EURJPY and Apple Shares to Ditch this Tuesday

27/01/2015

EURJPY and Apple Shares to Ditch this Tuesday

Forex

AUDCAD

AUDCAD Trend Line Retest | Long-Term Resistance at Parity

AUDCAD might have reached a top in its recent rally, as traders speculate that oil prices have already bottomed out. Price has broken below the short-term rising trend line visible on the 1-hour forex chart, indicating that selling pressure is picking up.

The pair has previously tested the long-term resistance at parity, which is close to the 61.8% Fibonacci retracement level on the daily time frame. Before heading further south though, AUDCAD showed a small pullback on the 1-hour chart and is finding resistance at the .9900 major psychological level.

If the selloff resumes, a head and shoulders pattern on the 1-hour chart could be seen, with a downside break below the neckline at .9800 indicative of further losses. If that happens, AUDCAD could make its way back to the previous lows at .9400, as seen on the daily chart.

Australia is set to release its quarterly CPI data tomorrow and reflect a downturn in price pressures, which might lead to Aussie weakness. Bear in mind though that the BOC just cut interest rates and that another potential oil price drop might mean more upside for

AUDCAD.

EURJPY

EURJPY Shallow Retracement | Potential Pullback to 135.00

EURJPY has been on a steady decline recently but is showing signs of a market correction on its short-term charts. The pair has dipped close to the 130.00 major psychological handle and is due for a pullback to the Fib levels marked on the 1-hour time frame.

At the moment, it looks like the pair has already encountered resistance at the 50% Fibonacci retracement level near 133.50 and may be due south soon. However, stochastic has just reached the oversold zone, indicating that euro bulls have enough energy to push for a higher pullback.

In that case, price could still retreat to the area of interest near the 135.00 major psychological level. This should be the line in the sand for any short-term rallies, as a break past this zone might mean that a reversal is taking hold. The path of least resistance seems to be to the downside for this pair, as the ECB has just announced its quantitative easing program and the Greek political situation might spark more uncertainty for the region.

Bear in mind that the anti-austerity Syriza party has taken power in Greece, which means that the debt-ridden country might have lower odds of securing its next batch of bailout funds from the troika. An increased likelihood of a debt default could put the euro in a tailspin as it would undermine the ECB’s bond buying program.
Stock

Resistance Holding on Apple Shares | Selloff to Range Support

Apple shares have previously shown upside momentum in bouncing off the short-term range support at $106/share and moving back to the top of the range around $114/share. However, this area still seems to be keeping gains in check for now, suggesting that another move to the range support is possible.

The upcoming FOMC rate statement could determine the longer-term direction for Apple shares and other US equities, as this might clarify whether or not the central bank is ready to tighten sometime this year. Weak inflationary pressures have led them to stick to their cautious stance and emphasize that rates will stay low for a “considerable time” even after easing has ended.

Take note though that the Fed also mentioned that they “can be patient” in considering policy normalization, which market participants took to be a hawkish hint. This might mean more expensive credit and tighter lending conditions though, which could limit spending and investment among businesses.

An upside break past $114/share for Apple shares on dovish Fed remarks could mean a move towards the previous highs at $120/share while a move below the $106/share level could mean more downside for the stock.