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USD/CAD: rise to the level of 1.0400 is possible 1. Current trend of USD/CAD On Monday the pair USD/CAD rate fell to support level of 1.0360. The decline was part of the correction, which followed after the rise at the end of last week. Today’s attention shall be drawn to the publication of the trading balances in the US and Canada for June. Experts believe that trade balance deficit in the USA will decline, while deficit in the Canadian trade balance will increase, which will trigger the rise in the SD against the CAD. 2. Important levels: support and resistance At the moment the pair traded near the level of 1.0360, which actually coincides with the moving average of the “Bollinger bands” indicator. During the day downward movement may reach the level of 1.0320, which coincides with the boundary of the ascending channel. The price is likely to go up to the level of 1.0400. In the current situation it is advisable to open long positions with profit taking near the level of 1.0400. 3. Technical indicators On the daily chart Bollinger lines are directed downward; however the price chart had broken the moving average and moved into the upper band, indicating a chance of growth. Histogram of MACD indicator is in the oversold zone and its volumes continue to decrease. The lines of Stochastic are near the overbought zone (80) and directed upward. In the near future these lines may intersect and shift to descending movement; however a sell signal has not been formed yet.
Dmitriy Zolotov Analyst
EUR/USD: Trading Balance data can strengthen USD 1. Current trend of EUR/USD This week the pair EUR/USD started with the decline to 1.3330. Strengthening in the USD is associated with the fact that investors took profit on the short positions, opened last Friday, following the publication of the Non-farming payrolls. Additional support to the pair was provided by the data on business activity index in the non-manufacturing sector of the USA, which rose to 56.0 points in July. Attention today should be focused on the US trade balance for June. According to experts its deficit may be reduced, which can foster strengthening of the USD. 2. Important levels: support and resistance At the moment the pair is testing support level of 1.3250, however it cannot exceed it down yet. If this level is broken down, the price will drop to the level of 1.3200 and from this level the pair may reverse to the ascending movement. In the current situation short positions can be opened from the level of 1.3250 with profit taking at 1.3200. It is also advisable to place pending orders “buy limit” at the level of 1.3200 with profit taking at the level of 1.3340. 3. Technical indicators On the daily chart bands of Bollinger indicator are directed upward, the price chart is going towards the moving average line, suggesting probability of the decline to the level of 1.3200. MACD histogram is in the overbought zone and it may cross the signal line from top to bottom in the near future, forming a sell signal. On the contrary, Stochastic lines are intersecting, tending upward, indicating a chance of temporary ascending movement.
Dmitriy Zolotov Analyst
GBP/USD: Carney has not take drastic decisions 1. Current trend On Tuesday the currency pair GBP/USD fell to the level of 1.5330. Downward movement in price was caused by sharp reduction of the US trade deficit from 44.1 to 34.2 billion USD in June. This morning the pair continued to weaken in advance of the speech of a new governor of the Bank of England Mark Carney. Investors believed that Carney could change monetary policy of the Central Bank of England as he repeatedly hinted. However, Mr. Carney said in his speech that monetary policy of the Bank of England would not be changed until unemployment rate in the country drops to the level of 7.0%. So far the Bank will continue to purchase troubled assets for the amount of 375 billion pounds and interest rates will not be raised. Recall that since last December unemployment rate in the UK has maintained at the level of 7.8%; key interest rate is currently 0.50%. 2. Important levels: support and resistance In general, market positively assessed statements by Mark Carney and after the short-term decline the Pound started to grow. At the moment the price is rising to the level of 1.5400 and if this level is broken down, the pair may go up to the level of 1.5490. In the current situation it makes sense to open long positions from the level of 1.5400 with profit taking at the level of 1.5490. 3. Technical indicators On the daily chart the moving average line of “Bollinger bands” is directed upward; the price chart tends to the upper line. Histogram of MACD has moved to the overbought zone, however this fact is not yet considered as a clear signal to buy. The lines of Stochastic are directed upward, giving a buy signal.
Dmitriy Zolotov Analyst of LiteForex Group of Companies
USD/CAD: general analysis 1. Current trend Today the pair demonstrated rapid rise, correction reached the level of 50.0% Fibonacci. Though there weren't any important events in the economic calendar that could have triggered this rise. Therefore correction will end soon and «bearish» trend is likely to continue. Canadian statistics will also support the rise: experts expect the increase of the construction permits and the rise of the index of business activity in the manufacturing sector. Forecast for the US economy is not so optimistic: it is expected that volume of consumer lending will drop to 15.4 billion USD; as per the report of the Ministry of Energy oil and oil products inventories will also decline. 2. Levels of support and resistance The pair is trading around strong resistance level of 1.0440, from which the pair will probably go down. It is likely that downward movement will reach the level of 1.0382, where the midline of the “Bollinger bands” indicator is located. 3. Trading tips I would advise to sell at the current price with the target at 1.0382. The price is unlikely to exceed this level today. Later, the price will probably reach the level of 1.0329.
Kamil Avad Analyst
USD/JPY: reduction of Japanese current account surplus has weakened the pair 1. Current trend of USD/JPY The currency pair USD/JPY has been weakening this week. Today the price has reached six-week lows at the level of 96.20. The decline was driven by the data on the current account balance in Japan. At the end of June budget surplus was higher than the previous value, but below experts’ expectations, amounting to 0.65 trillion yen. This fact triggered the decline in the pair. On the other hand, Chairman of the Bank of Japan confirmed intention to increase monetary base by 60-70 trillion yen annually. 2. Important levels: support and resistance The pair is trading near support level of 96.00. During the day the pair may experience upward correction to the level of 97.00. However it is more likely that the decline will continue down to the levels of 96.00 and 95.20. In the current situation it is advisable to place short positions with profit taking at the level of 95.20. 3. Technical indicators On the daily chart Bollinger bands demonstrate divergence, confirming downtrend. However, the price chart has broken down the lower line twice, indicating a chance of upward correction. MACD histogram has moved to the oversold zone, its volumes are increasing. Stochastic lines have also moved to oversold zone (20), giving a buy signal.
Dmitriy Zolotov Analyst of LiteForex Group of Companies
GBP/USD: Carney has opened new horizons 1. Current trend Yesterday’s speech by the head of the Bank of England Mr. Carney has triggered high volatility in the national currency rate. First market’s reaction to his statement, that interest rate will not be raised until unemployment rate reaches the level of 7%, was negative. According to projections of the bank of England this level will be achieved not sooner than Q3 2016. The pair fell to the level of 1.5204.However, later, after the inflation report the pair rose up to the level of 1.5500.The Bank of England has changed GDP forecast to1.5% against the previous forecast of 1.2% in 2013 and to 2.5% instead of 1.9% for 2014. Technical indicators show that the major obstacle to the further rise is the level of 1.5500. This level coincides with the level of 23.6 Fibonacci. If the level of 1.5500 is broken down, the growth may reach the level of 1.5800. 2. Support and resistance The nearest support levels are 1.5500, 15475 and 15450, while the main target of the “bears” is 1.5400. Key resistance levels: 1.5550, 1.5580 and 1.5600. 3. Trading tips At this stage we can expect testing of the level of 1.5500. If breakdown of this level takes place, the pair may grow up to 1.5800. Otherwise the pair may experience correction to the level of 1.5400.
Ilya Lashenko Analyst of LiteForex Group of Companies.
GBP/USD: pair lacks drivers to rise 1. Current trend of GBP/USD Since Wednesday the pair GBP/USD has been testing key resistance level at 1.5550, but isn’t able to consolidate above it. Pair lacks the drivers to rise. Today’s data on trade balance didn’t help it either. Market reacts feebly to the decrease of deficit rate down to -8.1 billion pounds, the pair stays around key level of 1.5550. 2. Important levels: support and resistance The level of 1.5550 is the key one, but we expect the price to overcome it and go further up to the levels of 1.5630 and 1.5700. The fall to the level of 1.5490 is not so likely. If the price consolidates above 1.5550, it would be logical to open long positions with targets at 1.5630. Short-term sell positions can be opened at the level of 1.5530. 3. Technical indicators On the daily chart Bollinger Bands are directed upwards. Price chart breaks through the upper line, which indicates the possibility of downward correction. MACD histogram is in overbought zone, its volumes are increasing. Stochastic lines are also in overbought zone, but the signal to buy hasn’t been formed yet.
Dmitriy Zolotov Analyst
USD/CAD: unemployment rate will cause further decline 1. Current trend of USD/CAD Time-frame of the four-hour chart clearly demonstrate the completion of the correction and continuation of the decline of quotes. Yesterday we witnessed intensive breakdown of the ascending channel, where the price corrected to the level of 50% Fibonacci. Growth in the pair was caused by yesterday’s data on a number of applications for unemployment benefits and the rise in price at the primary housing market. Today attention should be focused on the Canadian statistics: we expect the data on a number of new houses constructions, unemployment rate and number of jobs. Analysts believe that unemployment is likely to remain at the previous level of 7.1%, while, according to experts, total number of employed people in the country will increase. The US statistics will be a crucial factor: according to experts the volume of wholesale sales may decrease; inventories of wholesale companies may increase by 0.4%. These facts will indicate overstocking in warehouses and stagnation in the industry. 2. Important levels: support and resistance The nearest resistance level will be yesterday’s lows of the price at the level of 1.0302, next resistance level is 1.0276. Support level is 23.6% Fibonacci (1.0330). 3. Technical indicators MACD histogram has moved to the negative zone, the signal line is directed downward, suggesting that “bearish trend will continue. 4. Trading tips I would recommend to place short positions at the current price with the targets of 1.0276-1.0245.
Kamil Avad Analyst
EUR/USD: Federal budget balance can weaken USD 1. Current trend On the last trading day last week the American dollar slightly regained its positions: quotes of the pair EUR/USD fell by 60 points. This decline was caused by positive US macro-economic statistics. It became known that inventories at the warehouses of the wholesale companies have declined, which did not agree with experts’ expectations, thus indicating stability in this sector. Technically, this movement is a part of decline to the lower limit of the channel. Attention today should be focused on a very important indicator- US Federal budget report. According to experts deficit can amount to 95.3 billion USD, which is worse than the previous data. This news can trigger further rise in the pair to the upper limit of the channel. 2. Levels of support and resistance The nearest support level is 1.3265, which is near the lower line of the indicator “Bollinger bands”. Resistance levels are 1.3346 and 1.3400. 3. Trading tips In advance of the expected news it is recommended to open long positions at the current price. It also makes sense to place pending buy orders near the level of 1.3265.
Kamil Avad Analyst
Forex: Ichimoku Clouds. Review of USD/CHF USD/CHF, H4 On the four-hour chart Tenkan-sen line is approaching Kijun-sen line from below prior to the Golden Cross formation. Chinkou Span line is crossing the price chart from below; current cloud is descending. The pair has overcome Tenkan-sen and Kijun-sen levels and is moving towards the cloud. The lower border of the cloud becomes a resistance level at 0.9299. Kijun-sen line becomes the closest resistance line at 0.9235.
USD/CHF, D1 Let’s look at the daily chart. Tenkan-sen line is below Kijun-sen; they are both horizontal. The price has slowed down its fall and been corrected to Tenkan-Sen line which remains resistance level at 0.9282. Chinkou Span is below price chart, current cloud is descending. One of the previous minimums of Chinkou Span line is expected to be a support level at 0.9200.
Key levels Support levels: 0.9235, 0.9200. Resistance levels: 0.9282, 0.9299. Trading tips On the four-hour chart we can see a trend reversal, which will be confirmed by the cross of Tenkan-sen and Kijun-sen lines. It is a good opportunity to open long trades. The chart of the higher timeframe doesn’t confirm the reversal, but shows a little correction. Anastasiya Glushkova Analyst