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USD/JPY BROKE SUPPORT ZONE

09:27 16.02.2018

 

- USD/JPY broke support zone

- Next sell target - 105.50

 

USD/JPY continues to fall sharply after the earlier breakout of the support zone lying between the support levels 108.30 (which stopped the previous minor impulse wave 3 at the end of January) and 107.30 (low of the previous impulse wave (A)). The breakout of this support zone accelerated the active minor impulse wave (iii). USD/JPY is expected to fall further toward the sell target at the next support level 105.50 (target for the completion of the impulse wave (iii)).

 

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WEEKLY FOREX OUTLOOK: FEB. 19 - 23

12:55 16.02.2018

 


 

The recovery of the US dollar turned out to be brief.

 

Investors are worried about the US twin deficits – current account deficit and budget deficit. There are forecasts that the budget deficit will rise to $1 trillion in 2019 because of increased spending and tax cuts. In addition, many traders think that American authorities want the USD to be weak. The prospect of more Federal Reserve’s rate hikes doesn’t provide much support to the greenback anymore as other countries start to scale back their easy monetary policy. The USD no longer has an advantage. Even stronger-than-expected consumer inflation figures didn’t help. To sum up, the outlook for the US currency is still negative.

 

USD/JPY fell to the lowest levels since the end of 2016. The level of 105.00 is a psychologically important support. The lower USD/JPY gets, the more nervous Japanese authorities will become. So far, their comments have been mild, but if the pair keeps rapidly falling they may decide to intervene.     

 

EUR/USD continues the uptrend, although it got overbought. Resistance is in the 1.2600 area. Support is at 1.2415 and 1.2310. As for GBP/USD, if it rises above 1.4160, the next target will be at 1.4350.

 

Most important events in the economic calendar for the upcoming days include the release of European PMI, UK labor market figures and the Fed’s meeting minutes on Wednesday;

 

the second estimate of British GDP and Canada’s and New Zealand’s retail sales on Thursday and Canada’s CPI on Friday. The Bank of England’s Governor Carney will testify on inflation and the economic outlook in Parliament on Wednesday.

 

Asian markets will be shut for Lunar New Year holidays until Thursday. US banks will also be closed on Monday because of Presidents’ Day.

 

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AUD/USD IS TIRED OF A CAGE

07:30 19.02.2018

 

Recommendations:

 

SELL 0.7895 SL 0.795 TP 0.7795

 

BUY 0.7985 SL 0.793 TP1 0.8055 TP2 0.8095 TP3 0.8185

 

On the daily chart of AUD/USD, bulls didn’t manage to overcome an important resistance level of 0.7985. As a result, the pair consolidated in the 0.7895-0.7985 area. When the pair gets out of this range, this will determine the further fate of the Aussie.

 

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On H1, a break of support at 0.7895 will trigger the “Shark” pattern with a target at 88.6%. On the other hand, successful test of resistance at 0.7985 will increase the risks of a rally. Don’t exclude the possibility of a “Widening wedge”.

 

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FBS Video Lessons

 

In this video Tutorial Lesson 10: CALCULATING VALUE OF A PIP

You will learn how to multiply the amount of your trade in lots by one pip in a decimal form (0.0001 or 0.01). A lot is given in units of our base currency. You should remember that the US Dollar is a quote currency in many pairs (EUR/USD, GBP/USD etc.). It means that the exchange rate of the quote currency to USD equals to 1. 

Learn more


 

Do not forget to chose your language from the video's subtitles :) 

 

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One of the underlying tenets of technical analysis is that historical price action predicts future price action. Since the forex is a 24-hour market, there tends to be a large amount of data that can be used to gauge future price activity, thereby increasing the statistical significance of the forecast. This makes it the perfect market for traders that use technical tools, such as trends, charts and indicators.

 

It is important to note that, in general, the interpretation of technical analysis remains the same regardless of the asset being monitored. There are literally hundreds of books dedicated to this field of study, but in this tutorial we will only touch on the basics of why technical analysis is such a popular tool in the Forex market.

As the specific techniques of technical analysis are discussed in other tutorials, we will focus on the more forex-specific aspects of technical analysis.

 

Technical Analysis Discounts Everything; Especially in Forex 

There are many large players in the Forex market, such as hedge funds and large banks, that all have advanced computer systems to constantly monitor any inconsistencies between the different currency pairs. Given these programs, it is rare to see any major inconsistency last longer than a matter of seconds. Many traders turn to forex technical analysis because it presumes that all the factors that influence a price - economic, political, social and psychological - have already been factored into the current exchange rate by the market. With so many investors and so much money exchanging hands each day, the trend and flow of capital is what becomes important, rather than attempting to identify a misprinted rate.

 

 

# forex analysis news

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USD/JPY Daily Analytics

06:37 20.02.2018

Technical levels: support – 106.00; resistance – 107.15.

 

Trade recommendations:

 

Sell — 107.15; SL — 107.35; TP1 — 106.30; TP2 — 106.00.

Reason: narrowing bearish Ichimoku Cloud with falling Senkou Span B; a dead cross of Tenkan-sen and Kijun-sen, but narrowing channel of the lines; the market is in correctional movement to the Cloud.

 

1519108594-3dcc4d3b0e9d38341d309e86e7227

 

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AUD/USD Daily analytics

06:36 20.02.2018

Technical levels: support – 0.7880; resistance – 0.7980

 

Trade recommendations:

 

Sell — 0.7900; SL — 0.7920; TP1 — 0.7820; TP2 — 0.7770.

Buy — 0.7920; SL — 0.7900; TP1 — 0.7980; TP2 — 0.8020.

Reason: narrow bearish Ichimoku Cloud with falling Senkou Span A; a golden cross of Tenkan-sen and Kijun-sen, but the narrowing channel Tenkan-Kijun; the prices keeps staying inside a Cloud and the channel Tenkan-Kijun.

 

1519108594-42a68b4bfa2f0515dfbaa054e9dba

 

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XAU/USD Daily Analytics

06:55 20.02.2018

Recommendations:

 

BUY $1320 SL $1305 TP1 $1350 TP2 $1365 TP3 $1400

 

BUY $1300 SL $1285 TP1 $1330 TP2 $1350 TP3 $1365

 

On the daily chart, XAU/USD bulls didn’t manage to overcome significant resistance at $1360-1365 an ounce. As a result, the risks of correction and triggering of the “Bat” pattern increased. At the same time, the trend remains bullish, so pullbacks from diagonal support may be used for buying.

 

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On H1 of XAU/USD, the “Shark” pattern is being triggered. Its 88.6% corresponds to the level of $1,323 an ounce. It is in the $1320-1323 convergence area.

 

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USD/CAD Daily analytics

07:01 20.02.2018

Recommendation:

 

BUY 1.2645 SL 1.259 TP1 1.2745 TP2 1.2850

 

SELL 1.2510 SL 1.2565 TP1 1.2410 TP2 1.2300

 

On the daily chart, USD/CAD is at the crossroads. A break of resistance at 1.2645 will give bulls hope for reaching 88.6% and 161.8% of the “Shark” and AB=CD. On the other hand, decline below support at 1.2460 will increase the risk of downtrend’s resumption. 

 

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On H1 of USD/CAD, a break above diagonal resistance near 1.2510 will allow bears to reach 88.6% target of the “Bat”.  

 

1519110037-5c726ce87bf89e31cdcfbd4c37b26

 

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EUR/USD Daily analytics

12:02 20.02.2018

 

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The main trend is still bullish, but there's a "V-Top" pattern, so the price is declining. The main intraday target is the nearest support at 1.2332 - 1.2296. If a pullback from this area happens little later on, there'll be an opportunity to have another upward price movement towards the next resistance at 1.2384 - 1.2434.

 

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Bears faced with support at 1.2355, so the pair is likely going to test the closest resistance at 1.2391 - 1.2415. If a pullback from these levels happens, the market will probably try to achieve another support at 1.2325 - 1.2296.

 

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GBP/USD Daily analytics

12:04 20.02.2018

 

1519128040-9270fef1fdb0a00a48e775857c89f

 

There's a "V-Top" pattern, so the pair is likely going to test the 89 Moving Average soon. If a pullback from this line arrives afterwards, there'll be an opportunity to have an upward price movement in the direction of the next resistance at 1.4011 - 1.4066.

 

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All the Moving Averages have been broken, so the price is declining. The main intraday target is the closest support at 1.3875 - 1.3845, which could be a departure point for another bullish rally.

 

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EUR/USD Daily Analytics

12:08 20.02.2018

 

1519128414-0f85332c5c7d4a555a2f36b8c7c80

 

The last bearish "Harami" led to the current upward price movement. There's no any reversal pattern so far, which means the pair is likely going to continue moving down in the short term.

 

1519128413-eaf212a6c3e083236db226f44d59e

 

All the Moving Averages have been broken, so the market is moving down towards the lower "Window". If any reversal pattern forms little later on, we could have an upward correction.

 

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USD/JPY Daily Analytics

12:09 20.02.2018

 

1519128412-2a30cae9a1ad08f90e612f79dcfee

 

There's a bullish "Harami", which has been confirmed, so the price reached the 21 Moving Average. However, there's no any bearish pattern, so the pair is likely going to test the 89 MA.

 

1519128412-73d8329807a419c5ce5607d47e2c7

 

The price has been rising since a "Harami" formed at the last local low. If the 55 Moving Average acts as support, there'll be an opportunity to have another bullish price movement.

 

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TELEGRAM HAS BEATEN RECORDS

13:15 20.02.2018

If you do not know anything about Telegram’s pre-ICO or just forgot, we will give you some key points. Telegram is planning to launch its own blockchain the “Telegram Open Network” (TON). TON will have a lot of advantages such as decentralization, high security, capacity to hold fiat and Telegram’s currency in one wallet, and the main advantage will be the speed and volumes of transactions. At the same time Telegram is going to create its own cryptocurrency with a name “Gram”. The aim of the Telegram was to raise $850 million in a private sale of tokens and $1.15 billion in a public sale.

 

1519132884-b84c9fc4e084b584a212ae22f950e

 

So talks about the blockchain TON and pre-ICO have been existing since the end of 2017. But there were not any comments from the Telegram cofounder Mr. Durov, when just several days ago he broke the silence. According to a document, he submitted to the US Securities and Exchange Commission (SEC), in January the company had raised $850 million from 81 investors. Their names are hidden, however, there is information of at least two persons. They are co-founders of two Russian companies: Qiwi and Wimm-Bill-Dann, who invested $17 and $10 million, respectively. An interesting fact is that Pavel Durov limited the possible number of investments.

 

Officially it was not the ICO. It can be called as a closed placement of securities in dollars and euros. Investors bought rights to the project's cryptocurrency, so before the launch of tokens, they received securities that implied participation in the future distribution of coins. According to the document, investments will be used only “for the development of the TON Blockchain, the development and maintenance of Telegram Messenger and other purposes” and not for Durov brothers benefit. Talking about future plans, the company is going to raise an additional $1.15 billion via public crowdsale. However, there is not a firm date, all we know that it is planned in March 2018.

 

But when will we see the results of such huge investments? An early minimum viable product (MVP) version of TON is planned to be released in the second quarter of 2018 with the Telegram wallet service in the fourth quarter. All TON services together with tokens “Gram” are scheduled for launch in 2019.

 

Making a conclusion, we can say that the Telegram pre-ICO has already beaten all records. The previous ICO record was set by Tezos that raised $232 million. There were only two more other coin projects that got more than $200 million, they are Filecoin and Bancor.

 

If you want more information about the TON and plans of Telegram, you can read our article 

 

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THE USA VS THE EUROZONE

14:50 20.02.2018

There are a lot of factors that affect currencies markets. They are divided into two groups:  unpredictable and predictable events. The first group of unpredictable events includes political news and natural disasters. The second group, that we will consider today, covers economic indicators that are displayed in an economic calendar and released at the exact time.

 

These indicators show the economic growth and health, they cause exact monetary policy decisions of central banks. If traders know how these figures influence the economy and currency, they will know how to trade.

 

We offer you to compare the last data on the main indicators of the two world’s largest economies: American and European. Under the table, you will find an explanation.

 

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Let’s start with GDP (Gross Domestic Product). As we can see from the table, the American and Eurozone GDPs are almost similar. It shows the stable growth of economies as GDP is the broadest indicator of the economic health. An important fact is when the GDP rises, the domestic currency’s rate grows.

Trade Balance. When deficit happens to the trade balance, it leads to the fall of the domestic currency. Comparing figures of the American and European trade balance, we see a deficit in American balance and profit in European. If you look at currency rates, you will see that the US dollar is depreciating now, when the euro remains firm. Although there are many other factors that influence the currencies, trade balance plays its part.

CPI (Consumer price index) and PPI (Product price index) are two of the most important indicators of a monetary policy. CPI estimates an inflation level. And according to this level, a central bank decides which monetary policy to apply. The normal level of inflation is 2%, so all banks aim to reach this figure. If the inflation above 2%, the same when it is much below 2%, it is bad for the currency, the domestic currency depreciates. When we compare the data of the US and the EU, we can see that the CPI data is bigger in the US, it means that inflation is higher there, that is why the Fed has already started tightening its policy and increasing the interest rate. It will positively affect the greenback. The Eurozone CPI is not so high, that is why as we know the ECB is not going to raise the interest rate in the close future. Now it is just tapering quantitative easing.

Central bank uses interest rates to control inflation in a country. When inflation is near 2%, a central bank starts to tighten its policy, rising interest rates. It positively affects a domestic currency. When a central bank slows down interest rates, inflation rises, so it is bad for domestic currency. If we look at rates, we can see that the EU has the lowest rate of 0.0%. Such low rate is not good for the euro. Here we can say that the US rate of 1.5% affects the US dollar more positively than 0.0% rate the euro.

The lower Unemployment rate data leads to currency’s growth. We can notice that unemployment is in 2 times lower in the US, so it shows the positive growth of the US economy.  

The Eurozone does not release Core Retail Sales (Retail Sales excluding Autos), that is why you cannot find the second figure in the table. So let’s compare Retail Sales. When retail sales increase, a domestic currency may appreciate. According to RS figures, the US economy has better data, so consumer spending is higher in the US, the economy is growing faster, it is good for the US dollar. However, both figures are negative, that is a bad sign for an economic growth.

The last but not least indicator is PMI. It is a survey of manufacturing and service industries that shows the economic health. Looking at the data, we can say that figures are almost similar in both economies. Moreover, figures above 50.0 mean industry expansion, so we can say about expansion in manufacturing and services in America and Europe.

 

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Making a conclusion, we can say that the US economy looks better than the European one in more indicators. You can think that despite good indicators, the greenback has been falling for a long time when the euro is steady. But you should not forget about other factors that affect currency rates: positive indicators of other currencies, political issues, and traders’ mood. Tightening of the Fed’s monetary policy can lead to the rise of the US dollar soon. Positive economic indicators support this trend. At the same time, although now the European economy is failing against the American one, experts see a potential. Tapering of quantitative easing may lead to the growth of the inflation that will let increase the interest rate and will support the euro in the future. Good figures of GDP, trade balance and PMI will support the Eurozone’s economy.

 

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USD/JPY: PRICE REACHED 21 MOVING AVERAGE

12:09 20.02.2018

 

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There's a bullish "Harami", which has been confirmed, so the price reached the 21 Moving Average. However, there's no any bearish pattern, so the pair is likely going to test the 89 MA.

 

QLa8MPm.png

 

The price has been rising since a "Harami" formed at the last local low. If the 55 Moving Average acts as support, there'll be an opportunity to have another bullish price movement.

 

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EUR/USD: BEARISH "HARAMI" PATTERN

12:08 20.02.2018

 

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The last bearish "Harami" led to the current upward price movement. There's no any reversal pattern so far, which means the pair is likely going to continue moving down in the short term.

 

qcXkbTk.png

 

All the Moving Averages have been broken, so the market is moving down towards the lower "Window". If any reversal pattern forms little later on, we could have an upward correction.

 

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Important Economic Events

 

The Bank of England’s Governor and several members of the Monetary Policy Committee will testify on inflation and economic outlook before the Parliament’s Treasury Committee at 12:00 MT time on February 20. 

This event can get the GBP in motion. Any direct comments about the currency market will be especially critical. The hearings should give traders some clues about the central bank’s future monetary policy. 

 

Follow this event on the FBS Economic Calendar https://goo.gl/1W2EnS

 

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Always by your side - FBS

 

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USD/CHF Daily Analytics

06:34 21.02.2018

Recommendation:

 

BUY 0.9410

 

SL 0.9355

 

TP1 0.9510 TP2 0.9590

 

On the daily chart of USD/CHF, bulls are trying to counterattack and trigger the “Shark” pattern. Its 88.6% target is near 0.9775. As there’s a distinct downtrend, we doubt in the pair’s ability to rise to this level, though everything is possible.

 

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On H1, if USD/CHF exits the downtrend channel and breaks above resistance at 0.9410 with the following activation of the “Shark” pattern, the odds of advance to 0.9590 will increase.

 

1519194779-351a015a31e5fdb2fee97b43bc66a

 

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