Market analysis and trade recommendations by FBS

[riki143]

US dollar: outlook for January 16-20

The US dollar index (DXY) weakened during the past week after the initial attempt to get towards 103.00.
1/13/2017

The main negative pressure on the American currency came from the disappointment that President-elect Donald Trump didn’t give more details about fiscal stimulus plans during his news conference. This made the market think that the US dollar has appreciated too much after the presidential election. Better news came from the Federal Reserve: Janet Yellen said that the US economy is doing well. Hawkish comments from the Fed provided some support to the greenback.

The US will have a long weekend: banks will be closed on Monday due to the Martin Luther King Day. Traders will be looking at the headlines from the World Economic Forum, which will take place in Switzerland during the entire next week. The US will release Empire State manufacturing index on Tuesday, consumer inflation figures on Wednesday and building permits, Philly Fed manufacturing index, unemployment claims and housing starts on Thursday.

Some market participants are closing their USD longs. Others, on the contrary, believe that the greenback may resume growth once Trump reveals information about his stimulus plans. All in all, we think that the greenback will manage to return to the positive dynamics in the medium-term as the US economy is in a good shape, but in the short-term further correction/consolidation is possible. The currency still has support in the 100.85 and 100.50 area (2015 highs). Resistance is in the region of 102.00.

More:
https://new.fxbazooka.com/analytics/12041

 

[riki143]

USD/JPY: outlook for January 16-20
1/13/2017

USD/JPY fell below the 115.50 support. We may see a deeper correction within the overall uptrend.

Still, daily MAs are in the bullish setup. The pair has support around 114.20/00 (23.6% Fibo of August-December advance). Further support is at 112.90 (50-day MA) and 111.40 (38.2% Fibo). Above 115.50 the pair will get chance to recover to the 118.00 region. The weekly close – above or below the 100-week MA at 114.70.

The US dollar is temporary out of the market’s favor. Another bearish thing is that Japanese investors have started seasonal cash repatriation that means more buying of the yen. Still, the yield gap between the US and Japan in favor of the former will likely keep supporting the greenback around 112.00.

The economic calendar doesn’t contain any significant economic releases from Japan, so focus on the news from the World Economic Forum, which will take place in Switzerland during the entire next week, and Chinese statistics on Friday. The latter will be very important for the market’s risk sentiment. Negative news from China will increase demand for the yen as a safe haven.

More:
https://new.fxbazooka.com/analytics/12042

 

[riki143]

GBP/USD: outlook for January 16-20
1/13/2017

In the past week, despite the weakness of the US dollar, British pound, unlike the euro, stayed under pressure.

The UK economic figures were mixed: manufacturing and industrial production showed good gains in November, but goods trade deficit widened. During the new week, we’ll get more insight about British economy: the nation will release consumer inflation figures on Tuesday, labor market data on Wednesday and retails sales on Friday. Statistics are not currently the primary driver for the pound.

Brexit remains a big source of concerns for the British pound. We expect many comments about it at the World Economic Forum, which will unfold in Switzerland during the entire week. In addition, the UK Prime Minister Theresa May is expected to finally uncover Brexit strategy – possibly just days before a crucial Supreme Court ruling on whether Parliament must give its consent to leaving the EU. The key thing the markets will be watching is whether Ms. May wants Britain to remain in the EU’s single market or customs union after Brexit. Last weekend she hinted on the upcoming exit from the single market, and her words worsened sentiment about the pound.

Technically there’s a head-and-shoulders pattern on the chart, but a close below the neckline around 1.2120 is needed to send the pair down to support at 1.20 and then potentially 1.1945. Resistance is at 1.2305 and 1.2410.

More:
https://new.fxbazooka.com/analytics/12043

 

[riki143]

USD/CHF reached sell target 1.0060
1/13/2017

USD/CHF reached sell target 1.0060
Next sell target – 1.0000
USD/CHF recently reached the strong support level 1.0060, which was set as the sell target in our previous forecast for this currency pair. The price earlier broke through the 38.2% Fibonacci correction level of the previous sharp upward impulse from the start of November – which accelerated the active C-wave of the intermediate ABC correction (4) from the middle of December.

If USD/CHF breaks below the support level 1.0060 – the pair can then fall to the next sell target at parity, coinciding with the forecast price calculated for the completion of the active the intermediate ABC correction (4).

More:
https://new.fxbazooka.com/analytics/12044

 

[riki143]

EUR/GBP reached buy target 0.8600
1/13/2017

EUR/GBP reached buy target 0.8600
Next buy target - 0.8900
EUR/GBP continues to rise inside the accelerated impulse waves 3 and (3), which earlier broke through the pivotal resistance level 0.8600, which was set as the buy target in our earlier forecast for this currency pair. Both of the active impulse waves 3 and (3) belong to the long-term upward impulse ? from the start of December.

EUR/GBP is expected rise further in the direction of the next buy target at the next resistance level 0.8900 (former strong support level, which reversed earlier waves 3, 5 and B in October, as can be seen below). Strong support now stands at the support level 0.8600.

More:
https://new.fxbazooka.com/analytics/12045

 

[riki143]

EUR/USD: outlook for January 16-20
1/13/2017

During the past week, EUR/USD tested higher levels. The weaker US dollar and stronger industrial production in the euro area drove the pair to the upside.

At the same time, the single currency didn’t manage to step far from its recent lows. Political uncertainty keeps limiting the bulls. The ECB December meeting minutes showed that, despite improvement in the data, low inflation still remains a concern.

In the new week pay attention to the following releases: the region’s trade balance on Monday, German ZEW economic sentiment on Tuesday and final CPI on Wednesday. The European Central Bank will have its first 2017 meeting on Thursday. The minutes also showed that "a few members" of the central bank’s Governing Council rejected proposals to continue quantitative easing beyond March. However, the ECB is not likely to change its approach in January keeping its monetary policy extremely loose. As a result, if the US currency starts gaining strength again, the euro probably will not be able to keep rising.

Resistance is at 1.0700, 1.0780 and 1.0850. Support is at 1.0540 and 1.0500 ahead of 1.0375.

More:
https://new.fxbazooka.com/analytics/12046

 

[riki143]

Key option levels for Monday, January 16th
1/15/2017

EUR/USD

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest - 1 578 454 ? - 115 025 ?
Closest resistance levels 1.0668; 1.0690; 1.0720; 1.0745
Closest support levels 1.0634; 1.0613; 1.0583; 1.0541
Trading recommendations
Baseline scenario Short EUR/USD below 1.0634, with target points at 1.0613 and 1.0583
Alternative scenario Moving above 1.0668 can be considered as a signal to Buy the pair, with target at 1.0690 and 1.0720

GBP/USD

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest + 1 106 ? + 951 ?
Closest resistance levels 1.2227; 1.2262; 1.2290; 1.2327
Closest support levels 1.2158; 1.2133; 1.2098; 1.2076
Trading recommendations
Baseline scenario Long GBP/USD above 1.2227, with target points at 1.2262 and 1.2290
Alternative scenario Moving below 1.2158 can be considered as a signal to Sell the pair, with target at 1.2133 and 1.2098

USD/CAD

Main trend Short-term period Medium-term period
Bearish Bullish
Changes in the open interest + 182 ? + 554 ?
Closest resistance levels 1.3113; 1.3170; 1.3205; 1.3250
Closest support levels 1.3099; 1.3075; 1.3055; 1.3023
Trading recommendations
Baseline scenario (High risk of reversal) Short USD/CAD below 1.3099, with the target points at 1.3075 and 1.3055
Alternative scenario Moving above 1.3113 can be considered as a signal to Buy the pair, with target at 1.3170 and 1.3205

More:
https://new.fxbazooka.com/analytics/12048

 

[riki143]

GBP/USD after "Hard Brexit" headlines: lower levels in the mid-term?
1/16/2017

Monday’s Asian opening was headlined by a strong sell off in GBP across the board, as the currency is digesting the statements from UK PM Theresa May about a possible “hard Brexit”, suggesting that such negotiations will turn into a very difficult process for the United Kingdom to exit from the European Union. We should remember that May will deliver a speech on Tuesday about her Brexit plans. As for now, we’ll have today another key event at 18:30 GMT with a speech coming from the BoE’s Governor Mark Carney and will be interesting to see some hints about current Carney’s concerns on Brexit aftermath.

Our technical analysis for GBP/USD at H1 chart is very bearish as the pair tested new historical lows, even lower after those who were reached during last October’s “flash-crash”. However, GBP/USD is extremely oversold and it’s recovering from that sharp decline. It’s possible to see a strong recovery by the pair at least towards the 1.2069 level, where we can expect a resistance to being found, with the next target placed around 1.2131, still below the 200 SMA.

More:
https://new.fxbazooka.com/analytics/12049

 

[riki143]

AUD/USD: bears are counting on the wedge
1/16/2017

On the daily AUD/USD chart, the bears are trying to use the inside bar and return the quotes below support at 0.7467 (50% of the last medium-term descending wave). If they succeed, risks of decline towards $0.7390 will increase.

On H1 AUD/USD has every chance to finish the "widening wedge" pattern. Formation of the point 5 and the following retracement towards 23.6%, 38.2% and 50% of the wave 4-5 will be the signal for opening short positions. If all goes well, attack of the bears may bring the prices below 0.7420.

Recommendation: SELL 0,745 SL 0,7505 TP1 0,7385 TP2 0,7345.

More:
https://new.fxbazooka.com/analytics/12050

 

[riki143]

EUR/USD: bears decided to repeat attack
1/16/2017

On the daily EUR/USD chart the inability of the bulls to renew January high led to the formation of the inside bar. During trading on January 13 there was support at 1.0595-1.0600. Its first test was unsuccessful, but in the near term bears will launch another attack.

On H1 there's a combination of "Three Indians" and 1-2-3 patterns. This is a serious reversal signal. A break of support at 1.06 will trigger the "Bat" pattern and increase the risks of decline towards 1.0470-1.0480.

https://new.fxbazooka.com/img/articles/12051/Screenshot_2017_01_16_08_05_34.png[IMG]

Recommendation: SELL 1,06 SL 1,0655 TP 1,048.

More:
[URL=https://new.fxbazooka.com/analytics/12051]https://new.fxbazooka.com/analytics/12051[/URL]

 

[riki143]

EUR/USD: bearish "Double Top"
1/16/2017

The price is still consolidating in a support area. Therefore, buyers are likely going to test the nearest resistance at 1.0650 - 1.0669 in the short term. If we see a pullback from these levels, there’ll be an opportunity to have another decline towards the 89 Moving Average.

There’s a possible reversal pattern. So, bulls are likely going to test a resistance at 1.0605 – 1.0669 during the day. However, if a pullback from this area are be on the table, bears will probably try to reach the nearest support at 1.0575 – 1.0551.

More:
https://new.fxbazooka.com/analytics/12052

 

[riki143]

GBP/USD: "Breakaway Gap"
1/16/2017

There’s a “Breakaway Gap”, so we’ve got a new low. Bulls are likely going to fulfil the gap in the short term, so we should keep an eye on a resistance at 1.2113 as a possible intraday target. Nevertheless, there’s an opportunity to have another decline towards a support at 1.1946 afterwards.

The price faced a support at 1.2037, which led to the current consolidation. In this case, bulls are likely going to test a resistance at 1.2113 shortly. Considering a possible pullback from this level, bears could reach the nearest support at 1.1946 soon.

More:
https://new.fxbazooka.com/analytics/12053

 

[riki143]

EUR/USD: euro supported by Cloud
1/16/2017

Technical levels: support – 1.0570; resistance – 1.0640, 1.0700, 1.0730.

Trade recommendations:

1. Buy — 1.0570; SL — 1.0550; TP1 — 1.0640; TP2 – 1.0700.

Reason: expanding bullish Ichimoku Cloud; a new golden cross of Tenkan-sen and Kijun-sen, but the prices are in the correction movement to Kijun-sen; strong support of Kijun-sen.

More:
https://new.fxbazooka.com/analytics/12055

 

[riki143]

USD/JPY: on the new local lows
1/16/2017

Technical levels: support – 113.80; resistance – 114.50.

Trade recommendations:

1. Sell — 114.50; SL — 114.70; TP1 — 113.80; TP2 — 113.10.

Reason: bearish Ichimoku Cloud, falling Senkou Span A and B; a new dead cross of falling Tenkan-sen and Kijun-sen, but the prices are on the new lows and market will enter to the oversold area.

More:
https://new.fxbazooka.com/analytics/12056

 

[riki143]

EUR/USD: "Window" acted as a resistance
1/16/2017

The upper “Window” acted as a resistance, so we’ve got a bearish “Doji”, which has been confirmed enough. So, the price is likely going to test the 34 & 55 Moving Averages in the short term. If any bullish pattern arrives afterwards, there’ll be an opportunity to have another upward price movement.

As we can see on the one-hour chart, the price found a lodgement under the closest resistance. Considering that there isn’t any confirmed bullish pattern, the market is likely going to decline towards the lower “Window” and the 144 Moving Average.

More:
https://new.fxbazooka.com/analytics/12058

 

[riki143]

USD/JPY: bullish "Engulfing"
1/16/2017

We’ve got a “Hammer” and a “Harami” patterns, but both of then haven’t been confirmed yet. Therefore, the pair is likely going to test the nearest support level, which could be a departure point for another bullish movement.

There’re an “Inverted Hammer” and an “Engulfing”, which all have a confirmation. In this case, bulls are likely going to test the 34 Moving Average. If a pullback from this line happens, there’ll be an opportunity to have another decline.

More:
https://new.fxbazooka.com/analytics/12059

 

[riki143]

EUR/USD: wedge in wave (i)
1/16/20117

There’s a zigzag in wave 2. Previously a wedge in wave 1 has been formed, so bears are likely going to form another impulse in wave . The main intraday target is 1/8 MM Level.

As we can see on the one-hour chart, there’s a small wedge in wave (i). So, there’s an opportunity to have a local upward correction during the day. Nevertheless, bears will probably try to form wave (iii) later on.

More:
https://new.fxbazooka.com/analytics/12060

 

[riki143]

CAD/JPY falling inside intermediate impulse wave (3)
1/16/2017

CAD/JPY falling inside intermediate impulse wave (3)
Next sell target – 86.00
CAD/JPY has been falling in the last few trading sessions inside the intermediate impulse wave (3), which started earlier from the powerful multi-month resistance level 88.70 (which stopped the previous intermediate correction (2) in April and the active primary impulse wave ?, as can be seen from the daily CAD/JPY chart below). The resistance zone near the resistance level 88.70 was strengthened by the upper daily Bollinger Band.

CAD/JPY is likely to correct down further to the next sell target at the support level 86.00 (low of the previous intermediate impulse wave (1), standing close to the 50% Fibonacci correction of the previous intermediate (C)-wave from November).

More:
https://new.fxbazooka.com/analytics/12061

 

[riki143]

EUR/JPY falling inside minor C-wave
1/16/2017

EUR/JPY falling inside minor C-wave
Next sell target - 120.00
EUR/JPY continues to fall inside the C-wave of the active intermediate ABC correction (4) from the middle of December (which started when the pair reversed down from the powerful resistance level 124.00, which has been reversing the price from May). The price earlier broke the support level 122.00 (which reversed earlier wave A) – which accelerated the active C-wave.

EUR/JPY is expected to fall to the next sell target at the next support level 120.00 (target price for the completion of the active intermediate ABC correction (4)). Strong resistance now stands at the recently broken price level 122.00.

More:
https://new.fxbazooka.com/analytics/12062

 

[riki143]

EUR/GBP & UK CPI for December: Is the opportunity to fill the gap?
1/17/2016

The United Kingdom continues to be the headline on the wires during this week, as today at 09:30 GMT we’ll have the UK CPI for December, which is expected to see an increase to 1.4% from 1.2%.This move is likely to happen as recent Sterling’s weakness is helping to increase prices of raw material and it should be noted that the BoE is looking for an inflation’s rising to 2.7% in 2017. Also, we should pay attention to the UK PM Theresa May’s word today at 11:45 GMT about recent Brexit developments.

Our technical analysis for EUR/GBP at H1 chart is showing a well-established bullish trend across the board amid the strong bullish gap seen on Monday’s opening. Currently, the pair remains supported by the 0.8773 level and it could help to reach higher levels in the short-term. However, if EURGBP manages to extend its decline in order to fill the gap, it should break below the 0.8747 level and the 50 SMA, looking for the 0.8700 level.

More:
https://fxbazooka.com/analytics/12064