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LiteForex Analytics

LiteForex Analytics

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#141
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EUR/USD: general analysis

Current trend

The pair is lowering. It renewed the historical minimum due to the FRS decision of the key interest rate rise to 0.5-0.75%. The rise was expected, and furthermore, the commitment to the tightening of the US monetary policy was announced.
“A modest increase in the federal funds rate is appropriate in light of the solid progress we have seen toward our goals of maximum employment and 2% inflation”, — is written on the official site of the FRS. Janet Yellen said that the FRS will pursue its policy according to Trump’s economical plan for lowering the taxes and increasing of spending on infrastructure. The new interest rate rise in the next year was also announced.

As today there are no significant releases in Eurozone, the USA Retail Sales and Initial Jobless claims indicators are worth traders’ attention.

Support and resistance

On the 4-hour chart the pair broke the lower border of the Bollinger Bands indicator, showing a strong sell signal. The MACD is on negative zone, its volumes are rising. The signal line crosses the histogram body downwards, giving sell signal. The Stochastic crosses the border between neutral area and oversold area downwards, giving a signal to open shorts positions.

Support levels: 1.0400.
Resistance levels: 1.0500, 1.0550, 1.0600, 1.0650, 1.0710, 1.0735, 1.0800, 1.0830, 1.0870.

Trading scenario

Open short positions from the current price with the target at 1.0300. Stop loss is at 1.0450.
Open long positions from the level of 1.0550 with the target at 1.0600. Stop loss is at 1.0520.
Implementation period: 1-3 days.

 


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#142
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XAG/USD: silver is falling

Current trend

Yesterday the price of silver significantly declined amid a continuous strengthening in the US Dollar that was supported by strong data from the US.

The Consumer Price Index excluding Food and Energy in November rose by 2.1% that matched the figure from the previous month but came out a 0.1% worse than forecasts of economists. On a month-to-month basis, the index added 0.2% that matched the expectations. Additionally, the number of Initial Jobless Claims for the week ending 9 December fell from 258 thousands to 254 thousands that exceeded the expectations by 1 thousand claims. The NY Empire State Manufacturing Index in December grew from 1.5 to 9.0 points, more than twice beating the forecasts. The Philadelphia Fed Manufacturing Index rose from 7.6 to 21.5 points, against the expectations of a growth to only 9.0 points.

Support and resistance

Bollinger Bands on the daily chart turned down while the price range is widening. The price, however, is trading underneath its lower border. MACD is falling having formed a sell signal. Stochastic continues falling having reached the oversold zone.
The indicators recommend waiting for clearer trading signals.

Support levels: 15.87 (local low), 15.65, 15.51 (11 April low).
Resistance levels: 16.00 (local high), 16.15 (25 November low), 16.30, 16.42 (18 November low), 16.62, 16.73 (local high), 16.87, 17.00, 17.22 (16 November high).

Trading tips

Long positions can be opened after the price consolidation above the level of 16.15 with targets at 16.62, 16.73, 17.00 and stop-loss at 15.80. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 15.87 with targets at 15.51, 15.25, 15.00 and stop-loss at 16.15. Validity – 2-3 days.


 


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#143
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GBP/USD: general analysis

Current trend

During the last week trading sessions the pair has lost about 110 points due to the strengthening of the USD. As expected, the regulator has increased the key interest rate from 0.50% to 0.75%, adding than the next rate rise can happen in the first half of the next year. On Thursday, December, 15, the Bank of England has decided to keep the interest rate on the same level of 0.25%. The Head of the regulator, Mark Carney has commented the decision carefully and avoided any specificity. However, he said that the inflation stays within expected range, and there are no conditions to its growth.

Concerning the “hawk” rhetoric of the USA FRS and tough negotiations between UK and the EU upon the Brexit, the pair will decrease in the long term.

Support and resistance

On the 4-hour chart the pair is trading in the bottom area of the Bollinger Bands. The indicator is pointed downwards, as the price range is wide, so the current trend will continue. The MACD is in negative zone and doesn’t give a clear signal. The Stochastic is ready to leave the overbought area, forming a strong sell signal.
According to the readings, it’s better to open short positions.

Support levels: 1.2450, 1.2401, 1.2361, 1.2184.
Resistance levels: 1.2516, 1.2567, 1.2605, 1.2648, 1.2698, 1.2723.

Trading scenario

Open short positions on the current level with the target at 1.2400. Stop loss is at 1.2520. Implementation period: 1-2 days.
Open long positions from the level of 1.2520 with the target at 1.2570. Stop loss is at 1.2500. Implementation period: 1-3 days.

 


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#144
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USD/CAD: general analysis

Current trend
The Canadian dollar continues to move in the upward channel since March 2016. Since last week, the pair once again start the upward movement within the channel, caused by the strengthening US dollar. Now the pair is in the middle of the range.
Further movement of the pair may be affected by data on wholesale sales from Canada at 15:30 (GMT+2) today, retail sales data from the US, and particularly the report of the American Petroleum Institute at 23:30 (GMT+2). As you know, the Canadian dollar has a strong correlation with the oil price. For the same reason it is important to pay attention to the Wednesday release, 17:30 (GMT+2) of oil stats from the US.

Support and resistance levels
Support levels: 1.3262, 1.3315, 1.3376, 1.2988, and, of course, the lower boundary of the channel at 1.3130.
Resistance levels: 1.3521, 13579, 1.3800 (the upper border of the channel), 1.3844.

Trading tips
Long positions may be opened at the market price, targets – 1.3521 and 1.3579, stop loss –1.3340.
The scenario with a return to the bottom border of the channel is still relevant. In this case, we sell from the level 1.3376 with target at 1.3130 and stop loss at 1.3450.


 


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#145
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AUD/USD: general analysis

Current trend

Yesterday, the Australian currency continued its decline against the US dollar after the release of Bank of Australia Meeting Minutes on interest rates and monetary policy. However, during the American session, the pair gained back about forty points from the 90 it had lost. The releases of the leading economic indicators index in Australia and the index of activity in all sectors of Japan did not affected the situation significantly.

Today, at 14:00 and 16:00 (GMT+2) we expect the stats on real estate market and mortgage lending in the US. Also important data will be stats on stocks of petroleum products in the US (17:30 GMT+2).

Support and resistance

Resistance levels: 0.7837 (one-year maximum), 0.7776 (month and week high), 0.7660, 0.7600, 0.7545, 0.7489, 0.7420, 0.7309.
Support levels: 0.7143, 0.7021, 0.6828.

Trading tips

Short positions can be opened at the market price with the targets of 0.7143, 0.7021 and stop loss at around 0.7310.
If the price consolidates above 0.7309 level, then the long positions will become relevant. Targets for the “bulls” will be 0.7420, 0.7489 and stop loss at around 0.7250.


 


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#146
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USD/JPY: pause before growth resumes

Current trend

The American Dollar continues consolidating against the Yen after a significant growth in November and the beginning of December. The Dollar fell due to profit fixation and the pair continues moving within the range of 80 points amid the lack of important fundamental news from the US or Japan. However, the Yen was slightly supported by yesterday’s decision on interest rates. The Bank of Japan left the rate unchanged, and in commentaries expressed some optimism noting a gradual economic recovery.

Today extra attention needs to be paid to macroeconomic statistics from the US that could determine further pair’s dynamics. Data on the GDP, labour market and Durable Goods Orders is due.

Support and resistance

In the short-term, the price might fall to the lower border of the ascending channel at the level of 117.15 from where its growth will resume.
Technical indicators suggest a growth continuation. Bollinger bands are directed up while the upper line is at the level of 119.00, indicating the next possible target. MACD histogram is about to resume its growth in the positive zone.
Support levels: 117.15, 116.50, 115.50, 114.80, 114.00, 113.15, 112.30.
Resistance levels: 118.00, 118.25, 118.65, 119.00, 119.35, 120.05.

Trading tips

Long positions can be opened from current levels and from the level of 117.15 with targets at 119.00, 120.05 and stop-loss at 116.80.

 


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#147
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USD/CHF: the US dollar keeps growing

Current trend

In the beginning of the week the US dollar is growing against the Swiss franc, renewing a local maximum on December, 21. The market activity is still low due to the Ney Year and Christmas holydays. The traders prefer not to buy a risky currency, but consolidate the profit while trading stable ones.

On Monday, 26, there were no significant macroeconomical statistics published, but on Tuesday there will be a lot of data from USA. The investors are interested in Business Activity and Consumer Confidence indices. Also the traders wait for the Redbook index and October S&P/Case-Shiller Home Price Indices. The nearest publications in Switzerland are due at Wednesday, December, 28, as the November UBS Consumption Indicator will be published. The data is based on 5 economic indicators of consumption: car sales, consumer confidence, retail sales, the number of domestic overnight hotel stays, credit card transactions volumes.

Support and resistance


Resistance levels: 1.0290 (maximum on December, 21), 1.0318 (maximum on December, 20) и 1.0342 — maximum on December, 15.
Support levels: 1.0271 (the nearest level), 1.0239 (minimum on December, 16), 1.0212 (maximum on December, 9), 1.0190, 1.0166, 1.0149 (the level of December, 4), 1.0123 and 1.0100.

On the daily chart Bollinger Bands indicator is growing. The price range is narrowing, reflecting recent controversial trade dynamics. Stick to the channel trade strategy.
The MACD is lowering, keeping the weak sell signal (the histogram is below the signal line). It’s better to close some of the short positions and wait for more trading signals.

The Stochastic reversed again in the middle of its working area. The indicator doesn’t contradict with the further “bullish” development in short or very short term.

Trading scenario

Open long positions after the breakout of 1.0290, if the technical indicators don’t contradict with the «bullish» trend. Take profit is at 1.0342, 1.0350 or 1.0375. Stop loss is at 1.0250. Implementation period: 2-3 days.
In case of reversal near the level 1.0290 it’s better to open correction short positions with the nearest target at 1.0200 or 1.0190. Stop loss is at 1.0320 or 1.0330. Implementation period: 2-3 days.


 


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#148
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XAG/USD: general analysis

Current trend

Yesterday the pair was growing against the “thin” market and no key macroeconomical news. It couldn’t consolidate above the strong resistance level of 16.00, and the silver began to decrease again.
Today the publication of the Pending Home Sales index can affect the market. The growth of the index above 0.5% will pressure the pair.

Support and resistance

On the daily chart the pair is trading in the narrow range of 15.85-16.05. The Bollinger Bands indicator has corrected downwards, as the price range has widened significantly, reflecting the high volatility of the continuing of the current trend. The MACD is in the negative zone, the volumes of the histogram are decreasing, keeping a sell signal. The Stochastic has reversed upwards near the border of the oversold area.
According to the indicators, short positions are more preferable.
Support levels: 15.82, 15.65, 15.47.
Resistance levels: 16.16, 16.41, 16.66, 16.94, 17.20.

Trading scenario

Open short positions at the current price with the target at 15.45. Stop loss is at 16.05. Implementation period: 1-2 days.
Open long positions at 16.15 with the target at 16.55. Stop loss is at 15.95. Implementation period: 1-2 days.

 


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#149
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Brent: renew of maxima in the end of the year

Current trend

The Brent oil prices grew to the level of year maxima 57.00 on Wednesday, and it is trading there now. The growth is caused to the oil production countries confirmed their agreement on the oil production limitation. The Oil Ministry of Iraq confirmed that the country is ready to limit the oil production by 200-210K barrel in January. The Venezuela Oil Ministry confirmed the limitation by 95K barrel per day. The EIA Crude Oil Stocks change index is worth attention today. It is expected to decrease by 2060 million barrel. In this case the price can renew the year maxima and grow to the level of 57.70, 58.50. Otherwise the retreat to the level of 55.90 (the middle line of the Bollinger Bands and an upward fan line of Fibonacci 61.8%).

Support and resistance

Support levels: 55.90, 55.00, 54.90, 53.00, 51.70.
Resistance levels: 57.00, 57.70, 58.50.

Trading scenario

Open long positions when the price has consolidated above the level of 57.00 with the target at 57.70 and 58.50. Stop loss is at 56.70. Open short positions below the level of 57.00 with the target at 55.90, 55.00 and stop loss at 57.40.

 


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#150
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XAU/USD: general analysis

Current trend
During the second half of 2016 the price of gold continued to steadily decline due to a stronger US dollar. Currently, however, the pair has already finished the movements triggered by Brexit and raised interest rates of the Fed. At the moment, there is concern on the market about the presidency of Donald Trump. In the near future he will have to convince the US Congress to allocate a large sum for the implementation of economic programs, and his new cabinet still has to go through the approval process in the Senate hearings. In this situation, these processes are likely to be long and exhausting, which may have a prolonged negative impact on the US currency, and strengthen the positions of precious metals.

The current week is replete with important economic releases from the US. Today in the afternoon in the United States data on the index of gradual acceleration of inflation and the index of business activity in the manufacturing sector from the ISM will be published. Projected growth of both indices will reflect the positive sentiment in the business environment and will contribute to the strengthening of the dollar.

Support and resistance
On the daily chart the pair is trading around strong support level of 1148.50. The indicator "Bollinger Bands" is directed downwards, whereas the price range is narrowing, which indicates the probability of a change of the current trend. Histogram of MACD is in the negative zone, its volumes are growing, keeping a weak buy signal. Stochastic has turned down at the border of the overbought area.
Support levels: 1118.88, 1128.28, 1141.69, 1146.39.
Resistance levels: 1159.14, 1172.55, 1180.60, 1188.65.

Trading tips
Short positions should be opened at the level of 1146.00 with the target at 1132.00 and a stop loss at the level of 1153.00. Implementation period: 1-2 days.
Long positions can be set at the level of 1151.70 with Take Profit at 1166.50 and a stop loss order at the level of 1143.50. Implementation period: 1-2 days.

 


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#151
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UKBrent: general review

Current trend

During yesterday’s trading session, after it has tested the level of 58.44, the price of Brent crude oil fell by almost $3 per barrel, and at its lowest point towards the end of the session was trading near the level of 55.40. Most likely, such a serious decline was caused by a strengthening in the US Dollar amid the publication of positive macroeconomic statistics in the US. Market participants were selling oil futures that are expressed in Dollars.

Today markets are waiting for the publication of the Weekly Crude Oil Stock by the American Petroleum Institute, due at 11:30 pm (GMT+2).

Support and resistance

The instrument is correcting after the sharp fall. The upward correction could continue to the middle MA of Bollinger Bands (56.77).

Support levels: 55.79, 54.74, 53.55.
Resistance levels: 56.49, 57.29, 58.44.

Trading tips

Long positions can be opened after the price consolidation above the level of 56.77 with targets at 57.29, 58.44 and stop-loss at 56.40.
Short positions can be opened after the price consolidation below the level of 55.37 with targets at 54.74, 53.55 and stop-loss at 55.60.

 


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#152
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GBP/USD: general review

Current trend

The pair significantly grew yesterday amid a substantial weakening in the US Dollar that remains under pressure after the publication of the FOMC Minutes in the middle of the week. The Minutes, despite been quite hawkish, showed that further path of monetary policy tightening in the US is uncertain as the effect to the economy of the promised fiscal stimulus by Donald Trump is unknown yet. The market seems to agree with the regulator about high level of uncertainty, as the Dollar continues falling despite strong statistics that keep coming out in the US.

Additional support to the Pound came from strong data on the Markit Services PMI. In December, the index rose from 55.2 to 56.2 points, well above forecasts.
Today attention needs to be paid to data on the Nonfarm Payrolls in the US.

Support and resistance

On the 4-hour chart, the pair turned down having failed its long-term SMA200, a breakout of which could lead to a growth continuation. However, the Composite has formed a divergence with the RSI and price, suggesting a decline possibility.
Support levels: 1.2322 (local lows), 1.2297 (November 2016 lows), 1.2206 (local lows).
Resistance levels: 1.2433 (local highs), 1.2505 (local highs), 1.2542 (local highs).

Trading tips

Long positions can be opened from the level of 1.2443 with targets at 1.2505, 1.2542 and stop-loss at 1.2412. Validity – 1-2 days.
Short positions can be opened from the level of 1.2297 with the target at 1.2206 and stop-loss at 1.2322. Validity – 1-2 days.


 


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#153
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XAG/USD: technical analysis

XAG/USD, D1

On the daily chart, the instrument is trading just above the middle MA of Bollinger Bands. The price remains below the EMA65, EMA130 and SMA200 that are directed down. The RSI is trying to turn down having broken out its December resistance. The Composite is testing its December resistance as well.

XAG/USD, H4

On the 4-hour chart, the instrument is trading on the middle MA of Bollinger Bands. The price remains on the level with the moving averages that are horizontal. The RSI is showing Bullish dynamics. The Composite is about to test its longer MA.

Key levels

Support levels: 16.15 (November 2016 lows), 15.67 (December 2016 lows), 15.34 (23.6% Fibonacci correction).
Resistance levels: 16.71 (local highs), 17.07 (October 2016 lows), 17.20 (50% correction).

Trading tips

There is a chance the upward correction is going to continue.
Long positions can be opened from the level of 16.71 with targets at 17.07, 17.20 and stop-loss at 16.55. Validity – 2-3 days.
Short positions can be opened from the level of 16.15 with the target at 15.67 and stop-loss at 16.33. Validity – 2-3 days.


 


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#154
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Brent: oil prices fell

Current trend

The price of Brent crude oil fell at the beginning of the week amid growing concerns that the OPEC countries are going to carry out their agreement to cut the production.

According to the experts, in the first days of January the Iraqi exports going through the port of Basra were the highest in the last 4 years. In addition, oil reserves in Iran’s floating storages significantly fell. In September 2016, their levels halved that indicates an increase in the country’s exports activities.
Oil prices were also pressured by data on the number of oilrigs in the US. For the week ending on 30 December, their number rose by 4 to 529 rigs, reaching the highest level since December 2015. The number of rigs in the US has been growing for the 10th consecutive week.

Support and resistance

Bollinger Bands on the daily chart turned sideways while the price range remains unchanged. MACD is falling and giving a quite strong sell signal. Stochastic is falling as well and approaching the border of the oversold zone.
The indicators recommend waiting for clearer trading signals.
Support levels: 55.07 (local low), 54.37, 53.91 (22 December low), 53.50, 52.68 (8 December low), 51.85.
Resistance levels: 55.77 (20 December high), 56.50, 57.10 (12 December high), 57.52 (6 January high), 58.10, 58.68 (15 July 2015 high), 59.51.

Trading tips

Long positions can be opened after the breakout of the level of 55.77 with targets at 57.10, 57.52 and stop-loss at 54.00. Validity – 2-3 days.
Short positions can be opened after the price consolidation below the level of 55.00 with targets at 53.50, 52.68 and stop-loss at 55.80. Validity – 2-3 days.


 


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#155
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USD/JPY: general analysis

Current trend

During the trading session on Tuesday the pair was lowering. The USA stock markets show the weakness, which affects the USD negatively. The growth of the Wholesale Inventories index by 1% has also pressured it: the growth of the index reflects the showering of the economical growth and can affect the GDP greatly. The JOLTS Job Openings is 5.522 million against the expected 5.555 million, which doesn’t support the USD also. The Japan Composite Index of Leading Indicators was growing to 102.7 points, exceeding the expectations by 0.1 points, which is good for the economy in the short term.

Donald Trump’s press conference will be held today in the USA. The main issues are expected to concern the plans of increasing the infrastructure investment and the tax decreasing plans. There can be come volatility peaks in the market during the conference.

Support and resistance

On the 4-hour chart the pair was corrected to the middle line of the Bollinger Bands indicator.
The MACD histogram is in the negative zone, keeping the signal to open short positions.
Support levels: 105.50, 115.20, 104.90.
Resistance levels: 116.300, 117.00, 117.50, 118.20.

Trading scenario

Open long positions from the level of 116.40 with the target at 117.00, 117.50. Stop loss is at 116.00.
Open short positions from the level of 115.50 with the target at 114.90. Stop loss is at 115.80.
Implementation period: 1-3 days.

 


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#156
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XAU/USD: technical analysis

XAU/USD, D1

On the daily chart, the instrument is growing along the upper line of Bollinger Bands. The price remains below its moving averages that turned horizontal. The RSI is approaching the border of the overbought zone. The Composite starts forming a divergence with the price and RSI suggesting a downward reverse possibility.

XAU/USD, H4

On the 4-hour chart, the instrument is growing along the upper line of Bollinger Bands. The price remains above its moving averages that start turning up. The RSI has been forming a Bearish divergence just below the border of the overbought zone. The Composite is about to retest its strong resistance.

Key levels

Support levels: 1190.65 (local lows), 1170.55 (38.2% Fibonacci retracement), 1146.96 (March 2015 lows).
Resistance levels: 1207.46 (50% retracement), 1215.03 (April 2016 lows), 1244.55 (61.8% retracement).

Trading tips

There is chance of the downward reverse in the price.
Short positions can be opened after the price rebound from the level of 1207.46 with targets at 1190.65, 1170.55 and stop-loss at 1215.03. Validity – 3-5 days.
Long positions can be opened after the breakout of the level of 1215.03 with the target at 1244.55 and stop-loss at 1205.13. Validity – 3-5 days.


 


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#157
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FDAX: technical analysis

FDAX, D1

On the daily chart, the instrument is trading in the upper Bollinger band. The price remains above its moving averages that are directed up. The RSI is showing Bearish dynamics having broken down its longer MA. The Composite is representing similar pattern.

FDAX, H4

On the 4-hour chart, the instrument is trading just above the lower line of Bollinger Bands. The price remains above the EMA65, EMA130 and SMA200 that are turning horizontally. The RSI is testing its last week support. The Composite is approaching its support level as well.

Key levels

Support levels: 11484.2 (December 2016 highs), 11336.1 (local lows), 11220.7 (local lows).
Resistance levels: 11638.5 (local highs), 11663.1 (local highs), 11792.3 (July 2015 highs).

Trading tips

The price is consolidating above a strong support level at 11484.2. Its breakdown could lead to a downward correction continuation, however, the main trend remains ascending.
Short positions can be opened from the level of 11484.2 with the target at 11336.1 and stop-loss at 11524.0. Validity – 3-5 days.
Long positions can be opened from the level of 11663.1 with the target at 11792.3 and stop-loss at 11638.5. Validity – 3-5 days.


 


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#158
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EUR/GBP: Fibonacci analysis

Possibility of fall continuation.

On the 4-hour chart, the price fell below the level of 0.8718 (23.6% correction) and after a breakdown of the 38.2% fan line (which seems likely as Stochastic is directed down), the fall could continue towards 0.8650 (38.2% corrections for the medium-term and short-term trends) and 0.8590 (50% correction). However, the ascending fan could be an additional obstacle to the price, so in the region of 0.8650 the price might reverse and start growing towards its January highs.
On the daily chart, the price is heading towards the level of 0.8650 (38.2% correction), a breakdown of which would lead to a fall continuation towards 0.8580 (lower line of Bollinger Bands), 0.8545 (23.6% correction). However, there is also a chance of a price reverse and growth towards the levels of 0.8742 (50% correction) and 0.8830 (61.8% correction), but this scenario seems unlikely (Stochastic turned down).

Main scenario

Sell the pair below the level of 0.8650 with targets at 0.8580, 0.8545 and stop-loss at 0.8690.

Alternative scenario

Buy the pair after the price rebound from the level of 0.8650 with targets at 0.8742, 0.8830 and stop-loss at 0.8620.


 


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#159
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USD/JPY: general analysis

Current trend

During the yesterday trading session the USD continued to fall against all the main currencies, including Yen. Investors are fixing the profit on the dollar assets. After the great growth due to the positive expectation of the new President policy the traders want to see the confirmation of the Trump’s intentions to reform the economy. Yesterday the USA FRS members’ commentaries supported the USD and helped it not to fall further. The FRS members said that the USA economy has almost reached the target level of the inflation and now is almost involved. Yesterday Trump’s commentaries of the “too strong” dollar and its bad affection on the USA economy pressed the USD. The USD/JPY pair has decreased to the level of 112.56, but today on the opening session the price was corrected upwards. Today the USA Consumer Price Index (15:30 GMT+2), the Industrial Production data (16:15 GMT+2), Fed's Beige Book review (21:00 GMT+2) and Janet Yellen Speech (22:00 GMT+2) are worth traders attention.

Support and resistance

Support levels: 113.00, 112.56, 112.00.
Resistance levels: 113.50, 114.00, 114.47.

Trading scenario

On the 4-hour chart Bollinger Bands are pointed downwards, reflecting the development of the downward trend. Still the correction into the area of the middle line of the Bollinger Bands (113.86) is possible. The reversal from the level of 113.86 and the downward movement is possible.

The MACD histogram is in the negative zone, its volumes are decreasing, reflecting the development of the correction. In case of the consolidation of the price above the level of 114.00 the formation of the upward trend is possible.
Sell the pair after the price is set below the level of 113.00 with the target at 112.56, 112.00 and stop loss at 113.35.
Open the pair after the price is set above the level of 114.00 with the target at 114.47, 115.00 and stop loss at 113.65.

 


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#160
LiteForexTeam

LiteForexTeam

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GBP/USD: the pair has a limited growth potential

Current trend
On Wednesday, the pair was corrected from the level of 1.2400 to the 1.2250 level. Today, the pair once again resumed its growth, which can reach the levels of 1.2380 (Fibonacci correction 50.0%) and 1.2470 (Fibonacci correction 61.8%). However, in the long term position of the pound is evaluated negatively. The head of the IMF, Christine Lagarde, in an interview with BBC said that the British economy will be under further pressure, because the new free trade agreement with the EU, which the UK intends to achieve, in any case, would give the country fewer trade opportunities than if it remained a member of the European Union. Goldman Sachs experts believe that the process of negotiations on a new agreement can take a long time and may take more time than the "Brexit" itself.

Support and resistance levels
The pair has a potential to grow up to the levels of 1.2380 and 1.2470, as confirmed by the Stochastics, turning upwards. However, long-term negative factors could lead to a reversal of the price at the level of 1.2380, then to the breakdown of the level of 1.2290 (Fibonacci correction 38.2%) and to a further decrease to the levels of 1.2180 (23.6% correction) and 1.2120.
Support levels: 1.2290, 1.2180, 1.2120.
Resistance levels: 1.2380, 1.2470.

Trading tips
In this situation, the short-term long positions can be opened at the level of 1.2340 with the targets at 1.2380 and 1.2470. Stop loss orders can be set in the area of 1.2310. Short positions can be opened at the level of 1.2380 or in case of breakdown of the level of 1.2290 with the targets at 1.2180, 1.2120 and stop losses at 1.2420, 1.2330, respectively.

 


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