Market news and trade recommendations by FBS

[riki143]

EUR/USD: BULLISH "HAMMER" ON THE 55 MA
12:30 01.02.2018

The 21 Moving Average acted as support, so there're a "Tweezers" and a "High Wave" patterns. In this case, the market is likely going to continue rising towards the last high.

There's a bullish "Hammer", which has been formed on the 55 Moving Average. Therefore, bulls are likely going to achieve the next resistance area in the short term.

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[riki143]

USD/JPY Daily Analytics
12:33 01.02.2018

There's no any reversal pattern so far, which means the price is likely going to test the upper "Window" soon. If a pullback from this level, there'll be a moment to have a local decline.

All the Moving Averages have been broken, so the price is rising. If any bearish pattern forms soon, bears will probably try to test the nearest support.

More:
https://fbs.com/analytics/articles/usd-jpy-no-any-reversal-pattern-so-far-6594

 

[riki143]

DOES THE POUND HAVE CHANCES FOR FURTHER STRENGTHENING?
14:20 01.02.2018

The pound rose from 1.35 versus the US dollar at the start of the year to 1.4345 on January 25. Then there was a pullback down, but starting from Wednesday, January 31, GBP/USD once again headed up. As a result, British currency showed in January its best monthly performance since May 2009.

The rise happened because of the several reasons. First of all, the weaker US dollar has been supporting the rise of many currencies during a long period. The pound added than 5% since the start of the year, while the dollar is near its 3-year lows against major currencies. Analysts say that the advance of GBP/USD is more the result of the market selling dollars than buying pounds.

The second reason is positive prospects for a Brexit deal that was supported by domestic economic developments and comments of the Bank of England’s Governor Mark Carney.

The general sentiment about Brexit is positive since the start of the year. The market believes that the country will be able to reach a favorable deal with its European partners. The talks are proceeding with some difficulties though. According to Reuters, EU officials don’t want to allow finance companies to operate in each other’s markets without barriers if Britain leaves the single market. A report was leaked this week that Brexit will bring negative consequences to the UK economy, no matter whether it leaves the European Union with a free trade deal, single market access or without any deal at all.

However, so far positive comments of BOE Governor Mark Carney have shielded the pound from the Brexit-related uncertainty. Sterling rose on Tuesday after he said that the country’s economy has recovered from the financial crisis. Mr. Carney said that private sector is gradually firming and a rise in wages over the next few years appeared to be on track. All this allows the bank to occupy itself with bringing down inflation. As a result, many analysts now think that the BOE will raise interest rates faster than expected. The first 2018 policy decision of BOE will be announced on Thursday, February 8. Before this Services PMI will be released on Monday, February 5.

Some analysts have already changed their long-term forecasts for the pound. For example, HSBC increased the year-end projection for GBP/USD from $1.26 to $1.34. UniCredit now thinks that the pound will end 2018 at $1.49. Their previous estimate was by 9% lower. BMO Capital Markets predicted GBP/USD at $1.45 last October, but, nowadays, they forecast $1.52 if the dollar continues to weaken and the UK economy keeps growing.

At the same time, there are experts who think that the pound has gained too much in the short-term and that this growth is not fully justified. Commerzbank believes that there will be a lot of problems in Brexit negotiations. According to the bank, Carney will recognize Brexit-related risks and will discourage the rate hike expectations next week. That’s why Commerzbank is cautious about buying GBP at the current levels.

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[riki143]

EUR/USD Daily Analytics
05:55 02.02.2018
Technical levels: support – 1.2480; resistance – 1.2530.

Trade recommendations:

Buy — 1.2480; SL — 1.2460; TP1 — 1.2530; TP2 — 1.2590
Reason: expanding bullish Ichimoku Cloud with rising Senkou Span A; a new golden cross of Tenkan-sen and Kijun-sen, but the lines are horizontal; the market is supported by Cloud and returned into the positive area.

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[riki143]

GBP/USD Daily Analytics
05:56 02.02.2018
Technical levels: support – 1.4200; resistance – 1.4280, 1.4390.

Trade recommendations:

Buy — 1.4280; SL — 1.4260; TP1 — 1.4390; TP2 — 1.4470.
Reason: expanding bullish Ichimoku Cloud with rising Senkou Span A; a new golden cross of Tenkan-sen and Kijun-sen, but the lines are horizontal; the prices returned into the positive area and may continue uptrend.

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[riki143]

EUR/USD Daily Analytics
07:32 02.02.2018
Recommendation:

SELL 1.2445 SL 1.25 TP 1.2345 TP2 1.22

SELL 1.2335 SL 1.239 TP1 1.2235 TP2 1.22

On the daily chart of EUR/USD, there’s a sustainable uptrend. Bulls are getting ready to test a 3-year high to reach 200% target of AB=CD. Failure or inability to fix above 1.2535 will be the first signal of buyers’ weakness.

On H1, EUR/USD bulls have to fear the formation of a “Widening wedge”. For that the euro needs to decline below $1.2335. Aggressive sell position is possible at the low of the bar #2.

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[riki143]

EUR/GBP Daily Analytics
07:42 02.02.2018
Recommendation:

SELL 0.8875

SL 0.893

TP1 0.8775 TP2 0.8715 TP3 0.869

On the daily chart of EUR/GBP, bears failed with their attack on the support of the lower border of the medium-term consolidation range of 0.8690-0.9015. Sellers retain hopes for a break and formation of the AB=CD pattern.

On H1, a break above resistance levels at 0.8780 and 0.8810 will increase the risks of triggering Gartley pattern with a target at 78.6% of the wave XA. From this area (0.8870-0.8880), there is a high possibility of aggressive selling by large players.

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[riki143]

EUR/USD Daily Analytics
10:32 02.02.2018

The main trend is still bullish. It's likely that the market is going to reach the next resistance at 1.2537 - 1.2569 in the short term. If a pullback from this area happens little later on, there'll be a moment to have a decline towards the nearest support at 1.2456 - 1.2384.

The pair is consolidating between the levels 1.2537 - 1.2493. The main intraday target is the 34 Moving Average, which could be a departure point for another upward price movement in the direction of the next resistance at 1.2537 - 1.2569.

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[riki143]

GBP/USD Daily Analytics
10:35 02.02.2018

The price is still rising above the Moving Averages. The main intraday target is the next resistance at 1.4344. If a pullback from this level happens afterwards, bears will probably try to test the closest support at 1.4206 - 1.4129.

Bulls faced with resistance at 1.4284, so the market is going to test the 89 Moving Average. This line could be a departure point for an upward price movement towards the next resistance at 1.4327 - 1.4344.

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[riki143]

ANY CHANCES TO FORECAST NFP?
11:15 02.02.2018

Today the US Bureau of Labor Statistics will release the Nonfarm Payrolls at 15:30 MT time. Nonfarm Payrolls count the change in the number of employed during the previous month. The data is important because it displays consumer spending and economic health. The advantage of the indicator is that it is delivered shortly after the month ends. It is announced together with two other indicators such as Average hourly earnings and Unemployment rate.

Nowadays, we can notice that the indicator is not as important as it was before. During the financial crisis, numbers of it were highly taken into consideration because of its main function as a measure of the economic health. However, now the economy is quite firm, it does not require additional supportive indicators. But still, the data support interest rates hikes. This year the Fed is expected to increase interest rates three times. So a market follows changes in the labor market. A tighter market causes wages rise. Wages increase will boost the interest rates.

Although it is almost impossible to forecast Nonfarm Payrolls data, analysts do not give up.

This time, analysts are divided into two camps.

For example, analysts of Nomura and Goldman Sachs predict 205K rise.

On the other hand, Hongkong and Shanghai Banking Corporation makes its prediction based on the temperature. It claimed that the drop in average temperatures across the country may cause the fall of job creation for the month. So its expectations are at the level of 170K. The Australian Bank Westpac agrees with HSBC, maybe the reason for the number is different, but the number is the same. Toronto-Dominion Securities is not far from them, it is looking for 175K.

Making a conclusion, we can say that despite the fact that the Nonfarm Payrolls data is not used as much as it was during the financial crisis, it is still a crucial indicator, for the Fed policy especially. Its volatility is still incredible, that creates difficulties for forecasts. October data of -33K was followed by 261K in November, the data delivered in December was quite similar to previous one, but the next one was in 80K less. However, the data is still taken into consideration and always supported by two other indicators that smooth its volatility.

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[riki143]

EUR/USD Daily Analytics
13:07 02.02.2018

The market has been rising since a "Tweezers" model formed on the 34 Moving Average. There's no any reversal pattern so far, which means the market is likely going to test the nearest resistance area in the short term.

There's a bullish "Hammer", which has been formed at the last local low. So, the price is likely going to continue moving up in the coming hours.

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[riki143]

USD/JPY Daily analytics
13:11 02.02.2018

The price has reached the upper "Window", but there's still no any reversal pattern. So, the pair is likely going to test the 55 Moving Average, which could be a departure point for a downward correction.

We've got a bullish "Three Methods" pattern, which has been confirmed. In this case, the pair is likely going to achieve the upper "Window" in the coming hours.

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[riki143]

EUR/USD Daily Analytics
06:05 05.02.2018
Technical levels: support – 1.2425; resistance – 1.2530.

Trade recommendations:

Buy — 1.2450/60; SL — 1.2430; TP1 — 1.2530; TP2 — 1.2590
Reason: bullish Ichimoku Cloud, but horizontal Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen with horizontal lines; the market is supported by Cloud again and may continue an uptrend.

More:
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[riki143]

GBP/USD Daily Analytics
06:06 05.02.2018
Technical levels: support – 1.4080; resistance – 1.4180, 1.4250.

Trade recommendations:

Buy — 1.4130; SL — 1.4110; TP1 — 1.4180; TP2 — 1.4250.
Reason: bullish Ichimoku Cloud with horizontal Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen, but the narrowing channel Tenkan-Kijun; the prices returned into the cloudy area.

More:
https://fbs.com/analytics/articles/...ampaign=EN_English&utm_content=Riki_Analytics

 

[riki143]

NZD/USD Daily Analytics
07:45 05.02.2018
Recommendations:

SELL 0.7280 SL 0.7335 TP1 0.717 TP2 0.708

SELL 0.7330 SL 0.7385 TP1 0.723 TP2 0.717 TP3 0.708

On the daily chart NZD/USD, bulls’ inability to storm 88.6% resistance from a 4-5 wave meant their weakness. An exit of quotations out of an upward trading channel will strengthen risks of development of correction in the direction of 0.7170 and 0.7080.

On the hour chart NZD/USD, pattern “Broadening wedge” is actual. A successful storm of support at 0.7280 or pullbacks with subsequent rebounds from resistances at 0.7310, 0.7330 and 0.7350 will create opportunities to form shorts.

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[riki143]

AUD/USD Daily Analytics
07:52 05.02.2018
Recommendations:

BUY 0.7975

SL 0.7920

TP1 0.8075 TP2 0.8125 TP3 0.8215

On the daily chart AUD/USD, an exit of the pair out of an upward trading channel and a break of support at 88.6% and 78.6% from the last wave showed a return of initiative to bears. They met an important area of 0.7885-0.7895 convergence, a continuation of a southern campaign is impossible without breaking below it.

On the hour chart, as the pair reached an intermediate target at 127.2% of the pattern “Crab”, the odds of a pullback increased. An update of the February low will allow counting on a realization of 161.8% target.

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[riki143]

COMMODITY MARKET: TWO DIFFERENT VIEWS
12:26 05.02.2018
Nowadays, commodities market is a highly discussed issue. The US dollar and prices of commodities are highly correlated. The weakening dollar always supports the rise of the commodity market and emerging market assets. That is why the significant fall of the dollar caused disputes between experts about the future of commodities.

The first group “guided” by DoubleLine CEO Jeffrey Gundlach is looking for the rise of the commodity market, expecting a weaker dollar at the same time

J. Gundlach based his opinion on a comparison of total returns of the S&P Goldman Sachs Commodity Index with the S&P 500 over the last several decades. So he concluded that there are points where commodities outperformed stocks, it led to a sharp increase in stocks, and vice versa. Now the S&P GSCI Total Return Index-to-S&P 500 Index ratio is at its lowest point, so it means that we will see a super rise of commodities this year.

Together with Jeffrey Gundlach, analysts at Goldman Sachs are calling for rising position for the next 12 months. Bank of America Merrill Lynch has raised the a-tonne copper price forecast from $7.140 to $7.700. Bloomberg Intelligence commodity strategists compare prospects of commodity market to the bull market of 2002-08. Hedge fund managers believe in strong oil and are building long positions.

These experts saw support of their decisions in rising prices of different commodities. For example, copper, palladium, platinum, and gold have grown in the last three months. The investment of assets reached the highest level in four years. Rising prices of crude oil helped analysts to form positive forecasts as well.

However, not all of the analysts are so positive about the perspectives of the commodity market.

Wells Fargo does not expect the continuation of the dollar fall, it considers the position of the dollar as neutral. The company denies the rise of the commodities prices, anticipating over-supply and range-bound prices at the commodity market for the next 10 years.

To sum up, we can say that it is quite difficult to forecast the future of the commodities prices because none of the experts could give enough number of supportive arguments for their positions. The price of the US dollar is volatile now, so we cannot be absolutely sure how it will affect the commodity market.

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https://fbs.com/analytics/articles/...ampaign=EN_English&utm_content=Riki_Analytics

 

[riki143]

WHAT IS THE CHANCE THAT THE RBA WILL CHANGE INTEREST RATES?
14:57 05.02.2018
On Tuesday, February 6 at 5:30 MT time, the Reserve Bank of Australia will announce interest rates for the first time this year after the break in January. Experts do not expect any changes this time. If we look at statistics, the RBA had not changed interest rates since September 2016.

Despite the fact that the economic growth of Australia is firm and the labor market has improved, inflation data does not give reasons to the RBA to change the interest rates. In the fourth quarter CPI rose less than anticipated by 0.1 percentage points and still it is lower than RBA’s 2-3% target.

The Australian dollar is quite volatile now. On the daily chart AUD/USD, we can see that moving inside the upward trend, Aussie achieved its highest point at 0.8135 since May 2015. After that, it started falling, when received the support at 38.2 Fibonacci retracements and changed its direction again. Although the RBA is not going to raise the interest rates this time, experts expect upbeat comments. It supports the Aussie.

Traders should take into account that Aussie will be volatile on Tuesday because several important figures will be announced. Retail sales and trade balance will be published before interest rates at 2:30 MT time.

Also, on Friday, February 9 at 2:30 MT time, the RBA will give a more detailed economic outlook, delivering Monetary Policy Statement.

Making a conclusion, we can say that although the RBA had not been changing interest rates for a long time, and is not anticipated to do it tomorrow, analysts expect it this year for sure. The growth of the economy and inflation that is supported by the labor market and rising demand for commodities can lead to the increase of interest rates.

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[riki143]

EUR/USD Daily Analytics
05:45 06.02.2018
Technical levels: support – 1.2260; resistance – 1.2400.

Trade recommendations:

Buy — 1.2400; SL — 1.2420; TP1 — 1.2260; TP2 — 1.2220
Reason: bullish Ichimoku Cloud, but falling Senkou Span A; a cancelled golden cross of Tenkan-sen and Kijun-sen with falling lines; the prices are entered inside a Cloud and may going to Senkou Span B’s support.

More:
https://fbs.com/analytics/articles/...ampaign=EN_English&utm_content=Riki_Analytics

 

[riki143]

GBP/USD Daily Analytics
05:46 06.02.2018
Technical levels: support – 1.3900/20; resistance – 1.4100.

Trade recommendations:

Buy — 1.3900/20; SL — 1.3880; TP1 — 1.4050; TP2 — 1.4100.
Reason: bullish Ichimoku Cloud with falling Senkou Span A; a new dead cross of Tenkan-sen and Kijun-sen, but the narrow channel Tenkan-Kijun; the prices are falling down to Senkou Span B’s support.

More:
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