Market news and trade recommendations by FBS

[riki143]

EUR/USD: HUGE "BREAKAWAY GAP"
07:29 24.04.2017

We’ve got a huge “Breakaway Gap”, so the downtrend has been broken. Bulls faced a resistance at 1.0872, so we’ve got a bearish correction. Therefore, there’s an opportunity to have another upward price movement towards the next resistance at 1.0910, which is strengthened by the “Wedge’s” upper side. If a pullback from this level happens, the pair is likely going to test a support at 1.0759 – 1.0736.

The last downward “Pennant” has been broken, so we’ve got a “Breakaway Gap”. Also, there’s a “V-Bottom” pattern, so the market is likely going to test the nearest resistance at 1.0905 – 1.0910. If we see a pullback from this area, there’ll be an opportunity to have a decline towards a support at 1.0777 – 1.0737.

More:
https://fbs.com/analytics/articles/eur/usd:_huge_"breakaway_gap"_669

 

[riki143]

GBP/USD: BULLISH "PENNANT"
07:35 24.04.2017

The price is consolidating between the levels 1.2911 – 1.2774. Also, we’ve got a “Pennant”, so the market is likely going to achieve the closest resistance at 1.2911 – 1.2945 in the short term. If we see a pullback from this area, there’ll be an opportunity to have a bearish correction in the direction of the nearest support at 1.2774 - 1.2727.

There’s a consolidation, which is taking place between the nearest resistance at 1.2865 and the 34 Moving Average. At the same time, we’ve got a “Pennant” pattern, so bulls are likely going to test the next resistance at 1.2900 – 1.2911. However, if a pullback from these levels be on the table, bears will probably try to reach the 55 Moving Average.

More:
https://fbs.com/analytics/articles/gbp/usd:_bullish_"pennant"_670

 

[riki143]

OIL MARKET OVERVIEW
10:24 24.04.2017

Oil prices regained their footing on Monday following substantial losses they experienced last week as an OPEC-led committee pledged to back extension of the supply cut deal and as investors favored riskier assets after the first round of the election. Emmanuel Macron securing a spot in the second round avoided the horrific scenario of a contest between anti-EU Le Pen and the far-left Melenchon. The threats for the Euro area had been eliminated, and investors embraced more risk. A collective sense of relief that the Eurozone is over another hurdle resulted in a short-term risk-on rally.
U.S. West Texas Intermediate (WTI) crude oil futures jumped above $50 from $49.18 seen last Friday.
Brent oil futures peaked to $52.95 after following $51.55 last week.
To the present day, OPEC and non-OPEC members struck a tentative agreement to sideline their production beyond June, but there is still no consensus on the timing of the agreement and countries’ individual commitments. The next meeting of the OPEC members will be held in Vienna on May 25.
Just a small reminder, OPEC countries and other major oil producers are committed to reducing oil stockpiles and all signatory parties participating in the output cut deal are committed to restoring the market’s stability in November, 2016. Up to date, compliance with the cuts has improved in March compared to the previous month (compliance to supply curbs was more robust in March (98%) compared to February’s 90% estimate).
As energy ministers of the output deal cut signatories remind the markets about their intentions to curb oil supply, the oil prices will be heading upwards. Refusals to adhere to the cuts would become their headwinds.
The current oil rally will likely be faltered once again as we see more signs of the US crude oil production revival.
Last week, U.S. drillers added 5 rigs to oil fields, bringing them up to the count of 688, according to data from Baker Hughes Inc.

US crude stockpiles fell last week said Energy Information Administration last Wednesday. But it happened mainly because US refineries increased their output (the gasoline stocks have increased).
Another headwind for oil futures might be the issuance of the Trumps executive orders on energy and the environment later this week. The orders will make it easier for the US develop energy industry offshore, and will lead to increased production of US crude oil.

More:
https://fbs.com/analytics/articles/oil_market_overview__674

 

[riki143]

USD/JPY: BULLS GOING TO TEST LAST HIGH AGAIN
13:03 24.04.2017

A new “Window” has just arrived, but the price faced a resistance on the 55 Moving Average. Also, we’ve got a “Belt Hold”. If this pattern confirms and a pullback from the 89 Moving Average happens, there’ll be an opportunity to have a local decline.

The last “Belt Hold” has been confirmed enough. However, there’s a bullish “Hammer”, so the market is likely going to test the local high once again. If any reversal pattern arrives afterwards, bears will probably try to achieve today’s “Window”.

More:
https://fbs.com/analytics/articles/usd/jpy:_bulls_going_to_test_last_high_again_677

 

[riki143]

EUR/USD: BULLISH "WINDOW"
13:00 24.04.2017

There’s a new “Window”, but we’ve got a bearish “Belt Hold” at the local high. Nevertheless, the middle of the last huge black candle is likely going to act as a resistance. If a pullback from this level happens, there’ll be an opportunity to have a decline towards today’s “Window”.

We’ve got a “Three Black Crows”, which has been confirmed. Also, the price has tested the upper side of today’s “Window”. Therefore, the market is likely going to test the closest resistance level during the day.

More:
https://fbs.com/analytics/articles/eur/usd:_bullish_"window"_676

 

[riki143]

EUR/USD: WAVE 2 ON THE WAY
14:45 24.04.2017

Wave 2 has been continued, so there’s a new local high. Previously, we’ve got a wedge pattern in wave 1. The main bullish target is 5/8 MM Level, which could be a departure point for wave 3.

As we can see on the four-hours chart, there’s a possible diagonal triangle in wave [c] of 2. Wave (iii) has been ended near 7/8 MM Level. Therefore, bears are likely going to deliver wave (iv) in the short term.

More:
https://fbs.com/analytics/articles/eur/usd:_wave_2_on_the_way_678

 

[riki143]

EUR/NZD RISING INSIDE INTERMEDIATE IMPULSE WAVE (3)
15:41 24.04.2017

EUR/NZD rising inside intermediate impulse wave (3)
Next buy target - 1.5700
EUR/NZD continues to rise inside the intermediate impulse wave (3) – which started earlier from the support area lying between the key support level 1.5100, lower daily Bollinger Band, 38.2% Fibonacci correction of the sharp upward impulse (1) from February and the 50-day simple moving average. The price earlier broke the daily down channel from March – which accelerated the active impulse wave (3).
EUR/NZD is expected to rise to the next buy target at the key resistance level 1.5700 (which reversed the price in last October, as can be seen from the daily EUR/NZD chart below).

More:
https://fbs.com/analytics/articles/eur/nzd_rising_inside_intermediate_impulse_wave_(3)_679

 

[riki143]

AUD/NZD REVERSED FROM SUPPORT ZONE
15:42 24.04.2017

AUD/NZD reversed from support zone
Next buy target - 1.0850
AUD/NZD continues to rise after the earlier sharp upward reversal from the support zone lying between the key support level 1.0650 (which also reversed the price in February), lower daily Bollinger Band and the 50% Fibonacci correction of the previous sharp upward C-wave from January. The upward reversal from this support zone created the daily Japanese candlestick reversal pattern Bullish Engulfing.
AUD/NZD is expected to rise to the next buy target at the next resistance level 1.0850 (top of the previous minor correction (ii)).

More:
https://fbs.com/analytics/articles/aud/nzd_reversed_from_support_zone_680

 

[riki143]

EUR/USD: EURO NEEDS A CORRECTION
05:15 25.04.2017

Technical levels: support – 1.0800; resistance – 1.0900.
Trade recommendations:
1. Sell — 1.0860; SL — 1.0880; TP1 — 1.0800.
2. Buy — 1.0800; SL — 1.0780; TP1 — 1.0900; TP2 – 1.0930.
Reason: bullish Ichimoku Cloud, but Senkou Span A and B are horizontal; a cancelled golden cross of Tenkan-sen and Kijun-sen, the lines are horizontal; the prices are under strong resistance on daily timeframe; the local market is overbought

More:
https://fbs.com/analytics/articles/eur/usd:_euro_needs_a_correction_687

 

[riki143]

AUD/USD: BULLS ARE STOPPED BY CLOUD
05:16 25.04.2017

Technical levels: support – 0.7550; resistance – 0.7570.
Trade recommendations:
1. Sell — 0.7540; SL — 0.7560; TP1 — 0.7470; TP2 — 0.7430.
Reason: bearish Ichimoku Cloud, horizontal Senkou Span A and B; a new golden cross of Tenkan-sen and Kijun-sen, but the lines are horizontal; the prices are under strong resistance of the Cloud.

More:
https://fbs.com/analytics/articles/aud/usd:_bulls_are_stopped_by_cloud_688

 

[riki143]

MORNING BRIEF FOR APRIL 25
06:26 25.04.2017

Safe-haven assets, including the yen and gold, are still under pressure as investors whet their appetites for the riskier assets after centrist Macron qualified for the May 7 runoff alongside far-right nationalist Marine Le Pen. While polls show, Macron winning the May 7 contest by 20-30% points, the risk for Macron that voters will be turned off is still in place especially after his and his supporters’ drinking spree at La Rotonde resto. It was a huge mistake to make ahead of the second round of the election, according to Thomas Guenole, professor politics at the Sciences Po institute. “Macron needed to show himself as a real statesman and instead he comes across as a child king,” the academic said.

EUR/USD was trading a bit lower at 1.0870 after jumping to as high as 1.0935 on Monday. There is a room for a further upside towards the psychological level at 1.1000.
While markets are still lingering in the glow of relief after the French election in the first half of this week, the second one will likely put Donald Trump in the forefront. The US President is poised to unveil his tax reform plan on Wednesday that should be a significant driver for the markets. Also, the administration flagged that it is ready to fight desperately for its planned Mexican border wall. It seems that Trump’s team is straining to demonstrate progress achieved on key campaign promises like money for a border wall, increased military spending, cut tax. But any of these measures require bipartisan support, and Democrats refuse to budge raising the prospects for a shutdown.
Today may take the heat off as there should be a very light day for economic data. North Koreans may make some waves though as they might test an intercontinental ballistic missile or nuclear device today celebrating the 85th anniversary of the Korean People’s Army.
The Canadian dollar was the biggest loser of Tokyo session. It fell after the US announced new duties averaging 20% on Canadian softwood lumber imports. USD/CAD spiked to the highest level (1.3560) last seen in December 2016. On the upside, there is a sturdy resistance at 1.3600.
Australia and New Zealand are closed for the Anzac Day holiday.
Aussie edged down to 0.7550 after hitting 0.7570 on Monday. AUD/USD will likely be trading sideways in the upcoming sessions having moved into a consolidation phase. On the downside, we see several supports at 0.7520, 0.7430 (the lower border of consolidation range). If there is a rebound, the prices might face a hurdle at 0.7610 (the upper border of the range). Tomorrow’s focus will be on the Australian CPI figures which are expected to confirm that the pronounced pulse of inflation in Australia is still weak. This might become a drag for AUD.
USD/JPY is hovering around 110.10 level. The technical outlook for the pair is neutral despite the salient surge seen on Monday. A daily closing above 110.60 would open the way towards 111.55. In the early trading hours, we heard some interesting comments from deputy governor of the Bank of Japan Iwata, saying the BoJ is conducting simulations on the exit strategy, but not willing to disclose the facts to the press.
In commodities markets, oil prices traded higher to almost $52.30, although gains were capped by fears that the OPEC members might fail to extend output cuts beyond June 30, as Russia claimed that it will lift output if the deal on curbs lapses.

More:
https://fbs.com/analytics/articles/morning_brief_for_april_25__689

 

[riki143]

GOLD CAME ACROSS THE WEDGE
06:49 25.04.2017

On the daily chart of gold, the bulls failed to settle down above the important resistance level of $1,287 per ounce. There might be a pullback towards $1,260 and $1,250. To restore the uptrend, buyers need to update the April high. If they succeed the target 200% in the AB=CD pattern will be fulfilled.

On the hourly chart of gold, the expanding wedge pattern has been formed. The correction towards 38.2%, 50% and 61.8% from the wave 4-5 can be used for the formation of short positions. But we should bear in mind, that there are positions of large buyers near $1,250.

More:
https://fbs.com/analytics/articles/gold_came_across_the_wedge__691

 

[riki143]

EUR/USD: BULLS GOING TO TEST MONDAY'S HIGH
07:03 25.04.2017

There’s a “V-Top” at the last high, so the price is consolidating between the levels 1.0872 – 1.0828. Therefore, bulls are likely going to test the nearest resistance at 1.0918. If a pullback from this level happens, there’ll be an opportunity to have a decline towards a support at 1.0759 – 1.0736.

We’ve got a “Pennant” pattern, so the market is likely going to reach the next resistance at 1.0905 – 1.0918. However, if we see a pullback from this area, bears will probably try to achieve the 89 Moving Average, which could act as a support.

More:
https://fbs.com/analytics/articles/eur/usd:_bulls_going_to_test_monday's_high_692

 

[riki143]

GBP/USD: "PENNANT" PUSHING PRICE HIGHER
07:08 25.04.2017

The market is consolidating between the levels 1.2911 – 1.2774. Also, there’s a “Pennant” pattern, so the pair is likely going to move up towards the nearest resistance at 1.2945. At the same time, if we see a pullback from this level, there’ll be a chance to have a decline in the direction of the closest support at 1.2774 – 1.2727.

The price is moving up and down in a range of the “Pennant”. The 34 Moving Average is acting as a support. In this case, the market is likely going to test the next resistance at 1.2911 – 1.2945 during the day. If a pullback from these levels happens, bears will probably try to reach the 55 Moving Average.

More:
https://fbs.com/analytics/articles/gbp/usd:_"pennant"_pushing_price_higher_693

 

[riki143]

EUR/USD SHORT-TERM AND LONG-TERM FORECASTS FROM BANKS
08:37 25.04.2017

Now, when political risks amid French presidential elections have faded, euro traders will focus on the Thursday’s European Central Bank monetary policy meeting and press conference. The market participants will be eager to know whether the ECB officials announce the withdrawal of the strong support they have lent to the Eurozone economy over recent years or not. It seems that they won’t do it and say that they are happy with their current monetary policy settings. In the face of a still subdued inflation outlook, prudence will prevail, the ECB won’t introduce any changes to its forward guidance and announce a slow pace of tapering in the next year, no cuts in the near-term future.
The major banks would probably agree with the aforementioned scenario for the ECB meeting. In the remaining part of the article, you may find some clues the banks’ strategists give you on the further direction of the euro.
The Bank of Tokyo-Mitsubishi UFJ
The banks' strategists note that the result of the first round of the French presidential elections was in line with markets’ expectation of a quite limited rally. They believe that the elections won’t have much further impact on the euro in the near-term.
In the longer term, the euro will be supported by the strong economic fundamentals coming from the Eurozone countries. The improving economic outlook of the EMU countries will prompt the ECB officials to adopt a less dovish monetary policy stance in the next quarters and don’t renege on their promise to taper QE at the end of the year.
The long-term outlook of the BTMU EUR/USD is a gradual drift higher towards 1.1200 by year end.
Societe Generale
SocGen analysts believe that EUR/USD bearishness is behind us and that there is a development of the uptrend.
The reasons behind the aforementioned conclusion:
The tightening gap between the US Treasury/Bund yield differentials. SocGen strategists note that the low in EUR/USD were registered when real yields were down at -120bp in Germany, and +50bp in the US. The following divergence is not relevant anymore; the gap narrowed to 105bp by the end of the past week. If the US/German real yield differential continues narrowing, the bank counts on the EUR/USD appreciation towards 1.24.
Additional tailwind for the euro – the Euro Area’s current account surplus.
Credit Agricole
The European single currency rallied sharply in response to the market-friendly results of the first round of the French elections.
EUR/USD could stay for a quite long time at its current levels near the high of the year.
The further upside will depend on how constructive President Draghi will be while presenting the ECB’s updated outlook for the Eurozone on this Thursday.
Danske
Danske Bank analysts expect a slightly dovish tone from the ECB President on Thursday,
They believe that Draghi will probably reiterate the phrase he dropped earlier “a reassessment of the current monetary policy stance is not warranted at this stage.” This would be perceived as dovish and send EUR lower.
Danske believes the change in ECB’s forward guidance on policy rates will probably be introduced at the CB’s meeting in June.

More:
https://fbs.com/analytics/articles/eur/usd_short_term_and_long_term_forecasts_from_banks_695

 

[riki143]

AUD/USD: BULLS SHOWED THEIR WEAKNESS
06:47 25.04.2017

On the AUD/USD daily chart, the bulls for the second time in the last couple of days tried to push quotes out of the downward trading channel. They failed to do so. Most likely, they fail to implement an inverted Gartley pattern with target 0.7635 too. The fall of the Australian dollar below support at 0.7525 will strengthen the risks of a downtrend restoration.

On the AUD/USD hourly chart, the breakout of the lower border of the upward trading channel will activate the "Crab" pattern. Its target 161.8% is located near 0.774.

Recommendation: SELL 0,7545 SL 0,76 TP1 0,747 TP2 0,741

More:
https://fbs.com/analytics/articles/aud/usd:_bulls_showed_their_weakness_690

 

[riki143]

WHERE BITCOIN IS HEADING?
12:46 25.04.2017

Bitcoin’s price spiked to $1,270 on Monday leaving it within $40 of its all-time high ($1,316) reached in early March on the speculation that the Securities and Exchange Commission might soon approve the first bitcoin exchange-traded fund.
Bitcoin has risen in price by almost 30% since the beginning of this year, and it shows no sign of letting up despite the numerous fundamental headwinds. Bitcoin incurred significant losses after suspension of all bitcoin withdrawals in China, after the Securities and Exchange Commission rejected Winklevoss’s proposal to establish the Bitcoin Trust, which would've traded on the BATS exchange; after the agency prohibited creation of the SolidX Bitcoin Trust, a bitcoin-focused exchange-traded fund that would’ve traded on the New York Stock Exchange. Since then, the cryptocurrency has pared some of its losses and spiked again.
After falling sharply during the second half of March, the bitcoin price managed to recoup its losses after Japan recognized bitcoin as a legal method of payment. Additional tailwind came out of Russia after the country’s authorities claimed that they might recognize the world’s most popular digital currency as a legitimate financial instrument next year.
Now, the coin Is becoming truly attractive to investors due to its rising profitability. The currency has become more stable, less volatile compared to the earlier stages of its existence. After spending two years in the doldrums, the currency came roaring back in 2016 when its price more than doubled. This year BTC rose even higher.
In the near-term future, one of the main drivers of the BTC/USD will be the SEC decision on a third bitcoin ETF proposal – the Grayscale Bitcoin Investment Trust (the ruling will be delivered somewhere in the third quarter). Another factor that might influence digit/traditional currency pair is the fact that Bitfinex’s customers are now long nearly 12, 967 coins, while 18, 775 coins are short. The data like these is viewed as a counter-indicator; when betting against the cryptocurrency increases, its raises the likelihood that any gains could be amplified as investors try to buy back the coins held short.
Short positions exceeded the long ones for the first time since February. The last time it happened, it preceded a nearly $300 r
ally in bitcoin price.
The main factor that determines the strong position of bitcoin at the present time and that might lead to its further appreciation is an increasing probability of the Segregated Witness (SegWit) activation, which is designed to solve a number of issues of network scaling.
The progress on the activation of SegWit in other cryptocurrencies, such as Litecoin, Syscoin and DigiByte, has already led to a significant increase in their prices. And according to many analysts, bitcoin will rise higher against USD once SegWit is activated.

More:
https://fbs.com/analytics/articles/where_bitcoin_is_heading?_698

 

[riki143]

EUR/USD: "WINDOW" STILL OPEN
13:10 25.04.2017

Monday’s “Window” are pushing the price even higher despite of the last “Belt Hold” pattern. Therefore, if a pullback from the nearest support happens, bulls are likely going to test the last high in the short term.

We’ve got a “Three Black Crows” and an “Engulfing”, so the pair is likely going to get a support on the 21 Moving Average. If a pullback from this line happens, there’ll be an opportunity to have another bullish price movement.

More:
https://fbs.com/analytics/articles/eur/usd:_"window"_still_open_700

 

[riki143]

USD/JPY: BULLS CAN'T STOP
13:16 25.04.2017

The 34 Moving Average has acted as a support, so the price is rising. Considering that there isn’t any reversal pattern so far, bulls are likely going to test the 89 Moving Average, which could be a departure point for a bearish correction.

There’s a bullish “Three Methods” pattern, which has been confirmed enough. Therefore, the price is likely going to continue moving up until any bearish candle pattern arrives.

More:
https://fbs.com/analytics/articles/usd/jpy:_bulls_can't_stop_701

 

[riki143]

EUR/USD: WAVE (III) GOING TO END
16:11 25.04.2017

We’ve got a new high on the four-hours chart. However, if the price couldn’t find a lodgment, bears are likely going to deliver a correction. The main target for wave (iv) is 4/8 MM Level.

There’s a possible double zigzag in wave (iii). It’s likely that wave [C] of y is going to end soon. Therefore, we could have wave a or w in the short term. Meanwhile, this wave count will be unconfirmed until the price come back upper 7/8 MM Level.

ore:
https://fbs.com/analytics/articles/eur/usd:_wave_(iii)_going_to_end_702