Market news and trade recommendations by FBS

[FBS]

Technicals for majors (by FX Bazooka)

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]

Technicals for majors (by FX Bazooka)

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]

Technicals for majors (by FX Bazooka)

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]

Technicals for majors (by FX Bazooka)

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]

Technicals for majors (by FX Bazooka)

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. 20: Asian session

Asian stocks fell, led by Chinese shares amid concern funding costs for the nation’s lenders will remain high even after the central bank injected cash into the financial system. Japanese Nikkei 225 edged down as investors booked profits before the long weekend in Japan.

USD/JPY rose to 104.45. Yen declined after the Bank of Japan kept monetary policy steady and voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen ($576 billion) to 70 trillion yen. But the BOJ slightly tweaked its view on the outlook to signal that it was mindful of the potential pain on the economy from an increase in the national sales tax in April next year. Investors are now waiting for Governor Kuroda’s comments on how the Fed’s tapering could affect the BOJ's decision on if and when it might next expand stimulus.

AUD/USD tested $0.8889, but then returned to $0.8870. NZD/USD tested $0.8712, but then returned by 20 pips lower.

EUR/USD slid to $1.3631. GBP/USD is trading a bit on the downside, in the $1.6360 area.

 

[FBS]

Key currency options (Dec. 20)

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: $1.3600 (large), $1.3645, $1.3650, $1.3770, $1.3775;

GBP/USD: $1.6200, $1.6300, $1.6350;

USD/JPY: 103.00, 103.50, 104.00 (large), 104.25, 104.50, 105.00 (large);

USD/CHF: 0.8875, 0.9020;

AUD/USD: 0.8850 (large), 0.8875 (large), 0.8900 (large), 0.9000, 0.9020, 0.9075, 0.9100;

NZD/USD: 0.8195;

USD/CAD: 1.0700, 1.0775, 1.0800 (large);

EUR/JPY: 142.75;

EUR/GBP: 0.8405;

EURCHF: 1.2220 1.2275.

 

[FBS]

EUR/USD: Ichimoku analysis (Dec. 20)

Daily. Last week the pair once again failed to overcome the $1.3800 figure, which led to a corrective decline to the Tenkan-Kijun channel. Pay attention to Chinkou Span, which at that point was in the overbought area. This was an additional incentive for the short-term trend reversal. Now the prices may test support formed by Kijun-sen (KS) just above $1.3600. After that the bulls may once again take the lead as the indicator’s readings are all in all rather positive.

Chart. Daily EUR/USD

H4. At H4 the pair fell inside the Cloud. The short-term trend became bearish: Tenkan and Kijun are now pointing down (C). However, the Cloud is still bullish. Therefore, after testing the lower boundary ($1.3600), euro can start recovering.

Chart. H4 EUR/USD

 

[FBS]

GBP/USD: Ichimoku analysis (Dec. 20)

Daily. The pair is apparently finishing consolidation. On the daily chart the prices spend a brief time inside the Tenkan-Kijun channel, and by the the end of the week sterling managed to get to positive territory. The prices haven’t even touched Kijun-sen (KS), which shows the weakness of the bears. Note that the indicator is still positive: golden cross (C) is still in place and the Cloud expands upwards.

Chart. Daily GBP/USD

H4. The pair was trading within the Ichimoku Cloud and the market was in the sideways state. Nevertheless, in the second half of the week the pair rebounded from the lower border of the Cloud. If the prices fix above the horizontal Kijun-sen at $1.6350, this can lead to the further strengthening of sterling. Otherwise, the market will have to find support at the $1.6300 handle.

Chart. H4 GBP/USD

 

[FBS]

USD/CHF: Ichimoku analysis (Dec. 20)

Daily. Last week currency pair found support in the 0.8850 area. A"double bottom" was formed on the daily chart and the bulls used it to turn the greenback up. Note the pair was oversold and this contributed to the bullish sentiment. Despite the bearish character of the indicator, the bulls tested resistance of Kijun-sen (KS). A short-term recoil down from here towards the Tenkan-sen in the 0.8915 region looks possible.

Chart. Daily USD/CHF

H4. At H4 the pair broke into the Cloud after some consolidation under the lower border of the Ichimoku Cloud. This breakthrough was rapid and by the end of the week the currency pair reached 0.9000. This is actually bad for the bulls. A sharp increase has led to an overbought market. Also, just above the 0.9000 figure there is a strong resistance level, formed by the upper boundary of the cloud. Consequently, in the near future we expect the pair to turn down from these levels.

Chart. H4 USD/CHF

 

[FBS]

USD/JPY: Ichimoku analysis (Dec. 20)

Daily. USD/JPY continues setting new yearly highs. Although the greenback is strongly overbought, the currency pair is trading above 104.00, in the 104.50 area. All the indicator lines on the daily timeframe are directed upwards, which indicates strong activity of the buyers. The bullish rally may pause around the weekly levels at 105.20 and 106.00.

Chart. Daily USD/JPY

H4. The pair was supported by the Ichimoku Cloud top, and after a brief consolidation above 102.70 US dollar resumed recovery. In general, technical picture is completely in favor of the bulls. Tenkan and Kijun formed a new Golden Cross above the Cloud. The Cloud continues to rise, which also has a positive impact on the long-term market sentiment. Only the fact that the pair is overbought can hinder further growth.

Chart. H4 USD/JPY

 

[FBS]

Technicals (20.12)

EUR/USD

EUR/USD keeps drifting down. Euro has slid to support at $1.3525. Euro may slide to consolidation area of $1.3620/3520. Data released in Germany was mixed (see the economic calendar).

55-period MA is starting to slope down.
The prices dropped below the Ichimoku Cloud ($1.3666) – a bearish sign. Tenkan-sen (red line) went almost vertically down.
MACD extended down in the negative territory. RSI, however, is currently signaling oversold (below the 30 level).
Support: $1.3625, $1.3613, $1.3600 and $1.3575 (200-period MA)

Resistance: $1.3666, $1.3705, $1.3740/50, $1.3790

Chart. H4 EUR/USD

Upcoming events:

EUR - All Day - EU Economic Summit

EUR - 10:00 GMT - Italian retail sales

USD - 13:30 GMT - Final GDP

USD - Tentative - Fed Chairman Nomination Vote

 

[FBS]

Technicals (20.12)

GBP/USD

Cable remains in a narrow $1.6335 /1.63875 range for a second day in a row. There are now clear signals on the pair for now. However, we still remain bullish for the pair with a medium-term target of $1.6600 as long as it holds above $1.6320.

· The cable consolidates above the bearish channel;

H4 MACD histogram remains in a positive territory, but stopped its rise;

Cable is supported by the 100- and 55- period MAs;
Ichimoku: Kidjun-sen is about to cross Tenkan-sen to the downside (that could become a bearish signal).
Support: $1.6340, $1.6320, $1.6300, $1.6230 (38.2% Fibo)

Resistance: $1.6435, $1.6465, $1.6500

Chart. H4 GBP/USD

Upcoming events:

GBP - 9:30 GMT - Final Q3 GDP, Current Account, Public Sector Net Borrowing

USD - 13:30 GMT - Final GDP q/q

USD - Tentative - Fed Chairman Nomination Vote

 

[FBS]

USD/JPY

USD/JPY extended the upside on Friday, hitting a fresh 5-year high of 104.60. Our next target for the pair lies at 105.55.

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 keeps on rising (bullish sign);
Sentiment remains clearly bullish as long as the 103.75 support holds.
Support: 104.00, 103.75, 103.40, 102.50
Resistance: 105.00, 105.55

Chart. H4 USD/JPY

Upcoming events:
USD - 13:30 GMT - Final GDP q/q

USD - Tentative - Fed Chairman Nomination Vote

 

[FBS]

Dec. 23: Asian session

Asian stocks went cautiously higher on Monday encouraged by record highs on Wall Street due to the upbeat data on American economic growth and the resilience of stocks to the Fed’s decision to start QE tapering. However, growth in shares wasn’t strong as China’s benchmark short-term money rates swung to 9.8% fueling the fears of a credit squeeze.

USD/JPY is little changed in the 104.00 area, below Friday’s peak at 104.63. Trading is quiet as Japanese banks are closed today in observance of the Emperor’s Birthday. Australian and New Zealand dollars are trading a little higher on Monday. AUD/USD extends the upside, strengthening to $0.8950. Last week the pair has formed a “hammer” candle. NZD/USD keeps consolidating in the $0.8190/8220 range. Gold price is consolidating around $1200.0 – slightly above the June 3-year low of $1180.0.

EUR/USD edged up to $1.3695 and GBP/USD – up to $1.6360.

 

[FBS]

Key currency options (Dec. 23)

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: $1.3600, $1.3650, $1.3660, $1.3700, $1.3750;

USD/JPY: 103.00, 104.00, 105.00 (large);

USD/CHF: 0.8900;

AUD/USD: 0.8900 (large) 0.9100 (large);

USD/CAD: 1.0650 1.0675.

 

[FBS]

FX BAZOOKA: technicals (Dec. 23)

EURUSD

EUR/USD managed to rise from support at $1.3625 and test $1.3710.

55-period MA is starting to slope down.

The prices returned inside the Ichimoku Cloud. Tenkan-sen (red line at $1.3667) is providing some support. The Cloud turned bearish, but isn’t widening.

MACD remains in the negative territory, but above the signal line. RSI (14) went from oversold to the neutral state (46).

Above $1.3667 there’s scope for increase to $1.3718/33. Upper Bollinger band is at $1.3760. Below this level we’ll be selling.

Resistance: $1.3690, $1.3705, $1.3740/50, $1.3790

Support: $1.3667, $1.3625, $1.3613, $1.3600 and $1.3575 (200-period MA)

Chart. H4 EUR/USD

Upcoming events:

USD - 13:30 GMT - Core PCE Price Index

USD - 13:30 GMT - Personal Spending

EUR - 14:00 GMT - Belgian NBB Business Climate

USD - 14:55 GMT - Revised UoM Consumer Sentiment

 

[FBS]

FX BAZOOKA: technicals (Dec. 23)

GBPUSD

GBP bulls have given some ground after a quick test of the $1.6485 high last week. Cable has been consolidating in a narrow descending channel since then. However, the pair remains supported at $1.6320 (23.6% Fibo) for now.

H4 MACD histogram is declining and is below the signal line (bearish signal);
Cable slipped below the 100- and 55-period MAs.
Support: $1.6320, $1.6300 (channel support), $1.6230 (38.2% Fibo)

Resistance: $1.6360, $1.6400,$1.6430

Chart. H4 GBP/USD

Upcoming events:

USD - 13:30 GMT - Core PCE Price Index

USD - 13:30 GMT - Personal Spending

USD - 14:55 GMT - Revised UoM Consumer Sentiment

 

[FBS]

FX BAZOOKA: technicals (Dec. 23)

USDJPY

USD/JPY is retracing a little lower from 104.60 (5-year high 104.60). Our next target for the pair lies at 105.55.

USD/JPY holds above the bullish H4 Ichimoku. The Kijun line lies above the Tenkan line, but both lines are flat.
The pair remains supported by the 55-day MA (102.85) and the 100-period MA (102.50);
H4 MACD histogram is declining and is below the signal line (bearish signal);
104.00/103.75 is the key area of support for now.
Support: 104.00/103.90, 103.75, 103.40

Resistance: 104.60, 105.00, 105.55

Chart. H4 USD/JPY

Upcoming events:

USD - 13:30 GMT - Core PCE Price Index

USD - 13:30 GMT - Personal Spending

USD - 14:55 GMT - Revised UoM Consumer Sentiment

 

[FBS]

FX BAZOOKA: technicals (Dec. 23)
USD/CHF

USD/CHF is correcting lower after hitting the 0.9000 mark (38.2% Fibo) on Friday.
We believe the last week’s break above the 0.8975 resistance opened the way to 0.9050.
The pair remains supported by the wide bearish Ichimoku, the 100-period MA and the middle Bollinger (0.8970/45 area);
H4 MACD histogram is declining and is below the signal line.
Support: 0.8930/20, 0.8900/8890
Resistance: 0.9000, 0.9030, 0.9050

Chart. H4 USD/CHF

Upcoming events:
USD - 13:30 GMT - Core PCE Price Index
USD - 13:30 GMT - Personal Spending
USD - 14:55 GMT - Revised UoM Consumer Sentiment