Forex Analysis by LiteForex

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AUD/USD: general analysis

Current trend
There are a lot of fundamental factors that will affect the dynamics of the Australian dollar this week. First of all, important data on inflation and unemployment will be published in USA on Wednesday, Thursday and Friday, especially Friday. Don’t forget about important releases scheduled on the night from Wednesday to Thursday: leading economic indicators from China, which is known to be one of Australia's major trading partners.

On the daily chart we can see a long-term downward trend, confirming the BOA's policy to reduce AUD rate against US dollar. Such policy is determined by the factor that 75% of the economy of the country is aimed at export.

Support and resistance
Resistance levels: 0.7837 (annual maximum), 0.7779 (monthly and weekly maximum), 0.7600, 0.7550, 0.7489.
Support levels: 0.7420, 0.7309.

Trading tips
The reasons for the global downward trend of the Australian currency is still there, so be careful when working in the "bull" corrections. Long position can be opened at the level of 0.7489 with the targets of 0.7550 and 0.7600 and stop-loss at 0.7430.
Short positions can be set at the level of 0.7600 with the targets of 0.7489 and 0.7420 and stop-loss 0.7750.

 

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Brent: the OPEC agreement pushes the prices up

Current trend

On Wednesday the oil prices have rapidly grown up by 7%. In particular, the Brent price has risen above the level of 52 dollars per barrel. This significant increase is a result of the agreement on the oil production limitation for 1.2 billion barrel per day set by the OPEC. The disagreements of Saudi Arabia, Iraq and Iran, that were the main obstacles to the agreement, were overcome. As a result Iraq should cut the production by 310K barrel per day, as Iran can even increase it by 90K barrel per day. This was the first agreement since 2008 year. The petroleum exporting counties that don’t belong to the Organization should also join the agreement. In particular Ministry of Energy of Russia has already declared the intention to cut the oil production. Experts (Goldman Sachs, Morgan Stanley) agree that in case of implementation of the agreement by all of its members, which is due at January, 2017, the oil price can rise up to 60 dollars per barrel. But the OPEC members have violated the previous agreements many times, so it’s better to wait until the implementation of the agreement.

Support and resistance

The price is growing up to the level of October maxima (53.00). From this area there is a possibility of correction to the level of 50.82 (Fibonacci correction 76.4%) and 49.43 (Fibonacci correction 61.8%, the middle line of the Bollinger Bands), as the Stochastic is ready to leave the overbought area. However in the middle term the growth to the level of 54.00, 55.00 is more likely.

Support levels: 50.82, 49.43, 48.29.
Resistance levels: 53.08, 54.00, 55.00.

Trading tips

It is recommended to open long positions when the price is set above 53.08 with the target at 54.00, 55.00 and stop loss at 52.60.
It is recommended to open short positions at the level of 50.82 or 53.00 with the target at 49.43 and stop loss at 53.30.

 

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AUD/USD: general analysis

Current trend
All this week the driver for pair’s motion was US dollar. Today is the first Friday of the month, which means that at the beginning of the American session Non-Farm Payrolls will be released. Statistics promise to be positive, which will put pressure on the pair AUD/USD.

From the technical point of view, the pair broke out of long-term downtrend channel last week. Let us consider two basic scenarios. The first is a continuation of the trend down, which is plausible in light of the strengthening of the dollar in recent years. The second scenario will happen if the breakout is the false one and it only serves to close the stop-loss order of players who trades up. It is not difficult to guess that most of the "bull" stops are in a range between the levels of 0.7309 and 0.7132, so the downward movement may continue to these levels.

Support and resistance
Resistance levels: 0.7837 (annual maximum), 0.7779 (monthly and weekly maximum), 07600, 0.7545, 0.7489, 0.7420.
Support levels: 0.7309, 0.7132 (the level of accumulation of stop-losses).

Trading tips
The reasons for the global downward trend of the Australian currency are still in force, so be careful when working in the "bull" corrections. Buy the pair from the level of 0.7420 with the targets at 0.7489, 0.7545 and 0.7600 and stop loss at 0.7370.
If the alternative scenario develops, the pending orders to buy can be set at the level of 0.7309 with the target at 0.7132 and stop loss at 0.7360.

 

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XAU/USD: general analysis

Current trend

Gold has been falling against the USD during the last five weeks. During the trading session on Friday the pair was at the level of 1176.70 — close to the year minimum reached in March. The market is under pressure due to USD growing in anticipation of the possible FRS interest rate increase on December, 14. The stable growth of the American stock market which became more attractive to the investors, also pressures the gold.

Key levels

On the daily chart the pair is lowering towards the lower border of the Bollinger Bands. The MACD histogram is in negative zone, its volumes are the same on the level of -23.640. Stochastic is in neutral zone, lines are pointed downwards, if it crosses the border of the oversold area, the sell signal will appear.
Support levels: 1147.30, 1130.75.
Resistance levels: 1176.30, 1187.70, 1229.70.

Trading tips

It’s recommended to open short positions from the current level 1155.00 with the target at 1147.00 and stop loss at 1160.00.
It’s recommended to open long positions from the level of 1177.00 with the target at 1187.00 and stop loss at 1172.00.

 

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Brent: the market remains optimistic

Current trend

The trading week started with a strong oil prices growth, the Brent listings reached the maximum from the July, 2015, rising above the level of 57.00. The OPEC and 11 non-OPEC countries have come to the agreement of the oil producing limitation by 558K barrels per day, and this supported the price greatly. The oil Minister of Saudi Arabia declared the possibility of further limitations unilaterally. This brought some optimism on the market, and the middle term targets increased. Today the level of 65 dollar per barrel is the strong support level.

The market is favorable for the “bulls” now. If all the participants follow the agreement fully, the world extracted oil resources will reduce by 46%, which will make the price to grow. On the other hand, the countries have violated such rules many times. In addition, the USA can prevent the oil prices from growing, as they can increase the production of the shale oil, reopening the wells, declared as unprofitable. So the traders are waiting for the realization of the agreement, remains optimistic.

Support and resistance

The price was corrected to the level of 55.24 and now is trying to grow. In case of the breakup at 56.46 the nearest targets will be at 57.10 (December maximum), 58.00 and 58.80. The indicators show the possibility of the growth, too. The price is moving within the upper border of the Bollinger Bands, which is pointed upwards and shows the upward trend, too. The Stochastic is reversing upward, the MACD histogram is growing in the positive area. The continuing of the downward correction to the level of 53.50 (Fibonacci correction 23.6%) and 51.50 (Fibonacci correction 38.2%) is less possible, as the price should consolidate below the 54.80 to develop it.

Support levels: 54.80, 53.50, 51.50.
Resistance levels: 56.45, 57.10, 58.00, 58.80, 60.00.

Trading scenario

Open long positions when the price is set above 56.45 with the target at 57.10, 58.00 and 58.80. Stop loss is at 55.90. Open short positions below 54.80 with the target at 53.50, 51.50 and stop loss at 55.40.

 

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NZD/USD: technical analysis

NZD/USD, D1
On the daily chart the tool is steadily growing along the upper border of the indicator "Bollinger Bands". Indicator is pointing up, while the price range continues to grow, which is the basis for the continuation of the current trend. The MACD histogram is getting closer to zero line from below, its volumes are growing, maintaining a buy signal. Stochastic is going to enter the overbought zone.

NZD/USD, H4
On the 4-hour chart the pair is trading in the upper Bollinger band. Indicator is pointing up, while the price range has increased, pointing to the preservation of the current trend. Histogram MACD is in the positive zone, its volumes continue to grow, while maintaining a strong buy signal. Volume line of Stochastic is pointing up, while the signal line is oriented downwards.

Key levels
Support levels: 0.7203, 0.7194, 0.7182, 0.7165, 0.7153.
Resistance levels: 0.7222, 0.7230, 0.7238, 0.7246.

Trading tips
Long positions may be opened at the current price with the targets at 0.7238, 0.7250 and stop loss at 0.7200. Implementation period 1 day.
Short positions can be placed at the level of 0.7205 with the targets at 0.7180, 0.7170 and stop loss at 0.7195. Implementation period 1 day.

 

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EUR/USD: general analysis

Current trend

The pair is lowering. It renewed the historical minimum due to the FRS decision of the key interest rate rise to 0.5-0.75%. The rise was expected, and furthermore, the commitment to the tightening of the US monetary policy was announced.
“A modest increase in the federal funds rate is appropriate in light of the solid progress we have seen toward our goals of maximum employment and 2% inflation”, — is written on the official site of the FRS. Janet Yellen said that the FRS will pursue its policy according to Trump’s economical plan for lowering the taxes and increasing of spending on infrastructure. The new interest rate rise in the next year was also announced.

As today there are no significant releases in Eurozone, the USA Retail Sales and Initial Jobless claims indicators are worth traders’ attention.

Support and resistance

On the 4-hour chart the pair broke the lower border of the Bollinger Bands indicator, showing a strong sell signal. The MACD is on negative zone, its volumes are rising. The signal line crosses the histogram body downwards, giving sell signal. The Stochastic crosses the border between neutral area and oversold area downwards, giving a signal to open shorts positions.

Support levels: 1.0400.
Resistance levels: 1.0500, 1.0550, 1.0600, 1.0650, 1.0710, 1.0735, 1.0800, 1.0830, 1.0870.

Trading scenario

Open short positions from the current price with the target at 1.0300. Stop loss is at 1.0450.
Open long positions from the level of 1.0550 with the target at 1.0600. Stop loss is at 1.0520.
Implementation period: 1-3 days.

 

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XAG/USD: silver is falling

Current trend

Yesterday the price of silver significantly declined amid a continuous strengthening in the US Dollar that was supported by strong data from the US.

The Consumer Price Index excluding Food and Energy in November rose by 2.1% that matched the figure from the previous month but came out a 0.1% worse than forecasts of economists. On a month-to-month basis, the index added 0.2% that matched the expectations. Additionally, the number of Initial Jobless Claims for the week ending 9 December fell from 258 thousands to 254 thousands that exceeded the expectations by 1 thousand claims. The NY Empire State Manufacturing Index in December grew from 1.5 to 9.0 points, more than twice beating the forecasts. The Philadelphia Fed Manufacturing Index rose from 7.6 to 21.5 points, against the expectations of a growth to only 9.0 points.

Support and resistance

Bollinger Bands on the daily chart turned down while the price range is widening. The price, however, is trading underneath its lower border. MACD is falling having formed a sell signal. Stochastic continues falling having reached the oversold zone.
The indicators recommend waiting for clearer trading signals.

Support levels: 15.87 (local low), 15.65, 15.51 (11 April low).
Resistance levels: 16.00 (local high), 16.15 (25 November low), 16.30, 16.42 (18 November low), 16.62, 16.73 (local high), 16.87, 17.00, 17.22 (16 November high).

Trading tips

Long positions can be opened after the price consolidation above the level of 16.15 with targets at 16.62, 16.73, 17.00 and stop-loss at 15.80. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 15.87 with targets at 15.51, 15.25, 15.00 and stop-loss at 16.15. Validity – 2-3 days.

 

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GBP/USD: general analysis

Current trend

During the last week trading sessions the pair has lost about 110 points due to the strengthening of the USD. As expected, the regulator has increased the key interest rate from 0.50% to 0.75%, adding than the next rate rise can happen in the first half of the next year. On Thursday, December, 15, the Bank of England has decided to keep the interest rate on the same level of 0.25%. The Head of the regulator, Mark Carney has commented the decision carefully and avoided any specificity. However, he said that the inflation stays within expected range, and there are no conditions to its growth.

Concerning the “hawk” rhetoric of the USA FRS and tough negotiations between UK and the EU upon the Brexit, the pair will decrease in the long term.

Support and resistance

On the 4-hour chart the pair is trading in the bottom area of the Bollinger Bands. The indicator is pointed downwards, as the price range is wide, so the current trend will continue. The MACD is in negative zone and doesn’t give a clear signal. The Stochastic is ready to leave the overbought area, forming a strong sell signal.
According to the readings, it’s better to open short positions.

Support levels: 1.2450, 1.2401, 1.2361, 1.2184.
Resistance levels: 1.2516, 1.2567, 1.2605, 1.2648, 1.2698, 1.2723.

Trading scenario

Open short positions on the current level with the target at 1.2400. Stop loss is at 1.2520. Implementation period: 1-2 days.
Open long positions from the level of 1.2520 with the target at 1.2570. Stop loss is at 1.2500. Implementation period: 1-3 days.

 

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USD/CAD: general analysis

Current trend
The Canadian dollar continues to move in the upward channel since March 2016. Since last week, the pair once again start the upward movement within the channel, caused by the strengthening US dollar. Now the pair is in the middle of the range.
Further movement of the pair may be affected by data on wholesale sales from Canada at 15:30 (GMT+2) today, retail sales data from the US, and particularly the report of the American Petroleum Institute at 23:30 (GMT+2). As you know, the Canadian dollar has a strong correlation with the oil price. For the same reason it is important to pay attention to the Wednesday release, 17:30 (GMT+2) of oil stats from the US.

Support and resistance levels
Support levels: 1.3262, 1.3315, 1.3376, 1.2988, and, of course, the lower boundary of the channel at 1.3130.
Resistance levels: 1.3521, 13579, 1.3800 (the upper border of the channel), 1.3844.

Trading tips
Long positions may be opened at the market price, targets – 1.3521 and 1.3579, stop loss –1.3340.
The scenario with a return to the bottom border of the channel is still relevant. In this case, we sell from the level 1.3376 with target at 1.3130 and stop loss at 1.3450.

 

[LiteForexNews]

AUD/USD: general analysis

Current trend

Yesterday, the Australian currency continued its decline against the US dollar after the release of Bank of Australia Meeting Minutes on interest rates and monetary policy. However, during the American session, the pair gained back about forty points from the 90 it had lost. The releases of the leading economic indicators index in Australia and the index of activity in all sectors of Japan did not affected the situation significantly.

Today, at 14:00 and 16:00 (GMT+2) we expect the stats on real estate market and mortgage lending in the US. Also important data will be stats on stocks of petroleum products in the US (17:30 GMT+2).

Support and resistance

Resistance levels: 0.7837 (one-year maximum), 0.7776 (month and week high), 0.7660, 0.7600, 0.7545, 0.7489, 0.7420, 0.7309.
Support levels: 0.7143, 0.7021, 0.6828.

Trading tips

Short positions can be opened at the market price with the targets of 0.7143, 0.7021 and stop loss at around 0.7310.
If the price consolidates above 0.7309 level, then the long positions will become relevant. Targets for the “bulls” will be 0.7420, 0.7489 and stop loss at around 0.7250.

 

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USD/JPY: pause before growth resumes

Current trend

The American Dollar continues consolidating against the Yen after a significant growth in November and the beginning of December. The Dollar fell due to profit fixation and the pair continues moving within the range of 80 points amid the lack of important fundamental news from the US or Japan. However, the Yen was slightly supported by yesterday’s decision on interest rates. The Bank of Japan left the rate unchanged, and in commentaries expressed some optimism noting a gradual economic recovery.

Today extra attention needs to be paid to macroeconomic statistics from the US that could determine further pair’s dynamics. Data on the GDP, labour market and Durable Goods Orders is due.

Support and resistance

In the short-term, the price might fall to the lower border of the ascending channel at the level of 117.15 from where its growth will resume.
Technical indicators suggest a growth continuation. Bollinger bands are directed up while the upper line is at the level of 119.00, indicating the next possible target. MACD histogram is about to resume its growth in the positive zone.
Support levels: 117.15, 116.50, 115.50, 114.80, 114.00, 113.15, 112.30.
Resistance levels: 118.00, 118.25, 118.65, 119.00, 119.35, 120.05.

Trading tips

Long positions can be opened from current levels and from the level of 117.15 with targets at 119.00, 120.05 and stop-loss at 116.80.

 

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GBP/USD: the pound stays under pressure

Current trend

During the trading sessions in the previous week the pound was lowering against the US dollar, renewing the local minimum from November, 2. Despite of the decreasing traders’ activity due to the upcoming New Year and Christmas holydays, the pound couldn’t became corrected, being under the pressure of new concerns due to the upcoming Brexit.

In addition rather controversial macroeconomical statistics from the UK were published on Friday, 23. The third quarter GDP index has grown by 0.6% QoQ, which is better than the predicted value by 0.1%. The YoY GDP has grown by 2.2%, which is worse than predicted value by 0.1%. The Business Investments indicator has grown only by 0.4% QoQ, while the experts predicted the growth by 0.9% QoQ. The YoY volume of the investments has decreased by 2.2% YoY against -1.6% in the previous quarter. The Index of Services has grown by 1.0% in October against +0.8% in September, while analysts were expecting the growth by 0.9% QoQ. The Current Account data are better than expected also. The third quarter deficit is 25.490 billion pounds, increased from the level of 22,080 billion, while the analysts expected the deficit to grow to the level of 27,450 billion pounds.

Support and resistance

Resistance levels: 1.2312 (minimum on December, 20), 1.2354, 1.2385 (minimum on November, 28), 1.2419, 1.2468, 1.2512 (maximum on November, 22), 1.2548, 1.2584 (the level of December, 14) and 1.2619.
Support levels: 1.2272 (testing during the morning session on December, 26), 1.2228 (current minimum from December, 23), 1.2171 and 1.2132 (the October, 28 level).
On the daily chart the Bollinger Bands indicator is lowering. The price range is slightly widening, giving to the “bears” the way to new local minima. However the indicator shows the possibility of the appearance of the correctional growth and the return of the price to the middle line area.

The MACD is lowering, keeping a sell signal (the histogram is below the signal line). It’s better to keep current shorts positions, but not to open new “bearish” ones.
The Stochastic is in the oversold area, is trying to reverse upwards, which can show the potential formation of the correctional growth in short or very short terms.

Trading scenario

Open long positions after the breakout of the level of 1.2312, if the technical indicators don’t contradict the “bullish” trend. Take profit is at 1.2419 or 1.2468. Stop loss is at 1.2210 and 1.2200. Implementation period: 2-3 days.
In case of the breakout of the level of 1.2228 downwards, it’s better to open short positions with the targets at 1.2132 and 1.2100. Stop loss is at 1.2280. Implementation period: 2-3 days.

 

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USD/CHF: the US dollar keeps growing

Current trend

In the beginning of the week the US dollar is growing against the Swiss franc, renewing a local maximum on December, 21. The market activity is still low due to the Ney Year and Christmas holydays. The traders prefer not to buy a risky currency, but consolidate the profit while trading stable ones.

On Monday, 26, there were no significant macroeconomical statistics published, but on Tuesday there will be a lot of data from USA. The investors are interested in Business Activity and Consumer Confidence indices. Also the traders wait for the Redbook index and October S&P/Case-Shiller Home Price Indices. The nearest publications in Switzerland are due at Wednesday, December, 28, as the November UBS Consumption Indicator will be published. The data is based on 5 economic indicators of consumption: car sales, consumer confidence, retail sales, the number of domestic overnight hotel stays, credit card transactions volumes.

Support and resistance

Resistance levels: 1.0290 (maximum on December, 21), 1.0318 (maximum on December, 20) и 1.0342 — maximum on December, 15.
Support levels: 1.0271 (the nearest level), 1.0239 (minimum on December, 16), 1.0212 (maximum on December, 9), 1.0190, 1.0166, 1.0149 (the level of December, 4), 1.0123 and 1.0100.

On the daily chart Bollinger Bands indicator is growing. The price range is narrowing, reflecting recent controversial trade dynamics. Stick to the channel trade strategy.
The MACD is lowering, keeping the weak sell signal (the histogram is below the signal line). It’s better to close some of the short positions and wait for more trading signals.

The Stochastic reversed again in the middle of its working area. The indicator doesn’t contradict with the further “bullish” development in short or very short term.

Trading scenario

Open long positions after the breakout of 1.0290, if the technical indicators don’t contradict with the «bullish» trend. Take profit is at 1.0342, 1.0350 or 1.0375. Stop loss is at 1.0250. Implementation period: 2-3 days.
In case of reversal near the level 1.0290 it’s better to open correction short positions with the nearest target at 1.0200 or 1.0190. Stop loss is at 1.0320 or 1.0330. Implementation period: 2-3 days.

 

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XAG/USD: general analysis

Current trend

Yesterday the pair was growing against the “thin” market and no key macroeconomical news. It couldn’t consolidate above the strong resistance level of 16.00, and the silver began to decrease again.
Today the publication of the Pending Home Sales index can affect the market. The growth of the index above 0.5% will pressure the pair.

Support and resistance

On the daily chart the pair is trading in the narrow range of 15.85-16.05. The Bollinger Bands indicator has corrected downwards, as the price range has widened significantly, reflecting the high volatility of the continuing of the current trend. The MACD is in the negative zone, the volumes of the histogram are decreasing, keeping a sell signal. The Stochastic has reversed upwards near the border of the oversold area.
According to the indicators, short positions are more preferable.
Support levels: 15.82, 15.65, 15.47.
Resistance levels: 16.16, 16.41, 16.66, 16.94, 17.20.

Trading scenario

Open short positions at the current price with the target at 15.45. Stop loss is at 16.05. Implementation period: 1-2 days.
Open long positions at 16.15 with the target at 16.55. Stop loss is at 15.95. Implementation period: 1-2 days.

 

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Brent: renew of maxima in the end of the year

Current trend

The Brent oil prices grew to the level of year maxima 57.00 on Wednesday, and it is trading there now. The growth is caused to the oil production countries confirmed their agreement on the oil production limitation. The Oil Ministry of Iraq confirmed that the country is ready to limit the oil production by 200-210K barrel in January. The Venezuela Oil Ministry confirmed the limitation by 95K barrel per day. The EIA Crude Oil Stocks change index is worth attention today. It is expected to decrease by 2060 million barrel. In this case the price can renew the year maxima and grow to the level of 57.70, 58.50. Otherwise the retreat to the level of 55.90 (the middle line of the Bollinger Bands and an upward fan line of Fibonacci 61.8%).

Support and resistance

Support levels: 55.90, 55.00, 54.90, 53.00, 51.70.
Resistance levels: 57.00, 57.70, 58.50.

Trading scenario

Open long positions when the price has consolidated above the level of 57.00 with the target at 57.70 and 58.50. Stop loss is at 56.70. Open short positions below the level of 57.00 with the target at 55.90, 55.00 and stop loss at 57.40.

 

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USD/JPY: the dollar is lowering in the end of the week

Current trend

During the trading session on Thursday, December, 29, the USD was lowering against the yen, reaching the new local minimum from the 14 of December and then renewed it during the morning session on the 30 of December. The “bearish” dynamics is due to the correctional moods before the New Year holydays. The investors usually close the most of positions in this time of the year, in addition, the dollar is greatly overbought against the yen as a result of the November growth. The USD index has reached the highest level from the 2002 year.

Also, the macroeconomical data in USA has affected the trading sessions on Thursday. The weekly Initial Jobless Claims index has lowered from 275K to 265K, which is by 1K worth than expected value. On the contrary, the Continuing Jobless Claims index has grown from 2.039 million to 2.102 million, while the analysts expected the lowering to 2.030 million.

Support and resistance

Resistance levels: 116.54 (actively testing during the morning session 30 December), 117.00, 117.58, 118.00, 118.24 (maximum on December, 20), 118.66 (maximum on December, 15) and 119.06 (the level of the February, 3, 2016).
Support levels: 116.04 (current local minimum, renewed during the morning session on December, 30), 115.61, 115.00 (the level on December, 14), 114.40 (maximum on December, 7), 114.00, 113.50, 113.00 (the level on December, 5) and 112.60.
On the daily chart the Bollinger Bands indicator is growing. The price range is rapidly narrowing, reflecting the appearance of the correctional dynamics. Stick to the channel trade strategy until the situation is clear.

The MACD is lowering, keeping rather strong sell signal (the histogram is below the signal line). Keep the short positions in the short term and do not open new positions.

The Stochastic has reached the overbought area, was corrected and reversed sideways. It’s better to wait for the clear signal.

Trading scenario

Open long positions after the breakout of 117.00. Take profit is at 118.24 or 118.66-119.06. Stop loss is at 116.50-116.35. Implementation period: 2-3 days.
The alternative scenario is the returning of the strong “bearish” trend and a downward breakout of the level of 116.04. In this case the “bearish” targets are at 114.40-114.00. Stop loss is at 116.54. Implementation period: 2-3 days.

 

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XAU/USD: general analysis

Current trend
During the second half of 2016 the price of gold continued to steadily decline due to a stronger US dollar. Currently, however, the pair has already finished the movements triggered by Brexit and raised interest rates of the Fed. At the moment, there is concern on the market about the presidency of Donald Trump. In the near future he will have to convince the US Congress to allocate a large sum for the implementation of economic programs, and his new cabinet still has to go through the approval process in the Senate hearings. In this situation, these processes are likely to be long and exhausting, which may have a prolonged negative impact on the US currency, and strengthen the positions of precious metals.

The current week is replete with important economic releases from the US. Today in the afternoon in the United States data on the index of gradual acceleration of inflation and the index of business activity in the manufacturing sector from the ISM will be published. Projected growth of both indices will reflect the positive sentiment in the business environment and will contribute to the strengthening of the dollar.

Support and resistance
On the daily chart the pair is trading around strong support level of 1148.50. The indicator "Bollinger Bands" is directed downwards, whereas the price range is narrowing, which indicates the probability of a change of the current trend. Histogram of MACD is in the negative zone, its volumes are growing, keeping a weak buy signal. Stochastic has turned down at the border of the overbought area.
Support levels: 1118.88, 1128.28, 1141.69, 1146.39.
Resistance levels: 1159.14, 1172.55, 1180.60, 1188.65.

Trading tips
Short positions should be opened at the level of 1146.00 with the target at 1132.00 and a stop loss at the level of 1153.00. Implementation period: 1-2 days.
Long positions can be set at the level of 1151.70 with Take Profit at 1166.50 and a stop loss order at the level of 1143.50. Implementation period: 1-2 days.

 

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UKBrent: general review

Current trend

During yesterday’s trading session, after it has tested the level of 58.44, the price of Brent crude oil fell by almost $3 per barrel, and at its lowest point towards the end of the session was trading near the level of 55.40. Most likely, such a serious decline was caused by a strengthening in the US Dollar amid the publication of positive macroeconomic statistics in the US. Market participants were selling oil futures that are expressed in Dollars.

Today markets are waiting for the publication of the Weekly Crude Oil Stock by the American Petroleum Institute, due at 11:30 pm (GMT+2).

Support and resistance

The instrument is correcting after the sharp fall. The upward correction could continue to the middle MA of Bollinger Bands (56.77).

Support levels: 55.79, 54.74, 53.55.
Resistance levels: 56.49, 57.29, 58.44.

Trading tips

Long positions can be opened after the price consolidation above the level of 56.77 with targets at 57.29, 58.44 and stop-loss at 56.40.
Short positions can be opened after the price consolidation below the level of 55.37 with targets at 54.74, 53.55 and stop-loss at 55.60.

 

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USD/JPY: general review

Current trend

The pair sharply fell yesterday after the release of the FOMC Minutes from the last meeting of the regulator in December. The Minutes showed that the officials are concerned with falling unemployment in the US that in the near future might result in higher inflation. However, it was noted that due to uncertainties regarding Donald Trump’s fiscal policy plans, the pace of further monetary policy tightening is hard to forecast. At present, the Fed is predicting 3 rate hikes in 2017.

Additionally, the Dollar remains under pressure prior to the publication of data on the US labour market, due tomorrow. Strong reading on the Nonfarm Payrolls could provide support to the American currency.

Support and resistance

The pair turned down having failed its 38.2% Fibonacci fan line. Both the RSI and Composite are showing Bearish patterns suggesting the fall could continue.
Support levels: 115.95 (local lows), 114.89 (March 2016 highs), 114.42 (November 2016 highs).
Resistance levels: 118.60 (local highs), 120.29 (July 2015 lows), 121.33 (January 2016 highs).

Trading tips

Short positions can be opened from the level of 115.95 with targets at 114.89, 114.42 and stop-loss at 116.30.
Long positions can be opened from the level of 118.60 with targets at 120.29, 121.33 and stop-loss at 118.17.