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EUR/USD: review and forecast of the price movement Current trend At the yesterday’s trading session European currency significantly strengthen against the USD despite positive statistics on the business activity index in the US service sector. In April this index has exceeded both the forecast and the previous value, reaching the level of 57.8 points. On Wednesday, the pair continued to rise and reached the level of 1.1269 and then corrected. Now, the pair is at the level of 1.1230. Apart from the speech of Mrs. Janet Yellen, the head of the US Fed, economic calendar is uneventful today. Support and resistance On the four-hour chart Bollinger bands demonstrate slight divergence, which confirms the downward correction can reach the moving average line at the level of 1.1180. MACD histogram is in the positive zone; its volumes are slowly increasing, which indicates continuation of the rise in price. It is likely that in the near future downward correction will continue. Resistance levels: 1.1270, 1.1290 and 1.1340. Support levels: 1.1170, 1.1220 and 1.1060. Trading tips Sell positions can be opened from the current levels with the nearest target of 1.1170. Breakdown of this level will open the way to 1.1120. It is also possible that the price will reverse from the level of 1.1170 and in this case the growth in price can go back to the recent highs of 1.1270 and 1.1290.
Analytics of LiteForex Investments Limited
GBP/USD: technical analysis Current trend This week has been one of the most difficult for the Pound in the time period of the downtrend. Monthly chart shows that the price currently reached one of the most important level of 1.5200. Given current price movement in the downtrend within correction, the levels of 1.5200-1.5230 is the zone of Fibonacci retracement of 23.6%, which is the first level of correction. A lot will depend on the results of today’s election in the UK, and the American labor market statistics, which will become known tomorrow. If the price goes up, next resistance level will be 1.5600, which coincides with 38.2% of Fibonacci retracement. If downtrend in the Pound resumes (which will be possible in case of breakdown of the levels of 1.5130 and 1.5030), the Pound will go to the local lows at the level of 1.4630. Support and resistance On the daily chart histogram OsMA is declining trying to reach zero level. As soon as it goes to the negative zone, it makes sense to open sell positions. Stochastic is in the sell zone; however the fact line has crossed the slow line from top to bottom, which gives a buy signal. Resistance levels: 1.5250, 1.5370, 1.5440 and 1.5530. Support levels: 1.5130, 1.5030 and 1.4940. Trading tips It makes sense to buy the pair in case of breakdown of the level of 1.5250 with take profit at 1.5440 and 1.5530. Sell positions can be opened after breakdown of the level of 1.1530 with the targets of 1.5060, 1.5030, 1.4940 and 1.4630.
Analytics of LiteForex Investments Limited
Forex: Ichimoku Clouds. Review of Brent Brent, H4 Let’s look at the four-hour chart. Tenkan-sen line has crossed Kijun-sen from above, forming trend reversal pattern “Dead Cross”. Chinkou Span line has crossed the price chart from above; current Kumo-cloud is ascending. The pair is trading around Senkou Span A (65.69) line and is trying to enter the cloud. The closest resistance level is Tenkan-sen line (66.91). The next obstacle for the price on its way down will be the lower border of the cloud at 64.02.
Brent, D1 On the daily chart Tenkan-sen line is above Kijun-sen, both lines are horizontal. Chinkou Span line is above the price chart; current Kumo-cloud is ascending. After long fall, the pair has been corrected under Tenkan-sen line, which is now a resistance level (66.94). Kijun-sen line will be a support level (61.97).
Key levels Support levels: 64.02, 61.97. Resistance levels: 66.91, 66.94. Trading tips On the four-hour chart the pair is going to enter the cloud, on the daily chart the pair is falling towards Kijun-sen line. Targets for the sell positions are around 61.97. Analytics of LiteForex Investments Limited
USD/CAD: prices of futures for oil are increasing Current trend On Tuesday, the American Petroleum Institute (API) reported the decline in the commercial inventories of oil in the USA by 2 million barrels. Futures prices of oil are rising despite negative forecast of the International Energy Agency (IEA). The decline in the USD against other currencies, which continues since mid-April, provides support to the oil prices. Recall that the Canadian dollar is considered a commodity currency; therefore it is very sensitive to the fluctuation in oil prices. Current situation is favourable for the Canadian currency; therefore it is strengthening against the USD. If we take 18 March as a starting point, the decline amounted 800 points. Currently, the pair is traded at the level of 1.1970, which coincides with 38.2% Fibonacci. Breakdown of this level can trigger further decline in price. A strong indication of the downtrend will be the consolidation of the price below the level of 1.1870, which goes along the line ЕМА200 on the daily chart. In this case the targets will be at the levels of 1.1720 (Fibonacci 50%) and 1.1470 (Fibonacci 61.8%). Indicators (OsMA, Stochastic channels and trend) on the periods of Н1, Н4 and Daily will suggest that short positions are advisable. Support and resistance Resistance levels: 1.1970 and 1.1870. Support levels: 1.2025, 1.2040, 1.2085, 1.2110, 1.2140 and 1.2180. Trading tips Limit sell orders are recommended at the levels of 1.2000, 1.2025 and 1.2040. Sell positions can be opened after breakdown of the level of 1.1970 with the target of 1.1930. Buy positions are advisable after breakdown of the level of 1.2085 with the targets of 1.2110, 1.2140, 1.2180 and 1.2280.
Dmitriy Zolotov Analyst of LiteForex Investments Limited
GBP/USD: analysis and forecast Current trend The main driver of yesterday’s movement in the market was poor data on the US retail sales for April. This index (which shows the changes in the volume of retail sales) was below the forecast, as it fell to 0.0% against expectations of 0.2%. Retail sales index excluding sales of the automobiles amounted to 0.1% against the forecast of 5%. Some important British news was also released yesterday: in the monthly inflation report, the Bank of England has downgraded forecast of GDP growth from 2.7% to 2.4% for 2016 and from 2.9% to 2.6% for 2017. The timing of the interest rate increase was rescheduled for the mid-2016. After the release of the report by the British regulator, the Pound fell to 1.5647, and later reached the level of 1.5633, amid the American news. Nevertheless, by the end of the day the pair GBP/USD has regained lost positions rising up to 1.5743. At today’s Asian session the USD declined versus all major currencies, and after breaking down resistance level of 1.5750, the pair GBP/USD is traded at the level of 1.5780. It is expected that the pair will move in the uptrend, as there is no important news scheduled for the release on Thursday. Support and resistance The indicator OsMA also suggests buy positions (rising histogram in the daily timeframe). Stochastic and trend indicator of the green color shows long positions on D1. However, it is worth paying attention to the daily chart of the cross-pair EUR/GBP, where the Pound is declining against the USD. Therefore, it is recommended to open buy positions if the pair GBP/USD rebounds to the levels of 1.5750, 1.5725 or 1.5700. The nearest targets can be at the levels of 1.5800 and 1.5900 (Fibonacci 50%). The signal of the completion of the downtrend and development of the uptrend is the breakdown of Fibonacci level of 38.2% (1.5595). In case of the uptrend the pair will be targeted at the level of 1.6200. As an alternative scenario we can consider the decline in the Pound to 1.5595 (Fibonacci 38.2%) or further down to 1.5540 (ЕМА200). After breaking down EMA144 (1.5380) the Pound can continue downtrend. Resistance levels: 1.5750, 1.5900, 1.6000 and 1.6160. Support levels: 1.5595, 1.554 and, 1.5380. Trading tips It is preferable to place buy orders with the nearest targets of 1.5800, 1.5850 and 1.5900. However, it is better to enter into long positions at the rebound to the levels of 1.5750, 1.5725 or 1.5700. Sell positions with the targets of 1.5540 and 1.5440 are advisable after breakdown of the level of 1.5595.
Analystics of LiteForex Investments Limited
EUR/USD: technical reversal of the trend has increased demand for Euro Current trend Throughout a month European currency has been growing against the USD amid weakening in the American currency. The data on all sectors of the American economy shows slowdown of economic growth. The decrease in demand for the USD has provoked investors into buying the Euro and the Pound. Additional support to European currency has added favourable data on the key indices of Germany, France and Europe as a whole. The number of industrial orders on Germany has grown. GDP of France has exceeded all expectations. From the technical point of view the pair EUR/USD has broken down all possible resistance and technically reversed downward trend. Attention today shall be focused on the US news on the industrial production, capacity utilization and consumer sentiment index. The rise in yields on government bonds in Germany will add attraction to the Euro. Support and resistance It is likely that the USD will win back some of the losses and the pair will reach the level of 1.1280. The trend will remain upward. Next week, information on the key indices of Eurozone can inspire investors and the pair may continue upward movement with the target of 1.1600. Most of the indicators show the rise in the pair; the volume of the long positions continues to grow. In the medium-term uptrend will continue with the transition to the consolidation stage. Support levels: 1.1280, 1.1215, 1.1150, 1.1075, 1.1020 and 1.0920. Resistance levels: 1.1385, 1.1450, 1.1540, 1.1600 and 1.1670. Trading tips It is recommended to open long positions at the current price from the key support levels of 1.1250 and 1.1150 and take profit at the level of 1.1600.
Analytics of LiteForex Investments Limited
USD/JPY: the East is a delicate matter Current trend Despite the ups and downs of the world currencies against the USA, the pair USD/JPY is notable for the stable movement in the channel of 122.00–116.00. Deviations in both directions as a rule do not exceed 120 points. On the one hand, it is easy to make forecast in this conditions, supposing further movement in price in the range of 121.20–118.80; on the other hand, it is difficult as in the long-term a lot will depend of the interest rate decision of the Bank of Japan. Currently, the interest rate of Japan is 0.1%. In the short-term monetary policy of the Bank of Japan will remain soft; however, in case of deterioration of economic statistics the interest rate can be lowered. This morning at 02:50 (GMT+3) the pair was supported by the Japanese GDP for Q1 (real GDP rose by 2.4% in January-March against the forecast of growth by 1.5%).Tokyo stocks and Nikkei went up. At 21:00 (GMT+3) the minutes of the US Open Market Committee (FOMC) will be released. If the minutes give positive assessment of the economic and financial situation in the USA, the pair will get additional support and in case of breakdown of the level of 121.20, the price will reach the level of 121.50, the growth can continue up to 122.00 until the end of the week. If the US news is negative, the pair will go to the bottom limit of the channel at 118.80, on its way breaking down the levels of 120.00, 119.80 and 119.30. However, it is unlikely that the pair will go further down. Support and resistance Support levels: 118.80, 119.60 and 120.00. Resistance levels: 121.20 and 121.50. Trading tips It is recommended to place pending orders BuyStop at the price 121.20 with the targets of 121.50 and 121.75. Alternative scenario: pending orders SellStop at the price of 120.50 with the targets of 120.00, 119.60, 119.30 and 118.80.
Ilya Lashenko Analyst of LiteForex Investments Limited
USD/CHF: after the 15th of January Current trend If we trace movement of the pair USD/CHF since 15 of January when the National Bank of Switzerland decided to decouple the rate of the national currency from the Euro, we will notice that the pair is trying to reach 0.9450, moving in the channel of 0.9720-0.9120. Despite the efforts of the Swiss regulator to weaken the national currency, Swiss Franc continues to act as a safe haven. Nevertheless, the pair remains vulnerable to the events in the USA and Eurozone. During today’s Asian session the USD has corrected versus the major currencies after the release of the minutes of the US Fed meeting on Wednesday, which says that the increase in the interest rate is unlikely in the mid of the year. The leaders of the US Fed expressed doubts about the necessity of the interest rate increase after the release of the US negative statistics last week. In the medium-term the pair is supported by positive attitude of the market to the USD, negative interest rates of Switzerland and the threat of intervention from the National Bank of Switzerland. However, the rise in the pair USD/CHF is restricted by the demand for Franc in the declining pair of EUR/CHF. In May, the index of economic sentiments in Switzerland demonstrated growth (–0.1 versus –23.2 in April, as per ZEW Credit Suisse), which also supports Franc. Support and resistance On the four-hour chart the price has rebounded from the levels of 0.9410 (ЕМА200) and 0.9365 (ЕМА144) and is now moving down to the nearest resistance level of 0.9285. The indicators OsMA and Stochastic are in the sale zone. Уровни поддержки: 0.9365, 0.9410, 0.9450 Уровни сопротивления: 0.9285, 0.9245, 0.9120 Trading tips For the period while the market is affected by the minutes of the US FOMC meeting, it makes sense to open short positions with the nearest targets of 0.9285 and 0.9245 and long-term target of 0.9120. Future dynamics will depend on the market’s attitude to the USD. The bottom limit of the downward channel (green color on the daily chart) is at the level of 0.8900. Alternative scenario is the movement in the pair to 0.9720, after breakdown of strong resistance level of ЕМА200 and the price level of 0.9450.
Analystics of LiteForex Investments Limited
GBP/USD: within the overall trend Current trend In the overall trend of decline of the major currencies against the USD in the last days, the Pound stands out against the background. Despite moderate assessment of the state of the British economy by the Bank of England and statement by Mark Carney that the growing Pound impedes economic growth of the country, the Pound continues to resist the rising USD. The British currency has been supported in the cross-pairs EUR/GBP, GBP/NZD, GBP/AUD, where the GBP is bought actively. Today’s US news will include: 15:30 (GMT+3) - orders for durable goods for April and orders for durable goods excluding cars for April. 16:00 (GMT+3) – housing price index for March, as per S&P/CaseShiller. 16:45 (GMT+3) – preliminary data on business activity index Markit for may and business activity index in the service sector Markit for May. 17:30 (GMT+3) – business activity index in the manufacturing sector, as per Federal Reserve Bank of Richmond. And business activity index in the manufacturing sector for May as per Federal Reserve Bank of Dallas. Later, at 18:30 (GMT+3) the data on placement of the promissory notes will be known and 20:00( GMT+3) – the data on placement of 20year bonds. In case of the negative statistics, after today’s rapid growth at the Asian and European sessions, the USD can undergo downward correction. However, in the medium-term the rise in the USD is likely to continue. Support and resistance Support levels: 1.5500, 1.5530, 1.5600, 1.5670 and 1.5800. Resistance levels: 1.5340, 1.5230, 1.5130 and 1.5065. Trading tips Today, it makes sense to place pending short orders Sell Limit from the levels of 1.5440, 1.5470, 1.5500, 1.5530 and 1.5600 with the targets of 1.5340 (ЕМА200 on the four-hour chart) and 1.5230 (Fibonacci 23.6%). In case of breakdown of this level, the decline in the Pound will accelerate. Targets: 1.5065, 1.4950, 1.4880 and 1.4630 (lows of April, 2015).
Analystis of LiteForex Investments Limited
USD/JPY: uptrend will continue Current trend Last week the USD had reached the key support level of 118.60 against the Yen, after that the American currency rebounded from this level and soared up. At the end of the week the pair exceeded over 100 points and reached the key resistance level of 121.80. The rise was triggered by the favourable data on the US labor market: secondary applications for unemployment benefits have considerably decreased, while consumer price index has exceeded all forecasts. In addition, business activity index of Japan was negative. This week, uptrend in the pair continues amid the increase in demand for the USD and the pair broke down the key resistance level of 121.80. Yesterday, strong fundamental data on the US construction sector has supported the rise in the USD and after exceeding all possible peaks, the pair has consolidated at the level of 123.15 (8- year highs). The main reasons of the decline in the Japanese national currency are: the fact that the Bank of Japan maintains zero level of the interest rate and also the increase in demand for the USD, which is its turn, was caused by expectations of monetary policy tightening and the rise in the key interest rate by the US Fed. Support and resistance In the medium-term the pair will move in the existing uptrend, with some deep downward corrections. Technically, the pair has exceeded all resistance levels and now, the pair can reach 124.10 (highs of June 2007) and 125.50 (highs of November 2002). Support levels: 123.00, 122.50, 122.10, 121.80, 121.30, 120.75, 120.40 and 119.40. Resistance levels: 123.75, 124.10, 124.75 and 125.50. Trading tips It is recommended to open long positions from the key support levels and take profit at the levels of 124.75 and 125.50.
Analystics of LiteForex Investments Limited