Market analysis and trade recommendations by FBS

[riki143]

NZD/USD: kiwi decided to have a rest in the south
12/5/2016

On the NZD/USD daily chart, there is a test of the neckline of the "Head and shoulders" pattern. A short position was opened from the 0.7135 level. Given the current "bearish" potential of the pair, traders should consider holding the previously formed shorts.

On the NZD/USD hourly chart, the signal given by senior 5-0, expanding wedge and "Shark" patterns . A breakout of the support at 0.704 will cause a continuation of the downward movement towards 0.697 and lower.

Recommendations: hold short positions formed from the 0,7135 level, SELL 0,704 SL 0,7095 TP1 0,697 TP2 0,68.

More:
https://fxbazooka.com/analytics/11568

 

[riki143]

GBP/USD: pound is trying to define which way to go
12/5/2016

On the GBP/USD daily chart, there is a "bull - bear" battle for the 1.269 level. If the "bulls" manage to keep prices above it, the update of the December peak will open the way towards 1.29 resistance line. In contrast, the fall of the pair below 1.269 can lead to the rollback towards 1.2515.

On the GBP/USD hourly chart, quotes are moving within the upward trading channel. A successful test of the 1,274 resistance line can cause a continuation of the rally towards 1.29 (161.8% target in the AB = CD pattern). The nearest support is located near the 1.257 mark.

Recommendations:

BUY 1,274 SL 1,2615 TP 1,29,

SELL 1,257 SL 1,2625 TP1 1,245 TP2 1,2365.

More:
https://fxbazooka.com/analytics/11569

 

[riki143]

Morning brief for December 5, 2016
12/5/2016

EUR/USD slumped to the lowest level since March 2015 (1.0502) as Italian PM Matteo Renzi said he would resign following his defeat on constitutional reform. Exit polls showed 59% Italians had voted against Renzi’s plan to make the government more powerful. News flow from Austria was encouraging, as Austria’s far-right presidential candidate was soundly defeated by pro-European Alexander Van der Bellen. So, now we are facing a dilemma whether populist sentiment across the Europe manages to undermine the EU construction or not (Sunday’s election results showed the great division among Europeans – “No” vote in the Italian referendum and a win of the pro-European candidate in Austria). Anyways, this week, we don’t expect any significant upside moves from the euro on the back of the ECB’s intention to extend its asset-buying program.

It seems that we have an addition to the club of the foolishly resigned PMs

USD/JPY rose above 113.90 having been supported by expectations of the Fed’s interest rate increase this month. Keep in focus the US ISM non-manufacturing PMI and FOMC members speaking.

NZD/USD is one of the biggest losers on the session. Kiwi dropped to circa 0.7090 after PM John Key unexpectedly announced his resignation and refusal to participate in the 2017 election. Then, it partially pared its losses rising above 0.7100 level.

AUD/USD edged up to 0.7460 due to the strong reading on the Chinese service sector output. Australian data was smooth with the only drop in company’s operating profits. After OPEC agreed to cut production on Wednesday oil prices moved higher offering support to the RBA’s view that a reduced drag from the resources sector will cause Australian economy strength in the near-term future.

GBP/USD is trading near the 1.2690 level. It skipped some points as Foreign Secretary Boris Johnson refused to endorse the proposal that Britain should consider paying the EU for having access to the single market. Today, traders will be watching for the UK services PMI which could offer some support to the pound if we get a strong reading. Starting today, the Supreme court will decide whether PM Theresa May needs to hold a vote in Parliament before formally notifying the EU. The government losing would delay the process of Brexit and should be positive for the British pound.

More:
https://fxbazooka.com/analytics/11570

 

[riki143]

Your volatility calendar for December
12/5/2016

Dec. 6, 05:30 GMT+2, RBA cash rate

The Reserve Bank of Australia is due to announce its rate decision. Short-term interest rates affect the currency valuation. Traders will use this event to predict how exchange rate will change in the future. Wait for significant swings in currency pairs with AUD once the cash rate is out.

Dec. 7, 17:00 GMT+2, BOC rate statement

The Bank of Canada’s rate statement contains the commentary on the overall performance of the national economy and offers clues about future monetary policy decisions. Traders give importance to the statement as it affects the exchange rate of the Canadian dollar.

Dec. 8, 14:45 GMT+2, ECB meeting

The European Central Bank will decide whether it will continue its monetary stimulus program. Traders expect important announcements from the ECB president Mario Draghi, who will conduct a press conference following the meeting, at 15:30. The event is going to be a big driver of the euro.

Dec. 13, 11:30 GMT+2, UK CPI

CPI is a measure of consumer inflation. This is a very important indicator for the Bank of England: higher CPI growth makes the central bank less likely to ease monetary policy and is positive for the British pound. The release will bring volatility to GBP/USD and EUR/GBP.

Dec. 14, 21:00 GMT+2, FOMC meeting

The US Federal Reserve is expected to raise interest rates from the current levels around 0.50%. If the central bank disappoints the market, the USD is going to suffer. The Fed’s press conference at 21:30 will also be very important. The US dollar will likely stay volatile during these events in all currency pairs, especially in USD/JPY and EUR/USD.

Dec. 15, 14:00 GMT+2, BOE meeting

The Bank of England’s policy is a major driver of the British pound’s exchange rates. The central bank’s statement and meeting minutes will shape the market’s expectations about further actions of the regulator. The impact on GBP currency pairs is going to be sizeable.

Dec. 19, 11:00 GMT+2, German Ifo business climate

This is a composite index based on surveyed manufacturers, builders, wholesalers and retailers. As Germany is the leading economy of the euro area, its economic performance is very important for the dynamics of the euro. The publication should provide a good trading opportunity in EUR/USD and other pairs containing the single currency.

Dec. 20, 02:30 GMT+2, Australian Mid-Year Economic and Fiscal Outlook

Australian government will release an update of its economic and fiscal outlook. Increased government spending and mentions of the fiscal stimulus may lead to heightened inflation rates, so the publication will have an impact on the value of Australian dollar.

Dec. 22, 15:30 GMT+2, US final GDP

This is the third and final release of American Q3 GDP growth. So far, the data showed that the US economy is in good shape. A confirmation of that will be bullish for USD. On the contrary, if the reading is revised down, American currency will find itself under negative pressure. Watch this release as it will have an impact on USD currency pairs.

Dec. 23, 15:30 GMT+2, US durable goods orders

The change in the total value of new purchase orders placed with manufacturers for durable goods is a leading indicator of American production. This information will give market players an insight about the latest changes in the US economy. Do not miss this release if you trade USD!

More:
https://fxbazooka.com/analytics/11571

 

[riki143]

EUR/USD: bullish "Thorn"
12/5/2016

There's a “Breakaway Gap”, but the price faced a support at 1.0517, so we’ve got a “Thorn” pattern. Therefore, the market is likely going to test the nearest resistance area at 1.0594 – 1.0655. If a pullback from this area happens, there’ll be an opportunity to have an achievement of the next support at 1.0550 – 1.0517.

The price has broken the Moving Averages. The nearest intraday target is a resistance at 1.0590 – 1.0655. If we have a pullback from this area, bears will probably try to reach a support at 1.0583.

More:
https://fxbazooka.com/analytics/11572

 

[riki143]

GBP/USD: resistance waiting for bulls
12/5/2016

The price has been rising since a “Double Bottom” was formed. It’s likely that bulls are going to move on, so we should keep an eye on the nearest resistance at 1.2770 – 1.2795. Considering a possible pullback from this area, there’s an opportunity to have a bearish correction afterwards.

We’ve got two “Thorns” on the one-hour chart. In this case, the market is likely going to reach the closest resistance at 1.2770 – 1.2795 in the short term. At the same time, if we see a pullback from these levels, the next intraday target will be a support at 1.2694 – 1.2672.

More:
https://fxbazooka.com/analytics/11573

 

[riki143]

EUR/USD: bears have won
12/5/2016

Technical levels: support – 1.0570/80; resistance – 1.0620, 1.0650.

Trade recommendations:

1. Sell — 1.0620; SL — 1.0640; TP1 — 1.0570; TP2 – 1.0520.

Reason: bearish mood of Ichimoku Cloud and falling Senkou Span A; cancelled golden cross of Tenkan-sen and Kijun-sen and the lines are falling; the prices are under the Cloud.

More:
https://fxbazooka.com/analytics/11574

 

[riki143]

GBP/USD: under daily resistance
12/5/2016

Technical levels: support – 1.2630, 1.2680; resistance – 1.2730.

Trade recommendations:

1. Sell — 1.2700; SL — 1.2720; TP1 — 1.2630; TP2 — 1.2550.

Reason: bearish Ichimoku Cloud and rising Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen; all lines of Ichimoku Indicator are rising; but the prices are under the strong daily resistance; overbought market.

More:
https://fxbazooka.com/analytics/11575

 

[riki143]

GBP/USD: under daily resistance
12/5/2016

Technical levels: support – 1.2630, 1.2680; resistance – 1.2730.

Trade recommendations:

1. Sell — 1.2700; SL — 1.2720; TP1 — 1.2630; TP2 — 1.2550.

Reason: bearish Ichimoku Cloud and rising Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen; all lines of Ichimoku Indicator are rising; but the prices are under the strong daily resistance; overbought market.

More:
https://fxbazooka.com/analytics/11576

 

[riki143]

AUD/USD: along the SSB
12/5/2016

Technical levels: support – 0.7420; resistance – 0.7450, 0.7470.

Trade recommendations:

1. Sell — 0.7450; SL — 0.7470; TP1 — 0.7380; TP2 — 0.7340.

Reason: bearish Ichimoku Cloud; a dead cross of Tenkan-sen and Kijun-sen; the prices are under the Cloud and SSB resistance.

More:
https://fxbazooka.com/analytics/11577

 

[riki143]

USD/THB: short- and long-term outlook
12/5/2016

We must admit that Thai Bat carried itself well in the cross with USD in the wake of the King Bhumibol’s passing and Donald Trump’s unexpected win. Strong Thailand’s fundamentals (strong GDP data, current account surplus, and prosperous tourism industry) underpin a stronger baht. Thailand’s central bank officials at their last meeting left their interest rate unchanged at 1.5% finding it appropriate for the gradual economic recovery. If oil prices continue their rally, Thai inflation rate may finally rise from the negative territory and allow the Thailand’s central bank not to recourse to additional easing measures. So, all these factors should force THB to rise. But the USD fascinating strengthening should overshadow positive impulses emanating from Thailand’s strong statistical data and central bank’s accommodative monetary policy.

The USD/THB surged above 35.75 level since the US presidential election. There were lots of toing and froing overnight.The US dollar soared to 36.14; then, it slumped to 35.60 in the course of the latest session. On the downside, there are plenty of support lines located at 35.50, 35.41, 35.30. The nearest resistance lines are located at 35.70, 35.90, 36.05 and 36.50. They can be tested if we receive more US upbeat economic releases.You may take positions in USD/THB only above 35.70, stop loss at 35.58.

More:
https://fxbazooka.com/analytics/11558

 

[riki143]

EUR/USD: new "Window"
12/5/2016

There’s a “Hammer”, which has been confirmed enough. If the new “Window” acts as a resistance, the market is likely going to start falling down. As we can see on the Daily chart, bulls tested the nearest resistance area once again. Also, we’ve got a “High Wave”. If this pattern confirms, there’ll be an opportunity to have a new low.

We’ve got a “Shooting Star”, but this pattern is still unconfirmed. Therefore, the pair is likely going to test the nearest Moving Averages. If we see a pullback from these lines, bulls will probably try to deliver a new local high.

More:
https://fxbazooka.com/analytics/11579

 

[riki143]

USD/JPY: bullish "Three Methods"
12/5/2016

The 21 Moving Average acted as a support, so we’ve got a “Harami” pattern, which has been confirmed enough. Therefore, the market is likely going to test the nearest support level once again. As we can see on the Daily chart, there isn’t any reversal pattern so far. In this case, bulls are likely going to move on.

We’ve got an “Engulfing”, which has a confirmation. Also, there’s a “Three Methods” pattern, so the pair is likely going to test the closest resistance. If we see a pullback from this level, bears will probably try to deliver a downward correction.

More:
https://fxbazooka.com/analytics/11580

 

[riki143]

Scalping strategies
12/5/2016

These trading strategies are designed only for those who prefer entering market frequently and taking small profits each time. To put it bluntly, these are the scalping strategies which should be employed on the lowest time frames available on the Metatrader 4 (1-minute and 5-minute time frames would be perfect).

First, I suggest to discuss the rapid-fire strategy and then to switch to the more ferocious one– piranha strategy.

Rapid-fire strategy ingredients:

The most liquid currency pair – EUR/USD
The lowest and the most exhilarating timeframe available on the broker’s platform – M1.
Trading tools:

Parabolic SAR with default setting (step 0.02., max 0.2.)

Simple moving average, period 60. The SMA 60 is used for identification of the direction of the momentum. So, when the price is above SMA 60, you should go long. In the reverse scenario, if the price is below the SMA 60, go short.

“Rules of the game”

You should catch the moment when the market price moves above the SMA 60
Then, look for Parabolic SAR moving above the price.
If the first two conditions are respected, you may enter the market long. The market price should go above the Parabolic SAR, the parabolic SAR should be below the market price.
The stop loss should be placed at 15 points below the entry price.
The profit target should be set at 10 points above the entry price.
The risk for this trade can be estimated at 15 points, the reward is 10 points. The risk to reward ratio is 1.5:1 (2% return against 3% risk).

The next strategy is called “piranha” after an omnivorous fish with very sharp teeth and strong jaws (it inhabits Venezuela’s rivers. This freshwater fish instantly bites its prey until it’s totally eaten. So, if decide to apply this “eating” technic to our trades, we should “bite” the market lots of time and chew off small profits.

“Piranha strategy ingredients”:

5-minute timeframe
GBP/USD currency pair.
Trading tools

Bollinger Bands with period 12, shift 0 and deviation 2 (default). Bollinger Bands are used for identification of the trading band of the GBP/USD. You should go long when prices touch the bottom band; the short trades should be taken when market prices reach the upper band.

“Rules of the game”

This strategy is designed for trading in a trend.

As we know piranhas are most active in the fresh river water, not in oceans and seas with strong currents, tides, and powerful waves. So, pretty much the same can be said about the piranha trading strategy: you should avoid using this strategy after ground-shaking events or important releases.

First, you should wait until prices touch the bottom band of the indicator;
Then, you may enter long;
Set the stop loss at 10 points below the entry price;
Set the profit target at 5 points above the entry price.
The risk for this strategy is 10 pips, while the reward is 5 pips. The risk-reward ratio – 2:1 (return – 1.5%, if we take 3% risk).

Strategies are taken from the book "17 proven currency trading strategies" written by Mario Singh

More:
https://fxbazooka.com/analytics/11581

 

[riki143]

US dollar: outlook for Decmber 5-9
12/5/2016

Last week the greenback failed to continue its advance. US dollar index opened with a gap higher around 101.45 but then declined below 101.00.

American nonfarm payrolls showed gains of 178K, and the unemployment rate declined from 4.9% to 4.6%. The only disturbing thing is the decline in average hourly earnings, but all in all US inflation expectations remain high on the awaited Donald Trump’s policy and increase oil prices. All in all, the data are in line with the Federal Reserve’s rate hike in December. Markets have completely priced in this event, the rally in Treasury yields has paused, so at this point, the US dollar does not have strong bullish drivers in the short-term.

This week pay attention to comments from the Fed’s speakers and ISM manufacturing index on Monday. We expect sideways trading for the US currency. Support lies at 100.70 and 100.20, while resistance is at 101.50.

More:
https://fxbazooka.com/analytics/11582

 

[riki143]

EUR/USD: outlook for December 5-9
12/5/2016

Last week EUR/USD managed to stay above the multiyear support in the 1.0500 area. This support is really strong and some big change in fundamental factors is needed to make the euro go lower.

On Monday bears once again pulled EUR/USD to 20-month low as Italians voted against the constitutional reform on the referendum. Prime Minister Matteo Renzi is now going to resign, so there’s political uncertainty ahead for the nation. Italian banking sector is in particular danger. At the same time, the single currency was supported by the speculation that despite the fact that the European Central Bank may announce an extension of its quantitative program beyond March 2017, it will signal that QE is ultimately going to end. Although the euro area’s inflation accelerated to 0.6% in October, that’s still below the ECB’s 2% target. Such levels of inflation will allow the ECB to continue monetary stimulus. The market is already pretty ready to QE extension, so the negative impact from that on the euro is limited. At the same time, the confirmation that the ECB sees the end of bond purchases ahead is bullish for the euro.

EUR/USD may be traded either in a range between 1.0680 and 1.0550. Longer-term short positions are possible only if we get confirmation of the pair’s break below 1.0500. If the currency manages to recover above 1.0680 next levels to watch are at 1.0740 and 1.0770/1.0800.

More:
https://fxbazooka.com/analytics/11583

 

[riki143]

GBP/USD: outlook for December 5-9
12/5/2016

The UK will release some economic data this week, although the figures probably won’t have a big impact on the Bank of England’s monetary policy, which is not expected to change in the coming months.

Political factors will be more important for the sterling. The UK Supreme Court is about to make a decision that could delay Prime Minister Theresa May’s plans to exit the EU. If the Court dismisses the government’s appeal, May won’t be able to trigger the Brexit process in March 2017. This would be positive for the pound. In addition, pay attention to the discussion on Britain’s access to the European single market. The positive talk will help the currency.

As large speculators partially close their bearish positions on the pound, GBP/USD may experience more growth this week. The pair has already managed to overcome 55-day MA, which is currently acting as support in the 1.2500 area. The bullish view provides an opportunity for extension to 1.2800 (100-day MA), 1.2850/60 (trendline resistance). The next resistance is at 1.2960.

More:
https://fxbazooka.com/analytics/11584

 

[riki143]

EUR/USD: flat in wave 2
12/5/2016

There’s a possible flat in wave 2, which is taking place on the four-hours chart. So, there’s an opportunity to have a bearish impulse in wave . If -2/8 MM Level turns out to be broken, we’re going to have another levels indication.

We’ve got a bullish impulse in wave [c] of 2. If the price finds a lodgement under 7/8 MM Level, there’ll be an opportunity to have a bearish movement. The intraday target is 6/8 MM Level.

More:
https://fxbazooka.com/analytics/11585

 

[riki143]

Is it right time for buying gold?
12/5/2016

Gold dropped to $1,162 overnight despite the growing threat of political instability in Europe (in the light of the recent outcome of Italian referendum). The yellow metal has been falling since Trump’s win on the expectations that the newly elected US president could introduce expansionary fiscal policies and spur the inflation rate growth accompanied with multiple interest rate increases. The investors moved their assets away from the safe-havens because of the rising stocks, high US yields. In the near term, strong US dollar and expectations of the Fed’s rate hike will continue to weigh on the gold prices.

There is an upside factor, however. The gold prices may rise next year due to the limited supply of gold. Because of the significant drop in gold prices this year, many producers decided to cut spending on the exploration of new gold mines. According to the Mark Bristow, chief executive of London-listed Randgold, the large undersupply is inevitable unless some major discoveries of high-grade ore bodies are made, but this is a remote possibility.

The technical picture for the gold is still bearish. So, it’s not the best time for sales. The nearest supports lie at $1,125.75 and $1,097.3 (the lower border of Ichimoku cloud). On the upside, there are several resistances located at $1,188, $1,211,65 (23,4% Fibo retracement level from the July 11 high).

More:
https://fxbazooka.com/analytics/11586

 

[riki143]

AUD/JPY rising inside sharp (C)-wave
12/5/2016

AUD/JPY rising inside sharp (C)-wave
Next buy target – 86.00
AUD/JPY has been rising sharply in the last few trading sessions inside the minor impulse wave 5. This impulse wave belongs to the sharp intermediate upward impulse (C), which is a part of the long-term upward ABC correction ? from June. The active impulse wave 5 started earlier – when the pair reversed up from the strong support level 81.40 (previous strong resistance level and the buy target set in our preceding report for this instrument).

AUD/JPY is likely to rise further in the accelerated impulse waves 5 and (C) in the direction of the next buy target at the pivotal resistance level 86.00 (which stopped the previous intermediate correction (2) in April, as can be seen below).

More:
https://fxbazooka.com/analytics/11587