Market news and trade recommendations by FBS

[riki143]

GBP/USD: outlook for Dec. 19-23
12/16/2016

GBP/USD slumped to 1.2370 on the broad strengthening of the US dollar. The Fed raised its interest for the first time this year. In contrast, the Bank of England kept its benchmark unchanged and suggested that it could ease or tighten its monetary policy going forward. The main drag, however, was the bank’s projections of the moderate rise in the inflation rate. The data flow from the UK was very strong, but it didn’t help the pound to hold its positions.

Next week, keep in focus the UK current account data and quarterly final GDP. On Thursday, traders will be watching for the US unemployment claims, core durable orders, and final GDP. On Friday, keep an eye on the US new home sales release and consumer sentiment index published by the University of Michigan.

As we approach into a rather volatile quarter for the Brexit process, the sterling may weaken further. A breach of the significant support at 1.2545 put an end to the GBP growth and shifted our outlook for the currency pair to bearish. The next supports on the pound’s way to the bottom located at 1.2375, 1.2300 (November 18 low) and at 1.2250. Numerous legal hurdles towards the triggering of Article 50 and upbeat economic releases coming from the UK may help the pound to recoup its losses. The nearest resistances can be found at 1.2470, 1.2490, and 1.2580 (the lower boundary of the Ichimoku cloud on the H4 timeframe).

More:
https://fxbazooka.com/analytics/11743

 

[riki143]

AUD/USD: outlook for Dec. 19-23
12/16/2016

AUD/USD dropped in the course of the past week as the Fed raised its interest rate and projected three hikes in 2017. Australian labor market data released on Thursday was mixed. Job figures were ahead of the market’s expectations, at the same time, the number of unemployed people increased by 0.1% in November.

Aussie will be under pressure next week. On Monday, traders will focus on Australia mid-year budget update as it may lead to a downgrade in the country’s AAA rating. There is a great split among the currency analysts. Some strategists believe that a credit rating cut may send Aussie lower, others expect a relatively small reaction saying that this factor is not a currency driver. We would also recommend you to go through the Reserve Bank of Australia meeting minutes coming the same day as the budget update.

The technical outlook for AUD/USD is still bearish unless Aussie manages to reclaim the 0.7450 level within a few days. A breach of the 0.7330 support may send the pair lower towards the 0.7300, 0.7260 levels. A boost in commodity prices may help AUD to rise towards the nearest resistance lines located at 0.7360, 0.7400 and 0.7450.

More:
https://fxbazooka.com/analytics/11744

 

[riki143]

EUR/USD: wave [iii] going to be continued
12/16/2016

There’s a flat in wave 2, which led to form a bearish impulse in wave . Therefore, wave [iii] is likely going to be continued. The main intraday target is -1/8 MM Level, which could be a departure point for a bullish correction.

We’ve got wave [ii], which brought a double zigzag. Also, there’s a downward impulse in wave (i). It’s likely that wave (ii) is going to end during the day. If we see a pullback from 6/8 MM Level, there’ll be an opportunity to have a bearish impulse in wave (iii).

More:
https://fxbazooka.com/analytics/11745

 

[riki143]

EUR/USD: "Piercing Line" led to correction
12/16/2016

There’s an upward correction, which is taking place on the four-hours chart. The main intraday target is the middle of the last huge black candle. If a pullback from this level happens, bears are likely going to deliver a local low. As we can see on the Daily chart, here’s a bullish “Harami”, which points to an opportunity to have a local correction.

The last “Piercing Line” led to a bullish correction. Considering a confirmation of this pattern, the market is likely going to achieve the nearest resistance line, which could be a departure point to another decline.

More:
https://fxbazooka.com/analytics/11746

 

[riki143]

US dollar: outlook for Dec. 19-23
12/16/2016

In line with expectations, the US Federal Reserve raised its benchmark rate by 25 basis points to 0.50-0.75% range. According to the central bank’s new economic projections, it will raise rates 3 times in 2017. Fed funds futures now show investors are pricing in a 25% chance of tightening at the Fed’s March meeting, and a 75% probability for a June rate increase.

The market is focused at policy divergence between the Fed and other central banks. This divergence is fueling demand for the greenback. American 10-year Treasury yield rose to the highest level since September 2014, while US dollar index reached 14-year high at 103.57. The next level to watch on the upside is 104.00. Support is located in the 102.00 area and at 101.50. The pullbacks to the downside will represent buying opportunities for the greenback.

Next week pay attention to existing home sales and crude oil inventories on Wednesday, durable goods orders, final GDP and unemployment claims on Thursday, as well as new home sales on Friday. All in all, these releases shouldn’t affect the market’s favorable attitude to the US currency.

More:
https://fxbazooka.com/analytics/11747

 

[riki143]

EUR/USD: outlook for Dec. 19-23
12/16/2016

EUR/USD fell victim to the renewed negative pressure. The pair tested levels below 1.0400. The decline was triggered by the overall strengthening of the US dollar after the Federal Reserve signaled it expected 3 rate hikes in 2017. Such policy of the American central bank is in sharp contrast with the European Central Bank’s decision to prolong its asset purchases through 2017 a week earlier, though with the monthly amount starting in April.

Data from the euro area were rather favorable. The region’s economy maintained its growth momentum in December and there were signs of a pickup in inflationary pressures. A composite PMI held at the highest level of this year in December and above the 50 mark that signals industry expansion.

The oversold euro will likely try to correct to 1.0500/1.0550, but the bears will keep dominating the market now when they’ve sensed that the pair doesn’t stand firm on the ground. The next resistance is at 1.0650. Decline below 1.0400 will open the way down to 1.0275.

The most important data release of the next week will be German Ifo business climate on Monday. Other events will be of lower importance: German PPI and current account, consumer confidence on Wednesday, ECB economic bulletin on Thursday and German Gfk consumer climate on Friday.

More:
https://fxbazooka.com/analytics/11748

 

[riki143]

USD/JPY: bearish patterns point to correction
12/16/2016

We’ve got a bearish “Shooting Star”, but this pattern hasn’t been confirmed yet. Therefore, the price is likely going to decline towards the nearest support, which could reverse the price movement into the upward direction. As we can see on the Daily chart, the last “Three Methods” pattern led to a new maximum. Moreover, bulls are likely going to push the price even higher.

There’re bearish patterns such a “Doji”, a “Harami” and a “Shooting Star”, but all of them haven’t been confirmed yet. Therefore, the pair is likely going to decline towards the nearest support. If a pullback from this level happens, there’ll be an opportunity to have another bullish rally.

More:
https://fxbazooka.com/analytics/11749

 

[riki143]

USD/JPY: outlook for Dec. 19-23
12/16/2016

USD/JPY kept skyrocketing: the pair reached 118.65 on the general US dollar’s rally after the long-awaited meeting of the Federal Reserve.

Next week the market’s attention will turn from the United States to Japan. The Bank of Japan will meet on Thursday. Changes in monetary policy are unlikely, but according to the speculation, the regulator is considering upgrading its assessment of the nation’s economy because of the improving global economic conditions, weaker yen and higher stocks. At the same time, the central bank should still repeat that risks to the economic and price outlook are to the downside.

Upside targets lie around 120.00 (78.6% Fibo of 2015-2016 decline and psychologically important level). Interest rate differentials between the US and Japan are widening and boosting the pair. The daily trend is clearly bullish, though we have to point out that the pair dived into resistance area formed by the neckline of 2015 head-and-shoulders pattern. Downside corrections should find support around 115.60 and 114.70 (100-week MA).

More:
https://fxbazooka.com/analytics/11750

 

[riki143]

AUD/USD falling inside minor impulse wave 3
12/16/2016

AUD/USD falling inside minor impulse wave 3
Next sell targets – 0.7300 and 0.7260
AUD/USD has been falling sharply in the last few trading sessions inside the minor impulse wave 3, which started earlier – when the pair reversed down from the resistance zone lying between the resistance level 0.7500 (previous buy target which also recently reversed the (a)-wave of the earlier ABC correction 2), upper daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp downward impulse wave 1 from the start of November.

AUD/USD is expected to fall further to the next sell target at the key support level 0.7300 (low of the previous minor impulse wave 1) – the breakout of which can lead to further losses toward 0.7260.

More:
https://fxbazooka.com/analytics/11751

 

[riki143]

USD/CAD broke resistance levels 1.3270 and 1.3350
12/16/2016

USD/CAD broke resistance levels 1.3270 and 1.3350
Next buy target - 1.3500
USD/CAD continues to rise inside the sharp upward impulse wave (3) – which started earlier from the support zone lying between the powerful support level 1.3100 (sell target set in our previous forecast for this currency pair), lower daily Bollinger Band, 61.8% Fibonacci correction of the previous sharp impulse wave (1) from August and the support trendline of the wide daily up channel from May.

Having recently broken through the two consecutive resistance levels 1.3270 and 1.3350 - USD/CAD can be expected to rise further in the direction of the next buy target at the resistance level 1.3500.

More:
https://fxbazooka.com/analytics/11752

 

[riki143]

Key option levels for Monday, December 19th
12/18/2016

EUR/USD

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest + 87 855 ? + 104 912 ?
Closest resistance levels 1.0493; 1.0543; 1.0562; 1.0586
Closest support levels 1.0421; 1.0398; 1.0368; 1.0329
Trading recommendations
Baseline scenario Short EUR/USD below 1.0421, with target points at 1.0398 and 1.0368
Alternative scenario Moving above 1.0493 can be considered as a signal to Buy the pair, with target at 1.0543 and 1.0562

GBP/USD

Main trend Short-term period Medium-term period
Bullish Bearish
Changes in the open interest + 92 ? - 10 ?
Closest resistance levels 1.2533; 1.2569; 1.2587; 1.2609
Closest support levels 1.2437; 1.2417; 1.2392; 1.2364
Trading recommendations
Baseline scenario Long GBP/USD above 1.2533, with target points at 1.2569 and 1.2587
Alternative scenario Moving below 1.2437 can be considered as a signal to Sell the pair, with target at 1.2417 and 1.2392

USD/JPY

Main trend Short-term period Medium-term period
Bearish Neutral
Changes in the open interest + 295 ? + 1 660 ?
Closest resistance levels 117.99; 118.36; 118.72; 119.08
Closest support levels 116.36; 115.61; 115.29; 114.96
Trading recommendations
Baseline scenario Short USD/JPY below 116.36, with the target points at 115.61 and 115.29
Alternative scenario Moving above 117.99 can be considered as a signal to buy the pair, with target at 118.36 and 118.72

USD/CAD

Main trend Short-term period Medium-term period
Bullish Bullish
Changes in the open interest + 100 ? + 280 ?
Closest resistance levels 1.3371; 1.3396; 1.3435; 1.3488
Closest support levels 1.3314(?); 1.3275; 1.3238; 1.3189
Trading recommendations
Baseline scenario Long USD/CAD above 1.3371, with the target points at 1.3396 and 1.3435
Alternative scenario Moving below 1.3314 can be considered as a signal to Sell the pair, with target at 1.3275 and 1.3238

More:
https://fxbazooka.com/analytics/11753

 

[riki143]

EUR/USD & German Ifo Business Climate: More downside ahead?
12/19/2016

Today at 09:00 GMT will be released the German IFO business climate and we can expect very little changes in terms of latest’s data. During November, the numbers proven that companies weren’t affected in huge terms by the victory of Donald Trump in the US elections, but analysts’ consensus are telling that such consequences should happen in the long-term and that seems to have logic, because Trump hasn’t taken his official duties and Brexit needs to be implemented and those two scenarios are expected to materialise in the next year. In terms of the German’s data, an increase to 110.7 from 110.4 could be seen today.

Our technical analysis for EUR/USD at H4 chart is still calling for more downside towards the parity zone in a long-term scenario, which is getting closer each day. However, a strong demand zone is located at the 1.0413 level, where buyers will try to push higher the pair to re-test the 200 SMA. Currently, EUR/USD is following a bearish channel and if the pair plunges below the 1.0413 zone, then it can test the 1.0178 level.

More:
https://fxbazooka.com/analytics/11754

 

[riki143]

AUD/USD: Aussie fulfilled targets
12/19/2016

On the AUD/USD daily chart, a breakout of the lower boundary of the short-term upwards trading channel near the 0.745 level was the signal of the end of the correction and restoration of the "bearish" trend. The 0.706 mark can be its target. There is a set target in the AB = CD pattern. Since the market is under the control of sellers, traders should sell on the rise of quotes.

On the AUD/USD hourly chart, 5-0 and expanding wedge patterns worked out. The correction towards the 38.2% level of the CD wave allowed to open short positions and take profits at the 0.73 level. At the present moment, the nearest resistance is located around 0,735.

More:
https://fxbazooka.com/analytics/11755

 

[riki143]

GBP/USD: pound has found an equilibrium point
12/19/2016

On the GBP/USD daily chart, "bears" managed to drag quotes below the lower border of the upward trading channel and below the 1.2512 level. Earlier this level served as support. Now it is a key resistance line. A new support can be found at 1.24 (23.6% Fibonacci level of the last downward wave).

On the GBP/USD hourly chart, a successful test of the 1.2305 level can activate the "Shark" pattern. Its target 88.6% is located near the mark of 1,215. A breakout of the support can lead to the rise of prices towards the upper boundary of the upward trading channel (1.26).

More:
https://fxbazooka.com/analytics/11756

 

[riki143]

EUR/USD: bears going to deliver new low
12/19/2016

Bulls faced a resistance at 1.0461, so the price is consolidating. In this case, the market is likely going to decline towards the nearest support at 1.0340 – 1.0300. If a pullback from this level happens, there’ll be an opportunity to see another upward movement in the direction of the next resistance at 1.0506 – 1.0552.

The price is consolidating, so there’s an opportunity to have a “Flag” pattern. Therefore, the pair is likely going to test the 34 Moving Average, which is strengthened by the downtrend. If we see a pullback from this line, bears will probably try to reach a support at 1.0365 – 1.0340.

More:
https://fxbazooka.com/analytics/11758

 

[riki143]

GBP/USD: local bullish "Flag"
12/19/2016

The pair found a resistance at 1.2498, so the price is consolidating. Considering the previously formed “Upward Wedge”, the market is likely going to rise towards a support at 1.2384 – 1.2358. If a pullback from this level happens, there’ll be a chance to have an achievement of the next resistance at 1.2476 – 1.2498.

As we can see on the one-hour chart, the price is trading under the 34 Moving Average. Also, there’s a “Flag” pattern, so bulls are likely going to get a resistance on the 55 Moving Average. However, if a pullback from this line be on the table, bears will try to reach the nearest support between the levels 1.2418 – 1.2384.

More:
https://fxbazooka.com/analytics/11759

 

[riki143]

EUR/USD: trading in Tenkan-Kijun’s channel
12/19/2016

Technical levels: support – 1.0440; resistance – 1.0515.

Trade recommendations:

1. Sell — 1.0515; SL — 1.0535; TP1 — 1.0440; TP2 – 1.0400.

Reason: bearish narrow Ichimoku Cloud and falling Senkou Span A; a dead cross of Tenkan-sen and Kijun-sen, but the prices are in the channel of Tenkan-Kijun; strong resistance of Kijun-sen.

More:
https://fxbazooka.com/analytics/11761

 

[riki143]

GBP/USD: correction to Senkou Span B
12/19/2016

Technical levels: support – 1.2430; resistance – 1.2535.

Trade recommendations:

1. Sell — 1.2535; SL — 1.2555; TP1 — 1.2430; TP2 — 1.2400.

Reason: an Ichimoku Cloud changed its mood to bearish; falling Senkou Span A; a dead cross of Tenkan-sen and Kijun-sen and falling Tenkan-sen; a strong resistance of Senkou Span B; the prices are in the correction to Senkou Span B.

More:
https://fxbazooka.com/analytics/11762

More:
https://fxbazooka.com/analytics/11762

 

[riki143]

EUR/USD: wave (iii) is about to start
12/19/2016

The price has been declining since a pullback from 5/8 MM Level happens. Therefore, wave [iii] of 3 is likely going to be continued. In this case we should keep an eye on -1/8 MM Level as a possible intraday target.

There’s a double zigzag in wave (ii), so the market is likely going to form wave (iii) in the short term. Previously, a bearish impulse in wave (i) was formed. However, if bears be stopped on 4/8 MM Level and we see a pullback from this line, there’ll be an opportunity to have an upward correction.

More:
https://fxbazooka.com/analytics/11765

 

[riki143]

EUR/USD: bearish "Engulfing"
12/19/2016

There’s a bullish “Hammer”, which has been confirmed, so bulls are likely to continue pushing the market higher during the current correction. The main intraday target is the 21 Moving Average. As we can see on the Daily chart, we’ve got a “Thrusting Line” pattern, so there’s an opportunity to have a bullish correction.

The price is consolidating under the low of 29.11.2015, so we’ve got an “Engulfing” pattern here. So, the pair is likely going to decline until any bullish pattern arrives.

More:
https://fxbazooka.com/analytics/11767