Market analysis and trade recommendations by FBS

[riki143]

AUD/CAD reached sell target 1.0000
11/18/2016

AUD/CAD reached sell target 1.0000
Next sell target – 0.9900
AUD/CAD continues to fall after the earlier breakout of the support zone lying between the parity (which was set as the sell target in our earlier forecast for this currency pair) and 61.8% Fibonacci correction of the previous upward impulse from August. The breakout of this support zone follows the earlier breakout of the support trendline of the daily up channel from June.

AUD/CAD is expected to fall further in the accelerated minor corrective wave 2 toward the next sell target at the support level 0.9900. Sell stop-loss can be placed above the recently broken price level 1.0000.

More:
https://fxbazooka.com/analytics/11374

 

[riki143]

NZD/JPY reached buy target 77.70
11/18/2016

NZD/JPY reached buy target 77.70
Next buy target - 79.00
NZD/JPY continues to rise inside the minor impulse wave 5, which belongs to the intermediate (C)-wave of the primary ABC correction ? from the end of June. The active wave 5 started earlier this month – when the pair reversed up with the daily Japanese candlesticks reversal pattern Bullish Engulfing from the support area lying between the support level 76.30 and the 38.2% Fibonacci correction of impulse 3.

Having recently reached the resistance level 77.70 (previous buy target) - NZD/JPY is expected to rise further to the next buy target at 79.00 (target price for the completion of the active ABC correction ?).

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https://fxbazooka.com/analytics/11375

 

[riki143]

US dollar: outlook for Nov. 21-25
11/18/2016

US dollar showed another week of strong gains versus its counterparts. US dollar index opened with a gap up above 99.00 and reached 101.40, the highest level since 2003. The currency is testing the upper edge of the broadening formation seen on the monthly and weekly charts.

The probability of the Federal Reserve’s December rate hike now exceeds 90%. Spiking US Treasury yields are the main driver of the market’s expectations. The Fed’s Chair Janet Yellen added to the demand for American currency signaling that the US central bank is close to raising interest rates. So far traders are thinking about a month-long horizon and favor the greenback. Data released in the US so far were mostly positive: retail sales showed the strongest performance in 2 years, consumer prices recorded the biggest increase in 6 months and the number of Americans filing for unemployment benefits fell to a 43-year low.

Next week is unlikely to change the market’s perception much. The US will release existing home sales on Monday and durable goods orders on Wednesday. The market players will also watch the Fed’s November meeting minutes on Wednesday, although much has changed since the central bank discussed monetary policy at the beginning of the month. All in all, the market has pretty much found out what it wanted from Yellen’s comments. Liquidity will be lower on Thursday because the US will celebrate Thanksgiving Day. To sum up, we expect the greenback to remain supported, but warn you that as December rate hike is now almost fully priced it, the US currency will have less fuel to continue such rapid rally.

Support is at 100.60, 100.00 and 99.00. Resistance is at 101.50, 102.00 and at the following big figures.

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https://fxbazooka.com/analytics/11376

 

[riki143]

EUR/USD: outlook for Nov. 21-25
11/18/2016

It was a week of freefall for the euro. EUR/USD opened with a gap down at 1.0830 and slumped to 1.0600. It’s the longest ever losing streak for the single currency.

The euro is losing to the US dollar as the Federal Reserve is now widely expected to raise interest rates in December. The ECB president, Mario Draghi, on the contrary, hinted that the Eurozone stimulus will last. Annual inflation in the euro area accelerated from 0.4% in September to 0.5% in October, but Draghi underlined that it remains far below the ECB’s objective. The region’s GDP growth was 0.3% in the 3 months from July through September, the same level of growth as was recorded in the second quarter of the year. German economic growth slowed down a bit. Another negative factor for the euro is rising political risk given many votes, which are scheduled in Europe.

Next week we will once again hear from Mario Draghi as he will testify about the European Central Bank's Annual Report before the European Parliament on Monday. The euro area’s flash manufacturing and services PMIs for November will be released on Wednesday, while German Ifo business climate will be published on Thursday.

Let’s have a look at the weekly chart. EUR/USD has reached 2015-2016 support line in the 1.0600 area. The euro has approached multiyear minimums. Next support is at 1.0500 and 1.0460. Resistance is at the previous support levels of 1.0685, 1.0740, 1.0800 and 1.0850. Traders will likely keep selling the euro on its attempts to recover.

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https://fxbazooka.com/analytics/11377

 

[riki143]

USD/JPY: outlook for Nov. 21-25
11/18/2016

The accelerated march of USD/JPY to the north continued. The pair rose above 110.00 boosted by the stronger dollar and advance in Japanese stocks, which showed good gains after Donald Trump’s victory in the US presidential election. The Topix index rose to the highest level since April.

Japan’s Q3 GDP figures were surprisingly strong as it added 0.5% vs. 0.2% q/q. The nation’s economy expanded for the third straight quarter as exports recovered. However, with Donald Trump as the US next president, this export-led recovery looks fragile. The Bank of Japan’s Governor Kuroda warned that “risks to both economic activity and prices are to the downside" and said that the BOJ is ready to ease policy again if the economy loses the momentum to hit his price goal. The fact that Japanese central bank is buying more of shorter-dated bonds is also having a negative impact on the yen.

Next week Japan will release trade balance on Monday, flash manufacturing PMI on Thursday and inflation figures on Friday.

USD/JPY is approaching 50% Fibo retracement of the decline since November 2015 at 111.35. The next resistance is at 112.00. At the same time, if the pair fails to close above 55-week MA at 110.00, it may correct down to 108.50 (200-week MA) because of its overbought condition. The next support is at 107.50.

More:
https://fxbazooka.com/analytics/11378

 

[riki143]

Bulls lost control over the market
11/21/2016

On the daily chart of gold, a breakout of the lower boundary of the medium-term upward channel has become a signal of the change of the trend. At the present moment, "bears" remain control over the market. A test of the support at $1210 (50% Fibonacci retracement level formed from the last mid-term "bullish" wave) can send quotes towards $1150 (target 127.2% in the "Perfect butterfly" pattern).

On the hourly chart of gold, correction towards the lower boundary of the last upward trading channel and target 88.6% in the "Bat" inverted pattern can be used for opening short positions.

Recommendations: SELL $1230 SL $1255 TP $1150.

More:
https://fxbazooka.com/analytics/11379

 

[riki143]

USD/JPY: bulls accelerate their pace
11/21/2016

On the USD/JPY daily chart, after the target on the previously formed longs was fulfilled, quotes continued their rally towards 112.5. There is 161.8% target in the "Crab" inverted pattern. At the present moment, "bulls" remain their control over the market. In such circumstances, it's better to use the strategy of buying on the pullbacks.

On the USD/JPY hourly chart, the "bulls" accelerate their pace. A breakout of the lower boundary of the short-term rising channel can send quotes towards108.9. There is 88.6% target in the "Shark" pattern. If it is fulfilled, you can open long positions.

Recommendation: BUY 108,9 SL 108,35 TP 112,5.

More:
https://fxbazooka.com/analytics/11380

 

[riki143]

Morning brief for November 21, 2016
11/21/2016

The US dollar extended its run of good luck against major currencies on speculation Trump economic policies might lead to faster monetary tightening. US Treasuries continue to rise. EUR/USD traded higher to 1.0610. Now the pair slid back from its morning high to 1.0580. Keep in focus the ECB president Mario Draghi’s testimony before the European Parliament scheduled for 18:00 (Metatrader time). Traders will be watching for some comments from the president on the ECB’s bond-buying plans (will it be extended or not?).

USD/JPY traded below 111.2, its highest level since May. Aussie hit a 4.5-month low of 0.7315 hardly showing any sign of recovery, Upbeat Japan’s trade balance data passed unheeded.

GBP/USD is trading around 1.2340 level, having started off weakening in the early hours.

NZD/USD edged up to 0.7023 at the beginning of the Asian session, then it retreated under pressure from the strengthening dollar.

USD/CAD moved down to circa 1.3463. The Canadian dollar ceased to follow oil prices as their recent rally didn’t put new heart into Canada’s national currency. Oil prices rose on growing expectations that OPEC will find a way to cut production. Russian President sees a high probability of oil production cut, as numerous contradictions within OPEC started to fade away. According to the latest news, most OPEC members prepared to offer Iran flexibility on tits production volumes.

If not Draghi’s speech, this day would be lacking market drivers, as there are no significant statistical releases, important events scheduled for today.

Some good news that can support the euro in the long run

Former Prime Minister Francois Fillon in the center-right primary leads the race to take on Marine Le Pen’s anti-European platform. Fillon’s candidacy is more appealing to voters who want neither a Sarkozy comeback nor Juppe’s softer approach on the economy and social issues.

Angela Merkel will seek a fourth term as German chancellor. Despite the disapproval of her immigration policy, the majority of the German population is ready to vote for her party in the upcoming parliamentary election, according to the recent opinion polls.

The win of Fillon and Merkel is associated with stability in the euro zone. The rise to power of far-right parties can lead to significant changes in Europe.

More:
https://fxbazooka.com/analytics/11381

 

[riki143]

Key option levels for Monday, November 21th
11/21/2016

EUR/USD

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest + 96 364 ? + 112 944 ?
Closest resistance levels 1.0630; 1.0662; 1.0691; 1.0709
Closest support levels 1.0582; 1.0560; 1.0527; 1.0480
Trading recommendations
Baseline scenario Short EUR/USD below 1.0582, with target points at 1.0560 and 1.0527
Alternative scenario Moving above 1.0630 can be considered as a signal to Buy the pair, with target at 1.0662 and 1.0691


GBP/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 404 ? + 1 223 ?
Closest resistance levels 1.2391; 1.2425; 1.2440/58; 1.2503
Closest support levels 1.2332; 1.2306; 1.2267; 1.2212
Trading recommendations
Baseline scenario Short GBP/USD below 1.2332, with target points at 1.2306 and 1.2267
Alternative scenario Moving above 1.2391 can be considered as a signal to Buy the pair, with target at 1.2425 and 1.2440/58


USD/JPY

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest - 777 ? + 448 ?
Closest resistance levels 111.14; 111.48; 111.71; 111.98
Closest support levels 110.51; 110.30; 110.00; 109.83
Trading recommendations
Baseline scenario Short (?) USD/JPY below 110.51, with the target points at 110.30 and 110.00
Alternative scenario Moving above 111.14 can be considered as a signal to buy the pair, with target at 111.48 and 111.71


USD/CAD

Main trend Short-term period Medium-term period
Neutral Bullish
Changes in the open interest + 333 ? + 234 ?
Closest resistance levels 1.3521; 1.3554; 1.3587; 1.3633
Closest support levels 1.3448; 1.3421; 1.3387; 1.3340
Trading recommendations
Baseline scenario Short USD/CAD below 1.3448, with the target points at 1.3421 and 1.3387
Alternative scenario Moving above 1.3521 can be considered as a signal to Buy the pair, with target at 1.3554 and 1.3587


More:
https://fxbazooka.com/analytics/11382

 

[riki143]

EUR/USD: bears going to test the next support
11/21/2016

Bears faced a support at 1.0600, so the price is consolidating. Meanwhile, the market is likely going to continue falling down towards the next support at 1.0550 – 1.0522. If a pullback from this area happens, there’ll be an opportunity to have a bullish movement in the direction of the nearest resistance at 1.0636 – 1.0673.

We’ve got a consolidation, which is taking place between a support at 1.0561 and a resistance at 1.0636. If we see any bearish pattern later on, the pair is likely going to reach a support at 1.0550 – 1.0522. However, if a pullback from these levels arrives, bulls will probably try to deliver an upward correction.

More:
https://fxbazooka.com/analytics/11383

 

[riki143]

GBP/USD: broken "Triangle"
111/21/2016

The price faced a support at 1.2330, so we’ve got a local correction. At the same time, bears are likely going to move on, so we should keep an eye on the next support at 1.2226 as a possible intraday target.

The last “Triangle” has been broken, so the pair faced a support at 1.2330. Nevertheless, the market is likely going to decline towards the next support at 1.2253 during the day. If a pullback from this level be on the table, bulls will probably try to achieve a resistance at 1.2399 – 1.2429.

More:
https://fxbazooka.com/analytics/11385

 

[riki143]

Forecasts from banks for main currency pairs
11/21/2016

Banks rush to your aid!

If you trust the opinion of high-profile currency specialists, this article will be useful for you. There are some trading recommendations for the upcoming week.

Goldman Sachs

The GS’s strategists admit that the greenback moved a lot, but in their view, the US currency has a room for even further appreciation.

Justification: the possibility of fiscal stimulus raises upward pressure on inflation; Trump wants to make some reshuffling in the Fed to make it more hawkish. The market is pricing 64 basis points in the multiple tightening in 2017. Moreover, through end-2019 the market is pricing 130 basis points.

The GS’s 12-month forecasts for EUR/USD – 1.00 and for USD/JPY – 115.

Deutsche Bank

A combination of economic and political risks can contribute to a further USD strengthening against the euro. In the short-term, there are some factors that can hold the Treasury yields at their present levels or even nudge them higher. Justification:

1. Brexit and Trump win contributed to the rise of global political risk. The next risk trigger may appear if Marin Le Pen wins the French presidential elections.

2. There are worries over the global negative output gap. The world still has a disinflationary bias, despite the worldwide spread of the protectionist sentiments.

DB maintains short EUR/USD from 1.0750.

Danske

Danske expects USD/JPY to rise toward 115.50 due to the recent increase in the US Treasuries. There is a strong correlation between the weakening yen and rising 10-year bond yields, as investors tend to move their assets to the US from Japan.

Morgan Stanley is heedful to advise this week. It suggests its outlook for all major currencies.

USD

MS maintains its USD bullish view. The Fed may lay aside its easing measures with upcoming fiscal stimulus from the US government. In addition, the rising US Treasuries support the greenback.

EUR

EUR/USD is mainly driven by the US dollar. The pair can move lower to 1.04 by the end of the year. The euro can remain strong on the crosses as the euro zone banks are not prone to increase foreign lending enough to compensate for the current account surplus. However, euro zone political elections can undermine the EUR strengthening, if far-right parties manage to come to power.

GBP

MS maintains its neutral outlook in relation to GBP/USD and notes that the pound has become vulnerable to any fluctuations in the bond yields. Traders will be watching the UK Autumn Statement this week. MS doesn’t expect lots of fiscal expansion from the UK government, but an additional rise in gilt issuance can spur yields faster than in the US offering support to the sterling.

CAD

Trump’s intention to renegotiate NAFTA sent CAD downwards. But the Canadian dollar is not as vulnerable as Mexican peso mainly due to the recently signed Canada-EU comprehensive economic and trade agreement. Thus, traders should watch for the actual implementation of trade policy and incoming Canadian data to unravel the further way of USD/CAD. For the present moment, MS remains its bullish view for this currency pair.

AUD

MS is bearish AUD/USD. Aussie weakened on the back of the USD strengthening and rising US Treasury yields. Rising metals prices, however, offered some support to AUD. China’s property sector is at risk of the growth slowdown in the nearest future, it may lead to the reduction of iron ore imports from Australia. Australian labor market deteriorated due to the slowing housing market and weak investments in the mining economic sector. All these factors weigh on the AUD’s attempts to growth.

More:
https://fxbazooka.com/analytics/11386

 

[riki143]

EUR/USD: "Engulfing" on the Moving Average
11/21/2016

There’s a “Doji” pattern, which has been confirmed enough, so the market is likely going to reach the 21 Moving Average in the short term. If we see a pullback from this line, there’ll be an opportunity to have another bearish price movement. As we can see on the Daily chart, we’ve got an “Engulfing”. If this pattern confirms, bulls will probably try to deliver an upward correction.

The price formed an “Engulfing” pattern on the 34 Moving Average line. So, there’s an opportunity to see a local downward correction. At the same time, bulls could try to reach the 55 Moving Average afterwards.

More:
https://fxbazooka.com/analytics/11389

 

[riki143]

USD/JPY: "Tweezers" and "Tower"
11/21/2016

The price has been rising since a “Harami” was formed at the last low. Meanwhile, there’s an “Engulfing” at the local high. If this pattern confirms, the market is likely going to test the 13 Moving Average. If a pullback from this line happens, there’ll be an option to have another upward movement.

We’ve got a “Tweezers” and a “Tower”, which both have been confirmed. In this case, bears are likely going to deliver a downward correction. The main intraday target is the 34 Moving Average, which could act as a support.

More:
https://fxbazooka.com/analytics/11390

 

[riki143]

Fibonacci Expansions
11/21/2016

In the last article, we’ve learned how to draw/use Fibonacci retracement. Today we will discover another effective technical tool – Fibonacci expansion. It may help you to identify exit levels, which will maximize your profit.

We often face with some temporary deviations in trends (we call them pullbacks or retracements). Once they are exhausted, prices usually return to the primary trend and sometimes even break highs/lows. At this very moment, you can use Fibo expansion to maximize your profit gains. All in all, our recommendation is to watch for a higher low or a lower high to apply this instrument. It’s clear that you will be lucky to catch the trend at the very beginning to get the biggest gains.

How to draw Fibonacci Expansion

To plot Fibo Expansion correctly, you should select three price points which indicate:

1. The beginning of the primary move, you first high;

2. The end of this move (the low of the move traced from the first high);

3. And the retracement (the swing high, next point measured from the primary move low).

Once you’ve plotted these points to the chart, three horizontal lines will appear corresponding to certain Fibo levels. Three horizontal lines identify your resistance/support levels which can be used for placing your profit targets. Voilà! That’s it, you’ve found your profitable setups, now you can earn lots of money.

Beware of the “Fibo expansion addiction” that may appear after you earn some money with this technical tool. Once you add Fibo expansions on a few of your charts, you will prone to add them all the time, because they are really profitable.

More:
https://fxbazooka.com/analytics/11391

 

[riki143]

AUD/USD reversed from pivotal support level 0.7320
11/21/2016

AUD/USD reversed from pivotal support level 0.7320
Next buy target – 0.7440
AUD/USD continues to rise after the earlier upward reversal from the pivotal support level 0.7320 (which reversed the previous waves (iv) and (ii) in June, as can be seen from the daily AUD/USD chart below). The support zone near the support level 0.7320 was strengthened by the lower daily Bollinger Band.

Given the fact that both the daily RSI and Stochastic indicators are in the oversold zone right now - AUD/USD can be expected to correct up from the current levels toward the next buy target at the resistance level 0.7440 (former powerful support from September, acting as resistance after it was broken recently).

More:
https://fxbazooka.com/analytics/11392

 

[riki143]

NZD/USD reversed from support zone
11/21/2016

NZD/USD reversed from support zone
Next buy target - 0.7150
NZD/USD today reversed up from the support zone lying between the strong multi-month support level 0.7000 (which has been steadily reversing the price from the middle of June, as can be seen from the daily NZD/USD chart below), lower daily Bollinger Band and the 61.8% Fibonacci correction of the previous upward impulse from May.

Given the strength of the support level 0.7000 - NZD/USD can be expected to correct up further to the next buy target at the resistance level 0.7150. Buy stop-loss can be placed at half the daily ATR (Average True Range) below the aforementioned support level 0.7000.

More:
https://fxbazooka.com/analytics/11393

 

[riki143]

EUR/USD: extension in wave [iii]
11/21/2016

There’s a bearish extension in wave [iii], which is taking place on the four-hours chart. The main intraday target is -2/8 Murrey Math Level (P=200). So, bears are likely going to deliver a new low shortly.

As we can see on the one-hour chart, there’s a correction in progress, which could be wave (iv). So, if the price finds a lodgement under -1/8 MM Level, there’ll be an opportunity to have another bearish impulse in wave (v) of [iii].

More:
https://fxbazooka.com/analytics/11394

 

[riki143]

EUR/GBP: technical and fundemantal analysis
11/21/2016

EUR/GBP is trading around 0.8580 level consolidating after significant downfall. If the euro manages to overcome 0.8636 (100-day MA) resistance, the prices might edge up towards 0.8778 (50-day MA, the lower boundary of Ichimoku cloud). The nearest supports are located at 0.8408 (50% Fibonacci retracement level from the June 24 low) and 0.8253 (200-day MA) near 61.7% Fibo retracement level.

Fundamental analysis:

In favor of the pound:

According to the recent comments from ECB President Mario Draghi, the central bank will continue its ultra-loose policy. In contrast, the BOE senior officials are not going to introduce additional easing measures, as they expect increasing inflation rate.

In the beginning of December, the Supreme Court will make its decision on whether or not the UK government should be able to activate Article 50 and begin the Brexit without Parliamentary procedure. Decision in favor of Parliament will be positive for the UK currency (because the process of Brexit will be delayed).

On the 4th of December, there will an Italian referendum that might get the euro down, if voters say “no” to the constitutional changes.

Against the pound:

On Wednesday, we will receive the Autumn Statement from the UK government which should indicate the deterioration in British public finances. So, it might weaken the pound and send the EUR/GBP currency pair higher.

If we get upbeat preliminary November PMIs for the Eurozone, wait for the euro strengthening on Wednesday (the releases will be published ahead of the US Autumn Statement).

On Friday, watch for Q3 growth stats for Britain. It can weaken the pound significantly, if data falls short of expectations.

We would rather be neutral on EUR/GBP in the short-term. On Wednesday, there might be some rebounds from present levels, if there are no deteriorations in the PMIs releases from Eurozone, and if the UK Autumn Statement does influence the pound.

More:
https://fxbazooka.com/analytics/11395

 

[riki143]

USD/CAD & Core Retail Sales for September: a rebound is coming in the Loonie?
11/22/2016

Today at 13:30 GMT we’ll have a key indicator from Canada, as the Core Retail Sales for September will be released and market’s analysts are expecting a positive data from 0.0% to 0.5%. From June, the data hasn’t been showing gains across the board and that’s why it could be a market mover in the CAD pairs. However, if we see a weak data or between the expected range, we won’t see strong volatility after the release.

Our technical analysis for USD/CAD at H4 chart is showing a bullish channel developing and it could support further gains of the greenback against the Loonie. If we see a rebound, that should mean a weak core retail sales’ data, the pair may test the resistance level of 1.3465 and break it to reach the 1.3576 price zone. However, if the Loonie manages to consolidate below the 200 SMA, then it can test the 1.3276 level, which should happen with a better-than-expected data.

More:
https://fxbazooka.com/analytics/11396