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AUD/NZD reversed from support area

2/1/2017

 

AUD/NZD reversed from support area

Next buy target - 1.0500

AUD/NZD continues to rise after the earlier upward reversal from the support area allocated between the powerful support level 1.0360 (which stopped the previous waves (A) and (i)) and the lower daily Bollinger Band. The upward reversal from this support area stopped the 3rd minor impulse wave (iii) of the C-wave from the middle of November.

 

Given the oversold reading on the daily Stochastic indicator, AUD/NZD is likely to rise further toward the next buy target at the resistance level 1.0500. Strong support remains at the support level 1.0360.

 

AUDNZD_-_Primary_Analysis_-_Feb-01_1456_

 

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AUD/USD: shark doesn't leave Aussie alone

2/2/2017

 

On the AUD/USD daily chart, prices reached an important resistance at 0.7646 (78.6% of the last mid-term descending wave). If it is broken, the prices will continue their rally towards the target 88.6% in the Shark inverted pattern. 

 

Screenshot_2017_02_02_07_19_14.png

 

On the AUD/USD hourly chart, a breakout of the upper boundary of the consolidation range 0.7515-0.7605 allowed the "bulls" to operate more freely. The mark of 0.7735 can be used as a target of the upward movement. The main support lies at 0.7605.

 

Screenshot_2017_02_02_07_19_29.png

 

Recommendations: hold longs formed from the level of 0,7595, BUY 0,7605 SL 0,755 TP 0,773.

 

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EUR/USD: bulls are sweeping away all the hurdles

2/2/2017

 

On the EUR/USD daily chart, prices approached to the convergence zone located at 1.0818-1.0825. If it is broken out, there will be a corrective movement towards 1,093 (61.8% level of the last descending wave). As long as the euro is above 1.0705, the bulls will be maintaining their control over the pair.

 

Screenshot_2017_02_02_07_10_10.png

 

On the EUR/USD hourly chart, a successful test of the resistance at 1.0805 will open the way towards the 1.093 level. There is a 200% target in the AB = CD pattern. The key supports are located at 1,075-1,076.

 

Screenshot_2017_02_02_07_10_32.png

 

Recommendation: BUY 1,0805 SL 1,075 TP 1,093. 

 

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Morning brief for February 2

2/2/2017

 

The US dollar dropped overnight as the Fed gave little fodder to change its pace of the US rate increases. Markets were somewhat disappointed with the statement and Treasury yields, so, the greenback had to reverse its hard-earned gains that had occurred following the upbeat ISM manufacturing release and ADP payrolls report. The euro edged up to 1.0795 enjoying the broad weakening of the USD. Trump’s trade advisor Peter Navarro’s comments on the currency manipulation of a number of countries sent the dollar lower and provoked a flurry of responses coming from Japan, the EU. Donald Tusk, European council President, said the US has become a worrying source of unpredictability. It seems that Trump is now playing the role of puppet master saying when market ought to rise/fall.

 

Later today we will hear the ECB President Draghi speaking at a joint conference by the ECB and Bank of Slovenia. The market’s reaction should be subdued.

 

Aussie was the main performer of the Asian session.  It hopped above 0.7640 on the stronger than expected trade balance data which showed Australia’s record monthly trade surplus. Soaring iron ore and coal prices added fuel to the flames and catapulted the AUD even higher against its US peer.

 

NZD/USD slowed down its rally and skipped some points overnight. A story of a cow showing symptoms of bovine TB infection triggered the Kiwi’s downfall. By the end of the Asian session, NZD/USD managed to rebound to 0.7300.

 

SCCZEN_A_3010NZHDFDAIRYCOW3_620x310.jpg

 

GBP/USD jumped above 1.2670 having reached its highest level since December 2016. A solid UK economic data and long-awaited certainty over the Brexit process helped the British pound to recover from its recent precipitous downfall. Later today the Bank of England meets and releases its latest inflation Report. The market expects aa upgrade of the bank’s growth and inflation forecasts.

 

USD/JPY has lost its ground on the session having slumped to 112.55 on the risk-averse selling of the greenback.

 

USD/CAD slumped below 1.3000 on the broad weakening of the US dollar. Brent oil futures have firmed further and rose to $56.60. 

 

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EUR/USD: bulls going to test resistance

2/2/2017

 

2-2-2017-EUR-H4.png

 

Bears faced a support at 1.0719, so we’ve got a “V-Bottom” pattern, which pushed the price towards a resistance at 1.0774. Therefore, the market is likely going to test the next resistance at 1.0830 – 1.0850. If a pullback from this area happens, there’ll be an opportunity to have a decline towards a support at 1.0774 – 1.0745.

 

2-2-2017-EUR-H1.png

 

There’s a “Double Bottom”, so the price is consolidating. In this case, the pair is likely going to reach the nearest resistance at 1.0815 – 1.0830. If we see a pullback from these levels, bears will probably try to achieve a support at 1.0795 – 1.0774.

 

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GBP/USD: another bullish "Pennant"

2/2/2017

 

2-2-2017-GBP-H4.png

 

We’ve got a “V-Bottom”, so the price is rising. Therefore, we should keep an eye on a resistance at 1.2674 – 1.2726 as a possible intraday target. Considering a possible pullback from this area, there’s a chance to have a decline towards a support at 1.2619 – 1.2581 afterwards.

 

2-2-2017-GBP-H1.png

 

The price is moving up towards the uptrend. Also, we’ve got a “Pennant” pattern, so bulls are likely going to reach the next resistance at 1.2703 – 1.2726 during the day. If a pullback from this area happens, there’ll be an option to have a local bearish correction.

 

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Bank’s projections for the BoE’s meeting

2/2/2017

 

Goldman Sachs - bullish

 

Analysts believe that the press conference, Inflation Report and MPC minutes should be hawkish, and, therefore, bullish for GBP.

 

Morgan Stanley –  bullish

 

MS focuses on the BoE’s inflation report. There is a potential for GBP/USD uplift back to at least 1.27/1.28 followed by the downfall towards 1.17.

 

BofA Merrill – neutral with slight hawkishness

 

The bank expects a neutral bias on policy from the BoE. It should hold rates, diverting from QE.

 

ANZ – too early to project a downward path for GBP

 

The bank notes that the pound managed to stabilize in recent weeks on the strong economic releases. Sterling Is discounted a lot, so, in the near-term, it will be gathering bullish momentum to partially recoup its past losses. In the longer term, however, the risks are skewed to the downside as hiring trends in the economy is gradually slowing; real income growth is poised to be halted by the rising inflation and investment outflow. At the end of March and in the early part of April, the tone of the EU-UK negotiation will be crucial in assessing further sterling’s near-term path.

 

NAB – bullish

 

The BoE will stay on hold but might express the desire to raise interest rate in the future. The main GBP/USD resistance for today is located at 1.2775 – the December 2016 high.

 

TD – bullish with bearish outlook for the future

 

Analysts expect the BoE to keep rates on hold throughout 2017 – 2018 and choose the middle road for interest rates until the Brexit situation becomes clearer. Sterling experienced a moderate rebound as the UK economy proved to be resilient after unexpected “leave” vote. But the GBP’s fundamentals are still vulnerable on the back of the EU-UK negotiations. 

 

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What’s new in the oil market?

2/2/2017

 

Oil prices slid down to $56.82 on Thursday as the Energy Information Administration report showed a sharp increase in the US crude and gasoline stockpiles. Other numerous fundamental factors are keeping oil prices firmly in the $50 – 60 range.

 

missile-e1444556495135-635x357.jpg

 

In the beginning of this week, Brent futures and West Texas intermediate were underpinned by indications that oil producers keep their promises of curbing output and geopolitical tensions between the United States and Tehran after Iranian missile tests. Senator Bob Corker, chairman of the US Senate Foreign Relations Committee, promised on Monday to work with other lawmakers and the Trump administration to hold Iran responsible. Israeli prime Minister Benjamin Netanyahu said he will bring up new sanctions on Iran in the course of his meeting with newly elected US President next month.  Mr. Netanyahu was a vociferous opponent of the Obama administration’s intention to strike a deal with Iran that led to an end of the economic sanctions for Iran. The resolution ratified in July 2015 prohibited any Iran’s nuclear activity.

 

benjaminnetanyahu_AP(1).jpg

 

Iranian Foreign Minister Mohammad Javad Zarif in his country’s defense said that Iran’s missiles are not designed to carry nuclear warheads and are meant for self-defense: “These missiles aren’t part of the nuclear accord. Iran will never use missiles produced in Iran to attack any other country.”

 

Whether international community will believe on Iran’s bare word or not, it’s an open question. But as long as this missile test situation is not resolved, the oil prices will be steadily trading at their present levels turning a deaf ear, or showing little reaction to the economic data with significant rises in stocks, or increased numbers of the US rigs. 

 

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EUR/USD: bulls going even higher

2/2/2017

 

Image20170202133535001.png

 

The market has been rising right after a pullback from 7/8 MM Level. So, wave [c] of 2 is likely going to be continued. In this case, we should keep an eye on +2/8 MM Level as a possible intraday target.

 

Image20170202133535002.png

 

There’s a bullish impulse in wave [c], which is taking place on the one-hour chart. Therefore, bulls are likely going to deliver an extension in wave (iii). If a pullback from +1/8 MM Level arrives later on, there’ll be an opportunity to have wave (iv).

 

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EUR/USD: bulls going to test upper "Window"

2/2/2017

 

0202eurusdH4.png

 

We’ve got a bullish “High Wave” on the 21 Moving Average, so the price is still rising. Considering that there isn’t any reversal pattern so far, the pair is likely going to continue moving up towards the nearest “Window”. If any bearish pattern arrives afterwards, there’ll be an opportunity to have a local correction.

 

0202eurusdH1.png

 

There’s an “Engulfing” on the 55 Moving Average, which has been confirmed by the last “Three Methods” pattern. Also, there’s a bearish “Hanging Man”. Therefore, bears are likely going to deliver a local correction, but bulls will probably try to test the upper “Window” afterwards.

 

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USD/JPY: Moving Average going to act as a resistance

2/2/2017

 

0202usdjpyH4.png

 

We’ve got a “Harami” and a “Three Black Crows” on the 21 & 13 Moving Averages. Both patterns have been confirmed, so the market is likely going to get a support on the nearest “Window”. If a pullback from this level happens, there’ll be an opportunity to have a local upward price movement.

 

0202usdjpyH1.png

 

The last “Three Methods” pattern led to the current decline. If we see a pullback from the achieved support area, bulls are likely going to deliver an upward correction. So, we should keep an eye on the 34 Moving Average as a possible intraday target, which could be a departure point for another decline.

 

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Review on the book of Adam Grimes

2/2/2017

 

lf4ybKBQ_400x400.jpeg

 

Adam Grimes in his book “The Art and Science of Technical Analysis” suggests a scientific foundation for numerous trading tools and techniques. A keen reader won’t find a holy grail there – a set of trading patterns and setups that need to be strictly followed to achieve the most profitable outcomes. Instead, he will enhance his knowledge of technical analysis, acquire a deep understanding of the nuances of trading in the Forex market. With such background, the reader will be able to get rid of the vices of his bets, find out the reason of his failures and develop a more comprehensive approach to trading.

 

The book is divided into 4 parts. The first part deals with the probability theory and Wyckoff market cycle concept. The next part is devoted to in-depth analysis of the trends, trading ranges and other details that are essential for every trader. The third part reveals new perspectives on risk management, position sizing, and pattern analysis helps to recognize the patterns in the market, suggests the most common trading strategies with examples. The last pattern is about trading psychologies; it addresses the issues of emotional control, provides powerful insight on cognitive biases, lists psychological challenges a trader may encounter at his marketplace.

 

We won’t throw dust into your eyes and fairly admit that the book is complex. Sometimes you will have to reread certain sections of the books to bring about understanding. The size of the book may appear daunting at first sight. But don’t be scared; a great many of pages are technical graphs provided for the better uptake of the content. It’s advisable to page through the entire book for a better understanding. But if you are interested only in a particular issue, you may delve into the reading of a section you need as each chapter is self-contained.

 

The book can be useful for two categories of people: self-directed intermediate traders willing to master their trading techniques and learn to control the emotional outbursts, and corporate traders, those who work within the institutional framework and have exclusive trading authority over a number of client accounts (those who seek for the total efficiency).

 

DOWNLOAD THE BOOK

 

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AUD/USD rising inside minor impulse wave (iii)

2/2/2017

 

AUD/USD rising inside minor impulse wave (iii)

Next buy target – 0.7750

AUD/USD continues to rise sharply inside the minor impulse wave (iii), which started earlier from the key support level 0.7520 (previous monthly high from December and the buy target set in our earlier forecast for this currency pair). The active minor impulse wave (iii) belongs to the sharp impulse wave 3 from the end of December.

 

AUD/USD is expected to rise further to the next buy target at the major resistance level 0.7750 (which reversed previous sharp impulse waves (v) and ©, as can be seen below). The pair is likely to correct down after reaching the resistance level 0.7750.

 

AUDUSD_-_Primary_Analysis_-_Feb-02_1631_

 

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AUD/JPY reversed from support area

2/2/2017

 

AUD/JPY reversed from support area

Next buy target - 87.10

AUD/JPY continues to rise after the recent upward reversal from the support area lying between the key support level 85.50 (which also reversed the previous wave A) and the 50% Fibonacci correction level of the previous upward impulse from December. The upward reversal from this support area completed the C-wave of the previous ABC correction (2) from January.

 

AUD/JPY is expected to rise further to the next buy target at the strong resistance level 87.10 (which reversed earlier waves ?, (1) and B).  Buy stop-loss can be placed below the aforementioned support level 85.50.

 

AUDJPY_-_Primary_Analysis_-_Feb-02_1633_

 

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USD/JPY: yen's surf

2/3/2017

 

On the USD/JPY daily chart, the fourth attempt of "bears" to test the support at 112.5 has failed. We wait for the development of consolidation in the range 112.5-115.35. A further course of events will depend on whether bulls manage to push the quotes beyond the downward trading channel or not.

 

Screenshot_2017_02_03_08_28_08.png

 

On the USD/JPY hourly chart, Wolf waves are formed. A return of quotes to the highs of bar ?3 will create prerequisites for the opening of the long positions with the target in the convergence zone located at 114.4-114.5.

 

Screenshot_2017_02_03_08_28_23.png

 

Recommendation: BUY 113.4 SL 112.85 TP1 114.4 TP2 115.4. 

 

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Silver is poised to move southwards

2/3/2017

 

On the daily graph of silver, bulls are trying to settle above the upper boundary of the descending medium-term trading channel. If they fail to do so, the "bearish" trend will be restored. The first sign of buyers' weakness will be evident if prices fall below the support located at $17.295. This can lead to the activation of the "Shark" pattern with $15 target

 

Screenshot_2017_02_03_08_37_06.png

 

On the hourly chart of silver, the "Shark" pattern has been activated with $17 target. The retest of the support located at 17.295 will allow traders to open short positions. 

 

Screenshot_2017_02_03_08_37_18.png

 

Recommendations: SELL $17,295 SL $17,485 TP1 $117 TP2 $15,85. 

 

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Morning brief for February 3

2/3/2017

 

The yen and Japanese 10-year yields skidded after the Bank of Japan committed itself to buying an unlimited number of bonds at a fixed rate. USD/JPY jumped to 113.07 on the session struggling to erase its weekly losses.

 

EUR/USD skipped some points having slid to 1.0750. The yield on 10-year US Treasury note ticked up to 2.487 from yesterday’s low at 2.432. Today’s focus will on the US non-farm payrolls and labor data coming at 15:30 MT time. Markets are expecting a solid result. Another event that might grasp the traders’ attention is Chicago’s Fed president Evans speech (he is a vote in Federal Committee this year) that should give the market some clues on the Fed’s path of the rate hikes.

 

GBP/USD slumped below 1.2520 from 1.2705 after the BoE meeting and Inflation Report. The central bank upgraded its growth forecasts for this year from 1.4% to 2%, but lowered its medium-term inflation forecasts. Carney’s press conference showed less hawkishness and resulted in the market’s disappointment. It seems that the BoE senior officials are more preoccupied with the country’s growth and unemployment rates rather than with looming heightened inflation rates. It was a really busy day for the pound. The UK Government published its White paper on Brexit. Today we will be waiting for the UK services PMI ahead of the major US labor market reports.

 

Aussie spiked to 0.7695 overnight due to the record trade surplus and surging commodity prices. NZD/USD was trading near the 0.7275 level without any significant troughs and swings.

 

USD/CAD advanced to 1.3030 in the course of the Asian session despite the uplift in oil prices. Brent oil futures rose to $56.85 on the investors’ wary that the US may introduce new sanctions on multiple Iranian entities after Iran’s missile test.

 

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NFP preview from major banks

2/3/2017

 

In case you decide to go with banks' guts, there are their forecasts for the nonfarm payrolls headline, the US unemployment rate, and average hourly earnings print (all are taken from eFX plus news). And our sage counsel will be following: trust everyone, but always cut the cards. 

 

Banks Nonfarm payrolls Unemployment rate Average hourly earnings

Consensus forecast +170K 4.7% 0.3%

Goldman Sachs +200K 4.6% 0.3%

Barclays +175K 4.6% 0.3%

BofA Merrill +160K 4.7% -

SEB +175K 4.7% 0.3%

Nomura +205K 4.6% 0.3%

Credit Agricole +175K 4.7% -

CIBC +175K 4.7% -

 

 

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EUR/USD: euro corrected to Kijun-sen

2/3/2017

 

Technical levels: support – 1.0720; resistance – 1.0810, 1.0900.

 

Trade recommendations:

 

1. Buy — 1.0720; SL — 1.0700; TP1 — 1.0810; TP2 – 1.0900.

 

Reason: bullish Ichimoku Cloud; a golden cross of Tenkan-sen and Kijun-sen; all the lines of Ichimoku Indicator are horizontal; the prices are in a range of Tenkan-sen and Kijun-sen.

 

01-eurusdh4(88).png

 

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USD/JPY: Dollar returned to Tenkan-sen

2/3/2017

 

Technical levels: support – 112.90; resistance – 113.70, 114.20.

 

Trade recommendations:

 

1. Buy — 113.00; SL — 112.80; TP1 — 113.70; TP2 — 114.20.

 

Reason: expanding bearish Ichimoku Cloud; a dead cross of Tenkan-sen and Kijun-sen; a market is oversold; the prices are in a Tenkan-Kijun’s channel.

 

04-usdjpyh4(72).png

 

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Key option levels for Friday, February 3rd

2/3/2017

 

EUR/USD

 

EURUSD(120).png

 

Main trend Short-term period Medium-term period

Bearish Neutral

Changes in the open interest + 253 985 ? + 290 561 ?

Closest resistance levels 1.0783; 1.0812; 1.0840; 1.0860

Closest support levels 1.0755; 1.0733; 1.0695; 1.06669

Trading recommendations

Baseline scenario Short EUR/USD below 1.0755, with target points at 1.0733 and 1.0695

Alternative scenario Moving above 1.0783 can be considered as a signal to Buy the pair, with target at 1.0812 and 1.0840

 

USD/JPY

 

USDJPY(88).png

 

Main trend Short-term period Medium-term period

Bullish Neutral

Changes in the open interest + 2 625 ? + 2 591 ?

Closest resistance levels 113.08; 113.35; 113.55; 114.04

Closest support levels 112.51; 112.26; 111.99; 111.56

Trading recommendations

Baseline scenario Long USD/JPY above 113.08, with target points at 113.35 and 113.55

Alternative scenario Moving below 112.51 can be considered as a signal to Sell the pair, with target at 112.26 and 111.99

 

USD/CAD

 

USDCAD(101).png

 

Main trend Short-term period Medium-term period

Bullish Bullish

Changes in the open interest + 1 312 ? + 644 ?

Closest resistance levels 1.3031; 1.3051; 1.3094; 1.3129

Closest support levels 1.3021; 1.2994; 1.2957; 1.2927

Trading recommendations

Baseline scenario Long USD/CAD above 1.3031, with the target points at 1.3051 and 1.3094

Alternative scenario Moving below 1.3021 can be considered as a signal to Sell the pair, with target at 1.2994 and 1.2957

 

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EUR/USD: bulls going to deliver new local high

2/3/2017

 

3-2-2017-EUR-H4.png

 

The price is consolidating in a range of the current “Rising Wedge”. Also, there’s a local “V-Top”, so the pair reached a support at 1.0745. In this case, bears are likely going to test the next support at 1.0719 – 1.0697. If a pullback from these levels happens, there’ll be an opportunity to have another upward movement in the direction of a resistance at 1.0815 – 1.0830.

 

3-2-2017-EUR-H1.png

 

We’ve got a “V-Top”, so the price achieved the 55 Moving Average. Therefore, the market is likely going to decline towards the next support at 1.0719 – 1.0703. If we see a pullback from this area, bulls will probably try to test a resistance at 1.0774 – 1.0795.

 

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GBP/USD: uptrend waiting for bears

2/3/2017

 

3-2-2017-GBP-H4.png

 

There’s a “V-Top”, so the market is likely going to test the nearest support at 1.2465. Considering a possible pullback from this level, there’s an opportunity to have an upward movement towards a resistance at 1.2581 – 1.2619 later on.

 

3-2-2017-GBP-H1.png

 

The 89 Moving Average acted as a support, so the price is consolidating. In this case, bears are likely going to test the uptrend, which could be a departure point for a local upward correction.

 

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EUR/USD: bearish "Three Methods"

2/3/2017

 

0302eurusdH4.png

 

We’ve got a “Doji Star”, which has been confirmed, so bears are likely going to test the lower “Window” and the 55 Moving Average. If any bullish pattern arrives later on, there’ll be an opportunity to have another upward price movement.

 

0302eurusdH1.png

 

There’s a “Hanging Man” at the last high. Also, we’ve got a bearish “Three Methods” pattern, so the market is likely going to continue falling down. In this case, we should keep an eye on the lower “Window” as a possible intraday target.

 

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USD/JPY: bulls going to test Moving Average

2/3/2017

 


 

We’ve got a “Hammer”, an “Engulfing” and a “Tweezers”, which all have been confirmed. Also, there’s a bearish “Advance Block”, so the market is likely going to reach the 21 Moving Average. If a pullback from this line happens, bears will probably try to test the last low once again.

 

0302usdjpyH1.png

 

The last “Hammer” and “Inverted Hammer” have pushed the price towards the 34 Moving Average. Therefore, the price is likely going to test the next Moving Average line, which could be a departure point to another decline.

 

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