Market analysis and trade recommendations by FBS

[riki143]

NZD/USD: kiwi is forming the second shoulder
9/21/2016

On the NZD/USD daily chart, there is a formation of the "Head and shoulders" pattern. The fall of quotes below the neckline at the 0.726 level will be a signal for the opening of short positions with the target, at least, at the 0.717 level. In the future, there might be a further depreciation of the NZD, kiwi can fall down to the 0.7 level ( the target 88.6% in the "Shark"pattern).

On the NZD/USD hourly chart "bears" are going to attack the diagonal support. A breakout of the lower boundary of two parallel rising trading channels will increase the risk of quotes falling down to the 0.7155 and 0.705 levels (61.8% and 78.6% Fibonacci of the recent "bull" wave).

Recommendation: SELL 0,726 SL 0,732 TP1 0,717 TP2 0,705.

More:
https://new.fxbazooka.com/analytics/10549

 

[riki143]

GBP/USD: going to lows of august
9/21/2016

Technical levels: support – 1.2950; resistance – 1.3020.

Trade recommendations:

1. Buy — 1.2980; SL — 1.2960; TP1 — 1.3020; TP2 — 1.2060.

Reason: a dead cross of Tenkan-sen and Kijun-sen and narrowing channel oh the lines; a bearish Ichimoku Cloud but the oversold market and a strong support on 1.2950.

More:
https://new.fxbazooka.com/analytics/10550

 

[riki143]

AUD/USD: the Bulls are careful before 0.7590
9/21/2016

Technical levels: support – 0.7530; resistance – 0.7590.

Trade recommendations:

1. Buy — 0.7530; SL — 0.7510; TP1 — 0.7590; TP2 — 0.7620.

Reason: a support of Tenkan-sen; a golden cross of Tenkan-sen and Kijun-sen and rising lines; narrowing bearish Ichimoku Cloud.

More:
https://new.fxbazooka.com/analytics/10551

 

[riki143]

EUR/USD: "V-Top" led to new low
9/21/2016

There’s a “Double Top” pattern, which led to an achievement of the nearest support at 1.1122. Therefore, the market is likely going to reach the next support at 1.1104. However, if a pullback from this level happens, there’ll be an opportunity to have an upward movement in the direction of a resistance at 1.1165 – 1.1181.

We’ve got a “V-Top” at the local high, so the price is likely going to decline towards a support at 1.1104 during the day. At the same time, if we see a pullback from this level, bulls will probably try to get a resistance at 1.1168.

More:
https://new.fxbazooka.com/analytics/10552

 

[riki143]

GBP/USD: trend line waiting for bears
9/21/2016

The price faced a support at 1.2934, which led to the current local consolidation. Nevertheless, the pair is likely going to achieve the next support near the trend line, which could reverse the price movement into an upward direction. If so, we should keep an eye on the closest resistance at 1.3056 – 1.3089 as an intraday target.

We’ve got a consolidation, which is taking place between the levels 1.2995 – 1.2934. Also, there’s a “Pennant” pattern, so the market is likely going to test the trend line. Considering a possible pullback, the 34 Moving Average will probably act as a resistance later on.

More:
https://new.fxbazooka.com/analytics/10553

 

[riki143]

EUR/USD: bearish impulse in wave c going to move on
9/21/2016

The price has been falling down since a zigzag in wave [x] was formed, which led to a pullback from 5/8 Murrey Math Level (P=200). So, it’s likely that wave (y) of [y] is going to move on in the short term. The main intraday target is 1/8 MM Level.

As we can see on the one-hour chart, wave b was ended yesterday, so the price is declining. Therefore, bears are likely going to push the market lower during the day. If wave c of (c) finishes on 2/8 MM Level, there’ll be an opportunity to have an upward correction.

More:
https://new.fxbazooka.com/analytics/10554

 

[riki143]

Key option levels for Wednesday, September 21th
9/21/2016

EUR/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 243 308 ? + 28 870 ?
Closest resistance levels 1.1216; 1.1236; 1.1273; 1.1300
Closest support levels 1.1149; 1.1126; 1.1097; 1.1062
Trading recommendations
Baseline scenario Short EUR/USD below 1.1149, with target points at 1.1126 and 1.1097
Alternative scenario Moving above 1.1216 can be considered as a signal to Buy the pair, with target at 1.1236 and 1.1273

GBP/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 1 262 ? + 1 700 ?
Closest resistance levels 1.3043; 1.3072; 1.3091; 1.3114
Closest support levels 1.2960; 1.2929; 1.2909; 1.2885
Trading recommendations
Baseline scenario Short GBP/USD below 1.2960, with target points at 1.2929 and 1.2909
Alternative scenario Moving above 1.3043 can be considered as a signal to Buy the pair, with target at 1.3072 and 1.3091

USD/CAD

Main trend Short-term period Medium-term period
Bullish Bullish
Changes in the open interest + 567 ? + 521 ?
Closest resistance levels 1.3219; 1.3243; 1.3266; 1.3298
Closest support levels 1.3146; 1.3113; 1.3068; 1.3016
Trading recommendations
Baseline scenario Long USD/CAD above 1.3219, with the target points at 1.3243 and 1.3266
Alternative scenario Moving below 1.3146 can be considered as a signal to sell the pair, with target at 1.3113 and 1.3068

More:
https://new.fxbazooka.com/analytics/10556

 

[riki143]

EUR/USD: "High Wave" set up bullish correction
9/21.2016

The price has faced a support by the lower “Window”. Also, we’ve got a “Harami” at the local low, which hasn’t been confirmed yet. Therefore, the market is likely going to achieve the nearest resistance. If a pullback from this line happens, there’ll be an opportunity to have another decline. As we can see on the Daily chart, the 34 and 55 Moving Averages acted as a resistance once again. Considering that there isn’t any reversal pattern, bears will probably go on.

There’s a bearish price movement, which is taking place on the one-hour chart. We’ve got a “High Wave” at the last low, which has been strongly confirmed. Also, there’s a chance to see another test of the nearest support. If we have a pullback from this line, then bulls will probably try to get a resistance on the Moving Averages.

More:
https://new.fxbazooka.com/analytics/10559

 

[riki143]

USD/JPY: "Window" acted as a strong resistance
9/21/2016

There’s a “Harami” pattern at the local high, but its confirmation hasn’t formed yet. So, the market is likely going to test the nearest “Window” once again. If we see a pullback from it, there’ll be an opportunity to have another decline. As we see on the Daily chart, the 21 Moving Average acted as a support, so bears will probably try to reach the closest support line in the short term.

We’ve got a “High Wave” at the local high, which points to an opportunity to have a new low during the day. Also, there’s a “Two Crows” pattern, which has been strongly confirmed. In this case, it’s likely that the price is going to achieve the nearest support shortly.

More:
https://new.fxbazooka.com/analytics/10560

 

[riki143]

How central banks control exchange rates through their monetary policy?
9/21/2016

In this article, we decided to shed a little light on the cryptic messages coming from central banks’ officials and explain how central banks control exchange rates through their monetary policy.

As we know, a car engine makes an automobile move, pick-up the speed or slow down by regulating the amount of gasoline. The same operational principle can be applied to the work of the central bank. It provides the nation’s economy with money (economy’s fuel) to keep it healthy and growing and takes this fuel away when it’s needed. So, let’s take a peep into the central banks’ hood to understand how this banking engine works.

To handle the nation's money supply, central banks have many tools at their disposal.

For example, they can modify their interest rates. Benchmark interest rates affect the demand for money by raising or lowering the cost to borrow (well, in essence, they define how money actually cost). When borrowing is cheap (when bank sets low interest rates), firms take on more debt and increase their production; consumers purchase more goods with cheap credit; and savers are not interested in saving their money in banks; they want to invest their savings in stocks or other assets. In the world of low interest rates, currencies feel themselves uncomfortable and start to depreciate. And, on the contrary, when the high interest rates come into play, national currency grows in value.

There is another effective method of money supply regulation – open-market operations (CBs buy or sell government bonds). If central bank buys short-term government bonds, it expands money supply and thereby decreases exchange rate of its currency. If central bank acts differently (prefers to sell its bonds), it gets the opposite effect.

Central banks can also regulate money supply by mandating the reserves that banks must keep on hand. Higher reserve requirements detract people, businesses from lending and rein in inflation. But the currency remains better off. It may grossly appreciate in value, once central bank decides to take this measure.

A certain combination of the aforementioned actions is called monetary policy. There are two types of monetary policy, expansionary (that has been recently taken on board by many prominent central banks including the European Central Bank, Swiss National Bank, Bank of England, Bank of Japan) and contractionary.

Expansionary monetary policy increases the money supply in order to lower unemployment, boost private-sector borrowing and consumer spending, and stimulate economic growth. Banks lower their interest rates in order to boost economic growth of the country.

In contrast, contractionary monetary policy slows the rate of growth in the money supply. Contractionary monetary policy is designed to fight inflation. It usually slows economic growth, increases unemployment and depresses borrowing and spending by consumers and businesses.

Armed with this information, I do hope that everybody will manage to decipher central banks’ messages.

More:
https://new.fxbazooka.com/analytics/10561

 

[riki143]

AUD/CAD reached buy target 1.0000
9/21/2016

AUD/CAD reached buy target 1.0000
Next buy target - 1.0100
AUD/CAD recently reached the round resistance level 1.0000 (which was set as the buy target in our previous forecast for this currency pair). The price has been rising steadily in the last few trading sessions inside the 3rd minor impulse wave 3 – which started previously – when the price reversed up from the support zone lying between the strong support level 0.9800, lower daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp upward impulse from May.

If the pair closes today above the parity - AUD/CAD can then rise to the next buy target at the next resistance level 1.0100 (which reversed the earlier sharp intermediate impulse wave (1) in August).

More:
https://new.fxbazooka.com/analytics/10562

 

[riki143]

EUR/AUD falling inside minor impulse wave
9/21/2016

EUR/AUD falling inside minor impulse wave
Next sell targets - 1.4600 and 1.4500
EUR/AUD has been falling in the last few trading session inside the minor impulse wave (iii) – which started previously – when the pair reversed down from the resistance zone located between the prominent resistance level 1.5100, upper daily Bollinger Band and the 50% Fibonacci correction of the previous downward impulse from the middle of May.

EUR/AUD is expected to continue the downward movement in the active impulse waves (iii) and C toward the next sell target at the support level 1.4600 – the breakout of which can lead to further losses toward the next major support level 1.4500.

More:
https://new.fxbazooka.com/analytics/10563

 

[riki143]

From where blows the wind of the new financial crisis
9/21/2016

One bubble had been swelling for years, and then went bang. When will go another? In 2008, the Case-Shiller home price index reported the greatest price drop in its history. The credit crisis resulting from the bursting of the housing bubble in the US was one of the primary causes of the global financial crisis. From which way the wind will blow next time?

Several prophetic economists and distinguished investors warn of a stock market crash. One of the most prominent Société Générale analysts – Albert Edwards – predicts a 75% stock market crash to strike in the forthcoming future. He believes that the US is one recession away from deflation. There is a massive debt on the corporate sector ($5,7 trln dollars in the first quarter of this year, an astounding increase by 63% from $3,5 trln in 8 years), which may lead to the chain of bankruptcies.

Another noted economist – Andrew Smithers – shares opinion of his colleague and warns investors of possible stock market crash. According to him, U.S stocks are grossly overvalued this year. Even James Dale Davidson, famous for his predictions of the 1999 and 2007 collapses, encourages investors to sell their stocks before it’s too late.

Meanwhile, it seems that investors don’t worry too much about aforementioned predictions from the noted doomsayers. S&P 500 futures have already risen by 0,48% after the Bank of Japan made its announcement. The next trigger for a sell-off or rebound may appear today, once we hear the Fed’s decision on the interest rates.

More:
https://new.fxbazooka.com/analytics/10564

 

[riki143]

EUR/GBP & ECB's Draghi speech: More Euro strengthening across the board?
9//22/2016

Following the disappointments brought by the Bank of Japan and the Federal Reserve during Wednesday, markets now would be watching for the ECB's president Mario Draghi today at 13:00 GMT, where it's expected to hold a speech that can bring some moves to the FX space, especially in the EUR pairs. However, major pairs were affected by the uncertainty's volatility around “Central Banks' storm” and it's likely that the moves for the rest of the week will be limited.

The technical picture for EUR/GBP at H4 chart is bullish, as it remains following a bullish trend line from the September 6th lows and we can see a resistance located at the 0.8623 level. If Draghi brings some hawkish comments, that is highly unlikely, then it could break higher towards the 0.8700 psychological level. In the neutral stance's scenario, the pair can do a pullback to the support level of 0.8543.

More:
https://new.fxbazooka.com/analytics/10565

 

[riki143]

GBP/USD: bulls launched the counter attack
9/22/2016

On the GBP/USD daily chart, the "bears" managed to fulfill the target at the 1.2965 level which we had defined earlier. Afterwards, there was a reversal. At the present time, there is a final stage of the 5-0 pattern formation.The move towards 38.2% (1.3135), 50% (1.3195) and 61.8% (1.3256) level of the last downward wave can be used for opening short positions.

On the GBP/USD hourly chart, quotes are moving towards the upper boundary of the descending trading channel. If "bulls" fail to overcome the diagonal resistance near the 1.3135 mark, or if there is an achievement of the 88.6% target in the "Shark"pattern, it will be the signal for the sales.

Recommendations:

SELL 1,3135 SL 1,3290 TP 1,291

SELL 1,3195 SL 1,325 TP1 1,3065 TP2 1,291

SELL 1,3265 SL 1,332 TP1 1,3135 TP2 1,3065.

More:
https://new.fxbazooka.com/analytics/10566

 

[riki143]

GBP/USD: bulls launched the counter attack
9/22/2016

On the GBP/USD daily chart, the "bears" managed to fulfill the target at the 1.2965 level which we had defined earlier. Afterwards, there was a reversal. At the present time, there is a final stage of the 5-0 pattern formation.The move towards 38.2% (1.3135), 50% (1.3195) and 61.8% (1.3256) level of the last downward wave can be used for opening short positions.

On the GBP/USD hourly chart, quotes are moving towards the upper boundary of the descending trading channel. If "bulls" fail to overcome the diagonal resistance near the 1.3135 mark, or if there is an achievement of the 88.6% target in the "Shark"pattern, it will be the signal for the sales.

Recommendations:

SELL 1,3135 SL 1,3290 TP 1,291

SELL 1,3195 SL 1,325 TP1 1,3065 TP2 1,291

SELL 1,3265 SL 1,332 TP1 1,3135 TP2 1,3065.

More:
https://new.fxbazooka.com/analytics/10566

 

[riki143]

EUR/USD: will a big player stop the euro?
9/22/2016

On the EUR/USD daily chart, "bears" failed to break support at the 1,113 level. It helped "bulls" to recover from their losses and lance countering. However, there is a high probability that a large seller will show his strength at the 1,1209-1,127 level and won't allow bulls to move further to the north.

On the EUR/USD hourly chart, the quotes returned to the area of the previous accumulation of short positions. Rebound from the lower or upper boundaries will be a signal for the opening of the short possitions. Near the upper boundary, there is a 88.6% target in the pattern "Shark," which reinforces the value of the resistance.

Recommendations:

SELL 1,1209 SL 1,1265 TP 1,104

SELL 1,127 SL 1,1325 TP1 1,113 TP2 1,104

More:
https://new.fxbazooka.com/analytics/10567

 

[riki143]

EUR/USD: the Bulls are in courage again
9/22/2016

Technical levels: support – 1.1150, 1.1180; resistance – 1.1210/30

Trade recommendations:

1. Buy — 1.1180; SL — 1.1160; TP1 — 1.1230; TP2 – 1.1270.

Reason: a dead cross of Tenkan-sen and Kijun-sen and a bearish Ichimoku Cloud, but the prices are over Kijun-sen.

More:
https://new.fxbazooka.com/analytics/10568

 

[riki143]

GBP/USD: the correction may be deeper
9/22/2016

Technical levels: support – 1.3020; resistance – 1.3100, 1.3190.

Trade recommendations:

1. Buy — 1.3020; SL — 1.3000; TP1 — 1.3100; TP2 — 1.3190.

Reason: a dead cross of Tenkan-sen and Kijun-sen; a bearish Ichimoku Cloud but the oversold market and a strong support on 1.2950; the prices are in the channel of Tenkan-Kijun.

More:
https://new.fxbazooka.com/analytics/10569

 

[riki143]

AUD/USD: looking for 0.7670
9/22/2016

Technical levels: support – 0.7620, 0.7590; resistance – 0.7670.

Trade recommendations:

1. Sell — 0.7670; SL — 0.7690; TP1 — 0.7590; TP2 — 0.7550.

Reason: a golden cross of Tenkan-sen and Kijun-sen, but the lines are horizontal; bearish Ichimoku Cloud; overbought market.

More:
https://new.fxbazooka.com/analytics/10570