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USD/CHF: Swiss trade surplus shrank
Current trend
Early in the European session on Tuesday, Trade Balance statistics for August were released in Switzerland. Imports fell 7.4% from a year earlier to CHF 11.36 billion, while exports declined 2.1% to CHF 14.23 billion. Swiss trade surplus shrank from CHF 3.58 billion in July to CHF 2.87 billion in August. Coupled with the CHF strengthening, this dynamics may push the Swiss National Bank to further ease its monetary policy.
Support and resistance
On time frames, from 4-hour to weekly, OSMA and Stochastic are giving buy signals, and the price is above ЕМА200, ЕМА144.
Short positions may be opened only within corrections and short periods of time with targets no lower than strong support levels (ЕМА50, 144, 200 on the daily chart) at 0.9645, 0.9560, 0.9525, from where long positions should be considered.
The USD is still likely to strengthen in the medium term supported either by favorable data from the US or by negative releases from the eurozone.
Support levels: 0.9680, 0.9665, 0.9645, 0.9560, 0.9525.
Resistance levels: 0.99760, 0.9800.
Trading tips
Place Buy Limit orders from the levels of 0.9680, 0.9665, 0.9645 with targets at 0.9710, 0.9750, 0.9790, 0.9850 and stop-loss at 0.9610.
Place Buy Stop order from the level of 0.9760 with targets at 0.9790, 0.9850 and stop-loss at 0.9710.
Place Sell Stop order from the level of 0.9590 with targets at 0.9560, 0.9530 and stop-loss at 0.9620.
Brent: US oil stocks lower?
Current trend
Ahead of the EIA Crude Oil Stocks change statistics for the US, which are expected to indicate a decline, the price of Brent crude oil has overcome the level of $49 per barrel.
Despite the fact that oil futures settled lower amid negative Caixin Manufacturing PMI, released in China, the price of oil strengthened early in the European session and still tends to grow. However, in the medium term, the price will be under pressure from such fundamental factors as: the global oil market oversupply, a slowdown in Chinese economy, increasing oil production by OPEC countries and concerns over Iranian oil exports.
Support and resistance
On the 4-hour and daily charts, OsMA and Stochastic indicators recommend long positions, however, it should be noted that, on the 4-hour chart, the price is near the strong resistance level of 49.40 (ЕМА200).
While the price remains below the level of 50.80 (EMA50 on the daily chart), any growth should be considered as a correction. If a downward trend develops, the price may head down to the level of 42.50 (August and year lows).
Support levels: 49.00, 48.50, 47.45, 46.65, 45.25.
Resistance levels: 49.40, 50.00, 50.80.
Trading tips
Open short positions from the current price and from the level of 50.70, 50.00, 49.50, 49.00 with targets at 48.50, 48.00, 47.50, 47.00, 46.65, 46.00, 45.25 and stop-loss at 51.10.
Alternative long positions can be considered only after the consolidation above the level of 50.80.
GBP/USD review and forecast
Current trend
Since yesterday, the GBP/USD pair has been trading within the range between 1.5360 and 1.5220. The price tends to continue declining until at least the end of the week.
Today, it is worth noting the publication of unemployment and construction sector statistics in the US. Due to mixed forecasts, the pair dynamics is uncertain: the USD may either decline or strengthen.
Support and resistance
Bollinger Bands is directed down; the price is moving from the middle to the lower MA. According to the indicator, the pair is likely to continue declining to the lower MA.
Support levels: 1.5167 (4 September low), 1.5220 (local low).
Resistance levels: 1.5390 (middle MA of Bollinger Bands), 1.5460 (local high).
Trading tips
Short positions can be opened after the breakdown of 1.5220 with the target at 1.5167, where a BuyLimit order should be placed, as the pair is likely to turn up when this level is broken through.
USD/JPY: US Dollar growing
Current trend
Since the opening of the Asian session, the USD is growing. That was the result of returned optimism on the market regarding the interest rates increase in the US after the Fed President Janet Yellen speech, who confirmed the rate increase is still possible during this year.
Thus, despite today’s falling Chinese stock indices, the Japanese Nikkei Stock Average closed 1.8% higher.
Support and resistance
The price remains in the range between the levels of 120.90 (ЕМА144) and 119.60 (ЕМА200 on the daily chart). The breakdown of the level of 119.60 would send the pair towards 118.50 (ЕМА50 on the weekly chart), 117.40 (2015 lows). At the same time, the breakout of the levels of 121.50 (50% Fibonacci), 122.50 (38.2% Fibonacci) would reverse the downward trend and send the pair to year highs at 125.65.
However, strong resistance levels at 120.90 (ЕМА144 on the daily chart), 121.00 (ЕМА200 on the 4-hour chart) can push the pair back inside the range.
OsMA and Stochastic on the 4-hour and daily charts give buy signals.
Support levels: 118.50, 118.90, 119.60.
Resistance levels: 120.90, 121.00, 121.50, 122.00.
Trading tips
Short positions can be opened from the levels of 120.90, 121.00, 121.40 with targets at 120.50, 120.00, 119.60 and stop-loss at 121.60.
Pending buy orders can be placed at the level of 122.10 with targets at 122.50, 123.70 and stop-loss at 121.40.
GBP/USD: strong level 1.5230
Current trend
Since opening of the European session, the GBP/USD pair is growing and recovering some losses of last week’s fall. In addition, the GBP finds some support in falling EUR/GBP pair.
However, prior to Friday’s Non-farm Payrolls for September from the US, the pair can continue falling. More pressure on the pair could come from the UK data on the Consumer Credit, Mortgage Approvals, second quarter GDP and the Current Account, if it comes out worse than forecasts.
Support and resistance
The GBP/USD pair returned to the support level at 1.5230 (23.6% Fibonacci). If a breakdown of this level turns out to be false, the price could consolidate between the ЕМА144 (1.5470) and ЕМА200 (1.5520) on the daily chart. Similar rebounds it demonstrates since May.
An upward correction in the pair could reach the levels of 1.5335, 1.5410 (ЕМА50, ЕМА144 on the 4-hour chart), while the price consolidation above the level of 1.5520 would allow the pair to grow to 1.5600 (38.2% Fibonacci), 1.5700, 1.5900 (50% Fibonacci).
At the same time, a breakdown of the level of 1.5180 (June and August lows) would send the pair to the level of 1.4600 (year lows).
OsMA and Stochastic on the daily chart give sell signals, while on the 4-hour chart hey turn to purchases.
Support levels: 1.5180, 1.5100.
Resistance levels: 1.5335, 1.5410, 1.5470, 1.5520.
Trading tips
Pending sell orders can be placed from the level of 1.5170 with target at 1.5110, 1.5050 and stop-loss at 1.5260.
Pending buy orders can be placed at the level of 1.5290 with targets at 1.5335, 1.5350, 1.5400, 1.5450, 1.5490 and stop-loss at 1.5210.
EUR/USD: general review
Current trend
Yesterday the Euro strengthened against the US Dollar.
The pair was pressured by growing demand for Dollar that increased after the Thursday’s statement by the Fed Chair Janet Yellen that the regulator is going to carry on with its plans to hike interest rates in the US before the end of the year. At the same time, the pair was supported by the Pending Home Sales data for August from the US that showed a decrease of 1.4%, while forecasts predicted a 0.5% growth.
Today, attention needs to be paid to the Consumer Confidence data for the eurozone (forecasted -7.1) and the US (forecasted 96.0), as well as the preliminary Consumer Price Index for Germany (forecasted -0.1%).
Support and resistance
On the 4-hour chart, the price approached the upper MA of Bollinger Bands thus indicating that there can be a downward reversal in the near future.
MACD, on the other hand, signals an upward movement continuation as its histogram remains in the positive zone and above the signal line.
Support levels: 1.1130, 1.1106.
Resistance levels: 1.1295, 1.1360, 1.1450.
Trading tips
Long positions can be opened from the level of 1.1300 with the target at 1.1345 and stop-loss at 1.1275.
Short positions can be opened from the level of 1.1185 with the target at 1.1140 and stop-loss at 1.1210.
AUD/USD: day full of economic news
Current trend
Wednesday is full of important economic news. ADP Employment Change and Chicago Purchasing Managers' Index for September are released in the US. Moreover, Fed's Yellen Speech is due at 10:00 p.m. (GMT+3).
However, Non-farm Payrolls data for September, due on Friday, is of key importance, as it may influence the Fed’s interest rate decision.
During the Asian session today, the AUD/USD pair strengthened slightly, supported by the growth of Asian indices. Nevertheless, in the medium term, the AUD, being, mainly, a commodity currency, tends to remain under pressure amid concerns over slowing global growth.
Support and resistance
OsMA and Stochastic on the 4-hour chart have turned to long positions. However, on the daily, weekly and monthly charts, the indicators are in the sell zone.
Local targets may be the levels of 0.6960, 0.6910. The breakout and consolidation above the level of 0.7270 may allow the pair to grow to 0.7500 (23.6% Fibonacci and EMA144 on the daily chart) in the short term. A current short-term correction may last to the levels of 0.7035 (ЕМА50), 0.7100 (ЕМА144), 0.7125 (ЕМА200 on the 4-hour chart).
Support levels: 0.6960, 0.6910.
Resistance levels: 0.7035, 0.7100, 0.7125, 0.7170, 0.7200, 0.7270.
Trading tips
Short positions can be opened from the current levels or from 0.7035 with stop-loss at 0.7060. Sell Limit orders can be placed at 0.7090, 0.7120 with stop-loss at 0.7190. Targets are the levels of 0.6960, 0.6910, 0.6885, 0.6800.
Long positions become valid after the consolidation above the level of 0.7270.
USD/CAD: prior to important news
Current trend
Important news releases from both countries are planned for today and tomorrow.
Today, between 3:30 pm and 5 pm (GMT +3) a bloc of news is due from the US. At the same time, RBC Manufacturing PMI for September is due in Canada at 4:30 pm (GMT +3).
On Friday, markets’ attention is going to be focused on the US Non-Farm Payrolls data for September (forecasted an increase by 30 thousand new jobs, to 203 thousands), due at 3:30 pm (GMT +3).
During the news releases, high market volatility is expected.
Support and resistance
The USD/CAD pair is moving along an upward channel and can reach 2004 highs at the level of 1.4000 if the medium-term tendency continues.
However, during the last two days the pair fell by almost 200 points, which allows to suggest that there can be good conditions on the market to enter long positions.
Prior to that, however, the price could fall to support levels at 1.3150 (ЕМА50 on the daily chart) and 1.3070 (lower border of the upward channel). After that it would resume an upward movement until, at least, the next Fed meeting in the US on 28 October.
OsMA and Stochastic on the 4-hour and daily charts recommend short positions.
Support levels: 1.3070, 1.3150, 1.3220 (ЕМА200 on the 4-hour chart), 1.3260 (ЕМА144).
Resistance levels: 1.3300, 1.3350, 1.3400, 1.3450.
Trading tips
Pending buy orders can be places from the levels of 1.3290, 1.3260, 1.3220 with targets at 1.3335, 1.3370, 1.3390 and stop-loss at 1.3190.
Short positions can be considered after the price reaches the level of 1.3150.
AUD/USD: in downtrend
Current trend
Today, the AUD/USD pair reacted poorly to favorable Retail Sales statistics, released in Australia. In August, the indicator grew by 0.4%.
The Reserve Bank of Australia announces discount rate decision on Tuesday. The rate is expected to remain unchanged at 2.0%. However, the Regulator may soon start its monetary easing due to nearly zero GDP growth, a slowdown in manufacturing activity and low inflation that indicate weakness of the economy.
Today, Nonfarm Payrolls and Unemployment Rate statistics are due in the US. These data may influence the Federal Reserve’s intention to raise interest rates before the end of the year.
Support and resistance
On the daily chart, OsMA and Stochastic are not giving clear signals, while on the 4-hour chart, the indicators recommend short positions.
The price is below the key resistance levels of 0.7180 (ЕМА50 on the daily chart), 0.7120 (ЕМА200), 0.7080 (ЕМА144), 0.7035 (ЕМА50 on the 4-hour chart). If the pair continues declining, the levels of 0.6960, 0.6910 may become local targets. The breakout and consolidation above 0.7270 would allow the price to grow to 0.7500 (Fibonacci 23.6% and EMA144 on the daily chart).
Support levels: 0.6960, 0.6910.
Resistance levels: 0.7035, 0.7080, 0.7120, 0.7180, 0.7200, 0.7270.
Trading tips
Place pending Sell Stop orders at the level of 0.6990 with targets at 0.6960, 0.6910, 0.6885, 0.6800 and stop-loss at 0.7060.
Place pending Buy Stop orders at the level of 0.7110 with the target at 0.7180 and stop-loss at 0.7070.
EUR/USD: pair is strengthening
Current trend
A certainty that the Fed will postpone an interest rate increase at its meeting on 28 October is growing on the markets. It is worth noting that the price of gold, which is highly correlated to the EUR/USD pair, is also growing.
At the same time, the pair is pressured by a possibility of further monetary policy easing in the eurozone by the ECB.
Today attention needs to be paid to the data on Industrial Production for September in the eurozone that is expected to fall by 0.5%, and Retail Sales for September from the US (forecasted a 0.1% contraction). If forecasts are confirmed the EUR/USD pair can grow.
Support and resistance
On the weekly chart, the pair is moving along an ascending channel with the top border at 1.1785 (38.2% Fibonacci correction).
Today the price broke out an important resistance level at 1.1380 (ЕМА200 on the daily chart) and is heading towards 1.1450 (May highs), 1.1500 (ЕМА50 on the weekly chart), where it could stay until the end of October.
Otherwise, the pair could fall to the levels of 1.1085, 1.1025, a breakdown of which would allow it to fall to 1.0800 (July and May lows) and 1.0500 (year lows).
On the 4-hour, daily and weekly charts, OsMA and Stochastic give buy signals.
Support levels: 1.1285, 1.1255, 1.1210, 1.1135, 1.1085, 1.1025.
Resistance levels: 1.1380, 1.1450, 1.1500.
Trading tips
Pending sell orders can be placed at the level of 1.1360 with targets at 1.1285, 1.1255 and stop-loss at 1.1420.
Pending buy orders can be placed from the level of 1.1430 with targets at 1.1450, 1.1500 and stop-loss at 1.1360.