Market analysis and trade recommendations by FBS

[riki143]

USD: OUTLOOK FOR AUGUST 21-25
13:17 18.08.2017

The US dollar index (DXY) got support at 92.80 last week and went up to consolidate between 93.20 and 94.00.

The minutes of the Federal Reserve’s July meeting showed that most central bank officials supported a move towards unwinding the Fed's massive balance sheet in September. The $4.5 trillion balance sheet was built up after the financial crisis to keep borrowing costs low. In addition, markets closely follow the Fed’s discussion about inflation, which has recently shown signs of weakness. Opinions within the Fed slightly differ on this point: some members think that the softness in prices is temporary, while others worry that it will take longer than expected for inflation to rise to 2% target. As a result, the odds are that the Fed will delay a rate hike until inflation picks up. This is not very inspiring for the USD.

In the upcoming days, pay attention to new home sales and crude oil inventories on Wednesday, existing home sales on Thursday and core durable goods orders on Friday. In addition, at the end of the week, world's major central bankers will gather at the Fed’s Jackson Hole Symposium. The Fed Chair Janet Yellen will speak on the topic of financial stability at 17:00 MT time on Friday.

Note that political turmoil in Trump’s administration and the market’s risk aversion will likely reduce the impact of any positive statistics from America and keep the US currency under pressure.

Despite the recent recovery, DXY is still not far from its 13-month lows hit at the beginning of August. It looks like the greenback is correcting up within the general downtrend. A decline below 93.20 will open the way down to 93.00 and 92.50 (200-week MA). Resistance is at 94.00 ahead of 94.90 (50-day MA).

More:
https://fbs.com/analytics/articles/usd:_outlook_for_august_21_25_3070

 

[riki143]

USD/JPY: DOLLAR RETURNED TO NEGATIVE AREA
13:18 18.08.2017

Technical levels: support – 109.00; resistance – 109.50.

Trade recommendations:

Sell — 109.50; SL — 109.70; TP1 — 109.00; TP2 — 108.60.
Reason: expanding bearish Ichimoku Cloud with falling Senkou Span A; a cancelled golden cross of Tenkan-sen and Kijun-sen, the falling lines; the bears continue their offensive.

More:
https://fbs.com/analytics/articles/usd_jpy:_dollar_returned_to_negative_area_3072

 

[riki143]

EUR/USD: OUTLOOK FOR AUGUST 21-25
13:25 18.08.2017

In line with expectations, EUR/USD moved horizontally between 1.1845 and 1.1685 during the past week. European stocks were affected by terrorist attack n Barcelona.

The minutes of the ECB July meeting revealed the central bank’s concern over the euro’s strength. It also seems that officials are still uncertain how to signal changes in their policy settings as the economic outlook improves and the need for broad-based bond purchases diminishes.

The ECB President Mario Draghi will address a conference in Germany on Aug. 23, and two days later attends the US Federal Reserve’s Jackson Hole symposium. According to a Reuters report, Draghi won’t deliver a new policy message in Jackson Hole. At the same time, taking into account low inflation in the euro area and other developed economies, any comments on this point will have an impact on the market.

Other events in the region’s economic calendar include German ZEW economic sentiment index on Tuesday, euro zone’s flash manufacturing & services PMIs on Wednesday and German Ifo business climate on Friday.

The pair’s now in a correction within the overall uptrend. The trend channel will stay intact as long as the pair’s above 1.1625. It looks like the euro will visit this level. If it is breached, the pair will be vulnerable for a decline to 1.1540. A close below 200-week MA at 1.1770 won’t be a very encouraging sign. Return above 1.1790 is needed to open the way to the recent highs at 1.1845 and 1.1910, as well as the psychological level of 1.2000.

More:
https://fbs.com/analytics/articles/eur_usd:_outlook_for_august_21_25_3073

 

[riki143]

EUR/USD: "ENGULFING", "DOJI" AND "HARAMI"
13:31 18.08.2017

There are bullish patterns such an "Engulfing", a "Doji" and a "Harami", which all have been formed on the 55 Moving Average line. So, the market is likely going to test the nearest resistance in the short term

The price has reached the Moving Averages, so it's likely to have any bearish pattern soon. In this case, we could have a local bearish correction, but bulls will probably try to deliver a new local high afterwards.

More:
https://fbs.com/analytics/articles/eur_usd:_"engulfing",_"doji"_and_"harami"_3074

 

[riki143]

USD/JPY: BEARS GOING TO REACH LOWER "WINDOW"
13:34 18.08.2017

There isn't any reversal pattern so far, which means we should keep an eye on the lower "Window" as an intraday target. If a pullback from this level happens, we could have an upward correction towards the Moving Averages

We've got an "Inverted Hammer" and a "Tweezers" patterns, but both of them haven't been confirmed yet. So, there's an opportunity to have a local bullish correction and the following decline afterwards.

More:
https://fbs.com/analytics/articles/usd_jpy:_bears_going_to_reach_lower_"window"_3075

 

[riki143]

USD/JPY: OUTLOOK FOR AUGUST 21-25
15:46 18.08.2017

USD/JPY had a very volatile week. The pair rebounded from 109.00 to 111.00, but then was rejected down and returned to 109.00.

Japanese GDP showed the biggest expansion in more than 2 years (+1% q/q) in the second quarter as consumer and business spending picked up. However, wage growth and inflation remain subdued as companies avoid passing more of their profits to employees. Japan will release inflation figures on Friday. Although a small acceleration in price growth from 0.4% to 0.5% is expected, this is still very far from the regulator’s 2% inflation target. As a result, risk sentiment will remain the primary driver of the pair.

The market’s risk aversion is feeding demand for the safe-haven yen. Concerns over US President Donald Trump's ability to push through the pro-growth measures led to significant declines on Wall Street. Terrorist attack in Barcelona also affected the markets. North Korea can also be a source of worries.

USD/JPY remains in short- and longer-term downtrend. A decline below 109.00 will open the way down to 108.80 (bottom of the weekly Ichimoku Cloud/August, June lows). In turn, decline below that point will bring the pair down to 108.10 (April low). A break below the latter will be a signal of the bigger top at Forex market. Resistance lies at 109.50, 110.50 and 111.00.

More:
https://fbs.com/analytics/articles/usd_jpy:_outlook_for_august_21_25_3082

 

[riki143]

GBP/USD: OUTLOOK FOR AUGUST 21-25
16:23 18.08.2017

Reports released this week in the UK showed a mixed picture. Consumer price inflation in Britain unexpectedly held steady in July at an annual rate of 2.6%, despite the fact that analysts were looking forward to a higher number. This news diminishes the pressure on the Bank of England to raise interest rates – not a positive factor for the pound. Retail sales growth exceeded forecasts on the monthly basis, although advance of the indicator in 3 months through July was the weakest in almost 4 years.

In the coming days, Britain will release the second estimate of its GDP growth in the second quarter. According to the initial data, the UK economy expanded by only 0.3% – that’s weak in comparison with last year’s figures.

Uncertainty about Brexit and global risk concerns are having a negative impact on the British currency.

GBP/USD broke below the 50-day MA at 1.2930 at the start of the week and is now consolidating above the 100-day MA at 1.2870. The pair’s currently trading at support line, which connects March and June lows. Decline below the recent lows and 61.8% retracement of June-August rally will open the way down towards the next Fibo level at 1.2735 and 200-day MA at 1.2640. Resistance levels are at 1.2930 and 1.3000.

More;
https://fbs.com/analytics/articles/gbp_usd:_outlook_for_august_21_25_3083

 

[riki143]

EUR/USD IS LOOKING FOR A HINT
11:06 21.08.2017

Recommendation:

SELL 1.1705 SL 1.1760 TP1 1.1625 TP2 1.1530

BUY 1.1825 SL 1.1770 TP 1.1925

On the daily chart, bulls are trying to return the pair inside the uptrend channel at the phase of the “Spike and reversal with acceleration”. If they succeed. The odds of the uptrend’s resumption will increase. On the other hand, failure will allow bears to continue correction.

On H1, EUR/USD finished forming the “widening wedge”. Return of the quotes to 23.6% of the wave 4-5 will be a reason for short positions. On the other hand, growth to $1.1825 will allow opening longs.

More:
https://fbs.com/analytics/articles/eur_usd_is_looking_for_a_hint_3100

 

[riki143]

EUR/USD: CONSOLIDATION IN CLOUDY AREA
10:32 21.08.2017

Technical levels: support – 1.1640, 1.1730; resistance – 1.1770, 1.1820.

Trade recommendations:

Sell — 1.1720; SL — 1.1740; TP1 — 1.1680; TP2 – 1.1640.
Reason: bearish Ichimoku Cloud with falling Senkou Span A; a new dead cross of Tenkan-sen and Kijun-sen; the prices are in the Cloud and may test the support of Senkou Span B.

More:
https://fbs.com/analytics/articles/eur_usd:_consolidation_in_cloudy_area_3096

 

[riki143]

AUD/USD: AUSSIE TESTED SSB’S RESISTANCE
10:33 21.08.2017

Technical levels: support – 0.7890; resistance – 0.7935.

Trade recommendations:

Buy — 0.7890; SL — 0.7870; TP1 — 0.7935; TP3 — 0.7980.
Reason: bearish Ichimoku Cloud with falling Senkou Span A; a golden cross of Tenkan-sen and Kijun-sen; the prices are testing the resistance of Senkou Span B.

More:
https://fbs.com/analytics/articles/aud_usd%3a_aussie_tested_ssb%E2%80%99s_resistance_3097[/UR]

 

[riki143]

NZD/USD: BULLS PREPARE A STRIKE
11:18 21.08.2017

Recommendation:

BUY 0.7335 SL 0.7280 TP1 0.7435 TP2 0.7530

On the daily chart, NZD/USD keeps retracing in line with the transformation of the “Shark” pattern to 5-0. Return of the pair to resistance at 0.7386 (23.6% of the wave CD) and its following successful test will increase the odds of the uptrend’s resumption.

On H1, bulls are ready to launch a third attack on 0.7334. Their success will trigger the “Shark” pattern and increase the odds of reaching 88.6% target. We don’t exclude the possibility of an inverted “Head and Shoulders” pattern.

More:
https://fbs.com/analytics/articles/nzd_usd:_bulls_prepare_a_strike__3102

 

[riki143]

EUR/USD: 34 MA ACTED AS RESISTANCE
11:29 21.08.2017

The 34 Moving Average has acted as resistance, so the price is consolidating. It seems like the market is going to reach the nearest support at 1.1712 - 1.1683. If a pullback from this area happens, there'll be an opportunity to have an upward price movement towards the next resistance at 1.1801 - 1.1846.

The price is consolidating along resistance at 1.1757. If a pullback from the 55 Moving Average happens, bears are likely going to achieve the closest support between the levels 1.1727 - 1.1712. Nevertheless, we should keep an eye on the next resistance at 1.1784 - 1.1801 as a bullish target.

More:
https://fbs.com/analytics/articles/eur_usd:_34_ma_acted_as_resistance_3103

 

[riki143]

GBP/USD: "THORN" PATTERN
11:34 21.08.2017

The last "Flag" pattern has been broken, so the price reached support at 1.2830. Also, there's a "Thorn" pattern, so the market is likely going to test the nearest support at 1.2811. If a pullback from this level happens, bulls will have a green light to reach the next resistance at 1.2892 - 1.2911.

There's a consolidation, which is taking place under the 34 Moving Average. So, the pair is likely going to reach the closest resistance at 1.2892. If we have a pullback from this level, bears will probably try to test support at 1.2930 - 1.2811.

More:
https://fbs.com/analytics/articles/gbp_usd:_"thorn"_pattern_3104

 

[riki143]

EUR/USD: POSSIBLE WEDGE PATTERN
12:33 21.08.2017

The price has been consolidating since an impulse in wave [iii] finished. It seems like we could have a zigzag in wave [iv]. So, we could have another bearish impulse in wave (c) of [iv] pretty soon.

There's a possible wedge pattern in wave (a) of [iv]. Therefore, we could have wave (b), which is likely going to take the form of a double zigzag. In this case, we should keep an eye on 6/8 MM Level as an intraday bullish target.

More:
https://fbs.com/analytics/articles/eur_usd:_possible_wedge_pattern_3105

 

[riki143]

EUR/USD: BEARISH "DOJI"
13:27 21.08.2017

We've got a bearish "Doji" on the 34 Moving Average, but confirmation of this pattern isn't enough. So, the price is likely going to test the closest support area, which could be a departure point for an upward price movement.

We've got an "Engulfing" pattern at the last local high. Considering confirmation of this pattern, the price is likely going to test the nearest support level. The bearish main target is the lower "Window".

More:
https://fbs.com/analytics/articles/eur_usd:_bearish_"doji"_3111

 

[riki143]

USD/JPY: "WINDOW" ACTED AS SUPPORT
13:30 21.08.2017

https://fbs.com/img/articles/3113/1503311167-7ac37306099513065bb808c328f11211_1200x1200_q90.png[/RIMG]

The lower "Window" has acted as support, so we've got an "Inverted Hammer". However, the price couldn't break the upper "Window", so bears are likely going to test the nearest support once again.

[IMG]https://fbs.com/img/articles/3113/1503311167-dbd5fbcba9d6baeef6051cf199716a61_1200x1200_q90.png

We've got a local bullish "Harami", which hasn't been confirmed yet. So, the price is likely going to test the closest resistance. If a pullback from this level happens, we could have just another decline.


More:
https://fbs.com/analytics/articles/usd_jpy:_"window"_acted_as_support_3113

 

[riki143]

OIL (WTI) FAVORED BY THE BEARS
01:32 22.08.2017

Oil (WTI) didn’t achieve to consolidate its gains above the 200 SMA at H1 chart and around that area, it found dynamic resistance; a move that was confirmed with a double top pattern. The Fibonacci area of 50% and 65% has been providing the enough supply to make a sell-off in the crude and it’s now heading to lower levels.

If the crude oil manages to break below August 17th lows, we can expect further weakness towards -23.6% at 45.57. RSI indicator remains in the negative territory, favoring to the bears.

More:
https://fbs.com/analytics/articles/oil_(wti)_favored_by_the_bears_3131

 

[riki143]

EUR/USD: "DOUBLE TOP" PATTERN
10:38 22.08.2017

The price is consolidating under the previously broken trend line. So, the pair is likely going to test the 34 Moving Average. If a pullback from this line happens, there'll be an opportunity to have another upward price movement towards the next resistance at 1.1846 - 1.1875.

We've got a local "Double Top" pattern, which has been confirmed, so the price is testing the nearest support at 1.1801. It seems like bears are going to reach the next support at 1.1773. However, if we have a pullback from this level, bulls will probably try to achieve another resistance at 1.1838 - 1.1846.

More:
https://fbs.com/analytics/articles/eur_usd:_"double_top"_pattern_3141

 

[riki143]

XAU/USD: INDIANS WILL SHOW WAY FOR GOLD
10:55 22.08.2017

Recommendation: SELL $1280 SL $1296 TP $1264 TP2 $1250

On the daily chart, XAU/USD managed to return inside the bullish medium-term uptrend channel. Successful test of resistance at $1297 will trigger AB=CD pattern. Its 200% is near $1385. On the other hand, failure will allow bears to seize the initiative.

On H1, XAU/USD formed a reversal pattern: a combination of “Three Indians” and 1-2-3. A break below correction low at the point 2 will signal the start of corrective move. There’s also diagonal resistance at 23.6% of the last bullish wave.

More:
https://fbs.com/analytics/articles/xau_usd:_indians_will_show_way_for_gold_3144

 

[riki143]

AUD/USD: BULLS WANT TO GO NORTH
11:17 22.08.2017

Recommendation:

BUY 0.796

SL 0.7905

TP1 0.802 TP2 0.807 TP3 0.835

On the daily chart, AUD/USD managed to settle above the important level of 0.7900 (23.6% of the last bullish wave). The odds of the uptrend’s resumption are now higher. The growth of Australian dollar towards 200% target of the AB=CD pattern may continue in case of a successful test of resistance at 0.7960.

On H1, AUD/USD reached targets of the “Widening wedge”. A break of resistance at 0.9660 will increase the odds of meeting 88.6% and 113% targets of the “Shark” pattern.

More:
https://fbs.com/analytics/articles/aud_usd:_bulls_want_to_go_north_3145