Market news and trade recommendations by FBS

[riki143]

USD/CAD outlook for October 10-14
10/7/2016

This week didn’t send any shockwaves to the technical chart of the USD/CAD (well, until Friday). Crude oil futures settle at $50 per barrel. USD/CAD is usually responsive to these sprouts of life. However, this time it was ignoring higher oil prices. Normally Canadian dollar would gain, because Canadian economy relies on the robust oil industry.

This ran against the normal reaction of CAD, because the Canadian economy is reliant on a robust oil industry.

On Tuesday we heard a BOC Senior Deputy Governor Carolyn Wilkins speaking of the Canadian economy and monetary policy trends. She said that the bank is ready to provide monetary stimulus in order to meet its inflation target. Wilkins admitted that Canadian economy is now experiencing tough time struggling with global events of a Brexit like nature, the collapse in oil prices. It has also been affected by headwinds from the European debt crisis, global financial crisis, but now there has been progress, since the risks of the inflation have been offset. Wilkin’s encouragement a bit contradicts the Monday data that we got from Canada. Canadian manufacturers signaled another slowdown in growth momentum in September. Then, we cheered up as the building permits data – a key indicator of demand in housing market – has been much better than expected; and the trade balance showed a narrower deficit. But, surprisingly, all these data didn’t add a bit of spice into the technical picture of the USD/CAD.

The USD/CAD experienced a significant swing only when Canadian employment numbers came out stronger than expected; and long-awaited FNP fell short of the expectations. The key level is 200-day MA at the 1.3210. There’s also 6-month resistance line at 1.3290. If “bulls” don’t gain momentum, the quotes may move until we get some prompts from the FOMC officials about their decision on the interest rates. The next support line for US dollar is lying against 50-day MA at 1.3065. A breakout of the resistance line at 1.3290 will open the way up to 1.3350/1.3400.

Next week we would recommend you to focus on the new housing price index coming on Tuesday. It’s a leading indicator of the housing industry's health which positively influences the economic growth. And after this report we won’t get any significant data releases from Canada. As it has been already mentioned; all our attention will be concentrated on the FOMC meeting minutes on Wednesday, on a bunch of the US key statistic indicators (unemployment claims, import prices, core retail sales, producer price index) and Janet Yellen’s speech at the end of the week.

More:
https://new.fxbazooka.com/analytics/10797

 

[riki143]

US dollar: outlook for October 10-14
10/7/2016

US dollar index closed above resistance line from December 2016 and rose to 97.00. America released upbeat ISM manufacturing and services PMIs. According to CME futures, the possibility of the Federal Reserve’s rate hike in December rose to 60%.

American labor market figures came mostly below forecast. Nonfarm payrolls rose by 156K in September vs. 171K expected. The unemployment rate increased to 5%. Average hourly earnings rose by 0.2%. Still, these figures are in line with December rate hike. Fed Chair Janet Yellen said in August that the economy needs to create just under 100K jobs a month. So, even though we can see some depreciation of the greenback, the currency should enjoy overall support.

Next week the Fed will release the minutes of its September meeting on Wednesday. The market will also watch retail sales and producer prices figures on Friday. In addition, we’ll hear comments from the Fed speakers, including remarks from Yellen on Friday. The last, but not the least is the second US presidential debate on Sunday night. Support of the Republican candidate Donald Trump has considerably declined in the last several days, so it’s interesting how the situation will develop further. All in all, Hillary Clinton’s victory would be regarded as a prerequisite for US economic and financial stability.

More:
https://new.fxbazooka.com/analytics/10799

 

[riki143]

EUR/USD: outlook for October 10-14
10/7/2016

During the week EUR/USD was trading in a very volatile fashion. The euro got a boost and managed to recover from lows on the speculation that the European Central Bank’s thinking about tapering its quantitative easing program. According to a report by Bloomberg, the regulator would start winding down its bond buying by 10 billion euro a month, ahead of the program’s currently scheduled end in March 2017. However, there was no official confirmation of this information, and earlier the ECB president Mario Draghi has consistently said monetary stimulus would be extended past March if necessary.

As for other news, German factory orders rose at the fastest pace in 5 months. Concerns about Deutsche Bank have declined, but the uncertainty still remains. Moreover, significant political uncertainty looms ahead, and despite good readings from Germany we see that the overall economy of the currency union is losing momentum.

Next week don’t miss German trade balance and Sentix investor confidence on Monday and German and the euro area’s ZEW economic sentiment on Tuesday.

Technically EUR/USD failed to stick to the levels above 100-week MA (1.1210). However, the pair got support near 1.1100 (support line from November 2015). Next week we expect EUR/USD to stay in 1.1200/1.1100 range. Decline below 1.1100 will open the way down to 1.1040/00.

More:
https://new.fxbazooka.com/analytics/10800

 

[riki143]

GBP/USD: outlook for October 10-14
10/7/2016

British pound was a big newsmaker during the past week. GBP/USD fell by more than 6% to 31-year low of 1.2000 during the Asian session on Friday. The decline took place amid low liquidity and could have been triggered by an error of some large bank’s trader and then exacerbated by algorithmic trades. An article in Financial Times citing French President Francois Hollande, who said that the UK must suffer the consequences of leaving the European Union, may also have had some negative impact on the British currency.

While this pound’s selloff may have been an accident, let’s have a wider look on its prospects.

Data released in the UK during the past week were mixed. On the one hand, all 3 PMIs exceeded expectations. On the other hand, industrial production contracted in August, while manufacturing growth was weaker than expected.

Concerns about Britain’s future have been mounting. Recent comments of Prime Minister Theresa May increased the risks of “hard Brexit” that would restrict access to the EU’s single market so that the government could control immigration. According to the media, Ms. May isn’t planning to negotiate special favors for financial services in EU exit talks. As the financial and related services sector accounts for 12% of GDP, it’s quite easy to see why investors are concerned about the pound.

All in all, the outlook for sterling looks gloomy. GBP/USD breached below multiyear minimums. Although it’s oversold after the rapid decline, bearish risks have increased. Resistance is at 1.2500, 1.2650 and 1.2790. Support is at 1.2000 and 1.1850. Next week British economic calendar is almost empty, so traders will watch comments from British and European officials on Brexit as well as US data.

More:
https://new.fxbazooka.com/analytics/10801

 

[riki143]

USD/JPY: outlook for October 10-14
10/7/2016

USD/JPY took off from 101.20 to 104.00, almost reaching September highs. The main driver of the pair was the strength of the US dollar on the upbeat American economic figures. On Friday, however, US currency declined on lower-than-expected NFP figures.

Japanese monetary authorities are probably really glad that the demand for the yen has weakened as it seems that they are not able to generate the yen’s weakness on their own. A weaker yen should help Japanese exporters and encourage the too-low inflation. At the same time, the current situation emphasizes that the Bank of Japan’s lack of power to influence the market: the reaction to the BOJ’s September policy adjustments was much less strong.

The pair broke above 2016 resistance line in the 102.00 area. These levels also correspond to 50-day MA and will now act as support for the greenback. Decline below this point will once again give power to the bears. Resistance lies at 104.40 and 105.50.

Note that even though USD/JPY can keep trying to show short-term gains thanks to the external environment such as higher oil prices, the longer-term the bullish move will unlikely be sustainable as there’s no additional fuel provided to the pair by the Japanese side of things.

Next week there won’t be many news from Japan, so focus on the US releases. Japanese banks will be closed on Monday because of the bank holiday. On Tuesday Japan will release current account figures and economy watchers’ sentiment. Tertiary industry activity is due on Thursday. Watch China’s trade balance on Thursday and inflation on Friday – these figures will have an impact on the market’s risk sentiment and, consequently, demand for the yen.

More:
https://new.fxbazooka.com/analytics/10802

 

[riki143]

EUR/USD & German Trade Balance: Not an enough catalyst for today's moves
10/10/2016

Today at 06:00 GMT will be released the German trade balance’s figures and it seems that we could expect an increase from 19.4B to 20.0B for August. It should be noted that Eurozone has been living a surplus in terms of exports and the data for Germany is still showing some positive numbers, despite the latest two releases, where we saw some numbers below the forecasted. Today’s liquidity should be slow, as economic calendar’s data will be little, because of holidays in North America.

Our technical analysis for EUR/USD at H4 chart is showing a complex structure in the short-term, while the pair remains to trade below the 200 SMA. One could expect a rise to the 1.1227 level, but today’s events shouldn’t be enough catalysts to move the pair across the board. That’s why we can expect very technical moves for the EUR/USD and eventually, it can find dynamic resistance at 200 SMA to resume the bearish bias.

More:
https://new.fxbazooka.com/analytics/10803

 

[riki143]

EUR/JPY: bulls are going to counterattack
10/10/2016

On the EUR/JPY chart, "bears" are trying to return to the boundaries of the triangle. If they succeed, the euro may fall to the level of 114.24 (38.2% Fibonacci of the downward wave). In contrast, a rebound from the diagonal support will create the prerequisites for the "bullish" trend restoration. Its Targets are located at the levels of 117.24 (61.8%) and 117.8 (88.6% in the "Shark" pattern).

On the EUR/JPY hourly chart, the correction located near the support line at 114.9 is going to be completed. There is a target at 127.2% of AB = CD, and the level of 38.2% of the last upward wave. The next point of the entry into longs will be sought at 114,24-114,44.

Recommendations:

BUY 114,9 SL 114,35 TP1 115,74 TP2 117,24,

BUY 114,25 SL 113,7 TP1 115,74 TP2 117,24.

More:
https://new.fxbazooka.com/analytics/10804

 

[riki143]

USD/CHF: will franc return to the triangle ?
10/10/2016

On the USD/CHF daily chart, "bulls" failed to fulfill target at 0.984. Afterwards, there was a there was a rapid rollback. "Bears" may try to return to the boundaries of the triangle. Rebound from the resistance at 0.974 will create prerequisites for opening long positions. Target 88.6% (0.9865) of the Shark pattern has not been fulfilled, so, there is a room for improvement.

On the USD/CHF hourly chart, if "bears" fail to attack levels at 0.974 (50% Fibonacci retracement from the last upward wave) and 0.9705 (88.6% target of the Shark pattern), it will be a signal for "bulls" to attack.

Recommendations: BUY 0,974 SL 0,9685 TP1 0,984 TP2 0,9865, BUY 0,9705 SL 0,965 TP1 0,984 TP2 0,9865

More:
https://new.fxbazooka.com/analytics/10805

 

[riki143]

Key option levels for Monday, October 10th
10/10/2016

EUR/USD

Main trend Short-term period Medium-term period
Bearish Bearish
Changes in the open interest + 44 200 ? + 90 607 ?
Closest resistance levels 1.1224; 1.1247; 1.1277; 1.1297
Closest support levels 1.1174(59?); 1.1138; 1.1113; 1.1084
Trading recommendations
Baseline scenario Short EUR/USD below 1.1174, with target points at 1.1138 and 1.1113
Alternative scenario Moving above 1.1224 can be considered as a signal to Buy the pair, with target at 1.1247 and 1.1277

GBP/USD

Main trend Short-term period Medium-term period
Neutral Bearish
Changes in the open interest - 25 900 ? - 13 808 ?
Closest resistance levels 1.2537; 1.2571; 1.2591; 1.2614
Closest support levels 1.2380; 1.2348; 1.2328; 1.2306
Trading recommendations
Baseline scenario Short GBP/USD below 1.2380, with target points at 1.2348 and 1.2328
Alternative scenario Moving above 1.2537 can be considered as a signal to Buy the pair, with target at 1.2571 and 1.2591

USD/JPY

Main trend Short-term period Medium-term period
Bullish Neutral
Changes in the open interest - 28 527 ? - 24 479 ?
Closest resistance levels 103.12; 103.48(33?); 103.66; 103.86
Closest support levels 102.50; 102.23; 102.03; 101.79
Trading recommendations
Baseline scenario Long USD/JPY above 103.12, with the target points at 103.48 and 103.66
Alternative scenario Moving below 102.50 can be considered as a signal to sell the pair, with target at 102.23 and 102.03

USD/CAD

Main trend Short-term period Medium-term period
Bullish Bullish
Changes in the open interest - 11 071 ? - 12 408 ?
Closest resistance levels 1.3294; 1.3323; 1.3349; 1.3387
Closest support levels 1.3226; 1.3205; 1.3173; 1.3134
Trading recommendations
Baseline scenario Long USD/CAD above 1.3294, with the target points at 1.3323 and 1.3349
Alternative scenario Moving below 1.3226 can be considered as a signal to sell the pair, with target at 1.3205 and 1.3173

EUR JPY GBP CAD USD

More:
https://new.fxbazooka.com/analytics/10806

 

[riki143]

EUR/USD: under the Cloud resistance
10/10/2016

Technical levels: support – 1.1170, 1.1130; resistance – 1.1200.

Trade recommendations:

1. Sell — 1.1180; SL — 1.1200; TP1 — 1.1130; TP2 – 1.1100.

Reason: a dead cross of Tenkan-sen and Kijun-sen and falling down Tenkan-sen; bearish character of Ichimoku Cloud.

More:
https://new.fxbazooka.com/analytics/10807

 

[riki143]

AUD/USD: consolidation in the Cloud
10/10/2016

Technical levels: support – 0.7590, 0.7575; resistance – 0.7625, 0.7650, 0.7690.

Trade recommendations:

1. Buy — 0.7590; SL — 0.7570; TP1 — 0.7690; TP2 — 0.7750.

Reason: a strong support near 0.7600; a dead cross of Tenkan-sen and Kijun-sen; a bullish Ichimoku Cloud.

More:
https://new.fxbazooka.com/analytics/10808

 

[riki143]

USD/JPY: consolidation may continue
10/10/2016

Technical levels: support – 102.90, 102.20; resistance – 103.40, 103.80.

Trade recommendations:

1. Buy — 103.00; SL — 102.80; TP1 — 103.80; TP2 — 104.20.

Reason: a bullish Ichimoku Cloud and rising Senkou Span A; a golden cross of Tenkan-sen and Kijun-sen, but the market is overbought yet.

More:
https://new.fxbazooka.com/analytics/10809

 

[riki143]

EUR/USD: "Double Bottom" stopped bears
10/10/2016

We’ve got a “Bear’s Trap” under the previously broken “Triangle”, so the price faced a resistance at 1.1196 afterwards. In this case, bulls are likely going to reach the 89 Moving Average in the short term. If we see a pullback from this line, there’ll be an opportunity to have a decline towards a support at 1.1165 – 1.1145.

There’s a consolidation, which is taking place between the nearest resistance at 1.1204 and the 55 Moving Average. So, the price is likely going to achieve a resistance at 1.1219 – 1.1232 during the day. However, if a pullback from this area happens, bears will probably try to catch a support at 1.1168 – 1.1152.

More:
https://new.fxbazooka.com/analytics/10810

 

[riki143]

GBP/USD: Moving Averages waiting for bulls
10/10/2016

We’ve got a bullish “Thorn” at the new historical low, which led to the current upward movement. Therefore, the market is likely going to continue rising towards a resistance at 1.2677. If a pullback from this level happens, there’ll be an opportunity to have another decline in the direction of a support at 1.2226.

The price has been moving in a flat’s range on the one-hour chart. It’s likely that the price is going to reach an area between the 34 Moving Average and the closest resistance at 1.2621. If we see a pullback from here, then bears will try to deliver a price movement towards a support at 1.2349 – 1.2226.

More:
https://new.fxbazooka.com/analytics/10811

 

[riki143]

EUR/USD: bulls going to deliver wave E
10/10/2016

As we can see on the four-hours chart, wave D has been ended in a form of a double zigzag. Moreover, we’ve got a pullback from 0/8 Murrey Math Level (P=200), which points to a possibility to have wave E of (Y) in the short term. The main intraday target is 6/8 MM Level.

There’s a zigzag, which was formed in wave [y] of D. Also, we’ve got an upward impulse in wave [a], so bears are likely going to deliver wave during the day. If we see a pullback from 2/8 MM Level, there’ll be an opportunity to have wave [c] of E shortly.

More:
https://new.fxbazooka.com/analytics/10812

 

[riki143]

Takeaways from the second presidential debate
10/10/2016

It was one of the most negative and acrimonious debate in US history. Americans have always been proud of a sacred tradition of a presidential debate where nominees trade barbs over their vision of the country’s future; the debate could help the voters to make their choice and define a well-deserved president. But this debate left many Americans embarrassed, if not insulted. Never before they heard such constant vile comments, rants and empty rhetoric.

The tone of the last presidential debate has been shaped by Donald Trump’s lewd and demeaning comments on the sexual aggression towards women. The Democrat nominee Hillary Clinton was accused of her use of a private email server when she was US secretary of state and threatened to be placed behind the bars, if her counterpart is elected. This debate was more of a blame game. Throughout the 90-minute exchange, which included questions posed by some people from the audience, they exchanged insults, defended themselves and tried to justify their wrong doings.

Well, there were some flashes of good reasoning in candidates’ speeches. They’ve covered several topics (migration issues, multiculturalism, Obamacare). They discussed Syrian War. Trump refused to take a hard line on Russia and Syrian President Bashar al-Assed saying that they do right things; they are bombing ISIS trying to defend their own citizens from imminent threat coming from radicalized Muslims. Clinton said that Russian and al-Assad should be accountable for all these atrocities in Syria and numerous war crimes they’ve committed by bombing eastern Aleppo.

All this cross-talk ended in Hillary’s victory. In contrast, Trump’s poll numbers are going to fall even further after his first performance during the first debate and the video tape where he bragged about groping women and sexually assaulting them. Although, many analysts admit that he managed to plow through the numerous accusations and that he sounded more convincing than Hillary with her rehearsed answers.

How all this empty talk affected the markets? Well, it seems that they decided to ignore it. The second presidential debate failed to become a major market mover of today’s trading session, as nothing worthy has been said. Neither Americans nor traders didn’t get any clues on the US future.

More:
https://new.fxbazooka.com/analytics/10813

 

[riki143]

Gold’s recovery from the last week downfall
10/10/2016

Last week we saw that gold fell sharply as the dollar surged on the speculations of a rate hike at the Federal Reserve meeting. The data releases coming from the US were also weighting on the gold’s derisive attempts to growth. On Friday, however, the precious metal managed to stabilize as US released weaker-than-expected labor market figures.

Today’s technical picture shows us the opposite. The gold prices gained their bullish momentum at 1250.56 level (38.2% Fibonacci retracement level) and now they are surging towards the new resistance lines (the next one will be located at 1277.51 – 5th October max). And in this situation my question will be following: how long the gold prices will rise? Is there a steady bullish trend? Let’s turn to the technical chart and figure this out.

The quotes managed to surpass the resistance line located against 200-day MA and now moving towards the next significant level at 1300 (plotted near the 23.6% Fibonacci retracement). I suggest to look at the stochastic oscillator which is now located below the 20 oversold threshold. From this we may conclude there is a room for rise in a short-term. But we don’t expect this bullish trend to be long-lasting since there will be FOMC meeting minutes on Wednesday which could become a landmark event for gold. If the Fed’s members confirm their intention to raise rates, the gold price may fall again down to the significant support level at 1248.87 (38.2 Fibonacci retracement). Meanwhile, you may snatch a certain sum of money on the gold’s short-term rally.

More:
https://new.fxbazooka.com/analytics/10816

 

[riki143]

AUD/NZD broke resistance level 1.0580
10/10/2016

AUD/NZD broke resistance level 1.0580
Next buy target - 1.0740
AUD/NZD has been rising steadily in the last few trading sessions inside the (c)-wave of the minor ABC correction 2 from the middle of September. The price earlier broke sharply through the resistance level 1.0580 (which stopped the (a)-wave of the active ABC correction 2) – which intensified the bullish pressure on this currency pair.

AUD/NZD is expected to rise further toward the next buy target standing at the strong resistance level 1.0740 (which reversed the previous corrective waves 2 and (ii) and which stands close to the 50% Fibonacci correction of the previous extended downward impulse from April).

More:
https://new.fxbazooka.com/analytics/10817

 

[riki143]

NZD/USD falling inside minor impulse wave (c)
10/10/2016

NZD/USD falling inside minor impulse wave (c)
Next sell target 0.7080
NZD/USD continues to fall inside the minor impulse wave (c), which recently broke through the strong support zone lying at the intersection of the multiple support levels: the support trendline of the daily up channel from May, pivotal support level 0.7250, 50% Fibonacci correction of the previous upward impulse from July and the 50-day moving average. The breakout of this support zone accelerated the active impulse wave (c).

NZD/USD is likely to fall further to the next sell target at the support level 0.7080 (previous monthly low from August). Strong resistance now stands at 0.7250.

More:
https://new.fxbazooka.com/analytics/10819

 

[riki143]

While cable is crashing, banks batten on its misfortunes
10/10/2016

Pound depreciated 4.2% last week, which it its worst performance since June 24. The slide accelerated after prime-minister Theresa May said, that she is going to trigger Article 50 in March next year. With GBP crashing to its 31-year low, many GBP short positions of the main stakeholders (CitiFX, Societe Generale and Credit Suisse) hit their long-term targets and got into big money. While many traders abstain from selling after tremendous GBP slump, suspecting consolidation in near-term scenario at 1.23-1.26 levels, the National Australia Bank (NAB) started its trading week with a new short GBP/USD position.

NAB decided not to keep to a conservative trading approach of waiting for the currency stabilization and initiated the trade at 1.2414 targeting 1.16 with a wide stop at 1.2750. This decision was taken due to the fact that the pound revealed its weakness during the 7th October session slumping precipitately in a matter of time. The trending cable is perhaps the easiest directional victim for investors, according to NAB.

NAB is short GBP/USD from 1.2414 with a target at 1.16 and a stop at 1.2750 since the 9th October trading session.

More:
https://new.fxbazooka.com/analytics/10820