Market analysis and trade recommendations by FBS

[riki143]

AUD/USD: BULLS RETURNED AUSSIE TO POSITIVE AREA
09:46 12.07.2017

Technical levels: support – 0.7630; resistance – 0.7660, 0.7680.

Trade recommendations:

Buy — 0.7630; SL — 0.7610; TP1 — 0.7680; TP2 — 0.7700.
Reason: narrow bearish Ichimoku Cloud with rising Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen; the prices are breaking out the SSA’s resistance and returned to the positive zone.

More:
https://fbs.com/analytics/articles/aud_usd:_bulls_returned_aussie_to_positive_area_2154

 

[riki143]

USD/JPY: DOLLAR IS CORRECTED TO CLOUD
09:47 12.07.2017

Technical levels: support – 113.30, 113.00; resistance – 113.90, 114.20.

Trade recommendations:

Buy — 113.30; SL — 113.10; TP1 — 113.90; TP2 — 114.30.
Reason: bullish Ichimoku Cloud, horizontal Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen; but the market in a correction phase to the Cloud.

More:
https://fbs.com/analytics/articles/usd_jpy:_dollar_is_corrected_to_cloud_2156

 

[riki143]

USD/CHF: FRANC ENTERED THE INTERSECTION
09:52 12.07.2017

On the USD/CHF daily chart, there is a struggle for the important level of 0.9636. If Bulls manage to push quotes higher, the risk of correction towards the current downtrend in the direction of 0.972 and higher will increase. In contrast, in the case of Bears’ victory, there will be a continuation of the downward movement towards targets 224%, 126.2% of the AB=CD and Crab patterns.

On the USD/CHF hourly chart, the result of the test of the support in the form of the lower border of the upward trading channel will indicate a further direction of the price movement. If Bears manage to test this level successfully, there will be a continuation of the downtrend. Their failure will lead to the development of correction.

More:
https://fbs.com/analytics/articles/usd_chf:_franc_entered_the_intersection_2157

 

[riki143]

EUR/USD: EURO SAW A CEILING
09:55 12.07.2017

On the EUR/USD daily chart quotes reached target 88.6% of the inverted Bat pattern. As a result, the risks of correction towards 1.1345 (78.6% from the last near-term downward wave + lower border of the upward trading channel) and lower.

On the EUR/USD hourly chart quotes entered the convergence zone of 1.145 – 1.1505. There are two targets of the AB=CD pattern – 200% and 224%. A fall of quotes below the level of 1.1425 will be a signal for the realization of the strategy 2B base of Victor Sperandeo and increase the risks of activation of the Shark pattern.

More:
https://fbs.com/analytics/articles/eur_usd:_euro_saw_a_ceiling_2158

 

[riki143]

EUR/USD: BEARISH "V-TOP" PATTERN
11:27 12.07.2017

Bulls faced resistance at 1.1494, so we've got a bearish "V-top" pattern, which pushed the price lower. So, the market is likely going to test the nearest support at 1.1425 - 1.1398 in the coming hours. If a pullback from this area happens, there'll be an opportunity to have an upward price movement towards the next resistance at 1.1494 - 1.1529.

We've got a "Double Top" pattern, which has been confirmed. Therefore, bears are likely going to test the 55 Moving Average in the short term. If a pullback from this line arrives afterwards, bulls will probably try to achieve the closest resistance at 1.1494.

More:
https://fbs.com/analytics/articles/eur_usd:_bearish_"v_top"_pattern_2160

 

[riki143]

GBP/USD: BULLS GOING TO REACH THE NEXT SUPPORT
11:31 12.07.2017

Bears faced support at 1.2817, but the pair is likely going to reach the next support at 1.2793 - 1.2768. Meanwhile, if we have a pullback from this area, there'll be an option to have an upward price movement in the direction of the 89 Moving Average.

The price is consolidating near the last "Pennant" pattern. Also, there's support at 1.2817. In this case, the price is likely going to reach the nearest support at 1.2793 - 1.2768 during the day. However, if we see a pullback from these levels, bulls will have a green light to achieve resistance at 1.2830 - 1.2860.

More:
https://fbs.com/analytics/articles/gbp_usd:_bulls__going_to_reach_the_next_support_2161

 

[riki143]

EUR/USD: PULLBACK FROM 7/8 MM LEVEL
14:39 12.07.2017

There's a quite interesting moment on the Daily chart, cause we've got a pullback from 7/8 MM Level. However, the market is likely going to test this level once again. If the price couldn't fixate above 7/8 MM Level, bears will have a green light to reach 6/8 MM Level shortly.

Wave [v] of C has turned out to be an ending diagonal pattern. It seems like wave (iii) has just arrived, so bears are likely going to deliver wave (iv) in the short term. Meanwhile, there's an opportunity to have wave (v) of [v] of C afterwards.

More:
https://fbs.com/analytics/articles/eur_usd:_pullback_from_7_8_mm_level_2166

 

[riki143]

EUR/USD: BEARISH "ENGULFING"
16:21 12.07.2017

We've got a bearish "Engulfing", which hasn't been confirmed yet. In this case, the price is likely going to decline towards the nearest resistance in the short term.

The 34 Moving Average has acted as support, so the market is likely going to test the next resistance in the coming hours. If any bearish pattern arrives afterwards, there'll be an opportunity to have a decline.

More:
https://fbs.com/analytics/articles/eur_usd:_bearish_"engulfing"_2168

 

[riki143]

USD/JPY: "TWEEZERS" AND "DOJI"
16:23 12.07.2017

There are bearish patterns such a "Tweezers" and a "Doji", which both have been confirmed. So, the pair is likely going to test the 144 Moving Average line during the day.

The nearest "Window" has been broken, so the price is declining. If we see any bullish pattern on the closest support, there'll be an option to have an upward correction.

More:
https://fbs.com/analytics/articles/usd_jpy:_"tweezers"_and_"doji"_2169

 

[riki143]

MORNING BRIEF FOR JULY 13
08:40 13.07.2017

The Canadian dollar is the major beneficiary in FX markets after the Bank of Canada raised its rates by 0.25% to 0.75% and slightly upgraded its growth forecasts. There was not even a hint for dovishness. So, the loonie surged on the rate announcement. USD/CAD was down 1.2676 from Wednesday’s opening of 1.2913. Not it trades a little bit higher from yesterday’s low at 1.2743. On the upside, there is solid resistance at 1.2820. The odds for a drop to lower levels are not high. It seems that pair is entering into the consolidation phase.

US yields and the dollar were generally lower after Janet Yellen said the Fed won’t rush to tighten monetary policy while testifying to the Congress. Markets noted that Yellen is now less sure that inflation on track towards the Fed’s target. She doesn’t know how inflation will further respond to the Fed’s tightening measures. The Fed’s concerns about the current inflation rates suggest that there were downside risks to its forward guidance.

The euro was one of the few currencies that lost out yesterday against the USD. It dipped to 1.1390. In Tokyo morning, EUR/USD managed to recoup some of its earlier losses having risen to 1.1440. In the meanwhile, it will likely continue to trade choppily within the range of 1.1320 – 1.1490.

USD/JPY was a great mover in the past few sessions. After rising briefly above 113.50 dropped harshly below 113. While the immediate bias is tilted to downside we don’t expect significant downfall from the current levels. Most likely, the pair will be trading sideways.

Aussie was one of the standout winners of yesterday’s session. It spiked to 0.7685. In the Asian session, it extended its gains to 0.7695.

Sterling rose to 1.2895, notwithstanding the exit stage left of Scottish tennis player from Wimbledon, due to the stronger-than expected unemployment rate (jobless rate is up from 1.8) and earning data.

Oil prices skipped some points overnight as OPEC said its expected demand for its crude will likely decline next year as its rivals increase their production despite the efforts to curb oil glut.

What is coming up:
Yellen will continue testifying Thursday.
US producer price index and unemployment claims are due at 3:30 pm (MT time).
The Congressional Budget office is poised to release its analysis of President Trump’s 2018 fiscal year budget. It is coming under fire from Trump administration, inevitably given the conservative (realistic?) growth assumptions that the CBO uses to do the fiscal maths.
Charles Evans and Lael Brainard are set to speak later today. Both of them on the dovish side of the Fed’s hawk- dove spectrum (additional losses for the USD?).

More:
https://fbs.com/analytics/articles/morning_brief_for_july_13_2186

 

[riki143]

NZD/USD: KIWI WOKE UP THE SHARK
09:41 13.07.2017

On the NZD/USD daily chart, Bears failed to keep quotes below the support at 0.723. It was a signal of their weakness, the Bull acted proactively. A successful test of the resistance at 0.7345 might lead to the restoration of the uptrend and increase the risks of the realization of the target 113% of the Shark pattern.

On the NZD/USD hourly chart, after short-term correction and consolidation within the Splash and Shelf pattern on the 1-2-3 basis, the restoration of the uptrend has started. A break of the upper border of the shelf near the resistance at 0.7305 will lead to the continuation of the rally.

More:
https://fbs.com/analytics/articles/nzd_usd:_kiwi_woke_up_the_shark_2187

 

[riki143]

GBP/USD: POUND IS AT A STALEMATE
09:43 13.07.2017

BUY 1.2925

SL 1.287

TP1 1.3030, TP2 1.3200.

On the GBP/USD daily chart, the pound is in a stalemate: bulls cannot return the quotes to the borders of the near-term upward channel, while bears cannot return quotes to the borders of the short-term downward channel. We will find out the further destination of the pair after the workout of the triangle pattern.

On the GBP/USD hourly chart, the failure of bears to keep the pound below the level of 1.2855 is a signal of their weakness. A break of the diagonal resistance at 1.2925 (the upper border of the downward trading channel) will increase the risks of the restoration of the uptrend.

More:
https://fbs.com/analytics/articles/gbp_usd:_pound_is_at_a_stalemate_2188

 

[riki143]

EUR/USD: "V-BOTTOM" PATTERN
11:58 13.07.2017

Bears faced support at 1.1398, so we've got a "V-Bottom" pattern, which pushed the price to resistance at 1.1464. Therefore, bulls are likely going to test the next resistance at 1.1494. If a pullback from this level happens, there'll be an opportunity to have a decline towards the nearest support at 1.1444 - 1.1425.

There's a "Thorn" pattern, which has been formed on the 89 Moving Average. In this case, the market is likely going to achieve the closest resistance at 1.1479 - 1.1488. However, if we see a pullback from this area, bears will probably try to reach support at 1.1444 - 1.1425.

More:
https://fbs.com/analytics/articles/eur_usd:_"v_bottom"_pattern_2192

 

[riki143]

GBP/USD: CONFIRMED "THORN" PATTERN
12:01 13.07.2017

The price faced support at 1.2817, so there's a "Thorn" pattern, which has been confirmed. Therefore, the pair is likely going to continue moving up in the direction of the next resistance at 1.2947 - 1.2982. Meanwhile, if a pullback from this area happens, there'll be an option to have a downward price movement towards support at 1.2926 - 1.2887.

The last "Pennant" pattern has been broken, so bulls found resistance at 1.2915. Nevertheless, the market is likely going to move on, so we should keep in mind the next resistance at 1.2947 - 1.2967 as an intraday target. If we see a pullback from these levels, bears will have a green light to reach the 89 Moving Average.

More:
https://fbs.com/analytics/articles/gbp_usd:_confirmed_"thorn"_pattern_2193

 

[riki143]

BANK OF CANADA RAISED RATE. WILL OTHER CENTRAL BANKS FOLLOW ITS LEAD?

12:47 13.07.2017

Canada became the first G-7 country to join the US in raising interest rates yesterday, proving the fact that the world’s central bankers have started entering a tightening cycle (as they promised at Sinatra’s forum on central banking).

The Bank of Canada raised its benchmark rate to 0.75% from 0.5% its first time in 7 years, having said that futures rate hikes/adjustments to the current monetary policy stance will be guided by the country’s economic fundamentals – by the incoming data flow. Governing Council responsible for setting rates said the current economic outlook warrants a partial withdrawal of monetary policy assistance.

The next banks in line to tighten their extremely loose monetary policies are the Bank of England, the ECB, and Bank of Japan.

But will they do so?

The Bank of Japan’s tone is still extremely dovish notwithstanding the other banks’ intention to tighten their current monetary policy setting. The BoJ’s Governor Haruhiko Kuroda has recently once again demonstrated its commitment to keep the yield curve at zero level and to weaken the yen to moderate levels if needed.

The Bank of England gives very ambiguous signals with regard to its monetary policy projections. The bank’s governor Mark Carney was even accused of behaving like a “reliable boyfriend” to the financial markets as he had sent the opposite signals about the likely timing of the first interest-rate hike.

The members of monetary policy committee almost introduced a hike at their previous meeting if not 1 – 2 members voting for holding the monetary policy unchanged. Why some of BoE’s officials still refuse to remove a monetary policy stimulus? The British economy is quite strong with the unemployment being at its lowest level in more than four decades, inflation staying well above the bank’s 2% target. Under the following circumstances normally raise the interest rate. But there’s BREXIT. Some analysts believe that the BOE’s policymakers will raise their benchmark rate despite these Brexit-provoked cautions. The exit from the EU has not proven yet to be an economic catastrophe for the UK. In contrast, the economy kept expanding. So, let us keep fingers crossed for a rate increase at the upcoming bank’s meeting.

While we cannot trust the BoE’s policymakers when they are communicating with financial markets, the ECB’s officials seem to be quite reliable speakers. The only fault of the latter one is that they are not always generous on delivering the details of the monetary policy plans. It is really unnerving. It is still not clear, for example, when the ECN starts trimming its bond-buying scheme, how it will proceed. The present Eurozone economic conditions are more or less favorable for a recourse to tightening measures. The euro area economic activity and confidence remain strong, the unemployment rate continues to fall. The only impediment to the ECB’s way to hiking is still low inflation rates figures (currently staying at 1.3% below the bank’s 2% target). Most analysts expect the ECB’s policymakers to announce the deceleration of their bond purchases’ pace in September. But you should beware that the impact from this announcement will not necessarily produce great swings in the pair with EUR. The ECB may be very creative in how it tapers QE. Don’t expect it sticking to the Federal Reserve’s textbook and just roughly reducing their monthly purchase by a certain amount of money. And this ECB’s creativeness may not send the EUR to heights traders would prefer.

More:
https://fbs.com/analytics/articles/...ill_other_central_banks_follow_its_lead__2196

 

[riki143]

GOLD MARKET OVERVIEW
14:53 13.07.2017

Gold prices posted a fourth-straight gain on Thursday reaching $1222.50 amid political uncertainty in the US and a bit dovish read on Fed’s Chair Janet Yellen’s testimony to Congress. Most analysts believe that gold’s rally was triggered by the turmoil in White House following Donald Trump Junior’s release of emails linked to his meeting with a Russian Lawyer. It was said that she wanted to convey some compromising information on Hillary Clinton, then Democratic presidential candidate, the information that would have helped the current president to gain the upper hand. All this email release story intensified the focus on whether Trump’s campaign had some collusion with Russian government or not.

White House linked drama is widely seen as cutting the offs for Trump’s pro-growth policies. Janet Yellen’s testimony was an additional catalyst for the golds’ rally. US dollar slumped significantly after the Fed Chair’s testimony. As gold and USD have the negative correlation, the precious metal surged.

In the longer term, gold may post some additional gains as demand for the bullion will be increasing. India, one of the major gold importer countries, more than doubled its purchases of gold in June amid a rush by the country’s jewelers to store up more gold ahead of a radical tax change. Indian government prepares one of the most radical tax overhaul this year. Imports will certainly decline in case of tax rate increase. At the present moment, the impact from increased Indian demand for gold is not observed. But it will be more salient once the festival season starts in mid-August (when retail purchases of gold will increase). Indians buy gold for marriages (as a gift to a couple of as a part of the bridal costume) and for other festivals.

Meanwhile, the gold is trading at $1220.45. Technically, there is a scope for extension towards $1230.95, $1248.65 levels. If the US dollar manages to regain its strength (for example, thanks to the stronger reading of CPI figures which is due tomorrow at 3:30 pm MT time), the gold prices will be hurt. It might slide towards the supports at $1.204.75 (this week low) and $1194. 25.

More:
https://fbs.com/analytics/articles/gold_market_overview_2198

 

[riki143]

EUR/USD: BEARISH "THREE METHODS" PATTERN
15:33 13.07.2017

There's an "Engulfing", which has been confirmed by the last bearish "Three Methods" pattern. So, the market is likely going to decline towards the 55 Moving Average in the short term.

The 144 Moving Average acted as support, so there's an "Engulfing" pattern, which hasn't been confirmed yet. In this case, bulls are likely going to test the 34 MA during the day. If a pullback from this level happens, bears will have a green light to deliver a new local low.

More:
https://fbs.com/analytics/articles/eur_usd:_bearish_"three_methods"_pattern_2199

 

[riki143]

USD/JPY: BULLISH "HARAMI"
15:39 13.07.2017

There's a possible "Three Methods" between the Moving Averages. If this pattern confirms, bears are likely going to reach the 55 Moving Average shortly.

We've got a bullish "Harami", which has been formed on the lower "Window". So, the pair is likely going to test the upper "Window" in the coming hours. If a pullback from this level happens, there'll be an opportunity to have another decline.

More:
https://fbs.com/analytics/articles/usd_jpy:_bullish_"harami"_2200

 

[riki143]

EUR/USD: DEVELOPING ENDING DIAGONAL
16:15 13.07.2017

There's a developing ending diagonal in wave [v] of C. It seems like wave (iv) has been formed, so bulls are likely going to deliver wave (v) of [v] in the coming hours. In this case, we could have a new high soon.

As we can see on the one-hour chart, wave (iv) took the form of a double zigzag. Therefore, the market is likely going to form another zigzag in wave (v) of [v], so 8/8 MM Level could be broken.

More:
https://fbs.com/analytics/articles/eur_usd:_developing_ending_diagonal_2201

 

[riki143]

EUR/USD: TIME TO REBOUND?
00:20 14.07.2017

EUR/USD is currently trading inside a strong demand zone that has been established by our Fibonacci’s projections. The 200 SMA at H1 chart is also providing the line in the sand for bulls, at which could gather enough momentum to ride the bullish bias. When that happens, the pair could be targeting the 1.1531 level, which corresponds to the -23.6% Fibonacci retracement level. To the downside, such scenario will get invalidated once it breaks below 1.1312.

RSI indicator is close to turn neutral, calling for a consolidation at the current stage.

More:
https://fbs.com/analytics/articles/eur_usd:_time_to_rebound__2208