Market analysis and trade recommendations by FBS

[riki143]

USD/CAD: outlook for 12-16 December, 2016
12/9/2016

USD/CAD dropped to 1.3350 in the course of the past week due to the news flow from Canada and surging oil prices. The Bank of Canada left policy unchanged at its meeting on Wednesday. Strong third-quarter GDP reading and positive signs in the global economy allowed the board not to change its current monetary stance.

Next week the US dollar will be a major mover of the pair. On Wednesday, after the US retail sales and inflation data, we will finally receive the FOMC decision on the interest rate. “Hawkish” statement should push the pair higher. On Thursday, we will be watching for Canada's manufacturing data followed by the press conference of the Bank of Canada’s Governor Stephen Poloz.

The USD/CAD technical picture for the present moment is bearish. The bulls failed to hold the 100-day MA support at 1.3195. In the short-term the prices may slide further towards the nearest support at 1.3075. Next week, however, the US dollar may rise significantly as the Fed tightens policy. Moving higher the prices may stumble across several resistances located at 1.3230, 1.3450 and 1.3635 levels.

More:
https://fxbazooka.com/analytics/11658

 

[riki143]

NZD/USD: outlook for 12-16 December, 2016
12/9/2016

NZD/USD dropped in the beginning of the past week after PM John Key unexpectedly announced his resignation and refusal to participate in the 2017 election. Then, kiwi pared its losses as we got upbeat milk auction price index and some good news from New Zealand’s dairy industry. In addition, rising oil prices contributed to the kiwi’s upsurge.
Next week the currency pair will be driven by the greenback. We suggest you highlighted Wednesday in your trading calendar as it is going to be a really busy day for the US dollar. There will be US retail sales and inflation data followed by the FOMC rate statement. If it is hawkish wait for prices to go lower. On Tuesday, pay attention to the US consumer price index, unemployment claims, and manufacturing data. Friday’s focus will be on the US building permits.
The NZD/USD technical outlook for the next week is “bearish” as the Fed’s rate hike is well priced in. On the downside, we see some supports located at 0.7060 (against 200-day MA), 0.6980 and 0.6920. The surge in commodity price or positive news on the non-OPEC oil production cut deal can help kiwi to rise. The nearest resistance lines can be found at 0.7195 and 0.7250 levels.

More:
https://fxbazooka.com/analytics/11659

 

[riki143]

US dollar: outlook for December 12-16
12/9/2016

US dollar index consolidated in the past week, though in a volatile fashion. The greenback tested 99.50 before recovering to the 101.00 area.

The long-awaited Federal Reserve’s monetary policy decision will finally take place on Wednesday. The market is almost 100% sure that the US central bank will raise interest rates. The Fed has already prepared the market for such a move and traders are rather confident about the US economy.

The FOMC will also release its economic projections. Traders hope that forecasts of the Fed’s members, as well as Janet Yellen's press conference, will give market players clues about the central bank’s plans for 2017. Knowing the Fed, we may expect that the central bank will be cautious and won’t be willing to commit strongly to further policy tightening. So, unless the regulator sounds surprisingly hawkish, the advance of the greenback shouldn’t be very strong.

Other economic events of the next week include the release of retail sales and producer prices on Wednesday, consumer prices, Philadelphia Fed Manufacturing Index and unemployment claims on Thursday as well as building permits on Friday.

Resistance for USD index is at 102.00/50 and 103.00. Support is at 100.70 and 99.50.

More:
https://fxbazooka.com/analytics/11660

 

[riki143]

USD/JPY: outlook for December 12-16
12/9/2016

USD/JPY rose to 100-week MA at 114.70, but stalled at this resistance.

The US dollar is in a bullish trend versus the Japanese yen, THOUGH its advance has slowed down after the rapid rally we saw in November. The pair is not sensitive to news from Japan, the main focus is on the events in the United States. The pair has prices in the Federal Reserve’s rate hike next week and is waiting for comments of the US central bank on further monetary policy steps.

Japan’s economic calendar for next week includes core machinery orders, producer prices and tertiary industry activity on Monday, as well as Tankan manufacturing & non-manufacturing indexes on Wednesday.

Support is at 112.35, 111.00 and 109.15. Resistance lies at 115.60 ahead of 116.50 and 117.50.

More:
https://fxbazooka.com/analytics/11661

 

[riki143]

EUR/USD: outlook for December 12-16
12/9/2016

EUR/USD had an extremely volatile week driven by increased political uncertainty in Italy and the ECB meeting.

The European Central Bank extended, but scaled back its monetary stimulus. The regulator extended its quantitative easing program by 9 months, but starting from April the central bank will reduce the value of securities it buys per month from 80 to 60 billion euros.

Monetary policy divergence between the ECB and the Fed has become even more pronounced. The main conclusion the market has made is that the euro zone is in desperate need of the ECB support. At the same time, many analysts wonder whether the ECB had moved towards ending its quantitative easing. However, the ECB president Draghi made sure to stress that ECB had no intention of tapering towards zero and that asset purchases could be increased again if necessary.

Next week the market’s attention will switch to the US Federal Reserve. The ability of the pair to get higher should be limited ahead of this event. As for the euro area’s economic calendar, watch German ZEW economic sentiment on Tuesday, the region’s flash manufacturing & services PMIs on Thursday and final inflation on Friday.

Strong long-term support in the area of 1.0500 is still in place. Taking into account Draghi’s dovishness, the euro’s attempts to recover will likely meet resistance at 1.0715, 1.0770 and 1.0850.

More:
https://fxbazooka.com/analytics/11662

 

[riki143]

EUR/USD: "Harami" led to decline
12/9/2016

We’ve got a “Tower” and an “Engulfing”, so the price reached the “Window”. In this case, the market is likely going to achieve the nearest support. As we can see on the Daily chart, there’re a “Harami” and a “Tower”, so the market is likely going to continue falling down.

There’s a “Harami”, which has been confirmed enough. However, if we see any bullish pattern, there’ll be an opportunity to have an upward correction. At the same time, bears will probably try to deliver another low afterwards.

?More:
https://fxbazooka.com/analytics/11663

 

[riki143]

USD/JPY: bullish "Three Methods"
12/9/2016

We’ve got a bullish “Hammer”, which has been confirmed enough. Also, there’s a “Three Methods”, so the pair is likely going to reach the nearest resistance. As we can see on the Daily chart, there isn’t any reversal pattern so far, so bulls will probably try to break the last high.

There’s a “Three Methods” pattern, which has a confirmation. So, the market is likely going to continue moving up towards the nearest resistance level.

More:
https://fxbazooka.com/analytics/11664

 

[riki143]

CAD/JPY reached buy target 86.00
12/9/2016

CAD/JPY reached buy target 86.00
Next buy target – 88.75
CAD/JPY continues to rise sharply – after the recent breakout of the key resistance level 86.00, which was set as the buy target in our previous forecast for this currency pair. The breakout of the resistance level 86.00 accelerated the active minor impulse wave C form the start of November (which belongs to the extended intermediate ABC correction (B) from June).

CAD/JPY is expected to rise further in the direction of the next buy target at the next powerful resistance level 88.75 (which stopped the previous sharp upward impulse at the end of April).

More:
https://fxbazooka.com/analytics/11665

 

[riki143]

EUR/USD falling inside minor impulse wave (v)
12/9/2016

EUR/USD falling inside minor impulse wave (v)
Next sell target - 1.0515
EUR/USD continues to fall inside the minor impulse wave (v) – which started earlier - when the pair reversed down from the resistance zone lying between the powerful resistance level 1.0850 (former strong support which reversed the earlier minor impulse wave (i) in October), upper daily Bollinger Band and the 38.2% Fibonacci correction level of the previous downward impulse from August.

EUR/USD is expected to fall further in the direction of the next sell target at the support level 1.0515 (which stopped the previous impulse wave (iii) at the end of November, as can be seen below).

More:
https://fxbazooka.com/analytics/11666

 

[riki143]

Key option levels for Monday, December 12th
12/11/2016

EUR/USD

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest + 14 ? + 117 254 ?
Closest resistance levels 1.0614(18?); 1.0666; 1.0706; 1.0733
Closest support levels 1.0542; 1.0517; 1.0485; 1.0444
Trading recommendations
Baseline scenario Long EUR/USD above 1.0614, with target points at 1.0666 and 1.0706
Alternative scenario Moving below 1.0542 can be considered as a signal to Sell the pair, with target at 1.0517 and 1.0485

GBP/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest - 34 692 ? - 35 744 ?
Closest resistance levels 1.2639; 1.2673; 1.2703/16
Closest support levels 1.2556; 1.2532; 1.2509; 1.2480
Trading recommendations
Baseline scenario Short GBP/USD below 1.2556, with target points at 1.2532 and 1.2509
Alternative scenario Moving above 1.2639 can be considered as a signal to Buy the pair, with target at 1.2673 and 1.2703

USD/JPY

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest - 43 772 ? - 66 156 ?
Closest resistance levels 115.43; 115.63; 115.92; 116.08
Closest support levels 114.12; 113.29; 112.79; 112.50
Trading recommendations
Baseline scenario Long USD/JPY above 115.43, with the target points at 115.63 and 115.92
Alternative scenario Moving below 114.12 can be considered as a signal to sell the pair, with target at 113.29 and 112.79

USD/CAD

Main trend Short-term period Medium-term period
Neutral Bullish
Changes in the open interest - 16 224 ? - 15 675 ?
Closest resistance levels 1.3201; 1.3221; 1.3243; 1.3273
Closest support levels 1.3101; 1.3070; 1.3048; 1.2994
Trading recommendations
Baseline scenario Long USD/CAD above 1.3201, with the target points at 1.3221 and 1.3243
Alternative scenario Moving below 1.3101 can be considered as a signal to Sell the pair, with target at 1.3070 and 1.3048

More:
https://fxbazooka.com/analytics/11667

 

[riki143]

USD/JPY & October's Tertiary Industry Activity: A short-term top for buyers ahead of Fed meeting?
12/12/2016

Today at 04:30 GMT will be published the Tertiary Industry Activity in Japan, which is expected to see a positive number for October, following a 0.1% decline in September. Analysts are targeting a possible 0.3%. The overall performance of Japanese industry activity had been showing a neutral-to-positive mood. However, if we notice a better-than-expected number today, we can see a short-term selling interest for USD/JPY and that could help to cap buyers across the board, ahead of Wednesday’s Fed meeting.

Our technical outlook for USD/JPY at H4 chart is showing a bullish triangle pattern that had been broken to the upside as we expected and it’s now heading towards the 116.07 level. In the short-term, the pair is showing overbought conditions and one could expect some corrective moves to erase that extreme levels. If that happen, then USD/JPY should look to test the psychological area of 113.00 across the board.

More:
https://fxbazooka.com/analytics/11668

 

[riki143]

GBP/USD: bears are testing the neckline
12/12/2016

On the GBP/USD daily chart, prices are moving within the upward trading channel. If the "bears" manage to test the support near its lower boundary (1.2515), the prices may continue to fall towards 1.24. In contrast, the rebound from the support will allow the "bulls" to maintain their control over the market.

On the GBP/USD hourly chart, there is a formation of the "Head and shoulders" pattern. It can be a signal of the beginning of the attack of bears. Traders should wait for a break of support at 1.2515, and only then go in shorts. The return of prices towards the resistance at 1.27 can lead to the restoration of the uptrend.

Recommendations:

SELL 1,2515 SL 1,257 TP 1,24,

BUY 1,27 SL 1,2615 TP 1,29.

More:
https://fxbazooka.com/analytics/11669

 

[riki143]

USD/CHF: bulls are gaining strength
12/12/2016

On the USD/CHF daily chart, there is a restoration of the uptrend. The rally may be extended to 1.037, 1.049 and 1.077 (target 161.8% in the "Crab" pattern). Update of the December high will be the signal of a new attack of "bulls".

On the USD/CHF hourly chart, the "Shark" pattern was activated which allowed traders to enter longs. The outlook for the pair is still "bullish". It can be confirmed by current upward trading channel. Traders may make a bid for buying the US dollar on pullbacks towards support or on a break of previously formed high.

Recommendations:

BUY 1,0215 SL 1,0160 TP 1,037,

BUY 1,012 SL 1,0065 TP 1,027.

More:
https://fxbazooka.com/analytics/11670

 

[riki143]

EUR/USD: "Pennant" led to decline
12/12/2016

Bears faced a support at 1.0552, so the price is consolidating. Therefore, the market is likely going to decline towards the next support at 1.0506 – 1.0461. If a pullback from this area happens, there’ll be an opportunity to have an upward correction.

The price is consolidating between a resistance at 1.0562 and a support at 1.0536. Considering the main bearish trend, the pair is likely going to test a support at 1.0506 – 1.0461 in the short term. If bears be stopped here, bulls will probably try to reach a resistance at 1.0552.

More:
https://fxbazooka.com/analytics/11671

 

[riki143]

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

USD/CAD opened with a gap this morning. The currency pair slumped to 1.3120 as OPEC and non-OPEC members managed to strike a deal on oil production cut and pushed the oil prices to their 1.5-year high. We still expect some rebounds from the pair’s current lows, if the Fed tightens its policy.

EUR/USD edged up from its Friday ‘s low of 1.0526. It may continue its upward movement until 1.0700. The fundamental factors, however, may drag the pair down. The US Treasury yield curve continues to steepen; economic reading coming from the US are still very strong. A preliminary survey from the UoM released on Friday showed the US consumer sentiment at its highest level since 2015. This may push the Fed to raise its interest rate.

USD soared to 115:50 against the Japanese yen. The greenback is staying very strong against a trade-weighted basket of peers as Fed’s rate hike is well priced in. In the short term, we wait for a consolidation followed by a correction towards the nearest support at 114.70. in the longer term, however, we see further USD strengthening amid the market’s reflationary expectations, fiscal stimulus introduced by Trump’s administration and intensification of the Fed’s tightening.

GBP/USD little changed on the session moving higher from its Friday’s low of 1.2550. The risk of a hard Brexit was mitigated after PM Theresa May promised to publish its negotiation plan and allow parliamentarians to vote on its final version. In addition to this, there were some rumors that the UK is considering the Norwegian model of relationship with the EU (the UK might consider paying the EU for access to single market).

Aussie and Kiwi are both higher on the session due to the soaring oil prices. There shouldn’t be any significant events, economic releases today that could radically change the present technical picture.

More:
https://fxbazooka.com/analytics/11672

 

[riki143]

GBP/USD: bears going to break trend
12/12/2016

The price faced a support at 1.2556, which was strengthened by the local uptrend. Therefore, bears are likely going to achieve the 89 Moving Average in the short term. If a pullback from this line happens, there’ll be a chance to have a bullish price movement in the direction of the 34 Moving Average.

We’ve got a consolidation, which is taking place near the 89 Moving Average. Considering the previously formed “Double Top” pattern, the market is likely going to decline towards a support at 1.2530 – 1.2507. If we see a pullback from these levels, bulls will probably try to test a resistance at 1.2630.

More:
https://fxbazooka.com/analytics/11673

 

[riki143]

Forecasts for EUR/USD from banks
12/12/2016

The ECB’s recent monetary policy decision is reinforcing the risk of the euro slumping to the parity against the US dollar. The ECB President Mario Draghi said on Thursday that the bank is going to extend its asset purchasing program beyond March trimming its size to 60 bln euros since April. The good thing is that the ECB has no intention of tapering towards its zero bound and that it is ready to increase its bond purchases instead if necessary.

There are some recent analysts’ forecasts for EUR/USD.

MUFG believes that EUR/USD is poised to trading lower as ECB sounded more dovish than it was expected.

BNP Paribas expects EUR/USD to extend its losses and target 1.04 by the end of Q1 2017.

Danske bank expects EUR/USD to trade within 1.05 – 1.10 range with a risk of a break to the downside.

Societe Generale is very eloquent and creative this week in its forecasts for the US dollar comparing its future movement with the flight of Icarus. The bank’s strategists don’t question the further USD strengthening pointing at the potential effects of tax cuts and faster monetary tightening. But they also warn traders of a potential reverse. As soon as the dollar flies to its new high, its further growth may be stalled. Political concerns over upcoming numerous elections may ease eventually and push the euro higher. SocGen believes that EUR/USD should trough around parity before the French elections, unless Marin le Pen, the leader of the far-right party wins the presidency (in this scenario, the euro is doomed to fall even lower).

We would recommend you to keep in focus the support located at 1.0500. if it’s broken, the euro may fall even further. The rebound from this level allows the euro to move higher and partially recoup its losses.

More:
https://fxbazooka.com/analytics/11675

 

[riki143]

EUR/USD: bulls going to test the "Window"
12/12/2016

There’s a “Harami” pattern, so the market is likely going test the 55 Moving Average and the nearest “Window”. As we can see on the Daily chart, we’ve got a pullback from the closest support. Also, there’s a possible “Piercing Line”, so if this pattern confirms, bulls will probably try to form a local upward correction.

We’ve got a “Hammer” pattern, which has been confirmed enough. So, the price is rising and there’re some bullish patterns as well. In this case, the pair is likely going to reach the upper “Window” in the short term. If a pullback from it happens, there’ll be an opportunity to have an intraday decline.

More:
https://fxbazooka.com/analytics/11677

 

[riki143]

USD/JPY: bearish "Harami"
12/12/2016

The last “Three Methods” pattern led to an upward price movement. Considering that bulls faced a resistance level, the market is likely going to form a local bearish correction. As we can see on the Daily chart, the middle of huge white candle acted as a support, so we’ve got a new high. At the same time, there’s an opportunity to see more bullish pressure in the short term.

We’ve got a “Harami” at the local high. If this pattern confirms, bears are likely going to achieve the nearest resistance, which could be a departure point for another upward price movement.

More:
https://fxbazooka.com/analytics/11678

 

[riki143]

AUD/JPY reached buy target 86.00
12/12/2016

AUD/JPY reached buy target 86.00
Next buy target – 87.70
AUD/JPY today broke sharply above the pivotal resistance level 86.00 (which reversed the earlier minor correction 2 at the end of April and which was set as the buy target in our previous forecast for this currency pair). The breakout of this resistance level 86.00 will, most certainly, accelerate the active impulse waves 5 and (C) - both of which belong to the primary ABC correction ?.

AUD/JPY is expected to rise further toward the next buy target at the resistance level 87.70 (intersecting with the resistance trendline of the wide daily up channel from June).

More:
https://fxbazooka.com/analytics/11679