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AUD/USD outlook for January 23-27

1/20/2017

 

Aussie spiked to 0.7590 in the course of the past week mainly on the relative weakness of the US dollar. Janet Yellen was the main troublemaker. Her recent comments on the future of the Fed’s monetary policy sent the greenback lower on Friday. Australian employment report released on Tuesday was a mixed bag as it indicated a modest increase in the number of jobs created and, at the same time, a heightened unemployment rate. Upbeat China’s gross domestic product allowed Aussie to rise further.

 

Next week the US dollar will be a major mover of the AUD/USD currency pair as there won’t be any significant events and data releases from Australia. Monday’s morning will herald a new era for the USA as soon as Donald Trump gets into power and signs his first executive orders. This can send the US dollar lower. Trump’s effect should influence the pair through the whole week.

 

A number of fundamental factors that we’ve just specified may send Aussie higher towards 0.7660, 0.7650 (78.6 Fibo retracement level formed from the November 8 high) and 0.7780. On the downside, there are several supports located at 0.7500 (100-day MA), 0.7470 (the upper border of Ichimoku cloud), 0.7380 (near the 50-day MA) and 0.7273. 

 

AUDUSDDaily(27).png

 

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GBP/USD outlook for January 23-27

1/20/2017

 

GBP/USD experienced the tremendous uplift in the course of the past week after prime minister Theresa May assured the public that the UK will reap lots of benefits after the country’s separation with the EU. The pound was rising throughout the week and ended it with impressive gains.

 

Next week traders’ focus will be on the UK’s Supreme Court ruling scheduled for January 24. It should clarify whether Government needs to consult Parliament before triggering Article 50 or not. If the court decides that Ms. May doesn’t possess a unilateral right to invoke the aforementioned article, the sterling may get a significant boost and rise further. The US dollar’s outlook is bearish. The greenback risks to tilt downside as the first Trump’s orders come into force.

 

The technical picture for GBP/USD has become bullish. The current GBP strength has room to extend higher towards the nearest resistances located at 1.2400 (50-day MA), 1.2535 (100-day MA) and 1.2715 levels (23.6 Fibo level traced from June 24 high). In the most unlikely, but still probable scenario, the quotes can fall towards the supports located at 1.2245 (January 19 low) and 1.2010 (January 17 low).

 

GBPUSDDaily(30).png

 

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Key option levels for Friday, January 20th

1/20/2017

 

EUR/USD

 

EURUSD(110).png

 

Main trend Short-term period Medium-term period

Bullish Neutral

Changes in the open interest + 149 834 ? - 10 885 ?

Closest resistance levels 1.0682; 1.0708; 1.0733/45; 1.0778

Closest support levels 1.0633; 1.0603; 1.0583; 1.0560

Trading recommendations

Baseline scenario Long EUR/USD above 1.0682, with target points at 1.0708 and 1.0733

Alternative scenario Moving below 1.0633 can be considered as a signal to Sell the pair, with target at 1.0603 and 1.0583

 

USD/JPY

 

USDJPY(83).png

 

Main trend Short-term period Medium-term period

Bearish Neutral

Changes in the open interest + 517 ? + 1 584 ?

Closest resistance levels 115.42; 115.77; 116.00; 116.25

Closest support levels 114.42; 114.09; 113.91; 113.69

Trading recommendations

Baseline scenario Short USD/JPY below 114.42, with target points at 114.09 and 113.91

Alternative scenario Moving above 115.42 can be considered as a signal to Buy the pair, with target at 115.77 and 116.00

 

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EUR/USD: "Three Black Crows" arrived

1/20/2017

 

2001eurusdH4.png

 

We’ve got a “Shooting Star”, which has been confirmed. Therefore, the market is likely going to get a support on the nearest “Window” in the short term, which could be a departure point for a local upward correction. However, bears will probably try to test the 55 Moving Average afterwards.

 

2001eurusdH1.png

 

There’re a “Shooting Star” and a “Three Black Crows”, which both have been confirmed enough. In this case, the pair is likely going to reach a support on the 89 Moving Average shortly. If a pullback from this line happens, there’ll be a chance to have a bullish correction.

 

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USD/JPY: bulls going to break the last high

1/20/2017

 

2001usdjpyH4.png

 

The price reached the 55 Moving Average, so we’ve got an “Engulfing” on this line, but the pattern hasn’t been confirmed yet. Therefore, the price is likely going to test the nearest resistance in the short term. Considering a possible pullback from this level, there’s an option to have another decline later on.

 

2001usdjpyH1.png

 

There’s a “Tweezers”, which has been confirmed enough. So, the market is likely going to test the 13 Moving Average soon, which could be a departure point to a local upward price movement.

 

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EUR/USD: wave 2 is on the way

1/20/2017

 

Image20170120162012001.png

 

There’s a bearish wedge in wave 1, which has been finished on 1/8 MM Level. Also we’ve got another wedge in wave [a], so wave 2 is likely going to be continued. Therefore, there’s an opportunity to have wave in the short term.

 

Image20170120162012002.png

 

As we can see on the one-hour chart, wave (B) ended yesterday, so the price is declining in wave © of . The main intraday target is 4/8 MM Level, which could be a departure point for another bullish wave.

 

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USD/CAD rising inside intermediate impulse wave (3)

1/20/2017

 

USD/CAD rising inside intermediate impulse wave (3)

Next buy target – 1.3450

USD/CAD has been rising sharply in the last trading sessions inside the intermediate impulse wave (3) – which started earlier – when the pair reversed up from the support zone lying between the support levels 1.3100 and 1.3020 (which reversed earlier waves 4 and A) and the lower daily Bollinger Band.

 

The upward reversal from the aforementioned support zone created the daily Japanese candlesticks reversal pattern Bullish Engulfing.  USD/CAD is expected to rise further toward the next buy target at the resistance level 1.3450.

 

USDCAD_-_Primary_Analysis_-_Jan-20_1545_

 

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EUR/AUD reached sell target 1.4100

1/20/2017

 

EUR/AUD reached sell target 1.4100

Next buy target - 1.4300

EUR/AUD continues to rise after the recent upward reversal from the strong support level 1.4100 (which stopped the previous waves (a), 1, a, b and which was set as the sell target in our previous forecast for this currency pair).  The support zone near the support level 1.4100 was strengthened by the lower daily Bollinger Band.

 

Given the strength of the support level 1.4100, EUR/AUD is expected to rise further toward the next buy target at the next resistance levels 1.4300 (intersecting with the 38.2% Fibonacci correction of the earlier downward impulse from December).

 

EURAUD_-_Primary_Analysis_-_Jan-20_1545_

 

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Key option levels for Monday, January 23th

1/22/2017

 

EUR/USD

 

EURUSD(111).png

 

Main trend Short-term period Medium-term period

Bullish Neutral

Changes in the open interest + 31 796 ? + 9 285 ?

Closest resistance levels 1.0730; 1.0760; 1.0778; 1.0805

Closest support levels 1.0672; 1.0636; 1.0588; 1.0558

Trading recommendations

Baseline scenario Long EUR/USD above 1.0730, with target points at 1.0760 and 1.0778

Alternative scenario Moving below 1.0672 can be considered as a signal to Sell the pair, with target at 1.0636 and 1.0588

 

GBP/USD

 


 

Main trend Short-term period Medium-term period

Bearish Neutral

Changes in the open interest + 454 ? + 739 ?

Closest resistance levels 1.2395; 1.2415; 1.2446

Closest support levels 1.2358; 1.2330; 1.2288; 1.2261

Trading recommendations

Baseline scenario Short GBP/USD below 1.2358, with target points at 1.2330 and 1.2288

Alternative scenario Moving above 1.2395 can be considered as a signal to Buy the pair, with target at 1.2415 and 1.2446

 

USD/CAD

 

USDCAD(93).png

 

Main trend Short-term period Medium-term period

Bearish Bullish

Changes in the open interest + 240 ? + 315 ?

Closest resistance levels 1.3344; 1.3376; 1.3421; 1.3479

Closest support levels 1.3298; 1.3270; 1.3249; 1.3217

Trading recommendations

Baseline scenario Short USD/CAD below 1.3298, with the target points at 1.3270 and 1.3249

Alternative scenario Moving above 1.3344 can be considered as a signal to Buy the pair, with target at 1.3376 and 1.3421

 

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USD/CAD: bears showed a slack

1/23/2017

 

On the USD/CAD daily chart, bears failed to break the uptrend. After breaking the diagonal support the bulls managed to repel the bears' attack and return quotes to the long-term trading channel. At the present moment, there is a struggle for the important level of 1.3306 (38.2% of the last descending wave).

 

Screenshot_2017_01_23_08_13_48.png

 

On the USD/CAD hourly chart, the bulls were stopped around the resistance at 1.3377. As a result, the "Shark" pattern was formed. If the 113% target is fulfilled, it will be a signal for a new attack buyers.There is a support located at 38.2% of the last descending wave.

 

Screenshot_2017_01_23_08_14_02.png

 

Recommendation: BUY 1,324 SL 1,3185 TP 1,3375.

 

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GBP/USD: bulls are going to repeat their attack

1/23/2017

 

On the GBP/USD daily chart, bulls failed to test the resistance at 1.244 (point B in the "Shark" inverted pattern). But they don't stop their efforts to break this level. If they manage to test it, the quotes may rise further towards 1.27. The nearest support lies near the 1.2380 level. 

 

Screenshot_2017_01_23_08_19_58.png

 

On the GBP/USD hourly chart, bulls gained control over the pair. Quotes are moving inside the upward trading channel. If buyers manage to hold this support at 1,237-1,238, the upward movement in the direction of 1,262 (Target 224% of the AB = CD) should continue.

 

Screenshot_2017_01_23_08_20_13.png

 

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Morning brief for January 23

1/23/2017

 

tumblr_mddci9qK391rjewmeo1_500.gif

 

Good morning everyone! Here is some FX news that happened while you were sleeping.

 

USD/JPY slumped to 113.70 on the fears that Trump’s “America First” policy can lead to renegotiation of the NAFTA agreement, trade wars with key Asian economies. Cautiousness and anxiety are likely to be the themes for the beginning of this week as market will anticipate the inaction of the Trump’s execute orders. This will push the US dollar lower and allow its major peers to make new highs.

 

The euro gained 0.33% and rose to 1.0740 on the broad weakening of the US dollar. There are no data releases on the roster today. ECB president Mario Draghi will speak in Turin at 1.30 am (MT time). But his speech should disturb the present movement of the EUR/USD currency pair.

 

GBP/USD edged up to 1.2415 in the countdown to the Supreme Court ruling scheduled for Tuesday. Theresa May is planning to offer special government support to the several sectors of the UK industry. The market shouldn’t take notice of these plans, however, as it will be preoccupied with the US protectionist trade policies.

 

USD/CAD slipped some points having broken the important support located at 1.3280. The CAD got a boost from rising oil prices. Brent oil futures advanced to $55.45 after statement over the weekend from OPEC and other producers that they have been successfully implementing output cuts. The bullish trend in the oil market is expected to reverse soon as Mr. Trump uses his executive powers to boost the US oil and gas industries.

 

donald_trump_pollution.jpg

 

Aussie and Kiwi both gained against the USD. AUD rose to 0.7575, and the NZD/USD went above 0.7195.   

 

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EUR/USD: on the new highs

1/23/2017

 

Technical levels: support – 1.0720; resistance – 1.0800.

 

Trade recommendations:

 

1. Buy — 1.0720; SL — 1.0700; TP1 — 1.0800; TP2 – 1.0830.

 

Reason: expanding bullish Ichimoku Cloud, rising Senkou Span A and B; rising Tenkan-sen and Kijun-sen and cancelled dead cross; the prices are on the new local highs.

 

01-eurusdh4(82).png

 

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AUD/USD: market is under resistance

1/23/2017

 

Technical levels: support – 0.7550; resistance – 0.7610.

 

Trade recommendations:

 

1. Buy — 0.7550; SL — 0.7530; TP1 — 0.7610.

 

2. Sell — 0.7610; SL — 0.7630; TP1 — 0.7550; TP2 — 0.7510.

 

Reason: expanding bullish Ichimoku Cloud and the rising Senkou Span A; a golden cross of Tenkan-sen and Kijun-sen; but the market is under a strong resistance on daily timeframe.

 

03-audusdh4(71).png

 

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EUR/USD: bulls going to test the nearest resistance

1/23/2017

 

23-1-2017-EUR-H4-1.png

 

The price faced a resistance at 1.0745. However, bulls are likely going to move on, so we should keep an eye on the next resistance at 1.0795 as a possible intraday target. If a pullback from this level happens, there’ll be an opportunity to have a bearish correction towards the nearest support at 1.0745 – 1.0719.

 

23-1-2017-EUR-H1-1.png

 

The price is consolidating right after a pullback from a resistance at 1.0745 has been formed. Meanwhile, the market is likely going to reach a resistance at 1.0784 during the day. Considering a possible pullback from this level, there’s a chance to have a downward price movement in the direction of a support at 1.0745 – 1.0719.

 

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GBP/USD: "Flag" helped bulls to move on

1/23/2017

 

23-1-2017-GBP-H4-1.png

 

The current downtrend is acting as a resistance. However, if the price breaks this trend line, bulls are likely going to test a resistance between the levels 1.2468 – 1.2509. If a pullback from this area happens, bears will probably try to test the closest support at 1.2432 – 1.2387.

 

23-1-2017-GBP-H1-1.png

 

The price is consolidating under the downtrend. Nevertheless, the pair is likely going to rise towards a resistance at 1.2432 – 1.2468, which could be a departure point for a decline in the direction of a support at 1.2414 – 1.2387.

 

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Trump’s to-do list for the first days of his presidency

1/23/2017

 

512.jpg

 

The inauguration day is over. The next chapter of American history is playing out right before our eyes. Newly elected President didn’t waste his time in moving forward with his policy plans. Shortly after Mr. Trump was sworn in as president of the United States, he rounded lawmakers in a room and signed some executive orders including a proclamation for a National Day of patriotism and formal nominations for his Cabinet picks. In addition, the new administration announced a loosening of regulations associated with Obamacare.

 

The next executive orders of Trump’s administration will result in the US withdrawal from the Trans-Pacific Partnership, the renegotiation of the NAFTA agreement. So, Canadian dollar and Mexican peso may suffer significantly, once the order is enacted.

 

In addition, Trump is going to cancel restrictions on the production of energy in the US, including shale and clean coal, to boost oil and gas industry. So, wait for some reverberations in commodity markets.

 

The next order will concern the lobbying in the political structures of the US. Trump promised to ban executive officials from becoming lobbyist for 5 years after they leave their posts in a president’s administration. This regulation won’t affect the market, but it will directly affect the work of the US law-making bodies. 

 

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Review on Ashraf Laidi's book

1/23/2017

 

ashraf_laidi2.jpg

 

Ashraf Laidi in his book “Currency trading and internal market analysis” reveals the secrets of currency movements. In plain English, he helps traders to recognize the dominant trends in the international financial and commodity markets. In a very succinct and simplistic way, he identifies the existent relationships between the Forex exchange, commodity and equity markets, defines what causes the currency’s upheavals and drops.

 

If you still don’t understand why Australian dollar soars when iron ore, copper or gold prices rise; if you are still struggling to decipher the mystic correlation between the currency value, interest rates, and financial assets, you should definitely go through the Mr. Laidi’s book to fill yourself in on the listed topics. For the better introduction of the book we’ve decided to present you in this article a small abstract from Laidi’s book in which the author describes the relationship between fluctuations in the food, commodity markets, and currency movements:

 

food.png

 

Those who seek to understand the relationships between short-/long-term interest rates and currency prices, those who craves to identify the factors influencing the movement of a particular currency pair might be particularly interested in reading Mr. Laidi’s writing.

 

For whom the book can be useful?

 

It can be valuable for both categories of traders – for newcomers and for experienced market participants. For the former ones, it could be a really good introduction course to the Forex exchange market fundamental analysis. The latter ones can use it as a stimulating refresher of their knowledge of FX market fundamentals. 

 

DOWNLOAD THE BOOK 

 

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EUR/USD: bearish "Shooting Star"

1/23/2017

 

2301eurusdH4.png

 

There’s a bullish local trend, which is taking place on the four-hours chart. Also, we’ve got a bullish “Hanging Man”, but a confirmation of this pattern is a quite weak. So, the market is likely going to test the nearest support, which could be a departure point for another bullish rally.

 

2301eurusdH1.png

 

We’ve got a “Shooting Star”, which has been confirmed enough. Therefore, the price is likely going to test the nearest resistance during the day. If a pullback from this level be on the table, bears will probably try to test the closest support line.

 

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USD/JPY: bears going to break the "Window"

1/23/2017

 

2301usdjpyH4.png

 

The 55 Moving Average line is acting as a resistance, so we’ve got a bearish “Engulfing”, which has been confirmed enough. Also, there’s a bullish “Harami”, so the market is likely going to test the nearest support line, which could be a departure point for a decline towards the closest “Window”.

 

2301usdjpyH1.png

 

We’ve got a “Doji” pattern at the local low, which has a confirmation. At the same time, the last “Three Methods” pattern acted as a resistance, so the pair is likely going to test the support nearby. If a pullback from this line happens, there’ll be an opportunity to have another decline.

 

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EUR/USD: wave [c] of 2 going to move on

1/23/2017

 

Image20170123164806001.png

 

We’ve got a zigzag in wave 2, which is developing on the four-hours chart. Therefore, wave [c] is likely going to be continued, so we should keep an eye on 5/8 MM Level as a possible intraday target. If a pullback from this level happens, there’ll be an opportunity for another decline.

 

Image20170123164806002.png

 

Wave has been formed like a zigzag, so the price is rising in wave [c] of 2. Meanwhile, wave (iv) is going to end. In this case, if the price finds a lodgement above 8/8 MM Level, there’ll be a chance to have wave (v) of [c].

 

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GBP/USD reached buy target 1.2450

1/23/2017

 

GBP/USD reached buy target 1.2450

Next buy target – 1.2720

GBP/USD continues to rise after the earlier breakout of the key resistance level 1.2400 (which reversed the pervious waves a, 4 and (2), as can be seen from the daily GBP/USD chart below). The breakout of the resistance level 1.2400 intensified the bullish pressure on this currency pair – leading to the subsequent breakout of the next resistance level 1.2450 (pervious buy target set in our earlier forecast for this currency pair).

 

If the price closes today above the resistance level 1.2450 - GBP/USD can then is expected to rise further toward the next buy target at the resistance level 1.2720 (which reversed the pervious waves 2 and ④ at the start of December).

 

GBPUSD_-_Primary_Analysis_-_Jan-23_1541_

 

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CAD/JPY broke key support level 86.00

1/23/2017

 

CAD/JPY broke key support level 86.00

Next sell target - 84.00 

CAD/JPY continues to fall after the earlier breakout of the key support level 86.00 (which stopped the previous intermediate impulse wave (1) in December and which was set as the sell target in our earlier forecast for this currency pair).  The support zone near the support level 86.00 was strengthened by the 23.6% Fibonacci correction level of the earlier upward impulse from November.

 

The breakout of the aforementioned support level 86.00 accelerated the active impulse waves (3) and ⑤. CAD/JPY is expected to fall further toward the next buy target at the next support levels 84.00 (intersecting with the 38.2% Fibonacci correction of the aforementioned upward impulse from November).

 

CADJPY_-_Primary_Analysis_-_Jan-23_1537_

 

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NZD/USD: bulls take control over the pair

1/24/2017

 

On the NZD/USD daily chart, quotes returned the upward long-term trading channel and fulfill a target at 0,722 on the previously open longs. Buyers remain their control over the pair; the quotes may rise further towards 0.7415-0.7455. There is 88.6% target in the "Shark" inverted pattern.

 

Screenshot_2017_01_24_08_35_48.png

 

On the NZD/USD hourly chart, quotes went out from the ascending triangle. Its upper boundary (0.722) serves as a support. Resistance is located at the 0.726 level.

 

Recommendation: BUY 0,726 SL 0,7205 TP1 0,7415 TP2 0,745.

 

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EUR/USD: the euro is gaining momentum

1/24/2017

 

On the EUR/USD daily chart, quotes continue to move within the short-term trading channel. In order to continue the rally "bulls" need to test the resistance at 1.085.If they manage to do so, the "Shark" inverted pattern will be activated. Its 88.6% target is located near the 1.12 mark.

 

Screenshot_2017_01_24_08_26_49.png

 

On the EUR/USD hourly chart, the return of the quotes to 1.071 will determine a further direction of the movement. A rebound can lead to the restoration of the short-term upward trend. In contrast, a breakout will activate the "Crab" pattern with the target located at 1.064 (88.6%).

 

Screenshot_2017_01_24_08_27_04.png

 

Recommendations:

 

SELL 1,071 SL 1,0765 TP1 1,064 TP2 1,058,

 

SELL 1,085 SL 1,0905 TP 1,071

 

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