Technical Analysis by Vistabrokers

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GBP continues decline towards 1.50

1 Hour Intraday Trading
Weaker than expected UK Construction data helped the high flying Dollar push the Sterling lower on the intraday chart, reaching a low of 1.5160 against the Dollar on the wake of the New Year. The 1 hour chart below shows us that the current price is well below the 50 MA as indicators recovered from an oversold position from Friday of last week.

Currently we have a downward intraday trend, which has taken a sharp downward dip over the New Year, on low volumes and has since retraced back to trade around the 1.5290’s. The daily timeframe, and longer term trend, also shows a clear dovish view with largely oversold conditions.

Scenarios:

There is a clear downward momentum, with the next support seen at 1.5162. The risk of a break below this level is high with the pair then exposed to free fall towards the 1.5000 level – a very critical and psychological level for the Sterling.

Alternately, should the Bulls manage to accumulate some momentum, something which we have not seen in recent days, the next important resistance point for them is see as the 50 MA, which currently sits at 1.5318; a break of which may see the price rise and test the previous base line of 1.5484.

 

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USDCHF remains above parity

From the hourly chart we see a clear continues uptrend for the USDCHF, as it uses the 50 MA as a solid support level in its flow. The pair has been trading above parity since the beginning of this week, reaching a 4.5 year high of 1.0134 in yesterday’s closing session. The pair is currently trading above the 1.0100 level, seen by some as a critical support level, since the beginning of today’s sessions and is consolidating around the 1.0115 levels.

The economic indicators are in a neutral position, having consolidated from overbought areas; investors still expect to see the upward momentum continue for the pair, as more and more optimistic economic data continues to be absorbed by the US economy.

Scenarios

The current trend is expected to continue, with healthy consolidations, as we have seen so far. The next resistance level for the Bulls is the September 2010 high of 1.0276; which if convincingly broken may leave the pair free to rise some further 350+ pips to the August 2010 high of 1.0624.

Alternately if we see a convincing push from the Bears to not only consolidate but convincingly sustain lower levels for the pair, we may see a reversal inn trend. The current support levels, stand at 1.0100, which if broken will leave the way for a drop towards the 50 MA, which has not been broken this year, and currently sits at 1.0078.

 

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USDJPY looks to consolidate in short term

Looking at the 1 Hour chart of the USDJPY pair we see that the short to midterm trend for the USDJPY is in a range, if not slightly bearish. The pair has been trading steady around the 119.80 levels following a sharp rise of over 500 pips since the 16th of December, which saw the pair find strong resistance around the 120.80 levels.

The New Year has seen the pair drop from the 120.80’s to 118.13, whilst the last few days have seen it recoup some of those losses as it now trades at the 61.8% Fibonacci retracement level – a point which has still to be convincingly broken by the Bulls.

Scenarios

In the short term we may see a consolidation in the USDJPY, having reached the 61.8% Fibonacci retracement level, with support at S1, which marks the 50 MA. Additionally indicators show that currently we are in/ heading towards an overbought level, as such a correction is expected. Should S1 be convincingly broker, we expect strong support at S2 – a level which is quite critical in not allowing the pair to freefall and wipe out the momentum of the Bulls.

Alternately we may see the current short range uptrend continue, in which case we expect the Bulls to meet strong resistance at the R1 level which has been tested twice so far, at 120.72

 

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Gold Daily Chart


Gold has been trading towards a falling wedge formation on the daily chart since mid-November as per the diagram below. The chart shows a struggle between the Bulls and Bears as the Bulls have managed to push the price up and give an intraday up trend to Gold since November, however the prevailing longer term trend is down as we can clearly see the push the Bears have enforced since July, dropping the price an unprecedented $210+ since.

Investors are waiting to see results from today’s NFP report, as volumes drop in anticipation of this. The figure is expected to show around 241K extra jobs created in the month of December for the USA – a forecast which if spot on would likely see limited deviation, in the longer term, of the Gold and we should expect the Gold to continue towards the yellow highlighted triangle below before a break out is seen.

Scenarios:

On the daily chart we favor the longer term trend, which is a hawkish view as seen by the downward wedge. Significant support lines are seen at 1166.9 and 1143.6, the two main points which align the lower part of the wedge. We also expect some support to be seen at the 50 MA, which currently sits at 1195.30.

Alternately, a upward break of the wedge could see the price head towards 1239.24, before any major resistance, with significantly more meaningful resistance at 1255.3 – the point at which the wedge began forming, from back in October of 2014.

 

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EUR/USD – Bearish Push!

Daily Trading

The EUR/USD, as we expected from our last analysis on the 5th of January remained under pressure and broke below the 1.1801 which was the 2006 low, finding finally resistance at 1.1754. At that level we saw a small reaction of the Bulls but we don’t know for how long as the Bearish trend still seems to be very strong and hard for the Bulls to reverse it. Price now is trading 100 pips above the bottom and indicators already are reaching the overbought areas.

Scenarios
Bears are leading the last months, a possible break below the S1 will most probably guide the price to lower levels close to 1.1640 which is the next important support level. If we notice a break above the R1 then we can only start thinking that Bulls wake up and start pushing but it will only be an alert and not a signal. They need to much effort to reverse the existing trend.

 

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GBPUSD rebounds on low CPI expectations

The GBPUSD pair has changed trend, from the downward run we saw at the beginning of the new year which saw the pair lose over 500 pips in the space of a week, to a newly upward channel trend as we can see from the 1 hour graph below.

The 50 MA, which was previously seen as acting as a ceiling for the pair, has reversed and acts now as a strong support for the cable. The current price of the cable against the dollar sits at 1.5157, just off from the 50 MA as a recent drop in the cable followed on from an expected slowed UK consumer price inflation down to 0.7% in December. This follows on from a 12 year low of 1% which was measured in November.

Scenarios

The current intraday trend is an upward channel, with price of the GBPUSD expected to find strong support at S1 and climb back up to test this week’s high of R1. A break of which could lead the price to rise and test R2.

Alternately, if the 50 MA proves to be broken by the bears and cannot be sustained as a support, we expect to see the price drop lower and head towards S2 – a break of which will see a reversal of trend.

 

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USDCHF in range on intraday

Today’s sessions saw the Dollar dropped against the Swiss Franc as the USDCHF pair dipped under the 1.0200 level to session lows of 1.0180, following resistance met at R1 – 1.0216 – a level which has changed the trend for the Swiss franc into a range, with a support at 1.0116 as shows below.

The short term intraday indicators show the pair to be at a neutral level with the exception of the Stochastic, which currently shows the currency is currently in an oversold position.

Scenarios:

The short term trend is in a range, with currently the lower part of the range being favored as the next test level, with 1.0169 – the 50MA - as the support. A convincing break of which may see the price head to 1.0116 which is the current support line and critical point for the current intraday range.

Alternately, we may see the pair head back-up and retest the R1 level which has already been unsuccessfully tested twice. A convincing break of this may see a continuation of the longer term up trend we have experienced in recent weeks.

 

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Gold continues to go up
GOLD

Currently quotes remain in the uptrend, as evidenced by location of prices above lines forming our trend indicator Alligator. According to the system rules, to enter the market investor should wait for a break of one of the actual at that moment fractals. Besides, the ideal time for getting of such a signal will be the absence of directed dynamics of the instrument, that is almost always accompanied by interlacing of Alligator lines, as well as proximity of our auxiliary indicators AO and AC to zero. We continue to keep an eye on the market.

Volatility in yes rises
USD/JPY

Last weeks trades showe maximum volatility levels over the recent years, which certainly should be taken into consideration from the standpoint of methods for managing capital. Thus, the recent fluctuations in USD/JPY has led to the formation of large-scale movements, thereby coming to the price fractals are already located in two hundred points from each other. Thus, a pending «buy stop» order must be placed on the level of extremum fractal upwards (118.86), while the break-down order must match the value of 116.90. It is expected that with the lack of strong fluctuations new significant levels defined by Williams fractals will form closer to the current price, and we need to move orders in accordance with their price value. Note that according to the system, pending orders must be placed lower by 1 point for sale, and higher by 1 point for purchase.

Euro falls farther
EUR/USD

At the moment, relevant pending orders to buy (1.1646) and to sale (1.1538) are actual. It is worth noting that the fractal-up corresponding to an entrance order to the long position is below the Alligator red line. At the same time it is important that the price is above the line at the time of the given level passage. Thus, we are waiting for a breakthrough of any named order to enter the market and then to consider any and all signals to "refill" the existing position that will maximize profits.

Quiet before the storm
GBP/USD

Perhaps the most favorable for the potential deal is a situation for the "cable". Thus, the achievement of the last year and a half minimum price levels led to the formation of lateral trend that offers the potential to carry out a successful transaction. So, the Alligator lines are intertwined, indicator AO and AC values are close to zero. Pending orders at the moment are located at 1.5199 (buy) and 1.5054 (sell). We are waiting for a breakthrough of one of them or the formation of a new, more contemporary fractal.

 

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EUR / USD. Waiting for Miracle

We can say that the current changes in the EUR / USD market reflect the solemnity of the moment - the market is frozen, awaiting. So, today the results of the ECB meeting will definitely "sadden" someone. Accordingly, someone it will vice versa make happy, and it will depend on the chosen direction, (guessed / not guessed), nerves and strategy. In such days, it is the right thing not to do anything until the news is coming, and then to be ready to enter the next breakthrough levels of support / resistance. Quotes are under the long-term downtrend near the channel line. As for the more recent movements, the value is now testing the medium-term trend line.

So, after the release of today's data, we recommend to put opening stop-orders to break values of 1.1680 up and 1.1458 down. The goal, in the case of the resistance line breakthrough is the correctional Fibo level of 38.2% (1.1880). If prices fall below the 11-year minimum at 1.1458 setting reduction targets will be technically baseless. Here it will be best to work on the scenario.


USD / JPY. Japanese Minister's Arrows Hit Targets

The long-term trend in the pair remains relevant. We note that back in 2012 Shinzo Abe took the helm of the Japanese economy once again and announced upcoming changes to combat the main problem of the Japanese economy – deflation. Then he put his man in charge of the Bank of Japan to successfully implement these plans. Thus, the regulator has started an ambitious program of assets purchase, flooding the economy with money. Since then, the Japanese currency has lost about 50% of its value, causing trading partners' murmurs and unofficial charges of waging foreign wars. Anyway, the long-term trend remains relevant.

Last upward impulse of October-November 2014 at the moment is corrected by the price of 38.2%. The price came up to this level twice and consecutively bounced off him. Thus, the risks currently biased towards the possible growth of the pair, but for the purchase we should wait for more clear upward impulse forming, as well as for some evidence from trend indicators. The graph shows two moving averages 3 with a shift 3 and 25 with a shift 5.

 

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EUR / USD. Bears are Back on Bike

The loss of the single currency in relation to the US dollar yesterday equaled 3 figures – the pair set a new 11-year low at around 1.1313. The reason of it was the proclamation of the long-awaited quantitative easing program. Many market participants were surprised with the determination showed by the European regulator. The European QE will begin in March and will be completed in September 2016. The volume of monthly purchases will be 60 billions euros. Now bears hold all the cards as evidenced by the clear trend acceleration in the form of quotes consolidation outside the long-term trend (see fig.).

Now the highest priority has the work for the rebound from the boundaries of trading channel formed in recent weeks with the expected results, when it is recommended to sell when approaching the line of resistance and then when confirming the rebound from it with the help of indicators. At the moment, the opposite boundary of the channel is reached, and here it would be appropriate to fix the result of the short position. Also today, it is impossible not to draw attention to the publication of data on the business activity in manufacturing and service sector.


GOLD. Fibonacci Decides most Everything

After gold price has reached the minimum over the past 4 year, it finally started to grow. Whether market participants were so sensitive to correction in global stock markets (they needed to settle in their money somewhere for not to keeping them in cache), or whether the achievement of the important Fibo level 61.8% from the large-scale rally observed in the period 2008-2011 has done its work. We note that in 2011 the historical maximum (1920 dollars per ounce) was established. Currently we see the previous downward movement breaking and the development of the upward movement within the channel. By itself, the turning point was by the classical scheme when at first the "head and shoulders" reversal pattern was formed, and then it was a breakthrough of its graphical boundaries (neck) upward.

Anyway, there are some problems in the uprise development (which does not change the general direction), because on the one hand quotes reached the channel line of the current upward trend, and on the other the level of expansion 161.8% of the initial pulse of November-December 2014 was achieved. Thus, it is recommended to take profits on long positions, waiting for lawful correction of the January upward impulse.

 

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USD / JPY. Thorny Path up to Fuji...

It seems that the large-scale correction of the last couple of months is close to completion. The figure that can be taken as a graphical consolidation figure definitely implies the need to work with it in line. Moreover, going beyond the scope of this "triangle" it is able to lead the new trend in the direction of the breakdown impulses, whether we like it or not. Probably the most market players will remember that in fact the Bank of Japan is now carrying out an ambitious program of quantitative easing and printing money directly implies a depreciation of the national currency. This fundamental factor gives grounds to the development of a new growth wave especially amid expectations of increasing of the key interest rate in the United States.

However, in order to obtain confirmation of the objectives established at the level of multi-year highs in December (121.84) and higher, the bulls first need to overcome the next level of resistance (118.86), then the above-mentioned upper limit of the "triangle" and then the Fibonacci extension level 161.8% from the pair growth on 16-21 January (120.69). Today, the market is positively affected by the publication of the revised trade balance in Japan in November (-0.83 to -0.73 trillion of yen), while December's value has declined, reaching the highest value over the past 1.5 year (-0.71 trillion.). It is ti be recalled that after the accident at the Fukushima 1 and an almost refusal of nuclear energy, the country is forced to import energy in a much larger scale, which led the country to a trade deficit.


GBP / USD. At the crossroads...

Dynamics of the "cable" in recent months was in the footsteps of the greenback strengthening. As in the pair with single currency, here it was formed the downward trend in which investors were using some simple and in this case the best trading systems and could take large profits.
Of course, there is always a temptation to buy cheaper, but, as history shows, catching the falling knife with bare hands is not the best method. An additional fundamental factor, supported the bears, remain rather vague messages of the Bank of England about a possible rate hike. In spring this Bank was one of the first candidates for the beginning of the rising rates cycle along with the Fed. However, on its meeting the regulator made it clear that the problems in the economy still remain. At the moment, quotes have reached the support line connecting lows of 2010, 2013 and here everything will be decided.

It is recommended to fix the result on the open short positions and not to take decisive action until tomorrow's publication of quarterly GDP in the UK. These indicator can give an impetus to quotes, summing up the foundation for the future dynamics of the pair.

 

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GOLD. As to Energy Conversation Principle...

As we noted in a previous review, the gold price had been achieved several important resistance levels. So, some technical factors in the form of the channel from the trend, which started in November 2014, prevent the global safe haven asset from growth. Then the correctional Fibonacci level 61.8% from the large-scale growth of 2008-2011 became a technical basis for the start of the trend. Also the discretion of bulls is limited by the extension level of 161.8% from the upward momentum of November-December 2014. Needless to say, that global capital markets are tied with benefits, which means that the money flow from market to market depending on overall market conditions. Thus, we may expect a decrease in quotations of the investigated asset amid rising of stock markets (which happens now amid the easing of monetary policy by some key central banks) and vice versa.

A hit of support line from the January ascending trend will become a confirmation of further reducing, and also a hit of the neckline on the graphic figure "head and shoulders", which is well seen now. In this case, we can expect to achieve the next support level in the form of correction 38.2% (1254 dollars per ounce) from the growth in January.


AUD / USD. For Connoisseurs of Beauty

The aussie in tandem with the US dollar continues a confident reduction within quite picturesque canal (connoisseurs should note). It is impossible to pay no regard to the fact that at the moment quotes have reached an important technical support - correctional Fibo level 61.8% from the growth in 2008-2011. The global financial and European debt crises, raging at the time, had a very limited negative impact on the Australian economy, allowing the RBA to raise rates. Such actions have caused a powerful trend in Australian dollar, but later quotes were affected by such factors as falling prices for iron ore, a very high rate of Aussie in the foreign market, as well as the completion of the mining industry boom in the country. All this prompted the Reserve Bank to take decisive action in the form of verbal interventions (dissatisfaction with high exchange rate), and the whole cycle of reduced rates. These fundamental factors in conjunction with the strengthening of the greenback's position were formed as a result into the AUD/USD trend.

It is recommended to close short positions (if you have them, of course) and be prepared for a possible corrective upside. It is worth noting that many pairs with the dollar had achieved significant levels, and here it's time to stay on the sidelines for a while. The goal, in the case of a breakthrough of the current interim trend clearly perceptible in the daily timeframe – is its correction by 38.2% (0.85 mark).

 

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USD / JPY. Will Hawks be Сaged?

In a previous review we have mentioned the presence of a fairly large-scale graphic figure "triangle", formed by the correction of the next ascension wave observed during last October-December. Thus, this correctional figure has occupied the whole space and time from the beginning of December, and its borders are a good benchmark in terms of further pair hesitation anticipating.
At the same time, now the other interesting chart pattern that resembles a triple top had formed. In fact it is just a trading corridor where there are quotes in the last few days. It should be noted that price changes occur clearly within this corridor, which means that its range of about one and a half figures can still be used to work on a rebound from its borders.
This tactic is justified until tonight the Federal Open Market Committee (FOMC) of the US Fed will announce its decision on the future of monetary policy. Recall that at the end of their meeting in December the regulator has made it clear that the main reference point for the beginning of the temporary tightening cycle will be apparently the April meeting. At the same time, the recent actions of some major central banks, such as Bank of Switzerland, Bank of Canada, European Central Bank, which took up thoroughly to easy their policies, can influence the mood of the Federal Reserve leaders. Given that the current inflation rate is far from target, these leaders may decide that they do not need to hurry up and go on about hawks.

So, it is recommended to work on a rebound from boundaries of the channel 117.30 - 118.70 using oscillators. In the case of the upper range limit overcoming (after the announcement of the Fed's decision), it is necessary to open long positions in order to reach the top graphic border of "triangle" and then - with the aim of 120.69, which is Fibonacci extension level of the pulse of 16-20 January.



AUD / USD. Is the Wait over?

Today aussie quotes shot up by 80 points in a minute after the very important (in the context of the Australian currency weakness against the US dollar) inflation data. So, despite the fact that the consumer price index in the 4th quarter of 2014 grew by only 0.2% while the forecast was 0.3%, other index, which excludes the cost of the most volatile commodity groups, exceeded expectations (0.5%), showing an increase by 0.7%. Apparently, market players in the context of recent statistics publications from other countries, which often have recorded deflation, were expecting much weaker performance, and were pleasantly surprised. So, now quotes have reached 38.2% correction from the last wave of decrease, but this climbing may turn into a directional trend, given the achievement key support levels - 61.8% Fibonacci correction of the upward trend of 2008-2011, as well as medium-term channel line and long-term downtrend.

A further rise in prices is expected and the first target may be the current medium-term downtrend resistance line. In the case of its overcoming it will be possible to talk about the beginning of the global adjustment of all reduction in July 2014 - January 2015.

 

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GOLD. Is it Head and Shoulders?

Our "head and shoulders" figure has gotten a missing second shoulder by performing another condition for formation and implementation of graphic patterns. Thus, the H&S formation was preceded by a clear upward trend, then all the necessary graphical borders were formed, in particular there are head and shoulders and even the neckline. Now it is a little thing to do - we need a breakdown of the neckline. From fundamental point of view, a recovery in global stock indices amid the steps that have been taken by some world central banks with a view to stimulating economic growth, as well as for anti-deflation, continue to put pressure on prices. During such periods, the cash flow is directed towards the priority of income from investments, as opposed to the need for preservation, which is provided by gold.

The first reduce goal in the case of the support break scenario on the classics should be the distance from the neckline to the top of the head. Another classic goal will be the correctional Fibo level 38.2% from the growth of the pair fixed in the current month. We can say that they tie together at 1254 dollars per troy ounce, where the close order should be placed.



EUR / USD. Is it Time to Lift Head?

Yesterday's FOMC meeting was not out of the ordinary event. The Fed did not scare people, announcing any drastic measures, keeping the overall market expectations within borders understood by most investors. We mean that the regulator, of course, has reacted to the recent easing measures from other world central banks, referring to the need of the economy support, focusing primarily on long-term targets for inflation and employment. Based on recent data, about half of the analysts think that the first rate hike will occur in June. In any case, the situation with the euro is now clearer, because the long-awaited asset repurchase program of ECB has finally been announced. It's time to gather stones ...

At the moment, the descending medium and long term trends remain valid, but the dynamics of the pair in the last days together with the fundamental background give reasons to expect a correction and a possible medium-term trend line break. For this, it is necessary to overcome the extremum at 1.1421, where it is possible to open long positions with the aim of 1.1620 - Fibonacci extension 161.8% of the above-mentioned pulse. Here lies an important resistance level, corresponding to this year maximum.

 

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GOLD. What's the next?

Now we have a complete set - the graphic pattern "head and shoulders" has realized fulfilling the minimum program for the correction of all the upward movement in January. Is this the end? It is likely that the upward movement still may, but it is no need to hurry with purchases until we will receive a confirmation from for one thing computer indicators. On the other hand, the reached Fibo level may be only an intermediate goal of reducing, and we should be ready for this because there are other levels of Fibonacci support, as well as the trend line, and this is a very different purpose. Today's data on the dynamics of the American economy in the 4th quarter may influence on the dynamics of quotations, because if situation in the second world's economy is not as good as expected, gold will get its support amid investors' run in assets-havens such as gold.

We fix a result of the short position and wait for one of the following conditions. In the case of the breakthrough of yesterday's extremum of the decline wave at 1252, we will open the order to sell with the goal 1220, where is the 61.8% Fibonacci correction of the January increase, as well as the line of a medium-term uptrend support. We can take into account the growth scenario after receiving confirmation from the indicators, such as the intersection of a price with moving averages values. The graph shows moving averages with 25 period (shift 5), and with 3 period (3 shift).


USD/JPY. Failed Expectations

On the last meeting FOMC leaders got off with platitudes and it was expected, but, if so, what can we do without a fundamental mover?.. The first thing that comes to mind is to use all the possibilities in working with support and resistance levels on the rebound in fairly long time sideways, which replaced the wave of growth after the correction 38.2% of the growth in October-December 2014. Seemingly a very "soft" monetary policy in Japan and a quite "hard" in the United States should contribute to a further growth. Thus, it seems that reached levels generally reflect the expectations of the market and we need something else.

Today's publication of preliminary data on US GDP in the 4th quarter can become this "something else". As expected, after rising by 5% in the 3rd quarter, this time we will see an increase by 3%. Exceeding of this indicator which is already embedded in prices will give an impetus to further growth and the achievement of upper lateral border of the current channel, and then the upper limit of the above-mentioned "triangle". If bulls have enough passion the main goal may be the Fibonacci extension level from the January growth at 120.69.

 

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AUD / USD. Waiting for Support on Support Level

All seemingly goes on - trades continue to be maintained in the long-term price channel, which started back in 2011, when the pair had reached a historical high amid rising rates of the Australian Central Bank. And this despite the fact that most all the major economies of the world felt themselves not so well, being far from the tightening of monetary policy. Aussie enjoyed the favor of investors, attracting large amounts of money in the economy from global investors. However, then the RBA seemed to realize the risks of such a high rate of national currency, and in the period of 2011-2013 reduced the rate eight times, bringing its level to a historic low of 2.5%.

Currently the price has reached and even locally overcomed the channel line of the mentioned trend. At that point another support level was reached, - the level of the medium-term trend, and at the same correctional Fibo level 61.8% of growth during 2008-2011. Given the context, it is necessary to pay special attention to the current situation and be prepared for a variety of scenarios. Thus, in the early hours of the Asian trading session on Tuesday many questions can be solved by giving the final vector to the pair movement. It will be the Reserve Bank of Australia meeting and it can bring some surprises. The regulator can draw attention to the absence of inflationary risks and on recent actions of some world's central banks for monetary policy easing, and hint at the possibility of similar stepsfrom the RBA. It is recommended to wait for the event before taking positive steps in accordance with the reaction of the market.



EUR/USD. Does Everybody Want to Sell Euro?..

Once again market players have chosen to close their eyes to facts which do not fit their view of the world, because forecasts are relentless - according to economists the dollar in FOREX must continue to increase. There are many reasons of it: a stability of the US economy, growing much faster than other developed countries (about 5% y/y) and a relatively stable permanent reduction in the unemployment rate and the program of quantitative easing which has already become a part of a history. Thus, the ECB has only announced its QE, whereas in Japan, all in full swing. It is clear that all of this is reflected in the growth of government US Treasury bonds yields. Although they are now on historically meager levels 1.9% (10-year), but in comparison with other ones US bonds are in the lead. And here is the eternal question again – is everything we have talked about taken into account in current prices? Only the time will give the answer, and now we see the downward trend at all levels, including the medium-to-date, on which we, first of all, will make an impression on the future prospects for the major currency pair.

Price is currently located at 1.13, where is the correction Fibo level 38.2% after a rebound from the lows over the past 11 years. The ATR with period 21 shows volatility about 136 points. Such a value has been noticed for the last time at the junction of 2011-2012, during the height of the European debt crisis. In general, we have everything to work to increase with the aim 1.1620 with all certain conditions: trend line break, and (that is very desirable) receiving a portion of disappointing US data. Such a data may be the index of business activity in the manufacturing sector of the US economy publication by the Institute for Supply Management (ISM) - expected to decline to 54.9 points from 55.5. In turn, good data may mark a new wave of the pair falling (especially given the general feeling in favor of the dollar) to the area of 1.1096. For this price will have to pass the level 1.1261.

 

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AUD / USD. And we Go to... South

So, our wildest expectations were fulfilled - the Reserve Bank of Australia had decided to decline the interest rate to a new historic low (2.25%), referring to a low inflation in the context of energy prices fall, as well as, to actions of other CB, which are not hesitate to pursue an aggressive policy incentives. "Why they can, and we can not?" - the RBA thought and lowered the rate, also mentioning just in case about still overvalued Aussie.
Thus, the path continues to the south, and now we can already say with certainty about the breakout of the Fibonacci correction 61.8% of the growth in 2008-2011 (and this is important), and the fact that the dynamics of the pair in all measurements is within the clearly defined price channel directed to the south.

Anyway, despite receiving an iron argument in favor of selling the pair, the technical picture forces us to make informed decisions at all stages of the movement. So, at the moment we state the formal achievement of the channel in the medium-term and short-term trend, and here classics of the genre requires fixing the intermediate results of the transaction, and than, when the correction to the area of the resistance line comes, to resume work in the trend.



GOLD. Wait a Little Longer

The gold has achieved our first identified goals (which may be counted as the minimum program executio in respect of correction under the figure «Head & Shoulders») which gives a reason to look for the point to enter a long position once all the necessary prerequisites appear. Also note that the price has tested the level of support fit in with a correctional Fibo level 38.2% of the growth in first two-thirds of January. Now, after a quite conspicuous and suitable as a primary bounce up was formed, this is the only thing to do.

So, to be considered that the correction is over, we need a break of the resistance line, which is connecting gradually lowering highs, to confirm the presence of the uptrend by formation of gradually highering lows and highs. In other words, closing the day above $ 1285 will be seen as an opportunity to purchase with very ambitious goals, the fixation of which requires further analysis and will depend on many factors coming permanently.

 

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USD / JPY. Vector Moves Down

The pair quotes remain in hibernation, but if you look closer, it is still very slowly leaving the familiar range, tending more and more to the south direction. The reason is firstly the latest data from the US, the majority of which (such as GDP data - 2.6%, forecast 3.0%) was below expected levels. So, the next resistance level moves to the today extremum 118, while support is now at 116.85. In the long term the dollar is expected to be supported with the ongoing quantitative easing program of the Bank of Japan to achieve inflation at 2% per year after 15 years of deflation. On this occasion, today the BoJ deputy governor Kiku Iwata spoke. He assured that everything is under control, but the situation is somewhat spoiled by the current decline in oil prices, as well as increased sales tax.

It is recommended to work within the formed channel using its boundaries to work on the rebound. Trend indicators are useless now, so we should look for the rebound confirmation from oscillators using the exit of the curve from overbought and oversold zones. At the moment, we hold a short position with a view to 116.50-116.85.


EUR/USD Gets off the Ground

It seems that the balance of buyers has finally heavy enough to be able to talk seriously about a correctional scenario for EUR/USD. The European Commission President Jean-Claude Juncker yesterday has showed the possibility to negotiate with the new Greek government, agreeing to some concessions. This gave the bulls confidence, which led to an increase in the pair at the moment almost by 180 points. However, after that the movement has been corrected, but we see clearly a change of moods. Today we expect a number of macroeconomic publications, both from the euro zone (retail sales, business activity in the services sector), and the United States, where preliminary data will be released (prior to the official on Friday) for the growth of the number of jobs from ADP, as well as activity in the service sector according to the Institute for Supply Management. All these data are able to provide additional impetus to the pair, as well as to freeze the status quo prior to the publication of the said employment figures from the US Department of Labor. In general, many economists think, that current prices already consist everything, including any impact of a full-scale quantitative easing program, which was announced at the last ECB meeting.

In the case of growth scenario, the first target is 1.1620. Here is the Fibonacci extension level 161.8% from the January pair rebound, and here goes the channel line of the already confirmed short-term uptrend. The nearest support is 1.1261, and its breakthrough will renew pressure on the euro.

 

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GBP / USD. What the Old Lady Says?

During last weeks the GBP/USD did not show any interesting trade opportunities, however, as is often happens, right now, a few hours before publication of the Bank of England's monetary policy decision the picture is very pretty. Here we have all the signs of graphic reversal pattern "head and shoulders" formation, here it is the proximity of the trendline (and not just any, but the very same), here is also a recent attempt to break the next resistance level (1.5222). Well, now it's Old lady business, because BOE today can reduce the rateexpectedly and unexpectedly at the same time. Expectedly because a number of other central banks has also all surprisingly reduced rates or softened monetary policy during their last meetings. Of course, the Bank of England did not even think about this before, but on the contrary, according to the distribution of votes in the last few sessions at the end of last year, even was considering rates raising. However, times change, and it will be possible to take a moment at very low rates of inflation.

Thus, it is recommended to wait for the publication of the BOE decision (12.00 GMT) and to work depending on the solution and the market's reaction to it. If the BOE reduce rates, a reducing aim for the pair will be a minimum of 23 January, and of the last year and a half - 1.4950. If rates remain at the same level (0.5%), we will expect the final break of the neckline, which will cause the achievement of the 61.8% correction of the reduction wave in December 2014 - January 2015, where the minimum growth target points out in such cases (the distance from the highest point of the head to the neckline, deferred from the breakout point).


GOLD. Everybody Sits on Fence...

Apparently, market players are not ready to take decisive action in relation to gold. Correction of the January growth continues and it is likely that there will be nothing interesting here up to tomorrow's publication of the US labor market statistics. Support still is at the correctional Fibonacci level 38.2% of the mentioned wave of growth (tested twice), while growth is limited by the resistance line drawn through several successive downward highs (visible when approaching). Another possible option when gold will get off the ground, is the support line of the current uptrend achievement. Note that the growth began after testing of correctional Fibo level 61.8% of the growth in the period 2008-2011 when gold was very popular amid raging global financial crisis.

In this situation, it is important not to take active steps ahead of time. So we should wait for a break of 1308 level, which is corresponding to the ended ascending wave extremum, or be ready to buy at the approach to the uptrend line. In the case of one of these scenarios realizationour targets will be based on the actual technical picture.

 

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GBP / USD. Cable is Testing Trend Line

The Bank of England decided not to go on a leash of "alarmists" and to keep rates at the usual level (0.5%). As it was expected, in the case of keeping the monetary policy unchanged (in a context of easing policy by some other central banks in order to achieve inflation growth) GBP/USD has gotten a good chance to continue the correction growth. This is what we saw yesterday - "cable" in the moment has added a figure closing the day very confident. However, the way up is thorny, because for its continuation the pair needs to overcome serious obstacles in terms of technology and not only. On the one hand, the reversal graphic figure "Inverted Head and Shoulders" that we have mentioned in the previous review was formed, however, the minimum growth target is not reached yet. It does not pay to persist in such situation, because the tested line of over a six-month downtrend is a very strong deterrent and very important for the market.

What we should expect now? The answer is - wait for data on the US labor market, because in fact they will determine the future dynamics of the dollar with respect to any and all competitors. To break through the trend line values should be weak and far from forecasts, which call into question the further Fed tightening. In this case, the first target of the growth will be 61.8% of the descent of December 2014 - January 2015, where is also a target to work with our «Head-n-Shoulders» - 1.5465. Rebound from the trend on positive data can once again lead quotes to 1.50.


USD/CAD. At the Crossroads

A correlation of the pair quotes with the dynamics of oil prices is one of the determining factors. We note that Canada is one of the leading oil exporters in the world and the impact of changes in hydrocarbon prices for the country's economy can not be overestimated. Thus, the decrease under the correction of large-scale growth in January has almost reached the 38.2% Fibonacci correction, which can be a deterrent to further price declining, and where a new impulse wave to new multi-year highs can begin to form. There is a high probability that a lot can be solved today, while the ministries of Canada and the United States will simultaneously publish data on the labor market in January: the unemployment rate and the number of new jobs.

Above mentioned statistics (13.30 GMT) will be a signal for many market players to enter the market. We do not recommend to enter directly at the time of publication due to possible problems with excessive volatility, but to place pending orders for the breakdown at the nearest minimum - 1.2350 and maximum - 1.2591. Setting targets in case of the activation of orders will depend on the future price, and considering the possible scale of the movement it does not pay to hurry.