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EUR/USD: general analysis
Current trend
On Tuesday, investors focused their attention on China. Shanghai stock market continued declining, so the authorities had to take measures to stabilize country’s economy. In particular, the People's Bank of China lowered the key interest rate to 4.6%. It is the fifth interest rate cut since November. This decision supported the American currency, as it eased the fears that the Federal Reserve may delay raising US interest rates. Moreover, positive US Consumer confidence statistics strengthened the USD.
Amid these factors, yesterday, the EUR was declining and reached the lowest mark at 1.1396. By the evening, the pair corrected to 1.1516 and lost about 100 points from the opening price.
Today, Durable Goods Orders statistics are released in the US. A 0.4% decline is expected which may affect the USD and allow the EUR to gain back some of its losses.
Support and resistance
On the 4-hour chart, the price rebounded from the middle MA and is heading to the upper border.
MACD is in the positive zone, below its signal line, that, on the contrary, indicates a forthcoming downward movement.
The nearest support levels are 1.1410, 1.1016 and 1.0854.
The nearest resistance level is 1.1710.
Trading tips
Open long positions when the price reaches 1.1615 with the target at 1.1685 and stop-loss at 1.1590.
Open short positions when the price reaches 1.1395 with the target at 1.1330 and stop-loss at 1.1420.
USD/JPY: stock markets recover
Current trend
After a sharp fall on Monday by more than 500 points, the USD/JPY pair is growing for the third day.
The world stock market indices are recovering and the USD is strengthening. At the same time, oil, commodities and gold prices grew. At present, dynamics in currencies pairs are going to be determined purely by developments in the stock markets.
The pair is also supported by positive macroeconomic data from the US, expectations of the interest rate increase in the US, Japanese economy slowdown and the difference is monetary policies between the Fed and the Bank of Japan.
Therefore, if the current tendencies continue, the USD/JPY pair keeps growing in the medium-term.
Support and resistance
The pair remains near the strong support levels at 119.10, 119.50.
OsMA and Stochastic on the 4-hour chart give buy signals, while on the daily chart they are turning to purchases.
Support levels: 119.70, 119.50 (ЕМА200 on the daily chart), 119.10 (100% Fibonacci), 118.40.
Resistance levels: 120.70, 121.00, 121.60, 122.00, 122.35.
Trading tips
Open long positions from the current levels and from 119.70 with targets at 120.70, 121.00, 121.60, 122.00, 122.35, 123.15, 124.10, 124.50 and stop-loss at 119.40.
Short positions can be opened after the breakdown and consolidation below the level of 119.10 with targets at 118.60, 117.25, 116.15.
GBP/USD: general review
Current trend
The Pound keeps falling against the USD.
Yesterday’s fall came as the result of a number of strong publications from the US. Initial Jobless Claims fell to 271 thousands, while the GDP Price Index grew to 2.1% and exceeded forecasts. The index is one of the inflation indications and its increase may help the Fed to reach their inflation target. However, a more significant support to the USD came from the GDP increase of 3.7%, while economists expected an increase of 3.2%.
At the same time, the Housing Price Index in the UK came out at 0.3%, which was worse than forecasted 0.4%. Today’s GDP publication in the UK can give impulse to the Pound and help to gain back some of the losses against the Dollar.
Support and resistance
A divergence between the price chart and the RSI suggests a downward trend is going to reverse.
The nearest support level is at 1.5333 (7 July low).
The nearest resistance level is at 1.5502 (yesterday high).
Trading tips
Open long positions from the level of 1.5433 with the target at 1.5502 and stop-loss at 1.5333.
If disappointing GDP data comes out in the UK close positions at current prices.
EUR/USD: general review
Current trend
On Friday, the Euro continued falling against the USD amid strong macroeconomic statistics from the US that came out on Thursday. The GDP figure for the second quarter showed a 3.7% growth, which was 0.5% higher than forecasts. For investors it tells that economic slowdown in China is not going to have a big effect on the US economy. Furthermore, it restores hopes that the Fed is going to proceed with the interest rate hike in the end of the year.
Today, attention needs to be paid to the Consumer Price Index for the eurozone. Should the forecasted 0.1% be confirmed, the Euro would strengthen. In addition, the Chicago Purchasing Managers’ Index that is due today can give an early indication of what figure to expect when the index for the country comes out.
Support and resistance
On the 4-hour chart, the price is moving towards the middle and upper MA’s of Bollinger Bands, which signals an upward movement in the short-run.
MACD is also indicating a possibility of the upward movement as its histogram nearly aligned with the signal line, while still in the negative zone.
The nearest support level is 1.1016.
The nearest resistance level is 1.1710.
Trading tips
Long positions can be opened from the level of 1.1315 with the target at 1.1390 and stop-loss at 1.1295.
Short positions can be opened from the level of 1.1125 with the target at 1.1030 and stop-loss at 1.1420, and after the breakdown of the level of 1.1016 with the target at 1.0955 and stop-loss at 1.1035.
USD/JPY: Yen in demand
Current trend
The USD/JPY pair fell amid the Asian stock markets crisis. The Japanese Nikkei Stock Average index closed 3.8% lower.
The Yen is going to continue being in demand as the safe-haven currency while instability presents on the markets.
During the week, the movement in the pair will largely be determined by stock markets dynamics and by macroeconomic statistics from the US. Today and during the week, a high volatility is expected.
Support and resistance
The USD/JPY pair remains near strong levels: 119.50 (ЕМА200 on the daily chart), 120.50 (61.8% Fibonacci), 121.00 (ЕМА144 on the daily chart), 121.50 (50% Fibonacci). The breakdown of the level of 119.50 would allow the pair to fall to 118.40 (ЕМА50 on the weekly chart), 117.40 (year lows). The breakout of the levels of 121.00, 121.50 would allow the pair to grow to 122.50 (38.2% Fibonacci), and with the trend continuation to 123.70 (23.6% Fibonacci), 124.50.
OsMA and Stochastic on the 4-hour, daily, weekly and monthly charts turned to sales.
Support levels: 119.50, 118.40.
Resistance levels: 121.00, 121.50, 122.00, 122.50.
Trading tips
Long positions can be opened from the current levels and from 119.70, 119.50 with targets at 120.00, 120.50, 121.00 and stop-loss at 119.30.
Short positions can be opened from the level of 119.10 with targets at 118.60, 118.40, 117.40 and stop-loss at 119.70.
GBP/USD: general analysis
Current trend
Yesterday, the GBP reached the lowest levels since 9th July and, currently, is trading at 1.5307. On Saturday, Mark Carney, the Governor of the Bank of England, announced that interest rates are unlikely to be raised before unemployment rate, which now is at 7.7%, lowers to 7%. The Regulator thinks that the target level will be reached only in 2016. However, analysts believe that interest rates may be increased much earlier. Mark Carney also noted that interest rate hike may happen earlier, if inflation rate exceeds the target level of 2% by more than 0.5%.
The USD is declining amid negative CPI manufacturing statistics (51.1 against 52.6 forecast and 52.7 earlier). Thus, a correction is possible and the GBP/USD pair may gain back its losses.
Support and resistance
The nearest support level is 1.5273 (9 June low).
The nearest resistance level is 1.5405 (1 September high).
Trading tips
Open long positions from the level of 1.5307 with the target at 1.5405 and stop-loss at 1.5273.
EUR/USD: general analysis
Current trend
Yesterday, the American currency strengthened amid moderately positive US labor market statistics. In August, ADP Employment Change index grew from 177K to 190K, but the actual data failed to comply with the forecast of 201K. In July, EU Consumer Price Index declined by 0.1% or by 2.1%, on a year-on-year basis. As the result, the European currency fell to the level of 1.1226, having lost 86 points.
Today, the European Central Bank publishes interest rate decision and comments on its further monetary policy. Given low inflation in the eurozone and instability of the global economy, the ECB is likely to continue QE program.
Support and resistance
On the 4-hour chart, the price is within the narrow channel, between the upper and the lower MA of Bollinger Bands which indicates a sideways movement of the pair.
MACD is in the negative zone and has reached its signal line. The indicator does not give a clear signal.
The nearest support levels: 1.1170, 1.1016.
The nearest resistance levels: 1.1318, 1.1710.
Trading tips
Open short positions from the level of 1.1320 with the target at 1.1395 and stop-loss at 1.1295.
Open short positions both from the level of 1.1145 with the target at 1.1100 and stop-loss at 1.1170, and when the pair breaks down the support level with the target at 1.0955 and stop-loss at 1.1035.
AUD/USD: under pressure
Current trend
Given Australia’s weak GDP statistics, negative Trade Balance, increasing concerns over economic growth due to the slowdown in China’s economy, lowering commodity prices, the Reserve Bank of Australia may cut its interest rate by the end of the year. Thus, even if the Federal Reserve does not increase the US interest rate, the AUD/USD pair will remain under pressure anyway.
Today, Nonfarm Payrolls statistics for August are released in the US. Positive data will increase the chances of a September rate hike, and the USD will strengthen against its counterparts.
Support and resistance
The AUD/USD pair is declining actively towards 0.6800 and 0.6000 (2004 and 2008 year lows) OsMA and Stochastic indicators on the 4-hour, daily, weekly and monthly charts recommend short positions.
Support levels: 0.6960, 0.6910.
Resistance levels: 0.7000, 0.7065, 0.7100, 0.7150, 0.7200.
Trading tips
Place pending sell orders at the level of 0.6950 with targets at 0.6910, 0.6885, 0.6800 and stop-loss at 0.6990.
Place pending buy orders at the level of 0.7010 with targets at 0.7035, 0.7050, 0.7080 and stop-loss at 0.6980.
GBP/USD: general review
Current trend
Last week the GBP/USD pair reached its 2 June lows at 1.5186.
Friday�s fall in the pair was determined by strong statistics from the US. The Unemployment Rate fell to 5.1%, which was below the forecasts of 5.2% and is the lowest level since May 2008. The Hourly Earnings grew by 0.3%, which was above the expectations.
The Pound, on the other hand, was under pressure as poor services sector data came out in the UK. The Services PMI fell to 55.6 points (forecasted 57.6), which is the lowest figure since June 2013. The pair was also pressured by the ECB statements as the regulator plans to maintain its soft monetary policy in the eurozone.
Low volatility is expected today due to the Bank Holiday in the US.
During the week, pay attention to UK publications on the NIESR GDP Estimate on Wednesday, the Bank of England Statement and its Rate Decision on Thursday.
Support and resistance
Bollinger Bands demonstrates a confident downward trend, which is unlikely to change in the short-term.
The nearest support level is at 1.5086 (5 May low).
The nearest resistance level is at 1.5220 (upper MA of Bollinger Bands).
Trading tips
Open short positions from the level of 1.5172 with the target at 1.5086 and stop-loss at 1.5220.
EUR/USD: general review
Current trend
Yesterday, the dynamics in the EUR/USD pair was calm, due to the Bank Holiday in the US and the absence of important macroeconomic publications from the EU.
Today, attention needs to be paid to the GDP data for the eurozone. According to forecasts, the GDP growth in the second quarter of the year should be at 0.3%, or 1.2% yearly. If the forecasts match the actual figure or turn out to be higher, the Euro is going to strengthen.
Support and resistance
On the 4-hour chart, the price is moving up towards the upper MA of Bollinger Bands.
MACD histogram is in the negative zone but above its signal line, which indicates the beginning of an upturn.
The nearest support level is at 1.1093.
The nearest resistance levels are at 1.1318, 1.1710.
Trading tips
Long positions can be opened from the level of 1.1235 with the target at 1.1310 and stop-loss at 1.1210, and after the breakout of the level of 1.1318 with the target at 1.1390 and stop-loss at 1.1295.
Short positions can be opened from the level of 1.1090 with the target at 1.1025 and stop-loss at 1.1115.