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GBP/USD: a recession follows inevitably an upturn Current trend Week UK statistics were released again before noon yesterday. This time, the retail sales index dropped almost twofold. Then the favourable data on the US labour market helped the dollar to put increased pressure on the GBP/USD. The pair broke a few important support levels and dropped below 1.5030, and then partially recovered losses. Today, the GBP/USD did not show high volatility, but the information on UK mortgage loans, publication of key indexes and preliminary data on US GDP in fourth quarter of the previous year will probably dynamize the pair. The demand for dollar continues to rise. The pound's upward correction was only a temporary respite after which investors resumed buying the American currency. High growth rates of the US economy continue, but let's remember that every rise is inevitably followed by a recession. The American currency is substantially overbought, which starts to affect US exports, therefore the growth will be replaced by a substantial correction in the shortest time. Support and resistance The pair is very likely to drop to local lows of July-March 2013 (1.4825), but a breakout will require not only a growing demand but also fundamental catalyzers. A level of 1.4825 will probably be critical. Support levels: 1.5050, 1.5030, 1.5000, 1.4950, 1.4890, 1.4825. Resistance levels: 1.5100, 1.5120, 1.5190, 1.5225, 1.5270, 1.5350, 1.5485, 1.5550. Trading tips This situation implies increasing short positions with profit fixing at 1.4830. After a level of 1.4830 is reached, long positions with short Stop-Loss and Take-profit at 1.5550, 1.5700 will be relevant.
Dmitry Likhachev Analyst of LiteForex Investments Limited
Forex: Ichimoku Clouds. Review of EUR/USD EUR/USD, H4 Let’s look at the four-hour chart. Tenkan-sen and Kijun-sen lines have merged and stay horizontal, reflecting the uncertainty of the market. Chinkou Span line is approaching the price chart from above; current cloud is descending. The pair is trading within the cloud, borders of which become support and resistance (1.1445) levels.
EUR/USD, D1 On the daily chart Tenkan-sen line is below Kijun-sen, they are both horizontal. Chinkou Span line is below the price chart, current cloud is descending. The pair resumes downward trend with target of 1.1060. The closest resistance level is Tenkan-sen line (1.1380).
Key levels Support levels: 1.1304, 1.1060. Resistance levels: 1.1388, 1.1445. Trading tips On the four-hour chart the pair is trading within the cloud, on the daily one we can see a correction of the downward movement. Pending sell orders can be placed below the lower border of the cloud (1.1304) with target at 1.1060. Anastasiya Glushkova Analyst of LiteForex Investments Limited
GBP/USD: British currency remains under pressure Current trend The British currency continues to trade in a range of 1.5100-1.5000 against the dollar. The upbeat data on UK production activity index and business activity index in the construction sector were not enough for the pound to recover substantially. Today, a number of US releases, such as production orders and report on oil stocks, are worth attention. Upbeat data on UK PMI index in the service sector are expected tomorrow, but bearish sentiment will still prevail and a volume of short positions will grow after each ascending movement. Support and resistance The likeliest scenario for today is a sideways movement within the current range. It means that short positions opened from the range borders may yield profits. In the medium term, the pair may continue to move within a descending range and may soon break the latest local low at 1.4950 heading for a level of 1.4825. Support levels: 1.5030, 1.5000, 1.4950, 1.4890, 1.4950, 1.4925. Resistance levels: 1.5050, 1.5100, 1.5120, 1.5190, 1.5225, 1.5270, 1.5350. Trading tips In the medium term, increasing short positions in the presence of upward corrections from the levels 1.5100, 1.5120, 1.5190 with profit fixing at 1.4850 (1.4825) seems relevant to the situation.
Dmitry Likhachev Analyst of LiteForex Investments Limited
Brent: general overview Current trend Brent crude oil has been growing for 4 sessions in a row. Yesterday, oil quotes reached a level of 58.81. US news was the main growth driver. The world's largest oil consumer removed 353 wells from service and the number of operating ones has become the least in the last 3 years. As Reuters news agency reports, the growth has been catalysed by the news about decreasing investments and the number of operating drill units in the USA. Though the market sentiment, apparently, has changed, volatility will remain high. However, oil quotes are under strong pressure owing to decreasing demand and oversupply. The economy rates of China, the second largest oil consumer, cannot be regarded as optimistic either. The country's non-manufacturing sector growth slowed down to 6-month lows. In the meanwhile, US oil stocks grew by 6.1 million barrels instead of the expected 3.6 million. Support and resistance Support levels: 56.20 (23,6% Fibonacci retracement), 54.65 (38,2% Fibonacci retracement), 53.20 (50% Fibonacci retracement), 51.80, (61,8% Fibonacci retracement), 50.00 (important psychological level). Resistance levels: 58.81 (yesterday's maximum), 60.00 (important psychological level), 61.53 (24 December's maximum), 63.49 (18 December's maximum). Trading tips Long positions should be opened after the price overcomes a level of 58.90 with a target at 60.00. Sell below a level of 56.00 with targets at 54.70 and 53.30.
Andrey Cherkas Analyst of LiteForex Investments Limited
Forex: Ichimoku Clouds. Review of AUD/USD AUD/USD, H4 Let’s look at the four-hour chart. Tenkan-sen line is above Kijun-sen, both lines are horizontal. Chinkou Span line has crossed the price chart from below, giving an additional signal to buy. Current cloud remains descending. The pair has broken through Tenkan-sen and Kijun-sen lines and is going to enter the cloud. The closest support level is Tenkan-sen line (07791). Lower border of the cloud is a resistance level at 0.7841.
AUD/USD, D1 On the daily chart Tenkan-sen line is below Kijun-sen, the red line is directed downwards, while the blue one remains horizontal. Chinkou Span line is below the price chart, current cloud is descending. Resistance levels are Tenkan-sen (0.7824) and Kijun-sen (0.7959) lines. One of the previous minimums of Chinkou Span line is expected to be a support level at 0.7590.
Key levels Support levels: 0.7791, 0.7590. Resistance levels: 0.7824, 0.7841, 0.7959. Trading tips On the four-hour chart we can see a trend reversal, although daily chart shows only a correction. First target for the long positions is 0.7841, the next one will be 0.7959. Anastasiya Glushkova Analyst of LiteForex Investments Limited
EUR/USD: the euro regains investors' confidence Current trend The EUR/USD dropped to a support level of 1.1300 and, having failed to overcome it, rose again to a local maximum at 1.1530. The growth of the pair signals an increase in demand for the European currency. Besides, strong data on German production orders released yesterday exceeded the forecast more than twofold. These are the fundamental factors that the euro had lacked to start recovering. However, despite today's negative data on the eurozone's manufacturing production, the pair is staying close to a local maximum. The dollar, in its turn, is not as aggressive as before. The demand for the American currency is fading, and investors are waiting for a slowdown in the US economy growth rates. The data on the US labour market has showed negative dynamics for the first time over the last months. The data on non-farm payrolls and unemployment rate in the USA are worth particular attention today. Support and resistance Realization of negative forecasts for NFPR may open the EUR/USD a way to new local maximums. A breakout of the level 1.1700 may point to a trend reversal. On the other hand, the European economy is still very weak and this will undoubtedly increase pressure on the pair at the levels 1.1600 and 1.1700. The volume of short positions at these levels will be increasing considerably. Approaching a level of 1.1700 may shift to declining to a level of 1.1415 and key support level of 1.1300. Support levels: 1.1415, 1.1300, 1.1170, 1.1100, 1.1050, 1.0990. Resistance levels: 1.1530, 1.1600, 1.1700, 1.1750, 1.1855, 1.1900. Trading tips We recommend opening pending short positions from the levels 1.1600 and 1.1700 with profit fixing at 1.1300 and at 1.1100 in the medium term. Losses should be limited above a level of 1.1700.
Dmitry Likhachev Analyst of LiteForex Investments Limited
USD/JPY: analysis and forecast Current trend The pair has been in a feeble downward channel since the end of the previous month tending more and more to a support level of 117.00 which it unsuccessfully attempted to break several times. At the end of the last week the pair rallied after publication of data on the US labour market. New non-farm payrolls amounted to 257 thousand which is more than a forecast of 234 thousand. The unemployment rate was less-than-expected and the average hourly wage grew up to 0,5%. The data strengthened the American currency and pushed USD/JPY upwards. The pair managed to cross a level of 119.00, but did not hold at it and is correcting downwards today. Bears will undoubtedly try to break through a support level of 118.25. Unless they succeed, the USD/JPY will move back to its highs and will try to refresh them. Technically, the situation is not clear with indicators producing opposite signals. Stochastic is in the overbought zone and is currently directed downwards, pointing to sales. On the contrary, the MACD is in the positive zone and the signal line is directed upwards. Support and resistance The resistance levels are 118.80,119.20, 119.60, 119.95. The support levels are 118.25, 117.70, 117.00, the latter is key for bears at present. Trading tips The resistance levels are 118.80,119.20, 119.60, 119.95. The support levels are 118.25, 117.70, 117.00, the latter is key for bears at present.
Ilya Laschenko Analyst of LiteForex Investments Limited
Forex: Ichimoku Clouds. Review of GBP/USD GBP/USD, H4 Let’s look at the four-hour chart. Tenkan-sen line has crossed Kijun-sen from above, forming a signal to sell. Chinkou Span line is approaching the price chart from above; current Kumo-cloud is ascending. The pair has been corrected under the red and the blue lines and the next obstacle on its way down will be the upper border of the cloud (1.5120). The closest resistance level is Tenkan-sen line (1.5234).
GBP/USD, D1 On the daily chart we can see an opposite situation. Tenkan-sen line has crossed Kijun-sen from below, froming a signal to buy. Chinkou Span line is crossing the price chart from below, current cloud is descending. The pair has broken through Kijun-sen line, Tenkan-sen line becomes the closest support level (1.5329). The next resistance will be the lower border of the cloud (1.5368).
Key levels Support levels: 1.5120, 1.5170. Resistance levels: 1.5234, 1.5368. Trading tips The charts are controversial. It is recommended to open short-term sell positions with targets at 1.5170 and middle-term buy positions with targets at 1.5368. Anastasiya Glushkova Analyst of LiteForex Investments Limited
EUR/USD: general analysis Current trend Yesterday the pair slightly grew against a backdrop of positive data on French and Italian manufacturing production volumes. Then unfavourable macroeconomic data was released in the US: the small business optimism index dropped to 97.9 points, and new non-farm payrolls reduced to 5.03 million. Today, market participants are waiting for the results of the Eurogroup meeting that will be held at 19:30 (GMT+2). The meeting will cover the questions related to the Greek situation and possible solutions to the Greek current economic crisis. Market participants do not hurry to open big volume positions ahead of the Eurogroup meeting. Support and resistance Yesterday the pair slightly grew against a backdrop of positive data on French and Italian manufacturing production volumes. Then unfavourable macroeconomic data was released in the US: the small business optimism index dropped to 97.9 points, and new non-farm payrolls reduced to 5.03 million. Today, market participants are waiting for the results of the Eurogroup meeting that will be held at 19:30 (GMT+2). The meeting will cover the questions related to the Greek situation and possible solutions to the Greek current economic crisis. Market participants do not hurry to open big volume positions ahead of the Eurogroup meeting. Trading tips Selling positions should be opened with the nearest target at about 1.2220 after a powerful resistance level at 1.1270 has been broken. Consolidating above a level of 1.1340 will signal a beginning of an ascending movement. In this case, bulls will attempt to assault a level of 1.1360.
Vadim Smarzh Analyst of LiteForex Investments Limited
Brent: general overview Current trend Brent crude oil dropped to a level of 53.82 yesterday owing to the news from the Middle East. Oil exporting countries are still competing for the market. Two OPEC members Iran and Iraq announced the highest discounts on hydrocarbons at the same time. The discount Baghdad intends to make on its Basrah Light crude is $4.1 higher than the one its Middle Eastern competitors are offering. National Iranian Oil reduced the price of 1bbl by $2.1. The increased world oil stocks and oil producing countries' output remain a strong factor that puts pressure on oil quotes. According to the US Department of Energy, oil stocks increased by 4,87 million barrels last week. The analysts polled by Bloomberg had expected an increase of only 3.75 million barrels. The output volume increased and amounted to a daily record of 9.23 bbl last registered in 1983. The US took the lead in oil producing and outperformed Russia according to the results of the year 2014. Nevertheless, Brent quotes managed to undergo correction and rise above an important psychological level of 55 dollars. The price is currently located near a level of 57.00. Support and resistance Support levels: 57.37 (maximum of the Asian session), 60.00 (important psychological level), 62.00 (important psychological level), 63.49 (maximum of 18th December 2014). Resistance levels: 55.97 (minimum of the Asian session), 53.82 (yesterday's minimum, 50% Fibonacci retracement), 52.30 (61,8% Fibonacci retracement, middle line of Bollinger bands), 50.00 (important psychological level). Trading tips If the current trend continues, short positions may be opened from a level of 57.40 with the nearest target at about 59.00. If the level 55.90 is firmly broken, Brent will head for the levels 54.00 and 52.30, from which an ascending movement can resume as part of technical correction.
Vadim Smarzh Analyst of LiteForex Investments Limited