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USD/JPY: general review
Current trend
The pair continues growing even though the Fed at yesterday’s meeting left the interest rate unchanged.
At the same time, the Bank of Japan is expected to expand its stimulation program to reach the inflation target of 2% that would lead to further fall in the Yen. Furthermore, cheaper national currency would allow increasing Japanese exports and making them more competitive, that would have a positive effect on the economy.
According to forecasts, the pair can grow to the level of 125.00.
Support and resistance
Support levels: 117.85.
Resistance levels: 119.10.
Trading tips
Open long positions from the level of 119.20 with the target at 122.35 and stop-loss at 118.90.
EUR/USD: general review
Current trend
Today the pair continued growing despite the publication of mixed data in the eurozone. The Producer Price Index for December fell to -0.8% that was substantially worse than forecasts of economists. At the same time, the Unemployment Rate slightly fell as well, from 10.5% to 10.4%. Therefore, continuous decline in prices could force the ECB to expand its stimulation program or cut interest rates further, either of which would significantly pressure the Euro.
Support and resistance
Support levels: 1.0894.
Resistance levels: 1.0943.
Trading tips
Short positions can be opened from the level of 1.0943 with the target at 1.0890 and stop-loss at 1.0955.
AUD/USD: pair resumed fall
Current trend
Yesterday the pair significantly fell after the RBA decision on interest rates. As was expected, the regulator left the rate unchanged at 2%.
At the same time, in its Rate Statement the regulator noted that it does not rule out further monetary policy easing this year if the economy continues slowing down due to the outside factors. It also noted that inflation is likely to remain very low in the medium-term.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is narrowing. MACD is turning down and forming a sell signal. Stochastic is falling.
The indicators recommend short positions.
Support levels: 0.7015 (local low), 0.6981, 0.6936, 0.6900 (21 January low), 0.6875, 0.6850, 0.6826 (15 January low).
Resistance levels: 0.7045 (local high), 0.7068, 0.7100, 0.7128 (local high), 0.7158, 0.7183, 0.7200 (5 January high).
Trading tips
Short positions can be opened after the breakdown of the level of 0.7015 with the target at 0.6900 and stop-loss at 0.7060. Validity – 2-3 days.
Long positions can be opened after the price rebound from the level of 0.7015 (with the appropriate indicators signals) with the target at 0.7100 and stop-loss at 0.6960. Validity – 2-3 days.
Analytics from LiteForex
USD/CAD: pair is falling
Current trend
Yesterday the pair significantly declined amid growing oil prices that were supported by strong data on the Caixin China Services PMI.
In addition, the pair was pressured by mixed data from the US. The ADP Employment Change for January came out at 205 thousands that was better than forecasts but substantially worse than the previous figure. The Markit Services PMI for January fell from 53.7 to 53.2 points, which did not match the expectations.
Tomorrow attention needs to be paid to labour market data from the US and Canada.
Support and resistance
Bollinger Bands on the daily chart is moving down while the price range is slowly widening. MACD continues growing. Stochastic is in the oversold zone and trying to turn up.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.3780 (local low), 1.3700, 1.3650, 1.3622 (10 December 2015 low), 1.3554, 1.3500.
Resistance levels: 1.3850 (local high), 1.3900, 1.3947, 1.4000 (psychologically important level), 1.4050, 1.4100 (local high), 1.4169, 1.4200, 1.4325 (26 January high).
Trading tips
Long positions can be opened after the breakout of the level of 1.3780 with the target at 1.4000 and stop-loss at 1.3700. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 1.3700 with targets at 1.3550, 1.3500 and stop-loss at 1.3760. Validity – 2-3 days.
USD/CHF: Franc continues growing
Current trend
Last week the pair significantly fell.
The pair was pressured by the latest Fed monetary policy meeting that substantially decreased chances of further interest rate hikes in the US. In addition, the USD was pressured by poor data on the Nonfarm Payrolls that fell from 262 to 151 thousands, while economists predicted 190 thousands. However, the Unemployment Rate unexpectedly fell by 0.1% to 4.9%, while Average Hourly Earnings grew by 0.5%.
Support and resistance
Bollinger Bands on the daily chart is turning down while the price range is widening. At the same time, the indicator formed a signal for correctional growth as the price has left the range. MACD is falling and giving a strong sell signal. Stochastic is in the oversold zone and turning horizontally.
The indicators recommend waiting for clearer trading signals.
Support levels: 0.9920 (local low), 0.9900, 0.9879 (11 January low), 0.9851 (24 December low), 0.9818, 0.9800, 0.9784 (14 December low).
Resistance levels: 0.9956 (local high), 1.0000 (psychologically important level), 1.0032, 1.0067, 1.0100, 1.0123 (3 February high), 1.0166, 1.0200, 1.0254 (29 January high), 1.0281.
Trading tips
Long positions can be opened after the breakout and consolidation above the level of 1.0000 (with the appropriate indicators signals) with the target at 1.0100 and stop-loss at 0.9960. Validity – 2-4 days.
Short positions can be opened after the price rebound from the level of 1.0000 with the target at 0.9900 and stop-loss at 1.0050. Validity – 2-3 days.
EUR/USD: general analysis
Current trend
The European currency was strengthening against the US Dollar. The pair gained support from Iran’s decision to replace the US Dollar with the Euro in its oil sales. Moreover, Teheran has required buyers of its oil to pay their debts in euros as well. Thus, India, which owes about $6 billion, has already reached an agreement on this issue with Iran. In this situation, the demand for the Euro might increase, and the currency is likely to continue strengthening.
Support and resistance
Support level: 1.1105.
Resistance level: 1.1246.
Trading tips
Long positions can be opened from the level of 1.1246 with the target at 1.1370 and stop-loss at 1.1200.
Brent: analysis and forecast
Current trend
Since the beginning of the week, the price of Brent crude oil has been gradually falling. Yesterday, the Energy Information Administration reported a decline by 754K barrels in US crude oil stocks; however, the price of oil did not manage to get any support. Despite a general decline in US crude inventories, investors were disappointed by the news about an increase at the country’s biggest oil storage hub in Cushing. According to the statistics, Cushing stocks rose by 0.5 million barrels to 64.7 million barrels that put the price of oil under more pressure.
Support and resistance
On the 4-hour chart, Bollinger Bands are directed down. MACD histogram is in the negative zone, its volumes are growing. According to the indicators, the price will continue moving down.
Support levels: 30.20, 29.20, 28.20.
Resistance levels: 31.84, 32.30, 32.90, 33.90.
Trading tips
Short positions can be opened after the breakdown of the level of 30.20 with the target at 29.20. If the price breaks down and consolidates below the level of 29.20, the next target will be 28.20.
Long positions can be opened after the breakout of the level of 31.84 with targets at 32.30, 32.90.
EUR/USD: general review
Current trend
The pair continues strengthening amid falling stock markets and weakening in the US Dollar. The Dollar was pressured by Fed Chair Janet Yellen testimony before the US Congress, after which the probability of further rate hikes significantly decreased. In addition, the head of the regulator stated that rate cuts remain a possibility if the situation requires this measure. And considering declining major macroeconomic indices and low inflation in the country, and the slowing Chinese economy, a possibility of this scenario exists.
Support and resistance
Support levels: 1.1224.
Resistance levels: 1.1321.
Trading tips
Long positions can be opened from the level of 1.1224 with the target at 1.1380 and stop-loss at 1.1185.
XAU/USD: growth will continue
Current trend
Since the beginning of this year, the price of gold substantially strengthened.
The price was significantly supported by a crash of the world stock markets that reduced the appetite for risk and forced investors to switch into safe-haven assets, such as gold.
In addition, the price was supported by the weakened US Dollar that remains under pressure due to the significantly lowered probability of further monetary policy tightening in the US this year.
Support and resistance
In the beginning of the month, the price broke out the upper border of a descending channel. In the short-term, a downward correction to the levels of 1174.50, 1153.85 is expected, after which a growth will resume.
Technical indicators suggest a growth continuation in the medium-term. MACD histogram is in the positive zone and its volumes are growing. Ichimoku point out to the growth as well.
Support levels: 1207.65, 1198.70, 1194.00, 1186.85, 1174.05, 1153.85, 1145.10.
Resistance levels: 1213.85, 1224.70, 1235.05, 1242.80, 1257.80, 1264.00.
Trading tips
Pending buy orders can be placed at the levels of 1186.85, 1153.85, 1145.10 with the target at 1300.00 and stop-loss at 1120.00.
GBP/USD: triangle has been formed; breakout of the upper border is expected
Current trend
During several months, the British Pound was falling against the US Dollar. However, at the beginning of February, the GBP/USD pair started growing within a narrow ascending channel and reached the key resistance level of 1.4670. For the last few days, the pair has been trading in a sideways channel and forming a triangle pattern.
Today, ahead of the macroeconomic releases, the Pound gained support and strengthened to the upper border of the triangle. However, later on, amid negative data on Consumer Price Index and Retail Price Index, released in the UK, the pair fell to the lower border. Key statistics for the UK and the US which might influence dynamics in the pair are due tomorrow and at the end of the trading week.
Support and resistance
If the lower border of the triangle is broken down, the pair would fall to 1.4180. In case of favorable data on the UK, the price might overcome the upper border and continue growing to 1.4670 and 1.4775.
According to technical indicators, the pair is likely to keep moving up. The price reached the middle MA of Bollinger Bands. MACD shows that volumes of short positions are falling.
Support levels: 1.4425, 1.4335, 1.4285, 1.4180, 1.4100, 1.4050, 1.3970.
Resistance levels: 1.4510, 1.4565, 1.4600, 1.4670, 1.4740, 1.4775, 1.4915, 1.5020.
Trading tips
Pending sell orders can be placed at the level of 1.4390 with the target at 1.4290 and stop-loss at 1.4420.
Pending buy orders can be placed at the level of 1.4530 with the target at 1.4630 and stop-loss at 1.4500.