Market analysis and trade recommendations by FBS

[riki143]

Jesse Livermore - the greatest speculator the world ever knew
1/26/2017

In this article, I am going to tell you about the most enigmatic and talented speculator of our history, the mold for Edwin Lefevre’s “Reminiscences of a Stock operator” – Jesse Livermore. Truth be told, I am not sure that it’s possible to describe all the twists and turns of his life just in few sentences. But as my dearest chairwoman always tells me: “Try harder”. So, I try.

Livermore led a life of brilliance and excess, surrounded by mistresses, rolled in money in his age of reason. He went through three bankruptcies, death of his child, two divorces and committed suicide in 1940. Wall Streeters were obsessed with him. They begged for his advice; they were buying as Livermore; they were selling as Livermore. You might wonder why. Ok, I won’t keep you in the dark any longer. This person – Jess Livermore – managed to snatch an impressive sum of money in the crash of 1907; later on, he made $100 million going short on Black Tuesday.

But you know, life is not just a run of good look; sometimes the fortune turns away from us. Jess Livermore was not always on a roll. There were many times when he lost his money. His unhappy marriage, neurotic, drinking wife and son added stress to his life and killed the desperation to win he had in his youth. As it was said in Lefevre’s book: “A man must believe in himself and his judgment if he expects to make a living at this game”. We may say, that Livermore lost his faith in himself. His spirits sank and he didn’t feel satisfied with his life. It seems that speculation and gambling were the only two things that kept him alive. Having stopped trading in stock and commodity markets, having lost his relatives, he decided to commit a suicide and shot himself in 1940. He left nothing to his second son, but his legacy to the generations of new traders and speculators is really huge.

How to trade in stocks

It’s a book in which Livermore described the rationale of his decision-making process. The book is bristle with witty quotations and trading tips that will never lose their value.

Reminiscences of a Stock Operator

The most popular book ever written about gambling, speculation that has become a trading and investment classic. It was written by American financial journalist – Edwin Lefevre, and published in 1923. Jesse Livermore was a prototype for the main character of the book – Laurie Livingston.

More:
https://new.fxbazooka.com/analytics/12213

 

[riki143]

GBPJPY rising inside corrective wave (2)
1/26/2017

GBPJPY rising inside corrective wave (2)
Next buy target – 148.60
GBPJPY has been rising steadily in the last few trading sessions inside the second intermediate corrective wave (2) from the middle of January. Wave (2) started when the pair reversed up from the support area located between the pivotal support level 138.00 (former strong resistance from September), lower daily Bollinger Band and the 50% Fibonacci correction of the previous upward correction form October.

Having recently broken the narrow daily down channel from December - EUR/CAD is expected to rise further toward the next buy target at the next resistance level 148.60 (top of the previous long-term ABC correction ② from October).

More:
https://new.fxbazooka.com/analytics/12214

 

[riki143]

EUR/USD reversed from resistance zone
1/26/2017

EUR/USD reversed from resistance zone
Next sell target - 1.0600
EUR/USD recently reversed down from the resistance zone lying between the resistance level 1.0770 (which stopped the earlier minor ABC correction 4 at the start of December), upper daily Bollinger Band and the 38.2% Fibonacci correction level of the previous sharp downward impulse from November. The downward reversal from this resistance zone stopped the earlier minor C-wave.

Give the strength of the resistance level 1.0770 and the fact that that the daily Stochastic is trading in the overbought area - EUR/USD can be expected to correct down further toward the next sell target at the support level 1.0600.

More:
https://new.fxbazooka.com/analytics/12215

 

[riki143]

GBP/USD: pound is losing firm ground
1/27/2017

On the GBP/USD daily chart, bulls came closer to the 88.6% level of the last descending wave and to the 88.6% target in the "Shark" inverted pattern but failed to stay in the convergence zone for a long period of time. After that, bears managed to test the diagonal support in the form of the lower boundary of the rising trading channel.

On the GBP/USD hourly chart, quotes are testing the lower boundary of the upward sloping trading channel.If they manage to test the important level at 1.254, there will be a correction towards 1.241, or lower.

Recommendation: SELL 1,254 SL 1,2595 TP 1,241.

More:
https://new.fxbazooka.com/analytics/12219

 

[riki143]

EUR/USD: bears came to senses
1/27/2017

On the EUR/USD daily chart, a successful test of the diagonal support may lead to the recovery of downtrend. But for this to happen bears will have to overcome significant levels at 1.064 and 1.058.

On the EUR/USD hourly chart, a breakout of the support at 1.071 allowed traders to open shorts. A successful test of the lower border of the ascending trading channel will allow opening of short positions in the direction of the target 88.6% in the "Shark" pattern.

Recommendations: hold shorts formed from the level of 1,071, SELL 1,066 SL 1,0715 TP1 1,058 TP2 1,045.

More:
https://new.fxbazooka.com/analytics/12220

 

[riki143]

EUR/USD: on support of Cloud
1/27/2017

Technical levels: support – 1.0660; resistance – 1.0710, 1.0770.

Trade recommendations:

1. Buy — 1.0660; SL — 1.0640; TP1 — 1.0710; TP2 – 1.0770.

Reason: bullish Ichimoku Cloud; a cancelled golden cross of Tenkan-sen and Kijun-sen; all the lines of Ichimoku Indicator are horizontal; the prices are supported by the Cloud.

More:
https://new.fxbazooka.com/analytics/12221

 

[riki143]

AUD/USD: market is under resistance
1/27/2017

Technical levels: support – 0.7530; resistance – 0.7610.

Trade recommendations:

1. Buy — 0.7530; SL — 0.7510; TP1 — 0.7610; TP2 — 0.7660.

Reason: bullish Ichimoku Cloud and rising Senkou Span A; a weak dead cross of Tenkan-sen and Kijun-sen, rising Tenkan-sen; the prices are in the Cloud, but on the strong local support.

More:
https://new.fxbazooka.com/analytics/12222

 

[riki143]

Morning brief for January 27
1/27/2017

The yen extended its losses against its major peers as the Bank of Japan stepped in to fulfill its commitment to keep the 10-year yield at around 0%. It boosted the amount of 5-10 year bonds it buys in its outright purchase operations. USD/JPY rose above 115.00 as a result of this.

The euro fared worse in a rising US yield environment. EUR/USD went lower to 1.0670 overnight. Today’s focus will be on the US data package which is due at 15:30 MT time. Many expect the US growth to slow to 2.1% from last quarter GDP print – 3.5%. Durable goods are to improve (market participants are waiting for a strong release).

AUD/USD slid down to 0.7530 having failed to pare its Wednesday’s post-CPI losses.

GBP/USD missed some points having fallen to 1.2565. Yesterday we got upbeat UK Q4 GDP release; the figures were revised to 0.6% from 0.5%. The UK Government has finally issued its Brexit Bill which says no more than the PM may notify the EU of its intention to leave the union. This was well priced in, so sterling hardly moved.

USD/CAD ticked up to 1.3115 on the rising US yields and falling oil prices. Brent oil futures capped its gains on the buildup of the US crude oil inventories.

The Mexican Peso slumped against the US dollar after Enrique Pena Nieto canceled a planned meeting with the US President Donald Trump. It was Mexican way to express the dissatisfaction with the recent Trump’s executive order aiming at building the wall on the US-Mexican border.

More:
https://new.fxbazooka.com/analytics/12223

 

[riki143]

EUR/USD: bearish "Triple Top"
1/27/2017

We’ve got a “Triple Top”, which led to the current correction. So, the price faced a support at 1.0669, which is strengthened by the 34 Moving Average. Meanwhile, the market is likely going to test the next support at 1.0588 – 1.0578 in the short term. If a pullback from this area happens, there’ll be an opportunity to have an upward movement towards a resistance at 1.0697 – 1.0719.

The pair faced a support at 1.0669, so the price is consolidating. However, bears are likely going to reach the next support at 1.0594 during the day. If we see a pullback from this level, bulls will probably try to achieve the nearest resistance at 1.0669 – 1.0697.

More:
https://new.fxbazooka.com/analytics/12224

 

[riki143]

GBP/USD: bears broke the "Flag"
1/27/2017

We’ve got a “V-Top” pattern, so the pair found a support at 1.2548. Nevertheless, the market is likely going to reach another support at 1.2490 – 1.2432 shortly. At the same time, there’s an opportunity to have an upward correction later on.

There’s a “Double Top”, which led to an achievement of a support at 1.2548. Also, we’ve got a “Flag” pattern, so bears are likely going to reach the 55 Moving Average. Considering a possible pullback from this line, we should keep an eye on a resistance at 1.2581 – 1.2619 as an intraday target.

More:
https://new.fxbazooka.com/analytics/12225

 

[riki143]

USD/CAD outlook for January 30 - February 3
1/27/2017

USD/CAD was falling throughout the week on the jitters of Trump’s protectionist executive orders. In the end of the week, the greenback braced up and managed to reverse the downtrend having risen to 1.3110.

Next week, the Bank of Canada Governor Poloz is due to deliver his speech. There is a possibility that he will leave the door open for a rate cuts amid the large potential negative shocks to Canada’s economy. This may weigh on the Canadian dollar and allow USD to rise higher. Another headwind for CAD is a looming renegotiation of the NAFTA agreement and introduction of a border adjustment tax offering a tax relief for US manufacturers and creating higher charges for imported products bought within the United States. On Tuesday, traders’ focus will be on the Canadian monthly GDP. But we don’t expect significant gains for CAD from it. The last month GDP figures fell out of market’s expectations. Towards the end of the week, we will be waiting for the US major economic releases (NFP, labor and manufacturing data), that might send greenback higher if the data is strong.

Fundamental factors that we’ve just listed make us believe that USD will rise in the short-term. The nearest resistance lines can be found at 1.3160 (near the 100-hour MA), 1.3190 (100-H4 MA and the long-term upward trendline), 1.3290 (near 50-day MA). On the downside, there are several supports located at 1.3050 (January 26 low) and at 1.2985 (near the 23.6% Fibo retracement level from the January last year peak).

More:
https://new.fxbazooka.com/analytics/12229

 

[riki143]

EUR/USD: "Window" acted as a support
1/27/2017

The price reached the 34 Moving Average. Also, the lower “Window” is acting as a support, so we’ve got a “Hammer”, an “Engulfing” and a “Tweezers”, but all these patterns haven’t been confirmed enough. Therefore, the current bearish correction is likely going to end soon, which means bulls will have a chance to test the last high again.

We’ve got a pullback from the lower “Window”, so there’re a “Hammer” and an “Engulfing”. In this case, there’s an opportunity to have a local decline during the day. However, the market is likely going to test the nearest Moving Average afterwards.

More:
https://new.fxbazooka.com/analytics/12230

 

[riki143]

USD/JPY: bearish "Hanging Man"
1/27/2017

There’s a local correction, which is taking place on the four-hours chart. Also, we’ve got a bearish “Shooting Star” pattern, which hasn’t been confirmed yet. So, the price is likely going to test the 12 & 21 Moving Averages, which both could be a departure point for another upward price movement.

We’ve got a “Hanging Man” and an “Engulfing”. If these patterns be confirmed, the market is likely going to test the nearest “Window”, which could act as a support. If we see a pullback from this level, there’ll be an opportunity to have a bullish movement towards the last high.

More:
https://new.fxbazooka.com/analytics/12231

 

[riki143]

Forecasts for Indonesian Rupiah and Malaysian Ringgit[/IMG]
1/27/2017

Emerging market currencies are significantly correlated with commodity prices. Therefore, the currently firming global growth and rising oil prices contribute to the appreciation of emerging market currencies. Many believed that emerging market currencies would suffer under US President Donald Trump’s protectionist policies. So far, even after inaction of these trade-flow curbing executive orders, many emerging market currencies are experiencing an impressive rebound. This week was especially favorable for them due to the widespread weakening of the US dollar. Traders might become even less enamored with the American currency if Trump’s spending plans and tax policies fail to realize.

Indonesian Rupiah

USD/IDR moved choppily in the course of the past week. The prices slid to 13,354 level in the last few days on the relative weakness of the US dollar and rising oil prices. In the near term, the US dollar may extend its gains due to numerous domestic and international fundamental factors. Indonesia is poised to see significant outflows this year as investors become concerned over a religious feud that sparked in the race for Jakarta governor Basuki Tjahaja Purnama. Foreign funds have already pulled $110 million from local equities in January. This may be a serious drag on the domestic currency. Morgan Stanley’s recent report predicting a significant drop in the exchange rate of IDR spawned even more risk-averse sentiments among foreign investors.

Malaysian Ringgit

USD/MYR slipped some point in the course of the past week mainly on the broad weakening of the US dollar. In the longer-term, however, the risks are tilted to the upside especially if we get upbeat economic releases from the US next week, or the talks over imminent Trump’s fiscal stimulus reappear in the media headlines. Additional headwind for MYR may arise as soon as US border taxes become a reality. The USA is one of the main Malaysia’s export partners, so the US protectionist policies will increase the trading costs of Malaysian manufacturers. Investment inflows, however, may offer a modest support to the currency (the country has recently experienced capital inflows ($77 mln) that came from tumultuous Indonesia). The currency pair may continue to trade in the narrow range of 4.4115 (the low of December 12, 2016) – 4.4590 (near the 50-day MA), as it stepped in the Ichimoku cloud on the daily technical chart.

More:
https://new.fxbazooka.com/analytics/12232

 

[riki143]

US dollar: outlook for Jan. 30 - Feb. 3
1/27/2017

The past week was rather stable for the US Dollar. The greenback got support near December lows and spent most of the time not far from them.

The picture for the American currency is ambiguous. On the one hand, it is supported by strong stock market and rising Treasury yields. The hopes that Donald Trump will deliver a stimulus plan have once again increased. On the other hand, his protectionist policies raised uncertainties for global trade. Investors are especially concerned by Trump’s intention to build a wall on the US-Mexican border to reduce illegal immigration and introduce 20% tax on goods from Mexico to pay for the wall’s construction.

The Federal Reserve will meet on Wednesday. No changes in the central bank’s monetary policy are expected. Last week the Fed’s Chair Janet Yellen said that she can’t be precise about the timing of interest-rate hikes. Next week the US economic calendar will be packed with data releases: there will be core PCE price index, personal spending & pending home sales on Monday, CB consumer confidence on Tuesday, ADP non-farm employment change & ISM manufacturing PMI on Wednesday & nonfarm payrolls together with ISM services PMI on Friday.

All in all, the US dollar should behave in a more or less stable. Short-term swings will be data-driver. The longer-term direction will depend on Trump. There’s bullish engulfing on the daily US dollar index chart. Resistance is at 101.00 and 102.00. Support is at 99.80 and 99.00.

More:
https://new.fxbazooka.com/analytics/12233

 

[riki143]

EUR/USD: outlook for Jan. 30 - Feb. 3
1/27/2017

EUR/USD tested 1.0775, but didn’t hold there. European economic picture looks fine. PMI showed expansion in both manufacturing and services. At the same time, with the European Central Bank on the loose side, the scope for further increases in EUR/USD looks limited. All in all, the pair is driven primarily by the news from America. If American economy data looks solid – and the odds are it will – the pair will take a swing south.

Resistance is at 1.0720 (Jan. 17 high). The pair tested levels support January line. Still, moving averages on H4 are still in the bullish layout, so the pair has to settle below 1.0655 for us to acknowledge the change in trend and set the target to 1.0550/20 area. At the same time, the bulls need to push the euro above 1.0720 for it to regain an opportunity of growth towards 1.0800.

As for the euro area’s economic calendar, focus your attention on the region’s consumer inflation figures for January and preliminary Q4 GDP on Tuesday. There will be also economic forecasts from the EU and ECB on Wednesday and Thursday.

More:
https://new.fxbazooka.com/analytics/12234

 

[riki143]

GBP/USD: outlook for Jan. 30 - Feb. 3
1/27/2017

GBP/USD rose to 1.2670 before turning lower.

Trading the British pound is not so easy these days. The market is running ahead of the news and most movements are on expectations, but not on the actual events. For example, GBP/USD fell even though it became known that British preliminary Q4 GDP posted a strong gain of 0.6%. It seems that Brexit hasn’t done much to the UK economy yet. British Supreme Court has ruled that the UK government needs an approval of the parliament to trigger Brexit. Yet, few experts doubt that Theresa May will get such an approval. Friendly relations between the US and the UK after the meeting between Ms. May and Donald Trump would support the pound.

We will learn much more about the UK’s economic health in the coming days. Don’t miss manufacturing PMI on Wednesday, construction PMI on Thursday and services PMI on Friday. The Bank of England will meet on Thursday. No change in the central bank’s monetary policy is expected. We don’t expect the regulator’s head Mark Carney to say something that would make the pound gain much as the strong pound is not in the interest of the UK economy. Note, however, that the Bank of England will also present its quarterly inflation report. British inflation has accelerated during the recent months. As a result, some analysts have started wondering whether the BoE’s excessive easing steps taken last year were necessary. Carney may have to answer this question. If he acknowledges the strength of British economy, the pound will get a short-term boost. If he underlines that uncertainty about the nation’s economic future is still present, the pound will keep snapping its recent recovery.

The pair dipped below the 2-week support line and can test lower levels. However, until the pound is trading above 1.2430/15 area (highs of Jan. 5, 6, 17 and 18), it will retain the ability to reach 1.2775 and get higher. Below 1.2430 we’ll target 1.2300.

More:
https://new.fxbazooka.com/analytics/12235

 

[riki143]

USD/JPY: outlook for Jan. 30 - Feb. 3
1/27/2017

USD/JPY for the second time found support in the 112.50 area.

The yen declined Japanese bonds rose as the Bank of Japan stepped in to buy debt. The central bank increased the purchases of bonds due in 5-10 years from 410 billion yen to 450 billion yen. It seems that the regulator aims not to allow the benchmark 10-year yields to exceed 0.10%.

Japanese inflation turned out to be slightly better-than-expected in December (core CPI gained 0.3% vs. the forecast increase of 0.2% on the annual basis). The Bank of Japan will meet on Tuesday. No shifts in monetary policy are expected as currently there’s no necessity for additional monetary policy easing.

The US dollar’s ability to gain versus the Japanese yen will depend on the actions of Donald Trump, comments from the Federal Reserve and the incoming US economic data. Trading can be volatile as the amount of liquidity will be lower with Chinese markets closed until Wednesday and the US releasing nonfarm payrolls on Friday. The only reason for the yen to strengthen will be a substantial increase in the market’s risk aversion.

Above 115.50 USD/JPY will be capable of reaching 117.50. Firm support is located at 112.50. The loss of this level will open the way down to 111.15.

More:
https://new.fxbazooka.com/analytics/12236

 

[riki143]

Key option levels for Monday, January 30th
1/29/2017

* Data about changes in the open interest will be available on Monday after 12:00 CT (Central Time)

EUR/USD

Main trend Short-term period Medium-term period
Neutral Neutral
Changes in the open interest -?- -?-
Closest resistance levels 1.0718(30?); 1.0756; 1.0781; 1.0819
Closest support levels 1.0697; 1.0678; 1.0646; 1.0598
Trading recommendations
Baseline scenario (High risk of reversal) Short EUR/USD below 1.0697, with target points at 1.0678 and 1.0646
Alternative scenario Moving above 1.0718 can be considered as a signal to Buy the pair, with target at 1.0756 and 1.0781

GBP/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest -?- -?-
Closest resistance levels 1.2578; 1.2596; 1.2623; 1.2643
Closest support levels 1.2521; 1.2501; 1.2476; 1.2449
Trading recommendations
Baseline scenario (High risk of reversal) Long GBP/USD above 1.2578, with target points at 1.2596 and 1.2623
Alternative scenario Moving below 1.2521 can be considered as a signal to Sell the pair, with target at 1.2501 and 1.2476

USD/JPY

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest -?- -?-
Closest resistance levels 115.04; 115.35; 115.63; 115.83
Closest support levels 114.73; 114.51; 114.23; 113.82
Trading recommendations
Baseline scenario Long USD/JPY above 115.04, with target points at 115.35 and 115.63
Alternative scenario Moving below 114.73 can be considered as a signal to Sell the pair, with target at 114.51 and 114.23

USD/CAD

Main trend Short-term period Medium-term period
Neutral Bullish
Changes in the open interest -?- -?-
Closest resistance levels 1.3170; 1.3212; 1.3236; 1.3271
Closest support levels 1.3123; 1.3101; 1.3074; 1.3048
Trading recommendations
Baseline scenario Long USD/CAD above 1.3170, with the target points at 1.3212 and 1.3236
Alternative scenario Moving below 1.3123 can be considered as a signal to Sell the pair, with target at 1.3101 and 1.3074

More:
https://new.fxbazooka.com/analytics/12240

 

[riki143]

NZD/USD: kiwi is drawing the second shoulder
1/30/2017

On the NZD/USD daily chart, bulls push prices towards the target 88.6% in the "Shark" inverted pattern. If they manage to test the resistance at 0.735 and 0.7415 (78.6% and 88.6% from the last mid-term descending wave), there might be a restoration of the upward trend. The nearest support lies near the 0.724 level.

On the NZD/USD hourly chart, there is a formation of the "Head and shoulders" pattern. A breakout of the neckline near the 0.7225 level can lead to the correction towards 0.7145. In contrast, a successful test of the resistance at 0.7285 will open the way to the north.

Recommendations:

SELL 0,7225 SL 0,728 TP 0,7145,

BUY 0,7285 SL 0,723 TP1 0,735 TP2 0,7415.

More:
https://new.fxbazooka.com/analytics/12243