Market analysis and trade recommendations by FBS

[riki143]

EUR/USD: bulls made a stop
9/9/2016

On the daily EUR/USD chart the bulls failed to settle above the lower border of the bullish trend channel. If another attack on resistance at 1.1330 is successful, the risks of continuation towards 1.1415 and 1.1462 will increase. The nearest support levels are at 1.126-1.127 and 1.123.

On H1 EUR/USD the bulls failed to break resistance at 1.1313 from the first attempt, which would become a signal of a break in bearish trend. If another attempt to break higher fails at 1.1293 and 1.1313, the pair will form a "Head and shoulders" pattern. As a result, the pair may slide to 1.123 and 1.1206.

More:
https://new.fxbazooka.com/analytics/10399

 

[riki143]

AUD/USD: bears countercharged
9/9/2016

On the daily AUD/USD chart the attempt of the bulls to restore the uptrend ended in a failure. The break of support at 0.7611-0.7625 may lead to a correction towards 0.752. The nearest resistance level is near 0.773.

AUD/USD breached the lower border of the uptrend channel and fell to support at 0.764. Its successful test will allow the pair to keep moving to 0.761 and 0.758. Recoil higher will allow the uptrend to resume. The nearest resistance is close to 0.7675.

More:
https://new.fxbazooka.com/analytics/10400

 

[riki143]

EUR/USD: keeping stand above the Cloud
9/9/2016

Technical levels: support – 1.1240/60; resistance – 1.1300/20.

Trade recommendations:

1. Buy — 1.1260; SL — 1.1240; TP1 — 1.1320; TP2 – 1.1380.

Reason: the prices are above the Cloud; a new golden cross of Tenkan-sen and Kijun-sen; a bullish Ichimoku Cloud.

More:
https://new.fxbazooka.com/analytics/10401

 

[riki143]

GBP/USD: correction to the Cloud
9/9/2016

Technical levels: support – 1.3270; resistance – 1.3360.

Trade recommendations:

1. Buy — 1.3270; SL — 1.325; TP1 — 1.3360; TP2 — 1.3420.

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

More:
https://new.fxbazooka.com/analytics/10402

 

[riki143]

AUD/USD: on the Clouds support
9/9/2016

Technical levels: support – 0.7625; resistance – 0.7700.

Trade recommendations:

1. Buy — 0.7620/25; SL — 0.7600; TP1 — 0.7700; TP2 — 0.7730.

Reason: a strong support of Senkou Span B; a golden cross of Tenkan-sen and Kijun-sen; narrowing bearish Ichimoku Cloud.

More:
https://new.fxbazooka.com/analytics/10403

 

[riki143]

EUR/USD: "V-top" brought bears into the market
9/9/2016

The last upward price movement has been stopped by a resistance at 1.1324, so we’ve got a “Thorn” pattern. Therefore, the market is likely going to get a support at 1.1251 in the short term. If we see a pullback from this level, there’ll be an opportunity to have another bullish movement towards a resistance at 1.1354 – 1.1365.

As we can see on the one-hour chart, the price faced a support on the 34 Moving Average. Also, there’s a local “V-Bottom” pattern, which led to an achievement of a resistance at 1.1282. In this case, the pair is likely going to reach the next resistance at 1.1296 – 1.1307 during the day. At the same time, if a pullback from this area be on the table, bears will probably try to catch a support at 1.1251.

More:
https://new.fxbazooka.com/analytics/10404

 

[riki143]

GBP/USD: "Double Bottom" led to local correction
9/9/2016

The price found a support at 1.3277, which led to the last upward movement. However, we’ve got a “V-Top” pattern, so the market is likely going to achieve the next support at 1.3247, which is strengthened by the uptrend. If we see a pullback from this level, then another upward movement becomes possible.

The 89 Moving Average has acted as a support on the one-hour chart. Also, there’s a possible “Double Bottom” pattern, so the price is likely going to get a resistance at 1.3374 -1.3396 during the day. Meanwhile, if we get a pullback from these levels, there’ll an open door for a decline toward the nearest support at 1.3251.

More:
https://new.fxbazooka.com/analytics/10405

 

[riki143]

Trade balance and exchange rate: what you need to know
9/9/2016

Trade balance and exchange rate: what you need to know

Perhaps every trader while reading financial news comes across some incomprehensible concepts or just cannot trace the correlations between economic events and their reflection in statistics. We have decided to give you a hand in the vortex of this information and fill you in on any of the characteristics of forex market and exchange rate determinants.

Filling the gaps in our knowledge of the trade deficit and exchange rates correlation

To take a stab at helping you to understand the pressure that trade deficits might exert on the exchange rates, let me challenge you with some definitions.

Let’s look at something called the balance of payments. It is a record of all economic transactions between the residents of a certain country and the rest of the world for a given period of time. It consists of sub-accounts – the current account and the financial account. The current account records the sale and purchase of goods and services as well as unilateral transfers, whereas the capital (or financial) account records transactions of purchase and sale of foreign assets and liabilities during a particular year.

So when the US buys TVs from China, that should be recorded in the US current account. Thus, when Americans spend a whaling sum of money on Chinese goods, the people of China have only two things to do with that money in order to keep their balance of payments. They can buy US goods in return, or they can buy US financial assets (like stocks and bonds). And the later transactions will be already recorded in the other side of the account – the financial one. If consumers, governments or business of a certain country are searching to buy more staff than their country is producing domestically, they have to import it. So there is a trade deficit that has to be mitigated by selling financial assets to pay for the imports. If a country doesn’t take measures to eliminate this trade deficit, it may reduce its national indicators (GDP, in particular).

Takeaways: Trade surplus creates demand for the country’s currency and makes its exchange rate go up.

Impact on exchange rates

Once we shed light on some essential definitions, let us procced to the very essence of this article – the link between trade deficits and exchange rates. When a country exports more than it imports (in other words, when the difference between exports and imports is positive), the country is having a trade surplus; there is a high demand for its goods and thus for its currency. Law of demand states that when demand is high, prices rise and thus the currency appreciates in value.

Alternatively, when the opposite is true, when a country imports more than it exports, there is relatively less demand for its currency, so prices reduce. In this case, the country is experiencing a trade deficit, its currency automatically depreciates, and the country’s GDP is shrinking.

More:
https://new.fxbazooka.com/analytics/10406

 

[riki143]

NZD/CHF reached buy target 0.7220
9/9/2016

NZD/CHF reached buy target 0.7220
Next sell targets - 0.7150 and 0.7100
NZD/CHF continues to decline – following the earlier downward reversal from the resistance zone lying at the intersection of the key resistance level 0.7220 (top of the previous sharp impulse wave 3 and the buy target set in our earlier forecast for this currency pair), upper daily Bollinger Band and the resistance trendline of the wide weekly up channel from January.

Given the strength of the aforementioned resistance zone - NZD/CHF is expected to correct down further to the next sell target at the support level 0.7150 – the breakout of which can lead to further losses toward 0.7100.

[IMG[https://new.fxbazooka.com/img/articles/10407/NZDCHF_-_Primary_Analysis_-_Sep-09_1337_PM_(1_day).png[/IMG]

More:
https://new.fxbazooka.com/analytics/10407

 

[riki143]

US dollar: outlook for September 12-18
9/9/2016

US ISM services PMI showed dramatic decline of 4.1 points in August falling to 6-month low. This together with disappointing nonfarm payrolls and contraction in manufacturing hurt positions of the US dollar bulls. By the end of the week, however, American currency managed to recover.

The odds of the Federal Reserve’s rate hike in September remain low, but its probability rose, according to CME futures tool, from 15% at the beginning of the week to 24% at its end. Market players are still unsure and ready to change their expectations. That’s why attention to the forthcoming American data releases will be high.

The US will release a big block of economic statistics on Thursday: retail sales, producer prices, Philly Fed manufacturing index, unemployment claims, current account, Empire State manufacturing index and industrial production. In addition, don’t miss the speech of FOMC member Lael Brainard on Monday: there’s speculation that she may deliver some hawkish comments that will be positive for the US dollar. Still, the greenback’s ability to strengthen on hawkish hints from the Fed should be limited: although some members of the central bank clearly try to keep the expectations of September rate hike alive, after the recent weaker economic figures the market won’t attach much importance to these attempts.

Analysts at Sociate Generale point out that despite weaker data from the United States Forex market doesn’t offer good alternatives to USD. Yields in the euro area and Japan are negative. The highest yields are currently offered by the New Zealand, but NZD has already strongly appreciated during the recent month.

The downside of the US dollar index was limited by the support line from May lows in 94.50 area. Resistance is located at 96.15 – resistance line connecting August highs.

More:
https://new.fxbazooka.com/analytics/10411[/IMG]

 

[riki143]

EUR/USD: outlook for September 12-18
9/9/2016

EUR/USD tested levels above 1.1300 during the past week, but failed to settle at highs.

The single currency strengthened as traders were disappointed by the European Central Bank’s decision not to ease monetary policy. The ECB signaled that it is ready to increase stimulus in future, but gave no hints on exactly what and when it plans to do. As the possibility of the US Federal Reserve lowering rates in September remains low, monetary policy divergence between the ECB and the Fed has weakened and the downward pressure on EUR/USD declined. At the same time, the amount of the market’s net short positions on the euro wasn’t high, so the squeeze of these positions won’t be able to produce sustainable growth of the European currency. If comments of the Fed’s members next week are hawkish, we will actually see lower levels of the pair.

As for Europe’s economic calendar, the ECB president Mario Draghi will speak on Tuesday. Also watch the release of German and euro area’s ZEW economic sentiment indexes. The region’s industrial production will be published on Wednesday and final inflation and trade balance will be released on Thursday.

The inability of EUR/USD to hold above 100-week MA (currently at 1.1268) means that further growth of the pair will likely be limited: it seems that higher levels of the single currency attract sellers. Support for the pair is provided by the moving averages: 100-day MA just above 1.1200, 50-day and 200-day MAs close to 1.1150.

More:
https://new.fxbazooka.com/analytics/10413

 

[riki143]

EUR/USD held on the edge of the abyss
9/12/2016

On the daily EUR/USD chart the inability of the bulls to hold the pair above 1.127 provoked an attack of the bears. Support at 1.1206 limited the decline, but if the bears make another attempt to break it, the euro will continue down to 1.113 and 1.111.

On H1 EUR/USD has reached the target on "Head and Shoulders" pattern. If the pair retests the nackline and then breaks support at 1.123 and 1.1206, the bears will take charge. On the contrary, if the bulls manage to settle above the nackline (1.126), successful test of resistance at 1.129 and 1.1313 will make the pair resume the uptrend.

Recommendation: SELL 1.1206 TP 1.111 SL 1.126

More:
https://new.fxbazooka.com/analytics/10415

 

[riki143]

EUR/USD: "V-Bottom" led to bullish correction
9/12/2016

The price faced a support on the Moving Averages, which led to form a “V-Bottom” pattern. So, the market is likely going to reach a resistance at 1.1270 – 1.1282 in the short term. However, if a pullback from this area happens, there’ll be an opportunity to have another decline towards a support at 1.1196 – 1.1181.

As we can see on the one-hour chart, there’s a “V-Bottom” pattern, so the price achieved a resistance at 1.1251. It’s likely that bulls are going to reach the next resistance at 1.1282 during the day. At the same time, bears will have a chance for a kind of revenge in we see a pullback from this resistance.

More:
https://new.fxbazooka.com/analytics/10416

 

[riki143]

GBP/USD: two "Double Bottoms" in a row
9/12/2016

Bears faced a support at 1.3247, so we’ve got a local consolidation, which is taking place on the four-hours chart. Therefore, it’s likely to see an upward price movement in the direction of a resistance at 1.3302 – 1.3345. However, if a pullback from this area be on the table, bears will probably try to get a support on the 89 Moving Average.

We’ve got a pullback from a support at 1.3251, so there’s a consolidation in progress. Also, there’s a “Double Bottom” pattern, so bulls are likely going to reach the next resistance at 1.3318 – 1.3334. If we get a pullback from these levels, there’ll be an opportunity to have another decline towards a support at 1.3209.

More:
https://new.fxbazooka.com/analytics/10417

 

[riki143]

Key option levels for Monday, September 12th
9/12/2016

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 111 889 ? + 159 181 ?
Closest resistance levels 1.1292; 1.1320; 1.1336; 1.1355
Closest support levels 1.1215; 1.1194; 1.1168; 1.1137
Trading recommendations
Baseline scenario Short EUR/USD below 1.1215, with target points at 1.1194 and 1.1168
Alternative scenario Moving above 1.1292 can be considered as a signal to Buy the pair, with target at 1.1320 and 1.1336


GBP/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest - 31 450 ? - 28 156 ?
Closest resistance levels 1.3319; 1.3347; 1.3378; 1.3398
Closest support levels 1.3246; 1.3216; 1.3196; 1.3173
Trading recommendations
Baseline scenario Short GBP/USD below 1.3246, with target points at 1.3216 and 1.3196
Alternative scenario Moving above 1.3319 can be considered as a signal to buy the pair, with target at 1.3347 and 1.3378

USD/JPY

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest - 54 294 ? - 40 707 ?
Closest resistance levels 102.91 (103.06?); 103.24; 103.46; 103.69
Closest support levels 102.08; 101.77; 101.50; 101.13
Trading recommendations
Baseline scenario Long USD/JPY above 102.91, with target points at 103.24 and 103.46
Alternative scenario Moving below 102.08 can be considered as a signal to sell the pair, with target at 101.77 and 101.50


USD/CAD

Main trend Short-term period Medium-term period
Bullish Bullish
Changes in the open interest - 16 390 ? - 15 234 ?
Closest resistance levels 1.3063; 1.3087; 1.3120; 1.3167
Closest support levels 1.2957; 1.2928; 1.2888; 1.2839
Trading recommendations
Baseline scenario Long USD/CAD above 1.3063, with the target points at 1.3087 and 1.3120
Alternative scenario Moving below 1.2957 can be considered as a signal to sell the pair, with target at 1.2928 and 1.2888

More:
https://new.fxbazooka.com/analytics/10418

 

[riki143]

EUR/USD: possible wedge in wave (a)
9/12/2016

We’ve got a pullback from 5/8 Murrey Math Level (P=200), so there’s an opportunity to have wave [y] of D in the short term. Also, there’s a zigzag in wave [x]. So, bears are likely going to reach 1/8 MM Level soon.

As we can see on the one-hour chart, there’s a possible wedge in wave (a). Previously, a pullback from 7/8 MM Level happened, which led to form a bearish impulse in wave i. Therefore, it’s likely to see wave v of (a) shortly.

More:
https://new.fxbazooka.com/analytics/10419

 

[riki143]

GBP/USD: bearish impulse on the way
9/12/2016

Wave (2) was possibly ended last week, so there’s an opportunity to have wave (3) in the short term. Previously, wave [4] was delivered in a form of a zigzag. Therefore, wave (3) is likely going to start soon, so we should keep an eye on 1/8 Murrey Math Level (P=200) as a possible bearish target.

We’ve got a zigzag in wave Y of (2) with a flat in wave . Also, there’s a pullback from 8/8 MM Level, so there’s a possible bearish impulse in wave on the way. The main intraday target is 3/8 MM Level.

More:
https://new.fxbazooka.com/analytics/10420

 

[riki143]

Oil glut can drain oil bulls’ purses
9/12/2016

More supply is coming on to the oil market, with post-sanctions Iran stepping up production, the US adding drill rigs by seven to 414 according to the last week data from industry group Baker Hughes, Saudi Arabia’s rush for profits and never-ending rivalry between Gulf nations producing oil at almost their full capacity. The chances of an end to unrest in Libya and Nigeria, Venezuelan aspiration to revive its oil production once it manages to recover from its social and economic problems and waning refinery demand for crude oil are adding fuel to the flame. You do not have to be a prophet to expect a drop of oil prices if the forthcoming future.

There is a slight possibility that the 15th International Energy Forum (IEF15) scheduled for the 26-28th of September this year will make any difference to the discernable trend of falling prices in the oil market. Therefore, many analysts have already started to warn oil bulls to be prepared for financial losses.

More:
https://new.fxbazooka.com/analytics/10421

 

[riki143]

AUD/JPY falling inside intermediate impulse wave (3)
9/12/2016

AUD/JPY falling inside intermediate impulse wave (3)
Next sell target - 76.20
AUD/JPY has been falling strongly in the last few trading session inside the intermediate impulse wave (3) – which started earlier – when the pair reversed down from the resistance zone lying between the pivotal resistance level 78.70 (top of the earlier minor correction 4), upper daily Bollinger Band and the 50% Fibonacci correction of the previous downward impulse from July.

AUD/JPY is expected to fall down further in the active impulse wave (3) toward the next sell target at the support level 76.20 (which stopped the previous minor impulse wave 5 in August, as can be seen below).

More:
https://new.fxbazooka.com/analytics/10422

 

[riki143]

EUR/AUD broke resistance zone
9/12/2016

EUR/AUD broke resistance zone
Next buy target - 1.5120
EUR/AUD continues to rise sharply- following the earlier breakout of the resistance zone lying between the resistance level 1.4900 (which reversed earlier waves (ii) and a, as can be seen below) and the 23.6% Fibonacci retracement of the previous extended downward price move from February. The breakout of this resistance zone accelerated the active minor correction (ii) – which belongs to the intermediate C-wave from May.

EUR/AUD is expected to rise further toward the next buy target at the resistance level 1.5120 (coinciding with the 38.2% Fibonacci correction level of the aforementioned downward price move from February).

More:
https://new.fxbazooka.com/analytics/10423