth forecasts, although they mentioned that the economic slowdown might just be temporary. Downbeat remarks could continue to undermine dollar strength.


EURUSD Channel Support | Bounce from 1.1300

EURUSD has been trading inside a rising channel on its 1-hour forex chart, reflecting a short-term uptrend for the pair. Price recently tested the channel resistance at the 1.1450 minor psychological level and may be due for a bounce off support at the 1.1300 major psychological level.

Stochastic is already indicating oversold conditions, which suggests that buyers could take control of price action and push for another move towards the channel resistance. Event risks for this trade setup include the release of the German ZEW economic sentiment index, the euro zone final CPI, and the region’s ZEW economic sentiment figure.

Weaker than expected data from the euro zone could lead to losses for the shared currency, which is losing support from the optimism surrounding the Greek debt situation. On the other hand, strong results could keep the shared currency afloat, especially if stochastic starts moving up from the oversold area also.

As for the US economy, the release of the building permits and housing starts figures today could also add volatility to the pair. Weak data could lead to downbeat expectaations ahead of the release of the FOMC minutes tomorrow, which could shed more light on why the Fed lowered their growth forecasts.



AAPL Stock Uptrend | Resistance at $135/Share

AAPL shares seemed to enjoy another boost in demand, as risk appetite improved across the financial markets yesterday. Price bounced off the short-term range support around $125/share and may be headed for the top around $135/share.

The short-term EMA is above the long-term EMA on the daily time frame, adding confirmation that buying momentum could be sustained. If upward pressure is strong enough, an upside break past the previous highs at $135/share could even be possible. Stochastic is still moving up, indicating that buyers are still in control.

Event risks for this stock setup include the release of the FOMC minutes during the middle of the week. Recall that the Fed downgraded their growth forecasts but assured that the slowdown is just temporary. Any biases in the minutes of their meeting could have a significant impact on US equities.

A larger market correction for Apple shares could lead to a test of support at the long-term EMA and rising trend line around the $120-122/share level. A break below this region, though unlikely, could spark a longer-term selloff for Apple shares.