Market analysis and trade recommendations by FBS

[riki143]

Morning brief for December 20
12/20/2016

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

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

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

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

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

More:
https://fxbazooka.com/analytics/11774

 

[riki143]

EUR/USD: bearish "Flag" pushing market lower
2/20/2016

The price is consolidating under a resistance at 1.0461. Also, there’s a “Flag” pattern, so the market is likely going to decline towards a support at 1.0340 – 1.0300. If a pullback from this area happens, there’ll be an opportunity to have another bullish rally in the direction of the nearest resistance at 1.0419 – 1.0461.

The last “Flag” pattern has been broken. Therefore, the price is likely going to continue falling down during the day. In this case, we should keep an eye on the closest support at 1.0340 – 1.0300 as a possible intraday target. However, if we see a pullback from these levels, bulls will probably try to deliver an upward correction.

More:
https://fxbazooka.com/analytics/11776

 

[riki143]

GBP/USD: "Triple Top" led to decline
12/20/2016

The price is consolidating between a resistance at 1.2498 and a support at 1.2309. Considering the previously formed “Wedge” pattern, the market is likely going to decline towards a support at 1.2358 – 1.2309 in the short term. Meanwhile, if a pullback from this area happens, there’ll be an option to have a bullish correction.

We’ve got a “Triple Top”, which has been confirmed. Also, there’s a “Pennant” pattern as well. So, the pair is likely going to test the nearest support at 1.2309. If bears be stopped here, then bulls will have an opportunity to push the price in the direction of the nearest resistance at 1.2384.

More:
https://fxbazooka.com/analytics/11777

 

[riki143]

Key option levels for Tuesday, December 20th
12/20/2016

EUR/USD

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest - 4 531 252 ? - 3 298 917 ?
Closest resistance levels 1.0462; 1.0511; 1.0532; 1.0589
Closest support levels 1.0402; 1.0318(37?); 1.0274 (critical); 1.0221
Trading recommendations
Baseline scenario Short EUR/USD below 1.0402, with target points at 1.0337/18 and 1.0274
Alternative scenario Moving above 1.0462 can be considered as a signal to Buy the pair, with target at 1.0511 and 1.0532

GBP/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 111 ? + 119 ?
Closest resistance levels 1.2474; 1.2503; 1.2523; 1.2546
Closest support levels 1.2374; 1.2355; 1.2332; 1.2305
Trading recommendations
Baseline scenario Short GBP/USD below 1.2374, with target points at 1.2355 and 1.2332
Alternative scenario Moving above 1.2474 can be considered as a signal to Buy the pair, with target at 1.2503 and 1.2523

USD/CAD

Main trend Short-term period Medium-term period
Neutral Bullish
Changes in the open interest + 117 ? + 240 ?
Closest resistance levels 1.3419; 1.3464; 1.3508; 1.3567
Closest support levels 1.3383; 1.3348; 1.3316; 1.3270
Trading recommendations
Baseline scenario Long USD/CAD above 1.3419, with the target points at 1.3464 and 1.3508
Alternative scenario Moving below 1.3383 can be considered as a signal to Sell the pair, with target at 1.3348 and 1.3316

More:
https://fxbazooka.com/analytics/11778

 

[riki143]

EUR/USD: bears going to deliver wave iii of (iii)
12/20/2016

The price has been declining since wave 2 ended like a flat pattern. Therefore, wave [iii] of 3 is likely going to be continued in the short term. The main intraday target is -1/8 MM Level, which could be a departure point for an upward correction.

As we can see on the M30 chart, we’ve got a double zigzag in wave (ii). So, there’s an opportunity to have an extension in wave iii. If the price finds a lodgement under 0/8 MM Level, bears will be free to push the market even lower.

More:
https://fxbazooka.com/analytics/11781

 

[riki143]

EUR/USD: "Tweezers" points to local correction
12/20/2016

We’ve got a “Tower” and a “Tweezers”, which both have been confirmed enough, so the market is likely continue falling down in the short term. As we can see on the Daily chart, there isn’t any reversal pattern so far. In this case, we’re likely going to have a new low soon.

There’s a “Three Methods” pattern, but also we’ve got a “Tweezers” at the local low. Therefore, there’s an opportunity to have an upward correction. If any bearish pattern arrives afterwards, the price is likely going to decline.

More:
https://fxbazooka.com/analytics/11782

 

[riki143]

USD/JPY: bearish "Harami"
12/20/2016

We’ve got a bullish “Harami”, which has been confirmed, so the price is likely going to test the nearest resistance once again. If we see any bearish patter on the upper “Window”, there’ll be an opportunity to have a bearish correction. As we can see on the Daily chart, here’s a possible “Three Methods”, so the last high could be tested again.

There’s a “Harami”, which led to the current upward movement. However, we’ve got a “Tweezers” at the local high, which has been confirmed. So, the market is likely going to test the 34 Moving Average, which could be a departure point for another bullish movement.

More:
https://fxbazooka.com/analytics/11783

 

[riki143]

AUD/USD reached sell targets 0.7300 and 0.7260
12/20/2016

AUD/USD reached sell targets 0.7300 and 0.7260
Next sell target – 0.7150
AUD/USD continues to fall after the earlier breakout of the support zone lying between support levels 0.7300 and 0.7260 – both of which were set as the sell targets in our previous forecast for this currency pair. The breakout of this support zone accelerated the active minor impulse wave 3, which belongs to the intermediate impulse wave (3) from the start of November.

AUD/USD is expected to continue to fall in the direction of the next sell target at the key support level 0.7150 (which stopped the previous intermediate impulse wave (1) in May, as can be seen below).

More:
https://fxbazooka.com/analytics/11784

 

[riki143]

NZD/USD broke pivotal support level 0.6990
12/20/206

NZD/USD broke pivotal support level 0.6990
Next sell target - 0.6850
NZD/USD continues to fall inside the minor impulse wave 3, which earlier broke through the pivotal support level 0.6990, which has been steadily reversing this currency pair from June, as can be seen below. The breakout of the support level 0.6990 coincided with the breakout of the 61.8% Fibonacci correction level of the previous sharp upward impulse from May.

NZD/USD is expected to fall in the accelerated impulse wave 3 (which belongs to the intermediate impulse wave (3) from the start of November) in the direction of the next sell target at the support level 0.6850.

More:
https://fxbazooka.com/analytics/11785

 

[riki143]

NZD/USD & NZ GDP Q3 2017: a bottom before the new year eve?
12/21/2016

Today at 21:45 GMT will be released the New Zealand GDP for the third quarter and current consensus call for an unchanged number of 0.9%, while by another hand, it can see a very slightly increase to 3.7% from 3.6% in a yearly-basis. Latest data showed a number that was close to meet the expectations, as the NZ’s economy grew 0.9% and overall figures are a clear proof that the RBNZ won’t cut interest rates soon and we’ll see if data continues to be positive at the end of the year.

Our current outlook for NZD/USD at the daily chart is showing a very weak structure which favors to more downside across the board, as the pair is well consolidated below the 200 SMA. Currently, ti’s facing off a strong support around 0.6915, where a breakout lower should expose the 0.6837 level, adding more strength to the overall bias. In the positive scenario, a rebound at the current stage could take the pair to visit the resistance zone of 0.7021 in coming weeks.

More"
https://new.fxbazooka.com/analytics/11786

 

[riki143]

EUR/USD: bulls are going to recoup their losses
12/21/2016

On the EUR/USD daily chart, the bears failed to test the support at 1.0387 (113% Fibonacci level formed from XA wave of the "Crab" pattern). If it is tested, the prices move lower towards 1.023, 1.0115 and 0.985 levels. In contrast, if "bears" fail to consolidate below this important level, it will be a signal for a correction.

On the EUR/USD hourly chart, there is a formation of the expanding wedge pattern. If quotes go beyond the descending trading channel and break the resistance at 1.0475, the rally will continue towards 1.0550 and 1.0610.

Recommendation:BUY 1,0475 SL 1,042 TP1 1,055 TP2 1,061.

More:
https://new.fxbazooka.com/analytics/11787

 

[riki143]

USD/CAD: Loonie fulfilled the target
12/21/2016

On the USD/CAD daily chart, target at 1.3395 has been fulfilled. If the "bulls" manage to update the December peak, the rally towards the upper boundary of the upward trading channel will continue. If prices drop below the support at 1.3306, it will be a signal for the start of the "bearish" counterattack.

On USD/CAD hourly chart, there is a final stage of formation of the 5-0 pattern. If prices return to the 50% Fibo level formed from the CD wave, it will be a signal for opening short positions. Alternatively, a breakout of the resistance located at 1,353 level will allow us to buy the US dollar.

Recommendation:

SELL 1,3335 SL 1,339 TP1 1,32 TP2 1,308,

BUY 1,353 SL 1,3475 TP1 1,37 TP2 1,3835.

More:
https://new.fxbazooka.com/analytics/11788

 

[riki143]

EUR/USD: downtrend may continue
12/21/2016

Technical levels: support – 1.0380; resistance – 1.0415, 1.0450.

Trade recommendations:

1. Sell — 1.0400; SL — 1.0420; TP1 — 1.0300; TP2 – 1.0260.

Reason: bearish Ichimoku Cloud and falling Senkou Span A; a dead cross of falling Tenkan-sen and Kijun-sen; strong resistance of Tenkan-sen.

More:
https://new.fxbazooka.com/analytics/11789

 

[riki143]

GBP/USD: correction to Tenkan-sen
12/21/2016

Technical levels: support – 1.2360; resistance – 1.2390.

Trade recommendations:

1. Sell — 1.2390; SL — 1.2410; TP1 — 1.2320; TP2 — 1.2300.

Reason: bearish character of Ichimoku Cloud, falling Senkou Span A; a dead cross of falling Tenkan-sen and Kijun-sen; the prices are in the correction to Tenkan-sen; canceling the market’s oversold.

More:
https://new.fxbazooka.com/analytics/11790

 

[riki143]

EUR/USD: "V-Bottom" launched bullish correction
12/21/2016

The price is still consolidating under a resistance at 1.0461. Also, there’s a “V-Bottom” pattern, so the market is likely going to test an area between the levels 1.0461 – 1.0506 in the short term. If a pullback from these levels happens, bears will be free to launch another decline.

The last “Flag” pattern has been broken, but a “V-Botton” arrived afterwards. Therefore, bulls are likely going to reach the 89 Moving Average soon. If we see a pullback from this line, there’ll be an opportunity to have a downward movement in the direction of a support at 1.0365 – 1.0340.

More:
https://new.fxbazooka.com/analytics/11791

 

[riki143]

Morning brief for December 21
12/21/2016

EUR/USD edged up to 1.0410 from yesterday’s low of 1.0350. But it happened due to the retreat in the dollar and not Eurozone macroeconomic releases/data flows that could support the euro. So, we see more downside going forward. Politics and terrorism will be the key drivers of the pair in the nearest future. Berlin crash in Germany, horrific attack in Switzerland and assassination in Turkey reflect growing populism and hatred in relation to immigrants. There is also another threat that looming on the horizon – Italy’s fragile banking sector. The Italian government has recently asked Parliament a permission to borrow money to bail-out the banks if the latter ones fail to raise sufficient funding.
USD/JPY hampered at 118 and retreated to 117.42 overnight. However, in the course of the Asian session, the US dollar managed to regain control over the market and rose to 117.60. It is a very hard time for the yen. Yesterday the Bank of Japan left its monetary stance unchanged with its short-term interest rate target at -0.1%. Also, the board decided to extend its asset-purchasing program and didn’t mention the probability of its tapering. The recent weakening of the yen didn’t spark talk of tapering, the BOJ adopted a wait-and-see attitude to check what happened with the yen after the New Year vacations.
AUD/USD managed to rebound from its extremely low levels overnight to 0.7275, but then failed to hold its positions and retreated to 0.7255. Aussie remains to be very vulnerable to commodity prices, subdued growth of Chinese economy and weakening of the renminbi. The Reserve Bank of Australia is in no haste to raise interest rate being unsatisfied with economic releases.
NZD/USD is trading along the 0.6925 level. New Zealand dairy prices slumped for the first time in 2 months, the trade deficit shrank but in the lesser extent than it was anticipated. Today we will receive New Zealand GDP update. The consensus forecast indicates a slight decrease in GDP number, so, Kiwi may extend its losses.
GBP/USD moved higher to 1.2385 yesterday, then it retreated to 1.2370. The pound is still under pressure on the back of the uncertainty over the Brexit process. 2016 was all about whether the Brexit can happen or not, next year everybody will be focused on the type of the new relationships between the EU and the UK.

More:
https://new.fxbazooka.com/analytics/11792

 

[riki143]

GBP/USD: bulls going to test Moving Averages
12/21/2016

Bears faced a support at 1.2309, which led to form a “V-Bottom” pattern, so an upward correction was started. In this case, the market is likely going to test a resistance at 1.2418 – 1.2451 in the short term. Considering the previously formed “Wedge”, there’s an opportunity to have another decline afterwards. So, we should keep an eye on the next support at 1.2309 – 1.2270 as a possible intraday target.

We’ve got a “V-Bottom”, so the price is rising. So, bulls are likely going to achieve the 55 Moving Average in the short term. If a pullback from this line happens, there’ll be a chance to have a bearish price movement towards a support at 1.2309 – 1.2270.

MORE:
https://new.fxbazooka.com/analytics/11793

 

[riki143]

USD: long-term projections from banks
12/21/2016

BNP Paribas => questions USD growth in the upcoming future

BNPP strategists call on traders to be watchful as central banks don’t always act in line with their projections (flashback: the Fed projected triple hike in 2017 at its last meeting). Some hurdles might appear on the greenback’s way to the Mount Olympus. BNPP strategists believe that acceleration of the US dollar’s pace towards the new highs might derail the Fed’s tightening plans.

Treasury concerns. Trump administration can raise concerns about the export implications of a stronger USD. So, the “strong dollar policy” might be questioned, and the administration might modify its expansionary plans which have already been well priced in by the market participants.

Other central bank response to the Fed’s tightening. The ECB may signal a tapering of its asset purchase programme by the end of 2017, especially if the euro goes down too fast. At the present time, the euro came too close to the banks’ EUR/USD parity target. The same can happen with the BoJ’s zero target for 10-year JGP yields. The Bank of Japan might allow its yields move higher if the yen weakens significantly against USD.

TD Bank => bullish outlook

TD analysts are bullish on the USD. They list a few fundamental factors that can continue pushing USD higher.

“Rising real and nominal rates in the US against the rest of the majors”;
Anticipation of the fiscal stimulus in the US;
Divergence in business cycles and varying timeframes for closing output gaps.
The bank is long USD/CAD expecting it to move towards 1.3650. AUD/USD should go lower, according to TD analysts, and reach the 0.7150 mark.

Deutsche Bank => bullish

The bank hints at a border USD strength. The DB strategists believe that Donald Trump’s and Paul Ryan’s “border tax adjustment” proposal should underpin the USD growth. The proposal would tax US imports at the corporate income tax rate and exempt income earned from exports from any taxation.

More:
https://new.fxbazooka.com/analytics/11797

 

[riki143]

Key option levels for Wednesday, December 21th
12/21/2016

EUR/USD

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest + 37 146 ? - 51 577 ?
Closest resistance levels 1.0448; 1.0498; 1.0519; 1.0545/60
Closest support levels 1.0391; 1.0372; 1.0346/31; 1.0313
Trading recommendations
Baseline scenario Short EUR/USD below 1.0391, with target points at 1.0372 and 1.0346
Alternative scenario Moving above 1.0448 can be considered as a signal to Buy the pair, with target at 1.0498 and 1.0519

GBP/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 150 ? + 447 ?
Closest resistance levels 1.2445; 1.2478; 1.2500; 1.2527
Closest support levels 1.2338; 1.2318; 1.2295; 1.2267
Trading recommendations
Baseline scenario Short GBP/USD below 1.2338, with target points at 1.2318 and 1.2295
Alternative scenario Moving above 1.2445 can be considered as a signal to Buy the pair, with target at 1.2478 and 1.2500

USD/JPY

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest - 8 ? + 363 ?
Closest resistance levels 117.70; 118.05; 118.41; 118.76
Closest support levels 116.90; 116.40; 116.04; 115.61
Trading recommendations
Baseline scenario Short USD/JPY below 116.90, with the target points at 116.40 and 116.04
Alternative scenario Moving above 117.70 can be considered as a signal to buy the pair, with target at 118.05 and 118.41

More:
https://new.fxbazooka.com/analytics/11798

 

[riki143]

EUR/USD: bearish "Tweezers"
12/21/2016

We’ve got an “Engulfing”, but a confirmation of this pattern is a quite weak. Anyway, bulls are likely going to test the 13 Moving Average in the short term. If we see a pullback from this line, there’ll be an opportunity to have another decline. As we can see on the Daily chart, here’s a “High Wave”. If this pattern confirms, we’re going to have an upward correction.

The last “Harami” pattern stopped the bearish rally, but we’ve got a “Tweezers” at the local high. Therefore, the market is likely going to decline during the day. If any bullish pattern arrives afterwards, there’ll be an option to have a new local high.

More:
https://new.fxbazooka.com/analytics/11799