Market analysis and trade recommendations by FBS

[riki143]

GBP/USD ahead of BoE's Carney speech: Coming up next, dovish words?
10/25/2016

Today at 14:35 GMT we expect a speech from the Bank of England’s Governor Mark Carney, as he’ll testify at the House of Lords Economic Affairs Committee in London, United Kingdom. Because of the overall Sterling’s bearish bias, any dovish words by Carney should add pressure on the British currency and eventually, such moves can open the doors to test flash crash’s lows across the board.

The technical overview for GBP/USD at H1 chart is still bearish, as the Cable is forming a lower triangle. However, The pair is attempting to consolidate above the 200 SMA and one breakout above the 1.2242 level can send it to test the 1.2300 handle. If Carney has some bearish words present during his testimony, then we should expect a lower breakout of the 1.2175 level, in order to test the 1.2144 price zone.

More:
https://fxbazooka.com/analytics/11019

 

[riki143]

GBP/USD: bears are not active
10/25/2016

Technical levels: support – 1.2170, 1.2200; resistance – 1.2230/50.

Trade recommendations:

1. Sell — 1.2230; SL — 1.2250; TP1 — 1.2130; TP2 — 1.2100.

2. Buy — 1.2260; SL — 1.2240; TP1 — 1.2330; TP2 — 1.2360.

Reason: bearish Ichimoku Cloud and horizontal Senkou Span A and B; dead cross of Tenkan-sen and Kijun-sen, but lines are horizontal; the prices are under a Cloud.

More:
https://fxbazooka.com/analytics/11020

 

[riki143]

AUD/USD: volatility in a Cloud
10/25/2016

Technical levels: support – 0.7610; resistance – 0.7670.

Trade recommendations:

1. Buy — 0.7620; SL — 0.7600; TP1 — 0.7670; TP2 — 0.7710.

Reason: bullish Ichimoku Cloud; a correctional dead cross of Tenkan-sen and Kijun-sen; a strong support of a Cloud.

More:

https://fxbazooka.com/analytics/11021[URL="http://"][/URL]

 

[riki143]

USD/JPY: bulls have won
10/25/2016

Technical levels: support – 104.20, 104.00; resistance – 105.20, 105.70.

Trade recommendations:

1. Buy — 104.20; SL — 104.00; TP1 — 105.20; TP2 — 105.70.

Reason: a bullish Ichimoku Cloud and rising lines Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen.

More:
https://fxbazooka.com/analytics/11022

 

[riki143]

EUR/USD: bears took a break
10/25/2016

On the EUR/USD daily chart, quotes failed to fulfill the target at 1,084 on short positions. The euro got into the convergence zone located within 1,0836-1,0896 levels. Its boundaries correspond to the Targets 113% and 127.2% of the "Crab" pattern. If there is a break of the resistance line, there could be a rebound towards the 1,095 level. If there is a successful test of support, the quotes will continue to fall towards the 1.0692 mark.

On the EUR/USD hourly chart, if "bulls" once again attack the 1.09 level, the "Bat" inverted pattern will be activated. It could lead to the correction in the direction of 1,093 and 1,095 levels. In the "bearish" market, the rollbacks should be used for opening short positions.

Recommendations:

SELL 1,093 SL 1,0985 TP1 1,0835 TP2 1,07

SELL 1,095 TP1 1,0835 TP2 1,07.

More:
https://fxbazooka.com/analytics/11023

 

[riki143]

GBP/USD: pound stayed too long in the consolidation zone
10/25/2016

On the GBP/USD daily chart, the quotes continue to stay in the consolidation zone at 1.2109 - 1.2317. Its boundaries correspond to the targets 224% of the "Deep-water crab" pattern and AB=CD pattern. Breakout of the resistance line will increase the risks of rebound towards the 1.248 mark and higher. In contrast, successful test of the support line will contribute to the restoration of the downward trend.

On the GBP/USD hourly chart, there is a "Spike and ledge" pattern based on the 1-2-3. The boundaries of the ledge are located at 1,214 and 1.2315 levels. Traders should bid for a breakout of one of these boundaries. If they are broken successfully, traders will be able to open long positions towards 1.24 and 1,257 marks or short positions.

Recommendations:

BUY 1,2315 SL 1,226 TP1 1,24 TP2 1,257

SELL 1,214 SL 1,2175 TP1 1,204 TP2 1,188.

More:
https://fxbazooka.com/analytics/11024

 

[riki143]

Morning brief for October 25, 2016
10/25/2016

CAD was the mover of the last trading session having dropped after Bank Canada Governor Stephen Poloz announced that the bank is going to keep rates on hold for another 18 months. Then, Canadian dollar rebounded from its seventh-month low (1.3280) after Poloz clarified its statement saying that he mentioned the need to wait 18 months referring to the time period over which the output gap should be closed.

The GBP/USD slipped additional points in the course of the last session; now it continues its sideward movement along the 50-day MA (1.224) on the 4H timeframe. Today we will keep in focus the BOE’s Governor Mark Carney speaking at the House of Lords Economic Affairs Committee in London at 14:35 GMT. If he is in favor of doves, the pound may slide down further from its present positions.

Aussie lost some ground for a while, but then it got some momentum from the rise in Dalian iron ore futures +coal prices ticked the new peaks. What can you do, AUD is a commodity currency. Kiwi also experienced an uplift; not it continues its rally towards the resistance line located at 0.7186.

There are small changes in the position of USD/JPY. There was a modest move higher from 104.20 to 104.41 or so.

Overnight, U.S. oil dropped on Monday, after Iraq said it wanted to be exempt from any output cut deal by the OPEC. Then, the market managed to digest this news and recovered from its $50.48 drop. Now Brent oil futures are trading at $51.41 per barrel. Next significant moves we may expect from the tomorrow’s data on the US crude oil inventories.

The USD got some strengths from the better-than-expected US manufacturing PMI sending the euro to its February lows. Today at 3:30 GMT we will hear the ECB President Draghi speaking once again, but no worries, it seems that this time there shouldn’t be last Thursday’s toing and froing followed by the euro’s tremendous drop. Also, today we will keep an eye on the monthly update of the CB consumer confidence index.

More:
https://fxbazooka.com/analytics/11026

 

[riki143]

Key option levels for Tuesday, October 25th
10/25/2016

EUR/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 112 834 ? - 8 530 ?
Closest resistance levels 1.0917; 1.0941; 1.0961; 1.0988
Closest support levels 1.0863; 1.0840; 1.0811; 1.0775
Trading recommendations
Baseline scenario Short EUR/USD below 1.0863, with target points at 1.0840 and 1.0811
Alternative scenario Moving above 1.0917 can be considered as a signal to Buy the pair, with target at 1.0941 and 1.0961

GBP/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 1 024 ? + 1 643 ?
Closest resistance levels 1.2275; 1.2303; 1.2323; 1.2346
Closest support levels 1.2214; 1.2195; 1.2162; 1.2139
Trading recommendations
Baseline scenario Short GBP/USD below 1.2214, with target points at 1.2195 and 1.2162
Alternative scenario Moving above 1.2275 can be considered as a signal to Buy the pair, with target at 1.2303 and 1.2323

USD/JPY

Main trend Short-term period Medium-term period
Neutral Neutral
Changes in the open interest + 452 ? + 1 059 ?
Closest resistance levels 104.58; 104.82; 105.14; 105.53
Closest support levels 103.90; 103.63; 103.40; 103.10
Trading recommendations
Baseline scenario Long USD/JPY above 104.58, with the target points at 104.82 and 105.14
Alternative scenario Moving below 103.90 can be considered as a signal to sell the pair, with target at 103.63 and 103.40

USD/CAD

Main trend Short-term period Medium-term period
Bullish Bullish
Changes in the open interest + 318 ? + 140 ?
Closest resistance levels 1.3373; 1.3389; 1.3407; 1.3439
Closest support levels 1.3333; 1.3307; 1.3266; 1.3210
Trading recommendations
Baseline scenario Long USD/CAD above 1.3373, with the target points at 1.3389 and 1.3407
Alternative scenario Moving below 1.3333 can be considered as a signal to sell the pair, with target at 1.3307 and 1.3266

More:
https://fxbazooka.com/analytics/11027

 

[riki143]

Beware of the UK High Court decision on Brexit legality
10/25/2016

According to Deutsche Bank, the UK High Court should decide this week whether the government has the authority to trigger the legal process of leaving the European Union without a parliamentary vote or not.

What decision to expect?

If the High Court decides in favor of the government, and this is upheld by the Supreme Court, the government will proceed with its current plan to trigger Article 50 pf Lisbon treaty by the end of March 2017.

If the High Court rules in favor of the claimant (Gina Miller, an investment manager, and anti-Brexit campaigner), the outcome is less predictable. The claimants’ litigation concerns the legality of the Brexit process, but the judges of the High Court may feel that prescribing next steps is out of the area of the court’s jurisdiction, and leave interpretation to the Supreme Court. If the Supreme Court rules against the government, it would increase the probability of a parliamentary vote on the triggering of the Brexit process.

How markets can react?

The market is likely to react positively to a decision against the government because it would eliminate the probability of “hard Brexit”. Although the majority of forecasts assume a vote in favor of the government, we would recommend to take precautions and shield yourself from risks of trading short on the pound.

The result of this case is likely to meaningfully increase political uncertainty in the UK and potentially burst into the constitutional crisis followed by a new general election. The prospect of denial of June’s decision remains very slim.

More:
https://fxbazooka.com/analytics/11028

 

[riki143]

EUR/USD: bearish "Flag"
10/25/2016

The price faced a support at 1.0847, which led to the current consolidation. Also, we’ve got a “Flag” pattern, so the market is likely going to reach the nearest support at 1.0821. If a pullback from this level happens, there’ll be an opportunity to have another upward movement.

There’s a consolidation, which is taking place between the 34 Moving Average and the closest support at 1.0847. Considering the bearish “Flag”, which hasn’t finished yet, the price is likely going to rise towards the next resistance at 1.0896 – 1.0911 during the day. If we have a pullback from this area, bears will probably try to test a support at 1.0821.

More:
https://fxbazooka.com/analytics/11029

 

[riki143]

GBP/USD: flat inside "Wedge"
10/25/2016

The price is consolidating under the 34 Moving Average. There’s a possible “Rising Wedge” pattern, so bears are likely going to reach a support at 1.2089 in the short term. If any bullish pattern arrives afterwards, there’ll be an opportunity to have an upward correction.

There’s the 89 Moving Average, which is likely going to act as a resistance soon. At the same time, if a pullback from this line happens, bears will probably try to deliver a new local low.

More:
https://fxbazooka.com/analytics/11030

 

[riki143]

Forecasts for AUD/USD ahead of the Australian CPI release
10/25/2016

Aussie surged today on the rising commodity prices having broken the resistance line at 0.7603. Now it paves its way towards the cherished resistance line at 0.7737. Tomorrow we will be waiting for the Australian Consumer Price Index quarterly update. The index measures the change in the consumer prices of goods and services. It is believed that it could seriously affect the AUD/USD movement.

If the data come within the market expectations, AUD/USD could show some fluctuation, but remain in range. If the data are worse-than-expected, the pair could slide down to the support located at 0.7582.

Analysts from Australian National Bank (NAB) recommend getting short anywhere above the 0.77 mark with a stop loss above the 0.7835 level and target at 0.75. The greenback remains strong with anticipation of December Fed’s rate hike and positive economic data coming from the US, while the overall sentiment towards Aussie remains bearish. The NAB supports its recommendations with technical chart analysis and some observations. Last week we got a rather mixed data on Australian labor market. The unemployment rate improved slightly, but the market lost 9.8K jobs; the latter data dragged the Aussie from its high (from the 0.7735 mark) to its present positions. The NAB analysts note that there was the identical situation on 8 September when the pair made almost the same high, but then traded down over the 3 consecutive days to a low of 0.7442. So, they believe that there should be a “history repeating”.

Meanwhile, today’s sentiment towards this currency pair is rather bullish. So, our analysts recommend you to trade AUD/USD long in a short-term.

More:
https://new.fxbazooka.com/analytics/11031

 

[riki143]

NZD/CAD rising inside impulse waves 3 and (3)
10/25/2016

NZD/CAD rising inside impulse waves 3 and (3)
Next buy target - 0.9640
NZD/CAD has been rising steadily in the last few trading sessions inside the active minor impulse wave 3, which started earlier – when the pair reversed up from the support zone lying between the pivotal support level 0.9300 (low of wave (ii)), lower daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp upward impulse from the end of April. The active impulse wave 3 belongs to the intermediate impulse wave (3).

NZD/CAD is expected to continue to rise in the active impulse waves 3 and (3) toward the next buy target at the strong resistance level 0.9640 (which reversed the price multiple times in September).

https://new.fxbazooka.com/img/articles/11032/NZDCAD_-_Primary_Analysis_-_Oct-25_1153_AM_(1_day).png[/IG]

More:
[URL=https://new.fxbazooka.com/analytics/11032]https://new.fxbazooka.com/analytics/11032[/URL]

 

[riki143]

AUD/JPY reversed from support level 78.70
10/25/2016

AUD/JPY reversed from support level 78.70
Next buy target - 81.00
AUD/JPY continues to rise following the earlier upward reversal from the support level 78.70 (former resistance level and the upper boundary of the sideways price channel from August, acting as support now after it was broken). The upward reversal from the support level 78.70 continues the active minor impulse wave (iii), which belongs to the C-wave of the intermediate ABC correction (B) from the end of June.

AUD/JPY is expected to rise to the nearby resistance level 80.00 (which reversed the pair last week) – the breakout of which can lead to further gains toward the next buy target at the resistance level 81.00 (target price for the completion of the active impulse wave 3).

More:
https://new.fxbazooka.com/analytics/11033

 

[riki143]

EUR/USD: "Tweezers" set up bullish correction
10/25/2016

The previously formed “Tweezers” pattern on the one-hour chart has been confirmed. Therefore, the market is likely going to achieve the 89 Moving Average. If we see a pullback from this line, bears will probably try to test the last low.

The price faced a support at 1.0847, which led to the current consolidation. Also, we’ve got a “Flag” pattern, so the market is likely going to reach the nearest support at 1.0821. If a pullback from this level happens, there’ll be an opportunity to have another upward movement.

More:
https://fxbazooka.com/analytics/11034

 

[riki143]

October’s market trend
10/25/2016

Currency volatility felt significantly on the triple-win of Hillary Clinton in the presidential debates and on the market pricing the probability of the US interest rate hike.

The dollar managed to rise at a seventh-month high not stopping its rally in the course of three weeks. Polls show Democratic nominee Clinton is taking the lead over her counterpart Donald Trump in the election race. In a way, it reduces political uncertainty and turns the traders’ attention to the monetary policy. At the present moment, the market is already pricing the probability of the US interest rate hike at 70%. The majority of stakeholders sell the euro for the dollar and buy the dollar for the yen on the reoccurring drops in its movement. It seems that peace and quiet have finally established in the currency market. But there is no answer how long all this will last.

The JPMorgan Chase & Co. global currency volatility index fell to 9.3%, reaching its lowest rate since December 8. The US dollar index, which measures the value of the greenback in relation to other major currencies, reached its highest level since February. There is a strong need for some catalyst to kick the market and drag it from the beaten path. We will keep a sharp look out to inform you on the possible triggers. Meanwhile, you may enjoy the market’s smooth cruising.

US Dollar Index

More:
https://fxbazooka.com/analytics/11035

 

[riki143]

USD/JPY: bulls going to deliver new high
10/25/2016

The 21 & 34 Moving Averages acted as a support, so the price is likely going to test the nearest resistance level. As we can see on the Daily chart, bulls are going to reach the upper side on the “Window”. If any reversal pattern arrives afterwards, there’ll be an option to see a local correction.

The price is moving in a range of the “Window”. Considering that there isn’t any reversal pattern so far, bulls are likely going to deliver a new high during the day.

More:
https://fxbazooka.com/analytics/11036

 

[riki143]

Keep in focus M. Draghi’s speech
10/25/2016

Last week Mario Draghi ascertained the reporters that an abrupt end of the bond-buying program is unlikely in the forthcoming future. In addition, he sent a clear signal that the QE program will likely be if not expanded, but at least extended beyond March.

The market’s reaction followed without further delay; the euro dropped to its June’s lows in the course of the ECB press conference. Now, it is sliding down further hardly losing the momentum it got on Thursday.

Later today at 3:30 GMT we will hear ECB President Mario Draghi speaking about stability, equity, and monetary policy at the German Institute for Economic Research in Berlin. According to Barclays, we should expect some further elaboration from Draghi on the extent of the ECB’s bond purchasing program, as its present pace with the shrinking pool of eligible assets and dim perspectives of the Eurozone economic recovery cannot be sustained anymore. If we get confirmation of Barclay’s guess from M. Draghi today’s speech, we may hope for the euro’s recovery from its present lows.

More:
https://fxbazooka.com/analytics/11037

 

[riki143]

EUR/USD & New Home Sales: Can we see further bullish momentum after the data?
10/26/2016

Today at 14:00 GMT will be released the US New Home Sales data for September and we’re expecting to see a slight decrease to 600,000 from 609,000. With that being said, markets should react against the US Dollar, which has been showing some weakness across the board, following the last week that was characterised by gains. We should remind that new home sales’ numbers had been showing good performance in the last three months.

Our technical analysis for EUR/USD at H1 chart is still bearish, but the pair remains trapped in a sideways range between the 1.0893 and 1.0852 levels. If we see positive data from the United States, then we can expect an attempt to break the support level of 1.0852, which should open the doors to visit the 1.0786 level. However, as the EUR/USD pair is consolidating above the 50 SMA, one can expect a short-lived bullish momentum towards the 200 SMA.

More:
https://fxbazooka.com/analytics/11040

 

[riki143]

Gold is returning to the trend
10/26/2016

On the daily chart of gold, "bulls" failed to test the resistance line at $1273-1276 per ounce. If they manage to break it, they will move up further towards $1292 and $1308 levels (38.2% and 50% levels from the last mid-term downward wave).

On the hourly chart of gold, quotes moved beyond the consolidation area located at $ 1250-1267 per ounce. It means that the process of accumulation of long positions has been finished and that a trend is showing up. If the "bulls" manage to test the resistance line at $ 1276, their rally may continue.

Recommendation: hold longs formed at $1267 per ounce.

More:
https://fxbazooka.com/analytics/11041