Market news and trade recommendations by FBS

[FBS]

Dear EarnForex Members!

Here in this thread we would like to share the latest updates, market news and trade recommendations made by our leading experts.

We hope that this information will be helpful for your trading.

If you have any additional questions about this or that review please feel free to ask us here.

 

[FBS]

Dec. 18: Asian session

Asian stock market edged up as investors are waiting for the Fed’s meeting results: today we’ll find out whether US central bank decides to start tapering QE or not. The Fed’s quantitative easing has been a major driver for global risk assets in recent years. MSCI’s broadest index of Asia-Pacific shares outside Japan inched up by 0.2%. Japanese Nikkei 225 index climbed by 1.5% as the hedge funds were buying.

USD/JPY found support in the 102.50 area and rose once again to 103.00. Yen fell as Japanese trade deficit widened to the record level of 1.35T yen ($13.1B). AUD/USD is trading at daily lows around $0.8900, up from the yesterday’s 3.5-month low of $0.8880. The pair made a quick bounce to $0.8930 as the RBA Governor Glenn Stevens said there are signs that loose policy is supporting spending. The pair weakened later as Stevens reiterated his commitment to keep the Aussie low: according to him, the regulator still hasn’t intervened in the currency market, but could do that if needed. NZD/USD has also lost some ground, weakening to the $0.8240 support.

EUR/USD rose to $1.3775 after it tested $1.3722 yesterday. GBP/USD went up to $1.6288 after testing $1.6216 yesterday.

 

[David Train]

can you please post more informative review on gbpusd?

 

[FBS]

Key currency options (Dec. 18)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3650, $1.3685, $1.3700, $1.3735, $1.3745, $1.3750, $1.3800;
AUD/USD: $0.8890, $0.8900, $0.8950, $0.8975, $0.9000;
GBP/USD: $1.6145, $1.6300;
USD/JPY: 101.00, 101.25, 102.00, 102.50, 102.80, 102.95, 103.00, 103.20, 103.50, 104.00, 104.20;
NZD/USD: $0.8250, $0.8350;
USD/CAD: 1.0450, 1.0500, 1.0550, 1.0570, 1.0700;
EUR/CHF: 1.2100, 1.2150.

 

[FBS]

Key currency options (Dec. 18)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3650, $1.3685, $1.3700, $1.3735, $1.3745, $1.3750, $1.3800;
AUD/USD: $0.8890, $0.8900, $0.8950, $0.8975, $0.9000;
GBP/USD: $1.6145, $1.6300;
USD/JPY: 101.00, 101.25, 102.00, 102.50, 102.80, 102.95, 103.00, 103.20, 103.50, 104.00, 104.20;
NZD/USD: $0.8250, $0.8350;
USD/CAD: 1.0450, 1.0500, 1.0550, 1.0570, 1.0700;
EUR/CHF: 1.2100, 1.2150.

 

[FBS]

can you please post more informative review on gbpusd?

Thank you for your question!

As we expected yesterday, the cable met buyers at the lower boundary of the bearish channel at $1.6230 (this is also the 38.2% Fibo retracement from the $1.5850/6450 rally). On Wednesday GBP/USD jumped to $1.6365 (61.8% Fibo of the recent decline), inspired by the upbeat UK employment figures. Jobless claims in Great Britain contracted by 36.7K in November (forecast: -35.2K; prior revised up to -42.8K). Unemployment rate fell from 7.6% to 7.4%, coming closer to the BoE 7.0% target. BoE meeting minutes brought nothing new except for the words that “further substantial appreciation” of GBP may hurt the economic recovery. However, the market didn’t pay too much attention on that.

The question now arises of whether the GBP rally will survive the Fed’s meeting or not. If the Fed tapers and pushes the greenback up, cable can depreciate. However, the market needs too close below $1.6230/00 area to confirm the top at $1.6465. If the Fed disappoints with QE reduction, we can see a rise towards our initial target of $1.6600 in the medium term.

 

[FBS]

Dec. 19: Asian session

US dollar gave back some of the gains it made yesterday as the Fed said it would start tapering QE.

USD/JPY corrected a bit from more than 5-year high at 104.36, but is still trading above 104.00. Japanese Nikkei share average jumped by 1.5% this morning. Data on Japan buying foreign bonds showed continued outflow of money from Japan.

Australian and New Zealand dollars came under pressure as Fed announced tapering. AUD/USD fell to$0.8820, its lowest level since August 2010, but has recovered some ground later. The pair sits at the $0.8850 August 2013 lows as of writing. NZD/USD fell to $0.8175 despite the better-than-expected New Zealand GDP. NZ economy rose by 1.4% q/q in Q3 vs. expected +1.1% and prior +0.3%.

EUR/USD slipped to $1.3648. GBP/USD is trading in the $1.6370 area after peaking to $1.6484 yesterday.

 

[FBS]

Key currency options (Dec. 19)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3500 (large), $1.3530, $1.3540, $1.3670, $1.3770, $1.3780;

GBP/USD: $1.6400;

USD/JPY: 103.00 (large), 103.50, 103.70;

AUD/USD: $0.8710 (large); $0.8900 (large); $0.8950, $0.9050 (large);

USD/CAD: 1.0595.

 

[FBS]

Fed announced $10 bln tapering

Farewell surprise from Mr. Bernanke )

The Federal Reserve announced it would cut its monthly bond purchases in January to $75 billion from $85 billion, taking the first step toward unwinding the unprecedented monetary stimulus. “In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the committee decided to modestly reduce the pace” purchases, the Federal Open Market Committee said today. The interest rate will remain at record lows at least before the unemployment falls below 6.5%. The Fed has also revised its economic forecasts to the upside.

 

[FBS]

Technicals for majors

EUR/USD

EUR/USD breached support at $1.3705 on the news that the Fed will taper QE.

The pair fell below 55-period MA and is trading in the area of the100-period one. The lines went from rising to the horizontal state.
The prices are at the lower edge of the Ichimoku Cloud ($1.3666) which is currently providing support. Failure here will be a bearish signal. The bullish Cloud itself has dramatically narrowed.
MACD went to the negative territory. RSI is currently signaling oversold.
Support: $1.3666, $1.3648, $1.3625 and $1.3575

Resistance: $1.3705, $1.3740/50, $1.3790

Chart. H4 EUR/USD

Upcoming events:

EUR - 9:00 GMT - Current Account

EUR - All Day - European Council meeting (banking union discussion)

USD - 13:30 GMT - Unemployment Claims

USD - 15:00 GMT - Existing Home Sales

USD - 15:00 GMT - Philly Fed Manufacturing Index

USD - 15:00 GMT - CB Leading Index

 

[FBS]

GBP/USD

Market sentiment on the H4 is bullish. Cable is consolidating around $1.6380 after having jumped to $1.6485 post the Fed’s announcement. We remain bullish for the pair as long as it holds above $1.6320.

The cable broke above the bearish channel.
H4 MACD histogram rose into the positive territory (bullish sign).
Cable rose above the 100- and 55- period MAs.
Ichimoku Cloud is also giving out bullish signals.
Support: $1.6340, $1.6300, $1.6230 (38.2% Fibo), $1.6215

Resistance: $1.6435, $1.6465, $1.6500

Chart. H4 GBP/USD

Upcoming events:

GBP - 9:30 GMT – Retails sales

USD - 13:30 GMT - Unemployment Claims

USD - 15:00 GMT - Existing Home Sales

USD - 15:00 GMT - Philly Fed Manufacturing Index

USD - 15:00 GMT - CB Leading Index

 

[FBS]

USD/JPY

Bulls have regained control over the pair: USD/JPY rose by almost 200 pips yesterday, touching a new 5-year high of 104.40.The bullish impulse slowed at these levels, resulting in another wave of bearish correction.

• USD/JPY holds above the bullish H4 Ichimoku with Kijun-sen crossing the Tenkan-sen to the upside.

• Supported by the 55-day MA (102.85) and the 100-period MA (102.50).

• MACD histogram rose into the positive territory (bullish sign).

• Sentiment remains bullish as long as the 103.75 support holds.

Support: 103.75, 103.40, 102.50

Resistance: 104.40, 105.00, 105.55

Chart. Daily USD/JPY

Upcoming events:

USD - 13:30 GMT - Unemployment Claims

USD - 15:00 GMT - Existing Home Sales

USD - 15:00 GMT - Philly Fed Manufacturing Index

USD - 15:00 GMT - CB Leading Index

 

[FBS]

USD/CHF

Bearish pressure on USD/CHF eased as the pair rose from the 2-year low of 0.8832 to 0.8960.

The pair broke into the wide bearish Ichimoku and is trading not far from the Cloud resistance now (0.8975).
MACD histogram rose into the positive territory (bullish sign).
The price rose above the 55-period MA that acted as a resistance, but met sellers at the 100-period MA
Buyers need a break above the 0.8960/75 resistance to move further
Support: 0.8930, 0.8920, 0.8900

Resistance: 0.8960/75, 0.9000, 0.9030

Chart. Daily USD/CHF

Upcoming events:

USD - 13:30 GMT - Unemployment Claims

CHF - 14:00 GMT - SNB Quarterly Bulletin

USD - 15:00 GMT - Existing Home Sales

USD - 15:00 GMT - Philly Fed Manufacturing Index

USD - 15:00 GMT - CB Leading Index

 

[FBS]

AUD/USD

AUD/USD renewed this year’s low by sliding to $0.8821. Aussie was already quite oversold, so here we didn’t see such a big decline as in other pairs.

The pair is at the lower Bollinger band and there’s still a small divergence in MACD/RSI, so we expect some correction up.
All MAs are declining that indicates that a medium-term downtrend is well in place.
The prices are below the bearish Ichimoku Cloud. The indicator lines went horizontal, so we may see some consolidation.
Support: $0.8820, $0.8800, $0.8755

Resistance: $0.8880, $0.8900, $0.8970, $0.9000

Chart. H4 AUD/USD

Upcoming events:

USD - 13:30 GMT - Unemployment Claims

USD - 15:00 GMT - Existing Home Sales

USD - 15:00 GMT - Philly Fed Manufacturing Index

USD - 15:00 GMT - CB Leading Index

 

[FBS]

USD/CAD

USD/CAD reached the highest level since 2010 at 1.0725. The medium-term uptrend continues.

100- and 50-period MAs turned a bit up. The lines are melded together. So far 50-period MA hasn’t fallen below the 100-period one.
RSI (14) is still in the overbought area above 70. The pair’s above the upper Bollinger band.
The prices rose above the Ichimoku Cloud which has turned bullish. The Cloud, however, is thin and the indicator lines went horizontal.
Resistance: 1.0725, 1.0745, 1.0800 (38.2% of the decline from 2008 to 2011)

Support: 1.0700, 1.0670, 1.0635

Chart. H4 USD/CAD

Upcoming events:

USD - 13:30 GMT - Unemployment Claims

USD - 15:00 GMT - Existing Home Sales

USD - 15:00 GMT - Philly Fed Manufacturing Index

USD - 15:00 GMT - CB Leading Index

 

[FBS]

Dec. 19: Asian session

US dollar gave back some of the gains it made yesterday as the Fed said it would start tapering QE.

USD/JPY corrected a bit from more than 5-year high at 104.36, but is still trading above 104.00. Japanese Nikkei share average jumped by 1.5% this morning. Data on Japan buying foreign bonds showed continued outflow of money from Japan.

Australian and New Zealand dollars came under pressure as Fed announced tapering. AUD/USD fell to$0.8820, its lowest level since August 2010, but has recovered some ground later. The pair sits at the $0.8850 August 2013 lows as of writing. NZD/USD fell to $0.8175 despite the better-than-expected New Zealand GDP. NZ economy rose by 1.4% q/q in Q3 vs. expected +1.1% and prior +0.3%.

EUR/USD slipped to $1.3648. GBP/USD is trading in the $1.6370 area after peaking to $1.6484 yesterday.

 

[FBS]

Key currency options (Dec. 19)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3500 (large), $1.3530, $1.3540, $1.3670, $1.3770, $1.3780;

GBP/USD: $1.6400;

USD/JPY: 103.00 (large), 103.50, 103.70;

AUD/USD: $0.8710 (large); $0.8900 (large); $0.8950, $0.9050 (large);

USD/CAD: 1.0595.

 

[FBS]

Dec. 19: European session

EUR/USD is trading in the $1.3680 area after it tested $1.3648 today. Data from the region are generally good, but the market expects news from the region’s leaders.

European leaders meet
Today is the meeting of the European Council. According to ANZ, there’s “a little bit of event risk tonight in the sense there’s a European leaders summit where they’re supposed to come up with proposals for a banking union. The risk to me is downside in euro for the next 24 hours.” However, German finance minister Schaeuble said that “convincing” agreement is reached on banking union backstop failed banks. Expect more on this topic today.

Euro zone’s current account surplus rose
Euro zone current account balance in Oct +26.2bln vs. +14.2B forecast

Ireland: surprisingly good growth
Irish GDP rose by 1.5% in Q3 vs. 0.7% forecast

German inflation
According to IFW Kiel institute of world economic research, German inflation in 2015 will be 2.5% (higher than the 1.90% forecast). As German policymakers are known for their fear of inflation, they might call ECB for tighter policy (potentially EUR-positive).

Greece: unemployment edged down, but remains high
Greek unemployment 27.0% in Q3vs. 27.1% prior

GBP/USD is consolidating in the $1.6360/6400 range after the yesterday’s post-FOMC jump to $1.6485. UK retail sales rose in line with forecast by 0.3% in November (vs. a 0.9% drop in October).

 

[FBS]

Fed announced $10 bln tapering

Farewell surprise from Mr. Bernanke )

The Federal Reserve announced it would cut its monthly bond purchases in January to $75 billion from $85 billion, taking the first step toward unwinding the unprecedented monetary stimulus. “In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the committee decided to modestly reduce the pace” purchases, the Federal Open Market Committee said today. The interest rate will remain at record lows at least before the unemployment falls below 6.5%. The Fed has also revised its economic forecasts to the upside.

 

[FBS]

Technicals for majors (by FX Bazooka)

EUR/USD

EUR/USD breached support at $1.3705 on the news that the Fed will taper QE.

The pair fell below 55-period MA and is trading in the area of the100-period one. The lines went from rising to the horizontal state.
The prices are at the lower edge of the Ichimoku Cloud ($1.3666) which is currently providing support. Failure here will be a bearish signal. The bullish Cloud itself has dramatically narrowed.
MACD went to the negative territory. RSI is currently signaling oversold.
Support: $1.3666, $1.3648, $1.3625 and $1.3575

Resistance: $1.3705, $1.3740/50, $1.3790

Chart. H4 EUR/USD

Upcoming events:

EUR - 9:00 GMT - Current Account

EUR - All Day - European Council meeting (banking union discussion)

USD - 13:30 GMT - Unemployment Claims

USD - 15:00 GMT - Existing Home Sales

USD - 15:00 GMT - Philly Fed Manufacturing Index

USD - 15:00 GMT - CB Leading Index