Market analysis and trade recommendations by FBS

[riki143]

AUD/USD: counterparts concluded a truce
11/10/2016

On the AUD/USD daily chart, prices once again rebounded from the lower boundary of the upward trading channel and come closer to the resistance at 0.769. If it is tested successfully, the rally will continue towards 0.776 or higher. In contrast, the rollback from this resistance can lead to the attack of diagonal support followed by activation of the "Shark" pattern.

For AUD/USD hourly chart, «bulls» will continue to keep the situation under control as long as quotes are located above 0.7571. If this support is tested, the expanding wedge pattern will be activated.

More:
https://fxbazooka.com/analytics/11244

 

[riki143]

Morning brief for November 10, 2016
11/10/2016

USD/JPY made a big swing yesterday. First, it slumped to 101.16, then soared towards 106.00 as the probability of a December rate hike had been revised. A Trump presidency is promised to be expansionary with fiscal stimulus and tax cuts, hence, the Fed will be forced to raise the rate to offset its implication and rein in the inflation. At the present moment, USD/JPY is consolidating along 105.5 level. There shouldn’t be any triggers today for this currency pair.

Having initially stretched to 1.1300 on the panic of Trump’s win EUR/USD slumped to 0.9060 overnight, as markets digested the surprising outcome of the presidential race. In the course of the Asian trading session, the euro edges up a little and now it tries to consolidate along 1.0930. Keep focus on the unemployment claims which if come ahead of expectation can boost the euro.

NZD/USD fell yesterday as Reserve Bank of New Zealand announced a rate cut. Then, it recovered, after RBNZ senior members convinced the general public that the central bank is done cutting rate for an extended period of time. Later today we will get business NZ manufacturing index and monthly FPI which shouldn’t bring significant moves to the chart.

AUD/USD surged a bit, supported by increases in prices of resources exported by the nation. Yesterday Aussie fell below 0.7575 level on the speculation of Trump’s intention to introduce tariff quote for Chinese exports. China is the major trading partner of Australia. So, any events that its economic growth, impact the Australian dollar.

GBP/USD was trading in the lesser margin yesterday (if compare it with other currencies). Now, the pair is trading along 1.2410. We got the UK trade balance data in the morning which indicated the widening trade deficit at 12.7 bln denominated in UK pounds. This day shouldn’t bring much volatility for GBP/USD chart.

Crude oil slid down to $45.12 after the Energy Information Administration report indicated 2,4M increase in the US oil inventories from the last week. Now oil prices recovered from the earlier downfall and hovering around the $45.60 mark.

Gold jumped 4.8% on Wednesday as Trump’s win boosted demand for the safest assets. Now prices are trying to $1286 level after overnight swings.

More:
https://fxbazooka.com/analytics/11245

 

[riki143]

EUR/USD: bulls going to reach Moving Averages
11/10/2016

We’ve got a “V-Top” pattern, so the market plunged. Because of the last “V-Bottom” pattern, the market is likely going to reach a resistance at 1.0991. If a pullback from this level happens, there’ll be an opportunity to have another decline.

The price was declining yesterday. Finally, bears faced a support at 1.0882, which led to form a “V-Bottom” pattern. In this case, the pair is likely going to achieve a resistance at 1.0988 – 1.1008 during the day. However, there’s an option to see a decline towards a support at 1.0850 later on.

More:
https://fxbazooka.com/analytics/11246

 

[riki143]

GBP/USD: consolidation going to move on
11/10/2016

We’ve got a consolidation between the nearest resistance at 1.2621 and the 55 Moving Average. Therefore, the market is likely going to reach a resistance at 1.2556 – 1.2621 in the short term. If a pullback from this area happens, bears will probably try to deliver a price movement towards a support at 1.2330 – 1.2226.

The price has been moving in a flat range. The 89 Moving Average is acting as a support. So, the pair is likely going to reach a resistance at 1.2493 shortly. If we see a pullback from this level, there’ll be an opportunity to have a decline in the direction of the next support at 1.2371.

More:
https://fxbazooka.com/analytics/11247

 

[riki143]

EUR/USD: euro is losing positions
11/10/2016

Technical levels: support – 1.0895; resistance – 1.0990, 1.1025.

Trade recommendations:

1. Buy — 1.0895; SL — 1.0875; TP1 — 1.0990; TP2 – 1.1025.

2. Sell — 1.0990; SL — 1.1010; TP1 — 1.0895; TP2 – 1.0850.

Reason: bullish character of Ichimoku Cloud, but all lines of Ichimoku Indicator are horizontal; the prices are in the negative zone.

More:
https://fxbazooka.com/analytics/11248

 

[riki143]

GBP/USD: in consolidation over Clouds
11/10/2016

Technical levels: support – 1.2360, 1.2400; resistance – 1.2450.

Trade recommendations:

1. Buy — 1.2400; SL — 1.2380; TP1 — 1.2490; TP2 — 1.2540.

Reason: bullish Ichimoku Cloud; all lines are horizontal; irregular dead cross of Tenkan-sen and Kijun-sen; strong support of the Cloud.

More:
https://fxbazooka.com/analytics/11249

 

[riki143]

AUD/USD: on the Cloud support
11/10/2016

Technical levels: support – 0.7665; resistance – 0.7730.

Trade recommendations:

1. Buy — 0.7660; SL — 0.7640; TP1 — 0.7730; TP2 — 0.7780.

Reason: bullish Ichimoku Cloud, rising Senkou Span B; cancelled dead cross of Tenkan-sen and Kijun-sen; the prices are on the strong support formed by Cloud.

More:
https://fxbazooka.com/analytics/11250

 

[riki143]

USD/JPY: forming the new local highs
11/10/2016

Technical levels: support – 104.90, 104.60; resistance – 105. 90.

Trade recommendations:

1. Buy — 104.60; SL — 104.40; TP1 — 105.30; TP2 — 105.90.

Reason: narrow Ichimoku Cloud and horizontal Senkou Span A and B; cancelled cross of Tenkan-sen and Kijun-sen and horizontal Tenkan-sen and Kihun-sen.

More:
https://fxbazooka.com/analytics/11251

 

[riki143]

Is Trump good for business?
11/10/2016

Despite the negative forecasts that the US stocks will slump if Donald Trump is elected president, S&P 500 jumped by more than 1% on Wednesday.

Why were the stocks cheered up so much by the billionaire’s rise to political power? Here are several important things:

- In his victory speech, Trump said that it’s time for the Americans “to come together as one united people”. Market players now expect that Trump’s actual action will be more moderate that the remarks he made while being a candidate.

- People realized that it’s not the end of the world as we know it. US economic fundamentals haven’t changed.

- The pre-election uncertainty is now over. Trump may deliver more surprises, but a lot of doubts has been removed as the market has a general understanding of what Trump plans to do. The key action will involve the economy, taxes, border security and immigration, law and order, Obamacare and regulations.

- Being a businessman himself Trump is expected to conduct business-friendly policies. The new president is expected to boost fiscal spending and encourage the US economic growth to accelerate. As Republicans control of both houses of Congress, it will be ease for them to pass the new legislation. According to the analysts, this could be a bullish driver for the American stocks next year.

- Health-care went up as investors relaxed after having prepared to for stronger regulatory scrutiny promised by Hillary Clinton. Companies like Caterpillar Inc. gained on Trump’s promise to increase infrastructure spending. Financials surged because investors project higher rates to increase their profits. This increase managed to offset the decline in defensive sectors such as utilities and consumer staples. The uncertainty of Trump’s trade policies affects global companies like Apple Inc., Coca-Cola Co., and Procter & Gamble Co.

Trump will become president after a ceremony on January 20, 2017. Still, even before that there will be a lot of talk about his plans and this talk will have a sizeable impact on the US and global stock markets.

More:
https://fxbazooka.com/analytics/11254

 

[riki143]

Forecasts for USD/JPY from banks
11/10/2016

Credit Agricole suggests buying USD/JPY from 103.09 with a stop at 99 and target at 110. Here is the rationale:

The US unlike the UK will be dealing with its trading partners from a position of strength;
The US economy can benefit from Trump’s presidency if he manages to realize his great spending plans.
With Republican Congress, new policies should be implemented without significant hindrances (oppositions). Many believe that there won’t be any Washington’s policy gridlocks that used to occur under Obama presidency, so, Trump will have all chances to fulfill his election pledges.
The recent cleanout of short JPY positions as a consequence of the US election outcome opens the doors for another increase in JPY shorts as investors focus on the improving prospects for global growth and inflation even on the back of the Fed’s rate hike.
Significant risk-aversion shouldn’t re-emerge in the near-term, so, the yen as a safe-have asset shouldn’t appreciate again.
Societe Generale doesn’t entirely share this point of view, but also believes that unless there’s a big increase in risk aversion, USD is likely to move higher against JPY.

Morgan Stanley suggests buying USD on its dips against low-yielding currencies. Mr. Trump supported by a Republican House and Senate will likely manage to put his expansionary plans into action (fiscal stimulus should push the nominal US yield curve intro steeper territory and offer investors higher real rate in the longer run. The Fed will have to introduce tightening measures to curb inflation rate. The change of the US monetary/fiscal policy mix will make the yield curve more attractive for inflows, offering significant support for USD.

More:
https://fxbazooka.com/analytics/11256

 

[riki143]

EUR/USD falling inside minor impulse wave
11/10/2016

EUR/USD falling inside minor impulse wave
Next sell target - 1.0850
EUR/USD continues to decline inside the minor impulse wave (iii) – which is a part of wave 3 of the intermediate downward impulse wave (3) from the start of May. The price earlier reversed down sharply from the resistance are lying between the pivotal resistance level 1.1150 (former strong support level from September), upper daily Bollinger Band as well as resistance trendline of the daily down channel from May and the 61.8% Fibonacci correction of the earlier impulse 3.

EUR/USD is likely to fall further to the next sell target at the support level 1.0850 (which stopped the previous sharp impulse at the end of October).

More:
https://fxbazooka.com/analytics/11257

 

[riki143]

GBP/JPY broke resistance zone
11/10/2016

GBP/JPY broke resistance zone
Next buy target - 134.00
GBP/JPY continues to rise inside the (c)-wave of the minor ABC correction 2 from the start of October. The price earlier broke through the resistance zone lying at the intersection of the resistance level 130.00 (former major support level which stopped the previous impulse waves ?, (1) and (iii), as can be seen below) and the 38.2% Fibonacci correction of the previous sharp downward impulse 1 from the start of September.

GBP/JPY is likely to rise in the accelerated (c)-wave toward the next buy target at the resistance level 134.00 (forecast price for the completion of the active wave 2, standing close to the 61.8% Fibonacci correction level of the previous impulse 1).

More:
https://fxbazooka.com/analytics/11258

 

[riki143]

Trump win might bring great changes to the European continent
11/10/2016

It seems that Trump win marks the beginning of the “far-right” curve. Surprising Republican victory showed the readiness of electorate to significant political shifts.

The next opportunity for people to express their disappointment with conventional politics is Italian referendum on political reform scheduled for December 4. The current polls indicate the majority of “no” votes. If the referendum results come in line with forecasts, Mateo Renzi will have to step down as Italian Prime Minister, opening up the possibility of new elections with the win of the radical Five Star Movement.

Next month, Austrians will have to choose their national leader. The polls indicate that Norbert Hofer, a front-runner of the right-wing populist Freedom party, has all chances to become the first far-right head of state in western Europe since the WWII.

Next year should provide even more opportunities for the popular pushback as there will be presidential and parliamentary elections in France, Germany, Netherlands. Trump’s breakthrough boosted the confidence of candidates running on nationalistic, anti-foreigner, anti-elite and anti-globalization platforms.

In Germany, Frauke Petry, the leader of the far-right populist Alternative für Deutschland, said that Trump’s victory was “encouraging” as it heralds the beginning of political sea-change in Europe.

The Dutch far-right leader Geert Wilders, Islamophobic front-runner in the next parliamentary elections congratulated Trump in Twitter and said his win is inspirational for all right-wing party leaders.

In Hungary, nationalist leader Viktor Orbán said Trump’s win proved that “democracy is still alive”.

Marine Le Pen, the leader of France’s far-right Front National, was triumphant on Wednesday as she heard about Trump win, saying his victory showed that it’s high time “political and media elite” put in its place. Her own win in the upcoming election is probable. National Front party with its anti-immigration stance is now a key electoral force; its support is growing which is marked by the outcome of French regional election in 2015.

From all has been said, we may conclude that there might be great changes not only in the US but also in the Eurozone countries. Every victory of the nationalist leader/ far-right party with their anti-immigrant rhetoric and protectionist approach to trade relationships can send some shockwaves across the trading desks.

More:
https://fxbazooka.com/analytics/11259

 

[riki143]

Key option levels for Thursday, November 10th
11/10/2016

EUR/USD

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest + 561 747 ? - 253 478 ?
Closest resistance levels 1.0957; 1.0979; 1.1003; 1.1039
Closest support levels 1.0876; 1.0857; 1.0834; 1.0807
Trading recommendations
Baseline scenario Long EUR/USD above 1.0957, with target points at 1.0979 and 1.1003
Alternative scenario Moving below 1.0876 can be considered as a signal to Sell the pair, with target at 1.0857 and 1.0834


GBP/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 183 ? + 302 ?
Closest resistance levels 1.2456; 1.2472; 1.2503; 1.2530
Closest support levels 1.2369; 1.2331; 1.2308; 1.2281
Trading recommendations
Baseline scenario Short GBP/USD below 1.2369, with target points at 1.2331 and 1.2308
Alternative scenario Moving above 1.2456 can be considered as a signal to Buy the pair, with target at 1.2472 and 1.2503


USD/JPY

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 1 128 ? + 1 164 ?
Closest resistance levels 106.51; 106.69; 106.89; 107.15
Closest support levels 105.53; 105.11; 104.43; 104.11
Trading recommendations
Baseline scenario Short USD/JPY below 105.53, with the target points at 105.11 and 104.43
Alternative scenario Moving above 106.51 can be considered as a signal to Buy the pair, with target at 106.69 and 106.89


USD/CAD

Main trend Short-term period Medium-term period
Neutral Bullish
Changes in the open interest + 211 ? + 201 ?
Closest resistance levels 1.3417; 1.3443; 1.3466; 1.3501
Closest support levels 1.3385(90?); 1.3362; 1.3344; 1.3317
Trading recommendations
Baseline scenario Long USD/CAD above 1.3417, with the target points at 1.3443 and 1.3466
Alternative scenario Moving below 1.3385 can be considered as a signal to sell the pair, with target at 1.3362 and 1.3344

More:
https://fxbazooka.com/analytics/11260

 

[riki143]

EUR/USD: Elliott wave analysis
11/10/2016

It seems like we’re going to have a zigzag in wave E of (X). In this case, wave of E is likely going to start soon. The main intraday target is 3/8 Murrey Math Level (P=200).

As we can see on the M15 chart, the current bearish impulse in wave [a] is going to end soon, cause wave (v) was finished. Therefore, bulls are likely going to reach 4/8 MM Level during the day.

More:
https://fxbazooka.com/analytics/11262

 

[riki143]

USD/JPY & Michigan Consumer Sentiment (Nov): Doing a top around 107.00 soon?
11/11/2016

Today at 15:00 GMT will be published the Michigan Consumer Sentiment for November, which is expected to have a slow increase from 87.2 to 87.5. While this indicator is mostly marked by some economic calendar as a mid-impact event, it can produce some volatility during the release, as it gauges the level of optimism of the consumers in the United States. Bear in mind that Consumer Sentiment had been in bearish trend.

Our technical view for USD/JPY at H4 chart is calling for an exhausted bullish trend across the board, following the rally it had during the week, thanks to the United States presidential elections. If consumer’s data comes below the expectations, the pair can attempt a decline towards the 105.36 level, while in the another scenario, it can find a top around 107.55 level.

More:
https://fxbazooka.com/analytics/11263

 

[riki143]

China’s mortal fear after the US election
11/11/2016

The yuan slumped to a 6-year low on the growing concerns over spoilt relationships between China and more protectionist US under Trump’s presidency.
Throughout the presidential race Trump threatened to impose tariffs at about 45% on Chinese exports saying that People’s Republic of China is a well-known master of currency manipulation. For many years, China kept its exchange rate at low levels in order to make its exports cheaper and more attractive for foreign consumers (US dollar is free-floating currency, while the exchange rate of yuan is fixed). According to the newly elected Republican president, China should pay the heavy price for its perennial manipulations with renminbi, its national currency.
The recent estimates of Commonwealth Bank of Australia show that the US tariffs if imposed would cut China’s shipments to the States by 25% just in a year. It seems that Trump will likely fulfill its pledge once he is inaugurated president. Chinese President Xi Jinping expressed his hope to expand bilateral cooperation with Trump and negotiate mutually acceptable terms of trade. If he fails to do so, China’s economic growth will shrink significantly, as the US is one of its major trading partners (look at the chart below).

[IG]https://fxbazooka.com/img/articles/11264/Безымянный(11).png[/IMG]

More:
https://fxbazooka.com/analytics/11264

 

[riki143]

EUR/USD: "Double Bottom" highlights possibility to have correction
11/11/2016

Bears faced a support at 1.0882, so we’ve got a consolidation in progress. Also, there’s a “Double Bottom” pattern. So, the market is likely going to rise towards the nearest resistance at 1.0945 – 1.0991. If a pullback from this area happens, there’ll be an opportunity to see another decline.

We’ve got a support at 1.0850. Considering the developing “Double Bottom” pattern, the current consolidation is likely going to move on. So, the nearest bearish target is a support at 1.0906 – 1.0875. However, if a pullback from these levels arrives, bulls will probably try to deliver an upward movement in the direction of a resistance at 1.0958 – 1.0988.

More:
https://fxbazooka.com/analytics/11265

 

[riki143]

GBP/USD: bulls going to climb higher
11//11/2016

The price has been moving in a flat range since the downtrend was broken. Therefore, the market is likely going to reach a resistance at 1.2677 in the short term. If bulls be stopped here, there’ll be an opportunity to have a bearish movement towards a support at 1.2476 -1.2330.

There’s a “Flag”, so the price is likely going to continue moving in a range of this pattern. The main intraday target is a support at 1.2493. If we have a pullback from this level, bulls will probably try to achieve the nearest resistance at 1.2621 – 1.2677.

More:
https://fxbazooka.com/analytics/11266

 

[riki143]

EUR/USD: wave started
11/11/2016

The market has plunged because of a zigzag in wave D. So, we’ve got a bearish impulse in wave [a]. In this case, there’s an opportunity to have an upward correction soon. The main intraday target is 3/8 Murrey Math Level (P=200).

As we can see on the M15 chart, there’s an ended impulse in wave [a], so bulls are likely going to deliver wave (a) of shortly. If a pullback from 4/8 MM Level happens afterwards, there’ll be time for wave (b).

More:
https://fxbazooka.com/analytics/11269