Thursday, 27 December 2018

FX TS 27.12.2018

Posted by Olga Gorinina at 12:13 Labels:


US stocks rose sharply on Wednesday, rebounding from new annual lows, the kind of Christmas gift from equity markets. DOW industrial index gained by more than a thousand points in one trading day, which is about 5%, and this is the largest daily increase in a year. Nevertheless, the reaction of the FOREX market is restrained somewhat, as after Christmas the volumes remain much lower than the average levels

EUR / USD - euro remains strong in the thin market
Over the last active trading days before Christmas, European currency has traveled from a low of 1.1300 to a high of 1.1480. Then, profit taking and tactical pullback sent market quotes to the first support area - 1.1360. The fact that the quotes fixed above this important mark is a very positive signal confirming the bulls maintain control over the market, and only low volumes keep the market from re-storming the local maximums of 1.1460. The nearest local resistance is in the area of 1.1405. Most likely, the last days of the outgoing year, the market will hold in this narrow range. However, we recommend staying out of the market as non-market risks are pretty high.
Trading recommendations - out of market
GBP / USD British currency weakness persists
The weakness of the US dollar led to some recovery in the British currency market. However, strategically and tactically, the market situation has not changed. GBP / USD is stuck before the first resistance around 1.2660. It should be noted that this level is supported by a downtrend resistance line, an additional technical deterrent restraining the recovery of the market. Of course, the British currency market is oversold, but one should not expect a recovery of this market under current conditions.
Trading recommendations - out of the market

AUD / USD - Australian currency has reached local minima 0.7040
On Wednesday, Australian currency reached a three-month low - 0.7040 zone. Our expectations that the mark of 0.7090 will keep the market did prove to be correct. The breakthrough of this significant level sent the market to a completely new price range. The last time the market visited these levels was October 2018. A breakthrough at this level will send quotes down to the area 0.6990.
Trading recommendations –Sale with pass 0.7040
Gold - gold continues to rally, the market marked new highs in 1277 area
On Wednesday, gold lost some of its gained positions amid a stronger dollar and the rally in US equities. At the same time, in the medium term, gold retains very high chances for a continuation of positive dynamics on the background of growing geopolitical and economic uncertainty in the world.
In the US, two main topics are now focused- the suspension of the government’s work, as well as the continuing criticism of President Trump against Fed Chairman Powell. Both factors support the gold market.
Recently, the topic of the possible resignation of Fed Chairman Jerome Powell has been discussed more and more on the market. Trump called the policy of the Fed the main problem of the US economy, and the increase in interest rates caused the collapse in the US market, which last week showed the worst results in more than 10 years of trading.
On the chart, we see steady growth in the context of an bullish trend. New maximum levels were indicated in the $ 1277 zone, the nearest local support in the $ 1266 area.
Trading recommendations - longs in the $ 1266 as market pullbacks

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