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EUR/USD: wave [iii] going to be continued

12/16/2016

 

Image20161216132110001.png

 

There’s a flat in wave 2, which led to form a bearish impulse in wave . Therefore, wave [iii] is likely going to be continued. The main intraday target is -1/8 MM Level, which could be a departure point for a bullish correction.

 

Image20161216132110002.png

 

We’ve got wave [ii], which brought a double zigzag. Also, there’s a downward impulse in wave (i). It’s likely that wave (ii) is going to end during the day. If we see a pullback from 6/8 MM Level, there’ll be an opportunity to have a bearish impulse in wave (iii).

 

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EUR/USD: "Piercing Line" led to correction

12/16/2016

 

1612eurusdh4.png

 

There’s an upward correction, which is taking place on the four-hours chart. The main intraday target is the middle of the last huge black candle. If a pullback from this level happens, bears are likely going to deliver a local low. As we can see on the Daily chart, here’s a bullish “Harami”, which points to an opportunity to have a local correction.

 

1612eurusdh1.png

 

The last “Piercing Line” led to a bullish correction. Considering a confirmation of this pattern, the market is likely going to achieve the nearest resistance line, which could be a departure point to another decline.

 

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US dollar: outlook for Dec. 19-23

12/16/2016

 

In line with expectations, the US Federal Reserve raised its benchmark rate by 25 basis points to 0.50-0.75% range. According to the central bank’s new economic projections, it will raise rates 3 times in 2017. Fed funds futures now show investors are pricing in a 25% chance of tightening at the Fed’s March meeting, and a 75% probability for a June rate increase.

 

The market is focused at policy divergence between the Fed and other central banks. This divergence is fueling demand for the greenback. American 10-year Treasury yield rose to the highest level since September 2014, while US dollar index reached 14-year high at 103.57. The next level to watch on the upside is 104.00. Support is located in the 102.00 area and at 101.50. The pullbacks to the downside will represent buying opportunities for the greenback.

 

Next week pay attention to existing home sales and crude oil inventories on Wednesday, durable goods orders, final GDP and unemployment claims on Thursday, as well as new home sales on Friday. All in all, these releases shouldn’t affect the market’s favorable attitude to the US currency.    

 

US_dollar_index(6).png

 

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EUR/USD: outlook for Dec. 19-23

12/16/2016

 

EUR/USD fell victim to the renewed negative pressure. The pair tested levels below 1.0400. The decline was triggered by the overall strengthening of the US dollar after the Federal Reserve signaled it expected 3 rate hikes in 2017. Such policy of the American central bank is in sharp contrast with the European Central Bank’s decision to prolong its asset purchases through 2017 a week earlier, though with the monthly amount starting in April.

 

Data from the euro area were rather favorable. The region’s economy maintained its growth momentum in December and there were signs of a pickup in inflationary pressures. A composite PMI held at the highest level of this year in December and above the 50 mark that signals industry expansion.

 

The oversold euro will likely try to correct to 1.0500/1.0550, but the bears will keep dominating the market now when they’ve sensed that the pair doesn’t stand firm on the ground. The next resistance is at 1.0650. Decline below 1.0400 will open the way down to 1.0275.

 

The most important data release of the next week will be German Ifo business climate on Monday. Other events will be of lower importance: German PPI and current account, consumer confidence on Wednesday, ECB economic bulletin on Thursday and German Gfk consumer climate on Friday.  

 

EURUSDDaily(33).png

 

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USD/JPY: bearish patterns point to correction

12/16/2016

 

1612usdjpyH4.png

 

We’ve got a bearish “Shooting Star”, but this pattern hasn’t been confirmed yet. Therefore, the price is likely going to decline towards the nearest support, which could reverse the price movement into the upward direction. As we can see on the Daily chart, the last “Three Methods” pattern led to a new maximum. Moreover, bulls are likely going to push the price even higher.

 

1612usdjpyH1.png

 

There’re bearish patterns such a “Doji”, a “Harami” and a “Shooting Star”, but all of them haven’t been confirmed yet. Therefore, the pair is likely going to decline towards the nearest support. If a pullback from this level happens, there’ll be an opportunity to have another bullish rally.

 

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USD/JPY: outlook for Dec. 19-23

12/16/2016

 

USD/JPY kept skyrocketing: the pair reached 118.65 on the general US dollar’s rally after the long-awaited meeting of the Federal Reserve.

 

Next week the market’s attention will turn from the United States to Japan. The Bank of Japan will meet on Thursday. Changes in monetary policy are unlikely, but according to the speculation, the regulator is considering upgrading its assessment of the nation’s economy because of the improving global economic conditions, weaker yen and higher stocks. At the same time, the central bank should still repeat that risks to the economic and price outlook are to the downside.

 

Upside targets lie around 120.00 (78.6% Fibo of 2015-2016 decline and psychologically important level). Interest rate differentials between the US and Japan are widening and boosting the pair. The daily trend is clearly bullish, though we have to point out that the pair dived into resistance area formed by the neckline of 2015 head-and-shoulders pattern. Downside corrections should find support around 115.60 and 114.70 (100-week MA).

 

USDJPYWeekly(7).png

 

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AUD/USD falling inside minor impulse wave 3

12/16/2016

 

AUD/USD falling inside minor impulse wave 3

Next sell targets – 0.7300 and 0.7260 

AUD/USD has been falling sharply in the last few trading sessions inside the minor impulse wave 3, which started earlier – when the pair reversed down from the resistance zone lying between the resistance level 0.7500 (previous buy target which also recently reversed the (a)-wave of the earlier ABC correction 2), upper daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp downward impulse wave 1 from the start of November.

 

AUD/USD is expected to fall further to the next sell target at the key support level 0.7300 (low of the previous minor impulse wave 1) – the breakout of which can lead to further losses toward 0.7260.

 

AUDUSD_-_Primary_Analysis_-_Dec-16_1526_

 

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USD/CAD broke resistance levels 1.3270 and 1.3350

12/16/2016

 

USD/CAD broke resistance levels 1.3270 and 1.3350

Next buy target - 1.3500

USD/CAD continues to rise inside the sharp upward impulse wave (3) – which started earlier from the support zone lying between the powerful support level 1.3100 (sell target set in our previous forecast for this currency pair), lower daily Bollinger Band, 61.8% Fibonacci correction of the previous sharp impulse wave (1) from August and the support trendline of the wide daily up channel from May.

 

Having recently broken through the two consecutive resistance levels 1.3270 and 1.3350 - USD/CAD can be expected to rise further in the direction of the next buy target at the resistance level 1.3500.

 

USDCAD_-_Primary_Analysis_-_Dec-16_1525_

 

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Key option levels for Monday, December 19th

12/18/2016

 

EUR/USD

 

EURUSD(86).png

 

Main trend Short-term period Medium-term period

Bearish Neutral

Changes in the open interest + 87 855 ? + 104 912 ?

Closest resistance levels 1.0493; 1.0543; 1.0562; 1.0586

Closest support levels 1.0421; 1.0398; 1.0368; 1.0329

Trading recommendations

Baseline scenario Short EUR/USD below 1.0421, with target points at 1.0398 and 1.0368

Alternative scenario Moving above 1.0493 can be considered as a signal to Buy the pair, with target at 1.0543 and 1.0562

 

GBP/USD

 

GBPUSD(78).png

 

Main trend Short-term period Medium-term period

Bullish Bearish

Changes in the open interest + 92 ? - 10 ?

Closest resistance levels 1.2533; 1.2569; 1.2587; 1.2609

Closest support levels 1.2437; 1.2417; 1.2392; 1.2364

Trading recommendations

Baseline scenario Long GBP/USD above 1.2533, with target points at 1.2569 and 1.2587

Alternative scenario Moving below 1.2437 can be considered as a signal to Sell the pair, with target at 1.2417 and 1.2392

 

USD/JPY

 

USDJPY(79).png

 

Main trend Short-term period Medium-term period

Bearish Neutral

Changes in the open interest + 295 ? + 1 660 ?

Closest resistance levels 117.99; 118.36; 118.72; 119.08

Closest support levels 116.36; 115.61; 115.29; 114.96

Trading recommendations

Baseline scenario Short USD/JPY below 116.36, with the target points at 115.61 and 115.29

Alternative scenario Moving above 117.99 can be considered as a signal to buy the pair, with target at 118.36 and  118.72

 

USD/CAD

 

USDCAD(73).png

 

Main trend Short-term period Medium-term period

Bullish Bullish

Changes in the open interest + 100 ? + 280 ?

Closest resistance levels 1.3371; 1.3396; 1.3435; 1.3488

Closest support levels 1.3314(?); 1.3275; 1.3238; 1.3189

Trading recommendations

Baseline scenario Long USD/CAD above 1.3371, with the target points at 1.3396 and 1.3435

Alternative scenario Moving below 1.3314 can be considered as a signal to Sell the pair, with target at 1.3275 and 1.3238

 

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EUR/USD & German Ifo Business Climate: More downside ahead?

12/19/2016

 

Today at 09:00 GMT will be released the German IFO business climate and we can expect very little changes in terms of latest’s data. During November, the numbers proven that companies weren’t affected in huge terms by the victory of Donald Trump in the US elections, but analysts’ consensus are telling that such consequences should happen in the long-term and that seems to have logic, because Trump hasn’t taken his official duties and Brexit needs to be implemented and those two scenarios are expected to materialise in the next year. In terms of the German’s data, an increase to 110.7 from 110.4 could be seen today.

 

Our technical analysis for EUR/USD at H4 chart is still calling for more downside towards the parity zone in a long-term scenario, which is getting closer each day. However, a strong demand zone is located at the 1.0413 level, where buyers will try to push higher the pair to re-test the 200 SMA. Currently, EUR/USD is following a bearish channel and if the pair plunges below the 1.0413 zone, then it can test the 1.0178 level.

 

EURUSDH4(40).png

 

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AUD/USD: Aussie fulfilled targets

12/19/2016

 

On the AUD/USD daily chart, a breakout of the lower boundary of the short-term upwards trading channel near the 0.745 level was the signal of the end of the correction and restoration of the "bearish" trend. The 0.706 mark can be its target. There is a set target in the AB = CD pattern. Since the market is under the control of sellers, traders should sell on the rise of quotes.

 

Screenshot_2016_12_19_07_59_48.png

 

On the AUD/USD hourly chart, 5-0 and expanding wedge patterns worked out. The correction towards the 38.2% level of the CD wave allowed to open short positions and take profits at the 0.73 level. At the present moment, the nearest resistance is located around 0,735.

 

Screenshot_2016_12_19_08_00_03.png

 

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GBP/USD: pound has found an equilibrium point

12/19/2016

 

On the GBP/USD daily chart, "bears" managed to drag quotes below the lower border of the upward trading channel and below the 1.2512 level. Earlier this level served as support. Now it is a key resistance line. A new support can be found at 1.24 (23.6% Fibonacci level of the last downward wave).

 

Screenshot_2016_12_19_07_52_42.png

 

On the GBP/USD hourly chart, a successful test of the 1.2305 level can activate the "Shark" pattern. Its target 88.6% is located near the mark of 1,215. A breakout of the support can lead to the rise of prices towards the upper boundary of the upward trading channel (1.26). 

 

Screenshot_2016_12_19_07_53_04.png

 

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EUR/USD: bears going to deliver new low

12/19/2016

 

19-12-2016-EUR-H4.png

 

Bulls faced a resistance at 1.0461, so the price is consolidating. In this case, the market is likely going to decline towards the nearest support at 1.0340 – 1.0300. If a pullback from this level happens, there’ll be an opportunity to see another upward movement in the direction of the next resistance at 1.0506 – 1.0552.

 

19-12-2016-EUR-H1.png

 

The price is consolidating, so there’s an opportunity to have a “Flag” pattern. Therefore, the pair is likely going to test the 34 Moving Average, which is strengthened by the downtrend. If we see a pullback from this line, bears will probably try to reach a support at 1.0365 – 1.0340.

 

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GBP/USD: local bullish "Flag"

12/19/2016

 

19-12-2016-GBP-H4.png

 

The pair found a resistance at 1.2498, so the price is consolidating. Considering the previously formed “Upward Wedge”, the market is likely going to rise towards a support at 1.2384 – 1.2358. If a pullback from this level happens, there’ll be a chance to have an achievement of the next resistance at 1.2476 – 1.2498.

 

19-12-2016-GBP-H1.png

 

As we can see on the one-hour chart, the price is trading under the 34 Moving Average. Also, there’s a “Flag” pattern, so bulls are likely going to get a resistance on the 55 Moving Average. However, if a pullback from this line be on the table, bears will try to reach the nearest support between the levels 1.2418 – 1.2384.

 

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EUR/USD: trading in Tenkan-Kijun’s channel

12/19/2016

 

Technical levels: support – 1.0440; resistance – 1.0515.

 

Trade recommendations:

 

1. Sell — 1.0515; SL — 1.0535; TP1 — 1.0440; TP2 – 1.0400.

 

Reason: bearish narrow Ichimoku Cloud and falling Senkou Span A; a dead cross of Tenkan-sen and Kijun-sen, but the prices are in the channel of Tenkan-Kijun; strong resistance of Kijun-sen.

 

01-eurusdh4(67).png

 

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GBP/USD: correction to Senkou Span B

12/19/2016

 

Technical levels: support – 1.2430; resistance – 1.2535.

 

Trade recommendations:

 

1. Sell — 1.2535; SL — 1.2555; TP1 — 1.2430; TP2 — 1.2400.

 

Reason: an Ichimoku Cloud changed its mood to bearish; falling Senkou Span A; a dead cross of Tenkan-sen and Kijun-sen and falling Tenkan-sen; a strong resistance of Senkou Span B; the prices are in the correction to Senkou Span B.

 

02-gbpusdh4(54).png

 

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EUR/USD: wave (iii) is about to start

12/19/2016

 

Image20161219142738001.png

 

The price has been declining since a pullback from 5/8 MM Level happens. Therefore, wave [iii] of 3 is likely going to be continued. In this case we should keep an eye on -1/8 MM Level as a possible intraday target.

 

Image20161219142738002.png

 

There’s a double zigzag in wave (ii), so the market is likely going to form wave (iii) in the short term. Previously, a bearish impulse in wave (i) was formed. However, if bears be stopped on 4/8 MM Level and we see a pullback from this line, there’ll be an opportunity to have an upward correction.

 

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EUR/USD: bearish "Engulfing"

12/19/2016

 

1912eurusdh4.png

 

There’s a bullish “Hammer”, which has been confirmed, so bulls are likely to continue pushing the market higher during the current correction. The main intraday target is the 21 Moving Average. As we can see on the Daily chart, we’ve got a “Thrusting Line” pattern, so there’s an opportunity to have a bullish correction.

 

1912eurusdh1.png

 

The price is consolidating under the low of 29.11.2015, so we’ve got an “Engulfing” pattern here. So, the pair is likely going to decline until any bullish pattern arrives.

 

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NZD/JPY reversed from resistance area

12/19/2016

 

NZD/JPY reversed from resistance area

Next sell targets –81.00 and 80.00

NZD/JPY continues to fall – after the pair earlier reversed down from the resistance area lying between the major resistance level 83.30 (which stopped the previous waves 4 and (4) and which was set as the buy target in our earlier forecast for this currency pair), upper weekly Bollinger Band and the 61.8% Fibonacci correction of the previous downward impulse from April of 2015.

 

The downward reversal from this resistance area created the strong weekly Japanese candlesticks reversal pattern Falling Star. NZD/JPY is expected to fall further to the next sell targets at the support levels 81.00 and 80.00.

 

NZDJPY_-_Primary_Analysis_-_Dec-19_1518_

 

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EUR/AUD reversed from support zone

12/19/2016

 

EUR/AUD reversed from support zone

Next buy target - 1.4470

EUR/AUD continues to rise after the recent sharp upward reversal from the support zone lying between the powerful support level 1.4130 (which reversed the price multiple times from October, as can be seen below) and the lower daily Bollinger Band. The upward reversal from this support zone stopped the earlier minor impulse wave 3, which belongs to the intermediate impulse wave © from May.

 

EUR/AUD is expected to rise further to the next buy target at the resistance level 1.4470 (top of the previous waves (a) and (ii)) - which stands close to the 38.2% Fibonacci correction of the previous sharp downward impulse from September.

 

EURAUD_-_Primary_Analysis_-_Dec-19_1510_

 

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USD/JPY: "Inverted Hammer" pushing price higher

12/19/2016

 

1912usdjpyH4.png

 

The upward “Window” acted as a resistance, so we’ve got a “Shooting Star”, which has been confirmed enough. At the same time, we’ve got a “Harami” on the nearest Moving Average line. Therefore, the market is likely going to test the “Window” once again. As we can see on the Daily chart, we’ve got a “Harami” and a “High Wave” on the last high. If these patterns finally confirm, there’ll be an opportunity to have a bearish correction.

 

1912usdjpyH1.png

 

The pair is declining, but we’ve got an “Inverted Hammer”. In this case, bulls are likely going to deliver an upward price movement. So, the nearest “Window” could be tested once again.

 

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USD/JPY ahead of BoJ meeting (December): A corrective move could start soon?

12/20/2016

 

Today will be released the BoJ’s interest rate decision and no major surprises are expected from the central bank, as they keep untouched the monetary policy during November’s meeting. Currently, investors will be looking into what will be said during the press conference by officials, as the BoJ had been postponing their inflation target’s deadline and Governor’s Kuroda could bring some hints about which would be tools and how long it will take to battle the deflation in Japan.

 

Our technical analysis for USD/JPY at daily chart remains strongly bullish, but we got a strong sellers’ reaction around 118.19. Ahead of the meeting, the pair could be preparing the ground to receive the news with a bearish correction, favoring the bullish momentum in the Japanese currency. If that happens, we can expect a decline to test the support area of 115.54. If the BoJ’s rhetoric is dovish, then the pair will look to reach the 120.00 handle.

 


 

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EUR/GBP: rivals are preparing for Christmas

12/20/2016

 

On the EUR/GBP daily chart, there is a consolidation in a range of 0.8345-0.8445. A breakout of its lower boundary can lead to the restoration of the downtrend towards the 161.8% target in the "Crab" pattern (0.763). In contrast, a successful test of the resistance will create prerequisites for the development of the correction towards 0.873.

 

Screenshot_2016_12_20_08_02_01.png

 

On the EUR/GBP hourly chart, a pullback of prices towards 0.8445 allowed us to open short positions. If the "bears" manage to test the nearest diagonal support and activate the "Shark" pattern,  the pair may fall towards the support at 0.8345.

 

Screenshot_2016_12_20_08_06_00.png

 

Recommendations: keep holding shorts formed from the 0,856 and 0,8445 levels. 

 

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USD/JPY: yen fulfilled targets

12/20/2016

 

On the USD/JPY daily chart, prices reached 118.4-118.9 convergence zone (78.6% Fibonacci retracement level formed from the last downward wave + 161.8% target in the "Crab" pattern). This allowed traders to close long positions formed from 114.75 and 115.8  levels. The next support levels are located near the 116.1 and 114.7 marks.

 

Screenshot_2016_12_20_08_08_49.png

 

On the USD/JPY hourly chart, quotes are moving within the upward trading channel which means that they maintain their control over the market. There can be a consolidation in the range of 116.1-118.35 levels. A successful test of its upper boundary can attract buyers.

 

Screenshot_2016_12_20_08_16_11.png

 

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Morning brief for December 20

12/20/2016

 

USD/JPY almost hit 117.60 as the BOJ left its loosening policy unchanged. The bank maintained its short-term interest rate target at -0.1%, its 10-year JGB target at around 0% and committed itself to continue buying JGBs at the annual pace of 80tln yen. The Fed's Chairwoman Janet Yellen delivered a speech yesterday at the University of Baltimore. She painted a rather bright future for the US job market, pointing out at a rather steady job creation, a low payoff rate and increased number of job openings.

 

EUR/USD slumped to 1.0390 as market were struck by the crash in Berlin on Monday. A truck rammed into a Christmas market killing 12 people and injuring many others. After the overnight shock, the euro managed to recover to 1.0400 earlier this morning. The euro will probably continue its downward movement vs. USD as European markets don’t stop fretting about Italy’s banking system. Yesterday we got Germany’s December Ifo Survey for December that was rather solid. It seems that Eurozone’s largest economy is picking up economic momentum, while other less developed European countries still struggle to fight the recession.

 

AUD/USD slumped to 0.7240 overnight due to a new rising tide of interest in the US dollar and falling commodity prices (the copper and other base metals). Earlier this morning we got the RBA’s Minutes from December board’s meeting, but they failed to become a market trigger.

 

NZD/USD continues its downward movement on the strengthening of the US dollar. Later today we will receive GDT price index and trade balance data from New Zealand that may offer support to Kiwi.

 

USD/CAD rose above 1.3405 on the session due to the upbringing news flows from the US and falling oil prices. Brent crude oil futures slipped 0.2% to $54.80. 

 

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