Market analysis and trade recommendations by FBS

[riki143]

The Elliott Wave principle
11/30/2016

Perhaps every trader heard the name of Ralph Nelson Elliott, the creator of the Elliott wave trading principle. He was a professional accountant, although I jokingly call him a “financial markets’ personal psychiatrist.” You might ask why? Because his trading theory forecasts market trends by identifying extremes in investor psychology (troughs and lows in prices –market’s outbursts and its tranquil contentment). The Elliott Wave principle states that collective investor psychology moves between optimism and pessimism. These changes of mood create patterns that can be traced in the price movements of markets.

According to Elliott, a complete “bullish” market cycle consists of a 5-wave advance and a 3-wave retracement. Waves 1,3 and 5 are impulses, waves 2 and 4 – rollbacks from the peaks in the uptrend. Corrective waves (2,4) can be divided into 3 smaller waves, whereas the impulses – into 5 waves.

Motive waves (impulses) always move in the same direction as the trend of one larger degree. Wave 2 retraces from the first wave peak, but never more than 100% of the length of the first wave. The same can be said about the 4th retracement wave (it never retraces more than 100% of wave 3). The third wave is always the longest and the most powerful in the market-movement cycle. As we already know the 4th wave is corrective; it can meander sideways for an extended period of time. It usually retraces less than 38.2% from the swing of the wave 3 (we can measure it with Fibo extension tool). It is a perfect place to buy (as it can be referred as a pullback from the peak of the third wave). Wave 5 is a final leg in the dominant uptrend. Its volume is lower than in wave 3. At this moment, many indicators can lag and give us false signals (the prices may reach a new high, but the indicators may not follow them).

This article will be the first in our tutorial on the Elliott Wave principle. In the subsequent articles, we will learn more about this trading theory and discover how to recognize the Elliott waves on the technical chart correctly.

More:
https://fxbazooka.com/analytics/11525

 

[riki143]

EUR/USD: two wedges in a row
11/30/2016

We’ve got wave 2, which is taking place between the -2/8 and 0/8 Murrey Math Levels (P=200). The nearest intraday target for wave [c] is 0/8 MM Level. If we see a pullback from this line, there’ll be an opportunity to have another decline.

There’s a wedge in wave [a], which set up the current upward correction. Also, we’ve got the smaller wedge in wave (i), bulls are likely going to deliver wave (iii) of [c] in the short term. So, we could have a new high soon.

More:
https://fxbazooka.com/analytics/11526

 

[riki143]

CHF/JPY reversed from support level 110.00
11/30/2016

CHF/JPY reversed from support level 110.00
Next buy target – 112.30
CHF/JPY recently reversed up from the support zone surrounding the support level 110.00 (former resistance level from June). The upward reversal from this support level created the daily Japanese candlesticks reversal pattern Piercing Line – which signalled the continuation of the active minor impulse wave 3, which belongs to the sharp intermediate (C)-wave from the middle of September.

CHF/JPY is likely to rise further in the direction of the next buy target at the resistance level 112.30 (which reversed the price multiples times in May and June, as can be seen from the daily CHF/JPY char below).

More:
https://fxbazooka.com/analytics/11527

 

[riki143]

CAD/JPY reversed from pivotal support level 83.00
11/30/2016

CAD/JPY reversed from pivotal support level 83.00
Next buy target - 86.00
CAD/JPY has been rising in the last few trading sessions – following the earlier upward reversal from the pivotal support level 83.00 (previous resistance level which reversed the earlier minor correction 4 in June, as can be seen from the daily CAD/JPY chart below). The upward reversal from the support level 83.00 created the daily Japanese candlesticks reversal pattern Long-Legged Doji.

CAD/JPY is expected to rise further to the next buy target at the resistance level 86.00 (standing close to the 78.6% Fibonacci correction level of the earlier downward impulse from April).

More:
https://fxbazooka.com/analytics/11528

 

[riki143]

EUR/USD & US NFP November: will the number invalidate the recent bottom?
12/2/2016

Today at 12:30 GMT will be released the latest US NFP data of the year, as November’s number can help to fuel expectations on a Fed interest rate’s hike in the next meeting (December). Latest Nonfarm Payrolls showed that the US economy added 161,000 jobs in October and analysts expect an increase to 175,000. If we witness a better-than-expected scenario today, then a rate hike by Fed is a likely move to be done by the central bank at December’s meeting.

Our technical view for EUR/USD at the daily chart is quite bearish, with a strong support located around 1.0547. With a very positive NFP’s November data we can expect a breakout lower of that zone, which should open the doors to test the 1.04 psychological area. However, if data comes in weak, it’s highly likely to see a rebound in the pair towards the 1.0740 level, which is our next key resistance across the board.

More:
https://fxbazooka.com/analytics/11546

 

[riki143]

Morning brief for December 2, 2016
12/2/2016

EUR/USD edged up 1.0687 in the course of the session putting it on track for 0.9% increase this week. The yield on German had the biggest jump in a year after it was reported by Reuters that the ECB will extend its bond purchases program beyond March at a meeting next week.Prolonging the ECB's QE was not unexpected, however, as European growth is still sluggish, but even a conventional gesture that QE would end is positive for the euro. There also might be a signal of the end of debt buying. Investors are bracing for Italy’s referendum and Austria’s presidential elections scheduled for December 4. Prepare for some significant moves in Monday’s session. Later today there will be Spanish Unemployment change that can bring some moves to the chart before the US NFP release.

There were many toing and froing on the technical chart of USD/JPY on the recent session. The US dollar dropped earlier this morning from 114.10 to around 113.60, then recovered towards 114 level. Later today the US dollar may spike even above this level if we get upbeat US releases on the average hourly earnings, NFP, unemployment rate. News flow from Japan is non-existent. Be all eyes on the NFP! A reading close to the consensus forecast (177K) would signal steady hiring and a tangible step toward the Fed's goal of full employment. Any advancement in average hourly earnings will signal us about broader economic growth in the future.

Aussie popped a little after a beat on October retail sales data. Such a relief for Australia after a run of disappointing figures this week that indicated a stall in the economic activity in the third quarters. The recently released retail sales can be deemed as a flash of hope for the revival of economic growth. Kiwi also added some points to the upside.

Cable in the cross with USD jumped to its two-month high of 1.2695 yesterday as Brexit Secretary David Davis claimed that the UK would consider making a contribution to the EU to secure an access to the single market. Later today we will receive an update of the UK construction PMI.

USD/CAD will be in focus today in the countdown to the bunch of the US releases and Canadian labor data. The currency pair slumped in the course of the session mainly on the soaring oil prices (trading around $53.30 mark). Rising US Treasury yields didn’t help the USD in the grapple with CAD overnight.

More:
https://fxbazooka.com/analytics/11547

 

[riki143]

AUD/USD: bears are going to attack
12/2/2016

On the AUD/USD daily chart, the expanding wedge pattern has been fulfilled. Rollback from 0.749 (38.2% Fibo from CD-wave) allowed opening short positions. At the present moment, there is a resistance near this mark. The "bearish" trend might continue. so, traders should prefer going short.

On the AUD/USD hourly chart, the second shoulder of the "Head and shoulders" pattern has been formed. A breakout of the neckline near the 0.7375 level will open the way to the south. Expanding wedge and 5-0 patterns are still relevant.

Recommendations: hold shorts formed from the level of 0,749, SELL 0,7375 SL 0,7435 TP 0,73

More:
https://fxbazooka.com/analytics/11548

 

[riki143]

EUR/USD: will bulls find happiness in the north?
12/2/2016

On the EUR/USD daily chart, a break of resistance at 1.066 initiated a corrective movement towards the 1.077 level (78.6% Fibonacci from XA wave in "Crab" pattern) and higher. The outlook for this pair is still "bearish", so, pullbacks should be used for the opening of short positions.

On the EUR/USD hourly chart, the "Shark" pattern is still relevant. It allows you to identify the important resistance level at 1.077. A rollback from this mark or from the 1.081-1.0815 range (38.2% Fibo from the last downward wave) will allow to form shorts.

Recommendation:

SELL 1,077 SL 1,0825 TP1 1,05 TP2 1,022,

SELL 1,0815 SL 1,087 TP1 1,05 TP2 1,022.

More:
https://fxbazooka.com/analytics/11549

 

[riki143]

NFP forecasts from banks
12/2/2016

Consensus forecasts for non-farm payrolls change - 177K, for unemployment rate - 4.9%, for average hourly earnings - 0.2%.

More:
https://fxbazooka.com/analytics/11551

 

[riki143]

EUR/USD: price reached resistance
12/2/2016

The price is still consolidating under the Moving Averages. Also, there’s a “Flag” pattern, so the market is likely going to reach a resistance at 1.0745 – 1.0778 in the short term. If a pullback from these levels happens, bears will probably try to reach a support at 1.0665 – 1.0617.

The local downtrend was broken, so the price is testing a resistance at 1.0684. If a pullback from this level arrives, the pair is likely going to achieve a support at 1.0665 – 1.0657. At the same time, there’s an opportunity to have another bullish movement afterwards.

More:
https://fxbazooka.com/analytics/11552

 

[riki143]

GBP/USD: bearish "Thorn"
12/2/2016

The price faced a resistance at 1.2672, so we’ve got a “Thorn” pattern here. In this case, the market is likely going to test the nearest support at 1.2556 – 1.2498 in the short term. If we see a pullback from this area, there’ll be an opportunity to have an upward movement towards a resistance at 1.2694 – 1.2770.

We’ve got a “V-Top” pattern, so the price reached a support at 1.2556. However, bears are likely going to reach the 55 Moving Average soon. Considering a possible pullback from this line, bulls will probably try to catch a resistance at 1.2672 – 1.2694 later on.

More:
https://fxbazooka.com/analytics/11553

 

[riki143]

Key option levels for Friday, December 2nd
12/2/2016

EUR/USD

Main trend Short-term period Medium-term period
Neutral Neutral
Changes in the open interest + 69 685 ? + 26 721 ?
Closest resistance levels 1.0670; 1.0696/1.0709; 1.0745; 1.0793
Closest support levels 1.0645; 1.0622; 1.0597; 1.0560
Trading recommendations
Baseline scenario Short EUR/USD below 1.0645, with target points at 1.0622 and 1.0597
Alternative scenario Moving above 1.0670 can be considered as a signal to Buy the pair, with target at 1.0696 and 1.0745


USD/JPY

Main trend Short-term period Medium-term period
Neutral Neutral
Changes in the open interest + 69 685 ? + 26 721 ?
Closest resistance levels 1.0670; 1.0696/1.0709; 1.0745; 1.0793
Closest support levels 1.0645; 1.0622; 1.0597; 1.0560
Trading recommendations
Baseline scenario Short EUR/USD below 1.0645, with target points at 1.0622 and 1.0597
Alternative scenario Moving above 1.0670 can be considered as a signal to Buy the pair, with target at 1.0696 and 1.0745


USD/JPY

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest + 1 023 ? + 1 695 ?
Closest resistance levels 114.08; 114.64; 114.89; 115.21
Closest support levels 113.55; 113.34; 113.07; 112.74
Trading recommendations
Baseline scenario Short USD/JPY below 113.55, with the target points at 113.34 and 113.07
Alternative scenario Moving above 114.08 can be considered as a signal to Buy the pair, with target at 114.64 and 114.89

More:
https://fxbazooka.com/analytics/11556

 

[riki143]

EUR/USD: bearish "Shooting Star"
12/2/2016

We’ve got an “Engulfing” at the local high, but this pattern hasn’t been confirmed yet. So, the price is likely going to test the 13 Moving Average in the short term. As we can see on the Daily chart, the price is testing the nearest resistance. If we see any bearish pattern, there’ll be an opportunity to have another decline.

There’re an “Evening Star” and a “Three Black Crows”, which both have been confirmed enough. Therefore, the pair is likely going to achieve the 34 Moving Average shortly. If a pullback from this line be on the table, bulls will probably try to deliver an upward correction.

More:
https://fxbazooka.com/analytics/11557

 

[riki143]

USD/JPY: two "Harami"
12/2/2016

We’ve got a “High Wave” and a “Shooting Star”, which both have been confirmed. Therefore, bears are likely going to test the 13 Moving Average in the short term. As we can see on the Daily chart, here’s a “High Wave”, but this pattern doesn’t have a confirmation. So, we should keep an eye on the nearest “Window” as a possible intraday target.

The price faced a support on the Moving Averages and we’ve got a “Hammer” and an “Engulfing”. In this case, it’s likely to see another test of the support area, which could bring any bullish pattern afterwards.

More:
https://fxbazooka.com/analytics/11559

 

[riki143]

EUR/USD: another bearish impulse started
12/2/2016

Wave 2 probably was ended yesterday in a form of a zigzag. So, there’s an opportunity to have another bearish impulse in wave 3. If – 2/8 Murrey Math Level (P=200) be broken, we will have a new levels indication.

As we can see on the one-hour chart, there’s a finished impulse in wave [c] of 2. So, the price is declining in wave (i). In this case, we are likely going to see the price much lower in the short term.

More:
https://fxbazooka.com/analytics/11562

 

[riki143]

EUR/CHF reversed from strong resistance zone
12/2/2016

EUR/CHF reversed from strong resistance zone
Next sell target - 1.0700
EUR/CHF continues to fall inside the minor (b)-wave, which started earlier – when the pair reversed down from the strong resistance zone lying between the pivotal resistance level 1.0800 (former powerful support level which has been reversing the price from July to October, as can be seen below), upper daily Bollinger Band and the 38.2% Fibonacci correction of the previous downward impulse from the start of September.

The downward reversal from the aforementioned resistance zone created the strong Japanese candlesticks reversal pattern Shooting Star (which is also a Doji). EUR/CHF is likely to fall further to the next sell target at the support level 1.0700.

More:
https://fxbazooka.com/analytics/11563

 

[riki143]

EUR/CAD broke major support level 1.4270
12/2/2016

EUR/CAD broke major support level 1.4270
Next sell target – 1.4100
EUR/CAD has been under strong bearish pressure lately – after the pair broke through the major support level 1.4270 (which earlier reversed the price sharply in June, July and October, as can be seen from the daily EUR/CAD chart below). The breakout of the support level 1.4270 accelerated the active minor impulse wave 3 – which belongs to the intermediate downward impulse (C) from November.

EUR/CAD is expected to fall further to the next sell target at the support level 1.4100. Sell stop-loss can be placed at half the daily ATR (Average True Range) above the aforementioned support level 1.4270.

More:
https://fxbazooka.com/analytics/11564

 

[riki143]

AUD/USD: outlook for December 5 -9, 2016
12/2/2016

AUD/USD slumped this week on the run of disappointing figures coming from Australia. We got a miss in the building approvals report followed by disappointing investment data. Upbeat Australian retail turnover and the Fed's employment report with soft wage growth helped Aussie to partially recover its losses and rise toward the level of 0.7470.

Next week traders will focus on RBA cash rate coupled with Australian real GDP and trade balance data. Many strategists expect the Reserve bank of Australia to hold the cash rate at record low 1.5%. For the Australian GDP data, there is a great risk to the downside. From the US, we will get lots of statistical releases – non-manufacturing PMI, revised non-farm productivity, trade balance data, unemployment claims and preliminary consumer sentiment. If they are strong, the AUD/USD may slide lower.

The fundamentals are pretty clear – there might be a great divergence between strong US data and the Australian weak data prompting the RBA to cut rates and undermining Aussie’s growth. The nearest supports for AUD/USD can be found at 0.7430 (50 H4 MA), 0.7346 and 0.7250. Any positive news flow from Australia or a sudden surge in commodity prices can send Aussie to the nearest resistances at 0.7460 (100 H4 MA), 0.7500 and 0.7565.

More:
https://fxbazooka.com/analytics/11561

 

[riki143]

USD/JPY: outlook for December 5-9, 2016
12/2/2016

USD/JPY made a big swing this week having risen from 111.3 (Monday’s low) to 114.8 level. The US dollar was driven up by strong readings on the US ADP payroll report and Chicago PMI as well as the surging oil prices. On Friday, the US dollar slipped some points on the soft wage growth despite the strong NFP reading and the lowest unemployment rate in 9 months (it is the case when the quality of created jobs is more important than their actual quantity).

Next week we won’t get lots of news flows from both countries. On Monday, traders will wait for US non-manufacturing PMI and FOMC members speaking. Also, we will be looking for the BoJ Governor Kuroda’s speech. On Tuesday, the US statistical services will publish reports on the hon-farm productivity, trade balance factory orders data. On Thursday, keep in focus Japan’s current account data and final GDP. Japan’s preliminary GDP showed that the nation’s economy grew 0.5% compared to the second quarter estimate. So, we may expect that the annualized data on the economic growth should offer some support to the yen. In the end of the week, we will receive Japan’s BSI manufacturing index followed by the US preliminary consumer sentiment data.

Many currency strategists see risks of the US dollar pullback in the near-term given how quickly long positioning has built up. The prices may retrace towards the nearest supports located at 113.65 (the upper border of Ichimoku cloud on the H4 timeframe), 112.44 and 111. If key US economic releases continue to come in very strong, USD may move higher towards 114.60 and 115 levels.

More:
https://fxbazooka.com/analytics/11560

 

[riki143]

GBP/USD & UK Services PMI for November: Will the data help to feed bulls on the Pound?
12/5/2016

Today at 09:30 GMT will be released the UK Services PMI for November, which should see a little decrease from 54.5 to 54.0. Latest data from services PMI had been showing an overall positive performance, despite current UK situation after Brexit’s referendum. Since September, the number has been better-than-expected and November’s number should help to cap further gains in the Sterling against other currencies, but that could last in a short-term view.

Our technical overview for GBP/USD at H4 chart is still showing an enough room to rise towards the 1.2867 level, which is our first and key resistance zone to pay attention to the upside. If the UK services PMI’s data comes in above the expectations, that bullish momentum could be fueled and make the pair to test the levels mentioned above, while a disappointing number can weigh on the GBP/USD pair and send it towards the 200 SMA around 1.2400.

More:
https://fxbazooka.com/analytics/11567