Market analysis and trade recommendations by FBS

[riki143]

Forex Analytics

USD/JPY: forecast for February 1-7

By Elizabeth Belugina

The Bank of Japan reduced the deposit interest rate to the negative level of -0.1% and left the door for more cuts open.

The regulator’s decision to turn to an even more aggressive loose monetary policy is caused by the turbulence at global financial markets. Concerns about slowing global economic growth, the problems of China and the decline of oil prices – all of it prevents Japan from attaining the 2% inflation mark, which is one of the key goals of Japanese central bank.

The fact that the Bank of Japan started to ease policy after a long pause means that it aims to fight the yen’s strength. The market players will now expect more easing from this central bank. Note, however, that the Bank of Japan’s decision wasn’t unanimous: 4 members votes against such step.

USD/JPY corrected up to 121.40 – resistance line, which used to act as support in 2012-2015. The next resistance is at 121.85/122.00 (December 2014 high, March 2015 high), as well as 122.80 and 123.50 (resistance line, going through June, August highs). Support is at 120.00, 118.70 and 117.00.

Next week there won’t be any market moving publications in Japan, so focus on Chinese statistics: manufacturing PMIs on Monday and services PMI on Wednesday. Better data will be positive for USD/JPY, while worse figures will have negative impact.

More:
https://fxbazooka.com/en/analitycs/show/7730

 

[riki143]

Forex Analytics

EUR/USD: forecast for February 1-7

By Elizabeth Belugina

EUR/USD traded within the range of the past 2 months. Dovish minutes of the Federal Reserve’s meeting allowed the euro to rise to 1.0950, although improved market sentiment on the recovery in oil prices and the Bank of Japan’s monetary easing made the euro turn down below 1.0900.

At the same time, it seems that the effect of Mario Draghi’s bearish comments has worn down. According to the media, the members of the ECB Governing Council don’t agree about potential increase of monetary stimulus in March. So, there are reasons to believe that the downside of the euro will be limited. Support is at 1.0815/00 and 1.0710.

On the other hand, the dovish outcome of the Fed’s meeting has already been priced in by the market. We don’t rule out the possibility of a rate hike, and the overall divergence in policy between the ECB and the Fed remained. The euro area’s inflation data improved a bit, although statistics from Germany was poor. We assume that sideways trading will persist in EUR/USD with the focus on its lower border. Strong resistance is located at 1.1000/1.1050 (200-day MA, downtrend resistance line at 2014-2016, 55-week MA).

The upcoming release of Chinese statistics on Monday and Wednesday can once again worsen the market’s mood and increase demand for the euro. In the euro area’s economic calendar all events are of medium and low importance.

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https://fxbazooka.com/en/analitycs/show/7731

 

[riki143]

Forex Analytics

US Dollar: forecast for February 1-7

By Kira Iukhtenko

Market sentiment towards the US Dollar worsened significantly after the Federal Reserve meeting on January 27. FOMC left interest rates unchanged and softened the overall rhetoric, pointing to increased global and internal risks. As a result, expectations for a Fed’s hike in March slipped to just 15%. How long will the USD selling last? To find the answer we need to monitor the upcoming economic events, as the Fed remains data-dependent.

Calendar for the new week is full of potentially market-moving events. Watch the PCE index and consumer spending data on Monday. FOMC voting members Fisher and George will deliver their speeches on Monday and Tuesday, respectively. These two policymakers have traditionally been hawkish – we will see whether they changed the views in the worsened economic conditions.

Apart from that, watch a block of PMI indices from Monday to Wednesday. On Friday, the market will focus on the labor market figures. Do not forget to leave your NFP forecasts on FX BAZOOKA website!

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https://fxbazooka.com/en/analitycs/show/7734

 

[riki143]

Forex Analytics

AUD/USD: weekly wave analysis
1 February 2016

Daily. The pair keeps forming corrective wave [2], which is an upside pullback to the impulse [1]. When this wave is completed, the decline will resume.

H4. The wave [2] is taking form of the triple zigzag. This week a new downtrend will likely start to develop, so take this into account while trading.

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https://fxbazooka.com/en/analitycs/show/7752

 

[riki143]

Forex Analytics

USD/JPY: weekly wave analysis
1 February 2016

Daily. In line with the forecast we saw the development of the rapid upward impulse (V). Growth will resume in the near term. We recommend considering only long positions.

H4. The pair is currently building an upward impulse III. The price will continue going upwards with small stops.

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https://fxbazooka.com/en/analitycs/show/7751

 

[riki143]

Forex Analytics

GBP/USD: weekly wave analysis
1 February 2016

Daily. The pair is currently forming the final part of the downtrend [C]. Let’s review the layout in detail, to determine the point where the decline will continue.

H4. The wave (4) is taking form of a double triple. After a small advance, we’ll see the market rise within new bearish impulse (5). The decline will likely start already this week.

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https://fxbazooka.com/en/analitycs/show/7750

 

[riki143]

Forex Analytics

EUR/USD: weekly wave analysis
1 February 2016

Daily. The market keeps moving in the final part of the double three (4), forming an upward zigzag Z. Let’s review the layout at Н4.

H4. The pair keeps forming corrective wave , which is taking form of the double three. The pair will finish the wave (x) this week, and then we’ll see final downward wave (y), which can be very small. Whenthewave is completed, growth will resume.

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https://fxbazooka.com/en/analitycs/show/7749

 

[riki143]

Forex Analytics

Forex trading plan for February 2

Chinese data showed that manufacturing slowed last month at its fastest pace in more than 3 years. The news worsened the mood of the market players. In addition, oil prices declined on reports in the media that the Organization of the Petroleum Exporting Countries (OPEC) has made no decisions on the emergency meeting yet.

EUR/USD met support in the 1.0810 area (support line from January lows). Negative risk sentiment can make the single currency test higher levels. Resistance is at 1.0930/50, 1.1000 and 1.1050. We recommend looking for opportunities to sell the euro on the attempts to approach resistance, as traders will expect more easing from the European Central Bank after the Bank of Japan cut the deposit rate on Friday. The ECB President Mario Draghi will speak at 16:00 GMT on Monday. Om Tuesday the euro area will release unemployment figures.

GBP/USD keeps fluctuating around 1.4300. The UK manufacturing PMI came above expectations, though we remember that other data released recently were weak. Construction PMI is due at 09:30 GMT. Pound tries to recover leaning slightly to the upside. However, there’s resistance at 1.4335 and 1.4400, below which the picture will remain bearish. Support is at 1.4228, 1.4150 and 1.4080.

USD/JPY stalled below the 200-day MA at 121.46. The pair is overbought in the short-term, but 120.00 should provide support and lead to a pullback to the upside. The BOJ’s more loose policy makes buying on the dips out preferred strategy. Resistance is at 121.85, 122.80 and 123.50.

AUD/USD spiked to 0.7140 (daily MAs, former support line) on Friday forming a shooting star candle. Worries about China represent negative factor for the Aussie. Further esistance is at 0.7200. Support is at 0.7040, 0.7000 and 0.6935. The Reserve Bank of Australia will announce its decision in the morning (03:30 GMT). The RBA is expected to keep the benchmark rate unchanged, but there’s the risk of dovish comments from the regulator.

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https://fxbazooka.com/en/analitycs/show/7756

 

[riki143]

Forex Analytics

AUD/USD: sell target - 0.7030
2 February 2016
By: Dmitriy Chernovolov

-AUD/USD reached buy target 0.7100
-Next sell target - 0.7030

AUD/USD continues to fall after the recent sharp downward reversal from the resistance zone lying between the resistance level 0.7100 (former strong support from December and the previous buy target set in our earlier forecast for this currency pair), the upper daily Bollinger Band and the 50% Fibonacci correction of the previous sharp minor impulse wave 1 from the start of December. The downward reversal from this resistance zone completed the previous minor correction 2.

AUD/USD is likely to fall further in the active minor impulse wave 3 (belonging to the intermediate impulse (3) wave from December) toward the next sell target at the support level 0.7030.

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https://fxbazooka.com/en/analitycs/show/7763

 

[riki143]

Forex Analytics

EUR/GBP: buy target - 0.7650
2 February 2016
By: Dmitriy Chernovolov

-EUR/GBP reversed from support zone
-Next buy target - 0.7650

EUR/GBP continues to rise after the recent upward reversal from the support zone lying between the support level 0.7550 (which stopped the earlier minor correction 2 in January, as can be seen from the daily EUR/GBP chart below) and the 50% Fibonacci correction of the previous sharp minor impulse wave 1. The upward reversal from this support zone continues the active minor impulse wave 3 – which belongs to the intermediate impulse wave (3) from the start of January.

EUR/GBP is likely to rise further in the active impulse waves 3 and (3) toward the next buy target at the resistance level 0.7650. Buy stop-loss can be placed below the aforementioned support level 0.7550.

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https://fxbazooka.com/en/analitycs/show/7764

 

[riki143]

Forex Analytics

Forex trading plan for February 3

By Kira Iukhtenko

At the beginning of the week, risk appetite is low amid weak Chinese data on Monday and falling oil prices. What’s more, US data on Monday was a disappointment as well. Expectations for a Fed’s rate hike keep on falling. On Wednesday, watch the non-manufacturing Caixin PMI in China. In the US, pay attention to the non-manufacturing PMI, ADP NFP and the crude oil inventories figures later in the day.

EUR/USD is strengthening for a second day in a row and approached the falling trend line at 1.0950. There is a strong resistance in this area, so beware a pullback. Key support is seen at 1.0810. Euro zone’s economic calendar on Wednesday is rather light, so all eyes will be glued to United States and to the global risk sentiment.

GBP/USD remains highly volatile, once again pulling back from the trend resistance line on weaker-than-expected construction PMI figures. Watch the Services PMI on Wednesday (forecast - 55.4). Key intraday support lies at 1.4350. Generally, the strong bullish Monday candle remains unbeaten, but these levels are bad for buying. Close above 1.4450 could confirm a reversal to the upside.

USD/JPY has also declined from the last week’s highs of 121.70. In the current risk-off mode, demand for the safe yen is expected to stay high. Band of Japan Governor Kuroda is scheduled to speak tomorrow – markets await more comments on the recent BOJ rate cut.

AUD/USD is falling on Tuesday, but the recent rising trend remains in play.Watch the 0.7050/00 support area. As for the economic calendar, Australia is scheduled to releasetrade balance and building approvals data.

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https://fxbazooka.com/en/analitycs/show/7767

 

[riki143]

Forex Analytics

GBP/NZD: sell target - 2.1690
3 February 2016
By: Dmitriy Chernovolov

-GBP/NZD reversed from resistance zone
-Next sell target - 2.1690

GBP/NZD recently reversed down sharply from the resistance zone lying between the strong resistance level 2.2200 (which has been reversing the price from last month, as you can see below), the upper daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp downward impulse wave 1 from the middle of November. The latest downward reversal from this resistance zone created the daily Japanese candlesticks reversal pattern Falling Star.

Given the strength of the resistance zone near the resistance level 2.2200 - GBP/NZD is likely to fall further from the current levels toward the next sell target at the support level 2.1690 (which stopped the previous (a)-wave in January).

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https://fxbazooka.com/en/analitycs/show/7775

 

[riki143]

Forex Analytics

NZD/CAD: buy target - 0.9300
3 February 2016
By: Dmitriy Chernovolov

-NZD/CAD reversed from support zone
-Next buy target - 0.9300

NZD/CAD recently reversed up sharply from the support zone lying between the round support level 0.9000 (former strong resistance from October), the lower daily Bollinger Band and the Fibonacci cluster made out of the 38.2% Fibonacci correction of the previous primary ABC correction ② and the 50% Fibonacci correction of the previous (C)-wave from November. The upward reversal from this support zone started the active minor correction 2.

NZD/CAD is likely to rise further in the active minor wave 2 toward the next buy target at the resistance level 0.9300 (target price for the completion of the active wave 2).

More:
https://fxbazooka.com/en/analitycs/show/7774

 

[riki143]

Forex Analytics

Forex trading plan for February 4

Oil remains one of the key topics with the continuing speculation about OPEC’s emergency meeting. Oman’s foreign minister said the meeting will be soon, though the time isn’t set yet. News from China improved (services sector growth picked up to a 6-month high in January), but the general risk sentiment remains negative. US ADP employment report showed that American economy added more jobs than expected (205K vs. the forecast of 193K).

EUR/USD jumped up. Eurozone retail sales have rebounded in December. Mario Draghi may try to discourage the bulls, when he speaks at 08:00 GMT on Thursday. Resistance is at 1.1050 (200-day MA). Support line is in the 1.0840 area and can attract buyers.

GBP/USD tested 1.4500. The cable was helped by the draft deal between Britain and the European Union and the UK services PMI, which came in line with expectations, at a rather good level. The results of the Bank of England’s meeting and quarterly inflation report are due at 12:00 GMT. No changes in policy of the central bank are expected. Governor Mark Carney will speak at 12:45 GMT. Remember that Carney’s last comments were dovish and for now the picture hasn’t changed enough for the regulator to change its position. This creates bearish risk for the pound. Resistance is at 1.4555 ahead of 1.4655. Support is at 1.4450/40.

USD/JPY fell for the third consecutive day: the positive impulse provided by the Bank of Japan is violated by the increased demand for the yen as a safe haven. The pair slid below 120.00, and we don’t recommend any long until the greenback is back above this mark. Support is at 118.15, 117.50 and 117.00. AUD/USD made this week a lower high around 0.7130. A close above 0.7120/50 is needed for Aussie to reverse to the upside. Support is at 0.7000 ahead of 0.6935.

https://fxbazooka.com/en/analitycs/show/7776

 

[riki143]

Forex Analytics

The USD/JPY pair is diving towards the cloud
4 February 2016
Tatiana Norkina, FBS analyst

During yesterday’s trading session, the pair USD/JPY had lost almost three figures. That was caused by dollar’s weakening. By the end of the day, the bears have fallen off the market to the strong support of the 117th figure. As a result, consolidation movement in this area occurred this morning.

It is noteworthy that the trading is under a four-hour Ichimoku cloud now, and it is possible to restore the Tenkan-sen (118.90) soon. There is also the lower limit of the Ichimoku cloud follows, which will act as a resistance.

Technical levels: Support - 117.00; resistance - 118.90.

Trading recommendations:

1. Sell — 118.90; SL — 119.10; TP1 — 117.50; TP2 — 117.10.

More:
https://fxbazooka.com/en/analitycs/show/7787

 

[riki143]

Forex Analytics

USD/CHF: sell target - 0.9900
4 February 2016
By: Dmitriy Chernovolov

-USD/CHF reversed from strong resistance zone
-Next sell target - 0.9900

USD/CHF has been falling strongly in the last few trading sessions – following the earlier downward reversal from the resistance zone surrounding the major, long-term resistance level 1.0200 (which previously reversed the price sharply at the start of 2015 and also in November of 2015, as you can see from the weekly USD/CHF chart below). If the price closes this week near the current levels – it will form the 3rd consecutive weekly reversal pattern Bearish Engulfing.

USD/CHF is currently approaching the parity. If the pair breaks below the parity - USD/CHF will then, most likely, fall to the next sell target at the support level 0.9900.

More:
https://fxbazooka.com/en/analitycs/show/7786

 

[riki143]

Forex Analytics

The USD/JPY pair is diving towards the cloud
4 February 2016
Tatiana Norkina, FBS analyst

During yesterday’s trading session, the pair USD/JPY had lost almost three figures. That was caused by dollar’s weakening. By the end of the day, the bears have fallen off the market to the strong support of the 117th figure. As a result, consolidation movement in this area occurred this morning.

It is noteworthy that the trading is under a four-hour Ichimoku cloud now, and it is possible to restore the Tenkan-sen (118.90) soon. There is also the lower limit of the Ichimoku cloud follows, which will act as a resistance.

Technical levels: Support - 117.00; resistance - 118.90.

Trading recommendations:

1. Sell — 118.90; SL — 119.10; TP1 — 117.50; TP2 — 117.10.

More:
https://fxbazooka.com/en/analitycs/show/7787

 

[riki143]

Forex Analytics

Forex trading plan for February 5

By Kira Iukhtenko

Demand for the US Dollar remained low on Thursday, but there is high probability that the recent wave of selling will be over soon. On Friday markets will focus on a block of the US labor market figures. According to the official forecast, the US economy added 189K new jobs in January (below 292K in December, but still enough for a Fed’s rate hike in March). You should also pay attention to the average hourly earnings (forecast – upbeat).

EUR/USD surged above 1.1200, but you may see from the RSI indicator that the pair is overbought. Selling at current levels seems to be an attractive idea. Note that the pair broke above the 55-week MA, but this level acted as a resistance for a couple of times. Will the bulls be strong enough to close the weekly candle higher? Support is seen at 1.1050/00. Watch the German factory orders on Friday.

GBP/USD remains highly volatile. On Thursday, the market was disappointed by the BOE meeting results – this time 9 out of 9 BOE members voted to leave rates unchanged. Chances for a BOE rate hike in 2016 remain very low. Watch the 1.4530 support (38.2% Fibonacci from the recent decline).

AUD/USD extends the upside. On Wednesday we’ve seen a strong bullish candle on the daily chart. However, any decline in risk appetite will hurt your ling positions badly – the buying positions are overstretched. Tomorrow watch the RBA monetary policy statement and the Australian retail sales figures.

USD/JPY keeps on declining. The pair is forming a bullish engulfing on a weekly chart. Key support is seen at 116 yen – this is a psychological level where the BOJ is expected to intervene.

More:
https://fxbazooka.com/en/analitycs/show/7788

 

[riki143]

Forex Analytics

US Dollar: forecast for February 8-14

By Kira Iukhtenko

The US dollar had been weakening against all the major currencies last week on the back of the weak data and dovish comments of the Fed’s member Dudley. According to the futures market, the chance for a Fed’s rate hike in March fell to 13%.

However, labor market figures rendered support to the US currency on Friday. NFP came below the forecast, while unemployment fell to 4.9%. What’s more, average hourly earnings rose by 0.5%.

Next week Chinese markets will be closed, so lack of stress from this area could support the US dollar. The Fed’s chief Janet Yellen will present the semiannual monetary policy report in Congress on Wednesday and Thursday. On Friday, watch the US retail sales figures. What’s more, some more US “blue chips” will publish their quarterly reports next week.

More:
https://fxbazooka.com/en/analitycs/show/7799

 

[riki143]

Forex Analytics

GBP/USD: forecast for February 8-14

By Kira Iukhtenko

The cable rose by 450 pips at the beginning of the week amid the global USD selloff. However, the pound’s rally was capped by the BOE meeting on Thursday: the bank left rates unchanged and revised the economic forecasts to the downside. The market is no longer expecting a rate hike in 2016.

From the technical viewpoint, the cable is now testing the trend line support at 1.4500. This is also 38.2% Fibonacci from the December-January decline. Pay attention to the “doji” candle formed on Friday – it signals that the market has formed a local top at 1.4665.

UK economic calendar is going to be rather light next week. December trade balance will be published on Tuesday and On Wednesday, watch the manufacturing production data.

More:
https://fxbazooka.com/en/analitycs/show/7798