Forex Analysis by LiteForex

[MikhailLF]

XAU/USD: wave analysis

The pair is in a correction, a fall is possible.

On the daily chart, the third wave of the higher level (3) formed, and a downward correction develops as the fourth wave (4). Now, the wave C of (4) is forming, within which the wave iii of C has formed, and a local correction is developing as the wave iv of C. If the assumption is correct, after the end of the correction, the pair will fall to the levels of 1622.21–1516.65. In this scenario, critical stop loss level is 1801.92.

 

[MikhailLF]

USD/JPY: return to the record highs

Current trend

USD continues to rally against JPY during today's morning session, trading near record highs and again trying to consolidate above the psychological level of 109.00. USD is in high demand amid yet another rise in the yield on US Treasury bonds. In addition, low demand for safe assets puts additional pressure on JPY.

Macroeconomic statistics from Japan published today does not have a significant impact on the dynamics of the instrument. Machinery Orders in Japan in January decreased by 4.5% MoM after growth by 5.2% MoM in the previous month. Analytical forecasts assumed a decrease in the indicator by 5.5% MoM. On an annualized basis, the indicator slowed sharply from +11.8% YoY to +1.5% YoY, which nevertheless was better than the negative forecasts of analysts at –0.2% YoY.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD indicator is growing preserving a weak buy signal (located above the signal line). Stochastic reversed upwards again after a short decline last week. The indicator readings continue to indicate that USD is overbought in the ultra-short term.

Current showings of the indicators do not contradict the further development of the "bullish" trend in the short term.

Resistance levels: 109.37, 109.84, 110.23.
Support levels: 109.00, 108.63, 108.15, 107.78.

 

[MikhailLF]

XAG/USD: return to upward dynamics

Current trend

Silver contracts are correcting upwards, trading above the level of $26.2 per ounce.

The quotes returned to their usual dynamics. Short-term factors in the form of mass purchase of assets by a certain group of private traders ceased to operate, and the main factors restraining the precious metals market began to come to the fore again, the main among which was the yield on US bonds. This indicator for key 10-year securities has retreated from the peaks of 1.634% and is currently at the level of 1.595%. Another reason that can provide short-term support for silver is the "monetization" of fiscal stimulus for the US economy of $1.9T, the first receipts to citizens' accounts for which are expected this week.

At the same time, the number of positions in silver is decreasing, and according to the Commodity Futures Trading Commission (CFTC), last week it was 36.1K against 39.6K a week earlier.

Support and resistance

On the global chart of the asset, after an active decline, the price returned to the upward trend. Technical indicators are in a sell state but are ready to reverse. The fluctuation range of the EMA on the Alligator indicator began to narrow, and the histogram of the AO oscillator is forming upward bars.

Support levels: 24.90, 21.90.
Resistance levels: 27.13, 30.00.

 

[MikhailLF]

FTSE 100: bond yields hold back the growth of the index

Current trend

The FTSE 100 index shows a lateral trend, trading at 6800.0.

World stock indices continue trading near their highs, but recently the growth rates have noticeably decreased. The key point to which investors are turning their attention is the significant fluctuations in the bond markets of the leading countries.

The global uptrend in bonds began with the growth of securities in the US, but now this dynamics is supported by the markets of other countries. The yield on government bonds of Great Britain also showed an increase: over the last month, one can note an increase in the yield of annual bonds from –0.024% to –0.005%, five-year bonds growth from 0.137% to 0.364% and ten-year bonds increase from 0.623% to 0.785%.

The growth leaders in the index are: British Land Company Plc. (+4.60%), Rolls-Royce Holdings Plc. (+4.11%), Land Securities Group Plc. (+4.02%), AstraZeneca Plc. (+3.64%). Among the leaders of the decline are: Just Eat Takeaway (–2.15%), Royal Dutch Shell Plc. Class B (–1.84%) and CRH Plc. (–1.63%).

Support and resistance

Index quotes continue to correct, moving within the global sideways channel. Technical indicators are in a state of purchase. The fast EMAs of the Alligator indicator are above the signal line, and the histogram of the AO oscillator is in the positive zone.

Resistance levels: 6900.0, 7000.0.
Support levels: 6675.0, 6300.0.

 

[MikhailLF]

USD/CHF: dollar remains under pressure

Current trend

Today, during the Asian session, the USD/CHF pair grows slightly, correcting after yesterday’s active decline, which was caused by the US Fed’s Meeting Minutes. As expected, the regulator confirmed its commitment to low interest rates at least until the end of 2023, raising its forecasts for the GDP growth for the next few years. The problematic issue of the yield of US Treasury bonds was again left without due attention. The head of the department, Jerome Powell, does not see a threat to the current level of inflation, the target of which is the level of 2%.

On Thursday, investors are focused on the Swiss statistics on the dynamics of imports and exports for February and data on the dynamics of manufacturing inflation for the same period. In the US, Initial Jobless Claims will be released. The index may drop below 700K for the first time in a long time.

Support and resistance

On the daily chart, Bollinger Bands reverse into a horizontal plane. The price range actively narrows, reflecting the emergence of ambiguous dynamics in the short term. MACD falls, maintaining a strong sell signal (the histogram is below the signal line). Stochastic falls but is near its lows, indicating that USD may become oversold in the ultra-short term.

It is better to keep current short positions in the short-term and/or ultra-short term until the signals from technical indicators are clarified.

Resistance levels: 0.9250, 0.9300, 0.9350, 0.9400.
Support levels: 0.9200, 0.9163, 0.9126, 0.9100.

 

[MikhailLF]

USD/CAD: the dollar is consolidating

Current trend

Today, during the Asian session, the USD/CAD pair is showing flat dynamics, consolidating near the level of 1.2500.

On Thursday, the US dollar was actively strengthening, responding to the growth of US Treasury bond yields. Yesterday, the 10-year notes renewed 13-month highs, rising above 1.70%, supported by the generally positive sentiment regarding the fundamental outlook for the US economy. Earlier, the currency declined after the publication of the minutes of the US Feds meeting, which reflected the reluctance of the regulator to respond to the surge in yields and also reduced the degree of speculation on a possible increase in interest rates.

Yesterday, the Canadian currency was negatively impacted by the ADP employment report for Canada. For February, the figure fell by 100.8K after falling by 65.8K for the previous period.

Support and resistance

On the daily chart, Bollinger bands are actively declining. The price range is narrowing, indicating ambiguous trading dynamics in the short term. The MACD indicator reversed upwards, forming a new buy signal (the histogram is above the signal line). Stochastic maintains a confident upward trend, signaling in favor of further development of the “bullish” dynamics in the ultra-short term.

It is better to keep current long positions and open new ones in the short-term and/or super-short term until the signals from technical indicators are clarified.

Resistance levels: 1.2500, 1.2540, 1.2570, 1.2600.
Support levels: 1.2439, 1.2400, 1.2353, 1.2300.

 

[MikhailLF]

Brent Crude Oil: oil prices are consolidating

Current trend

On Friday, the price of Brent crude oil rose moderately, adding more than 1% and regaining some of the previous day’s losses. On Thursday, investors reacted sharply negatively to the worsening of the epidemiological situation in Europe, where new restrictive measures provoked fears of a further decline in fuel demand. Now, the consolidated forecast of the three main industry organizations assumes an increase in oil demand for 2021 by 5.5 million barrels per day, which is significantly lower than the values that OPEC proposed in the summer of 2020.

The situation in Iran exerts some pressure on the instrument. Iranian oil imports to China have been hitting record highs in recent months, while the market anticipates further easing of US sanctions on Tehran.

Published Friday, Baker Hughes' report on active oil platforms in the US showed another increase from 402 to 411 units, reflecting a gradual growth in production volumes.

Support and resistance

On the daily chart, Bollinger Bands reverse into a horizontal plane. The price range remains practically unchanged, remaining spacious enough for the current level of activity in the market. The MACD declines, maintaining a strong sell signal (the histogram is below the signal line). Stochastic, having approached the level of 20, reversed into a horizontal plane, responding to an attempt to grow the instrument at the end of last week.

Resistance levels: 65.00, 66.00, 67.00, 68.00.
Support levels: 64.00, 63.00, 62.00, 61.00.

Больше аналитики в блоге компании: https://ru.lite.forex/blog/analysts-opinions/

 

[MikhailLF]

PayPal Holdings Inc.: wave analysis

The price may grow.

On the daily chart, the third wave of the higher level (3) develops, within which the wave 3 of (3) formed. Now, a downward correction has developed as the wave 4 of (3), within which the wave c of 4 has formed, and the development of the wave 5 of (3) has started. If the assumption is correct, the price will grow to the levels of 330.00–357.90. In this scenario, critical stop loss level is 222.23.

 

[MikhailLF]

Brent Crude Oil: the trend reversed downwards

Current trend

On Tuesday, Brent crude oil price hit its lowest level since early February, falling by 15% from recent highs in early March.

Yesterday, trading in futures closed at 60.79, the spread for the coming months for Brent and WTI Crude Oil turned into contango, where contracts are cheaper than in later months, which indicates a decrease in demand for crude oil. Market sentiment remains “bearish” as analysts fear a slowdown in demand recovery after new pandemic restrictions in Europe. For example, Germany, the largest oil consumer in the region, extended its isolation until April 18. In the US, the number of new infections may also grow during the spring break.

Over the past week, according to the American Petroleum Institute, US stocks of crude oil increased by 2.9M barrels, contrary to analysts' expectations of a decline of 900K. Official data from the Energy Information Agency will be released today. According to the forecast, a slight decrease in reserves by 272K barrels is expected.

Support and resistance

Yesterday, the key support of the long-term uptrend at the level of 63.03–62.61 was broken. The next downward target is the level of 59.33.

Within the medium-term downtrend, target zone 3 (60.96–60.60) was reached. The breakdown of 60.40 allows decline will continue to target zone 4 (57.36–57.00). The trend border shifts to 65.48–65.01.

Resistance levels: 63.03, 65.00, 67.55.
Support levels: 60.40, 59.33, 57.17.

 

[MikhailLF]

EUR/USD: slowing vaccination in Europe affects the price

Current trend

The EUR/USD pair is declining, trading around the level of 1.1825.

The topic of vaccination in the EU remains in the spotlight of investors. Yesterday, the European Commission issued a statement, which notes that the regulator still cannot achieve the goal of ensuring timely access to vaccines for all citizens of the block. Also, it was noted that “legal consequences” were not excluded against AstraZeneca for failing to meet its obligations to supply the vaccine. As for the macroeconomic statistics, they were moderately positive. Manufacturing PMI in Germany for March rose to 66.6 points from 60.7 points for February, while the same indicator in France was 58.8 points, which is also better than the 56.1 points shown earlier.

The USD Index grows moderately, trading above 92.500 points. Yesterday, traders were focused on the speech of the head of the US Federal Reserve, Jerome Powell. The official has slightly changed the tone of recent days and said that financial incentives, most likely, would not be able to have a serious impact on inflation, and there was no need to fear its growth. Also, he noted that in the event of a strong rise in prices, the regulator had effective containment mechanisms.

Support and resistance

Globally, the price decreases within a wide downwards channel. Technical indicators maintain a global sell signal. Fast EMAs on the Alligator indicator are below the signal on, and the AO oscillator histogram trades in the sell zone.

Resistance levels: 1.1957, 1.2176.
Support levels: 1.1774, 1.1600.

 

[MikhailLF]

GBP/USD: GBP wins back losses

Current trend

GBP is showing corrective gains against USD in today's morning session, developing the "bullish" signal formed the day before.

Technical factors are the reason for the strengthening of the instrument, while a further decrease in the yield of American bonds weakens USD.

In turn, yesterday USD received moderate support from macroeconomic publications in the USA. The revised data reflected the growth of the American economy in Q4 2020 by 4.3% YoY, which turned out to be 0.2% better than the forecast. The number of initial jobless claims for the week ending March 19 fell sharply from 781K to 684K, which also outstripped positive market expectations of a decline to 730K. Continuous jobless claims for the first time in a long time fell below 4M and consolidated at 3.87M after 4.134M in the previous period.

Today, the data on the retail sales in the UK for February is expected to be published.

Support and resistance

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is changing slightly, but remains rather spacious for the current level of activity in the market. MACD is trying to reverse upwards but preserves its previous sell signal (located below the signal line). Stochastic is showing similar dynamics, reversing upwards close to its lows and indicating the oversold GBP in the ultra-short term.

Resistance levels: 1.3760, 1.3800, 1.3857, 1.3924.
Support levels: 1.3700, 1.3650, 1.3600.

 

[MikhailLF]

USD/JPY: the instrument is declining

Current trend

USD is significantly declining against JPY in trading in today's Asian session, retreating from record highs since June 2020 updated at the end of last week.

Technical factors remain the reason for the appearance of the "bearish" trend for the instrument, since the news background is quite calm. Investors take a lead from the controversial macroeconomic statistics from the USA on the dynamics of personal income and spending in February, as well as assess the prospects for further recovery of the global economy as the coronavirus pandemic recedes.

This week, traders will focus on the March report on the US labor market, which will be published on Friday. The recovery in the world's largest economy is expected to accelerate sharply and the unemployment rate is expected to retreat to 6%.

Support and resistance

Bollinger Bands on the daily chart are showing moderate growth, signaling strong "bullish" potential in the short and medium term. The price range is expanding; however, it fails to keep up with the surge of last week's buyers' activity. MACD indicator is growing, having formed a new buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought USD in the ultra-short term.

Existing long positions should be kept until technical indicators are clarified.

Resistance levels: 109.84, 110.23, 111.00.
Support levels: 109.37, 109.00, 108.61, 108.15.

 

[MikhailLF]

XAU/USD: active downtrend

Current trend

Gold prices show active downtrend during today's Asian session, developing a "bearish" momentum formed yesterday.

On Monday, quotations of the asset fell by more than 1%, responding to the further strengthening of USD, as well as amid expectations of a further recovery in the global economy. The development of the downtrend for the instrument was also facilitated by technical factors of profit fixation at the end of the month.

At the same time, investors are cautious against the backdrop of an extremely alarming epidemiological situation in Europe. The largest economies in the region (Germany and France) are close to another tightening of restrictive measures, as the incidence rate is growing rapidly. All this is taking place against the background of low rates of vaccination of the population, as many European countries have suspended the use of the drug from AstraZeneca due to reports that it can cause thrombosis.

Support and resistance

On the D1 chart Bollinger Bands are reversing downwards. The price range is expanding; however, it fails to catch the surge of the "bearish" sentiment at the moment. MACD reversed into a descending plane, having formed new sell signal (located below the signal line). Stochastic keeps a confident downward direction but is already approaching its lows, which indicates the risks of oversold instrument in the ultra-short term.

Existing short positions should be kept until technical indicators are clarified.

Resistance levels: 1720.00, 1741.02, 1753.57, 1769.59.
Support levels: 1703.07, 1687.15, 1675.00, 1660.15.

 

[MikhailLF]

GBP/USD: downward trend

Current trend

GBP is declining against USD in trading this morning session, developing a "bearish" momentum formed at the beginning of this week.

Investors are actively buying USD amid growing yields on US bonds and are responding positively to the pace of vaccination, which allows them to hope that most of the quarantine restrictions will be lifted soon. However, given the current crisis in the incidence rate in Europe, not all analysts are so optimistic. There is an opinion that a too fast economic recovery and the abandonment of most of the restrictive measures could lead the USA to a third wave of coronavirus, which judging by European indicators will not be weaker than the first two. The same can be said about the UK, where the rate of vaccination of the population is one of the highest to date.

Today, investors are focused on the updated statistics on the UK GDP for Q4 2020, as well as the March data on Nationwide Housing Prices.

Support and resistance

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic is reversing downwards again after a brief increase last week. The current showings of the indicator do not contradict the further development of the downtrend in the ultra-short term.

Resistance levels: 1.3760, 1.3800, 1.3857, 1.3924.
Support levels: 1.3700, 1.3650, 1.3600.

 

[MikhailLF]

USD/CHF: updating record highs

Current trend

USD has shown moderate gains against CHF during today's Asian trading session, updating record highs since mid-July 2020. Market activity is gradually declining, given the upcoming Easter holidays, but investors are awaiting the publication of the US labor market report for March, which will take place on Friday. Market forecasts suggest a marked increase in the number of new jobs created by the US economy outside the agricultural sector. The unemployment rate may also decline and reach 6%.

Today the focus of investors will be on the statistics on business activity in the US and Switzerland in March, which will help assess the prospects for economic recovery.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range expands, freeing a path to new record highs for the "bulls". MACD indicator is growing preserving a weak buy signal (located above the signal line). Stochastic is still in close proximity to its highs, signaling strongly overbought USD in the ultra-short term.

To open new positions, it is necessary to wait for the trade signals to become clear.

Resistance levels: 0.9466, 0.9500, 0.9540.
Support levels: 0.9417, 0.9350, 0.9300, 0.9250.

 

[MikhailLF]

GBP/USD: updating weekly highs

Current trend

GBP is marginally strengthening against USD in today's morning session, ending the week at new local highs since March 23.

Market activity remains rather low due to the Easter holidays. Investors' interest is fueled only by the forthcoming publication of data on the US labor market for March. After an impressive report on private sector employment from ADP, investor optimism increased markedly, although the overall picture was smoothed by statistics on jobless claims. The number of initial jobless claims for the week ending March 26 increased from 658K to 719K, which turned out to be worse than the market forecasts of growth to 680K. The number of continuing jobless claims for the week ending March 19 decreased from 3.84M to 3.794M, while forecasts assumed a decrease in the indicator to 3.775M.

GBP positions on Thursday were supported by positive macroeconomic statistics on business activity in the UK manufacturing sector. Markit Manufacturing PMI rose from 57.9 to 58.9 points in March, which turned out to be better than the neutral forecasts of analysts.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowing from above, reflecting the emergence of ambiguous dynamics in the short term. MACD indicator is growing preserving a rather stable buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought GBP in the ultra-short term.

Resistance levels: 1.3857, 1.3924, 1.4000, 1.4050.
Support levels: 1.3800, 1.3760, 1.3700, 1.3650.

 

[MikhailLF]

USD/JPY: rising incidence of COVID-19 in Japan hurts the yen

Current trend

The USD/JPY pair actively strengthens, trading at the level of 110.65.

The weakening of the yen is due to the epidemiological situation. According to the Japanese Ministry of Health, the number of people infected with new strains of coronavirus is growing rapidly, and carriers of the British and African strains are already present in 34 out of 47 prefectures. Also, the first cases of detection of the Brazilian strain are reported. The government has not yet taken any steps regarding the new quarantine, as the country is undergoing pre-Olympic events that, if introduced, would be in jeopardy.

The US currency is holding at Friday's close levels, with little reaction to the news that the production of the AstraZeneca vaccine at the Baltimore plant has stopped. It was stopped by a personal decree of US President Joe Biden after 15M doses of the vaccine were spoiled at the plant due to a technological error in the manufacturing process. Earlier, the chief infectious disease specialist Anthony Fauci has already stated that the United States did not need a vaccine from this manufacturer, and soon its use might stop at all.

Support and resistance

The instrument moves within an uptrend and may rise again after a short-term correction. Technical indicators maintain a global buy signal. Alligator indicator’s EMA fluctuations range is quite wide, and the histogram of the AO oscillator moves in the positive zone.

Resistance levels: 110.90.
Support levels: 110.30, 109.30.

 

[MikhailLF]

WTI Crude Oil: active decline amid OPEC+ decision

Current trend

The price of North American light oil, WTI Crude Oil, is moving within a corrective trend, trading at 59.30.

The instrument began to actively decline in response to Thursday’s news, when the OPEC+ members decided not to cut production further but, on the contrary, to increase its volumes. The plan, which was being prepared for January, was decided to be implemented now, and thus, energy production in May-June will increase by 350K barrels per knock, and in July – by 441K barrels. Also, Saudi Arabia decided to abandon its project to reduce the oil production, returning to a gradual increase in production volumes, which will rise by 250K in May, by 350K in June, and by 400K barrels per day in July.

The decline in the rate began only now, as on Friday world exchanges were closed due to the holidays, and full-fledged trading started only yesterday. Thus, the likelihood of further weakening remains quite high, despite the current drop in sales volumes.

Support and resistance

Locally, the price decreases within the local sideways channel, trading near the support line. Technical indicators are in the state of a sell signal. Alligator indicator’s EMA fluctuations range is directed downward, and the histogram of the AO oscillator is in the sell zone.

Resistance levels: 61.60, 66.30.
Support levels: 57.30, 52.50.

 

[MikhailLF]

JP Morgan Chase Co.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) forms, within which the wave 3 of (5) develops. Now, the third wave of the lower level iii of 3 has formed, and a local correction is ending to develop as the fourth wave iv of 3. If the assumption is correct, after the end of the correction, the price will grow to the levels of 165.00–170.00. In this scenario, critical stop loss level is 145.53.

 

[MikhailLF]

XAU/USD: wave analysis

The pair may grow.

On the daily chart, the third wave of the higher level (3) formed, and a downward correction developed as the fourth wave (4). Now, the formation of the fifth wave (5) has started, within which the first wave of the lower level 1 of (5) is developing. If the assumption is correct, the pair will grow to the levels of 1877.85–1959.38. In this scenario, critical stop loss level is 1676.66.