Market analysis and trade recommendations by FBS

[riki143]

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

USD/JPY soared as high as 106.5 compared to 105.15 before the US election. There are at least two reasons that could explain the weakening of the yen. The US yields rose significantly and gave a boost to the greenback. The yen has an inverse correlation with US yields because higher yields make Japanese investors buy more US debt. Markets are pricing in the US Fed’s rate hike in December after the initial election shock dissipated.

EUR/USD edged up to 1.0905 on Friday. The euro is still under pressure until it manages to reclaim 1.0975 (100-day MA on 4H timeframe) or 1.1038 (50-day MA). Meanwhile, there is still a room for depreciation. Later today we get German final CPI and monthly wholesale price index. The former one has a significant effect on the final CPI for the whole eurozone, as Germany is one of the front-running countries of this monetary union.

Strange though it may appear GBP/USD surged overnight. Now the pound is pegging its way towards 1.6000 despite the US dollar strengthening. Later today we will get the releases from the University of Michigan which will show us the US consumer sentiment and inflation expectations. Consensus forecast indicates a slight increase in the figures that offer support to USD.

AUD/USD was weak at the beginning of the session, having slid towards 0.7560 on the speculation that Trump is going to impose a tariff on Chinese exports. Now the pair is moving towards the resistance at 0.7620, having partially recovered from the slump.

NZD/USD throughout the session was trading along the range 0.7250-0.7215. Now the quotes are steadily moving towards resistance at 0.7222 (100-day MA). This day shouldn’t bring volatility to the NZD/USD technical chart.

Earlier this morning USD/CAD edged down to 0.1355, having failed to test 1.3520 (the upper boundary of the upward trading channel). Later today we will hear Stephen Poloz, Bank of Canada governor, speaking at the 20th Annual Conference of the Central Bank of Chile. Volatility is sometimes experienced during his speeches as traders scrutinize the governor’s public engagements to receive some clues on the interest rate.



More:
https://fxbazooka.com/analytics/11270

 

[riki143]

Key option levels for Friday, November 11th
11/11/2016

EUR/USD

Main trend Short-term period Medium-term period
Neutral Neutral
Changes in the open interest + 196 635 ? + 229 640 ?
Closest resistance levels 1.0920(?); 1.0948; 1.0976; 1.1017
Closest support levels 1.0883; 1.0864; 1.0834; 1.0789
Trading recommendations
Baseline scenario Long EUR/USD above 1.0920, with target points at 1.0948 and 1.0976
Alternative scenario Moving below 1.0883 can be considered as a signal to Sell the pair, with target at 1.0864 and 1.0834


GBP/USD

Main trend Short-term period Medium-term period
Bullish Bearish
Changes in the open interest + 1 027 ? - 16 ?
Closest resistance levels 1.2588; 1.2608/15; 1.2650; 1.2685
Closest support levels 1.2548; 1.2512; 1.2482; 1.2441
Trading recommendations
Baseline scenario Long GBP/USD above 1.2588, with target points at 1.2608 and 1.2650
Alternative scenario Moving below 1.2548 can be considered as a signal to Sell the pair, with target at 1.2512 and 1.2482


USD/JPY

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 2 562 ? + 3 739 ?
Closest resistance levels 106.99; 107.22; 107.47; 107.63
Closest support levels 106.32; 106.04; 105.85; 105.62
Trading recommendations
Baseline scenario Short USD/JPY below 106.32, with the target points at 106.04 and 105.85
Alternative scenario Moving above 106.99 can be considered as a signal to Buy the pair, with target at 107.22 and 107.47


USD/CAD

Main trend Short-term period Medium-term period
Bullish Bullish
Changes in the open interest + 34 ? + 331 ?
Closest resistance levels 1.3514; 1.3541; 1.3578; 1.3628
Closest support levels 1.3448; 1.3408; 1.3385; 1.3355
Trading recommendations
Baseline scenario Long USD/CAD above 1.3514, with the target points at 1.3541 and 1.3578
Alternative scenario Moving below 1.3448 can be considered as a signal to sell the pair, with target at 1.3408 and 1.3385

More:
https://fxbazooka.com/analytics/11274

 

[riki143]

EUR/USD: on October lows
11/11/2016

Technical levels: support – 1.0860; resistance – 1.0920, 1.0990.

Trade recommendations:

1. Sell — 1.0920; SL — 1.0940; TP1 — 1.0870; TP2 – 1.0840.

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

More:
https://fxbazooka.com/analytics/11275

 

[riki143]

USD/JPY: overbought market
11/11/2016

Technical levels: support – 105.70, 104.00; resistance – 107.00.

Trade recommendations:

1. Buy — 105.70; SL — 105.50; TP1 — 106.50; TP2 — 107.00.

Reason: bullish Ichimoku Cloud and rising Senkou Span A; a new golden cross of Tenkan-sen and Kijun-sen and rising Tenkan-sen; but there is an overbought market.

More;
https://fxbazooka.com/analytics/11276

 

[riki143]

EUR/USD: "Inverted Hammer" stopped bears for a while
11/11/2016

We’ve got a “High Wave” at the local low, but a confirmation of this pattern isn’t enough. So, the market is likely going to test the nearest support line once again. As we can see on the Daily chart, here’s another “High Wave”, but this patterns is unconfirmed as well, so bears are likely going to move on.

There’s a consolidation in progress. Also, we’ve got an “Inverted Hammer” at the local low, which has been confirmed. However, the current upward price movement could be just a correction, so there’s an opportunity to have a new low afterwards.

More:
https://fxbazooka.com/analytics/11277

 

[riki143]

USD/JPY: bulls going to test high again
11/11/2016

The upper “Window” brought a lot of bearish patterns such a “Tweezers”, a “Doji” and a “Harami”. However, all these patterns haven’t been confirmed yet. So, it’s likely to have a downward correction in the short term. As we can see on the Daily chart, there isn’t any reversal pattern so far. If we see any bearish pattern later on, there’ll be time for a correction.

We’ve got a “Tweezers” on the one-hours chart. Moreover, there’s a support by the 13 Moving Average. So, the market is likely going to test the last high once again. At the same time, there’s an opportunity to see an achievement of the 34 Moving Average.

More:
https://fxbazooka.com/analytics/11278

 

[riki143]

What’s new in the commodity markets?
11/11/2016

Most industrial metals have recently rallied on the Donald Trump’s post-election promise to increase spending on the US infrastructure. According to Goldman Sachs analysts, if Trump manages to fulfill its pledge, prices on steel, iron ore, zinc, nickel, diesel and cement will increase. Meanwhile, the immediate “after-speech” effect is already evident. The prices on iron ore and copper got a boost. Copper futures jumped to $2.725 from $2.290 before the announcement of the election results. Iron ore spiked to $69.74 mark since Wednesday.

Gold futures rose 25% on the election night on the growing uncertainties over the slowdown in global economic growth, tempering investors’ expectations for the Fed’s hike in December. Then, gold futures fell to $1250.6 as people’s sentiments over the future of the US economy became positive.

Brent oil futures skidded to $45.34 after the International Energy Agency said that US crude oil inventories increased at 2.4M. Prices may retreat further amid excessive global oil supply growth unless OPEC enacts significant output cuts.

More:
https://fxbazooka.com/analytics/11279

 

[riki143]

USD/JPY: outlook for November 14-18
11/11/2016

Of course, the US presidential election had a great impact on USD/JPY. Despite the fact that Trump’s victory had been seen as an extremely risk-negative outcome, demand for the yen was short-lived. After the initial panic the market has calmed down.

Actually, traders still expect the Federal Reserve to raise rates in December. The premium of US Treasury 10-year yields over Japanese government bonds is at the maximal level in 2.5 years. Higher rates make investors buy the greenback, especially on the back of some weaker domestic data from Japan. The yen was also affected by concerns that Trump will force unfavorable changes to trade between the United States and Japan: earlier he criticized the lack of import taxes on Japanese vehicles entering the US.

US economic data and the Fed members’ comments the next week will also further shape the expectations. Good figures and hawkish comments will make the greenback continue its move north, while worse-than-expected data and dovish statements will give the US currency as reason for correction to the downside versus the Japanese yen. In addition, Japan will release Q3 GDP on Monday. The nation’s economic growth is expected to accelerate from 0.7% to 1% on the annual basis. GDP growth from quarter to quarter is forecasted to remain unchanged at 0.2%.

USD/JPY fell towards 101.00 before breaking above September-October resistance line at 105.80. There’s a positive intersection of 50-day and 100-day MA. Technically above 200-day MA at 106.55 the way will be opened up to 107.50 and 108.25. Corrections to the downside should find support at 105.00, 104.30 and 103.00.

More:
https://fxbazooka.com/analytics/11280

 

[riki143]

EUR/GBP & ECB's Draghi speech post-US elections: Some hints of further Trump - ECB policies relationship?
11/14/2016

Today at 15:00 GMT we’ll have the first speech from ECB’s President Mario Draghi, following the US elections, in which the Republican nominee, Donald Trump won the race to become the next president. Most of the worldwide leaders from G20 countries have been expressing their opinions about US elections’ outcome, included some central bank leaders, so it will be interesting how Draghi will handle this topic during his today’s speech from Rome, Italy. Also, markets will be waiting for some words about QE program as well.

Our technical view for EUR/GBP at H4 chart is still pretty bearish, as the pair was of the most outperformers during the US elections’ week. It managed to consolidate strong losses below the 200 SMA and we can spot a support zone around 0.8603. A breakout below that area should open the doors to test the 0.8524 level. However, if we see a rebound at the current stage, with “positive” words from Draghi, then it can rally towards the 0.8701 level, but we think the upside will be limited by that area in a short-term basis, because of the overall structure.

More:
https://fxbazooka.com/analytics/11288

 

[riki143]

GBP/USD: bulls are taking the situation under control
11/14/2016

On the GBP/USD daily chart, after the target at 1.2375 has been fulfilled, "bulls" slowed down and allowed quotes to fall below the base of the 26th figure. However, the situation remains under the control of buyers. So, the opening of long positions is relevant.

On the GBP/USD hourly chart, an update of the November high can lead to the continuation rally towards 1,274-1,276, 1.28 and 1,289-1,2905. Rebound from the lower boundary of the upward short-term trading channel (1,2465-1,2575) will be a signal for the opening of long positions.

Recommendation: BUY 1,247 SL 1,2415 TP 1,275

More:
https://fxbazooka.com/analytics/11289

 

[riki143]

USD/CAD: bulls change the trend
11/14/2016

On the USD/CAD daily chart, "bullish" trend is on the rise. Breakout of the resistance at 1.357 can lead to the continuation of the rally towards the upper boundary of the upward trading channel and then towards 1.3837. There is a 61.8% Fibonacci retracement level from the last long-term "bearish" wave.

On the USD/CAD hourly chart, "bullish" trend is gaining momentum. If buyers manage to hold quotes above the upper boundary of the last upward trading channel, the way towards 1.37 will be opened.

Recommendations: keep longs formed from the 1,3465 level. BUY 1,357 SL 1,3515 TP1 1,37 TP2 1,3837.

More:
https://fxbazooka.com/analytics/11290

 

[riki143]

Morning brief for November 14, 2016
11/14/2016

USD/JPY soared above 107.4 in brisk morning trade. It got an additional fillip from data out of Japan. Quarterly preliminary GDP went ahead of expectation; inflation is still far away from hitting 2% target (-0.1%).

EUR/USD slid down below 1.0760 (its lowest since January). The US dollar gained momentum after Trump win on the anticipation of the faster domestic inflation and the Fed’s tightening. Additional support was offered by the rise in Treasury yields. Later today keep in focus the ECB President Mario Draghi speech scheduled for 17:00 (MetaTrader time). It is going to be his first public engagement after Trump’s victory. Traders will scrutinize it to know how Draghi sees the US election outcome and what will be with QE program.

NZD/USD dropped below 0.7070 after a massive earthquake that rocked New Zealand on Monday prompting a tsunami warning. The reconstruction works will be needed; they should spur already strong economy and eliminate the need for interest rate cuts. Later today we will receive some economic data from New Zealand (retail sales and core retail sales). Consensus forecasts warn us of some drops in figures. Kiwi should lose some additional points in response to the distorted data.

AUD/USD went higher on Monday showing a sign of recovery after the US election shock. The data from China released earlier today was rather smooth (not bad in general, but there were slight losses in retail sales), that’s what deterred Aussie from the further downfall. At the present moment, the pair is hovering above 0.7540.

In commodities, the gold fell to $1212.5 under pressure of strengthening greenback. Brent crude oil futures tumbled to $44.17 on Friday after OPEC reported that its production rose to its highest level on record and warned of a production surplus next year, despite an agreement to potentially cut output. Oil prices edged up since Friday having reached $44.70 mark. But against a backdrop of rising oil production and wrangles amid OPEC-members ahead of the Vienna meeting, these lame tries to growth don’t bring our spirits up.



US Treasuries soared. What an impressive upsurge!

More:
https://fxbazooka.com/analytics/11291

 

[riki143]

EUR/USD: bearish "Pennant"
11/14/2016

We’ve got a “V-Top” pattern, which led to the bearish rally. However, bears faced a support at 1.0777, so there’s a local correction on the way. Considering a “Flag” pattern, the market is likely going to decline towards a support at 1.0744 – 1.0710. At the same time, there’s an opportunity to have an upward movement in the direction of a resistance at 1.0821 – 1.0850 afterwards.

The price found a support at 1.0777, so the pair is consolidating. Meanwhile, there’s a “Pennant” pattern, so bears are likely going to test a support at 1.0744 – 1.0710 shortly. If a pullback from this levels happens, there’ll be a chance to see another bullish correction.

More:
https://fxbazooka.com/analytics/11292

 

[riki143]

GBP/USD: bears going to test local uptrend
11/14/2016

The price is still consolidating above the broken downtrend. We’ve got a resistance at 1.2677, so there’s a “V-Top” pattern, which led to decline towards a support at 1.2556. Therefore, bears are likely going to move on, so we should keep an eye on a support near the local uptrend as a possible short term target.

Bulls faced a resistance at 1.2677, so we’ve got a “Double Top” pattern, which has been confirmed. In this case, the market is likely going to reach a support at 1.2492 during the day. If a pullback from this level happens, there’ll be an opportunity to have an upward correction.

More:
https://fxbazooka.com/analytics/11293

 

[riki143]

GBP/USD: on Tenkan and Kijun support
11/14/2016

Technical levels: support – 1.2520; resistance – 1.2610, 1.2680.

Trade recommendations:

1. Buy — 1.2520; SL — 1.2500; TP1 — 1.2610; TP2 — 1.2680.

Reason: bullish Ichimoku Cloud; golden cross of Tenkan-sen and Kijun-sen, but all lines of Ichimoku Indicator are horizontal; strong support of Tenkan-sen and Kijun-sen.

More:
https://fxbazooka.com/analytics/11294

 

[riki143]

AUD/USD: bears reached the October lows
11/14/2016

Technical levels: support – 0.7520/30, 0.7490; resistance – 0.7580.

Trade recommendations:

1. Sell — 0.7580; SL — 0.7600; TP1 — 0.7520; TP2 — 0.7490.

Reason: bearish Ichimoku Cloud; dead cross of Tenkan-sen and Kijun-sen; the prices are on the October support; oversold market, waiting for the correction.

More:
https://fxbazooka.com/analytics/11295

 

[riki143]

USD/JPY: bulls are on the attack
11/14/2016

Technical levels: support – 106.90, 106.60; resistance – 107.70, 108.80.

Trade recommendations:

1. Buy — 106.60; SL — 106.40; TP1 — 107.70; TP2 — 108.80.

Reason: bullish Ichimoku Cloud and rising lines of Ichimoku Indicator; a new golden cross of Tenkan-sen and Kijun-sen over the Clouds; but there is an overbought market.

More:
https://fxbazooka.com/analytics/11296

 

[riki143]

Key option levels for Monday, November 14th
11/14/2016

EUR/USD

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest - 307 959 ? - 199 904 ?
Closest resistance levels 1.0882; 1.0907/20; 1.0954; 1.0976
Closest support levels 1.0779; 1.0758; 1.0733; 1.0704
Trading recommendations
Baseline scenario Short EUR/USD below 1.0779, with target points at 1.0758 and 1.0733
Alternative scenario Moving above 1.0882 can be considered as a signal to Buy the pair, with target at 1.0907 and 1.0954


GBP/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 1 094 ? + 646 ?
Closest resistance levels 1.2619; 1.2641; 1.2671; 1.2702
Closest support levels 1.2509; 1.2464; 1.2437; 1.2407
Trading recommendations
Baseline scenario Short GBP/USD below 1.2509, with target points at 1.2464 and 1.2437
Alternative scenario Moving above 1.2619 can be considered as a signal to Buy the pair, with target at 1.2641 and 1.2671


USD/JPY

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest + 183 ? + 453 ?
Closest resistance levels 107.75; 107.98; 108.26; 108.58
Closest support levels 106.46; 106.20/06; 105.71; 105.40
Trading recommendations
Baseline scenario Long USD/JPY above 107.75, with the target points at 107.98 and 108.26
Alternative scenario Moving below 106.46 can be considered as a signal to sell the pair, with target at 106.20 and 105.71


USD/CAD

Main trend Short-term period Medium-term period
Bullish Bullish
Changes in the open interest + 379 ? + 632 ?
Closest resistance levels 1.3569; 1.3604; 1.3635; 1.3676
Closest support levels 1.3539; 1.3514; 1.3481; 1.3457
Trading recommendations
Baseline scenario Long USD/CAD above 1.3569, with the target points at 1.3604 and 1.3635
Alternative scenario Moving below 1.3539 can be considered as a signal to sell the pair, with target at 1.3514 and 1.3481


EUR JPY GBP CAD USD

More:
https://fxbazooka.com/analytics/11298

 

[riki143]

EUR/USD outlook from banks
11/14/2016

Many banks are expecting the euro to fall in the near-term.

Credit Suisse is looking to sell the pair at 1.0980 with a target at 1.0765, or at 1.1025 with a target at 1.0625 (these are limit orders). The bank pays attention to the formation a “triangle” continuation pattern on the monthly timeframe which is close to breakdown. CS believes that the recent US dollar strengthening can be an augural sign of the long-awaited downfall.

Credit Agricole shares the same view over the euro growth perspectives on the back of the Fed’s monetary policy tightening.

Deutsche bank analysts scaled back its “bullish” EUR/USD overview and now feel more confident in their prediction of the EUR/USD breaking it 1.05 – 1.15 range. You would probably ask why? That’s why: US Treasuries are rising; the Fed seems ready to raise interest rate in December; Trump’s fiscal and regulatory easing could add further upside risk to the Fed’s outlook and US economic growth, while the recent rise in European real rates increases the odds of a more dovish ECB. DB’s forecast for the euro remains at 1.05 for the end of 2016.

While CS, CA, DB believe in further USD appreciation, Nordea remains skeptical in Trump’s capabilities to make the greenback great again. Bank’s analysts believe that there is no justification that Trump will be another Republican Reagan who will manage to produce another US economic miracle by introducing supply side policies and replacing “dovish” Yellen with Volcker-like “hawkish” Taylor. Reagan was pro-free trade and pro-immigration president, while Trump is more anti-, anti- man. So, the fiscal stimulus achieved from his domestic policies will be offset by his foreign policy.

Nordea is also skeptical of the immediate effect of “Trumpian” expansionary fiscal measures on the US growth. At the present time, the USA have larger twin deficit (it needs foreign funding more than ever) and larger public debt than they used to have in times of Reagan’s presidency. The recent rise in real yields can be delusional. During the Reagan years, these rises were justified, as US economy did experience the burst in productivity. At the present time, sluggish investment flows offer no hope for significant improvements in the US productivity in the upcoming years.

While in the near-term you may rely on the forecasts of the major banks of the USD strengthening, as there is a strong rationale behind their bets. In the longer term, it would be wise to give ear to the Nordea’s prudent conclusions.

More:
https://fxbazooka.com/analytics/11299

 

[riki143]

EUR/USD: unstoppable bears
11/14/2016

The market has been falling down since a pullback from the upper “Window” arrived. Also, we’ve got a “Three Methods” pattern, so bears are likely going to move on. If we see any reversal pattern on the nearest support level, there’ll be an opportunity to have an upward correction. As we can see on the Daily chart, here isn’t any bullish pattern so far. In this case, it’s likely to see the price even lower.

We’ve got a new “Window” and a “Harami” pattern, which has been confirmed. So, the pair is likely going to decline towards the closest support, which could be a departure point for an intraday correction.

More:
https://fxbazooka.com/analytics/11300