Market analysis and trade recommendations by FBS

[riki143]

Key option levels for Friday, November 4th
11/4/2016

EUR/USD

Main trend Short-term period Medium-term period
Bullish Bearish
Changes in the open interest + 64 239 ? + 25 582 ?
Closest resistance levels 1.1127; 1.1152; 1.1173/87; 1.1203
Closest support levels 1.1093; 1.1068; 1.1041; 1.1023
Trading recommendations
Baseline scenario Long EUR/USD above 1.1127, with target points at 1.1152 and 1.1173
Alternative scenario Moving below 1.1093 can be considered as a signal to Sell the pair, with target at 1.1068 and 1.1041

GBP/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 3 897 ? + 3 532 ?
Closest resistance levels 1.2479; 1.2505; 1.2544/58; 1.2574
Closest support levels 1.2440; 1.2408; 1.2383; 1.2349
Trading recommendations
Baseline scenario Long GBP/USD above 1.2479, with target points at 1.2505 and 1.2544
Alternative scenario Moving below 1.2440 can be considered as a signal to Sell the pair, with target at 1.2408 and 1.2383

USD/JPY

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest + 1 174 ? + 14 723 ?
Closest resistance levels 103.56; 103.82; 104.14; 104.59
Closest support levels 102.84; 102.65; 102.39; 102.08
Trading recommendations
Baseline scenario Short USD/JPY below 102.84, with the target points at 102.65 and 102.39
Alternative scenario Moving above 103.56 can be considered as a signal to Buy the pair, with target at 103.82 and 104.14


More:
https://fxbazooka.com/analytics/11185

 

[riki143]

AUD/CAD reached buy target 1.0300
11/4/2016

AUD/CAD reached buy target 1.0300
Next buy target - 1.0400
AUD/CAD earlier broke through the resistance level 1.0300, which stopped the previous minor impulse wave (i) at the end of October and which was set as the buy target in our earlier forecast for this currency pair. The breakout of the resistance level 1.0300 is likely to accelerate the active minor impulse waves (iii) and 3 – both of which belong to the sharp intermediate impulse wave (3) from August.

AUD/CAD is likely to rise further toward the next buy target at the next round resistance level 1.0400. Buy stop-loss can be placed below the recently broken price level 1.0300.

More:
https://fxbazooka.com/analytics/11186

 

[riki143]

USD/JPY: weekly outlook for November 7-11
11/4/2016

USD/JPY fell from 105.2 to 102.4 on the growing concerns over the US election outcome. The greenback got some support from the decent US unemployment report and trade balance on Friday. On Tuesday, the Bank of Japan left its policy settings unchanged as broadly expected by the market. It also pushed back the timing for hitting the inflation target as its current monetary policy measures failed to weaken the yen.

The US presidential election scheduled for November 8 will be the key driver of USD/JPY currency pair over the short term. If Donald Trump wins the presidential race, JPY can rise significantly in the near-term, as more traders and investors sail in safe harbors. The nearest support for USD/JPY lies at 102.5 level. Once it’s broken, the pair could slide down further towards 102.00 and 101 levels.

If Hillary Clinton wins, the market reaction should be limited. USD/JPY could test 104.00 level and in the case of the breakout move further towards 106.9 mark located against 200-day moving average.

On Wednesday, watch for Japan’s current account data. If the report indicates surplus, the yen can edge up in relation to US dollar. On Thursday look through core machinery orders in search for the green shoots of Japan’s economic activity. On Friday, keep an eye on the producer price inflation data.

More:
https://fxbazooka.com/analytics/11188

 

[riki143]

AUD/USD: weekly outlook for November 7-11
11/4/2016

Aussie performed well in the course of this week but failed to break the resistance at 0.7700. On Tuesday, the Reserve Bank of Australia left the cash rate unchanged at 1.5%. The latest PMI surveys from China offered additional support to AUD and signaled that China’s economic growth has steadied. Commodity prices continue to rise giving Aussie a room for a further appreciation. On Friday, the RBA didn’t change its forecasts for inflation and economic growth but sounded dovish promising to introduce more easing if Australian economy needs a boost. Retail sales in September showed a slight increase (by 0.2%) followed by 0.3% rise in August.

Next week traders will be all eyes on the US presidential election that will take place on November 8, as there won’t be any significant releases, events that could bring big changes to the chart. Until this day AUD/USD will be trading below 0.7700. Whatever the outcome of the US election, Aussie should hold up better than other currencies given the rise in commodity prices, acceleration of China’s economic growth and accommodative monetary policy of the Reserve Bank of Australia. A Trump win might cause Aussie to rise to 0.7800 (April’s high), as the Fed could disregard the need for the rate hike in December. As dust settles, Aussie’s precipitous surge should be followed by a downfall. A Clinton win could send AUD to 0.7300 and strengthen the greenback. Before 0.7300, there are some other supports located at 0.7600 (50-day MA on the daily timeframe), 0.7490 (200-day MA on the daily timeframe).

More:
https://fxbazooka.com/analytics/11189

 

[riki143]

Crash course on the US voting system
11/4/2016

We’ve decided to fill you in on how the US votes are counted and how they aggregate a final result. Perhaps, this information can help you to form your own opinion of who might win the upcoming US presidential race.

Americans don’t vote for their president directly; they vote for the electors who in turn support one of the candidates. Each state has a different number of electors depending on how money people live there. So, at the end of election day (November 8) there is a certain number of electors in each state who tend to support a Democratic or Republican nominee. But this number cannot be simply assigned to a certain candidate because all states abide the principle “the winner takes all”. For example, there are 10 electors assigned for Missouri; 6 of them vote for Democrats, 4 electors vote for Republicans. The winner is a Democratic nominee as he/she got the majority of votes, leaving the Republicans empty-handed. The same procedure happens in each state. There are some states who usually vote for Republican or Democratic nominee; there are also some states where the outcome is less certain. These are so-called swing states. In total, there are 538 electors. The candidate who has more than a half of these electors on his/her side wins the election. Once the electors have been elected, it becomes clear who will be the president. However, the president won’t be officially elected until December 18, 2016, when all the electors of electoral college cast their votes on behalf of their states. Then, the electoral votes are counted by Congress which announces who will reside in the White House for the next 4 years.

You can find out how votes are distributed among the nominees; who is taking a lead in each state, according to the recent polls, by looking at the electoral map.

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https://fxbazooka.com/analytics/11190

 

[riki143]

US dollar: outlook for November 7-11
11/4/2016

American political factors will continue to be the main driver of the currency market. Investors and traders are waiting for the outcome of the presidential race. US dollar index (DXY) declined in the past week as opinion polls have tightened and the uncertainty surrounding the election is extremely high.

The Federal Reserve, as expected, changed neither its monetary policy, not its statement. The probability of December rate hike is still high, about 70%. Nonfarm payrolls increased by 161K in October, a bit missing the forecast, but still being high enough for the Fed to raise tares this year. In addition, growth of the average hourly earnings accelerated.

The US presidential election will take place on Tuesday, November 8. The vote will take place across 6 time zones. The first state projections based on exit polls will appear at 02:00 Metatrader time on Wednesday. The earliest possible time the election will be “called” for either candidate by US TV networks is 06:00 Metatrader time. If Hillary Clinton wins the US presidential election, the greenback will sharply strengthen as the Fed will be expected to proceed with December rate hike. DXY will aim at 100.00. In case of Trump’s victory the index will be vulnerable for a decline to 92.00 as the Fed will probably have to stay on hold for longer.

More:
https://fxbazooka.com/analytics/11191

 

[riki143]

GBP/USD: outlook for November 7-11
11/4/2016

Fundamental picture for the British pound has improved during the past week. The UK High Court ruled that British parliament – not the government – has the power to trigger Article 50 – a process of exit from the European Union. The UK government is going to appeal the verdict and a final ruling from the Supreme Court will be released in December. All in all, the start of Brexit may be delayed past March 2017. If it’s the parliament that will be in charge of Brexit negotiations, then ‘softer' Brexit becomes more likely as a majority of the members of parliament have a pro-EU stance and voted for remain. For a time being this will provide support to the British pound.

Moreover, the Bank of England turned from dovish to the neutral stance. It increased 2017 forecasts for growth and inflation (2.7% CPI from 2.0% and 1.4% GDP from 0.8%). The BOE Governor Carney indicated that there were limits to his tolerance for inflation overshoot and that policy can respond to either direction. Carney also promised to stay in the Bank of England until 2019 improving the market’s sentiment about the sterling. The increase in pound provoked covering of short positions on sterling and allowed the currency to get higher.

GBP/USD managed to rise above 5-month downtrend at 1.2325. Support is at this level, at 1.2100 and 1.2000. Hillary Clinton’s victory in the US presidential election will make the currency head down. Resistance lies at 1.2500, 1.2640 and 1.2740. If Trump wins, the pair will test higher levels. The UK economic calendar is quite empty, except for the manufacturing production on Tuesday.

More:
https://fxbazooka.com/analytics/11192

 

[riki143]

EUR/USD: outlook for November 7-11
11/4/2016

EUR/USD gained in the past week and came to resistance

at 1.1120 (August/September lows, 50-day MA).

The main bullish driver for the pair was the general

weakness of the US dollar. Still, data from the euro

area were mostly favorable. Manufacturing expanded in

October at the fastest pace since early 2014, consumer

prices rose at the fastest pace in more than 2 years,

while the unemployment rate remained unchanged at the

lowest level in more than 5 years. The European Central

Bank (ECB) economic bulletin showed that the region’s

economy should continue to expand, albeit at a moderate

pace.

If Donald Trump wins the US election, the euro may

shoot up to 1.1200 with the next target at 1.1365

(August high). If Hillary Clinton wins, the US dollar

will strengthen making the pair slide to 1.1000 and

likely to 1.0940.

Next week pay attention to German factory orders, euro

zone’s Sentix investor confidence and retail sales on

Monday. There will the Eurogroup meeting on Monday and

ECOFIN meetings on Tuesday. The EU will release

economic forecasts on Wednesday. French banks will be

closed on Friday because of a holiday.



https://fxbazooka.com/img/articles/11193/EURUSDWeekly

(2).png

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https://fxbazooka.com/analytics/11193

 

[riki143]

AUD/USD: bears won't give up without battle
11/7/2016

On the AUD/USD daily chart, prices tested the neckline, but failed to move further towards the target 161.8% in the AB = CD pattern (0,7845). To regain momentum, bulls should attack the resistance at 0.7715. There is the upper boundary of the ascending triangle.

On the AUD/USD hourly chart, "bulls" should test the 88.6% level (0.7715) of XA wave to return quotes to the trading channel.

Recommendation: BUY 0,7715 SL 0,766 TP 0,7845.

More:
https://fxbazooka.com/analytics/11194

 

[riki143]

GBP/USD: pound is ready for correction
11/7/2016

On the GBP/USD daily chart, "bulls" managed to test the upper boundary of the 1,211-1,232 consolidation range. Quotes returned to the target 161.8% in the AB = CD pattern (1,248), but failed to consolidate above this level.Successful test of the resistance will cause quotes to rise towards 1,269 (127.2% in the AB = CD).

On the GBP/USD hourly chart, the expanding wedge reversal pattern has been formed. Rollback in the direction of 23.8% (1.2445), 38.2% (1.2375) and 50% (1,232) are typically used for opening long positions.If quotes return to 1.2185 (78.6%) the wedge pattern will transform into the continuation of the trend.

Recommendation: BUY 1,2443 SL 1,2388 TP 1,269 BUY 1,2375 SL 1,232 TP 1,26.

More:
https://fxbazooka.com/analytics/11195

 

[riki143]

Morning brief for November 7, 2016
11/7/2016

EUR/USD fell below the 1.1100 level. The FBI said on Sunday that criminal charges were withdrawn against Clinton, defusing tensions over the presidential race two days before the U.S. election. Later today there will be Eurogroup meetings. European finance ministers will meet to discuss business. In the euro-zone, Greece is still struggling with its indebtedness. The wider issue of Brexit is also on the table, with the High Court ruling in favor of Parliament which could halt the process. Watch German factory orders at 2:00 am (Metatrader time) to know how well the eurozone’s leading economy performs.


USD/JPY was one of the major performers of the session, having jumped to 104.2 from 103.4.


GBP/USD dipped to around 1.24600 on the FBI announcement. Later today watch closely housing inflation data (Halifax HPI) which indicates the level of activity in the UK housing market.


Aussie is trading sidelines along the 0.7670 level as there was no ground-shaking news from Australia. Keep an eye on the tentative Chinese trade balance which could influence Australian dollar as China is Australia’s largest trading partner. Kiwi edged down from 0.7345 to 0.7300 having touched 0.7360 mark. So, there were little changes for the session

Oil prices rose with traders citing buying after the week of precipitous downfalls on the disappointing fundamental news. Brent crude oil futures are trading at about $46.00 per barrel having recovered from Friday’s slump to $45.00.

News flow halted after FBI dropped charges against Clinton. We got some data releases from Australia and Japan, minutes of the Bank of Japan September meeting, but they look lusterless on the back of the upcoming US election

More:
[URLhttps://fxbazooka.com/analytics/11196]https://fxbazooka.com/analytics/11196[/URL]

 

[riki143]

EUR/USD: on the Clouds support
11/7/2016

Technical levels: support – 1.1050, 1.1030; resistance – 1.1090, 1.1140.

Trade recommendations:

1. Buy — 1.1030; SL — 1.1010; TP1 — 1.1090; TP2 – 1.1140.

Reason: golden cross of Tenkan-sen and Kijun-sen; bullish character of Ichimoku Cloud, Senkou Span B is falling down, but Senkou Span A is rising; the prices are in the correction; strong support of the Cloud.

More:
https://fxbazooka.com/analytics/11197

 

[riki143]

GBP/USD: returning to Senkou Span B
11/7/2016

Technical levels: support – 1.2400; resistance – 1.2490, 1.2520/40.

Trade recommendations:

1. Buy — 1.2400; SL — 1.2380; TP1 — 1.2490; TP2 — 1.2540.

Reason: bullish Ichimoku Cloud, rising Senkou Span A; golden cross of Tenkan-sen and Kijun-sen; strong support of the Cloud and Kijun-sen.

More:
https://fxbazooka.com/analytics/11198

 

[riki143]

USD/JPY: morning jump into the Cloud
11/7/2016

Technical levels: support – 104.00, 103.70; resistance – 104.70/90.

Trade recommendations:

1. Sell — 104.70; SL — 104.90; TP1 — 104.00; TP2 — 103.70.

Reason: bearish Ichimoku Cloud, but rising Senkou Span A; dead cross of Tenkan-sen and Kijun-sen; narrowing channel of Tenkan and Kijun; the prices are below the strong resistance.

More:
https://fxbazooka.com/analytics/11199

 

[riki143]

Key option levels for Monday, November 7th
11/7/2016

EUR/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 210 051 ? + 209 772 ?
Closest resistance levels 1.1142; 1.1163; 1.1183/97; 1.1214
Closest support levels 1.1059; 1.1026; 1.1005; 1.0981
Trading recommendations
Baseline scenario Long EUR/USD above 1.1142, with target points at 1.1163 and 1.1183
Alternative scenario Moving below 1.1059 can be considered as a signal to Sell the pair, with target at 1.1026 and 1.1005

GBP/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest - 33 616 ? - 31 372 ?
Closest resistance levels 1.2522; 1.2542; 1.2575/88
Closest support levels 1.2418; 1.2381; 1.2359; 1.2334
Trading recommendations
Baseline scenario Short GBP/USD below 1.2418, with target points at 1.2381 and 1.2359
Alternative scenario Moving above 1.2522 can be considered as a signal to Buy the pair, with target at 1.2542 and 1.2575

USD/JPY

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest - 31 349 ? - 26 663 ?
Closest resistance levels 104.42; 104.65; 104.91; 105.20
Closest support levels 102.93; 102.73; 102.53; 102.21
Trading recommendations
Baseline scenario Short USD/JPY below 102.93, with the target points at 102.73 and 102.53
Alternative scenario Moving above 104.42 can be considered as a signal to Buy the pair, with target at 104.65 and 104.91

USD/CAD

Main trend Short-term period Medium-term period
Bearish Bullish
Changes in the open interest - 10 450 ? - 9 828 ?
Closest resistance levels 1.3407; 1.3435; 1.3473; 1.3503
Closest support levels 1.3371; 1.3346; 1.3328; 1.3307
Trading recommendations
Baseline scenario Short USD/CAD below 1.3371, with the target points at 1.3346 and 1.3328
Alternative scenario Moving above 1.3407 can be considered as a signal to buy the pair, with target at 1.3435 and 1.3473

EUR JPY GBP CAD USD

More:
https://fxbazooka.com/analytics/11200

 

[riki143]

EUR/USD: "V-Top" led to "Breakaway Gap"
11/7/2016

There’s a “V-Top”, which led to the “Breakaway Gap” this morning. So, the market is likely going to decline towards the 55 Moving Average. Considering the previously formed a “Double Bottom”, bulls are likely going to move on. In this case, we should keep an eye on the nearest resistance at 1.1151 as a possible intraday target.

We’ve got a consolidation on the one-hour chart. Therefore, bears are likely going to test the closest support at 1.1038 – 1.1025 during the day. If a pullback from this area happens, bulls will probably try to reach the next resistance at 1.1122.

More:
https://fxbazooka.com/analytics/11201

 

[riki143]

How to trade gaps
11/7/2016

Gap is an area on a chart which is not filled with any technical objects, where no trades took place. Gaps usually occur in the interim of two sessions. If something important happens (data releases, significant political announcements), the market volatility increases and Bid/Ask spread widens resulting in a gap. The gaps often occur at the week’s opening if there were some big news during the weekend. ?

There are 4 types of gaps – breakaway, exhaustion, common and continuation.

Breakaway gaps usually warn us of imminent market reversals. They occur at the end of the price pattern and indicate the beginning of the new trend. Normally these gaps remain unclosed.

Exhaustion gaps are also formed at the end of price patterns, but, contrary to the breakaway gaps, they appear when price makes the last effort to continue the trend and achieve new lows or highs. They have closed shortly afterward.

Common gaps occur when the quotes move sidelines if prices are not included in any price patterns.

Continuation gaps (runaway/measuring gap) occur in the middle of a price pattern and tell us that buyers or sellers want to form the pattern as soon as possible.

How to trade

‘The gap is filled’ is an expression which is used when price moves back to the point where it had been before the gap. Such gap fillings occur very often. Many traders learned how to trade them and invented numerous strategies to make as much money as possible.
You should follow the newscasts especially at the end of the week and search for the event that could produce trading discontinuities on the technical chart. Once you manage to do so, you will be well-positioned at the beginning of the week and prepared to trade on the gaps. If the price starts to fill a gap, it doesn’t cease until the gap is closed as there are no any significant resistances/supports that could impede the price actions.
It’s also useful to see what amount of liquidity is on the market. If it’s a bank holiday in one of the major economy and liquidity is low, it may be sensible to buy when the market is trying to close a bearish gap and there’s no strong resistance ahead.
Some traders prefer to fade gaps in the opposite direction once the price has set a high or low after the gap. For example, if a currency gaps up on some important event, skillful traders may fade the gap by shorting the currency.
Sometimes traders might be willing to buy when the price reaches the previous support after the gap has been filled.
There are many trading strategies that benefit from the “gap filling”. Before initiating any trade on gaps, you should define the type of the gap. Pay attention to the volume (high volume corresponds to the occurrence of breakaway gaps; low volume – to the exhaustion gaps). Good luck in your trades!

More:
https://fxbazooka.com/analytics/11202

 

[riki143]

GBP/USD: bears going to deliver correction
11/7/2016

The downtrend has been broken, but the price reached a resistance at 1.2621. Also, we’ve got a “V-Top”, which led to a local decline. So, bears are likely going to reach a support at 1.2330. If we see a pullback from this level, there’ll be an opportunity to have another test of the nearest resistance at 1.2621.

There’re a “V-Top” pattern and a “Breakaway Gap”, so the market is likely going to decline towards a support at 1.2399 – 1.2371. If bears be stopped here, bulls will probably try to achieve a resistance at 1.2493.

More:
https://fxbazooka.com/analytics/11203

 

[riki143]

“What if analysis” of markets after presidential election
11/7/2016

As the most acrimonious US election is drawing to a close, financial markets keep fingers crossed for Hillary Clinton as she could maintain the status quo, whereas Trump’s victory would resemble the aftermath of the UK’s vote to leave the European Union. Controversy over Hillary Clinton’s e-mails could cause a fundamental shift in the presidential race and spread panic among investors. So, we decided to give you some prompts ahead of November 8 on what could happen with markets after the election.

Written on the basis of Bloomberg's article

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https://fxbazooka.com/analytics/11134

 

[riki143]

US election prep: trading strategies from banks
11/7/2016

Take a nap and stock up with coffee ahead of the US Election Day, as it is going to be a real marathon. There some prompts from banks on how to trade the US election.

Here is the schedule for the key state poll closings

More:
https://fxbazooka.com/analytics/11205